II

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.

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

2 This Act may be cited as the ‘‘Work and Responsibil3 ity Act of 1994’’.

4 SEC. 2. TABLE OF CONTENTS; REFERENCES.

5 (a) TABLE OF CONTENTS.—This Act contains the

6 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.
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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.
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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.
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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.
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1 (b) REFERENCES.—References herein to the ‘‘Act’’

2 are references to the Social Security Act except where oth3 erwise provided or when the context otherwise requires.

4 TITLE I—JOBS

5 SEC. 101. REQUIREMENT TO PARTICIPATE IN ENHANCED

6 JOBS PROGRAM.

7 (a) Section 402(a)(19) of the Act is amended by

8 striking out all down through subparagraph (E)(i) and in9 serting in lieu thereof the following:

10 ‘‘(19) provide—

11 ‘‘(A) that the State has in effect and oper12 ation a job opportunities and basic skills train13 ing program (hereafter in this title referred to

14 as the ‘JOBS’ program which meets the re15 quirements of part F), and a program of em16 ployment (hereafter in this title referred to as

17 the ‘WORK’ program) which meets the require18 ments of part G;

19 ‘‘(B) that the State will (except as other20 wise provided in this paragraph or in part F),

21 to the extent the program is available in the po22 litical subdivision involved, apply the require23 ments and conditions of this paragraph to—
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1 ‘‘(i) each applicant for or recipient of

2 aid to families with dependent children

3 who—

4 ‘‘(I)(a) was born after 1971, or

5 ‘‘(b) is the parent of a dependent

6 child and is living with such child’s

7 other parent who is an individual born

8 after 1971 (or was living with such an

9 individual during any month after

10 September 1995 in which they re11 ceived aid under this part), and

12 ‘‘(II) is the parent of a depend13 ent child,

14 (but not including any individual who is el15 igible by application of section 407, in a

16 State which exercises the option to limit

17 eligibility under section 407(b)(2)(B),

18 ‘‘(ii) thereafter any additional classes

19 of parents of dependent children to whom

20 the State chooses to make section 417 ap21 plicable (and identified in the State plan

22 by date of birth, date of application, or

23 other reasonable basis), and

24 ‘‘(iii) any other applicants for or re25 cipients of aid who the State chooses to re-
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1 quire to participate in the program under

2 part F and identifies in its State plan ap3 proved under this part;

4 ‘‘(C) that the State will, except as other5 wise provided in this paragraph or part F—

6 ‘‘(i) require all individuals described

7 in subparagraph (B) other than a child

8 who is not a custodial parent and is under

9 age 16 or attending full time an elemen10 tary, secondary, or vocational (or tech11 nical) school) to participate in the program

12 under part F;

13 ‘‘(ii) to the extent that Federal finan14 cial participation under section 403(k) is

15 available, allow individuals who are not re16 quired to participate in such program, or

17 to whom subparagraph (D) applies, to par18 ticipate in such program, except that such

19 individual shall, in a month in which he or

20 she meets a condition of any of clauses (i)

21 through (vii) of subparagraph (D), be per22 mitted to cease participation in such pro23 gram, and be subject to the provisions of

24 subparagraph (D) (for so long as they re25 main applicable) and the State may, at its
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1 option, apply section 417 to individuals de2 scribed in subparagraph (B)(ii) and who

3 choose to participate in the program under

4 part F (even though they meet one of the

5 criteria under subparagraph (D) for defer6 ral from participation); and

7 ‘‘(iii) with respect to individuals who

8 wish to participate, but whom the State is

9 not required to include under clause (ii),

10 consider such individual’s request for ap11 proval of a self-initiated education and

12 training program and apply criteria gen13 erally applicable to approval of such activi14 ties under the State’s JOBS program, but

15 approval of such application shall only

16 guarantee child care pursuant to sub17 section (g)(1)(A)(i)(II);

18 ‘‘(D) that participation in the program

19 under part F will not be required and the provi20 sions of such part, other than paragraph (1)

21 and (2) of section 481(a) (relating to personal

22 responsibility agreements and employability

23 plans) will not apply, but the State may provide

24 for participation in appropriate cases in one or

25 more types of activities designed as preparation
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1 for participation in the program under part F,

2 in the case of any individual described in sub3 paragraph (B) who—

4 ‘‘(i) is the custodial parent of a

5 child—

6 ‘‘(I) born less than one year ear7 lier, or,

8 ‘‘(II) (in the case of either a

9 child conceived during a month in

10 which such parent received aid under

11 this part or a child whose custodial

12 parent is under the age of 20 and

13 does not have a high school diploma

14 or equivalent) born more recently than

15 within the preceding 12 weeks (or, if

16 greater) the number of weeks speci17 fied in section 102(a)(1) of the Fam18 ily and Medical Leave Act of 1993 es19 tablishing the period of leave to which

20 certain employees are entitled follow21 ing the birth of a child, but this

22 clause may only be applied to one par23 ent of a child for any month;

24 ‘‘(ii) is a woman in the third trimester

25 of pregnancy;
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1 ‘‘(iii) is 60 years of age or older;

2 ‘‘(iv) is needed in the home because of

3 the illness or incapacity (as confirmed by a

4 licensed physician, psychologist, or mental

5 health professional (from a list of such

6 professionals approved for this purpose by

7 the State)) of another member of the

8 household and no other appropriate house9 hold member is available to provide the

10 needed care;

11 ‘‘(v) is found, on the basis of a certifi12 cation by a licensed physician, psycholo13 gist, or mental health professional (from a

14 list of such professionals approved for this

15 purpose by the State) to have an illness or

16 incapacitating condition, that at least tem17 porarily, prevents the individuals from en18 gaging in employment or training;

19 ‘‘(vi) resides in an area of the State

20 where the time required to travel to and

21 from the site where the individual’s partici22 pation in the program under part F would

23 take place would exceed a total of two

24 hours (or, if greater, the generally accepted

25 commuting time in that area) in a day; or
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1 ‘‘(vii) meets such other criteria as the

2 State may specify in its plan that reason3 ably suggest an inability to participate in

4 the program under part F, except that the

5 average monthly number of individuals to

6 whom this clause is applied for months in

7 any fiscal year shall not exceed 5 percent

8 of the average monthly number of all indi9 viduals (described in clauses (i) and (ii) of

10 subparagraph (B)) for months in such fis11 cal year (or, in the case of fiscal years

12 after 1999, 10 percent of such average

13 monthly number) together with the average

14 monthly number of individuals registered

15 in the WORK program under part G for

16 months in such year, unless the Secretary,

17 upon a showing by the State of extraor18 dinary or unforeseeable circumstances, al19 lows the application of this clause to a

20 greater number of individuals for a speci21 fied period of time;

22 ‘‘(E) that the State will promptly advise

23 each applicant and recipient of the participation

24 requirements under this paragraph and of the

25 limitation on the number of months of eligibility
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1 for aid under this part that may be applied (as

2 required by the provisions of section 417) to

3 such applicant or recipient;

4 ‘‘(F) that—

5 ‘‘(i) in the case of a custodial parent

6 who has not attained 20 years of age, does

7 not have a high school diploma (or its

8 equivalent), and is required to participate

9 in the program under part F, the State

10 will require such parent to participate in

11 an educational activity; and’’.

12 (b) Section 402(a)(19)(E)(ii) of the Act (as in effect

13 on the date of enactment of this Act) is amended by strik14 ing out ‘‘(notwithstanding the part-time requirement in

15 subparagraph (C)(iii)(II))’’.

16 (c) Section 402(a)(19) of the Act is further amend17 ed—

18 (1) by striking out paragraph (F) (as in effect

19 on the date of enactment of this Act), and

20 (2) by striking out so much of subparagraph

21 (G) as precedes clause (ii) and inserting in lieu

22 thereof the following:

23 ‘‘(G) that—

24 ‘‘(i) if an individual who is required to

25 participate in the program under part F
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1 refuses without good cause to accept em2 ployment of 20 hours per week or more (or

3 such greater number of hours as the State

4 plan provides pursuant to section

5 417(b)(4)(i)(IV)) in which such individual

6 is able to engage which is offered through

7 the public employment offices of the State,

8 or is otherwise offered by an employer if

9 the offer of such employer is determined to

10 be a bona fide offer of employment, the

11 family of which such individual is a mem12 ber shall be ineligible for aid for six

13 months or if sooner, until the first month

14 following the month in which such individ15 ual accepts such an offer of employment;

16 and

17 ‘‘(ii) if an individual who is required

18 to participate in the program under part F

19 fails without good cause to do so, the

20 needs of such individual shall not be taken

21 into account in making the determination

22 under paragraph (7), and if such individ23 ual is the parent or other caretaker rel24 ative, at the option of the State, payments

25 of aid for any dependent child in the fam-
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1 ily in the form of payments of the type de2 scribed in section 406(b)(2) (which in such

3 case shall be without regard to clauses (A)

4 through (D) thereof) may be made;’’.

5 (d) Section 402(a)(19)(G) of the Act is further

6 amended—

7 (1) by redesignating clauses (ii), (iii), and (iv)

8 as clauses (iii), (iv), and (v), respectively,

9 (2) by striking out in clause (iii) (as redesig10 nated) ‘‘clause (i)’’ and inserting in lieu thereof

11 ‘‘clause (ii)’’,

12 (3) by striking out in clause (v) (as redesig13 nated) the dash and all that follows down through

14 ‘‘(II)’’, and placing the text of clause (II) imme15 diately after ‘‘this subparagraph’’, and

16 (4) by adding at the end thereof the following

17 new clause:

18 ‘‘(vi) the State agency shall con19 duct an evaluation of the cir20 cumstances in any case in which an

21 individual to whom a sanction is being

22 applied under clause (iii)(I) continues

23 after three months to fail or refuse to

24 comply with the requirement that oc25 casioned the imposition of the sanc-
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1 tion, and in the case of any other in2 dividual to whom a sanction is being

3 applied under clause (iii), and provide

4 appropriate counseling and other sup5 portive services to assist the individual

6 to address the cause of the failure or

7 refusal;

8 ‘‘(vii) during months in which a

9 sanction is applied under this sub10 paragraph, the family of which the

11 sanctioned individual is a member

12 shall be considered to be receiving aid

13 for purposes of title XIX, and for pur14 poses of any other Federal or Feder15 ally-assisted program, such family

16 shall be considered to be receiving the

17 amount of such aid that would be

18 payable if such individual were not

19 being sanctioned;

20 ‘‘(viii) during months in which a

21 sanction is applied under this sub22 paragraph, the family of which the

23 sanctioned individual is a member

24 shall be considered to be receiving aid

25 for purpose of title XIX, and for pur-
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1 poses of any other Federal or Feder2 ally-assisted program, such family

3 shall be considered to be receiving the

4 amount of such aid that would be

5 payable if such individual were not

6 being sanctioned; and’’.

7 (e) Section 402(a)(42) of the Act is amended by in8 serting before the semicolon the following: ‘‘and if an indi9 vidual is being sanctioned under section 402(a)(19)(G),

10 such individual and all members of the family shall not

11 become ineligible for such medical assistance by reason of

12 such sanction’’.

13 SEC. 102. ESTABLISHMENT OF ENHANCED JOBS PROGRAM

14 UNDER PART F.

15 (a) Section 481 of the Act is amended—

16 (1) by amending the heading of such section to

17 read:

18 ‘‘PURPOSE; REQUIREMENT TO ESTABLISH AND OPERATE

19 PROGRAM; DEFINITIONS’’;

20 (2) by redesignating subsection (b) as sub21 section (c); and

22 (3)(A) by transferring subsection (a) of section

23 482 to section 481, and redesignating it as sub24 section (b); and

25 (B) by amending section 481(b) (as so redesig26 nated) by striking out ‘‘Secretary of Labor’’ in para-
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1 graph (1)(C) and inserting in lieu thereof ‘‘Secretary

2 of Labor and the Secretary of Education’’.

3 (b) Section 482 of the Act is amended by striking

4 out all that precedes subsection (c) and adding the follow5 ing new heading and subsections (a) and (b):

6 ‘‘OPERATION OF ENHANCED STATE PROGRAMS

7 ‘‘SEC. 482. (a) REQUIRED ELEMENTS OF ENHANCED

8 JOBS PROGRAM.—

9 ‘‘(1)(A) PERSONAL RESPONSIBILITY AGREE10 MENT.—Each individual who is a parent or other

11 caretaker relative of a dependent child and a rep12 resentative of the State agency shall, at the time of

13 application for aid under part A, sign a personal re14 sponsibility agreement. The agreement shall, in the

15 case of individuals to whom section 417 applies, set

16 forth in clear terms, understandable by all parties,

17 an acknowledgment that aid under the State plan is

18 subject to a general 24-month limit and should be

19 considered transitional in nature. The agreement, in

20 all cases, should acknowledge that the goal of both

21 the individual and the State is to enable the individ22 ual to achieve maximum economic independence and

23 self sufficiency. To this end, the individual will par24 ticipate in appropriate activities, and the State will

25 furnish necessary enabling services and assistance.
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1 ‘‘(B) The State agency shall provide the pro2 gram and employment information required by sub3 section (c) as promptly as possible, but in no event

4 later than 90 days after the earliest date for which

5 payment is made. In the case of individuals to whom

6 section 417 applies, the information shall be pro7 vided in person, on either an individual or group

8 basis, and the State agency shall obtain written con9 firmation from the individual that the individual re10 ceived and understood the program and employment

11 information.

12 ‘‘(2) EMPLOYABILITY PLAN.—

13 ‘‘(A)(i) The State agency shall, with re14 spect to each individual required to participate

15 in the program under this part, other than an

16 individual to whom section 402(a)(19)(D) ap17 plies, conduct an assessment of the educational,

18 child care, and other supportive services needs,

19 as well as the skills, literacy, prior work experi20 ence and employability of each participant in

21 the JOBS program, including a review of the

22 family circumstances. The agency may also re23 view the needs of any child of the participant.

24 ‘‘(ii) On the basis of such assessment, the

25 State agency and the individual shall, within 90
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1 days from the earliest date for which payment

2 is made, jointly develop an employability plan

3 for such individual. The purpose of the employ4 ability plan is to lay out the fastest and most

5 effective way to help the participant find em6 ployment and become self-sufficient. The plan

7 shall indicate the overall period of time that is

8 expected to be necessary to achieve the individ9 ual’s employment goal, taking into consider10 ation, in the case of individuals to whom the

11 provisions of section 417 apply, the maximum

12 remaining period of time for which aid may be

13 paid to such individual under the plan approved

14 under part A. The plan will detail the activities

15 in which the individual will be expected to en16 gage in order to find employment, including job

17 search, employment training and preparation,

18 or education. The plan must be reasonable in

19 light of the individual’s literacy, skills, and

20 needs, and the resources and opportunities for

21 employment (including self-employment) within

22 the community where the individual resides,

23 and shall, to the maximum extent possible and

24 consistent with this section, reflect the pref25 erences of such individual. The employability
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1 plan shall also describe the child care and other

2 social services and assistance which the State

3 agency will provide in order to allow the individ4 ual to take full advantage of the activities under

5 the program operated under this part, and the

6 steps the individual should take to bring

7 promptly to the attention of the State agency

8 any difficulties the individual is encountering in

9 participating in the program under this part.

10 The employability plan shall not be considered

11 a contract.

12 ‘‘(iii) The State plan shall provide that, if

13 an individual works an average of 20 hours a

14 week (or such greater number, but not more

15 than 30, as the State plan may provide) or

16 more in a position of employment, work in such

17 position shall constitute the primary activity

18 under such individual’s employability plan.

19 ‘‘(B) The State plan under this part must

20 provide for a review mechanism that will be

21 available should the individual and the State

22 agency be unable to agree on the content of the

23 employability plan. The review process shall, at

24 the least, provide for prompt involvement of an25 other employee (or designee) of the State agen-
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1 cy with supervisory or greater responsibilities

2 than the person with whom the individual is in

3 disagreement to provide further negotiation

4 support. If agreement still cannot be reached,

5 the State agency shall, in accordance with regu6 lations of the Secretary, afford the individual

7 access to arbitration or a mediation process, to

8 a more formal review or hearing, or to a com9 bination of such processes.

10 ‘‘(C) Failure or refusal by an individual to

11 sign an agreed upon employability plan, or to

12 sign a plan with respect to which the applicable

13 processes under subparagraph (B) have been

14 completed and under which the employability

15 plan has been found appropriate, shall result in

16 denial of aid with respect to such individual, ex17 cept that no sanction or other penalty shall con18 tinue under this subparagraph after the individ19 ual has signed an appropriate plan.

20 ‘‘(3) EMPLOYABILITY PLAN FOR DEFERRED IN21 DIVIDUALS.—The State agency and each individual

22 for whom participation in activities has been found

23 appropriate under section 402(a)(19)(D) shall joint24 ly develop an employability plan. The plan shall

25 place primary emphasis on the activities in which
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1 the individual is able to engage that, together with

2 any services provided by the State, will best prepare

3 the individual for full participation in the program

4 under this part. Plans under this paragraph are not

5 subject to the procedures of paragraph (2).

6 ‘‘(4) CASE MANAGER.—The State agency may

7 assign a case manager to each participant and the

8 participant’s family who will be responsible for as9 sisting the family to obtain any services which may

10 be needed to assure effective participation in the

11 program.

12 ‘‘(5) PERIODIC ASSESSMENT.—At such inter13 vals as the State agency finds appropriate, but not

14 less frequently than once every 6 months, a rep15 resentative of the State agency and the individual

16 shall conduct a review of the individual’s employ17 ability plan (including the plan of an individual to

18 whom paragraph (3) applies) and the progress that

19 is being made to achieve the goals set in the plan.

20 The State agency shall consider, in conducting the

21 assessment, whether an individual participating in

22 activities under section 402(a)(19)(D) has become

23 ready to participate in the program under this part,

24 or whether an individual required to participate

25 under this part should no longer be so required and
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1 instead should participate in such activities. If it is

2 concluded that there should be any such change in

3 status, the individual’s employability plan shall be

4 revised accordingly effective with the month follow5 ing the month in which the revision is made. In the

6 case of an individual participating in the program

7 under this part, the assessment shall specifically ad8 dress both the individual’s participation and the

9 State agency’s delivery of services as agreed to in

10 the employability plan. If it is found in the course

11 of an assessment that there has been a substantial

12 failure to provide services to the recipient in accord13 ance with the employability plan, the plan (or some

14 other State agency record) must document that find15 ing, and the period during which the failure oc16 curred.

17 ‘‘(6) REVISION OF EMPLOYABILITY PLAN.—The

18 employability plan may be revised as necessary fol19 lowing an assessment under paragraph (5) or at any

20 other time that events warrant it, upon the agree21 ment of the individual and the State agency. If there

22 is disagreement about the need for revision, or the

23 respects in which the plan will be revised or the new

24 content of the plan, the procedures described in

25 paragraph (2)(B) will be applicable.
25

•S 2224 IS

1 ‘‘(7) The State agency may require that, in the

2 case of an individual described in section

3 402(a)(19)(B) and whose employability plan, includ4 ing an employability plan under paragraph (3), re5 flects the need for treatment for substance abuse,

6 such individual participate in substance abuse treat7 ment that is available without charge to the individ8 ual. The State plan may, notwithstanding any other

9 provision of law, make applicable to any individual

10 required to participate in such treatment activities

11 the provisions of section 402(a)(19)(G), and if so,

12 shall advise the individual of the consequences of

13 failure or refusal to accept treatment,

14 ‘‘(b) TRANSITION TO WORK PROGRAM.—(1) The

15 State agency shall schedule a meeting with each individual

16 subject to the time limit under section 417, with adequate

17 advance notice to the individual, not later than 90 days

18 prior to the first month for which such individual will be19 come ineligible for aid under part A by reason of such

20 time limit. The State agency shall evaluate the individual’s

21 progress under the employability plan, determine whether

22 any extensions (as allowed under section 417) are nec23 essary and available, and advise the individual about the

24 job search requirement (described in paragraph (2)) and

25 the steps that must be taken thereafter to register for the
26

•S 2224 IS

1 program under part G. If a meeting is held with the indi2 vidual in connection with a redetermination of eligibility,

3 periodic assessment, or for any other purpose, within the

4 6-month period preceding the first month of ineligibility

5 by reason of section 417, the State agency may take the

6 steps required by this paragraph at such meeting in satis7 faction of this requirement.

8 ‘‘(2) Not later than 45 days prior to the close of the

9 twenty-fourth month of receipt of aid under part A (or,

10 at the option of the State, at an earlier date after the

11 twenty-first month of receipt of such aid), the individual

12 shall be required to engage in job search to the extent

13 consistent with the goals of such individual’s employability

14 plan. Engaging in job search for the period of time re15 quired by the State under the preceding sentence shall be

16 a prerequisite to receipt of a work assignment under the

17 WORK program established and operated under part G.

18 For purposes of this subparagraph, ‘month of receipt of

19 aid under part A’ shall not include any month prior to

20 the first month in which this subparagraph was in effect.

21 ‘‘(3) References to applicants, or to actions that must

22 occur at the time of application or from the earliest date

23 for which payment is made, in the amendments made by

24 this section, shall be construed to include references to re25 cipients, and actions that must occur at the time of the
27

•S 2224 IS

1 first redetermination of eligibility by a State for aid to

2 families with dependent children occurring after the effec3 tive date of such amendments in such State.’’.

4 SEC. 103. AMENDMENTS PERTAINING TO SERVICES AND

5 ACTIVITIES UNDER JOBS PROGRAM

6 (a) REPEAL OF REDUNDANT PROVISION.—Section

7 482(c) of this Act is amended by repealing paragraph (5).

8 (b) REQUIREMENT TO PROVIDE JOB SEARCH SERV9 ICES.—Section 482(d)(1)(A) of the Act is amended—

10 (1) in clause (i), by redesignating subclauses (I)

11 through (IV) as (II) through (V), respectively,

12 (2) by inserting before subclause (II) (as redes13 ignated) the following:

14 ‘‘(I) group and individual job

15 search as described in subsection

16 (g);’’, and

17 (3) in clause (ii), by repealing subclause (I) and

18 redesignating subclauses (II) through (IV) as

19 subclauses (I) through (III), respectively.

20 (c) EMPLOYMENT-ORIENTED EDUCATION.—Section

21 482(d)(1)(A)(i)(II) of the Act as redesignated is amended

22 by striking out ‘‘basic and remedial education to achieve

23 a basic literary level’’ and inserting in lieu thereof ‘‘em24 ployment-related education to achieve literacy levels need25 ed for economic self-sufficiency’’.
28

•S 2224 IS

1 (d) SELF-EMPLOYMENT PROGRAMS.—Section

2 482(d)(1)(A)(ii) of the Act (as redesignated) is amend3 ed—

4 (1) by striking out ‘‘and’’ after clause (II) (as

5 redesignated),

6 (2) by adding ‘‘and’’ after clause (III), and

7 (3) by adding after and below clause (III) (as

8 redesignated), the following:

9 ‘‘(IV) programs to prepare for

10 self-employment or to enable individ11 uals to establish a microenterprise.’’.

12 (e) CHILD CARE PROVIDER TRAINING AND NON13 TRADITIONAL EMPLOYMENT.—Section 482(d)(1)(B) of

14 the Act is amended by adding at the end thereof the fol15 lowing new sentence: ‘‘The State shall include in its plan

16 a description of whether and how it will provide training

17 to prepare individuals to be child care providers. The State

18 shall also include in its plan a description of the steps it

19 will take to encourage the training and placement of par20 ticipants in nontraditional positions of employment, in21 cluding steps to increase program participants’ awareness

22 of the availability of such training and placement opportu23 nities.’’.

24 (f) WORK SUPPLEMENTATION EXTENSION.—Section

25 482(e) of the Act (as redesignated) is amended—
29

•S 2224 IS

1 (1) in paragraph (2)(G)—

2 (A) by striking out ‘‘9 months’’ and insert3 ing in lieu thereof ‘‘12 months’’, and

4 (B) by striking out ‘‘without regard to the

5 provisions of subparagraph (b)(ii)(II) of such

6 section’’, and

7 (2) in paragraph (4)(A), striking out ‘‘9

8 months’’ and inserting in lieu thereof ‘‘12

9 months’’.

10 (g) AMENDMENTS TO JOB SEARCH PROGRAM.—Sec11 tion 482(g) of the Act is amended—

12 (1) in paragraph (1) by striking out ‘‘may’’ and

13 inserting in lieu thereof ‘‘shall’’;

14 (2) by amending so much of paragraph (2) as

15 precedes subparagraph (A) to read as follows:

16 ‘‘(2) The State agency may require job search

17 by an individual who is applying for and shall upon

18 approval of the application require job search by an

19 individual who is receiving aid to families with de20 pendent children and is determined by the State to

21 have non-negligible work experience, or to have a

22 high school diploma or equivalent, including individ23 uals required by the State’s exercise of its option

24 under section 402(a)(19)(B) (i) and (ii) to partici25 pate in the program under this part—’’;
30

•S 2224 IS

1 (3) in paragraph (2)(A), by striking out ‘‘8

2 weeks’’ and inserting in lieu thereof ‘‘12 weeks’’;

3 and

4 (4) by amending paragraph (2)(B) to read as

5 follows:

6 ‘‘(B) at such time or times thereafter as

7 the State agency many determine, but not to

8 exceed a total of 4 months in any 12-month pe9 riod (and for this purpose, there shall be in10 cluded the time that the individual engaged in

11 job search pursuant to both subparagraph (A)

12 and section 482(c), but not any period of job

13 search that occurred at the same time that the

14 individual was participating in another activity

15 under this part.’’.

16 (h) PROCEDURES TO RESOLVE DISPUTES.—Section

17 482(h) of the Act is amended by striking out ‘‘shall estab18 lish’’ and all that follows down to ‘‘shall provide an oppor19 tunity for a hearing’’ and inserting in lieu thereof ‘‘shall

20 establish either (A) a conciliation procedure, meeting

21 standards established by the Secretary, for the resolution

22 of disputes involving an individual’s participation in the

23 program, or (B) a procedure that includes advance notice

24 to the individual of an apparent failure to comply with

25 a program requirement, and 10 days in which to contact
31

•S 2224 IS

1 and meet with a State agency representative in order to

2 resolve the dispute (or to comply with the requirements)

3 and make unnecessary the imposition of a sanction. If the

4 dispute is not resolved through whichever of these proce5 dures the State adopts, the State agency’’.

6 (i) COORDINATION REQUIREMENTS.—Section

7 483(a)(1) of the Act is amended by inserting immediately

8 following ‘‘the Job Training Partnership Act’’ in the first

9 sentence’’, the Adult Education Act, the Carl D. Perkins

10 Vocational and Applied Technology Education Act

11 Amendments of 1990,’’.

12 (j) PROVISIONS GENERALLY APPLICABLE TO PROVI13 SION OF SERVICES UNDER JOBS AND WORK.—Section

14 484 of the Act, including the heading, is amended to read

15 as follows:

16 ‘‘PROVISIONS GENERALLY APPLICABLE TO PROVISION OF

17 SERVICES UNDER JOBS OR WORK

18 ‘‘Sec. 484. (a) In assigning participants in the pro19 gram under this part to any program activity, or in assign20 ing individuals registered with the program under part G

21 to a position of employment, the State agency shall assure

22 that—

23 ‘‘(1) each assignment takes into account the ca24 pacity, health and safety, family responsibilities, and

25 place of residence of the participant;
32

•S 2224 IS

1 ‘‘(2) no participant will be required, without his

2 or her consent, to travel an unreasonable distance

3 from his or her home or remain away from such

4 home overnight;

5 ‘‘(3) individuals are not discriminated against

6 on the basis of race, color, sex, national origin, reli7 gion, age, or disability, and all participants will have

8 such rights as are available under any applicable

9 Federal, State, or local law prohibiting discrimina10 tion;

11 ‘‘(4) no such assignment will—

12 ‘‘(A) result in the displacement of any cur13 rently employed worker, including partial dis14 placement such as a reduction in the hours of

15 non-overtime work, wages, or employment bene16 fits;

17 ‘‘(B) impair existing contracts for services

18 or collective bargaining agreements;

19 ‘‘(C) infringe upon the promotional oppor20 tunities of any currently employed worker;

21 ‘‘(D) result in the employment of the par22 ticipant or filling of a position when—

23 ‘‘(i) any other person is on layoff, on

24 strike or has been locked out from, or has

25 recall rights to, the same or a substantially
33

•S 2224 IS

1 equivalent job or position with the em2 ployer; or

3 ‘‘(ii) the employer has terminated any

4 regular employee or otherwise reduced its

5 workforce with the effect of filling the va6 cancy so created with such participant; or

7 ‘‘(E) result in filling a vacancy for a posi8 tion in a State or local government agency for

9 which State or local funds have been budgeted,

10 unless such agency has been unable to fill such

11 vacancy with a qualified applicant through such

12 agency’s regular employee selection procedure

13 during a period of not less than 60 days;

14 ‘‘(5) no participant shall be assigned to a posi15 tion to perform work under a contract for services

16 for the first 90 days after the commencement of

17 such contract if such contract immediately succeeds

18 a contract for services under which an employee cov19 ered by a collective bargaining agreement performed

20 the same or substantially similar work for another

21 employer;

22 ‘‘(6) no participant shall be assigned to a posi23 tion with a private nonprofit entity to carry out ac24 tivities that are the same or substantially equivalent

25 to activities that have been regularly carried out by
34

•S 2224 IS

1 a State or local government agency in the same local

2 area, unless such placement meets the

3 nondisplacement requirements of paragraph (4);

4 ‘‘(7) to the extent that a State workers’ com5 pensation law is applicable, workers’ compensation

6 benefits in accordance with such law shall be avail7 able with respect to injuries suffered by participants,

8 and, to the extent that such law is not applicable,

9 participants shall be provided with medical and acci10 dent protection for on-site injuries in accordance

11 with regulations issued by the Secretary;

12 ‘‘(8) health and safety standards established

13 under State and Federal law that are otherwise ap14 plicable to the working conditions of employees shall

15 be equally applicable to the working conditions for

16 participants; and

17 ‘‘(9) the State will establish and maintain griev18 ance procedures, meeting the requirements of sub19 section (c), for resolving complaints by regular em20 ployees or their representatives alleging violations of

21 the nondisplacement provisions described in para22 graph (4), or of the requirements relating to wages,

23 benefits and working conditions under this title.
35

•S 2224 IS

1 ‘‘(b) A grievance procedure that meets the require2 ments of this subsection must include the following proce3 dures:

4 ‘‘(1) DEADLINES.—Hearings on any grievance

5 filed pursuant to subsection (a)(8) shall be con6 ducted within 30 days of the filing of such grievance

7 and a decision shall be made not later than 60 days

8 after the filing of such grievance. A grievance shall

9 be made not later than 45 days after the date of the

10 alleged occurrence.

11 ‘‘(2) APPEALS.—Upon receiving a decision

12 under paragraph (1), or if 60 days has elapsed with13 out a decision being made, a grievant may either—

14 ‘‘(A) file an appeal as provided for in the

15 State’s procedures or in regulations promul16 gated by the Secretary, or

17 ‘‘(B) submit such grievance to binding ar18 bitration in accordance with paragraph (3).

19 ‘‘(3) ARBITRATION.—

20 ‘‘(A) IN GENERAL.—

21 ‘‘(i) JOINTLY SELECTED ARBITRA22 TOR.—In accordance with paragraph (2)

23 on the occurrence of an adverse grievance

24 decision, or 60 days after the filing of such

25 grievance if no decision has been reached,
36

•S 2224 IS

1 the party filing the grievance shall be per2 mitted to submit such grievance to binding

3 arbitration before a qualified arbitrator

4 who is jointly selected and independent of

5 the interested parties.

6 ‘‘(ii) IMPASSE PROCEDURES.—If the

7 parties are unable to agree on an arbitra8 tor within 20 days from when the request

9 for arbitration is filed, the parties shall re10 quest the Federal Mediation and Concilia11 tion Service or the American Arbitration

12 Association to submit a list of arbitrations.

13 The parties shall alternately strike names

14 from such list until the name of one person

15 remains, who shall be the arbitrator.

16 ‘‘(B) DEADLINES.—An arbitration pro17 ceeding conducted pursuant to subparagraph

18 (A)(i) shall be held not later than 45 days after

19 the request for such arbitration, or if the arbi20 trator is appointed pursuant to paragraph

21 (A)(ii), not later than 30 days after such ap22 pointment, and a decision concerning such

23 grievance shall be made not later than 30 days

24 after the date of such arbitration proceeding.

25 ‘‘(C) COST.—
37

•S 2224 IS

1 ‘‘(i) IN GENERAL.—The cost of the

2 arbitration proceeding conducted under

3 this subsection shall be divided evenly be4 tween the parties to the arbitration.

5 ‘‘(ii) EXCEPTION.—If a grievant pre6 vails under the arbitration proceeding con7 ducted under this subsection, the party

8 found in violation of the requirements of

9 this part shall pay the total cost of such

10 proceeding and the attorney’s fees of the

11 grievant.

12 ‘‘(D) ENFORCEMENT.—Suits to enforce ar13 bitration awards under this subsection may be

14 brought in any district court of the United

15 States having jurisdiction over the parties, with16 out regard to the amount in controversy and

17 without regard to the citizenship of the parties.

18 ‘‘(4) REMEDIES.—Remedies for a grievance

19 filed under this subsection include—

20 ‘‘(A) suspension of payments to employers;

21 ‘‘(B) the termination of such payments;

22 ‘‘(C) the prohibition of the placement of a

23 participant;
38

•S 2224 IS

1 ‘‘(D) reinstatement of a displaced employee

2 to the position held by such employee prior to

3 displacement;

4 ‘‘(E) payment of lost wages and benefits of

5 the displaced employee;

6 ‘‘(F) reestablishment of other relevant

7 terms, conditions, and privileges of the dis8 placed employee; and

9 ‘‘(G) such equitable relief as is necessary

10 to correct a violation or to make a displaced

11 employee whole.

12 ‘‘(c) WRITTEN NOTIFICATION OF LABOR ORGANIZA13 TIONS.—

14 ‘‘(1) No position of employment with an em15 ployer may be established under title part unless the

16 local labor organization representing employees of

17 such employer who are engaged in the same or sub18 stantially similar work as that proposed to be car19 ried out under such position have been provided

20 written notification of the initial assignment of a

21 participant to such position not less than 30 days

22 prior to the commencement of such assignment. No

23 such notification shall be required with respect to

24 the subsequent assignment of participants to the

25 same position with the same employer.
39

•S 2224 IS

1 ‘‘(2) If a local organization provided notice of

2 an assignment pursuant to paragraph (1) objects to

3 an assignment of a participant pursuant to para4 graph (1) objects to an assignment of a participant

5 on the basis that such assignment would violate the

6 requirements relating to nondisplacement, wages,

7 benefits, or working conditions under this title, such

8 organization may, as an alternative to the grievance

9 procedures provided pursuant to subsection (b), file

10 a complaint pursuant to an expedited grievance pro11 cedure. Such expedited procedure shall be carried

12 out in accordance with the binding arbitration proce13 dures described in subsection (b)(3), except that—

14 ‘‘(A) the request for arbitration shall be

15 filed within 30 days of receiving written notice,

16 ‘‘(B) the arbitrator shall be jointly selected

17 by the parties not later than 10 days after the

18 request for arbitration, or, if the parties are un19 able to agree, appointed by the Federal Medi20 ation and Conciliation Service (or another en21 tity is agreed to by both parties) not later than

22 15 days after the request for arbitration, and

23 ‘‘(C) the proceeding shall be conducted and

24 a decision issued not later than 30 days after

25 the request for arbitration.
40

•S 2224 IS

1 ‘‘(3) If a local organization files a complaint

2 pursuant to the expedited grievance procedure under

3 paragraph (2), a participant shall not be placed in

4 the position that is the subject of the complaint until

5 it is determined pursuant to the expedited procedure

6 that such placement would not be in violation of this

7 title.

8 ‘‘(d) In assigning participants in the JOBS program

9 under this part to any program activity, the State agency

10 shall, in addition to the assurances required under sub11 section (a), assure that—

12 ‘‘(1) the conditions of participation are reason13 able, taking into account in each case the experience

14 and proficiency of the participant and the child care

15 and other supportive services needs of the partici16 pant; and

17 ‘‘(2) each assignment is based on available re18 sources, the participant’s circumstances, and local

19 employment opportunities.

20 ‘‘(e) In assigning individuals registered with the

21 State’s WORK program under part G to a position of em22 ployment, the State agency shall, in addition to the assur23 ance required under subsection (a), assure that—

24 ‘‘(1) no individual eligible to register for the

25 State’s WORK program, determined in accordance
41

•S 2224 IS

1 with the provisions of part A and this part, shall be

2 excluded from such program;

3 ‘‘(2) no family with a member eligible to par4 ticipate in the State’s program under part G will, by

5 reason of such assignment, and upon participating

6 the full number of hours provided by such assign7 ment, have income less than the amount such family

8 would have if it were receiving aid under the State’s

9 plan approved under part A and had no other in10 come (except if a sanction is applied under section

11 496(f));

12 ‘‘(3) each family with a member participating in

13 the program under part G shall be considered to be

14 receiving aid to families with dependent children for

15 purpose of the State’s plan approved under title

16 XIX;

17 ‘‘(4) where a labor organization represents a

18 substantial number of employees who are engaged in

19 similar work in the same area as that proposed to

20 be funded under part G, an opportunity shall be pro21 vided for such organization to submit comments with

22 respect to such proposal;

23 ‘‘(5) participants employed under the WORK

24 program shall be compensated for such employment
42

•S 2224 IS

1 in accordance with appropriate law, but in no event

2 at a rate less than the highest of—

3 ‘‘(A) the Federal minimum wage rate spec4 ified in section 6(a)(1) of the Fair Labor

5 Standards Act of 1938;

6 ‘‘(B) the rate specified by the appropriate

7 State or local minimum wage law; or

8 ‘‘(C) the rate paid to employees of the

9 same employer performing the same type of

10 work and having similar employment tenure

11 with such employer; and

12 ‘‘(6) except as otherwise provided under this

13 paragraph, participants employed under the WORK

14 program shall be provided benefits (including health

15 benefits, unless the State agency concludes that it

16 would impose an undue financial burden on either

17 the employer or the State), working conditions and

18 rights at the same level and to the same extent as

19 other employees of the same employer performing

20 the same type of work and having similar employ21 ment tenure with employer.

22 ‘‘(f) Funds available to carry out the program under

23 this part, or under part G, may not be used to assist, pro24 mote, or deter union organizing.
43

•S 2224 IS

1 ‘‘(g) The provisions of this section apply to any work2 related programs and activities under this part or under

3 part G (as provided herein), and under any other work4 related programs and activities authorized (in connection

5 with the AFDC program) under section 1115.’’.

6 SEC. 104. TWENTY-FOUR MONTH LIMIT.

7 Part A of title IV of the Social Security Act is amend8 ed by redesignating section 417 as section 419 and adding

9 after and below section 416 the following new section:

10 ‘‘SEC. 417. TWENTY-FOUR MONTH LIMIT.

11 ‘‘(a) LIMITATION.—(1) IN GENERAL.—Notwith12 standing any other provision of law, a State plan approved

13 under this part must provide that, except as otherwise pro14 vided in this title, aid to families with dependent children

15 will not be payable to an individual to whom section

16 402(a)(19)(B) (i) or (ii) applies or to individuals who have

17 choses to participate in the program under part F and

18 to whom the State has elected under section

19 402(a)(19)(C) to apply this section, or to his or her de20 pendent child or children living in the same home with

21 such individual for any month after the twenty-fourth

22 month (whether or not such months are consecutive) for

23 which such individual has, together with his or her de24 pendent child or children, received aid under the State’s

25 plan, or under the plan of any other State, approved under
44

•S 2224 IS

1 this part. The limitation in the preceding sentence shall

2 not apply to (A) an individual who has received such aid

3 for 24 months and who is working to the extent described

4 in clause (IV) or (V) of paragraph (2)(B)(i), whichever

5 may be applicable, or (B) an individual’s dependent child

6 or children if they are living with another relative specified

7 in section 406(a)(1) who is not subject to, or has not re8 ceived aid for months in excess of, the limit prescribed

9 by, this section.

10 ‘‘(2) APPLICABILITY.—In applying paragraph (1)—

11 ‘‘(A) if an individual has previously received aid

12 under a State plan approved under this part for

13 more than 18 months, the number of months for

14 which an individual is considered to have previously

15 been paid aid under such a State plan shall be re16 duced by one month for every period of four months

17 throughout which no such aid was paid, and no

18 wages under the program under part G were paid

19 but such number of months shall never be reduced

20 to fewer than 18 (regardless of whether such periods

21 of four months were consecutive); and

22 ‘‘(B)(i) there shall not be included, as a month

23 in which an individual received aid under a State

24 plan approved under this part—
45

•S 2224 IS

1 ‘‘(I) any month prior to the first month for

2 which this section is in effect in such State, or

3 in the case of a recipient of aid in such State

4 for the month preceding such month, the first

5 month in which such individual’s eligibility is

6 redetermined by such State;

7 ‘‘(II) any month prior to the first month in

8 which payment of aid under this part was au9 thorized with respect to such individual;

10 ‘‘(III) any month prior to the month in

11 which such individual attains age eighteen;

12 ‘‘(IV) any month during which the individ13 ual worked 20 hours a week (or such greater

14 number, but not more than 30, as the State

15 plan under part F provides) or more;

16 ‘‘(V) any month during which the total av17 erage number of hours worked per week by

18 both parents, in a family eligible by reason of

19 section 407 and in which section 402(a)(19)(D)

20 is applicable to neither parent, exceeds 30 hours

21 (or such greater number, but not more than 40,

22 as the State plan under part F provides); or

23 ‘‘(VI) any month during which section

24 402(a)(19)(D) was applicable to such individ25 ual; and
46

•S 2224 IS

1 ‘‘(ii) there shall be included each month for

2 which aid would have been paid but for the applica3 bility to such individual of a sanction under section

4 402(a)(19)(G) or 402(a)(26).

5 For purposes of clauses (i)(IV) and (V), there shall not

6 be excluded any month in which the individual fails to ac7 cept an offer of additional hours of employment, or in

8 which such individual reduces the hours of employment

9 and thereby becomes eligible for additional amounts of aid

10 under this part.

11 ‘‘(b) NOTICE TO INDIVIDUALS.—A State plan ap12 proved under this part shall provide that notice will be

13 given to each member of a family to whom the time limit

14 under subsection (a) applies, not less frequently than once

15 every six months, concerning the number of months of eli16 gibility remaining for each such member. The notice re17 quired by this subsection may be given together with the

18 payment of aid.

19 ‘‘(c) EXTENSION OF LIMIT.—

20 ‘‘(1) EXTENSION BY REASON OF FAILURE TO

21 PROVIDE SERVICES.—The State agency shall extend

22 the twenty-four-month limit referred to in subsection

23 (a) in the case of an individual who has been unable

24 to complete the education, training, or other activi25 ties intended to prepare such individual for employ-
47

•S 2224 IS

1 ment by reason of the substantial failure of the

2 State agency to provide or arrange for the provision

3 of child care or any other service agreed upon in the

4 individual’s employability plan. A finding of failure

5 to provide services shall be based on the documenta6 tion made at the semi-annual assessment (required

7 by section 482(a)(5)), together with any reports or

8 information either the individual or the State agency

9 may have with respect to the period between the as10 sessment and the close of the twenty-fourth month.

11 The time limit shall be extended for so many months

12 as are necessary to allow the individual to complete

13 the activities agreed upon in the employability plan,

14 but in no event may such extension exceed an addi15 tional 24 months.

16 ‘‘(2) EXTENSION TO COMPLETE COURSE OF

17 EDUCATION.—

18 ‘‘(A) The State agency shall extend the

19 twenty-four-month limit referred to in sub20 section (a)—

21 ‘‘(i) in the case of an individual re22 ceiving services under the Individuals with

23 Disabilities Education Act, for so long as

24 necessary to permit such individual to at25 tain a high school education (or the equiv-
48

•S 2224 IS

1 alent) or, if sooner, until such individual

2 reaches age 22; and

3 ‘‘(ii) in the case of an individual in a

4 structured learning program (as defined in

5 paragraph (4)), including a program under

6 the School-to-Work Opportunities Act of

7 1993, for so long as necessary to permit

8 such individual to complete the program

9 or, if sooner, until such individual reaches

10 age 22.

11 ‘‘(B) Subject to subsection (e), the State

12 agency may extend the twenty-four-month limit

13 referred to in subsection (a)—

14 ‘‘(i) for no more than 12 additional

15 months in order to allow an individual to

16 complete high school (or an equivalent pro17 gram of education), so long as the individ18 ual is making satisfactory progress toward

19 obtaining a high school diploma (or equiva20 lent);

21 ‘‘(ii) for no more than 24 additional

22 months in order to allow an individual to

23 complete a post-secondary program so long

24 as the individual is enrolled in a work25 study program, or is employed at least 15
49

•S 2224 IS

1 hours per week, and is making satisfactory

2 progress toward completing a degree-grant3 ing or certificate-granting education or

4 training program, or structured

5 microenterprise or self-employment pro6 gram likely to improve the individual’s eco7 nomic self-sufficiency; or

8 ‘‘(iii) for such additional number of

9 months as it finds appropriate in any case,

10 determined on an individual basis, where

11 such extension is necessary to afford an in12 dividual with significant learning disabil13 ities or other substantial barriers to em14 ployment additional time to obtain the re15 medial education, job skills training, or

16 other services specified in the employability

17 plan needed to enable the individual to se18 cure employment.

19 ‘‘(3) EXTENSION OF EMPLOYABILITY PLAN.—

20 The State agency shall extend, and if appropriate re21 vise, the employability plan of each individual with

22 respect to whom an extension is provided under this

23 subsection, and shall continue to furnish, through

24 the months of the extension, the supportive services

25 for which the extended plan provides.
50

•S 2224 IS

1 ‘‘(4) As used in this subsection, a ‘structured

2 learning program’ means one that begins at the sec3 ondary school level, continues into a post-secondary

4 program, and is designed to lead to a degree or rec5 ognized skills certificate.

6 ‘‘(d) EXCEPTION FOR TRANSITION TO

7 UNSUBSIDIZED EMPLOYMENT.—The State may, at its op8 tion, provide for continuing for one additional month the

9 payment of aid to an individual (and his or her dependent

10 child or children) under the State plan, notwithstanding

11 subsection (a), in any case where such continued payment

12 is necessary to assist the individual who is about to com13 mence a position of employment (other than as a partici14 pant in the program under part G) until receipt of the

15 first payment of wages. The State plan shall describe the

16 evidence of employment that the State will require in order

17 that payment may be continued under this subsection.

18 ‘‘(e) LIMITATION ON AVERAGE MONTHLY NUMBER

19 OF EXTENSIONS.—If the average monthly number of indi20 viduals with respect to whom the State has extended the

21 twenty-four month limit by application of subsection (c)(1)

22 or (c)(2)(B) in any fiscal year exceeds 10 percent of the

23 average monthly number of individuals to whom this sec24 tion applies (and who are required to participate in the

25 program under part F) in the fiscal year involved, the pro-
51

•S 2224 IS

1 visions of section 403(k)(6) (reducing Federal payments

2 under section 403(a)) shall apply, unless the Secretary,

3 upon a showing by the State of extraordinary or unfore4 seeable circumstances, allows the application of such sub5 sections to a greater number of individuals for a specified

6 period of time.

7 ‘‘(f) ALTERNATIVE TIME LIMIT DEMONSTRA8 TIONS.—Notwithstanding any other provision of this part,

9 the Secretary may permit not more than five States to

10 conduct demonstrations to determine what effects, if any,

11 application of time limits of other than twenty-four

12 months would have in promoting the objectives of the part.

13 The Secretary shall approve a demonstration only if the

14 proposed time limit is consistent with both the purpose

15 of making AFDC a transitional program and affording re16 cipients with support to enable them to prepare themselves

17 to obtain unsubsidized employment. Any State applying

18 a time limit other than that specified in subsection (a)

19 shall evaluate both the short and long term effects of such

20 time limit in enabling recipients to become self-sufficient

21 and shall report the results of such evaluation to the Sec22 retary.’’.
52

•S 2224 IS

1 SEC. 105. RESPONSIBILITIES OF ASSISTANT SECRETARY

2 FOR FAMILY SUPPORT.

3 Section 419 of the Act, as redesignated by section

4 104 of this Act, is amended by striking out ‘‘and part F’’

5 and inserting in lieu thereof ‘‘part F, and part G’’.

6 TITLE II—WORK

7 SEC. 201. ESTABLISHMENT OF PROGRAM.

8 (a) Title IV of the Act is amended by adding at the

9 end thereof the following new part:

10 ‘‘PART G—WORK

11 ‘‘SEC. 491. PURPOSE AND DEFINITIONS.

12 ‘‘(a) PURPOSE.—It is the purpose of this part to as13 sist States in developing and providing positions of em14 ployment for individuals who have received aid to families

15 with dependent children for 24 months, and participated

16 in the program under part F, but have not been able to

17 secure unsubsidized employment.

18 ‘‘(b) DEFINITION.—As used in this part, a ‘WORK

19 position’ is a position of employment to which an individ20 ual is assigned under this part.

21 ‘‘SEC. 492. ESTABLISHMENT AND OPERATION OF STATE

22 PROGRAMS.

23 ‘‘(a) REQUIREMENT.—Each State shall establish and

24 operate a program to locate and create temporary posi25 tions of employment (in this part referred to as the

26 ‘WORK program’) for individuals who have received aid
53

•S 2224 IS

1 for 24 months, as provided in section 417. The WORK

2 program shall be in effect in each political subdivision of

3 the State not later than 2 years after the State’s program

4 under part F is in effect in such subdivision.

5 ‘‘(b) STATE PLAN.—The State shall establish and op6 erate its WORK program under a plan approved by the

7 Secretary which describes how the State will implement

8 the plan, and indicates, through cross-references to the ap9 propriate provisions of this part and of parts A and F,

10 that the program will be operated in accordance with such

11 provisions of law. The State plan shall describe the strate12 gies and activities to be undertaken by the State to iden13 tify and develop WORK positions. Such strategies shall,

14 to the extent practicable, be designed to identify and de15 velop positions likely to result in the placement of partici16 pants in unsubsidized employment. The strategies and ac17 tivities may include—

18 ‘‘(1) wage subsidies or other incentives to for19 profit, nonprofit, and public employers to employ

20 participants;

21 ‘‘(2) performance-based contracts with public or

22 nonprofit or other private organizations to place par23 ticipants in unsubsidized employment;
54

•S 2224 IS

1 ‘‘(3) payments to nonprofit employers to assist

2 in supervising participants employed by such em3 ployers;

4 ‘‘(4) assistance to participants in establishing

5 microenterprises and other self-employment efforts;

6 ‘‘(5) payments to nonprofit employers and pub7 lic agencies to employ participants in temporary

8 projects designed to address community needs, such

9 as projects to enhance neighborhood infrastructure

10 and provide other community services; and

11 ‘‘(6) payments to employers to employ partici12 pants as child care providers.

13 ‘‘(c) COORDINATION WITH JOB OPPORTUNITIES AND

14 BASIC SKILLS TRAINING PROGRAM.—The State plan sub15 mitted to the Secretary to carry out the requirements of

16 this part shall, together with the State plan required to

17 carry out part F, constitute a single plan and shall, to

18 the maximum extent feasible, reflect an integrated strat19 egy to assist the individuals and families served under the

20 plan to achieve economic self-sufficiency.

21 ‘‘(d) WORK ADVISORY BOARDS.—

22 ‘‘(1) DESIGNATION.—The State plan shall des23 ignate, or describe a process for establishing or des24 ignating, a WORK advisory board for each local

25 area in the State to provide advice and guidance in
55

•S 2224 IS

1 the administration of the program under this part.

2 The State shall ensure the participation of local

3 elected officials in the designation or establishment

4 of such boards.

5 ‘‘(2) LOCAL AREA.—The local areas for which

6 WORK advisory boards shall be designated or estab7 lished pursuant to paragraph (1) may be—

8 ‘‘(A) service delivery areas established

9 under section 101 of the Job Training Partner10 ship Act;

11 ‘‘(B) the geographic boundaries of the

12 labor market areas in the State; or

13 ‘‘(C) such other areas as the Governor de14 termines are appropriate to promote the effec15 tive administration of the WORK program.

16 ‘‘(3) COMPOSITION.—Each WORK advisory

17 board designated or established pursuant to para18 graph (1) shall consist of—

19 ‘‘(A) representatives of private sector em20 ployers,

21 ‘‘(B) representatives of organized labor;

22 ‘‘(C) representatives of not-for-profit orga23 nizations, including community-based organiza24 tions;
56

•S 2224 IS

1 ‘‘(D) representatives of local government,

2 such as local, elected officials and representa3 tives of economic development agencies, human

4 service agencies, and educational agencies; and

5 ‘‘(E) such other community leaders as the

6 State determines are appropriate.

7 ‘‘(4) FUNCTIONS.—Each WORK advisory board

8 shall provide comments to the State agency relating

9 to the State plan developed pursuant to subsection

10 (b) of this section. In addition, each WORK advisory

11 board shall provide advice and guidance to the agen12 cy administering the WORK program in the local

13 area relating to—

14 ‘‘(A) the identification of potential WORK

15 positions;

16 ‘‘(B) opportunities for placing WORK par17 ticipants in unsubsidized employment;

18 ‘‘(C) methods for ensuring compliance with

19 the requirements of this part relating to

20 nondisplacement and working conditions;

21 ‘‘(D) methods for carrying out the coordi22 nation requirements specified in subsection (e)

23 of this section; and
57

•S 2224 IS

1 ‘‘(E) such other aspects of the WORK pro2 gram that such board determines are appro3 priate.

4 ‘‘(e) COORDINATION WITH OTHER PROGRAMS AND

5 ENTITIES.—

6 ‘‘(1) IN GENERAL.—The State plan shall in7 clude a description of the cooperative arrangements

8 established with appropriate programs and agencies

9 to enhance the administration of the program under

10 this part, including arrangements with—

11 ‘‘(A) the Employment Service, and

12 ‘‘(B) other relevant employment and public

13 service programs administered through public

14 and private entities, such as programs sup15 ported under the Job Training Partnership Act

16 and the National and Community Service Act

17 and with programs under the CCDBG Act to

18 explore the development of positions in child

19 care for WORK program participants.

20 ‘‘(2) LOCAL COORDINATION.—The entity ad21 ministering the WORK program in local areas shall,

22 in addition to establishing linkages with the pro23 grams and agencies described in paragraph (1), es24 tablish cooperative arrangements with other appro25 priate entities to enhance the administration of the
58

•S 2224 IS

1 program under this part. Such arrangements may be

2 established with local government and service agen3 cies, public housing agencies, community-based orga4 nizations, business and labor organizations, vol5 untary organizations, and other appropriate entities.

6 ‘‘SEC. 493. ELIGIBILITY FOR WORK PROGRAM; REGISTRA7 TION.

8 ‘‘(a) ELIGIBILITY.—(1) IN GENERAL.—An individ9 ual—

10 ‘‘(A) to whom section 417 applies, who has re11 ceived aid under the State plan approved under part

12 A for twenty-four months, and with respect to whom

13 no extension under section 417 has been provided,

14 ‘‘(B) who is not an individual to whom section

15 402(a)(19)(D) applies, and

16 ‘‘(C) who meets the eligibility criteria for aid to

17 families with dependent children (but for section

18 417) under the State’s plan approved under part A,

19 shall be permitted to register for participation in the

20 State’s WORK program and, upon registration and con21 tinuing compliance with the requirements applicable to in22 dividual’s awaiting assignment to a WORK position, be

23 eligible for such an assignment and, in accordance with

24 the succeeding provisions of this part, a payment of aid

25 to families with dependent children.
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1 ‘‘(2) SPECIAL RULES.—The State plan shall specify

2 whether one or both parents will be required to register

3 with and participate in the WORK program as a condition

4 of eligibility for an assignment for either parent under the

5 WORK program and a payment of aid to the family, in

6 the case of a family in which both parents are subject to

7 the limit in section 417.

8 ‘‘(b) REGISTRATION.—The State plan shall establish

9 a simple procedure under which an individual who meets

10 the criteria of subsection (a) may register with and partici11 pate in the WORK program so that the individual will re12 ceive wages (if an appropriate assignment is available) or

13 aid, or (if applicable) both, in the month following the final

14 month of the time limit under section 417. The State plan

15 must describe the methods that will be employed to assure

16 the uninterrupted provision of aid for the family of an in17 dividual who has complied with all applicable requirements

18 and conditions of this part.

19 ‘‘(c) WORK PROGRAM ASSESSMENT.—The State plan

20 shall provide for the prompt assessment of each individual

21 registering with the program, in order to determine an ap22 propriate assignment for such individual. The assessment

23 must include a review of the individual’s education, train24 ing, and employment experience while participating in the
60

•S 2224 IS

1 program under part F, as well as any employment experi2 ence the individual may have had thereafter.

3 ‘‘(d) LIMITATIONS ON ASSIGNMENTS.—

4 ‘‘(1) HOURS OF WORK.—The State plan shall—

5 ‘‘(A) ensure, to the extent practicable, that

6 participants’ wages earned from WORK posi7 tions provide on the average 75 percent of the

8 sum of wages together with aid paid to partici9 pants in the States WORK program;

10 ‘‘(B) ensure no assignment will result in

11 an average number of hours of work over any

12 four-week period that is less than 15 hours per

13 week or greater than 35 hours per week; and

14 ‘‘(C) provide that in making WORK as15 signments the State agency shall, to the maxi16 mum extent feasible, ensure that an assignment

17 to a WORK position will not interfere with any

18 hours of unsubsidized employment in which the

19 individual is already engaged at the time of the

20 assignment.

21 ‘‘(2) LENGTH OF ASSIGNMENT.—An assign22 ment to a WORK position shall be for no longer

23 than 12 months and may not be reassigned to the

24 same position.
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•S 2224 IS

1 ‘‘(e) PAYMENT OF AID.—The State agency admin2 istering the State’s plan approved under part A shall pay

3 for each month to each family with an individual reg4 istered with the WORK program the amount of aid that

5 would be payable to such family under such plan, except

6 that—

7 ‘‘(1) wages earned by a family member from

8 employment in a WORK position shall not be con9 sidered in determining eligibility for continued par10 ticipation in the WORK program;

11 ‘‘(2) in determining the amount of aid that is

12 payable, the State agency may determine whether to

13 disregard from the wages received from the WORK

14 position any amounts that may be disregarded under

15 section 402(a)(8)(A)(iv); and

16 ‘‘(3) if a family member has been assigned to

17 and is employed in a WORK position, the amount

18 of the family’s aid will not be subject to increase by

19 reason of the individual’s failure to perform the full

20 number of hours per week for which the assignment

21 was made.

22 ‘‘(f) TREATMENT UNDER OTHER LAWS.—

23 ‘‘(1) Individuals participating in the WORK

24 program, and their families, whether or not any aid

25 is payable in addition to wages from a WORK posi-
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1 tion, shall be considered to be receiving such aid for

2 purposes of the State’s plan for medical assistance

3 approved under title XIX.

4 ‘‘(2) Wages paid for employment in a WORK

5 position shall be treated as if they were wages from

6 unsubsidized employment for the purpose of any

7 other Federal law unless it is expressly provided oth8 erwise in Federal law.

9 ‘‘(g) PROGRAM PARTICIPANTS.—The Secretary may

10 by regulation prescribe criteria for determining when an

11 individual’s employment no longer constitutes participa12 tion in the WORK program.

13 ‘‘SEC. 494. PROVISIONS GENERALLY APPLICABLE TO WORK

14 POSITIONS.

15 ‘‘(a) IN GENERAL.—In addition to the applicable pro16 visions of section 484, the conditions described in this sec17 tion shall be applicable to WORK positions.

18 ‘‘(b) PROHIBITION ON CONTRIBUTIONS FOR RETIRE19 MENT BENEFITS.—No funds available under this title

20 may be used for contributions to a retirement plan on be21 half of any participant.

22 ‘‘(c) EXCLUSION FROM UNEMPLOYMENT COMPENSA23 TION.—The employment of participants under the WORK

24 program shall not be subject to the provisions of any Fed25 eral or State unemployment compensation law.
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1 ‘‘(d) SICK AND PERSONAL LEAVE.—The Secretary is

2 authorized to issue regulations establishing a minimum

3 number of hours that a participant may be on leave from

4 a WORK position due to illness or other reasons specified

5 by the Secretary without having the amount of wages pay6 able to such participant reduced to account for such leave.

7 In accordance with paragraph (1) of this subsection, the

8 regulations shall provide that if the employer provides, to

9 similarly situated regular employees, paid leave that is

10 equal to or exceeds the minimum prescribed by the Sec11 retary, the employer shall also provide such paid leave to

12 a participant. If the employer does not provide such paid

13 leave, the State agency shall implement such leave.

14 ‘‘(e) RECORDS ON RETENTION OF PARTICIPANTS.—

15 The entity administering the WORK program shall main16 tain records on the extent to which each employer receiv17 ing assistance under this part retains participants in

18 unsubsidized employment subsequent to the completion of

19 WORK assignments.

20 ‘‘SEC. 495. PRE-ASSIGNMENT ACTIVITIES AND SERVICES;

21 PRIORITY OF ASSIGNMENTS; POST-ASSIGN22 MENT ASSESSMENT

23 ‘‘(a) ASSIGNMENTS.—The State plan approved under

24 this part shall provide for the establishment and mainte25 nance of a registry, updated regularly and frequently, of
64

•S 2224 IS

1 all registered individuals who are awaiting assignment to

2 a WORK position. The State plan shall describe the cri3 teria that will generally be applied for determining the

4 order in which registered individuals will be assigned to

5 positions. Such criteria must provide for assigning, as

6 promptly as an appropriate position becomes available,

7 and individual to whom a sanction is being applied under

8 section 496(f)(2)(A) (in the case of a first failure to com9 ply with a requirement of the WORK program) or who

10 has ended a period of time during which a sanction has

11 been applied under section 496(f)(2) (B), (C), or (D) (in

12 the case of a second or subsequent such failure), and

13 thereafter preference will be given to individuals who have

14 not previously received a WORK assignment during a pe15 riod of consecutive months while registered for the WORK

16 program.

17 ‘‘(b) JOB SEARCH; OTHER WORK PREPARATORY

18 ACTIVITIES.—

19 ‘‘(1)(A) JOB SEARCH.—The State plan under

20 this part shall describe any requirements the State

21 applies to individuals registered for and awaiting as22 signment to a WORK position, including the extent

23 to which the individual must participate in individual

24 or group job search (not to exceed 35 hours per

25 week) and the period for which the job search must
65

•S 2224 IS

1 continue or the number of contacts that must be

2 made, or such other measure as the State finds ap3 propriate.

4 ‘‘(B) The State agency may require an individ5 ual employed in a WORK position or in regular em6 ployment to engage in job search but the number of

7 hours per week of required job search (or of the time

8 needed to comply with the job search requirement if

9 measured differently from hours per week) together

10 with the hours per week for which the individual is

11 employed may not exceed 35.

12 ‘‘(C) The State agency shall require each indi13 vidual who has completed an assignment to perform

14 supervised job search (in accordance with the time

15 limits established under paragraph (1)) while await16 ing another assignment.

17 ‘‘(2) OTHER ACTIVITIES.—If the State requires

18 that an individual registered under this part and

19 awaiting assignment to a WORK position engage in

20 any activities in addition to job search that would

21 prepare the individual to carry out successfully the

22 assignment or otherwise support achievement of the

23 purposes of this part, the State plan shall describe

24 those activities and the maximum periods of time for

25 which they may be required (or other measure that
66

•S 2224 IS

1 the State finds appropriate), which may not exceed

2 35 hours per week.

3 ‘‘(3) CHILD CARE AND OTHER SUPPORTIVE

4 SERVICES.—(A) The State agency shall notify each

5 individual registered with the WORK program of the

6 availability (under sections 402(g) (1) and (2)) of

7 child care and other supportive services necessary to

8 permit the individual to participate successfully in

9 the WORK program (during both a pre-assignment

10 period and a period of employment under the

11 WORK program).

12 ‘‘(B) A State may, at its option, provide child

13 care and other supportive services (and include an

14 appropriate provision in its plan under this part) to

15 an individual employed in a WORK position to en16 able or assist such individual also to engage in edu17 cation or training activities, approved for this pur18 pose by the State agency as likely to enhance such

19 individual’s ability to secure and retain permanent,

20 unsubsidized employment, and if the State chooses

21 to provide any one or more such services under this

22 subparagraph, shall notify all registered individuals

23 who are potentially eligible therefor of the availabil24 ity of such services.
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1 ‘‘(c) COMPREHENSIVE POST-ASSIGNMENT ASSESS2 MENT.—The State agency shall conduct a comprehensive

3 assessment of each individual registered with the WORK

4 program after every second assignment completed by such

5 individual (or of an individual who has been registered for

6 two years). On the basis of this assessment, the State

7 may—

8 ‘‘(1) reassign the individual to activities under

9 section 402(a)(19)(D) or to the JOBS program (for

10 such period of training and other activities as may

11 be appropriate), or

12 ‘‘(2) assign the individual to another WORK

13 position if the individual was unable to find

14 unsubsidized employment either because there were

15 no jobs available that such individual had the nec16 essary skills to fill or because such individual is in17 capable of working outside of a sheltered environ18 ment.

19 Notwithstanding the preceding sentence, in such cases

20 where the State finds that the individual is employable and

21 living in an area where there are jobs available to match

22 the individual’s skills, the State may require the individual

23 to engage in intensive job search, supervised by a job de24 veloper who may require the individual to apply for appro25 priate job openings to determine if the individual is mak-
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1 ing a good faith effort to find unsubsidized employment.

2 An individual who fails without good cause to apply for

3 appropriate job openings, cooperate with the job developer

4 or employer, or accept a private sector job opening, shall

5 be ineligible for aid under part A or an assignment under

6 the State’s WORK program for 6 months. Following such

7 a period of ineligibility, the State shall reassess such indi8 vidual’s status, and may take such steps under this sub9 section as it finds appropriate.

10 ‘‘SEC. 496. FAILURE TO MEET WORK PROGRAM REQUIRE11 MENTS.

12 ‘‘(a) ACTIONS THAT CONSTITUTE FAILURE TO

13 MEET WORK PROGRAM REQUIREMENTS.—The following

14 actions, without good cause, constitute failure by an indi15 vidual to meet the requirements of the WORK program—

16 ‘‘(1) failing or refusing to accept a bona fide

17 offer of unsubsidized employment of at least 20

18 hours per week (or less if the offered employment

19 meets the criteria specified in section 482(d)(2));

20 ‘‘(2) failing or refusing to accept or report for

21 a WORK position to which the individual has been

22 assigned;

23 ‘‘(3) voluntarily leaving such a position; or

24 ‘‘(4) failing or refusing to engage, to the extent

25 required under the State plan, in the job search or
69

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1 other activities required pursuant to section 495 or

2 subsection (e).

3 ‘‘(b) MISCONDUCT RESULTING IN DISCHARGE FROM

4 WORK POSITION.—In addition to the actions described

5 in subsection (a), a participant will be deemed to have

6 failed to meet the requirements of the WORK program

7 if, prior to the completion of an assignment, such partici8 pant is discharged by an employer from a WORK position

9 due to misconduct.

10 ‘‘(c) DEFINITIONS OF GOOD CAUSE AND MIS11 CONDUCT.—The Secretary shall issue regulations estab12 lishing criteria for determining what constitutes good

13 cause for purposes of subsections (a) and (g) and mis14 conduct for purposes of subsection (b). Such regulations

15 shall, at a minimum, include—

16 ‘‘(1) with respect to the actions described in

17 paragraph (3) of subsection (a), a requirement that

18 a participant voluntarily leaving a WORK position

19 promptly notify the entity administering the WORK

20 program of the reasons for leaving; and

21 ‘‘(2) with respect to discharge for misconduct,

22 a provision allowing the State, with the approval of

23 the Secretary, to apply the criteria relating to mis24 conduct applicable to the disqualification of an indi-
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1 vidual for benefits under the State unemployment

2 compensation law.

3 ‘‘(d) OPPORTUNITY FOR HEARING.—The State plan

4 shall provide advance notice to an individual when the

5 State agency determines that a sanction should be im6 posed, and shall advise the individual of the right to a

7 hearing. The State agency shall provide a hearing, upon

8 request by the individual, in accordance with procedures

9 established by the Secretary (which shall allow the State

10 to adopt procedures followed in hearings on unemployment

11 compensation claims that meet the standards set forth by

12 the United States Supreme Court in Goldberg v. Kelly,

13 397 U.S. 254 (1970).).

14 ‘‘(e) INTERIM ACTIVITIES.—The State agency may

15 require, pending the hearing referred to in subsection (d),

16 participation by the individual in appropriate activities

17 under the WORK program.

18 ‘‘(f) SANCTIONS.—If, in accordance with the preced19 ing provisions of the section, an individual is found to have

20 failed without good cause to meet a requirement of the

21 WORK program—

22 ‘‘(1) if the failure involves subsection (a)(1) (re23 lating to an offer of unsubsidized employment), the

24 family of which such individual is a member shall be

25 ineligible for aid to families with dependent children
71

•S 2224 IS

1 (if any such aid were otherwise payable) for a period

2 of six months and such individual may not be as3 signed to a WORK position during such period; and

4 ‘‘(2) if the failure involves paragraph (2), (3),

5 or (4), of subsection (a) or involves subsection (b)—

6 ‘‘(A) in connection with the first of any

7 such failures, the amount of aid for which the

8 family (of which such individual is a member)

9 is eligible shall for one month equal one-half of

10 the amount that would be payable to the family

11 if the individual were awaiting assignment to a

12 WORK position, but such reduction shall cease

13 upon the acceptance by such individual of an

14 assignment to a new WORK position or, in

15 cases involving job search or other required ac16 tivities (as described in subsection (a)(4)), the

17 individual’s engaging in the required program

18 activities;

19 ‘‘(B) in connection with the second of any

20 such failures, the amount of aid so payable

21 shall be reduced as described in subparagraph

22 (A) for a 3-month period and the individual

23 may not be assigned during such period to a

24 new WORK position;
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•S 2224 IS

1 ‘‘(C) in connection with the third of any

2 such failure, such family shall be ineligible for

3 any such aid for a 3-month period and the indi4 vidual may not be reassigned during such pe5 riod; and

6 ‘‘(D) in connection with the fourth or any

7 subsequent such failure, such family shall be in8 eligible for any such aid for a 6-month period

9 and the individual may not be reassigned dur10 ing such period;

11 but during the months in which a sanction is applied

12 under this subsection, the family of which the sanctioned

13 individual is a member shall be considered, for purposes

14 of the State’s plan approved under part A, its plan ap15 proved under title XIX, to be receiving aid to families with

16 dependent children and for purposes of any other Federal

17 or federally-assisted program based on need, such family

18 shall be considered to be receiving the amount that would

19 be payable to such family if the individual were awaiting

20 assignment to a WORK position. Notwithstanding the

21 preceding sentence, if at any time an individual subject

22 to a sanction under this subsection accepts an offer of

23 unsubsidized employment in a position that meets the cri24 teria for WORK positions prescribed by subsection (a)(1),

25 the sanction shall cease at that time and both the individ-
73

•S 2224 IS

1 ual and the family shall be considered, for purposes of part

2 A, to be an individual and family no longer subject to

3 sanction under this program.

4 ‘‘(g) Notwithstanding section 493, no individual who

5 without good cause leaves an unsubsidized position that

6 provides 20 hours or more per week (or such greater num7 ber as the State has elected under section

8 482(a)(2)(A)(iii)) on the average, may register under sec9 tion 493(b) for the WORK program (of any State) until

10 after the 3-month period beginning on the date on which

11 the individual left the position.

12 ‘‘(h) EVALUATION FOLLOWING SECOND WORK

13 SANCTION.—The State plan must provide that the State

14 will promptly conduct a thorough evaluation of an individ15 ual (and family) against whom a second sanction must be

16 imposed to determine whether there are particular cir17 cumstances, not previously recognized by the State agen18 cy, that are contributing to the individual’s failure to meet

19 the requirements of the WORK program, and to provide,

20 where appropriate, any additional social services, evalua21 tions, or other diagnostic or remedial services or take such

22 other actions as may be necessary to assist the individual

23 and protect the other family members. In conducting the

24 evaluation, the State agency shall consider whether the in25 dividual is appropriately registered in the WORK pro-
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•S 2224 IS

1 gram, or whether the individual should be referred to the

2 State plan approved under part A to be considered an indi3 vidual to whom section 402(a)(19)(D) applies.’’.

4 (b) REQUIREMENT TO PROVIDE SUPPORTIVE SERV5 ICES TO INDIVIDUALS REGISTERED FOR WORK PRO6 GRAM.—Section 402(g)(2) is amended, by striking out

7 ‘‘part F’’ and inserting in lieu thereof ‘‘part F or part

8 G’’.

9 SEC. 202. FEDERAL FUNDING FOR THE JOBS AND WORK

10 PROGRAMS; PARTICIPATION REQUIREMENTS;

11 MAINTENANCE OF EFFORT AND SUBSTAN12 TIAL IMPLEMENTATION.

13 (a) AMOUNT OF STATE’S ENTITLEMENT FOR

14 JOBS.—Paragraphs (1) through (4) of section 403(k) of

15 the Act are amended to read as follows:

16 ‘‘(k)(1) In addition to payments under subsection (a),

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

18 under part F an amount equal to the product of—

19 ‘‘(A) the State’s enhanced Federal medical as20 sistance percentage as defined in subsection (m)(6),

21 and

22 ‘‘(B) its expenditures to carry out the program

23 under part F (other than expenditures required by

24 section 402(g)(1)(A) in the case of the 50 States

25 and the District of Columbia),
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1 but payments to a State under this title for any fiscal year

2 for such activities may not exceed the limitation under

3 paragraph (2) with respect to such State.

4 ‘‘(2) The limitation under this paragraph with re5 spect to a State for any fiscal year is the amount that

6 bears the same ratio to the amount specified in paragraph

7 (3) for such fiscal year as the average monthly number

8 of adult recipients (as defined in paragraph (4)) in the

9 State in the preceding fiscal year bears to the average

10 monthly number of such recipients in all the States for

11 such preceding year.

12 ‘‘(3) The amount specified in this paragraph is—

13 ‘‘(A) $1,750,000,000 for fiscal year 1996,

14 ‘‘(B) $1,700,000,000 for fiscal year 1997,

15 ‘‘(C) $1,800,000,000 for fiscal year 1998,

16 ‘‘(D) $1,900,000,000 for each of fiscal years

17 1999 through 2004, and

18 ‘‘(E) $1,900,000,000, adjusted by the CPI as

19 prescribed by section 406(i), for fiscal year 2005

20 and each fiscal year thereafter,

21 reduced by 2 percent (for direct grants to Indian tribes

22 and Alaska Native organizations under section 482(i)),

23 and further reduced by 2 percent (of the amount specified

24 in each subparagraph) (or, in the case of fiscal years after

25 1998, 1 percent) for carrying out section 404 of the Work
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1 and Responsibility Act of 1994 (relating to demonstra2 tions, research and evaluation, and technical assistance)

3 and further reduced in fiscal year 1996 by the amount

4 available to the Secretary for purposes of special adjust5 ments under subsection (p).

6 ‘‘(4) For purposes of this subsection, the term ‘adult

7 recipient’ in the case of any State means an individual

8 other than a dependent child (unless such child is the cus9 todial parent of another dependent child) whose needs are

10 met in whole or in part with payments of aid to families

11 with dependent children or wages from a position under

12 the WORK program, or a combination of such aid and

13 wages.’’.

14 (b) PARTICIPATION STANDARDS FOR JOBS PRO15 GRAM.—Section 403(k) of the Act is further amended by

16 adding at the end thereof the following new paragraphs:

17 ‘‘(6)(A) Notwithstanding any other provision of

18 this subsection—

19 ‘‘(i) if, with respect to a State in a fiscal

20 year, the average monthly number of individ21 uals receiving aid to families with dependent

22 children who are described in subparagraph

23 (B)(i) or (ii) of section 402(a)(19) but are not

24 included in subparagraph (D) thereof who par25 ticipate in an activity under the JOBS program
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1 (including individuals who are employed for the

2 minimum number of hours adopted by the

3 State under section 482(a)(2)(A)(iii) or are

4 being sanctioned pursuant to section

5 402(a)(19)(G)) exceeds 55 percent of the aver6 age monthly number of all such individuals, the

7 Secretary shall pay to such State an additional

8 amount (without the requirement of any addi9 tional nonfederal share) for use in carrying out

10 its program under part F, and

11 ‘‘(ii) if, with respect to a State, such aver12 age monthly number in such year does not ex13 ceed 45 percent, then the Secretary shall reduce

14 by 25 percent the Federal matching rate gen15 erally applicable to such State’s expenditures

16 for aid for each month in such year with re17 spect to the number of individuals by which the

18 average monthly number is less than 45 percent

19 of the total.

20 The Secretary shall determine the amount of the ad21 ditional payments for performance exceeding the

22 standard and shall make such additional payments

23 for a fiscal year by increasing as appropriate the

24 amount payable to such State under subsection (a)

25 up to the amount of the reductions under clause (ii),
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1 together with the reductions under subparagraph

2 (C) and subsection (l)(4)(A) for such fiscal year, and

3 if the additional payments exceed such reductions

4 the amount available to the Secretary for such fiscal

5 year under subsection (p) shall be reduced by the

6 amount of such excess.

7 ‘‘(B) The Secretary shall issue regulations pre8 scribing criteria for determining what constitutes

9 participation by an individual for purposes of this

10 section, the periods of time over which participation

11 will be measured, and any other matters necessary

12 to implement the provisions of this subsection or of

13 subsection (l).

14 ‘‘(C) If the average monthly number of individ15 uals in a fiscal year to whom the State applies sec16 tion 402(a)(19)(D)(vii) exceeds the limit prescribed

17 therein (or such greater limit as the Secretary may

18 have allowed), or if the average monthly number of

19 individuals with respect to whom the State extends

20 the time limit under section 417 exceeds the limit

21 prescribed in section 417(e) (or such greater limit as

22 the Secretary may have allowed), the Secretary shall,

23 notwithstanding any other provision of this section,

24 reduce by 25 percent for each month in such fiscal

25 year the Federal matching rate generally applicable
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1 to such State’s expenditures for aid with respect to

2 the total number of individuals by which such aver3 age monthly numbers exceeds such limits.

4 ‘‘(D) Notwithstanding subparagraph (A)(i), the

5 Federal payment shall not be increased if the Sec6 retary determines that the State has not accurately

7 recorded the number of months for which individuals

8 to whom section 417 applies have received aid, or

9 has not accurately recorded or reported to the Sec10 retary other required data, to an extent inconsistent

11 with standards for accuracy prescribed in regula12 tions by the Secretary.’’.

13 (c)(1) AMOUNT OF STATE’S ENTITLEMENT FOR

14 WORK.—Section 403(l) of the Act is amended by striking

15 out paragraphs (1) through (3) and inserting in lieu there16 of the following:

17 ‘‘(l)(1) In addition to payments under subsections (a)

18 and (k), the Secretary shall pay to each State with a plan

19 approved under part G an amount to carry out its pro20 gram under such plan equal to the sum of—

21 ‘‘(A) an amount equal to—

22 ‘‘(i) such State’s expenditures to operate

23 its WORK program (other than expenditures to

24 which subparagraph (B) applies and expendi25 tures to which section 402(g)(1)(A) applies in
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1 the case of the 50 States and the District of

2 Columbia), multiplied by

3 ‘‘(ii) the State’s enhanced Federal medical

4 assistance percentage as defined in subsection

5 (m)(6), but such amount with respect to a

6 State for any fiscal year may not exceed the

7 limitation under paragraph (2) applicable to

8 such State for such fiscal year, and

9 ‘‘(B) an amount equal to—

10 ‘‘(i) the State’s expenditures for wages to

11 participants in its program under part G

12 (whether paid directly to the participant, or in

13 the form of wage subsidies to the participant’s

14 employer), multiplied by

15 ‘‘(ii) such State’s Federal medical assist16 ance percentage, as defined in section 1905(b)

17 (or, where applicable, the last sentence of sec18 tion 1118).

19 ‘‘(2) The limitation under this paragraph with re20 spect to a State for any fiscal year is the amount that

21 bears the same ratio to the amount specified in paragraph

22 (3) for such fiscal year as the sum of (i) the average

23 monthly number of individuals subject to the time limit

24 in section 417 (and who are subject to the requirement

25 to participate in the program under part F) in such State,
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1 and (ii) the average monthly number of individuals reg2 istered in such State’s WORK program, bears to the total

3 of such sums of all the States for months in the preceding

4 fiscal year.

5 ‘‘(3) The amount specified in this paragraph is—

6 ‘‘(A) $200,000,000 for fiscal year 1998,

7 ‘‘(B) $700,000,000 for fiscal year 1999,

8 ‘‘(C) $1,100,000,000 for fiscal year 2000,

9 ‘‘(D) $1,300,000,000 for fiscal year 2001,

10 ‘‘(E) $1,400,000,000 for fiscal year 2002,

11 ‘‘(F) $1,600,000,000 for fiscal year 2003,

12 ‘‘(G) $1,700,000,000 for fiscal year 2004, and

13 ‘‘(H) $1,700,000,000 adjusted by the CPI as

14 prescribed by section 406(i), and then multiplied by

15 the WORK program factor, as defined in paragraph

16 (4),

17 reduced by 2 percent (for direct grants to Indian tribes

18 and Alaska Native organizations under section 482(i)) and

19 further reduce by 2 percent (of the amount specified in

20 each subparagraph) (or in the case of fiscal years after

21 1998, 1 percent) for carrying out section 404 of the Work

22 and Responsibility Act of 1994 (relating to demonstra23 tions, research and evaluation, and technical assistance).
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1 ‘‘(4) For purposes of determining the amount speci2 fied in paragraph (3) for any fiscal year, the ‘WORK pro3 gram factor’ is the ratio of—

4 ‘‘(A) the sum of the average monthly number of

5 recipients of aid who are individuals described in

6 section 402(a)(19)(B)(i) and WORK registrants

7 (who are not receiving aid) for months in the preced8 ing fiscal year, divided by the sum of the average

9 monthly number of all recipients of such aid and

10 WORK registrants (who are not receiving aid) for

11 months in such preceding fiscal year, to

12 ‘‘(B) such quotient with respect to the average

13 monthly numbers for months in fiscal year 2004.’’.

14 (2) Paragraph (4) of section 403(l) (as in effect prior

15 to enactment of this Act) is redesignated as subsection

16 (k)(7) of section 403.

17 (d) PARTICIPATION STANDARDS FOR WORK PRO18 GRAM.—Section 403(l) of the Act is further amended by

19 adding at the end thereof the following new paragraphs:

20 ‘‘(4)(A) Notwithstanding any other provision of

21 this paragraph, the Federal matching rate applicable

22 to a State’s expenditures for aid to families with de23 pendent children for a fiscal year shall be reduced

24 for each month in such year by 25 percent with re25 spect to the average monthly number of individuals
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1 by which such State fails to meet its WORK partici2 pation standard for such year.

3 ‘‘(B) For purposes of this paragraph, a State’s

4 WORK participation standard is met if—

5 ‘‘(i) the average monthly number of posi6 tions to which WORK registrants are assigned

7 is not fewer than the number of such positions

8 that the Secretary requires that the State es9 tablish, taking into account the limitation appli10 cable to such State under paragraph (2) for the

11 fiscal year involved, and the amounts of assist12 ance necessary to locate or create WORK posi13 tions; or

14 ‘‘(ii) the ratio of—

15 ‘‘(I) the average monthly number of

16 individuals assigned to positions in the

17 WORK program, participating in job

18 search as required by the State plan under

19 part G following an assignment to a

20 WORK position, but for a period of no

21 longer than 3 consecutive months, being

22 sanctioned pursuant to section 496(f) or in

23 unsubsidized employment and not receiving

24 aid (but who at some time within the pre-
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1 ceding 3 months were participating in the

2 WORK program), to

3 ‘‘(II) the sum of the average monthly

4 number of individuals registered with the

5 State’s WORK program and the average

6 monthly number of individuals in

7 unsubsidized employment and not receiving

8 aid (but who at some time within the pre9 ceding 3 months were participating in the

10 State’s WORK program), is not less than

11 0.80.’’.

12 (e) PROVISIONS APPLICABLE TO JOBS, WORK, AND

13 CHILD CARE FUNDING.—Section 403(m) of the Act is

14 amended to read as follows:

15 ‘‘(m)(1) If a State so requests, the limitation applica16 ble to such State under subsection (k)(2) for a fiscal year,

17 or the limitation applicable to such State under subsection

18 (l)(2) for such fiscal year, may be increased (and the other

19 limit decreased equally) by an amount up to 10 percent

20 of the sum of such limits for such fiscal year or, if less,

21 by the amount of the limit to be decreased. In the case

22 of fiscal 1997, the State may request that its limit under

23 subsection (k)(2) be reduced by up to 10 percent and the

24 amount made available for preparing to conduct its

25 WORK program.
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1 ‘‘(2) If the sum of the amount specified in any fiscal

2 year under subsection (k)(3), and the amount specified for

3 such fiscal year under subsection (l)(3), exceeds (or if the

4 Secretary estimates that it will exceed) the total amount

5 paid (or estimated to be payable) under subsections (k)(1)

6 and (l)(1)(A) for such fiscal year, then the Secretary shall

7 adjust the maximums applicable to payments to those

8 States to which the limits under such subsections have

9 made additional payment unavailable under either sub10 section (k)(1) or (l)(1)(A), and to which payments for

11 such fiscal year under either or both such subsections

12 would be greater but for the applicability to such States

13 of such limits. The Secretary shall by regulation provide

14 for the equitable adjustment of such limits in the case

15 where all States’ requests for adjustment of limits, and

16 additional payments, for a fiscal year under this para17 graph exceed the amount available for reallotment.

18 ‘‘(3)(A) If in any fiscal year—

19 ‘‘(i) the average rate of total unemployment in

20 a State for such fiscal year equals or exceeds 6.5

21 percent, and

22 ‘‘(ii) the average rate of total unemployment in

23 such State for such fiscal year equals or exceeds 110

24 percent of such rate for either of the two preceding

25 fiscal years,
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1 the percent applicable to such State for such fiscal year,

2 for purposes of applying each of subsections (k)(1)(A),

3 (l)(1)(A)(i), and (n)(1)(A), to the extent made possible by

4 the availability of additional amounts to such State pursu5 ant to paragraph (2), shall be applied as if it had been

6 increased by 10 percent of the difference between 100 per7 cent and the rate otherwise applicable in each of such sub8 sections, respectively, from the beginning of such fiscal

9 year (but if no such additional amount is made available,

10 such rates shall be unaffected by this subparagraph).

11 ‘‘(B) The amounts specified in subsections (k)(3),

12 (l)(3), and (n)(3) for any fiscal year are each increased,

13 if, for either the last two quarters of the preceding fiscal

14 year, or the first two quarters of the fiscal year involved

15 (but not such last two quarters), the average rate of total

16 unemployment in the United States equals or exceeds 7

17 percent, by 2.5 percent plus an additional 0.25 percent

18 for each one-tenth of a percentage point by which the aver19 age rate of total unemployment in the United States (for

20 such two-quarter period) exceeds 7 percent.

21 ‘‘(4) Notwithstanding the provisions of subsections

22 (k) and (l), no amount of a State’s expenditures as aid

23 to families with dependent children shall be excluded for

24 purposes of payment under subsection (a) by reason of

25 the State’s failure to meet the participation standards or
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1 the limit on deferrals (under section 402(a)(19)(D)(vii))

2 or extensions of the time limit (under section 417(e)) ap3 plicable to the State’s program under part F for months

4 in the first year that such program is in effect, or by rea5 son of the State’s failure to meet the participation stand6 ard applicable to its program under part G during the first

7 year that such program is in effect.

8 ‘‘(5) Prior to the general effective date of the amend9 ments to part F made by the Work and Responsibility Act

10 of 1994, or the general effective date of part G, as the

11 case may be, the Secretary shall issue regulations contain12 ing the necessary information to permit implementation

13 of such standards and application of reductions in Federal

14 payment for failure to meet such standards. Not later than

15 12 months after such amendments become effective with

16 respect to a State, such State shall be required to begin

17 reporting data as required by the Secretary in order to

18 determine whether the participation standards have been

19 met.

20 ‘‘(6) As used in this part, a ‘State’s enhanced Federal

21 medical assistance percentage’ with respect to expendi22 tures for a fiscal year means such State’s Federal medical

23 assistance percentage as defined in section 1905(b) (or,

24 where applicable as defined in the last sentence of section

25 1118), plus
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1 ‘‘(A) 5 percentage points, but not less than 65

2 percent, with respect to fiscal years 1996 and 1997,

3 ‘‘(B) 7 percentage points, but not less than 67

4 percent, with respect to fiscal year 1998,

5 ‘‘(C) 9 percentage points, but not less than 69

6 percent, with respect to fiscal year 1999, and

7 ‘‘(D) 10 percentage points, but not less than 70

8 percent, with respect to fiscal year 2000, and each

9 fiscal year thereafter.’’.

10 (f)(1) Section 402(g)(3)(A)(i) of the Act is amended

11 by striking out ‘‘Federal medical assistance percentage (as

12 defined in section 1905(b))’’ and inserting in lieu thereof

13 ‘‘State’s enhanced Federal medical assistance percentage

14 (as defined in section 403(m)(6))’’.

15 (2) Section 402(g)(B)(A)(ii) of the Act is amended

16 by striking out ‘‘Federal medical assistance percentage (as

17 defined in section 1118)’’ and inserting in lieu thereof

18 ‘‘State’s enhanced Federal medical assistance percentage

19 (as defined in section 403(m)(6))’’.

20 (g) Section 403 of the Act is amended by adding at

21 the end thereof the following new subsection:

22 ‘‘(o) Notwithstanding the preceding provisions of this

23 section, the percentage applicable to a State for purposes

24 of section 402(g)(3)(A) and subsections (k)(1)(A),

25 (l)(1)(A)(ii), and (n)(1)(A) (for determining the Federal
89

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1 payment with respect to a State’s JOBS program expendi2 tures, portions of its WORK program expenditures, and

3 its child care expenditures, respectively) shall be the

4 State’s Federal medical assistance percentage, but not less

5 than 60 percent (or, in the case of section 402(g)(3)(A)

6 and subsection (n)(1)(A), the State’s Federal medical as7 sistance percentage) for any fiscal year—

8 ‘‘(1) in which the nonfederal share of the sum

9 of its expenditures that may be included for pur10 poses of subsection (a)(3) and its expenditures for

11 its program under part F, its program under part

12 G, and child care services under subsections (g) and

13 (i) of section 402 (not included under subsection

14 (a)(3)) is less than the nonfederal share of expendi15 tures for purposes of subsection (a)(3) and of ex16 penditures (for which Federal matching was pro17 vided) under its program under part F and child

18 care services (not included under subsection (a)(3))

19 under subsections (g) and (i) of section 402 for fis20 cal year 1994 (or fiscal year 1993 if such nonfederal

21 share were greater for such year), or

22 ‘‘(2) in which the number of individuals to

23 whom the provisions of section 417 are being applied

24 is less than 90 percent of the number of individuals

25 in the State who are custodial parents described in
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1 subparagraph (B)(i) of section 402(a)(19) (but not

2 included under subparagraph (D) thereof) unless the

3 State has submitted an approvable plan amendment

4 that provides for implementing all statutory require5 ments to its JOBS program, and meeting related re6 quirements with respect to 90 percent of such indi7 viduals within two years of the date such require8 ments first become effective.’’.

9 (h) SECRETARY’S SPECIAL ADJUSTMENT FUND.—

10 Section 403 of the Act is amended by adding at the end

11 thereof the following new subsection:

12 ‘‘(p)(1) There shall be available to the Secretary from

13 the amount appropriated for payments under subsection

14 (k) for States’ JOBS programs for fiscal year 1996,

15 $300,000,000 for special adjustments to States’ limita16 tions on Federal payments for their JOBS and WORK

17 programs. Amounts made available to the Secretary pur18 suant to this subsection shall also be available for carrying

19 out subsection (k)(6) and section 404(c).

20 ‘‘(2) A State may, not later than March 1 and Sep21 tember 1 of each fiscal year, submit to the Secretary a

22 request to adjust the limitation on payments under this

23 section with respect to its JOBS (and, in fiscal years after

24 1997) its WORK programs for the following fiscal year.

25 The Secretary shall only consider such a request from a
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1 State which has, or which demonstrates convincingly on

2 the basis of estimates that it will, submit allowable claims

3 for Federal payment in the full amount available to it

4 under subsections (k) and (l) in the current fiscal year

5 and obligated 95% of its full amount in the prior fiscal

6 year. The Secretary shall by regulation prescribe criteria

7 for the equitable allocation among the States of Federal

8 payments pursuant to adjustments of the limitations re9 ferred to in the preceding sentence in the case where the

10 requests of all States that the Secretary finds reasonable

11 exceed the amount available, and, within 30 days following

12 the dates specified in this paragraph, will notify each State

13 whether one or more of its limitations will be adjusted in

14 accordance with the State’s request and the amount of the

15 adjustment (which may be some or all of the amount re16 quested).

17 ‘‘(3) The Secretary may adjust the limitation on Fed18 eral payments to a State for a fiscal year under subsection

19 (k) and under subsection (l), and upon a determination

20 by the Secretary that (and the amount by which) a State’s

21 limitation should be raised, the amount specified in either

22 such subsection, or both, shall be considered to be so in23 creased for the following fiscal year.

24 ‘‘(4) The amount made available under subsection (a)

25 for special adjustments shall remain available to the Sec-
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1 retary until expended. That amount shall be reduced by

2 the sum of the adjustments approved by the Secretary in

3 any fiscal year, and the amount shall be increased in a

4 fiscal year by the amount by which all States’ limitations

5 under subsection (k), (l), and (n) for a fiscal year exceeded

6 the sum of the Federal payments under such subsections

7 for such fiscal year (after application of subsection

8 (m)(2)), but for fiscal years after 1977, such amount at

9 the end of such fiscal year shall not exceed

10 $400,000,000.’’.

11 SEC. 203. ADMINISTRATION OF THE JOBS AND WORK PRO12 GRAMS.

13 (a) STATE OPTION.—Part G of title IV of the Act

14 is amended by adding at the end thereof the following new

15 section:

16 ‘‘ADMINISTRATION

17 ‘‘SEC. 497. (a) The chief executive officer of any

18 State with a plan approved under part A may designate

19 a State agency (hereinafter referred to as the ‘JOBS/

20 WORK agency’), other than the agency established or des21 ignated under section 402(a)(3) (hereafter referred to as

22 the ‘part A agency’) to administer (or supervise the ad23 ministration of) the JOBS program under part F and the

24 WORK program under this part in such State.

25 ‘‘(b) The JOBS/WORK agency designated under this

26 section and the part A agency shall jointly submit the
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1 State plan required by parts F and G, and shall enter into

2 and provide to the Secretary an agreement setting out the

3 responsibilities of each agency. Any such agreement shall

4 provide—

5 ‘‘(1) that the part A agency will retain respon6 sibility for—

7 ‘‘(A) determining initial and continuing eli8 gibility of applicants for and recipients of (and

9 the amount of) aid to families with dependent

10 children;

11 ‘‘(B) maintaining accurate records of the

12 number of months for which each individual re13 ceived aid, and notifying individuals of the re14 maining months of eligibility, in accordance

15 with the preceding provisions of this title;

16 ‘‘(C) applying sanctions when appropriate

17 under the provisions of section 402(a)(19)(G)

18 or 496(f); and

19 ‘‘(D) affording an opportunity for a fair

20 hearing as required by section 402(a)(4), or in

21 connection with any disagreement (with adverse

22 consequences) about the application of section

23 417 (other than matters about which the

24 JOBS/WORK agency provides a hearing);
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1 ‘‘(2) that each agency agrees to cooperate with

2 the other in order to exchange all information nec3 essary to carry out the programs involved in a man4 ner that simplifies as much as possible the burden

5 on recipients of aid under part A, and participants

6 in the programs under parts F and G, and allows

7 the most effective administration of all programs in8 volved;

9 ‘‘(3) a specific description of how responsibility

10 will be allocated and coordinated between the two

11 agencies for the following functions:

12 ‘‘(A) determining to which individuals sec13 tion 402(a)(19)(D) is applicable;

14 ‘‘(B) determining the individuals to whom

15 extensions under section 417(e) are to be grant16 ed (and the length of such extensions); and

17 ‘‘(C) conducting reviews, and providing

18 dispute resolution measures, including fair

19 hearings in appropriate cases, on disagreements

20 arising out of requirements under the JOBS or

21 WORK program; and

22 ‘‘(4) that the requirements of paragraphs (4),

23 (5), (6), (9), (19), and (21)(A) of section 402(a) will

24 be applicable as appropriate to the joint plan sub25 mitted under this section to the same extent (and to-
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1 gether with all relevant regulations issued there2 under by the Secretary) as they are to a State plan

3 submitted under part A.

4 ‘‘(c) In each State in which the chief executive officer

5 designates an agency under subsection (a), the Secretary

6 shall make payment to the agency so designated in the

7 case of payments required under subsections (k) and (l)

8 of section 403, rather than to the State’s part A agency,

9 and the JOBS/WORK agency so designated shall be re10 sponsible for the proper expenditure of such funds.

11 ‘‘(d) Upon designation by the chief executive officer

12 under subsection (a), and approval by the Secretary of the

13 State plan submitted in accordance with this section, all

14 references (whether direct or by context) in this Act to

15 the State agency responsible for the State plan under part

16 A shall be deemed to be references to the agency des17 ignated under this section when referring to a function

18 or responsibility of such agency.

19 ‘‘(e) In any State administering a Statewide one-stop

20 career center system for the provision of employment and

21 training services, as defined by the Secretary in conjunc22 tion with the Secretary of Labor, the Governor shall en23 sure that the programs under parts F and G—

24 ‘‘(1) participate in the operation of such sys25 tem, and
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1 ‘‘(2) make employment and training services

2 available to participants through the one-stop career

3 centers.’’.

4 SEC. 204. SPECIAL PROVISIONS RELATING TO INDIAN

5 TRIBES AND ALASKA NATIVE ORGANIZA6 TIONS.

7 (a) AUTHORITY TO ADMINISTER JOBS AND WORK

8 PROGRAMS.—Section 482(i) of the Act is amended—

9 (1) by redesignating paragraphs (5), (6), (7),

10 and (8) as paragraphs (6), (7), (8), and (9), respec11 tively, and

12 (2) by amending paragraphs (1) through (4) of

13 such subsection to read as follows:

14 ‘‘(1)(A) An Indian tribe or Alaska Native orga15 nization may apply to the Secretary to conduct both

16 a JOBS program under this part, and a WORK pro17 gram under part G. An application to conduct these

18 programs in a fiscal year must be submitted not

19 later than July 1 of the preceding fiscal year. Upon

20 approval of the application, payment in the amount

21 determined in accordance with the succeeding provi22 sions of this subsection shall be made directly to the

23 tribe or organization involved.

24 ‘‘(B) Neither the JOBS program nor the

25 WORK program set forth in the application of an
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1 Indian tribe or Alaska Native organization submit2 ted under subparagraph (A) need meet any require3 ment under this part or part G or under section

4 402(a)(19) that the Secretary determines is inappro5 priate for such program.

6 ‘‘(C) The JOBS and WORK programs of any

7 Indian tribe or Alaska Native organization may be

8 terminated voluntarily by such tribe or organization

9 or may be terminated by the Secretary upon a find10 ing that such programs are not being conducted in

11 substantial conformity with the terms of the applica12 tion approved under subparagraph (A). Following

13 voluntary termination of an application, or termi14 nation by the Secretary of an application of an In15 dian tribe or Alaska Native organization, such tribe

16 or organization shall not be eligible to submit a new

17 application under subparagraph (A) with respect to

18 any year before the sixth year following such termi19 nation.

20 ‘‘(2) The Secretary shall pay directly to each

21 Indian tribe or Alaska Native organization with an

22 application approved to conduct a JOBS program

23 under this part and a WORK program under part

24 G for a fiscal year an amount (without the require25 ment of any non-Federal share) which bears the
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1 same ratio to 2 percent of the sum of the amounts

2 specified in sections 403(k)(3) and 403(l)(3) for

3 such fiscal year as the adult Indian or Alaska Native

4 population receiving aid to families with dependent

5 children residing within the area to be served by the

6 tribe or organization bears to the total of such

7 adults receiving such aid residing within all areas

8 which any such tribe or organization could serve.

9 The Secretary shall from time to time review the

10 components of the ratios established under the first

11 sentence of this subparagraph to determine whether

12 the individual payments under this subsection con13 tinue to reflect accurately the distribution of popu14 lation among the grantees, and shall make adjust15 ments necessary to maintain the correct distribution

16 of funding.

17 ‘‘(3) A grantee under this subsection may use

18 up to 20 percent of its payment for the JOBS pro19 gram, or for the WORK program, as the case may

20 be, for a fiscal year to carry out such program in

21 the following fiscal year, and up to 10 percent of

22 such payment for either such program to carry out

23 the other such program in the fiscal year for which

24 the payment was made.
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1 ‘‘(4) At the request of a grantee, the Secretary

2 may approve use of up to 10 percent (or, if less,

3 $5000) of the payment for the JOBS program in

4 connection with an economic development project

5 upon a demonstration by the grantee that such

6 project will include provision for training JOBS pro7 gram participants in skills necessary for employment

8 on the project.

9 ‘‘(5) An application under this subsection shall

10 provide that (upon approval) the grantee will be re11 sponsible for determining whether an individual

12 (within the grantee’s service area) to whom the time

13 limits of section 417 apply is one to whom section

14 402(a)(19)(D) is applicable, and whether (and for

15 how long) extensions of the time limit under section

16 417 should be provided and for reporting to the

17 State agency making payments of aid to the individ18 uals served by the grantee the determinations made

19 under this paragraph’’.

20 (b) CHILD CARE.—Section 403 is amended by adding

21 after and below subsection (b) the following new sub22 section:

23 ‘‘(c)(1) Each Indian tribe and Alaska Native organi24 zation submitting an application under section 482(i) to

25 administer its JOBS and WORK programs under parts
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1 F and G, respectively, may also submit to the Secretary

2 (as a part of the application) a description of the child

3 care needs of its JOBS and WORK program participants,

4 and of the program that it will implement to meet such

5 needs, and request direct funding for the provision of all

6 such child care. The child care program described need

7 not meet any requirement of this part (other than the re8 quirements of section 402(g)(1)(A)(viii)) that the Sec9 retary determines is inappropriate with respect to such

10 child care program.

11 ‘‘(2) The Secretary shall pay to each Indian tribe and

12 each Alaska Native organization whose application ap13 proved under section 482(i) includes a request for direct

14 funding for child care an amount (without the requirement

15 of a nonfederal share) to provide child care for recipients

16 of AFDC and for participants in the tribe’s or organiza17 tion’s JOBS and WORK programs, and to provide transi18 tional child care with respect to an individual who is eligi19 ble for child care under section 402(g)(1)(A)(ii). The

20 amount of the payment provided under the preceding sen21 tence for a fiscal year shall not exceed the total amount

22 payable directly to such tribe or organization under section

23 482(i).

24 ‘‘(3) The provisions of sections 402(g)(1)(A) (i) and

25 (ii) shall not be construed as imposing any obligation upon
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1 a State to provide child care for the children of JOBS

2 or WORK program participants included within an ap3 proved application under section 482(i) that includes a re4 quest for direct funding of child care, during the period

5 for which such direct funding is provided.

6 ‘‘(4) The Secretary shall establish data collection and

7 reporting requirements, and performance standards, with

8 respect to child care programs implemented under this

9 subsection.’’.

10 SEC. 205. SPECIAL RULES FOR THE TERRITORIES.

11 ‘‘(a) EXCLUSION FROM GENERAL CEILING OF

12 JOBS, WORK, AND ‘‘AT-RISK’’ CHILD CARE.—Section

13 1108(a) of the Act is amended by striking out, in the mat14 ter preceding paragraph (1), ‘‘section 403(k)’’ and insert15 ing in lieu thereof ‘‘subsection (k), (l)(1), or (n) of section

16 403’’.

17 (b) Section 482 of the Act is amended by adding at

18 the end thereof the following new subsection:

19 ‘‘(j) OPTIONS FOR TERRITORIES.—(1) IN GEN20 ERAL.—Puerto Rico, the Virgin Islands, Guam, and

21 American Samoa may each determine whether the provi22 sions of section 417 shall be applicable under its State

23 plan approved under part A, and, if so, part G shall be

24 applicable. Each State exercising the option in the preced25 ing sentence shall submit the necessary plan amendments
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1 and plans to the Secretary for approval. Any such plan

2 or plan amendment must also describe with respect to

3 such section 417 and part G (and all related amendments)

4 a phase-in strategy and a timetable for achieving full im5 plementation.

6 ‘‘(2) SECRETARIAL WAIVERS.—The Secretary may

7 waive or modify any requirement pertaining to the provi8 sions of section 417, the program required under part G,

9 or the requirements of part A (including participation

10 rates and performance standards) that, as established

11 with reference to the 50 States and the District of Colum12 bia, would be inappropriate for a State to which this sub13 section applies.

14 ‘‘(3) TERMINATION.—The applicability of section 417

15 and part G to a State to which this section applies may

16 be terminated voluntarily by such State, but following any

17 such termination, such State shall not be eligible to exer18 cise the option with respect to any year before the sixth

19 year following such termination.’’.

20 SEC. 206. TRAINING AND EMPLOYMENT FOR NON-CUSTO21 DIAL PARENTS.

22 Section 482 of the Act is amended by adding at the

23 end thereof the following new subsection:

24 ‘‘(j) TRAINING AND EMPLOYMENT FOR NON-CUSTO25 DIAL PARENTS.—
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1 ‘‘(1) The Secretary shall approve the applica2 tion of a State to conduct a program of training and

3 employment opportunities for noncustodial parents

4 that meets the requirements of this subsection.

5 ‘‘(2) An application to conduct a program

6 under this subsection shall—

7 ‘‘(A) describe the political subdivision or

8 subdivisions, or other identifiable areas of the

9 State where the program will be conducted,

10 ‘‘(B) describe the services that will be pro11 vided to participants, including the training, job

12 readiness services, and employment opportuni13 ties that will be available, and indicate whether

14 these will be provided through the program

15 under this part or under part G (or both) or

16 whether some or all of the activities under this

17 subsection will be conducted as a separate pro18 gram,

19 ‘‘(C) describe the supportive services that

20 will be provided to enhance the participant’s in21 volvement in the program and ability to obtain

22 employment and meet his or her child support

23 obligations,

24 ‘‘(D) indicate whether the State will con25 duct a random assignment evaluation of the ef-
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1 fects of the program on improved responsibility

2 in meeting child support obligations, and

3 ‘‘(E) provide assurance that the State’s

4 program will comply with the requirements of

5 this subsection.

6 ‘‘(3) The application must provide that a

7 noncustodial parent will be eligible to commence par8 ticipation in the program under this subsection if his

9 or her child is receiving aid to families with depend10 ent children (or the child’s custodial parent is receiv11 ing wages in connection with the program under

12 part G), or if the noncustodial parent owes past-due

13 child support which has been assigned to the State

14 agency administering the State plan approved under

15 part A and is unemployed. Paternity must be estab16 lished before a noncustodial father may enter the

17 program, and the noncustodial parent must be co18 operating in the establishment of a child support ob19 ligation and the entry of an award. If a parent who

20 has been participating in the program ceases to be

21 eligible therefor because the child with respect to

22 whom the support obligation exists is no longer eligi23 ble for aid to families with dependent children (and

24 the custodial parent is not receiving wages in con25 nection with the program under part G), the State
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1 must nonetheless allow the participant to complete

2 the training or program activity.

3 ‘‘(4) A State conducting a program under this

4 subsection shall not be required—

5 ‘‘(A) to accept all applicants even though

6 they meet the criteria of paragraph (3), or

7 ‘‘(B) to provide the same training, services,

8 or employment opportunities to all participants,

9 and the State shall not require—

10 ‘‘(C) that individuals participate in the

11 JOBS program (or in education or training ac12 tivities comparable or similar to the JOBS pro13 gram) as a prerequisite to participation in the

14 WORK program (or comparable program of

15 subsidized employment), or

16 ‘‘(D) that the custodial parent of an indi17 vidual’s child be participating in the JOBS pro18 gram under part F or the WORK program

19 under part G as a condition of such individual’s

20 eligibility to participate in the program under

21 this subsection.

22 ‘‘(5) The State agency shall assure that wages

23 will be paid for work performed by the participant

24 and may provide for the payment of training sti25 pends.
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1 ‘‘(6)(A) The State agency shall garnish sub2 sidized wages, or any stipends, paid in connection

3 with a non-custodial parent’s participation in the

4 program under this subsection, and remit them to

5 the State agency administering the State plan ap6 proved under part D for distribution as a child sup7 port collection in accordance with the provisions of

8 that part.

9 ‘‘(B) The State may provide, if, with respect to

10 an individual participating in the program under

11 this subsection, it has jurisdiction over the child sup12 port obligation being enforced that hours of partici13 pation in program activities may, or a reasonable

14 basis, be credited to reduce amounts of past-due

15 child support owed to such State agency by the indi16 vidual.

17 ‘‘(7)(A) A State with an application approved

18 under this subsection may use, for carrying out the

19 program described in such application in any fiscal

20 year, up to 10 percent of the sum of the amounts

21 available to it for such fiscal year under subsection

22 (k)(2) and (l)(2) of section 403. The State shall be

23 entitled to so much of such amount as equals the

24 percentage specified in section 403(k)(1)(A) multi-
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1 plied by its expenditures necessary to carry out its

2 approved application.

3 ‘‘(B) A State may include, as expenditures nec4 essary to carry out its approved application,

5 amounts expended for stipends, wage subsidies, sup6 portive services, training, and administrative costs of

7 the State agency directly related to the program

8 under this subsection.’’.

9 SEC. 207. FEDERAL TAX TREATMENT OF WORK REMUNERA10 TION.

11 (a) WORK REMUNERATION INELIGIBLE FOR EARNED

12 INCOME TAX CREDIT.—Subparagraph (B) of section

13 32(c)(2) (defining earned income for purposes of the

14 Earned Income Tax Credit) of the Internal Revenue Code

15 of 1986 is amended by striking ‘‘and’’ at the end of clause

16 (ii), by striking the period at the end of clause (iii) and

17 inserting in lieu thereof ‘‘, and’’, and by inserting after

18 clause (iii) the following clause:

19 ‘‘(iv) no amount of remuneration re20 ceived for services provided in a WORK

21 position to which the taxpayer was as22 signed under part G of title IV of the So23 cial Security Act shall be taken into ac24 count.’’.
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1 (b) WORK REMUNERATION INELIGIBLE FOR TAR2 GETED JOBS TAX CREDIT.—Section 51(b) (defining

3 qualified wages for purposes of the Targeted Jobs Tax

4 Credit) of the Internal Revenue Code of 1986 is amended

5 by inserting after paragraph (3) the following new para6 graph (4):

7 ‘‘(4) SPECIAL RULES FOR WORK POSITIONS.—

8 ‘‘(A) QUALIFIED WAGES.—No amount of

9 remuneration received for services provided in a

10 WORK position to which an employee was as11 signed under part G of title IV of the Social Se12 curity Act shall be treated as qualified wages.

13 ‘‘(B) QUALIFIED FIRST-YEAR WAGES.—

14 The 1-year period described in paragraph (2) is

15 determined without regard to the period in

16 which the employee provided services in a

17 WORK position to which the employee was as18 signed under part G of title IV of the Social Se19 curity Act.’’.

20 (c) WORK REMUNERATION NOT SUBJECT TO

21 FUTA.—Section 3306(b) (defining wages for purposes of

22 the Federal unemployment tax) of the Internal Revenue

23 Code of 1986 is amended by striking ‘‘or’’ at the end of

24 paragraph (15), by striking the period at the end of para-
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1 graph 16 and inserting in lieu thereof ‘‘, or’’, and by in2 serting after paragraph (16) the following paragraph:

3 ‘‘(17) remuneration paid for services provided

4 in a WORK position to which the employee was as5 signed under part G of title IV of the Social Secu6 rity Act.’’.

7 (d) WORK REMUNERATION EXCLUDED FROM

8 GROSS INCOME.—The Internal Revenue Code of 1986 is

9 amended by redesignating section 137 (containing certain

10 cross references) as section 138, and by inserting after

11 section 136 the following section:

12 SEC. 137. WORK PROGRAM REMUNERATION.—

13 Gross income shall not include any remuneration received

14 for services provided in a WORK position to which the

15 individual was assigned under part G of title IV of the

16 Social Security Act.’’.

17 TITLE III—CHILD CARE

18 SEC. 301. CHILD CARE FOR JOBS AND WORK PROGRAM

19 PARTICIPANTS AND AT-RISK FAMILIES.

20 (a) GUARANTEE WHILE IN WORK OR JOBS PRO21 GRAM.—(1) Section 402(g)(1)(A)(i)(I) of the Act is

22 amended by striking out the semicolon and inserting in

23 lieu thereof ‘‘(including employment under part G, or

24 other required activities under such part);’’.

25 (2) Section 402(g)(1)(A)(i) of the Act is amended—
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1 (A) by striking out ‘‘(including participation in

2 a program that meets the requirements of subsection

3 (a)(19) and part (F))’’, and

4 (B) by striking out ‘‘approves the activity’’ and

5 inserting in lieu thereof ‘‘approves the activity as

6 part of the individual’s employability plan under

7 part F (regardless of whether resources are available

8 to provide other services or pay for other activities

9 to carry out such plan)’’.

10 (b) TRANSITIONAL CHILD CARE AFTER LEAVING

11 WORK PROGRAM.—

12 (1) Section 402(g)(1)(A)(ii) of the Act is

13 amended immediately following ‘‘aid to families with

14 dependent children’’ by inserting ‘‘or wages under

15 the program under part G’’.

16 (2)(A) Clause (iii) of section 402(g)(1)(A) of

17 the Act is amended by inserting before the period at

18 the end thereof ‘‘or wages under part G’’.

19 (B) Clause (iv) of such section is amended im20 mediately after ‘‘aid to families with dependent chil21 dren’’ by inserting ‘‘or wages under part G’’.

22 (c) HEALTH AND SAFETY STANDARDS; CONTINUITY

23 OF CARE.—(1) FOR RECIPIENTS.—Section 402(g)(1)(A)

24 of the Act is amended by adding at the end thereof the

25 following new subparagraphs:
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1 ‘‘(viii) Child care guaranteed

2 under this section, whether provided

3 by a method permitted under sub4 paragraph (B) or by means of an

5 agreement under subsection (j) with

6 the lead agency designated under the

7 Child Care and Development Block

8 Grant Act of 1990 (hereafter referred

9 to as the ‘CCDBG Act’), must meet

10 all health and safety standards estab11 lished by the lead agency (for pur12 poses of the CCDBG Act), and, in ad13 dition to any other requirements im14 posed pursuant to that Act, the State

15 agency must establish immunization

16 requirements and assure (and any

17 such agreement must provide) that,

18 consistent with regulations of the Sec19 retary (I) children whose child care is

20 paid for, in whole or in part, under

21 this subsection will be required to

22 have received all immunizations, at

23 the appropriate times, as currently

24 recommended by the Advisory Com25 mittee on Immunization Practices (an
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1 advisory committee established by the

2 Secretary, acting through the director

3 of the Centers for Disease Control

4 and Prevention) as specified on the

5 pediatric vaccines list referred to in

6 section 1928(e), and (II) child care

7 providers used will take steps to as8 sure that toxic substances, weapons,

9 and any other items at the location

10 where the child care is provided that

11 could be harmful to young children,

12 will be secured and unobtainable by

13 the children.

14 ‘‘(ix) The State plan must assure

15 that child care provided under this

16 subsection will conform in all ways to

17 the provisions for parental choice, un18 limited parental access, handling of

19 parental complaints, and consumer

20 education, as well as to all the other

21 standards, criteria, and requirements

22 applicable to child care provided under

23 the CCDBG Act.

24 ‘‘(x) The State agency may, at

25 its option, provide or authorize the
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1 provision of child care under this sub2 section (and if it exercises this option,

3 shall so advise the lead agency des4 ignated under the CCDBG Act, if it

5 has an agreement with such agency

6 under subsection (j)) to a child for

7 such periods of time as are necessary

8 to assure continuity of care even

9 though, for such periods, the individ10 ual whose participation in the pro11 gram under part F or part G or

12 whose employment is enabled by the

13 child care may have temporary inter14 ruptions in employment or training.’’.

15 (2) FOR AT-RISK FAMILIES.—Section 402(i) of the

16 Act is amended by redesignating paragraphs (5) and (6)

17 as paragraphs (8) and (9), respectively, and by inserting

18 after paragraph (4) the following new paragraphs:

19 ‘‘(5) Child care provided under this subsection,

20 whether provided by a method permitted under para21 graph (2) or by means of an agreement under sub22 section (j) with the lead agency designated under

23 CCDBG Act, must meet all health and safety stand24 ards established by the lead agency (for purposes of

25 the CCDBG Act), and, in addition to any other re-
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1 quirements imposed pursuant to that Act, the State

2 agency must establish immunization requirements

3 and assure (and any such agreement must provide)

4 that, consistent with the regulations of the Secretary

5 (i) children whose child care is paid for, in whole or

6 in part, under this subsection will be required to

7 have received all immunizations, at the appropriate

8 times, as currently recommended by the Advisory

9 Committee on Immunization Practices (as advisory

10 committee established by the Secretary, acting

11 through the director of the Centers for Disease Con12 trol and Prevention) as specified on the pediatric

13 vaccines list referred to in section 1928(e), and (ii)

14 child care providers used will take steps to assure

15 that toxic substances, weapons, and any other items

16 at the location where the child care is provided that

17 could be harmful to young children, will be secured

18 and unobtainable by the children.

19 ‘‘(6) The State plan must assure that child care

20 provided under this subsection will conform in all

21 ways to the provisions for parental choice, unlimited

22 parental access, handling of parental complaints,

23 and consumer education, as well as to all other

24 standards, criteria, and requirements applicable to

25 child care provided under the CCDBG Act.
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1 ‘‘(7) The State agency may, at its option, pro2 vide or authorize the provision of child care under

3 this subsection (and if it exercises this option, shall

4 so advise the lead agency designated under the

5 CCDBG Act, if it has an agreement with such agen6 cy under subsection (j)) to a child for such periods

7 of time as are necessary to assure continuity of care

8 even though, for such periods, the individual whose

9 employment is enabled by the child care may have

10 temporary interruptions in employment.’’.

11 SEC. 302. RELATED AMENDMENTS.

12 (a) CHILD CARE FOR PARTICIPANTS IN THE JOBS

13 OR WORK PROGRAM, AND TRANSITIONAL CHILD

14 CARE.—Section 402(g) of the Act is amended—

15 (1) by striking out, in paragraph (1)(A)(vii), ‘‘a

16 sliding scale formula’’ and all that follows and in17 serting in lieu thereof ‘‘the sliding fee scales estab18 lished by the lead agency designated under the Child

19 Care and Development Block Grant Act of 1990 as

20 required by section 658E(c)(5) of that Act.’’;

21 (2) by amending paragraph (1)(C)(i) by strik22 ing out clause (II) and inserting in lieu thereof ‘‘an

23 amount not less than the amount provided in the

24 State plan pursuant to this clause for January

25 1994.’’;
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•S 2224 IS

1 (3) by amending paragraph (3)(B) by adding

2 ‘‘and’’ after clause (i), striking out ‘‘applicable

3 standards’’ and all that follows in clause (ii) and in4 serting in lieu thereof ‘‘all requirements, standards,

5 and criteria applicable to child care funded under

6 the CCDBG Act.’’, and by repealing clause (iii); and

7 (4) by repealing paragraphs (4) and (5).

8 (b) AT-RISK-CHILD CARE.—Section 402(i) of the Act

9 is amended—

10 (1) in paragraph (3)(A), by striking out ‘‘a slid11 ing scale formula’’ and all that follows and inserting

12 in lieu thereof ‘‘the sliding fee scales referred to in

13 subsection (g)(1)(A)(vii).’’;

14 (2) in paragraph (8)(B) (as redesignated by

15 section 401(c)(2)), by striking out ‘‘applicable stand16 ards of State and local law;’’ and inserting in lieu

17 thereof ‘‘all requirements, standards, and other cri18 teria applicable to child care funded under the

19 CCDBG Act;

20 (3) by repealing subparagraphs (C) and (D) of

21 such paragraph (8); and

22 (4) by amending paragraph (9) (as redesig23 nated) to read as follows:

24 ‘‘(9) In order to facilitate more accurate analy25 sis of the supply and quality of child care resources,
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1 the demand for such resources that cannot currently

2 be satisfied, and the effectiveness and relationship of

3 Federal programs providing support for child care

4 and child development activities, the Secretary shall

5 specify by regulation a core set of consistently de6 fined data elements for child care which must be

7 used by each State with respect to all reports relat8 ing to child care or child development activities sup9 ported in whole or in part under this Act or under

10 the CCDBG Act.’’.

11 SEC. 303. LIMITATION OF AT-RISK CHILD CARE TO FAMI12 LIES INELIGIBLE FOR RECIPIENT OR TRANSI13 TIONAL CHILD CARE.

14 Section 402(i)(1)(A) of the Act is amended to read

15 as follows:

16 ‘‘(A) is not eligible for child care under

17 subsection (g);’’.

18 SEC. 304. OPTION TO CONSOLIDATE STATE RESPONSIBIL19 ITY FOR CHILD CARE.

20 (a) STATE OPTION.—Section 402 of the Act is

21 amended by adding at the end thereof the following new

22 subsection:

23 ‘‘(j)(1) In order to provide the child care which must

24 be guaranteed pursuant to subsection (g) or which may

25 be furnished pursuant to subsection (i), the State agency
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1 may enter into an agreement with the lead agency des2 ignated under section 658D of the CCDBG Act under

3 which—

4 ‘‘(A) subject to paragraph (2), the State agency

5 will pay (either in advance or as reimbursement) the

6 lead agency for the cost of providing child care for

7 any child with respect to whom care must be guar8 anteed under subsection (g) or is to be furnished

9 under subsection (i), and the lead agency agrees that

10 care for all such children will only be paid for from

11 such reimbursement; and

12 ‘‘(B) that (i) all child care provided by the lead

13 agency under the agreement, whether directly or by

14 contractual or other arrangements, will be subject to

15 the same requirements, standards, and other criteria

16 as are applicable to child care funded under the

17 CCDBG Act, and (ii) parents and children to whom

18 such care is provided will be offered all the same

19 protections and procedural safeguards as are appli20 cable to child care furnished under the CCDBG Act.

21 ‘‘(2) LIMITS OF REIMBURSEMENT.—The State agen22 cy shall not pay the lead agency for care provided to a

23 child an amount (A) less than the minimum permitted

24 under subsection (g)(1)(C)(i)(II) and specified by the

25 State for fiscal year 1994 in its plan approved under this
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1 part nor (B) in excess of the amount described in sub2 section (g)(1)(C) or (i)(3)(B), whichever may be applicable

3 to the child involved, and, with respect to children to

4 whom subsection (i)(3)(B) applies, the State agency shall

5 be obligated to pay the lead agency for child care furnished

6 in a fiscal year only to the extent of appropriations avail7 able for such purpose for such fiscal year.

8 ‘‘(3) SINGLE STATE AGENCY.—Nothing in this sub9 section shall be construed as precluding the designation

10 of the agency established or designated under section

11 402(a)(3) as the lead agency for purposes of the CCDBG

12 Act. No agreement shall be necessary in the case where

13 the same agency is designated under both the CCDBG Act

14 and this Act, but the agency shall, as lead agency, comply

15 with all the provisions of this subsection.’’.

16 SEC. 305. FUNDING FOR QUALITY IMPROVEMENT AND LI17 CENSING ACTIVITIES BENEFITTING CHIL18 DREN RECEIVING AFDC OR AT-RISK CHILD

19 CARE.

20 (a)(1) LICENSING AND MONITORING COSTS.—Sec21 tion 402(g)(3) of the Act is amended by adding at the

22 end thereof the following new subparagraph:

23 ‘‘(C) In determining the amount expended

24 by a State for purposes of section 403(a)(3),

25 the Secretary shall allow the State to include an
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1 amount, determined in accordance with a for2 mula prescribed by the Secretary, to reimburse

3 the State for expenditures in connection with li4 censing, monitoring, and similar activities with

5 respect to child care providers in the State. The

6 formula adopted by the Secretary shall reflect

7 either the number of children for whom child

8 care is reimbursed under section 403(a), the

9 number of child care providers in the State fur10 nishing such child care, or both, and any other

11 factors which the Secretary determines it would

12 be equitable to consider. The total payment to

13 all States pursuant to this subparagraph shall

14 not exceed $15,000,000 for any fiscal year.’’.

15 (2) The amendment made by paragraph (1) shall be

16 effective for fiscal years after 1995.

17 (b) SUPPLY AND QUALITY IMPROVEMENT ACTIVI18 TIES.—Section 402(i) of the Act is amended by redesig19 nating paragraph (9) (as previously redesignated) as para20 graph (10) and inserting after and below paragraph (8)

21 the following:

22 ‘‘(9) Of the amount available to a State for any

23 fiscal year under section 403(n), 10 percent of such

24 amount may be paid by the Secretary with respect

25 to expenditures for those activities to improve the
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1 quality of child care in the State described in section

2 458G of the Child Care and Development Block

3 Grant Act (referred to in this subsection as the

4 ‘CCDBG’ Act) and to increase the availability in

5 low-income communities of child care appropriate for

6 infants and very young children in a variety of set7 tings. Either the State agency administering the

8 plan approved under this part or the lead agency

9 designated under the CCDBG Act may conduct such

10 activities (in which case the State agency shall pay

11 to the lead agency the amount provided by the Sec12 retary for this purpose pursuant to the preceding

13 sentence).’’.

14 SEC. 306. FUNDING OF CHILD CARE FOR FAMILIES AT RISK

15 OF WELFARE DEPENDENCY.

16 (a) FEDERAL FUNDING.—Section 403(n) is amend17 ed—

18 (1) in paragraph (1)(A), by striking out ‘‘the

19 Federal medical assistance percentage as defined in

20 section 1905(b))’’ and inserting in lieu therof ‘‘the

21 State’s enhanced Federal medical assistance percent22 age (as defined in subsection (m)(6))’’; and

23 (2) in paragraph (2), by amending subpara24 graph (B) to read as follows:
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1 ‘‘(B) The amount specified in this sub2 paragraph is—

3 ‘‘(i) $300,000,000 for fiscal year

4 1995,

5 ‘‘(ii) $500,000,000 for fiscal year

6 1996,

7 ‘‘(iii) $600,000,000 for fiscal year

8 1997,

9 ‘‘(iv) $700,000,000 for fiscal year

10 1998, and

11 ‘‘(v) $1,000,000,000 for fiscal year

12 1999,

13 ‘‘(vi) $1,050,000,000 for fiscal year

14 2000,

15 ‘‘(vii) $1,100,000,000 for fiscal year

16 2001,

17 ‘‘(viii) $1,150,000,000 for fiscal year

18 2002,

19 ‘‘(ix) $1,200,000,000 for fiscal year

20 2003,

21 ‘‘(x) $1,300,000,000 for fiscal year

22 2004, and

23 ‘‘(xi) the product of $1,300,000,000

24 adjusted by the CPI as prescribed in sec25 tion 406(i) and the ratio of the child popu-
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1 lation in the United States for the most re2 cent preceding fiscal year for which such

3 data are available, to such population for

4 the second most recent preceding fiscal

5 year,

6 reduced by 2 percent (or, in the case of fiscal

7 years after 1998, 1 percent) for carrying out

8 section 404 of the Work and Responsibility Act

9 of 1994.’’.

10 (b) REALLOTMENT OF AT-RISK CHILD CARE

11 FUNDS.—Section 403(n)(3)(C) of the Act (permitting a

12 one-year carryover by a State of unclaimed Federal funds

13 for at-risk child care) is amended to read as follows:

14 ‘‘(C) If the amount specified in subpara15 graph (B) for any fiscal year exceeds (or if the

16 Secretary estimates that it will exceed) the total

17 amount paid (or estimated to be payable) under

18 paragraph (1) for such fiscal year, then the

19 Secretary shall provide additional payments to

20 States whose expenditures pursuant to section

21 402(i) for such year exceed their limitation on

22 Federal payment under paragraph (2). The

23 Secretary shall by regulation provide for the eq24 uitable reallotment of any amounts available in

25 the case where all States’ claims for a fiscal
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1 year under this subparagraph exceed the

2 amount available for reallotment.’’.

3 SEC. 307. SUPPLEMENT TO INCOME DISREGARD.

4 (a) REQUIREMENT.—Section 402(g)(1)(B) of the Act

5 is amended by adding at the end thereof the following new

6 sentence: ‘‘If the State agency guarantees child care by

7 applying the income disregard provision in subsection

8 (a)(8)(A)(iii) in determining the amount of aid to be paid

9 for a month, the State agency shall offer the caretaker

10 relative the option of receiving care under another ar11 rangement pursuant to this subparagraph, or, alter12 natively, the State agency shall reimburse the caretaker

13 relative for expenditures for child care for such month in

14 an amount equal to the excess of such expenditures (or,

15 if less, the maximum amount that may be paid for the

16 type of child care involved, as determined under subpara17 graph (C)) over the amount that is disregarded under such

18 subsection.’’.

19 (b) NOTICE.—Section 402(g)(1)(A)(i) of the Act is

20 amended by striking out the period at the end and insert21 ing in lieu thereof a semicolon and adding after and below

22 clause (II) the following: ‘‘and if the State agency applies

23 the income disregard provision in subsection (a)(8)(A)(iii)

24 without reimbursement under subparagraph (B) for any

25 additional cost, it shall advise each such family that they
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1 also have the option to have the State agency provide child

2 care under another arrangement pursuant to subpara3 graph (B).’’.

4 TITLE IV—PROVISIONS WITH MULTI5 PROGRAM APPLICABILITY

6 SEC. 401. PERFORMANCE STANDARDS.

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

8 ‘‘SEC. 487. PERFORMANCE STANDARDS.

9 ‘‘(a) DEVELOPMENT OF FACTORS TO BE MEAS10 URED.—In order to specify a set of outcome-based per11 formance measures to which the Secretary can thereafter

12 apply standards of achievement to define successful State

13 JOBS and WORK programs (with appropriate variations

14 in the factors to be measured, and the standards applied,

15 among the States and for programs directly administered

16 by Indian tribes or Alaska Native organizations), the Sec17 retary shall develop recommendations for factors to be

18 measured in assessing such programs, together with spe19 cific elements to be examined and the methodology for col20 lecting the necessary data. Factors to be recommended

21 shall include the percentage of a State’s AFDC caseload

22 subject to the time limits in section 417 who receive aid

23 for 24 cumulative months and may include factors such

24 as those considered under section 106 of the Job Training

25 Partnership Act, as well as—
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1 ‘‘(1) the increase in employment and level of

2 earnings of program participants after leaving the

3 JOBS and WORK programs,

4 ‘‘(2) the retention of program participants for

5 significant periods of time in unsubsidized employ6 ment,

7 ‘‘(3) the decrease in the rate of dependency on

8 welfare of participants’ families,

9 ‘‘(4) the improvement in the long-term eco10 nomic well-being of families with children with a

11 family member who previously participated in one or

12 both such programs, and

13 ‘‘(5) such other factors as the Secretary finds

14 appropriate.

15 The Secretary shall solicit views on the recommendations

16 from the Secretary of Labor, the Secretary of Education,

17 and other Federal, State, and local officials (and rep18 resentatives of associations of such officials) from both the

19 executive and the legislative branches of government, and

20 from other individuals and organizations with expertise in

21 the fields of social welfare, education and training pro22 grams for children and adults, employment-related pro23 grams and social and supportive services related to these

24 areas, as well as from community-based organizations and

25 former and current program participants. Based upon the
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1 consultations and consideration of the views provided re2 garding the recommended factors, the Secretary shall, not

3 later than October 1, 1996, publish in the Federal Reg4 ister the factors to be measured in assessing States’ per5 formance in administering the programs established under

6 parts F and G.

7 ‘‘(b) DEVELOPMENT OF PERFORMANCE STAND8 ARDS.—(1) RECOMMENDATIONS.—In order to set stand9 ards of achievement to be applied to each of the factors

10 to be measured as defined in accordance with subsection

11 (a), the Secretary shall, not later than April 1, 1998, de12 velop recommended standards to be applied to each of the

13 factors. Views on these recommended standards shall be

14 solicited from officials, organizations, and individuals

15 broadly representative of the groups described in sub16 section (a). Based upon the consultations and consider17 ation of the comments received from these sources, the

18 Secretary shall, not later than October 1, 1998, publish

19 in the Federal Register the standards to be applied to the

20 measurement factors.

21 ‘‘(2) REQUIREMENTS.—The performance standards

22 described in paragraph (1) shall include provisions govern23 ing cost-effective methods for obtaining such data as are

24 necessary to carry out this section which, notwithstanding

25 any other provision of law, may include access to earnings
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1 records, State employment security records, records col2 lected under the Federal Insurance Contributions Act

3 (chapter 21 of the Internal Revenue Code of 1986), State

4 aid to families with dependent children records, and the

5 use of statistical sampling techniques, and similar records

6 or measures, with appropriate safeguards to protect the

7 confidentiality of the information obtained.

8 ‘‘(c) INCENTIVES AND PENALTIES.—The Secretary

9 shall recommend and, not later than October 1, 1998,

10 issue regulations prescribing incentives for States meeting

11 or exceeding the performance standards adopted pursuant

12 to subsection (b), and penalties for States failing to meet

13 such standards. In developing such regulations, the Sec14 retary shall study and consider the relationship between

15 penalties and incentives as a means of achieving the pro16 posed standards. The Secretary will consider whether the

17 penalties and incentives set are sufficient to insure that

18 a State which incurs the costs necessary to obtain the de19 sired outcomes is financially better off than one that does

20 not. Such regulations shall also include provisions for

21 delay of any penalty when the Secretary finds it appro22 priate to afford a State sufficient time to develop and

23 (with the Secretary’s approval) implement a corrective ac24 tion plan which, if successful, will obviate the application

25 of a penalty, and provision for furnishing technical assist-
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1 ance to any State in order to improve its program and

2 avoid the application of a penalty.

3 ‘‘(d) The Secretary shall, from time to time, and in

4 consultation with officials, organizations, and individuals

5 broadly representative of the groups referred to in sub6 section (a), review and, if appropriate, propose modifica7 tions to the factors to be measured, the standards of per8 formance, or the incentives and penalties, and after oppor9 tunity for review and comment, modify any one or more

10 of such items.

11 ‘‘(e) The Secretary shall on an annual basis make

12 public the level of performance achieved by each State as

13 compared to the applicable standard.

14 ‘‘(f)(1) Each State with a plan approved under this

15 part shall collect and furnish such data as the Secretary

16 may require to assist in the development of the factors

17 to measure performance (pursuant to subsection (a)) and

18 the development of standards to be applied to those factors

19 (pursuant to subsection (b)).

20 ‘‘(2) Each State with a plan approved under this part

21 shall establish methods to solicit, on a regular and ongoing

22 basis, the views of participants in the program under this

23 part, and in the WORK program under part G, and of

24 employers of participants from both programs, on the

25 quality and effectiveness of the services provided under the
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1 program. Participants and employers may provide either

2 oral or written views, and the State should use a range

3 of methods to obtain such views, including written ques4 tionnaires and group interviews and discussions. The in5 formation obtained from participants and employers shall

6 be analyzed by the State and a summary of the informa7 tion, together with the State’s analysis, made available for

8 use in improving the administration of the JOBS and

9 WORK programs.

10 SEC. 402. AFDC QUALITY CONTROL SYSTEM AMENDMENTS.

11 (a) EXPANDED PURPOSE.—Section 408(a) of the Act

12 is amended to read as follows:

13 ‘‘(a) IN GENERAL.—In order (1) to improve the accu14 racy of payments of aid to families with dependent chil15 dren, and wages under the WORK program under part

16 G, to assess the accuracy of State reported data relating

17 to its JOBS and WORK programs and to its implementa18 tion of the time limits established by section 417, (2) to

19 determine the number of individuals to whom the State

20 found applicable section 402(a)(19)(D) (by each of the

21 categories enumerated within such section) and the num22 ber of individuals with respect to whom an extension of

23 the time limit under section 417 was provided (by each

24 of the categories enumerated within section 417(e)), (3)

25 to determine whether participation standards under sec-
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1 tion 403 have been met, (4) to assess the effectiveness

2 of the State’s program by applying the performance stand3 ards developed under section 487, and (5) to serve such

4 other purposes as the Secretary finds appropriate for a

5 performance measurement system, the Secretary shall es6 tablish and operate a quality control system to secure the

7 accurate data needed to measure performance, identify

8 areas in which corrective action is necessary, and deter9 mine the amount (if any) of the disallowance required to

10 be repaid to the Secretary because of erroneous payments

11 of aid made by the State, or its failure to meet such par12 ticipation or performance standards.’’.

13 (b) ADDITIONAL DATA REQUIRED TO BE SAM14 PLED.—Section 408(h) of the Act is amended—

15 (1) by redesignating paragraphs (2) through

16 (6) as paragraph (3) through (7), respectively,

17 (2) by adding after and below paragraph (1)

18 the following new paragraph:

19 ‘‘(2) payments of aid that will be considered,

20 for purposes of this section, to be erroneous pay21 ments because of a State’s exceeding the limits spec22 ified in section 402(a)(19)(D) or 417(e), and the

23 State’s failure to achieve the participation rates

24 specified in section 403, or to meet the performance

25 standards developed pursuant to section 487, and
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1 the additional data elements to be included in a

2 sample (and whether as part of the sample review

3 under subsection (b) or separately) in order to deter4 mine whether such participation rates have been

5 achieved, and the extent to which the State has met

6 such performance standards;’’; and

7 (3) by amending paragraph (3) (as redesig8 nated) by inserting before the semicolon ‘‘and mat9 ters relating to the size and selection of samples and

10 relating to the methodology for making statistically

11 valid estimates of the State’s compliance with the

12 limits referred to in paragraph (2) and its achieve13 ment of participation rates and performance (meas14 ured against such standards) achieved by the State’’.

15 (c) STATE STUDIES.—Section 408(h) is amended by

16 adding at the end thereof the following new sentence: ‘‘Ex17 penditures by a State to conduct studies approved by the

18 Secretary to test and improve its quality control system,

19 and adapt it to the full range of purposes described in

20 subsection (a) shall, notwithstanding any other provision

21 of law, be considered for purposes of section 403(a)(3) to

22 be necessary for the proper and efficient administration

23 of the State’s plan approved under this part.’’.

24 (d) CONFORMING AMENDMENT.—Section 408(b)(5)

25 of the Act is amended—
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1 (1) in subparagraph (A), by striking out ‘‘sub2 section (h)(3)’’ and inserting in lieu thereof ‘‘sub3 section (h)(4)’’, and

4 (2) in subparagraph (B), by striking out ‘‘sub5 section (h)(4)’’ and inserting lieu thereof ‘‘subsection

6 (h)(5)’’.

7 (e) CONSULTATION.—The Secretary of Health and

8 Human Services shall consult with the State agencies ad9 ministering programs under parts A, F, and G of title IV

10 of the Act, and with others knowledgeable about design

11 and administration of quality control systems and per12 formance measurements systems, and thereafter, but not

13 later than April 1, 1995, report to the Congress and pub14 lish in the Federal Register the proposed rules necessary

15 to effectuate the amendments to section 408 of the Act

16 made by this section.

17 SEC. 403. NATIONAL WELFARE RECEIPT REGISTRY; STATE

18 INFORMATION SYSTEMS.

19 (a) FEDERAL RESPONSIBILITIES.—Part A of title IV

20 of the Act is amended by adding after section 410 the

21 following new section:

22 ‘‘NATIONAL WELFARE RECEIPT REGISTRY

23 ‘‘SEC. 411. (a) ESTABLISHMENT.—In order to assist

24 States in administering their State plans approved under

25 this part, part F, and part G, the Secretary shall establish

26 and maintain an automated registry, to be known as the
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1 National Welfare Receipt Registry, containing information

2 reported by each State agency administering a plan ap3 proved under this part concerning individuals receiving (or

4 who have received) aid to families with dependent children

5 or wages under a State’s WORK program under part G.

6 ‘‘(b) INFORMATION TO BE MAINTAINED.—There

7 shall be maintained in the Registry, at a minimum, the

8 following information with respect to each individual in

9 the family who has received aid to families with dependent

10 children:

11 ‘‘(1) The individual’s name, date of birth, and

12 social security account number.

13 ‘‘(2) The months for which aid was provided

14 (with respect to such individual), including months

15 in which no aid was paid with respect to such indi16 vidual because a sanction was being applied pursu17 ant to section 402(a)(19)(G), section 402(a)(26), or

18 section 496(f).

19 ‘‘(3) Months in which section 402(a)(19)(D)

20 was applicable to the individual.

21 ‘‘(4) Months during which an extension under

22 section 417 (e) was provided with respect to an indi23 vidual.

24 ‘‘(5) Months in which an individual was reg25 istered with the State’s WORK program under part
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1 G and months in which the individual was assigned

2 to a position under part G.

3 ‘‘(6) Such other information as the Secretary

4 may determine would assist in the administration of

5 the programs involved, including the performance

6 measurement of one or more of such programs.

7 ‘‘(c) USE OF INFORMATION.—(1) TO WHOM PRO8 VIDED.—The Secretary shall promptly respond to requests

9 by a State agency administering a plan approved under

10 this part for information with respect to one or more indi11 viduals, identified by name and social security number.

12 The Secretary shall furnish such information electroni13 cally, and if such an individual has previously received (or

14 is receiving) aid to families with dependent children, or

15 was registered under a program pursuant to part G, iden16 tify the State making payment of aid or administering the

17 program under part G for each month involved or indicate

18 that the requested information is not in the Registry.

19 ‘‘(2) REGULATIONS.—The Secretary shall prescribe

20 rules pertaining to—

21 ‘‘(A) the format in which and process by which

22 States must submit the information maintained

23 under subsection (b);

24 ‘‘(B) the format in which and process by which

25 States must submit requests (and responses will be
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1 furnished to such requests) for information under

2 this subsection;

3 ‘‘(C) the safeguards that the State must adopt

4 to assure that requests are submitted, and responses

5 received, only by personnel authorized by the State

6 agency to perform these functions; and

7 ‘‘(D) steps that the State must take to safe8 guard any information received from the Registry,

9 and assure that it will not be redisclosed except to

10 the extent permitted under section 402(a)(9) or

11 under this section.

12 The Secretary shall take into consideration in developing

13 and issuing rules under this subsection the varying levels

14 of capability among the States to monitor, provide, and

15 receive by electronic means the information to be main16 tained in the Registry, and shall allow in such rules a

17 State to adopt alternatives to the generally applicable re18 quirements if the State demonstrates that its alternative

19 will be effective in reporting, receiving and using the infor20 mation to be maintained in the Registry and the State

21 has in effect an advance planning document approved

22 under section 402(e).

23 ‘‘(d) The Secretary shall not be liable to either a

24 State or an individual for inaccurate information provided
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1 to the Registry by one State and reported by the Secretary

2 to a second State.

3 ‘‘(e) The Secretary may disclose information in the

4 Registry, in addition to disclosure to States for the pur5 poses described above, only—

6 ‘‘(1) to the Social Security Administration in

7 order to verify the accuracy of, and as necessary to

8 correct, the social security account numbers of indi9 viduals about whom information has been reported,

10 and for use by the Social Security Administration in

11 determining the accuracy of payments under the

12 Supplemental Security Income program under title

13 XVI, or for use in connection with benefits under

14 title II, as may be relevant,

15 ‘‘(2) to the Internal Revenue Service for pur16 poses directly connected with the administration of

17 the earned income tax credit under section 32 of the

18 Internal Revenue Code of 1986, or the advance pay19 ment of such credit under section 3507 of such Code

20 or for verification of a dependency exemption claim

21 in an individual’s tax return or in connection with

22 the dependent care tax credit,

23 ‘‘(3) to the Secretary of Labor (or the State

24 agency administering the State’s program under title

25 III of the Act) for purposes directly connected with
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1 the administration of the unemployment compensa2 tion program under title III (or under a State law

3 with respect to which the Secretary of Labor cer4 tifies payment under such title), and

5 ‘‘(4) for research purposes found by the Sec6 retary to be likely to contribute to achieving the pur7 poses of this part or part F or G, but without per8 sonal identifiers.

9 ‘‘(f) There are authorized to be appropriated to estab10 lish the National Welfare Receipt Registry, $6,000,000 for

11 fiscal year 1995, and to operate the Registry, $4,000,000

12 for each of fiscal years 1996 through 1999.’’.

13 (b) STATE RESPONSIBILITIES.—Section 402(a) of

14 the Act is amended by adding after paragraph (28) the

15 following new paragraph:

16 ‘‘(29) provide—

17 ‘‘(A) that information will be reported to

18 the National Welfare Receipt Registry, at such

19 times, in such format and by such process as

20 the Secretary shall prescribe pursuant to sec21 tion 411;

22 ‘‘(B) that the State agency will request

23 from such Registry, and from the other Reg24 istries maintained as part of the National Wel25 fare Reform Information Clearinghouse estab-
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1 lished pursuant to section 453A, in such man2 ner as the Secretary may prescribe, and will use

3 all information that would facilitate the proper

4 and efficient operation of the State’s programs

5 under this part and parts F and G, and

6 ‘‘(C) that the State agency will cooperate

7 with any other State agency administering or

8 supervising the administration of a plan ap9 proved under this part in order to resolve any

10 disagreement between an individual seeking aid

11 under such a plan (or seeking to participate in

12 a program under part G) and the State about

13 the correctness of information it reported to the

14 Registry and report to the Registry any correc15 tions to be made in the data contained in the

16 Registry;’’.

17 (c) STATE AUTOMATED INFORMATION SYSTEM.—

18 Section 402(a)(30) of the Act is amended to read as fol19 lows:

20 ‘‘(30)(A) provide for an automated system

21 which manages, monitors, and reports the informa22 tion in paragraph (29) efficiently and economically,

23 and for security against unauthorized access to, or

24 use of, the data in such system; and
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1 ‘‘(B) at the option of the State, provide for the

2 establishment and operation, in accordance with an

3 (initial and annually updated) advance planning doc4 ument approved under subsection (e), of a statewide

5 automated information system to assist in the ad6 ministration of the State plan approved under this

7 part through automated procedures and processes in

8 any one or more of the following areas—

9 ‘‘(i) to assist in performing intake and re10 ferral functions;

11 ‘‘(ii) to assist in providing the child care

12 services required under subsection (g)(1), and

13 available under subsection (i), and coordinating

14 the provision of such services with those pro15 vided in the State under the Child Care and

16 Development Block Grant Act, in an efficient

17 manner that eliminates (or at least minimizes)

18 the disruption of service to children and fami19 lies and assists the State in monitoring the

20 quality, cost, and delivery of such services; or

21 ‘‘(iii) to assist in the administration of the

22 State’s plan approved under part F, including

23 monitoring the delivery of employment and

24 training services and related support services,

25 and to manage the information necessary to ad-
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1 minister and assess its programs under parts F

2 and G;

3 and to provide for security against unauthorized access to,

4 or use of, the data in such system and, if the State elects

5 to implement any such automated system, may also de6 velop and implement a system (or, if more cost-effective,

7 enhance an existing system) for determining eligibility for

8 any payment amount of aid under this part;’’.

9 (d) DEVELOPMENT OF MODEL AUTOMATED INFOR10 MATION MANAGEMENT SYSTEMS.—Section 413 of the Act

11 (including its heading) is amended to read as follows:

12 ‘‘MODEL AUTOMATED INFORMATION MANAGEMENT

13 SYSTEMS

14 ‘‘SEC. 413. (a)(1) The Secretary shall, in partnership

15 with States, design and develop model automated support

16 and case management systems to assist States in the oper17 ation, managing, tracking, and reporting in each of the

18 program areas described in section 402(a)(30)(A) and

19 clauses (i), (ii), and (iii) of section 402(a)(30)(B), and

20 thereafter provide necessary technical assistance to States

21 choosing to adopt such model.

22 ‘‘(2) Two or more States may determine to collabo23 rate in developing model automated support and case

24 management systems to assist them in operating, manag25 ing, tracking, and reporting in each of the program areas

26 described in section 402(a)(30) and, in such case, the Sec-
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1 retary shall provide all appropriate technical assistance,

2 and otherwise cooperate with the States’ collaboration to

3 develop systems that meet all the requirements of this

4 part.

5 ‘‘(b) The model system developed by the Secretary

6 under subsection (a)(1), or the system developed collabo7 ratively by States under subsection (a)(2), must meet the

8 following criteria—

9 ‘‘(1) with respect to payment of aid under the

10 State’s plan approved under this part, the system

11 must be capable of assisting in performing the in12 take and Federal function;

13 ‘‘(2) with respect to the State’s child care pro14 grams under this part, as well as under the CCDBG

15 Act, the system must be capable of assisting in—

16 ‘‘(A) identifying and establishing the eligi17 bility of families with children in need of child

18 care, and determining the appropriate program

19 under which to pay for such care;

20 ‘‘(B) determining the continuing eligibility

21 of such families for such care, and planning for

22 and monitoring services provided to such fami23 lies;
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1 ‘‘(C) processing payments and other finan2 cial data needed for the management of the

3 child care programs, and

4 ‘‘(D) producing necessary management re5 ports for the efficient and effective administra6 tion of the child care programs, including the

7 generating of required financial and statistical

8 reports;

9 ‘‘(3) with respect to the State’s JOBS and

10 WORK programs under parts F and G respectively,

11 the system must be capable of assisting in—

12 ‘‘(A) assessing a participant’s service needs

13 in relation to stated goals,

14 ‘‘(B) developing an appropriate employ15 ability plan, and

16 ‘‘(C) monitoring and recording the individ17 ual’s attendance at or participation in all re18 quired program activities.

19 In the case of each of the State’s systems described

20 in paragraphs (1), (2), and (3), the system must

21 also be capable of exchanging data electronically

22 with related Federal electronic data systems and

23 other such systems of the State, and providing such

24 other information necessary to assess the State’s
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1 program performance against the standards estab2 lished by the Secretary under section 487.

3 ‘‘(c) There are authorized to be appropriated to carry

4 out subsection (a), $7,500,000 for each of fiscal years

5 1995 and 1996.

6 ‘‘(d)(1) In addition to the technical assistance re7 quired in connection with the model systems described in

8 subsection (a)(1), the Secretary shall provide for such

9 training, and furnish such technical assistance as may be

10 appropriate to enable States to develop and implement

11 automated management systems as promptly and in as

12 cost-effective a manner as possible.

13 ‘‘(2) There are authorized to be appropriated

14 $1,000,000 for each fiscal years 1995 through 1999 to

15 carry out this subsection.’’.

16 (e) ENHANCED MATCHING.—Section 403(a) of the

17 Act is amended—

18 (1) by redesignating paragraph (3) as para19 graph (3)(A) and striking out ‘‘and’’ at the end

20 thereof, and

21 (2) by adding after and below such paragraph

22 the following:

23 ‘‘(B) if the Secretary determines that the

24 modification of a State’s system that meets the

25 requirements of section 402(a)(30)(A) will be
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1 cost-effective, or that a State’s automated man2 agement information system uses any one or

3 more of the Secretary’s models developed under

4 section 413(a)(1), or is based on a State col5 laboration under section 413(a)(2), Federal

6 payments with respect to such systems shall

7 equal 80 percent (or, if greater, the State’s en8 hanced Federal medical assistance percentage,

9 as defined in subsection (m)(6)) of a State’s ex10 penditures under its approved advance planning

11 document for the cost of developing and imple12 menting any such system collaborative project;

13 and

14 ‘‘(C) notwithstanding any other provision

15 of this section, the total amount payable by the

16 Secretary with respect to expenditures, (during

17 the five-year period) to which subparagraph (B)

18 applies shall not exceed $800,000,000 to be dis19 tributed among the States, and to make avail20 able at such time or times over the five-year pe21 riod, as is provided in regulations issued by the

22 Secretary, taking into account the relative size

23 of State caseloads and the levels of automation

24 needed to meet the requirements of this title,

25 and payments under subparagraph (B) shall be
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1 made at such times and in such manner as pro2 vided in subsection (b) and the advance plan3 ning document approved under section

4 402(e).’’, and

5 (3) by striking out ‘‘section 403(a)(3)’’ in sub6 paragraph (C) of section 402(g)(3) of this Act, as

7 added by section 305(a)(1) of this Act, and inserting

8 in lieu thereof ‘‘section 403(a)(3)(A)’’.

9 (f) REVISION OF ADVANCE PLANNING DOCUMENT

10 REQUIREMENT.—Section 402(e) of the Act is amended to

11 read as follows:

12 ‘‘(e)(1) The Secretary shall not approve the Advance

13 Data Planning document referred to in subsection (a)(30),

14 unless such document, when implemented, will economi15 cally, efficiently, and effectively carry out the objectives

16 of the automated, statewide, management information sys17 tems referred to in such subsection, and such document

18 provides a plan to address the State’s approach, schedule,

19 needed resources, and cost-benefit of the project.

20 ‘‘(2) The Secretary shall, on a continuing basis, re21 view, access, and inspect the planning, design, and oper22 ation of the statewide management information systems

23 approved under subsection 403(a)(3)(B), to determine

24 whether, and to what extent, such systems meet and will

25 continue to meet requirements imposed under this part.’’.
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1 SEC. 404. RESEARCH AND EVALUATION; TECHNICAL AS2 SISTANCE; DEMONSTRATION PROJECTS.

3 (a) FUNDING.—There shall be available to the Sec4 retary of Health and Human Services (hereafter in this

5 section referred to as the ‘‘Secretary’’) for carrying out

6 the projects and other activities specified in this section,

7 and other such activities related to the provisions of this

8 Act, in a fiscal year an amount equal to 2 percent (or,

9 in the case of fiscal years after 1998, 1 percent) of the

10 sum of the amounts specified in subsections (k)(3), (l)(3),

11 and (n)(2)(B) of section 403 of the Social Security Act

12 for such fiscal year.

13 (b) RESEARCH AND EVALUATION.—In addition to

14 any other research and evaluation found appropriate by

15 the Secretary pertaining to the new programs and amend16 ments to existing programs added to the Social Security

17 Act by the provisions of this Act, the Secretary shall, in

18 consultation with the Secretary of Labor and the Sec19 retary of Education conduct, in accordance with scientif20 ically-acceptable methodology, the following studies of the

21 time-limited program of assistance together with training

22 and preparation for employment, followed by a program

23 of required employment or employment-related activities:

24 (1) A two-phase implementation study of—

25 (A) the initial steps taken by States and

26 political subdivisions to implement the new pro-
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1 grams and requirements established by the

2 amendments made by this Act, as well as the

3 obstacles faced, institutional arrangements en4 tered into, and recommendations of such States

5 and political subdivisions based on their experi6 ences, and thereafter

7 (B) the experiences of States and localities

8 after the new programs and requirements have

9 been substantially implemented, including a

10 study of the program design, services provided,

11 funding levels, participation rates, and rec12 ommendations of the administering agencies,

13 and a review of the impact of these new pro14 grams and requirements on the State and local

15 administration of the programs, including man16 agement systems, staffing structures, and the

17 culture of the welfare programs.

18 (2) An evaluation in a variety of States and lo19 calities, using random assignment of individuals to

20 treatment and control groups, and other appropriate

21 rigorous methods, to examine the effectiveness of

22 time-limited assistance in helping participants

23 achieve self-sufficiency, and the corresponding effect

24 on unemployment rates, reduction of welfare depend25 ency and teen pregnancy, the effects on income lev-
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1 els, family structure, and children’s well-being

2 among participant groups.

3 (3) Together with the Secretary of Labor, a

4 comprehensive national study after the WORK pro5 gram (under part G of title IV of the Act) has been

6 in effect for 2 years to measure the program’s suc7 cess in assisting participants to obtain unsubsidized

8 employment, and to evaluate skill levels and barriers

9 to employment in the case of individuals who have

10 not, after participating in such program for 2 years,

11 been able to obtain unsubsidized employment.

12 (c) TECHNICAL ASSISTANCE.—In addition to any

13 other specific authorization in the Social Security Act for

14 technical assistance, the Secretary is authorized to offer

15 a broad range of technical assistance to States (including

16 Indian tribes and Alaska Native organizations) and terri17 tories, including training, consultations, and fostering the

18 exchange of information among States and others about

19 practices, strategies, and techniques that are proving ef20 fective.

21 (d) PLACEMENT DEMONSTRATION PROJECTS.—The

22 Secretary is authorized to approve up to 10 demonstra23 tions of innovative techniques to increase the number of

24 placements of participants in the JOBS program (under

25 part F of title IV of the Social Security Act) in positions
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1 of unsubsidized employment with significant retention

2 rates. No more than 5 such demonstrations shall test the

3 use by the State of a private organization, pursuant to

4 a contractual arrangement under which the organization

5 will place JOBS program participants in employment, and

6 no more than 5 such demonstrations shall involve the use

7 of placement bonuses payable to State or local agency em8 ployees who effectuate successful placements. All the

9 projects shall specify performance standards (based on

10 placement and retention rates) to measure successful per11 formance, and, in the case of projects involving the use

12 of private agencies, shall also specify the services that

13 must be made available to clients, both before and after

14 the placement, and indicate whether the organization will

15 also serve participants in the State’s WORK program

16 (under part G of title IV of the Social Security Act.)

17 (e) WORK-FOR-WAGES DEMONSTRATION PRO18 JECTS.—The Secretary is authorized to approve up to 5

19 local demonstration projects to test the development, im20 plementation, and effectiveness of WORK programs con21 ducted outside the context of the State’s AFDC program.

22 Any project approved under this subsection must include

23 the following elements:

24 (1) The State agency administering the State’s

25 AFDC program (under part A of title IV of the So-
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1 cial Security Act) must close the case when an indi2 vidual to whom section 417 applies (as added by sec3 tion 104 of this Act) reaches the time limit specified

4 in such section.

5 (2) Each individual involved in the demonstra6 tion must be advised of the procedures that must be

7 followed to apply for the WORK-for-Wages Project,

8 and may not be denied an opportunity to participate

9 if such individual would be eligible to participate in

10 the State’s WORK program under part G of such

11 title.

12 (3) Each individual will be afforded the oppor13 tunity to earn wages in a position of employment

14 and WORK stipends if necessary to provide at least

15 the income level of the State’s AFDC program (after

16 application of the $120 per month earned income

17 disregard for work expenses) in the case of a simi18 larly situated family (and States conducting projects

19 will be encouraged to standardize, to the extent con20 sistent with the preceding provisions of this para21 graph, the amount of the stipends), but no payment

22 of either wages or the stipend will occur unless the

23 individual has worked or participated in an alter24 native project-specified activity such as job search,
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1 interim community service, or other activity designed

2 by the project.

3 (4) Those elements of the WORK program

4 under part G of title IV of the Act which the Sec5 retary determines are essential to achieve its objec6 tives, while protecting the interests of participants in

7 the program and others involved in or affected by

8 the project, will be retained and applied in the

9 project.

10 (f) WORK SUPPORT AGENCY DEMONSTRATIONS.—

11 The Secretary is authorized, in consultation with the Sec12 retary of Labor, the Secretary of Agriculture, and the Sec13 retary of the Treasury, to approve demonstration projects

14 in up to 5 States, under which the State establishes a

15 Work Support Agency to provide a broad and coordinated

16 array of services and assistance to individuals who are

17 former recipients of aid to families with dependent chil18 dren to assist them in retaining unsubsidized employment.

19 Services may include assistance in obtaining other benefits

20 or payments for which the individual is still eligible, assist21 ance in dealing with short-term family problems which

22 could otherwise jeopardize continuation of the employment

23 relationship, short-term or one-time financial aid to meet

24 unusual employment-related needs and any other aid or
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•S 2224 IS

1 services that support the individual’s ability to retain or,

2 where necessary, secure employment.

3 (g) DEMONSTRATION PROJECTS FOR NONCUSTODIAL

4 PARENTS.—In order to encourage the development of in5 novative parenting programs for noncustodial parents that

6 build upon existing programs for high-risk families, such

7 as the Head Start program, the Healthy Start program,

8 the Even Start program, and the Family Preservation and

9 Support program, the Secretary is authorized to make

10 grants to States, Indian tribes and Alaska Native organi11 zations, or community-based organizations to conduct

12 demonstration projects designed to improve the parenting

13 skills of noncustodial parents with particular emphasis on

14 matters such as the importance of parental involvement

15 and economic security in the healthy development of chil16 dren. The applicant shall describe the services to be pro17 vided, and the way in which project services will be coordi18 nated with one or more of the programs or initiates re19 ferred to in the preceding sentence.

20 (h) The Secretary shall, with respect to all dem21 onstrations authorized under this section, prescribe—

22 (1) the minimum length of such projects in

23 order to assure the value of the project,
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1 (2) the assignment techniques and other re2 quirements for the methodologies so that the results

3 will be scientifically acceptable,

4 (3) the required financial contribution by the

5 project applicant,

6 (4) types of expenditures that may be included

7 under the project,

8 (5) the timing and nature of required reports

9 and the procedures to be followed in conducting the

10 evaluation and review of project results, and

11 (6) any other rules that the Secretary finds ap12 propriate to assure the integrity of the demonstra13 tion, and to protect the rights and interests of pro14 gram participants who are assigned to the dem15 onstration.

16 SEC. 405. OFFSETS TO MANDATORY SPENDING FROM RE17 DUCED FRAUD, WASTE, AND ABUSE.

18 (a) CERTIFICATIONS.—In order to assure achieve19 ment of the reductions in mandatory spending assumed

20 in the cost estimates accompanying this Act, beginning in

21 fiscal year 1998, and each of the five succeeding fiscal

22 years is—

23 (1) the Secretary of Health and Human Serv24 ices shall certify to the Director of the Office of

25 Management and Budget that each of the systems
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1 of data bases included in the National Welfare Re2 form Information Clearinghouse established by Sec3 tion 453A of the Social Security Act, (as added by

4 section 625 of this Act) are both receiving data from

5 and providing data to State and Federal agencies,

6 and otherwise fully complying with all requirements

7 imposed by or pursuant to the provisions of the So8 cial Security Act establishing, and requiring use of

9 the components, of the Clearinghouse, and

10 (2) the Director of the Office of Management

11 and Budget shall determine whether, and if so cer12 tify that, all such data were used fully and by the

13 Federal agencies to which it was supplied in order

14 to reduce fraud, waste, and abuse in the programs

15 it administers and in compliance with the require16 ments imposed by or pursuant to the Social Security

17 Act and subsection (d).

18 (b) ALTERNATIVE REDUCTIONS IN MANDATORY

19 SPENDING.—If the Director of the Office of Management

20 and Budget, after consultation with the Secretary of

21 Health and Human Services, certifies, prior to the close

22 of a fiscal year, as provided in subsection (a)(2), that, not23 withstanding the full use of data as described in sub24 section (a) and States’ implementation of applicable re25 quirements of the Social Security Act, mandatory spend-
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•S 2224 IS

1 ing was not reduced (when compared to the levels esti2 mated had the Clearinghouse not been established and

3 used) by the amount projected in the cost estimates, then

4 in the succeeding fiscal year the following reductions in

5 spending shall occur, in the sequence stated, to the extent

6 necessary to reduce mandatory spending by the difference

7 between the amount that it was estimated would be saved

8 (or avoided) in the year (in which the certifications are

9 made) and the amount certified by the Director as having

10 been saved (or avoided)—

11 (1) the amount made available to the Secretary

12 of Health and Human Services under section 404(a)

13 of this Act for research, demonstrations, and tech14 nical assistance, and the amount available under sec15 tion 452(j) of the Social Security Act (as added by

16 section 616 of this Act) for technical assistance to

17 States with respect to child support enforcement

18 programs (each such amount being reduced propor19 tionately); and, if necessary,

20 (2) amounts otherwise payable under section

21 403(a)(3) of the Social Security Act (as amended by

22 this Act) to States which have not fully implemented

23 all the requirements imposed by or pursuant to the

24 Social Security Act for full use of the data available

25 from any part of the National Welfare Reform Infor-
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1 mation Clearinghouse shall be reduced by 3 percent

2 (or such lesser amount as is necessary to achieve the

3 necessary reductions in mandatory spending).

4 (c) RELATED AMENDMENTS.—Section 1137(a)(2) of

5 the Act is amended by striking out ‘‘such Code,’’ and in6 serting in lieu thereof ‘‘such Code, and information avail7 able from any Registry maintained under the National

8 Welfare Reform Information Clearinghouse established

9 under section 453(A) (or, prior to the full establishment

10 and operation of the Director of New Hires, from systems

11 of similar information maintained by any other State,

12 where cost-effective),’’.

13 (d) The Social Security Administration and the Sec14 retary of the Treasury shall each request and fully use

15 all information in the registries maintained under the Na16 tional Welfare Reform Information Clearinghouse estab17 lished under section 453A of the Social Security Act to

18 the extent that such information may be useful in carrying

19 out their statutory responsibilities and reducing fraud,

20 waste, and abuse.

21 TITLE V—PREVENTION OF DEPENDENCY

22 SEC. 501. SUPERVISED LIVING ARRANGEMENTS FOR MI23 NORS.

24 (a) Section 402(a)(43) of the Act is amended by

25 striking out ‘‘at the option of the State,’’.
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1 (b) Such section is further amended in subparagraph

2 (A)(i) by striking out ‘‘, or reside in a foster home’’ and

3 all that follows down to the semicolon.

4 (c) Such section is further amended—

5 (1) by amending so much of subparagraph (B)

6 as precedes clause (i) to read ‘‘(B) in the case

7 where—’’,

8 (2) by striking out the semicolon at the end of

9 each numbered clause in such subparagraph and in10 serting in lieu thereof a comma, and

11 (3) by adding after and below clause (v) of such

12 subparagraph the following: ‘‘subparagraph (A) shall

13 not be applicable, but the State agency shall assist

14 the individual in locating an appropriate adult-super15 vised supportive living arrangement taking into con16 sideration the needs and concerns of the minor, (or

17 may determine that the individual’s current living

18 arrangement is appropriate) and thereafter shall re19 quire that the individual (and child, if any) reside in

20 such living arrangement as a condition of the contin21 ued receipt of aid under the plan (or in an alter22 native appropriate arrangement, should cir23 cumstances change and the current arrangement

24 cease to be appropriate) or, if the State agency is

25 unable, after making diligent efforts, to locate any
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1 such appropriate living arrangement, it shall provide

2 for comprehensive case management, monitoring,

3 and other social services consistent with the best in4 terests of the individual (and child) while living inde5 pendently;’’.

6 SEC. 502. STATE OPTION TO LIMIT BENEFIT INCREASES

7 FOR ADDITIONAL FAMILY MEMBERS.

8 (a) STATE OPTION.—Section 402(a) of the Act is

9 amended—

10 (1) by striking out ‘‘and’’ after paragraph (44);

11 (2) by striking out the period after paragraph

12 (45) and inserting in lieu thereof ‘‘; and’’; and

13 (3) by adding at the end thereof the following

14 new paragraph:

15 ‘‘(46) at the option of the State, provide that—

16 ‘‘(A) subject to subparagraphs (B), (C),

17 and (D), the amount of aid to families with de18 pendent children paid to a family under the

19 plan will not be increased by reason of the birth

20 of a child to an individual included in such fam21 ily for purposes of making the determination

22 under paragraph (7) and applying paragraph

23 (8), or will be increased less than the amount

24 that would be paid with respect to such child if

25 such child had been a member of the family
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1 when the family first applied for aid, (but any

2 such child will be considered to be a recipient

3 of aid for all other purposes, including title

4 XIX) if—

5 ‘‘(i) in the case where the individual is

6 a custodial parent of a dependent child,

7 the child was conceived in a month for

8 which the individual received aid under the

9 plan, or

10 ‘‘(ii) in the case where the individual

11 is a dependent child, the individual is the

12 parent of another child who is a member of

13 the same family and whose needs are in14 cluded for purposes of making such deter15 mination;

16 ‘‘(B) services will be offered under para17 graph (15) to all appropriate family members;

18 ‘‘(C) there will be disregarded, in making

19 the determination under paragraph (7) and be20 fore applying the provisions of paragraph (8),

21 an amount of income equal to any increase in

22 aid that would have been paid but for subpara23 graph (A) that is derived from child support

24 collected with respect to the child referred to in

25 paragraph (A), earned income of a member of
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1 the family referred to in such subparagraph, or

2 from any other source specified in the plan that

3 the Secretary may approve as consistent with

4 the objectives of this paragraph; and

5 ‘‘(D) the provisions of subparagraph (A)

6 will not be applied in case of rape or in any

7 other cases that the State agency finds would

8 violate standards of fairness and good con9 science.’’.

10 (b) MATCHING FOR RELATED ADMINISTRATIVE

11 COSTS.—Section 403(a)(3) of the Act is amended by

12 striking out the semicolon and inserting in lieu thereof ‘‘or

13 counseling or referral services (but no other types of fam14 ily planning services) furnished pursuant to section

15 402(a)(15);’’.

16 SEC. 503. CASE MANAGEMENT FOR PARENTS UNDER AGE

17 20.

18 Section 482(b) of the Act, as amended by section

19 102(2) of this Act, is further amended by—

20 (1) redesignating paragraph (4) as paragraph

21 (4)(A),

22 (2) striking out ‘‘The State agency’’ in such

23 paragraph (4)(A) and inserting in lieu thereof ‘‘Ex24 cept as provided in subparagraph (B), the State

25 agency’’, and
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•S 2224 IS

1 (3) by inserting after and below paragraph

2 (4)(A) the following:

3 ‘‘(B) The State agency shall—

4 ‘‘(i) assign a case manager to each

5 custodial parent receiving aid under part A

6 who is under age 20;

7 ‘‘(ii) provide that case managers will

8 have the training necessary (taking into

9 consideration the recommendations of ap10 propriate professional organizations) to en11 able them to carry out their responsibilities

12 and will be assigned a caseload the size of

13 which permits effective case management;

14 and

15 ‘‘(iii) provide that the case manager

16 will be responsible for—

17 ‘‘(I) assisting such parent in ob18 taining appropriate services, including

19 at a minimum, parenting education,

20 family planning services, education

21 and vocational training, and child care

22 and transportation services,

23 ‘‘(II) making the determinations

24 required to implement the provision of

25 paragraph (43),
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1 ‘‘(III) monitoring such parent’s

2 compliance with all program require3 ments, and, where appropriate, pro4 viding incentives and applying sanc5 tions, and

6 ‘‘(IV) providing general guidance,

7 encouragement and support to assist

8 such parent in his or her role as a

9 parent and in achieving self-suffi10 ciency.’’.

11 SEC. 504. STATE OPTION TO PROVIDE ADDITIONAL INCEN12 TIVES AND PENALTIES TO ENCOURAGE TEEN

13 PARENTS TO COMPLETE HIGH SCHOOL AND

14 PARTICIPATE IN PARENTING ACTIVITIES.

15 (a) STATE PLAN.—Section 402(a)(19)(E) of the Act

16 (as amended by section 101 of this Act) is amended by

17 adding ‘‘and’’ after clause (ii) and adding after and below

18 clause (ii) the following new clause:

19 ‘‘(iii) at the option of the State, some

20 or all custodial parents who are under age

21 20 (and pregnant women under age 20)

22 who are receiving aid under this part will

23 be required to participate in a program of

24 monetary incentives and penalties, consist25 ent with subsection (k);’’.
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1 (b) ELEMENTS OF PROGRAM.—Section 402 of the

2 Act is amended by adding at the end thereof the following

3 new subsection:

4 ‘‘(k)(1) If a State chooses to conduct a program of

5 monetary incentives and penalties to encourage custodial

6 parents (and pregnant women) who are under age 20 to

7 complete their high school (or equivalent) education, and

8 participate in parenting activities, the State shall amend

9 its State plan—

10 ‘‘(A) to specify the one or more political sub11 divisions in which the State will conduct the pro12 gram (or other clearly defined geographic area or

13 areas), and

14 ‘‘(B) to describe its program in detail.

15 ‘‘(2) A program under this subsection—

16 ‘‘(A) may, at the option of the State, include all

17 such parents who are under age 21;

18 ‘‘(B) may, at the option of the State, require

19 full-time participation in secondary school or equiva20 lent educational activities, or participation in a

21 course or program leading to a skills certificate

22 found appropriate by the State agency or parenting

23 education activities (or any combination of such ac24 tivities and secondary education);
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1 ‘‘(C) shall require that the case manager as2 signed to the custodial parent pursuant to section

3 482(b)(3) will review the needs of such parent and

4 will assure that, either in the initial development or

5 revision of the parent’s employability plan, there will

6 be included a description of the services that will be

7 provided to the parent and the way in which the

8 case manager and service providers will coordinate

9 with the educational or skills training activities in

10 which the custodial parent is participating;

11 ‘‘(D) shall provide monetary incentives for more

12 than minimally acceptable performance of required

13 educational activities; and

14 ‘‘(E) shall provide penalties (which may be

15 those required by subsection (a)(19)(G) or, with the

16 approval of the Secretary, other monetary penalties

17 that the State finds will better achieve the objectives

18 of the program.

19 ‘‘(3) When a monetary incentive is payable because

20 of the more than minimally acceptable performance of re21 quired educational activities by a custodial parent, the in22 centive shall be paid directly to such parent, regardless

23 of whether the State agency makes payment of aid under

24 the State plan directly to such parent.
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1 ‘‘(4)(A) For purposes of this part, monetary incen2 tives paid under this subsection shall be considered aid

3 to families with dependent children.

4 ‘‘(B) For purposes of any other Federal or federally5 assisted program based on need, no monetary incentive

6 paid under this subsection shall be considered income in

7 determining a family’s eligibility for or amount of benefits

8 under such program, and if aid is reduced by reason of

9 a penalty under this subsection, such other program shall

10 treat the family involved as if no such penalty has been

11 applied.

12 ‘‘(5) The State agency shall from time to time provide

13 such information as the Secretary may request, and other14 wise cooperate with the Secretary, in order to permit eval15 uation of the effectiveness on a broad basis of the State’s

16 program conducted under this subsection.’’.

17 SEC. 505. ADOLESCENT PREGNANCY PREVENTION GRANTS.

18 (a) ADOLESCENT PREGNANCY PREVENTION.—Title

19 XX (42 U.S.C. 1397–1397F) is amended by adding at

20 the end the following:

21 ‘‘SEC. 2008. ADOLESCENT PREGNANCY PREVENTION

22 GRANTS.

23 ‘‘(a) PURPOSE.—The purpose of this section is to en24 courage and provide financial assistance for the develop25 ment of intensive and sustained school-linked and school-
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1 based pregnancy prevention programs for adolescents and

2 their families in areas of high poverty or high unmarried

3 adolescent birth rates that build upon other Federal,

4 State, and local pregnancy prevention and youth develop5 ment programs.

6 ‘‘(b) GENERAL AUTHORITY.—Notwithstanding sec7 tion 2005(a)(6), the Secretary of Health and Human

8 Services, the Secretary of Education, and the Chief Execu9 tive Officer of the Corporation for National and Commu10 nity Service (hereinafter referred to as the ‘responsible

11 Federal officials’), in consultation with other relevant Fed12 eral agencies, shall jointly make grants to eligible entities,

13 to carry out programs in accordance with this section.

14 ‘‘(c) FEDERAL ADMINISTRATION.—

15 ‘‘(1) Notwithstanding the Department of Edu16 cation Organization Act (20 U.S.C. 3401 et seq.)

17 and the General Education Provisions Act (20

18 U.S.C. 1221 et seq.), the responsible Federal offi19 cials shall jointly provide for the administration of

20 this section, and shall jointly issue whatever regula21 tions, procedures, and guidelines, the responsible

22 Federal officials consider necessary and appropriate

23 to administer and enforce the provisions of this sec24 tion.
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1 ‘‘(2) The responsible Federal officials may enter

2 into agreements with any other Federal entity with

3 expertise in youth development activities to admin4 ister the program under this section and may pro5 vide such entity with appropriate reimbursement.

6 ‘‘(d) FUNDING.—

7 ‘‘(1) IN GENERAL.—To achieve the purposes of

8 this section, the responsible Federal officials shall

9 make grants to eligible entities under subsection (b)

10 and conduct activities under subsections (m) and (n)

11 so that in the aggregate the expenditures for such

12 grants and activities do not exceed $20,000,000 for

13 fiscal year 1995, $40,000,000 for fiscal year 1996,

14 $60,000,000 for fiscal year 1997, $80,000,000 for

15 fiscal year 1998, and $100,000,000 for fiscal year

16 1999 and each subsequent fiscal year.

17 ‘‘(2) PAYMENTS TO GRANTEES.—Upon approval

18 by the responsible Federal officials, each grant appli19 cant shall be entitled to payment of at least $50,000

20 and not more than $400,000 for each fiscal year

21 based on an assessment by the responsible Federal

22 officials of the scope and quality of the proposed

23 program and the number of adolescents to be served

24 by the program. Payments to a grantee for any fis25 cal year shall be available for expenditure by such
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1 grantee in such fiscal year or the succeeding fiscal

2 year.

3 ‘‘(3) RESERVATION FOR EVALUATION, TRAIN4 ING, TECHNICAL ASSISTANCE, AND NATIONAL

5 CLEARINGHOUSE.—The responsible Federal officials

6 shall reserve, with respect to each fiscal year, up to

7 10 percent of the aggregate amount described in

8 paragraph (1) for expenditure by the responsible

9 Federal officials for evaluation, training, and tech10 nical assistance related to the programs under this

11 section, and for the establishment and operation of

12 a National Clearinghouse on Adolescent Pregnancy

13 Prevention Programs under subsection (n).

14 ‘‘(4) EXCESS AMOUNT.—If in any fiscal year

15 the aggregate amount specified in paragraph (1) for

16 such fiscal year exceeds the amount required to

17 carry out approved grant applications and other

18 functions under paragraph (3), then the amount

19 specified in section 2003(c)(5) shall be increased by

20 the excess.

21 ‘‘(e) DEFINITIONS.—As used in this section:

22 ‘‘(1) ADOLESCENTS.—The term ‘adolescents’

23 means youth who are ages 10 through 19.

24 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en25 tity’ means a partnership that includes—
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1 ‘‘(A) a local education agency, acting on

2 behalf of one or more schools, together with

3 ‘‘(B) one or more community-based organi4 zations, institutions of higher education, or

5 public or private agencies or organizations.

6 ‘‘(3) ELIGIBLE AREA.—The term ‘eligible area’

7 means a school attendance area in which—

8 ‘‘(A) at least 75 percent of the children are

9 from low-income families as that term is used

10 in part A of title I of the Elementary and Sec11 ondary Education Act of 1965; or

12 ‘‘(B) the number of children receiving Aid

13 to Families with Dependent Children under

14 part A of title IV is substantial as determined

15 by the responsible Federal officials; or

16 ‘‘(C) the unmarried adolescent birth rate is

17 high, as determined by the responsible Federal

18 officials.

19 ‘‘(4) SCHOOL.—The term ‘school’ means a pub20 lic elementary, middle, or secondary school.

21 ‘‘(5) RESPONSIBLE FEDERAL OFFICIALS.—The

22 term ‘responsible Federal officials’ means the Sec23 retary of Education, the Secretary of Health and

24 Human Services, and the Chief Executive Officer of
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1 the Corporation for National and Community Serv2 ice.

3 ‘‘(f) USES OF FUNDS.—Grants under this section—

4 ‘‘(1) shall be used to—

5 ‘‘(A) develop, operate, expand, and improve

6 a sequential, age-appropriate program of in7 struction and counseling services for adolescents

8 designed to promote personal responsibility and

9 a healthy drug free lifestyle, and to prevent ad10 olescent pregnancy, through such activities as

11 counseling and instruction in the full range of

12 consequences of premature sexual behavior and

13 adolescent pregnancy, training in decision-mak14 ing, and activities to promote involvement of

15 parents and families in adolescent development

16 and personal responsibility; and

17 ‘‘(B) provide opportunities for youth at18 risk to develop sustained contact with one or

19 more volunteer or professionally trained adults

20 to provide character development, through such

21 activities as mentoring, group coaching, or

22 after-school activities; and

23 ‘‘(2) may be used to conduct other related ac24 tivities that promote the purposes of this section.
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1 ‘‘(g) APPLICATION.—Each applicant for a grant

2 under subsection (b) must submit an application that—

3 ‘‘(1) includes a plan, based on local needs, for

4 accomplishing the purposes of this section that—

5 ‘‘(A) sets forth specific, measurable goals

6 intended to be accomplished under the program,

7 and describes the methods to be used in meas8 uring progress toward accomplishment of such

9 goals;

10 ‘‘(B) describes the components of the pro11 gram, including—

12 ‘‘(i) the role in the program of any

13 national service participants supported by

14 the National and Community Service Act

15 of 1990 (42 U.S.C. 12501 et seq.) or by

16 any other national service law as defined in

17 such Act, and

18 ‘‘(ii) the activities, in accordance with

19 subsection (f), that will be made available

20 under the program,

21 and the manner in which such components will

22 be implemented, including the extent to which

23 activities will take place after school, on week24 ends, or during the summer;
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1 ‘‘(C) describes the manner in which one or

2 more professional staff will administer the pro3 gram, and, where appropriate or feasible, the

4 manner in which national service participants

5 will be involved in the development or delivery

6 of services and in the coordination of during or

7 after-school activities;

8 ‘‘(2) demonstrates the manner in which the pro9 gram will be based on research concerning effective

10 means of reducing adolescent pregnancy, including

11 reducing risk-taking behaviors correlated with ado12 lescent pregnancy;

13 ‘‘(3) demonstrates that the program will serve

14 male and female adolescents and, where feasible,

15 out-of-school adolescents, and describes the steps the

16 applicant will take to serve such adolescents;

17 ‘‘(4) demonstrates the manner in which the ap18 plicant will provide, to the extent feasible, a continu19 ity of services for adolescents until age 19;

20 ‘‘(5) demonstrates the extent to which school

21 personnel, parents, community organizations, and

22 the adolescents to be served have participated in the

23 development of the application and will participate

24 in the planning and implementation of the program;
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1 ‘‘(6) describes the applicant’s partnership, in2 cluding the relationship of the partners, the role of

3 each partner in the development and implementation

4 of the program, and the manner in which the part5 ners will coordinate their resources;

6 ‘‘(7) describes the nature and scope of commit7 ment to the program by other community institu8 tions, such as religious organizations, community

9 groups, institutions of higher education, business,

10 and labor;

11 ‘‘(8) describes the methods to be used in coordi12 nating the provision of services under the program

13 with the provision of services or benefits under other

14 Federal or federally assisted programs, State and

15 local programs, and private programs serving the

16 same population;

17 ‘‘(9) demonstrates that the area to be served is

18 an eligible area;

19 ‘‘(10) contains assurances that at least one ac20 tivity will be located in a school in the area to be

21 served and describes the activities that will be

22 school-based;

23 ‘‘(11) contains assurances that the amounts

24 provided under this section will not be used to sup-
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•S 2224 IS

1 plant Federal, State, or local funds for services and

2 activities that promote the purposes of this section;

3 ‘‘(12) contains assurances that the applicant

4 will provide a non-Federal share, in cash or in kind,

5 of at least 20 percent of the cost of carrying out the

6 approved program;

7 ‘‘(13) describes the applicant’s plan for continu8 ation of the program following completion of the

9 grant period and termination of Federal support

10 under this section;

11 ‘‘(14) contains assurances that the applicant

12 will furnish such reports, containing such informa13 tion, and participate in such evaluations, as the re14 sponsible Federal officials may require; and

15 ‘‘(15) includes such other information and as16 surances as the responsible Federal officials may

17 reasonably require.

18 ‘‘(h) PRIORITIES.—In making awards under this sec19 tion, the responsible Federal officials shall give priority to

20 applicants that—

21 ‘‘(1) provide for non-Federal resources signifi22 cantly in excess of those required in subsection

23 (g)(12) or for an increasing ratio of non-Federal re24 sources over the term of the grant; and
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•S 2224 IS

1 ‘‘(2) participate in other Federal and non-Fed2 eral programs that relate to the purposes of this sec3 tion.

4 ‘‘(i) TREATMENT AS NON-FEDERAL SHARE.—For

5 purposes of the National and Community Service Act of

6 1990 (42 U.S.C. 12501 et seq.), the funds provided to

7 a grantee under this section shall not be considered Fed8 eral funds.

9 ‘‘(j) PROHIBITION ON USE OF FUNDS.—No assist10 ance made available under this section shall be used to

11 provide religious instruction, to conduct worship services,

12 or to promote any religious view or teaching in any man13 ner.

14 ‘‘(k) GEOGRAPHIC DIVERSITY.—The responsible

15 Federal officials shall, to the extent feasible, ensure that

16 applications are approved from both urban and rural areas

17 and reflect nationwide geographic diversity.

18 ‘‘(l) APPLICATION PERIOD.—An application approved

19 under this section shall be for a term of 5 years; except

20 that approval may be terminated before the end of such

21 period if the responsible Federal officials determine that

22 the grantee conducting the program has failed substan23 tially to carry out the program as described in the ap24 proved application.
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•S 2224 IS

1 ‘‘(m) EVALUATION, TRAINING, AND TECHNICAL AS2 SISTANCE.—

3 ‘‘(1) EVALUATION.—The responsible Federal

4 officials shall evaluate the effectiveness of programs

5 conducted under this section, directly or by grant or

6 contract, and may require each grantee conducting

7 such a program to provide such information as the

8 responsible Federal officials determine is necessary

9 for such evaluations.

10 ‘‘(2) TRAINING AND TECHNICAL ASSISTANCE.—

11 The responsible Federal officials may provide train12 ing and technical assistance with respect to the de13 velopment, implementation, or operation of programs

14 under this section.

15 ‘‘(3) COORDINATION WITH NATIONAL CLEAR16 INGHOUSE.—The responsible Federal officials shall

17 coordinate the activities conducted under this sub18 section with the activities conducted by the National

19 Clearinghouse on Adolescent Pregnancy Prevention

20 Programs under subsection (n).

21 ‘‘(n) NATIONAL CLEARINGHOUSE ON ADOLESCENT

22 PREGNANCY.—

23 ‘‘(1) ESTABLISHMENT.—The responsible Fed24 eral officials shall establish, through grant or con25 tract, a national center for the collection and provi-
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•S 2224 IS

1 sion of programmatic information and technical as2 sistance that relates to adolescent pregnancy preven3 tion programs, to be known as the ‘National Clear4 inghouse on Adolescent Pregnancy Prevention Pro5 grams’.

6 ‘‘(2) FUNCTIONS.—The national center estab7 lished under paragraph (1) shall serve as a national

8 information and data clearinghouse, and as a train9 ing, technical assistance, and material development

10 source for adolescent pregnancy prevention pro11 grams. Such center shall—

12 ‘‘(A) develop and maintain a system for

13 disseminating information on all types of ado14 lescent pregnancy prevention program and on

15 the state of adolescent pregnancy prevention

16 program development, including information

17 concerning the most effective model programs;

18 ‘‘(B) develop and sponsor a variety of

19 training institutes and curricula for adolescent

20 pregnancy prevention program staff;

21 ‘‘(C) identify model programs representing

22 the various types of adolescent pregnancy pre23 vention programs;

24 ‘‘(D) develop technical assistance materials

25 and activities to assist other entities in estab-
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•S 2224 IS

1 lishing and improving adolescent pregnancy

2 prevention programs;

3 ‘‘(E) develop networks of adolescent preg4 nancy prevention programs for the purpose of

5 sharing and disseminating information; and

6 ‘‘(F) conduct such other activities as the

7 responsible Federal officials find will assist in

8 developing and carrying out programs or activi9 ties to reduce adolescent pregnancy.’’.

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

11 this section shall become effective October 1, 1994.

12 SEC. 506. DEMONSTRATION PROJECTS TO PROVIDE COM13 PREHENSIVE SERVICES TO PREVENT ADO14 LESCENT PREGNANCY IN HIGH-RISK COMMU15 NITIES.

16 (a) DEMONSTRATON PROJECTS.—Title XX (42

17 U.S.C. 1397–1397f) is amended by adding at the end the

18 following:

19 ‘‘SEC. 2009. DEMONSTRATION PROJECTS TO PROVIDE COM20 PREHENSIVE SERVICES TO PREVENT ADO21 LESCENT PREGNANCY IN HIGH-RISK COMMU22 NITIES.

23 ‘‘(a)(1) PURPOSE.—In order to stimulate the develop24 ment of innovative approaches for the effective delivery of

25 comprehensive services, with particular emphasis on preg-
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•S 2224 IS

1 nancy prevention, to certain youth and their families in

2 high-risk communities and the promotion of community

3 involvement in improving the environment in which such

4 youth live, the Secretary of Health and Human Services

5 shall conduct demonstration projects in accordance with

6 this section.

7 ‘‘(2) APPROVAL OF PROJECTS.—The Secretary of

8 Health and Human Services, in consultation with the Sec9 retary of Education, the Secretary of Housing and Urban

10 Development, the Attorney General, the Director of the

11 Office of National Drug Control Policy, and the Secretary

12 of Labor, shall approve at least 5 and not more than 7

13 projects, in accordance with subsection (c). Upon approval

14 by the Secretary, each project applicant shall be entitled

15 to payment of up to $3,600,000 for each of fiscal years

16 1995 through 1999 for the purpose of conducting ap17 proved demonstration projects.

18 ‘‘(b) FUNDING.—

19 ‘‘(1) IN GENERAL.—There shall be made avail20 able to the Secretary not to exceed $20,000,000 for

21 each of fiscal years 1995 through 1999 for carrying

22 out the projects under this section. Payments to a

23 grantee for any fiscal year must be expended by the

24 grantee in such fiscal year or the succeeding fiscal

25 year.
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•S 2224 IS

1 ‘‘(2) EVALUATION, TRAINING, AND TECHNICAL

2 ASSISTANCE.—The Secretary shall reserve, with re3 spect to each fiscal year, ten percent of the amount

4 described in paragraph (1) for expenditure by the

5 Secretary for training and technical assistance relat6 ed to the demonstration projects under this section

7 and for evaluation of such projects. The amount so

8 reserved shall remain available for obligation

9 through fiscal year 1999.

10 ‘‘(3) EXCESS AMOUNTS.—If in any fiscal year

11 the amount specified in paragraph (1) for such fiscal

12 year exceeds the amount required to carry out ap13 proved projects and evaluation, training, and tech14 nical assistance under this section, then the amount

15 specified in section 2003(c)(5) shall be increased by

16 the excess.

17 ‘‘(c) APPLICATION; ELIGIBILITY CRITERIA.—A local

18 public or private nonprofit organization, including a unit

19 of government, or any combination of such entities, shall

20 be eligible to submit a project application. In order that

21 an application be approved under subsection (a), the appli22 cation must—

23 ‘‘(1) demonstrate that the geographic area to be

24 served by the project satisfies the following criteria:
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•S 2224 IS

1 ‘‘(A) it includes a population of 20,000 to

2 35,000 residents,

3 ‘‘(B) it has an identifiable boundary and is

4 recognizable as a community by its residents,

5 and

6 ‘‘(C) within the community, there is a pov7 erty rate of not less than 20 percent;

8 ‘‘(2) include a plan for accomplishing the pur9 poses of this section that—

10 ‘‘(A) describes the comprehensive, inte11 grated services, in accordance with subsection

12 (e), that will be made available under the

13 project;

14 ‘‘(B)(i) sets forth the goals intended to be

15 accomplished under the project, and

16 ‘‘(ii) describes the methods to be used in

17 measuring progress toward accomplishment of

18 such goals and the outcomes to be measured,

19 including unmarried adolescent birth rates,

20 rates of youth alcohol and drug use, rates of

21 youth violence, high school graduation rates,

22 and such other outcomes as the Secretary finds

23 appropriate;

24 ‘‘(C) describes the process by which the af25 fected community (including parents, the youth
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•S 2224 IS

1 to be served, schools, local government, religious

2 organizations, community groups, business, and

3 labor) is a full partner in the process of devel4 oping and implementing the project and the ex5 tent to which parents, the youth to be served,

6 and local institutions and organizations have

7 contributed to the planning process;

8 ‘‘(D) identifies the private and public part9 nerships to be used;

10 ‘‘(E) describes the methods to be used in

11 coordinating the provision of services under the

12 project and the provision of services or benefits

13 under other Federal or federally assisted pro14 grams, State and local programs, and private

15 programs serving the same population; and

16 ‘‘(F) describes the manner in which other

17 Federal funds and non-Federal funds will be

18 used to further the purpose of the program;

19 ‘‘(3) demonstrate strong State and local govern20 ment commitment to the project and involvement in

21 the planning and implementation of the project;

22 ‘‘(4) demonstrate the ability of the applicant to

23 carry out the project;
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•S 2224 IS

1 ‘‘(5) describe the methods to be used for main2 taining accurate records regarding the activities car3 ried out with funds under this section;

4 ‘‘(6) contain assurances that the amounts pro5 vided under this section will not be used to supplant

6 Federal, State, and local funds for services and ac7 tivities that promote the purposes of this section;

8 ‘‘(7) contain assurances that the applicant will

9 provide a non-Federal share, in cash or in kind, of

10 10 percent of the cost of carrying out the approved

11 project and describe the capacity of the applicant to

12 provide the non-Federal share;

13 ‘‘(8) contain assurances that the applicant will

14 furnish such reports, containing such information,

15 and participate in such evaluations, as the Secretary

16 may require; and

17 ‘‘(9) include such other information as the Sec18 retary may require.

19 ‘‘(d) PRIORITY.—In making awards under this sec20 tion, the Secretary shall give priority to applicants that

21 provide for non-Federal resources significantly in excess

22 of those required in subsection (c)(7).

23 ‘‘(e) USE OF GRANTS.—Under each demonstration

24 project conducted under this section, the grantee shall de25 velop a community-wide strategy to address the causes
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•S 2224 IS

1 and factors of risk-taking tendencies among youth, to

2 positively affect community norms, to increase community

3 health and safety, and to generally improve the social envi4 ronment to enhance the life choice of community youth.

5 The strategy shall be used to provide a comprehensive set

6 of coordinated services designed to saturate the commu7 nity and shall include, but not be limited to, the following

8 areas:

9 ‘‘(1) Health education and access services de10 signed to promote physical and mental well-being

11 and personal responsibility (with particular emphasis

12 on pregnancy prevention), such as school health

13 services, family planning services, alcohol and drug

14 abuse prevention services and referral for treatment,

15 life skills training, and decision-making skills train16 ing.

17 ‘‘(2) Educational and employability development

18 services designed to promote educational advance19 ment leading to a high school diploma or its equiva20 lent and opportunities for high skill, high wage job

21 attainment and productive employment, to establish

22 a lifelong commitment to learning and achievement,

23 and to increase self-confidence, such as academic tu24 toring, literacy training, drop-out prevention pro25 grams, career and college counseling, mentoring pro-
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•S 2224 IS

1 grams, job skills training, apprenticeships, and part2 time paid work opportunities.

3 ‘‘(3) Social support services designed to provide

4 youth with a stable environment, opportunities for a

5 sustained relationship with one or more adults, and

6 opportunities for participation in safe and productive

7 activities, such as cultural, recreational and sports

8 activities, leadership development, peer counseling

9 and crisis intervention, mentoring programs,

10 parenting skills training, and family counseling.

11 ‘‘(4) Community activities designed to improve

12 community stability, and to encourage youth to par13 ticipate in community service and establish a stake

14 in the community, such as community policing, com15 munity service programs, community activities in

16 partnership with less distressed neighborhoods, local

17 media campaigns, and establishment of community

18 advisory councils with youth representation.

19 ‘‘(5) Employment opportunity development ac20 tivities designed to be coordinated with educational

21 and employability development services, social sup22 port services, and community activities described in

23 paragraphs (2) through (4). Emphasis shall be on

24 development of linkages with employers within and

25 outside the community to help create employment
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•S 2224 IS

1 opportunities and foster an understanding by com2 munity youth of the relationship between productive

3 employment, healthy development, and sound life

4 choices.

5 ‘‘(f) EVALUATION, TRAINING, AND TECHNICAL AS6 SISTANCE.—

7 ‘‘(1) EVALUATION.—The Secretary shall evalu8 ate the effectiveness of each demonstration project

9 conducted under this section and may require each

10 grantee conducting such a project to provide such

11 information as the Secretary determines is necessary

12 for such evaluations.

13 ‘‘(2) TRAINING AND TECHNICAL ASSISTANCE.—

14 The Secretary shall provide training and technical

15 assistance with respect to the development, imple16 mentation, or operation of projects under this sec17 tion.

18 ‘‘(3) COORDINATION WITH NATIONAL CLEAR19 INGHOUSE.—The Secretary shall coordinate the ac20 tivities conducted under this subsection with activi21 ties conducted by the National Clearinghouse on Ad22 olescent Pregnancy Prevention Programs under sec23 tion 2008(n).

24 ‘‘(g) FUNDING PERIOD.—Each demonstration

25 project supported under this section shall be conducted for
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•S 2224 IS

1 a 5-year period; except that the Secretary may terminate

2 a project before the end of such period if the Secretary

3 determines that the grantee conducting the project has

4 failed substantially to carry out the project as described

5 in the approved application.

6 ‘‘(h) DEFINITIONS AND SPECIAL RULES.—As used in

7 this section:

8 ‘‘(1) YOUTH.—The term ‘youth’ means an indi9 vidual who is not less than 10 years of age and not

10 more than 21 years of age.

11 ‘‘(2) USE OF CENSUS DATA.—Population and

12 poverty rate shall be determined by the most recent

13 decennial census data available.’’.

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

15 this section shall become effective October 1, 1994.

16 TITLE VI—CHILD SUPPORT

17 ENFORCEMENT

18 SEC. 600. REFERENCES IN TITLE.

19 References in this title to a section or other provision

20 refer to a section or other provision of the Social Security

21 Act, unless the context otherwise requires.
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•S 2224 IS

1 PART A—ELIGIBILITY AND OTHER MAT2 TERS CONCERNING TITLE IV-D PRO3 GRAM CLIENTS

4 SEC. 601. COOPERATION REQUIREMENT AND GOOD CAUSE

5 EXCEPTION.

6 (a) CHILD SUPPORT ENFORCEMENT REQUIRE7 MENTS.—Section 454 is amended—

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

9 (23);

10 (2) by striking the period at the end of para11 graph (24) and inserting ‘‘; and’’; and

12 (3) by adding after paragraph (24) the follow13 ing new paragraph:

14 ‘‘(25) provide that the State agency administer15 ing the plan under this part—

16 ‘‘(A) will make the determination specified

17 under paragraph (4), as to whether an individ18 ual is cooperating with efforts to establish pa19 ternity and secure support (or has good cause

20 not to cooperate with such efforts) for purposes

21 of the requirements of sections 402(a)(26) and

22 1912;

23 ‘‘(B) will advise individuals, both orally

24 and in writing, of the grounds for good cause
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•S 2224 IS

1 exceptions to the requirement to cooperate with

2 such efforts;

3 ‘‘(C) will take the best interests of the

4 child into consideration in making the deter5 mination whether such individual has good

6 cause not to cooperate with such efforts;

7 ‘‘(D)(i) will make the initial determination

8 as to whether an individual is cooperating (or

9 has good cause not to cooperate) with efforts to

10 establish paternity within 10 days after such in11 dividual is referred to such State agency by the

12 State agency administering the program under

13 part A of title XIX;

14 ‘‘(ii) will make redeterminations as to co15 operation or good cause at appropriate inter16 vals; and

17 ‘‘(iii) will promptly notify the individual,

18 and the State agencies administering such pro19 grams, of each such determination and redeter20 mination;

21 ‘‘(E) with respect to any child born on or

22 after the date 10 months after enactment of

23 this provision, will not determine (or redeter24 mine) the mother (or other custodial relative) of

25 such child to be cooperating with efforts to es-
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•S 2224 IS

1 tablish paternity unless such individual fur2 nishes—

3 ‘‘(i) the name of the putative father

4 (or fathers); and

5 ‘‘(ii) sufficient additional information

6 to enable the State agency, if reasonable

7 efforts were made, to verify the identity of

8 the person named as the putative father

9 (including such information as the putative

10 father’s present address, telephone num11 ber, date of birth, past or present place of

12 employment, school previously or currently

13 attended, and names and addresses of par14 ents, friends, or relatives able to provide

15 location information, or other information

16 that could enable service of process on

17 such person), and

18 ‘‘(F)(i) (where a custodial parent who was

19 initially determined not to be cooperating (or to

20 have good cause not to cooperate) is later deter21 mined to be cooperating or to have good cause

22 not to cooperate) will immediately notify the

23 State agencies administering the programs

24 under part A of title XIX that this eligibility

25 condition has been met; and
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•S 2224 IS

1 ‘‘(ii) (where a custodial parent was initially

2 determined to be cooperating (or to have good

3 cause not to cooperate)) will not later determine

4 such individual not to be cooperating (or not to

5 have good cause not to cooperate) until such in6 dividual has been afforded an opportunity for a

7 hearing.’’.

8 (b) AFDC AMENDMENTS.—

9 (1) Section 402(a)(11) is amended by striking

10 ‘‘furnishing of’’ and inserting ‘‘application for’’.

11 (2) Section 402(a)(26) is amended—

12 (A) in each of subparagraphs (A) and (B),

13 by redesignating clauses (i) and (ii) as

14 subclauses (I) and (II);

15 (B) by indenting and redesignating sub16 paragraphs (A), (B), and (C) as clauses (i), (ii),

17 and (iv), respectively;

18 (C) in clause (ii), as redesignated—

19 (i) by striking ‘‘is claimed, or in ob20 taining any other payments or property

21 due such applicant or such child,’’ and in22 serting ‘‘is claimed;’’; and

23 (ii) by striking ‘‘unless’’ and all that

24 follows through ‘‘aid is claimed; and’’;
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•S 2224 IS

1 (D) by adding after clause (ii) the follow2 ing new clause:

3 ‘‘(iii) to cooperate with the State in

4 obtaining any other payments or property

5 due such applicant or such child; and’’;

6 (E) in the matter preceding clause (i), as

7 redesignated, to read as follows:

8 ‘‘(26) provide—

9 ‘‘(A) that, as a condition of eligibility for

10 aid, each applicant or recipient will be required

11 (subject to subparagraph (C))—’’;

12 (F) in subparagraph (A)(iv), as redesig13 nated, by striking ‘‘, unless such individual’’

14 and all that follows through ‘‘individuals in15 volved’’;

16 (G) by adding at the end the following new

17 subparagraphs:

18 ‘‘(B) that the State agency will imme19 diately refer each applicant requiring paternity

20 establishment services to the State agency ad21 ministering the program under part D;

22 ‘‘(C) that an individual will not be required

23 to cooperate with the State, as provided under

24 subparagraph (A), if the individual is found to

25 have good cause for refusing to cooperate, as
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•S 2224 IS

1 determined in accordance with standards pre2 scribed by the Secretary, which standards shall

3 take into consideration the best interests of the

4 child on whose behalf aid is claimed—

5 ‘‘(i) to the satisfaction of the State

6 agency administering the program under

7 part D, as determined in accordance with

8 section 454(25), with respect to the re9 quirements under clauses (i) and (ii) of

10 subparagraph (A); and

11 ‘‘(ii) to the satisfaction of the State

12 agency administering the program under

13 this part, with respect to the requirements

14 under clauses (iii) and (iv) of subpara15 graph (A);

16 ‘‘(D) that (except as provided in subpara17 graph (E)) an applicant requiring paternity es18 tablishment services (other than an individual

19 eligible for emergency assistance as defined in

20 section 406(e)) shall not be eligible for any aid

21 under this part until such applicant—

22 ‘‘(i) has furnished to the agency ad23 ministering the State plan under part D

24 the information specified in section

25 454(25)(E); or
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•S 2224 IS

1 ‘‘(ii) has been determined by such

2 agency to have good cause not to cooper3 ate;

4 ‘‘(E) that the provisions of subparagraph

5 (D) shall not apply—

6 ‘‘(i) if the State agency specified in

7 such subparagraph has not, within 10 days

8 after such individual was referred to such

9 agency, provided the notification required

10 by section 454(25)(D)(iii), until such noti11 fication is received; and

12 ‘‘(ii) if such individual appeals a de13 termination that the individual lacks good

14 cause for noncooperation, until after such

15 determination is affirmed after notice and

16 opportunity for a hearing; and’’; and

17 (H)(i) by relocating and redesignating as

18 subparagraph (F) the text at the end of sub19 paragraph (A)(ii) beginning with ‘‘that, if the

20 relative’’ and all that follows through the semi21 colon;

22 (ii) in subparagraph (F), as so redesig23 nated and relocated, by striking ‘‘subpara24 graphs (A) and (B) of this paragraph’’ and in25 serting ‘‘subparagraph (A)’’; and
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•S 2224 IS

1 (iii) by striking ‘‘and’’ at the end of sub2 paragraph (a)(ii).

3 (c) MEDICAID AMENDMENTS.—Section 1912(a) is

4 amended—

5 (1) in paragraph (1)(B), by inserting ‘‘(except

6 as provided in paragraph (2))’’ after ‘‘to cooperate

7 with the State’’;

8 (2) in subparagraphs (B) and (C) of paragraph

9 (1) by striking ‘‘, unless’’ and all that follows and

10 inserting a semicolon; and

11 (3) by redesignating paragraph (2) as para12 graph (5), and inserting after paragraph (1) the fol13 lowing new paragraphs:

14 ‘‘(2) provide that the State agency will imme15 diately refer each applicant or recipient requiring

16 paternity establishment services to the State agency

17 administering the program under part D of title IV;

18 ‘‘(3) provide that an individual will not be re19 quired to cooperate with the State, as provided

20 under paragraph (1), if the individual is found to

21 have good cause for refusing to cooperate, as deter22 mined in accordance with standards prescribed by

23 the Secretary, which standards shall take into con24 sideration the best interests of the individuals in25 volved—
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•S 2224 IS

1 ‘‘(A) to the satisfaction of the State agency

2 administering the program under part D, as de3 termined in accordance with section 454(25),

4 with respect to the requirements to cooperate

5 with efforts to establish paternity and to obtain

6 support (including medical support) from a par7 ent; and

8 ‘‘(B) to the satisfaction of the State agen9 cy administering the program under this title,

10 with respect to other requirements to cooperate

11 under paragraph (1);

12 ‘‘(4) provide that (except as provided in para13 graph (5)) an applicant requiring paternity estab14 lishment services (other than an individual eligible

15 for emergency assistance as defined in section

16 406(e), or presumptively eligible pursuant to section

17 1920) shall not be eligible for medical assistance

18 under this title until such applicant—

19 ‘‘(i) has furnished to the agency admin20 istering the State plan under part D of title IV

21 the information specified in section 454(25)(E);

22 or

23 ‘‘(ii) has been determined by such agency

24 to have good cause not to cooperate; and
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•S 2224 IS

1 ‘‘(5) provide that the provisions of paragraph

2 (4) shall not apply with respect to an applicant—

3 ‘‘(i) if such agency has not, within 10 days

4 after such individual was referred to such agen5 cy, provided the notification required by section

6 454(25)(D)(iii), until such notification is re7 ceived); and

8 ‘‘(ii) if such individual appeals a deter9 mination that the individual lacks good cause

10 for noncooperation, until after such determina11 tion is affirmed after notice and opportunity for

12 a hearing.’’.

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section shall be effective with respect to applications

15 filed in or after the first calendar quarter beginning 10

16 months or more after enactment of this amendment (or

17 such earlier quarter as the State may select) for aid under

18 title IV–A or for medical assistance under title XIX.

19 SEC. 602. STATE OBLIGATION TO PROVIDE PATERNITY ES20 TABLISHMENT AND CHILD SUPPORT EN21 FORCEMENT SERVICES.

22 (a) STATE LAW REQUIREMENTS.—Section 466(a) is

23 amended by adding at the end the following new para24 graph:
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•S 2224 IS

1 ‘‘(12) USE OF CENTRAL CASE REGISTRY AND

2 CENTRALIZED COLLECTIONS UNIT.—Procedures

3 under which—

4 ‘‘(A) every child support order established

5 or modified in the State on or after October 1,

6 1997, is recorded in the central case registry

7 established in accordance with section 454A(e);

8 and

9 ‘‘(B) child support payments are collected

10 through the centralized collections unit estab11 lished in accordance with section 454B—

12 ‘‘(i) on and after October 1, 1997,

13 under each order subject to wage withhold14 ing under section 466(b); and

15 ‘‘(ii) on and after October 1, 1998,

16 under each other order required to be re17 corded in such central case registry under

18 this paragraph or section 454A(e), except

19 as provided in subparagraph (C); and

20 ‘‘(C)(i) parties subject to a child support

21 order described in subparagraph (B)(ii) may

22 opt out of the procedure for payment of support

23 through the centralized collections unit (but not

24 the procedure for inclusion in the central case

25 registry) by filing with the State agency a writ-
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•S 2224 IS

1 ten agreement, signed by both parties, to an al2 ternative payment procedure; and

3 ‘‘(ii) an agreement described in clause (i)

4 becomes void, and may not be renewed, when5 ever—

6 ‘‘(I) the party owing support fails to

7 make a timely payment; or

8 ‘‘(II) either party advises the State

9 agency of an intent to vacate the agree10 ment.’’.

11 (b) STATE PLAN REQUIREMENTS.—Section 454 is

12 amended—

13 (1) in paragraph (4), to read as follows:

14 ‘‘(4) provide that such State will undertake—

15 ‘‘(A) to provide appropriate services under

16 this part to—

17 ‘‘(i) each child with respect to whom

18 an assignment is effective under section

19 402(a)(26), 471(a)(17), or 1912 (except in

20 cases where the State agency determines,

21 in accordance with paragraph (25), that it

22 is against the best interests of the child to

23 do so); and

24 ‘‘(ii) each child not described in clause

25 (i)—
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•S 2224 IS

1 ‘‘(I) with respect to whom an in2 dividual applies for such services; and

3 ‘‘(II) (on and after October 1,

4 1997) each child with respect to

5 whom a support order is recorded in

6 the central State case registry estab7 lished under section 454A, regardless

8 of whether application is made for

9 services under this part; and

10 ‘‘(B) to enforce the support obligation es11 tablished with respect to the custodial parent of

12 a child described in subparagraph (A).’’;

13 (2) in paragraph (6)—

14 (A) by striking all that precedes subpara15 graph (C) and inserting the following:

16 ‘‘(6) provide that—

17 ‘‘(A) services under the State plan shall be

18 made available to nonresidents on the same

19 terms as to residents;

20 ‘‘(B) no fees or costs shall be imposed on

21 any absent or custodial parent or other individ22 ual—

23 ‘‘(i) on or after October 1, 1997, for

24 application for child support enforcement

25 services under this part; or
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•S 2224 IS

1 ‘‘(ii) for inclusion in the central State

2 registry maintained pursuant to section

3 454A(e);’’;

4 (B) in each of subparagraphs (C) and

5 (D)—

6 (i) by indenting such subparagraph

7 and aligning its left margin with the left

8 margin of paragraph (B); and

9 (ii) by striking the final comma and

10 inserting a semicolon;

11 (C) by striking subparagraph (E) and in12 serting the following subparagraphs:

13 ‘‘(E) no other fees or costs may be im14 posed on the custodial parent; and

15 ‘‘(F) any other fees or costs may be im16 posed on the noncustodial parent (but fees for

17 child support collection services provided

18 through the central collections unit operated

19 pursuant to section 454B, or for related auto20 mated procedures pursuant to section 454A(g),

21 may be imposed only if such fees or costs are

22 added to, and not deducted from, amounts col23 lected as child support);’’.

24 (c) CONFORMING AMENDMENTS.—
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1 (1) Section 452(g)(2)(A) is amended by striking

2 ‘‘454(6)’’ each place it appears and inserting

3 ‘‘454(4)(A)(ii)’’.

4 (2) Section 454(23) is amended, effective Octo5 ber 1, 1997, by striking ‘‘information as to any ap6 plication fees for such services and’’.

7 (3) Section 466(a)(3)(B) is amended by strik8 ing ‘‘in the case of overdue support which a State

9 has agreed to collect under section 454(6)’’ and in10 serting ‘‘in any other case’’.

11 (4) Section 466(e) is amended by striking ‘‘or

12 (6)’’.

13 SEC. 603. DISTRIBUTION OF PAYMENTS.

14 (a) DISTRIBUTIONS THROUGH STATE CHILD SUP15 PORT ENFORCEMENT AGENCY TO FORMER ASSISTANCE

16 RECIPIENTS.—Section 454(5) is amended—

17 (1) in subparagraph (A)—

18 (A) by inserting ‘‘except as otherwise spe19 cifically provided in section 464 or 466(a)(3),’’

20 after ‘‘is effective,’’; and

21 (B) by striking ‘‘except that’’ and all that

22 follows through the semicolon; and

23 (2) in subparagraph (B), by striking ‘‘, except’’

24 and all that follows through ‘‘medical assistance’’.
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1 (b) DISTRIBUTION TO A FAMILY CURRENTLY RE2 CEIVING AFDC.—Section 457 is amended—

3 (1) by striking subsection (a) and redesignating

4 subsection (b) as subsection (a);

5 (2) in subsection (a), as redesignated—

6 (A) in the matter preceding paragraph (2),

7 to read as follows:

8 ‘‘(a) IN THE CASE OF A FAMILY RECEIVING

9 AFDC.—Amounts collected under this part during any

10 month as support of a child who is receiving assistance

11 under part A (or a parent or caretaker relative of such

12 a child) shall (except in the case of a State exercising the

13 option under subsection (b)) be distributed as follows:

14 ‘‘(1) an amount equal to the amount specified

15 in section 402(a)(8)(A)(vi) shall be taken from each

16 of—

17 ‘‘(A) amounts received in a month which

18 represent payments for that month; and

19 ‘‘(B) amounts received in a month which

20 represent payments for a prior month which

21 were made by the absent parent in the month

22 when due;

23 and shall be paid to the family without affecting its

24 eligibility for assistance or decreasing any amount
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•S 2224 IS

1 otherwise payable as assistance to such family dur2 ing such month;’’;

3 (B) in paragraph (4), by striking ‘‘or (B)’’

4 and all that follows and inserting ‘‘; then (B)

5 from any remainder, amounts equal to arrear6 ages of such support obligations assigned, pur7 suant to part A, to any other State or States

8 shall be paid to such other State or States and

9 used to pay any such arrearages (with appro10 priate reimbursement of the Federal Govern11 ment to the extent of its participation in the fi12 nancing); and then (C) any remainder shall be

13 paid to the family.’’.

14 (3) by inserting after subsection (a), as redesig15 nated, the following new subsection:

16 ‘‘(b) ALTERNATIVE DISTRIBUTION IN CASE OF FAM17 ILY RECEIVING AFDC.—In the case of a State electing

18 the option under this subsection, amounts collected as de19 scribed in subsection (a) shall be distributed as follows:

20 ‘‘(1) an amount equal to the amount specified

21 in section 402(a)(8)(A)(vi) shall be taken from each

22 of—

23 ‘‘(A) amounts received in a month which

24 represent payments for that month; and
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•S 2224 IS

1 ‘‘(B) amounts received in a month which

2 represent payments for a prior month which

3 were made by the absent parent in the month

4 when due;

5 and shall be paid to the family without affecting its

6 eligibility for assistance or decreasing any amount

7 otherwise payable as assistance to such family dur8 ing such month;

9 ‘‘(2) second, from any remainder, amounts

10 equal to the balance of support owed for the current

11 month shall be paid to the family;

12 ‘‘(3) third, from any remainder, amounts equal

13 to arrearages of such support obligations assigned,

14 pursuant to part A, to the State making the collec15 tion shall be retained and used by such State to pay

16 any such arrearages (with appropriate reimburse17 ment of the Federal Government to the extent of its

18 participation in the financing);

19 ‘‘(4) fourth, from any remainder, amounts

20 equal to arrearages of such support obligations as21 signed, pursuant to part A, to any other State or

22 States shall be paid to such other State or States

23 and used to pay any such arrearages (with appro24 priate reimbursement of the Federal Government to

25 the extent of its participation in the financing); and
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•S 2224 IS

1 ‘‘(5) fifth, any remainder shall be paid to the

2 family.’’.

3 (c) DISTRIBUTION TO A FAMILY NOT RECEIVING

4 AFDC.—Section 457(c) is amended to read as follows:

5 ‘‘(c) IN CASE OF FAMILY NOT RECEIVING AFDC.—

6 Amounts collected by a State agency under this part dur7 ing any month as support of a child who is not receiving

8 assistance under part A (or of a parent or caretaker rel9 ative of such a child) shall (subject to the remaining provi10 sions of this section) be distributed as follows:

11 ‘‘(1) first, amounts equal to the total of such

12 support owed for such month shall be paid to the

13 family;

14 ‘‘(2) second, from any remainder, amounts

15 equal to arrearages of such support obligations for

16 months during which such child did not receive as17 sistance under part A shall be paid to the family;

18 ‘‘(3) third, from any remainder, amounts equal

19 to arrearages of such support obligations assigned to

20 the State making the collection pursuant to part A

21 shall be retained and used by such State to pay any

22 such arrearages (with appropriate reimbursement of

23 the Federal Government to the extent of its partici24 pation in the financing);
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•S 2224 IS

1 ‘‘(4) fourth, from any remainder, amounts

2 equal to arrearages of such support obligations as3 signed to any other State pursuant to part A shall

4 be paid to such other State or States, and used to

5 pay such arrearages, in the order in which such ar6 rearages accrued (with appropriate reimbursement

7 of the Federal Government to the extent of its par8 ticipation in the financing).’’.

9 (d) DISTRIBUTION TO A CHILD RECEIVING ASSIST10 ANCE UNDER TITLE IV–E.—Subsection (d) is amended,

11 in the matter preceding paragraph (1), by striking ‘‘Not12 withstanding the preceding provisions of this section,

13 amounts’’ and inserting ‘‘IN CASE OF A CHILD RECEIVING

14 ASSISTANCE UNDER TITLE IV–E.—Amounts’’.

15 (e) SUSPENSION OR CANCELLATION OF DEBTS UPON

16 MARRIAGE OF PARENTS.—Section 457 is further amend17 ed by adding at the end the following new subsection:

18 ‘‘(e) SUSPENSION OR CANCELLATION OF DEBTS TO

19 STATE UPON MARRIAGE OF PARENTS.—(1) CIR20 CUMSTANCES REQUIRING SUSPENSION OR CANCELLA21 TION.—In any case in which a State has been assigned

22 rights to support owed with respect to a child who is re23 ceiving or has received assistance under part A and—

24 ‘‘(A) the parent owing such support marries (or

25 remarries) the parent with whom such child is living
209

•S 2224 IS

1 and to whom such support is owed and applies to

2 the State for relief under this subsection;

3 ‘‘(B) the State determines (in accordance with

4 procedures and criteria established by the Secretary)

5 that the marriage is not a sham marriage entered

6 into solely to satisfy this subsection; and

7 ‘‘(C) the combined income of such parents is

8 less than twice the Federal poverty line,

9 the State shall afford relief to the parent owing such sup10 port in accordance with paragraph (2).

11 ‘‘(2) SUSPENSION OR CANCELLATION.—In the case

12 of a marriage or remarriage described in paragraph (1),

13 the State shall either—

14 ‘‘(A) cancel all debts owed to the State pursu15 ant to such assignment, or

16 ‘‘(B) suspend collection of such debts for the

17 duration of such marriage, and cancel such debts if

18 such duration extends beyond the end of the period

19 with respect to which support is owed.

20 ‘‘(3) NOTICE REQUIRED.—The State shall notify cus21 todial parents of children who are receiving aid under part

22 A of the relief available under this subsection to individ23 uals who marry (or remarry).’’.

24 (f) REGULATIONS.—The Secretary shall promulgate

25 regulations—
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•S 2224 IS

1 (1) under title IV–D of the Social Security Act,

2 establishing a uniform nationwide standard for allo3 cation of child support collections from an obligor

4 owing support to more than one family; and

5 (2) under title IV–A of such Act, establishing

6 standards applicable to States electing the alter7 native formula under section 457(b) of the Social

8 Security Act for distribution of collections on behalf

9 of families receiving Aid to Families with Dependent

10 Children, designed to minimize irregular monthly

11 payments to such families.

12 (g) CLERICAL AMENDMENT.—Section 454 is amend13 ed—

14 (1) in paragraph (11), by striking ‘‘(11)’’ and

15 inserting ‘‘(11)(A)’’; and

16 (2) by redesignating paragraph (12) as sub17 paragraph (B) of paragraph (11).

18 (h) CONFORMING AMENDMENT.—Section

19 402(a)(26)(A)(i), as redesignated by section 601(b)(2)(A),

20 is amended—

21 (1) by striking ‘‘(I)’’; and

22 (2) by striking ‘‘, and (II)’’ and all that follows

23 before the semicolon.
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1 SEC. 604. DUE PROCESS RIGHTS.

2 (a) Section 454, as amended by section 603(g), is fur3 ther amended by inserting after paragraph (11) the follow4 ing new paragraph:

5 ‘‘(12) provide for procedures to ensure that—

6 ‘‘(A) individuals who are parties to cases

7 in which services are being provided under this

8 part—

9 ‘‘(i) receive notice of all proceedings in

10 which support obligations might be estab11 lished or modified; and

12 ‘‘(ii) receive a copy of any order estab13 lishing or modifying a child support obliga14 tion within 14 days after issuance of such

15 order; and

16 ‘‘(B) individuals receiving services under

17 this part have access to a fair hearing or other

18 formal complaint procedure, meeting standards

19 established by the Secretary, that ensures

20 prompt consideration and resolution of com21 plaints (but the resort to such procedure shall

22 not stay the enforcement of any support

23 order);’’.

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

25 this section shall become effective on October 1, 1996.
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•S 2224 IS

1 SEC. 605. PRIVACY SAFEGUARDS.

2 (a) STATE PLAN REQUIREMENT.—Section 454, as

3 amended by section 601, is further amended—

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

5 (24);

6 (2) by striking the period at the end of para7 graph (25) and inserting ‘‘; and’’; and

8 (3) by adding after paragraph (25) the follow9 ing new paragraph;

10 ‘‘(26) will have in effect safeguards applicable

11 to all sensitive and confidential information handled

12 by the State agency designed to protect the privacy

13 rights of the parties, including—

14 ‘‘(A) safeguards against unauthorized use

15 or disclosure of information relating to proceed16 ings or actions to establish paternity, or to es17 tablish or enforce support; and

18 ‘‘(B) prohibitions on the release of infor19 mation on the whereabouts of one party to an20 other party against whom a protective order

21 with respect to such party has been entered.’’.

22 (b) The amendments made by this section shall be23 come effective on October 1, 1996.
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•S 2224 IS

1 SEC. 606. REQUIREMENT TO FACILITATE ACCESS TO SERV2 ICES.

3 (a) STATE PLAN REQUIREMENT.—Section 454(23) is

4 amended—

5 (1) by striking ‘‘the State will regularly’’ and

6 inserting ‘‘the State will—

7 ‘‘(A) regularly’’;

8 (2) by incorporating the remainder of the text

9 within subparagraph (A);

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

11 (4) by adding after and below subparagraph

12 (A) the following new subparagraph:

13 ‘‘(B) have a plan for outreach to parents

14 designed to disseminate information about and

15 increase access to child support enforcement

16 services, including plans responding to needs—

17 ‘‘(i) of working parents to obtain such

18 services without taking time off work; and

19 ‘‘(ii) of parents with limited pro20 ficiency in English for elimination of lan21 guage barriers to use of such services;

22 and’’.

23 (b) The amendments made by this section shall be24 come effective on October 1, 1996.
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1 PART B—PROGRAM ADMINISTRATION AND

2 FUNDING

3 SEC. 611. FEDERAL MATCHING PAYMENTS.

4 (a) INCREASED BASE MATCHING RATE.—Section

5 455(a)(2) is amended to read as follows:

6 ‘‘(2) The applicable percent for a quarter for

7 purposes of paragraph (1)(A) is—

8 ‘‘(A) for fiscal year 1996, 69 percent,

9 ‘‘(B) for fiscal year 1997, 72 percent, and

10 ‘‘(C) for fiscal year 1998 and succeeding

11 fiscal years, 75 percent.’’.

12 (b) MAINTENANCE OF EFFORT.—Section 455 is

13 amended—

14 (1) in subsection (a)(1), in the matter preced15 ing subparagraph (A), by striking ‘‘From’’ and in16 serting ‘‘Subject to subsection (c), from’’; and

17 (2) by inserting after subsection (b) the follow18 ing new subsection:

19 ‘‘(c) MAINTENANCE OF EFFORT.—Notwithstanding

20 the provisions of subsection (a), total expenditures for the

21 State program under this part for fiscal year 1996 and

22 each succeeding fiscal year, reduced by the percentage

23 specified for such fiscal year under subsection (a)(2)(A),

24 (B), or (C)(i), shall not be less than such total expendi25 tures for fiscal year 1995, reduced by 66 percent.’’
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•S 2224 IS

1 SEC. 612. PERFORMANCE-BASED INCENTIVES AND PEN2 ALTIES.

3 (a) INCENTIVE ADJUSTMENTS TO FEDERAL MATCH4 ING RATE.—(1) IN GENERAL.—Section 458 is amended

5 to read as follows:

6 ‘‘INCENTIVE ADJUSTMENTS TO MATCHING RATE

7 ‘‘SEC. 458. (a) INCENTIVE ADJUSTMENT.—(1) IN

8 GENERAL.—In order to encourage and reward State child

9 support enforcement programs which perform in an effec10 tive manner, the Federal matching rate for payments to

11 a State under section 455(a)(1)(A), for each fiscal year

12 beginning on or after October 1, 1997, shall be increased

13 by a factor reflecting the sum of the applicable incentive

14 adjustments (if any) determined in accordance with regu15 lations under this section with respect to Statewide pater16 nity establishment and to overall performance in child sup17 port enforcement.

18 ‘‘(2) STANDARDS.—(A) IN GENERAL.—The Sec19 retary shall specify in regulations—

20 ‘‘(i) the levels of accomplishment, and rates of

21 improvement as alternatives to such levels, which

22 States must attain to qualify for incentive adjust23 ments under this section; and

24 ‘‘(ii) the amounts of incentive adjustment that

25 shall be awarded to States achieving specified ac-
216

•S 2224 IS

1 complishment or improvement levels, which amounts

2 shall be graduated, ranging up to—

3 ‘‘(I) 5 percentage points, in connection

4 with Statewide paternity establishment; and

5 ‘‘(II) 10 percentage points, in connection

6 with overall performance in child support en7 forcement.

8 ‘‘(B) LIMITATION.—In setting performance stand9 ards pursuant to subparagraph (A)(i) and adjustment

10 amounts pursuant to subparagraph (A)(ii), the Secretary

11 shall ensure that the aggregate number of percentage

12 point increases as incentive adjustments to all States do

13 not exceed such aggregate increases as assumed by the

14 Secretary in estimates of the cost of this section as of

15 June 1994, unless the aggregate performance of all States

16 exceeds the projected aggregate performance of all States

17 in such cost estimates.

18 ‘‘(3) DETERMINATION OF INCENTIVE ADJUST19 MENT.—The Secretary shall determine the amount (if

20 any) of incentive adjustment due each State on the basis

21 of the data submitted by the State pursuant to section

22 454(15)(B) concerning the levels of accomplishment (and

23 rates of improvement) with respect to performance indica24 tors specified by the Secretary pursuant to this section.
217

•S 2224 IS

1 ‘‘(4) FISCAL YEAR SUBJECT TO INCENTIVE ADJUST2 MENT.—The total percentage point increase determined

3 pursuant to this section with respect to a State program

4 in a fiscal year shall apply as an adjustment to the appli5 cable percent under section 455(a)(2) for payments to

6 such State for the succeeding fiscal year.

7 ‘‘(b) MEANING OF TERMS.—For purposes of this sec8 tion—

9 ‘‘(1) the term ‘Statewide paternity establish10 ment percentage’ means, with respect to a fiscal

11 year, the ratio (expressed as a percentage) of—

12 ‘‘(A) the total number of out-of-wedlock

13 children in the State under one year of age for

14 whom paternity is established or acknowledged

15 during the fiscal year, to

16 ‘‘(B) the total number of children born out

17 of wedlock in the State during such fiscal year;

18 and

19 ‘‘(2) the term ‘overall performance in child sup20 port enforcement’ means a measure or measures of

21 the effectiveness of the State agency in a fiscal year

22 which takes into account factors including—

23 ‘‘(A) the percentage of cases requiring a

24 child support order in which such an order was

25 established;
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•S 2224 IS

1 ‘‘(B) the percentage of cases in which child

2 support is being paid;

3 ‘‘(C) the ratio of child support collected to

4 child support due; and

5 ‘‘(D) the cost-effectiveness of the State

6 program, as determined in accordance with

7 standards established by the Secretary in regu8 lations.’’.

9 (b) TITLE IV–D PAYMENT ADJUSTMENT.—Section

10 455(a)(2), as amended by section 611, is further amend11 ed—

12 (1) by striking the period at the end of sub13 paragraph (C)(ii) and inserting a period; and

14 (2) by adding after and below subparagraph

15 (C), flush with the left margin of the subsection, the

16 following:

17 ‘‘increased by the incentive adjustment factor (if any) de18 termined by the Secretary pursuant to section 458.’’.

19 (c) CONFORMING AMENDMENTS.—Section 454(22) is

20 amended—

21 (1) by striking ‘‘incentive payments’’ the first

22 place it appears and inserting ‘‘incentive adjust23 ments’’; and

24 (2) by striking ‘‘any such incentive payments

25 made to the State for such period’’ and inserting
219

•S 2224 IS

1 ‘‘any increases in Federal payments to the State re2 sulting from such incentive adjustments’’.

3 (d) CALCULATION OF IV–D PATERNITY ESTABLISH4 MENT PERCENTAGE.—(1) Section 452(g) is amended in

5 paragraph (1), in the matter preceding subparagraph (A),

6 by inserting ‘‘its overall performance in child support en7 forcement is satisfactory (as defined in section 458(b) and

8 regulations of the Secretary), and’’ after ‘‘1994,’’.

9 (2) Section 452(g)(2) is amended—

10 (A) in subparagraph (A), in the matter preced11 ing clause (i)—

12 (i) by striking ‘‘paternity establishment

13 percentage’’ and inserting ‘‘IV–D paternity es14 tablishment percentage’’; and

15 (ii) by striking ‘‘(or all States, as the case

16 may be)’’;

17 (B) in subparagraph (A)(i), by striking ‘‘during

18 the fiscal year’’;

19 (C) in subclause (I) of subparagraph (A)(ii), by

20 striking ‘‘as of the end of the fiscal year’’ and insert21 ing ‘‘in the fiscal year or, at the option of the State,

22 as of the end of such year’’;

23 (D) in subclause (II) of subparagraph (A)(ii),

24 by striking ‘‘or (E) as of the end of the fiscal year’’
220

•S 2224 IS

1 and inserting ‘‘in the fiscal year or, at the option of

2 the State, as of the end of such year’’;

3 (E) in subparagraph (A)(iii)—

4 (i) by striking ‘‘during the fiscal year’’;

5 and

6 (ii) by striking ‘‘and’’ at the end; and

7 (F) in the matter following subparagraph (A)—

8 (i) by striking ‘‘who were born out of wed9 lock during the immediately preceding fiscal

10 year’’ and inserting ‘‘born out of wedlock’’;

11 (ii) by striking ‘‘such preceding fiscal

12 year’’ both places it appears and inserting ‘‘the

13 preceding fiscal year’’; and

14 (iii) by striking ‘‘or (E)’’ the second place

15 it appears.

16 (3) Section 452(g)(3) is amended—

17 (A) by striking subparagraph (A) and redesig18 nating subparagraphs (B) and (C) as subparagraphs

19 (A) and (B), respectively;

20 (B) in subparagraph (A), as redesignated, by

21 striking ‘‘the percentage of children born out-of-wed22 lock in the State’’ and inserting ‘‘the percentage of

23 children in the State who are born out of wedlock

24 or for whom support has not been established’’; and

25 (C) in subparagraph (B), as redesignated—
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•S 2224 IS

1 (i) by inserting ‘‘and overall performance

2 in child support enforcement’’ after ‘‘paternity

3 establishment percentages’’; and

4 (ii) by inserting ‘‘and securing support’’

5 before the period.

6 (e) TITLE IV–A PAYMENT REDUCTION.—Section

7 403 is amended—

8 (1) in subsection (a), by striking ‘‘1958—’’ and

9 inserting ‘‘1958—’’ (subject to subsection (h))—’’;

10 (2) in subsection (h), by striking all that pre11 cedes paragraph (3) and inserting the following:

12 ‘‘(h)(1) If the Secretary finds, with respect to a State

13 program under this part in a fiscal year beginning on or

14 after October 1, 1996—

15 ‘‘(A)(i) on the basis of data submitted by a

16 State pursuant to section 454(15)(B), that the State

17 program in such fiscal year failed to achieve the IV–

18 D paternity establishment percentage (as defined in

19 section 452(g)(2)(A)) or the appropriate level of

20 overall performance in child support enforcement (as

21 defined in section 458(b)(2)), or to meet other per22 formance measures that may be established by the

23 Secretary, or

24 ‘‘(ii) on the basis of an audit or audits of such

25 State data conducted pursuant to section
222

•S 2224 IS

1 452(a)(4)(C), that the State data submitted pursu2 ant to section 454(15)(B) is incomplete or unreli3 able; and

4 ‘‘(B) that, with respect to the succeeding fiscal

5 year—

6 ‘‘(i) the State failed to take sufficient cor7 rective action to achieve the appropriate per8 formance levels as described in subparagraph

9 (A)(i), or

10 ‘‘(ii) the data submitted by the State pur11 suant to section 454(15)(B) is incomplete or

12 unreliable,

13 the amounts otherwise payable to the State under this

14 part for quarters following the end of such succeeding fis15 cal year, prior to quarters following the end of the first

16 quarter throughout which the State program is in compli17 ance with such performance requirement, shall be reduced

18 by the percentage specified in paragraph (2).

19 ‘‘(2) The reductions required under paragraph (1)

20 shall be—

21 ‘‘(A) not less than one nor more than two per22 cent, or

23 ‘‘(B) not less than two nor more than three

24 percent, if the finding is the second consecutive find25 ing made pursuant to paragraph (1), or
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•S 2224 IS

1 ‘‘(C) not less than three nor more than five per2 cent, if the finding is the third or a subsequent con3 secutive such finding.’’; and

4 ‘‘(3) In subsection (h)(3), by striking ‘‘not in full

5 compliance’’ and all that follows and inserting ‘‘deter6 mined as a result of an audit to have submitted incomplete

7 or unreliable data pursuant to section 454(15)(B), shall

8 be determined to have submitted adequate data if the Sec9 retary determines that the extent of the incompleteness

10 or unreliability of the data is of a technical nature which

11 does not adversely affect the determination of the level of

12 the State’s performance.’’.

13 (f) EFFECTIVE DATES.—

14 (1) INCENTIVE ADJUSTMENTS.—(A) The

15 amendments made by subsections (a), (b), and (c)

16 shall become effective October 1, 1996, except to the

17 extent provided in subparagraph (B).

18 (B) The provisions of section 458 of the Act, as

19 in effect prior to the enactment of this section, shall

20 be effective for purposes of incentive payments to

21 States for fiscal years prior to fiscal year 1998.

22 (2) PENALTY REDUCTIONS.—(A) The amend23 ments made by subsection (d) shall become effective

24 with respect to calendar quarters beginning on and

25 after the date of enactment of this Act.
224

•S 2224 IS

1 (B) The amendments made by subsection (e)

2 shall become effective with respect to calendar quar3 ters beginning on and after the date one year after

4 the date of enactment of this Act.

5 SEC. 613. FEDERAL AND STATE REVIEWS AND AUDITS.

6 (a) STATE AGENCY ACTIVITIES.—Section 454 is

7 amended—

8 (1) in paragraph (14), by striking ‘‘(14)’’ and

9 inserting ‘‘(14)(A)’’;

10 (2) by redesignating paragraph (15) as sub11 paragraph (B) of paragraph (14); and

12 (3) by inserting after paragraph (14) the fol13 lowing new paragraph:

14 ‘‘(15) provide for—

15 ‘‘(A) a process for annual reviews of and

16 reports to the Secretary on the State program

17 under this part, using such standards and pro18 cedures as are required by the Secretary, under

19 which the State agency will determine the ex20 tent to which such program is in conformity

21 with applicable requirements with respect to the

22 operation of State programs under this part

23 (including the status of complaints filed under

24 the procedure required under paragraph

25 (12)(B)); and
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1 ‘‘(B) a process of extracting from the

2 State automated data processing system and

3 transmitting to the Secretary data and calcula4 tions concerning the levels of accomplishment

5 (and rates of improvement) with respect to ap6 plicable performance indicators (including IV–D

7 paternity establishment percentages and overall

8 performance in child support enforcement) to

9 the extent necessary for purposes of sections

10 452(g) and 458.’’.

11 (b) FEDERAL ACTIVITIES.—Section 452(a)(4) is

12 amended to read as follows:

13 ‘‘(4)(A) review data and calculations transmit14 ted by State agencies pursuant to section

15 454(15)(B) on State program accomplishments with

16 respect to performance indicators for purposes of

17 section 452(g) and 458, and determine the amount

18 (if any) of penalty reductions pursuant to section

19 403(h) to be applied to the State;

20 ‘‘(B) review annual reports by State agencies

21 pursuant to section 454(15)(A) on State program

22 conformity with Federal requirements; evaluate any

23 elements of a State program in which significant de24 ficiencies are indicated by such report on the status

25 of complaints under the State procedure under sec-
226

•S 2224 IS

1 tion 454(12)(B); and, as appropriate, provide to the

2 State agency comments, recommendations for addi3 tional or alternative corrective actions, and technical

4 assistance; and

5 ‘‘(C) conduct audits, in accordance with the

6 government auditing standards of the United States

7 Comptroller General—

8 ‘‘(i) at least once every 3 years (or more

9 frequently, in the case of a State which fails to

10 meet requirements of this part, or of regula11 tions implementing such requirements, concern12 ing performance standards and reliability of

13 program data) to assess the completeness, reli14 ability, and security of the data, and the accu15 racy of the reporting systems, used for the cal16 culations of performance indicators specified in

17 subsection (g) and section 458;

18 ‘‘(ii) of the adequacy of financial manage19 ment of the State program, including assess20 ments of—

21 ‘‘(I) whether Federal and other funds

22 made available to carry out the State pro23 gram under this part are being appro24 priately expended, and are properly and

25 fully accounted for; and
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•S 2224 IS

1 ‘‘(II) whether collections and disburse2 ments of support payments and program

3 income are carried out correctly and are

4 properly and fully accounted for; and

5 ‘‘(iii) for such other purposes as the Sec6 retary may find necessary;’’.

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

8 this section shall be effective with respect to calendar

9 quarters beginning on or after the date one year after en10 actment of this section.

11 SEC. 614. AUTOMATED DATA PROCESSING REQUIREMENTS.

12 (a) REVISED REQUIREMENTS.—(1) Section 454(16)

13 is amended—

14 (A) by striking ‘‘, at the option of the State,’’;

15 (B) by inserting ‘‘and operation by the State

16 agency’’ after ‘‘for the establishment’’;

17 (C) by inserting ‘‘meeting the requirements of

18 section 454A’’ after ‘‘information retrieval system’’;

19 (D) by striking ‘‘in the State and localities

20 thereof, so as (A)’’ and inserting ‘‘so as’’;

21 (E) by striking ‘‘(i)’’; and

22 (F) by striking ‘‘(including’’ and all that follows

23 and inserting a semicolon.

24 (2) Part D of title IV is amended by inserting after

25 section 454 the following new section:
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•S 2224 IS

1 ‘‘AUTOMATED DATA PROCESSING

2 ‘‘SEC. 454A. (a) IN GENERAL.—In order to meet the

3 requirements of this section, for purposes of the require4 ment of section 454(16), a State agency shall have in op5 eration a single statewide automated data processing and

6 information retrieval system which has the capability to

7 perform the tasks specified in this section, and performs

8 such tasks with the frequency and in the manner specified

9 in this part or in regulations or guidelines of the Sec10 retary.

11 ‘‘(b) PROGRAM MANAGEMENT.—The automated sys12 tem required under this section shall perform such func13 tions as the Secretary may specify relating to management

14 of the program under this part, including—

15 ‘‘(1) controlling and accounting for use of Fed16 eral, State, and local funds to carry out such pro17 gram; and

18 ‘‘(2) maintaining the data necessary to meet

19 Federal reporting requirements on a timely basis.

20 ‘‘(c) CALCULATION OF PERFORMANCE INDICA21 TORS.—In order to enable the Secretary to determine the

22 incentive and penalty adjustments required by sections

23 452(g) and 458, the State agency shall—

24 ‘‘(1) use the automated system—
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•S 2224 IS

1 ‘‘(A) to maintain the requisite data on

2 State performance with respect to paternity es3 tablishment and child support enforcement in

4 the State; and

5 ‘‘(B) to calculate the IV–D paternity es6 tablishment percentage and overall performance

7 in child support enforcement for the State for

8 each fiscal year; and

9 ‘‘(2) have in place systems controls to ensure

10 the completeness, and reliability of, and ready access

11 to, the data described in paragraph (1)(A), and the

12 accuracy of the calculations described in paragraph

13 (1)(B).

14 ‘‘(d) INFORMATION INTEGRITY AND SECURITY.—The

15 State agency shall have in effect safeguards on the integ16 rity, accuracy, and completeness of, access to, and use of

17 data in the automated system required under this section,

18 which shall include the following (in addition to such other

19 safeguards as the Secretary specifies in regulations):

20 ‘‘(1) POLICIES RESTRICTING ACCESS.—Written

21 policies concerning access to data by State agency

22 personnel, and sharing of data with other persons,

23 which—
230

•S 2224 IS

1 ‘‘(A) permit access to and use of data only

2 to the extent necessary to carry out program re3 sponsibilities;

4 ‘‘(B) specify the data which may be used

5 for particular program purposes, and the per6 sonnel permitted access to such data; and

7 ‘‘(C) ensure that data obtained or disclosed

8 for a limited program purpose is not used or

9 redisclosed for another, impermissible purpose.

10 ‘‘(2) SYSTEMS CONTROLS.—Systems controls

11 (such as passwords or blocking of fields) to ensure

12 strict adherence to the policies specified under para13 graph (1).

14 ‘‘(3) MONITORING OF ACCESS.—Routine mon15 itoring of access to and use of the automated sys16 tem, through methods such as audit trails and feed17 back mechanisms, to guard against and promptly

18 identify unauthorized access or use.

19 ‘‘(4) TRAINING AND INFORMATION.—The State

20 agency shall have in effect procedures to ensure that

21 all personnel (including State and local agency staff

22 and contractors) who may have access to or be re23 quired to use sensitive or confidential program data

24 are fully informed of applicable requirements and
231

•S 2224 IS

1 penalties, and are adequately trained in security pro2 cedures.

3 ‘‘(5) PENALTIES.—The State agency shall have

4 in effect administrative penalties (up to and includ5 ing dismissal from employment) for unauthorized ac6 cess to, or disclosure or use of, confidential data.’’.

7 (3) IMPLEMENTATION TIMETABLE.—Section

8 454(24) is amended to read as follows:

9 ‘‘(24) provide that the State will have in effect

10 an automated data processing and information re11 trieval system—

12 ‘‘(A) by October 1, 1995, meeting all re13 quirements of this part which were enacted on

14 or before the date of enactment of the Family

15 Support Act of 1988; and

16 ‘‘(B) by October 1, 1998, meeting all re17 quirements of this part enacted on or before the

18 date of enactment of the Work and Responsibil19 ity Act of 1994 (but this provision shall not be

20 construed to alter earlier deadlines specified for

21 elements of such system);’’.

22 (b) SPECIAL FEDERAL MATCHING RATE FOR DE23 VELOPMENT COSTS OF AUTOMATED SYSTEMS.—Section

24 455(a) is amended—

25 (1) in paragraph (1)(B)—
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•S 2224 IS

1 (A) by striking ‘‘90 percent’’ and inserting

2 ‘‘the percent specified in paragraph (3)’’;

3 (B) by striking ‘‘so much of’’; and

4 (C) by striking ‘‘which the Secretary’’ and

5 all that follows and inserting ‘‘, and’’; and

6 (2) by adding at the end the following new

7 paragraph:

8 ‘‘(3)(A) The Secretary shall pay to each State, for

9 each quarter in fiscal year 1995, 90 percent of so much

10 of State expenditures described in subparagraph (1)(B) as

11 the Secretary finds are for a system meeting the require12 ments specified in section 454(16), or meeting such re13 quirements without regard to clause (D) thereof.

14 ‘‘(B)(i) The Secretary shall pay to each State, for

15 each quarter in fiscal years 1996 through 2000, the per16 centage specified in clause (ii) of so much of State expend17 itures described in subparagraph (1)(B) as the Secretary

18 finds are for a system meeting the requirements specified

19 in section 454(16) and 454A, subject to clause (iii).

20 ‘‘(ii) The percentage specified in this clause, for pur21 poses of clause (i), is the higher of—

22 ‘‘(I) 80 percent, or

23 ‘‘(II) the percentage otherwise applicable to

24 Federal payments to the State under subparagraph

25 (A) (as adjusted in pursuant to section 458).
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•S 2224 IS

1 ‘‘(iii) Notwithstanding any other provision of this sec2 tion, the total amount payable by the Secretary with re3 spect to expenditures during fiscal years specified in clause

4 (i) shall not exceed $260,000,000, to be distributed among

5 the States, and to be made available at such time or times

6 over the five-year period, as is provided in regulations is7 sued by the Secretary, taking into account the relative size

8 of State caseloads and the level of automation needed to

9 meet the requirements of this part, and payments under

10 clause (i) shall be made to a State at such times and in

11 such a manner as provided in the advance planning docu12 ment approved under section 452(d).’’.

13 (c) CONFORMING AMENDMENT.—Section 123(c) of

14 the Family Support Act of 1988 is repealed.

15 (d) ADDITIONAL PROVISIONS.—For additional provi16 sions of section 454A, as added by subsection (a), see sec17 tions 621, 622, and 636 of this Act.

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

19 STAFFING.

20 (a) REPORTING TO SECRETARY.—Section 452(a) is

21 amended, in the matter preceding paragraph (1), by strik22 ing ‘‘directly’’.

23 (b) TRAINING PROGRAM.—Section 452(a)(7) is

24 amended by striking ‘‘paternity;’’ and inserting ‘‘pater25 nity, through activities including—
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•S 2224 IS

1 ‘‘(A) development of a core curriculum and

2 training standards to be used by States in the

3 development of State-specific training guides;

4 and

5 ‘‘(B) development of a national training

6 program for directors of State programs under

7 this part;’’.

8 (c) STATE PLAN REQUIREMENT.—Section 454, as

9 amended by sections 602 and 604, is further amended—

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

11 (25);

12 (2) by striking the period at the end of para13 graph (26) and inserting ‘‘; and’’; and

14 (3) by adding after paragraph (26) the follow15 ing new paragraph:

16 ‘‘(27) provide that the State agency will develop

17 and implement a training program which—

18 ‘‘(A) is consistent with the national train19 ing standards and core curriculum developed by

20 the Secretary pursuant to section 452(a)(7),

21 and uses a State-specific training guide incor22 porating such core curriculum;

23 ‘‘(B) provides for initial and ongoing train24 ing of all staff (including State and local agency

25 staff and contractors) of the program under
235

•S 2224 IS

1 this part, including annual training for case

2 workers and special training when significant

3 changes are made in statutes, regulations, poli4 cies, or procedures; and

5 ‘‘(C) may provide (subject to approval by

6 the Secretary) for appropriate training of other

7 persons with responsibilities relating to the im8 plementation of the State program under this

9 part (including staff administering programs

10 under part A, part E, title XIX, and other re11 lated and complementary programs; judges and

12 other staff of judicial and administrative tribu13 nals; law enforcement personnel; staff of social

14 services organizations; and the private bar.’’.

15 (d) STAFFING STUDIES.—(1) SCOPE OF STUDY.—

16 The Secretary of Health and Human Services shall, di17 rectly or by contract, conduct studies of the staffing of

18 each State child support enforcement program under title

19 IV–D of the Act. Such studies shall include a review of

20 the staffing needs created by requirements for automated

21 data processing, maintenance of a central case registry,

22 and centralized collections of child support, and of changes

23 in these needs resulting from changes in such require24 ments.
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•S 2224 IS

1 (2) FREQUENCY OF STUDIES.—The Secretary shall

2 complete the first staffing study required under paragraph

3 (1) by October 1, 1996, and may conduct additional stud4 ies subsequently at appropriate intervals.

5 (3) REPORT TO CONGRESS.—The Secretary shall

6 submit a report to the Congress stating the findings and

7 conclusions of each study conducted under this subsection.

8 SEC. 616. FUNDING FOR SECRETARIAL ASSISTANCE TO

9 STATE PROGRAMS.

10 Section 452 is amended by adding at the end the fol11 lowing new subsection:

12 ‘‘(j) FUNDING FOR FEDERAL ACTIVITIES ASSISTING

13 STATE PROGRAMS.—(1) There shall be available to the

14 Secretary, from amounts appropriated for fiscal year 1995

15 and each succeeding fiscal year for payments to States

16 under this part, the amount specified in paragraph (2) for

17 the costs to the Secretary for—

18 ‘‘(A) information dissemination and technical

19 assistance to States, training of State and Federal

20 staff, staffing studies, and related activities needed

21 to improve programs (including technical assistance

22 concerning State automated systems);

23 ‘‘(B) research, demonstration, and special

24 projects of regional or national significance relating
237

•S 2224 IS

1 to the operation of State programs under this part;

2 and

3 ‘‘(C) operation of the Federal parent Locator

4 Service under section 453 and the National Welfare

5 Reform Information Clearinghouse under section

6 453A, to the extent such costs are not recovered

7 through user fees.

8 ‘‘(2) The amount specified in this paragraph for a

9 fiscal year is the amount equal to a percentage of the re10 duction in Federal payments to States under part A on

11 account of child support (including arrearages) collected

12 in the preceding fiscal year on behalf of children receiving

13 aid under such part A in such preceding fiscal year (as

14 determined on the basis of the most recent reliable data

15 available to the Secretary as of the end of the third cal16 endar quarter following the end of such preceding fiscal

17 year), equal to—

18 ‘‘(A) 1 percent, for the activities specified in

19 subparagraphs (A) and (B) of paragraph (1); and

20 ‘‘(B) 2 percent, for the activities specified in

21 subparagraph (C) of paragraph (1).’’.

22 SEC. 617. DATA COLLECTION AND REPORTS BY THE SEC23 RETARY.

24 (a) ANNUAL REPORT TO CONGRESS.—(1) Section

25 452(a)(10)(A) is amended—
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•S 2224 IS

1 (A) by striking ‘‘this part;’’ and inserting ‘‘this

2 part, including—’’; and

3 (B) by adding at the end the following indented

4 clauses:

5 ‘‘(i) the total amount of child support

6 payments collected as a result of services

7 furnished during such fiscal year to indi8 viduals receiving services under this part;

9 ‘‘(ii) the cost to the States and to the

10 Federal Government of furnishing such

11 services to those individuals; and

12 ‘‘(iii) the number of cases involving

13 families—

14 ‘‘(I) who became ineligible for aid

15 under part A during a month in such

16 fiscal year; and

17 ‘‘(II) with respect to whom a

18 child support payment was received in

19 the same month;’’.

20 (2) Section 452(a)(10)(C) is amended—

21 (A) in the matter preceding clause (i)—

22 (i) by striking ‘‘with the data required

23 under each clause being separately stated for

24 cases’’ and inserting ‘‘separately stated for (1)

25 cases’’;
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•S 2224 IS

1 (ii) by striking ‘‘cases where the child was

2 formerly receiving’’ and inserting ‘‘or formerly

3 received’’;

4 (iii) by inserting ‘‘or 1912’’ after

5 ‘‘471(a)(17)’’; and

6 (iv) by inserting ‘‘(2)’’ before ‘‘all other’’;

7 (B) in each of clauses (i) and (ii), by striking

8 ‘‘, and the total amount of such obligations’’;

9 (C) in clause (iii), by striking ‘‘described in’’

10 and all that follows and inserting ‘‘in which support

11 was collected during the fiscal year;’’;

12 (D) by striking clause (iv);

13 (E) by redesignating clause (v) as clause (vii),

14 and inserting after clause (iii) the following new

15 clauses:

16 ‘‘(iv) the total amount of support col17 lected during such fiscal year and distrib18 uted as current support;

19 ‘‘(v) the total amount of support col20 lected during such fiscal year and distrib21 uted as arrearages;

22 ‘‘(vi) the total amount of support due

23 and unpaid for all fiscal years; and’’.

24 (3) Section 452(a)(10)(G) is amended by striking ‘‘on

25 the use of Federal courts and’’.
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•S 2224 IS

1 (4) Section 452(a)(10) is further amended by striking

2 the matter following the end of subparagraph (I).

3 (b) DATA COLLECTION AND REPORTING.—Section

4 469 is amended—

5 (1) in subsections (a) and (b), to read as fol6 lows:

7 ‘‘(a) The Secretary shall collect and maintain, on a

8 fiscal year basis, up-to-date statistics, by State, with re9 spect to services to establish paternity and services to es10 tablish child support obligations, the data specified in sub11 section (b), separately stated, in the case of each such

12 service, with respect to—

13 ‘‘(1) families (or dependent children) receiving

14 aid under plans approved under part A (or E); and

15 ‘‘(2) families not receiving such aid.

16 ‘‘(b) The data referred to in subsection (a) are—

17 ‘‘(1) the number of cases in the caseload of the

18 State agency administering the plan under this part

19 in which such service is needed; and

20 ‘‘(2) the number of such cases in which the

21 service has been provided.’’; and

22 (2) in subsection (c), by striking ‘‘(a)(2)’’ and

23 inserting ‘‘(b)(2)’’.
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•S 2224 IS

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

2 this section shall be effective with respect to fiscal year

3 1995 and succeeding fiscal years.

4 PART C—LOCATE AND CASE TRACKING

5 SEC. 621. CENTRAL STATE AND CASE REGISTRY.

6 Section 454A, as added by section 614, is further

7 amended by adding at the end the following new sub8 sections:

9 ‘‘(e) CENTRAL CASE REGISTRY.—(1) IN GEN10 ERAL.—The automated system required under this section

11 shall perform the functions, in accordance with the provi12 sions of this subsection, of a single central registry con13 taining records with respect to each case in which services

14 are being provided by the State agency (including, on and

15 after October 1, 1997, each order specified in section

16 466(a)(12)), using such standardized data elements (such

17 as names, social security numbers or other uniform identi18 fication numbers, dates of birth, and case identification

19 numbers), and containing such other information (such as

20 information on case status) as the Secretary may require.

21 ‘‘(2) PAYMENT RECORDS.—Each case record in the

22 central registry shall include a record of—

23 ‘‘(A) the amount of monthly (or other periodic)

24 support owed under the support order, and other
242

•S 2224 IS

1 amounts due or overdue (including arrears, interest

2 or late payment penalties, and fees);

3 ‘‘(B) the date on which the support obligation

4 will terminate under such order;

5 ‘‘(C) all child support and related amounts col6 lected (including such amounts as fees, late payment

7 penalties, and interest on arrearages); and

8 ‘‘(D) the distribution of such amounts collected.

9 ‘‘(3) UPDATING AND MONITORING.—The State agen10 cy shall promptly establish and maintain, and regularly

11 monitor, case records in the registry required by this sub12 section, on the basis of—

13 ‘‘(A) information on administrative actions and

14 administrative and judicial proceedings and orders

15 relating to paternity and support;

16 ‘‘(B) information obtained from matches with

17 Federal, State, or local data sources;

18 ‘‘(C) information on support collections and dis19 tributions; and

20 ‘‘(D) any other relevant information.

21 ‘‘(f) DATA MATCHES AND OTHER DISCLOSURES OF

22 INFORMATION.—The automated system required under

23 this section shall have the capacity, and be used by the

24 State agency, to extract data at such times, and in such

25 standardized format or formats, as may be required by
243

•S 2224 IS

1 the Secretary, and to share and match data with, and re2 ceive data from, other data bases and data matching serv3 ices, in order to obtain (or provide) information necessary

4 to enable the State agency (or Secretary or other State

5 or Federal agencies) to carry out responsibilities under

6 this part. Data matching activities of the State agency

7 shall include at least the following:

8 ‘‘(1) NATIONAL CHILD SUPPORT REGISTRY.—

9 Furnish to the National Child Support Registry es10 tablished under section 453A (and update as nec11 essary, with information including notice of expira12 tion of orders) minimal information (to be specified

13 by the Secretary) on each child support case in the

14 central case registry.

15 ‘‘(2) FEDERAL PARENT LOCATOR SERVICE.—

16 Exchange data with the Federal Parent Locator

17 Service for the purposes specified in section 453.

18 ‘‘(3) AFDC AND MEDICAID AGENCIES.—Ex19 change data with State agencies (of the State and

20 of other States) administering the programs under

21 part A and title XIX, as necessary for the perform22 ance of State agency responsibilities under this part

23 and under such programs.

24 ‘‘(4) INTRA- AND INTERSTATE DATA

25 MATCHES.—Exchange data with other agencies of
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•S 2224 IS

1 the State, agencies of other States, and interstate

2 information networks, as necessary and appropriate

3 to carry out (or assist other States to carry out) the

4 purposes of this part.’’.

5 SEC. 622. CENTRALIZED COLLECTION AND DISBURSEMENT

6 OF SUPPORT PAYMENTS.

7 (a) STATE PLAN REQUIREMENT.—Section 454, as

8 previously amended by sections 601, 605, and 615, is fur9 ther amended—

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

11 (26);

12 (2) by striking the period at the end of para13 graph (27) and inserting ‘‘; and’’; and

14 (3) by adding after paragraph (27) the follow15 ing new paragraph:

16 ‘‘(28) provide that the State agency, on and

17 after October 1, 1997—

18 ‘‘(A) will operate a centralized, automated

19 unit for the collection and disbursement of child

20 support under orders being enforced under this

21 part, in accordance with section 454B; and

22 ‘‘(B) will have sufficient State staff (con23 sisting of State employees, and (at State op24 tion) contractors reporting directly to the State

25 agency) to monitor and enforce support collec-
245

•S 2224 IS

1 tions through such centralized unit, including

2 carrying out the automated data processing re3 sponsibilities specified in section 454A(g) and

4 to impose, as appropriate in particular cases,

5 the administrative enforcement remedies speci6 fied in section 466(c)(1).’’.

7 (b) ESTABLISHMENT OF CENTRALIZED COLLECTION

8 UNIT.—Part D of title IV is amended by adding after sec9 tion 454A the following new section:

10 ‘‘CENTRALIZED COLLECTION AND DISBURSEMENT OF

11 SUPPORT PAYMENTS

12 ‘‘SEC. 454B. (a) IN GENERAL.—In order to meet the

13 requirement of section 454(28), the State agency must op14 erate a single centralized, automated unit for the collection

15 and disbursement of support payments, coordinated with

16 the automated data system required under section 454A,

17 in accordance with the provisions of this section, which

18 shall be—

19 ‘‘(1) operated directly by the State agency (or

20 by two or more State agencies under a regional co21 operative agreement), or by a single contractor re22 sponsible directly to the State agency; and

23 ‘‘(2) used for the collection and disbursement

24 (including interstate collection and disbursement) of

25 payments under support orders in all cases being en26 forced by the State pursuant to section 454(4).
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•S 2224 IS

1 ‘‘(b) REQUIRED PROCEDURES.—The centralized col2 lections unit shall use automated procedures, electronic

3 processes, and computer-driven technology to the maxi4 mum extent feasible, efficient, and economical, for the col5 lection and disbursement of support payments, including

6 procedures—

7 ‘‘(1) for receipt of payments from parents, em8 ployers, and other States, and for disbursements to

9 custodial parents and other obligees, the State agen10 cy, and the State agencies of other States;

11 ‘‘(2) for accurate identification of payments;

12 ‘‘(3) to ensure prompt disbursement of the cus13 todial parent’s share of any payment; and

14 ‘‘(4) to furnish to either parent, upon request,

15 timely information on the current status of support

16 payments.’’.

17 (c) USE OF AUTOMATED SYSTEM.—Section 454A, as

18 added by section 614 and amended by section 621, is fur19 ther amended by adding at the end the following new sub20 section:

21 ‘‘(g) CENTRALIZED COLLECTION AND DISTRIBUTION

22 OF SUPPORT PAYMENTS.—The automated system re23 quired under this section shall be used, to the maximum

24 extent feasible, to assist and facilitate collections and dis25 bursement of support payments through the centralized
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•S 2224 IS

1 collections unit operated pursuant to section 454B,

2 through the performance of functions including at a mini3 mum—

4 ‘‘(1) generation of orders and notices to em5 ployers (and other debtors) for the withholding of

6 wages (and other income)—

7 ‘‘(A) within two working days after receipt

8 (from the National Directory of New Hires or

9 any other source) of notice of and the income

10 source subject to such withholding; and

11 ‘‘(B) using uniform formats directed by

12 the Secretary;

13 ‘‘(2) ongoing monitoring to promptly identify

14 failures to make timely payment; and

15 ‘‘(3) automatic use of enforcement mechanisms

16 (including mechanisms authorized pursuant to sec17 tion 466(c)) where payments are not timely made.’’.

18 (d) The amendments made by this section shall be19 come effective on October 1, 1997.

20 SEC. 623. AMENDMENTS CONCERNING INCOME WITHHOLD21 ING.

22 (a) MANDATORY INCOME WITHHOLDING.—(1) Sec23 tion 466(a)(1) is amended to read as follows:

24 ‘‘(1) INCOME WITHHOLDING.—(A) UNDER OR25 DERS ENFORCED UNDER THE STATE PLAN.—Proce-
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•S 2224 IS

1 dures described in subsection (b) for the withholding

2 from income of amounts payable as support in cases

3 subject to enforcement under the State plan.

4 ‘‘(B) UNDER CERTAIN ORDERS PREDATING

5 CHANGE IN REQUIREMENT.—Procedures under

6 which all child support orders issued (or modified)

7 before October 1, 1995, and which are not otherwise

8 subject to withholding under subsection (b), shall be9 come subject to withholding from wages as provided

10 in subsection (b) if arrearages occur, without the

11 need for a judicial or administrative hearing.’’.

12 (2) Section 466(a)(8) is repealed.

13 (3) Section 466(b) is amended—

14 (A) in the matter preceding paragraph (1),

15 by striking ‘‘subsection (a)(1)’’ and inserting

16 ‘‘subsection (a)(1)(A)’’;

17 (B) in paragraph (5), by striking all that

18 follows ‘‘administered by’’ and inserting ‘‘the

19 State through the centralized collections unit

20 established pursuant to section 454B, in ac21 cordance with the requirements of such section

22 454B.’’;

23 (C) in paragraph (6)(A)(i)—
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•S 2224 IS

1 (i) by inserting ‘‘, in accordance with time2 tables established by the Secretary,’’ after

3 ‘‘must be required’’; and

4 (ii) by striking ‘‘to the appropriate agency’’

5 and all that follows and inserting ‘‘to the State

6 centralized collections unit within 5 working

7 days after the date such amount would (but for

8 this subsection) have been paid or credited to

9 the employee, for distribution in accordance

10 with this part.’’;

11 (D) in paragraph (6)(A)(ii), by inserting ‘‘be in

12 a standard format prescribed by the Secretary, and’’

13 after ‘‘shall’’; and

14 (E) in paragraph (6)(D)—

15 (i) by striking ‘‘employer who discharges’’

16 and inserting ‘‘employer who—(A) discharges’’;

17 (ii) by relocating subparagraph (A), as des18 ignated, as an indented subparagraph after and

19 below the introductory matter;

20 (iii) by striking the period at the end; and

21 (iv) by adding after and below subpara22 graph (A) the following new subparagraph:

23 ‘‘(B) fails to withhold support from wages,

24 or to pay such amounts to the State centralized
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1 collections unit in accordance with this sub2 section.’’.

3 (b) CONFORMING AMENDMENT.—Section 466(c) is

4 repealed.

5 (c) DEFINITION OF TERMS.—The Secretary shall

6 promulgate regulations providing definitions, for purposes

7 of title IV–D of the Act, for the term ‘‘income’’ and for

8 such other terms relating to income withholding under sec9 tion 466(b) of the Act as the Secretary may find it nec10 essary or advisable to define.

11 SEC. 624. LOCATOR INFORMATION FROM INTERSTATE NET12 WORKS AND LABOR UNIONS.

13 STATE LAW REQUIREMENT.—Section 466(a), as

14 amended by section 623, is amended by adding after para15 graph (7) the following new paragraph:

16 ‘‘(8) LOCATOR INFORMATION.—(A) INTER17 STATE NETWORKS.—Procedures ensuring that the

18 State will neither provide funding for, nor use for

19 any purpose (including any purpose unrelated to the

20 purposes of this part), any automated interstate net21 work or system used to locate individuals—

22 ‘‘(i) for purposes relating to the use of motor

23 vehicles; or

24 ‘‘(ii) providing information for law enforcement

25 purposes (where child support enforcement agencies
251

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1 are otherwise allowed access by State and Federal

2 law),

3 unless all Federal and State agencies administering pro4 grams under this part (including the entities established

5 under sections 453 and 453A) have access to information

6 in such system or network to the same extent as any other

7 user of such system or network.

8 ‘‘(B) LABOR UNIONS.—Procedures under which

9 labor unions, and their hiring halls, must furnish to

10 the State agency, upon request, with respect to any

11 union member against whom paternity or a support

12 obligation is sought to be established or enforced,

13 such information as the union or hiring hall may

14 have on such member’s residential address and tele15 phone number, employer’s name, address, and tele16 phone number, and wages and medical insurance

17 benefits.’’.

18 SEC. 625. NATIONAL WELFARE REFORM INFORMATION

19 CLEARINGHOUSE.

20 (a) Part D of title IV is amended by adding after

21 section 453 the following new section:

22 ‘‘NATIONAL WELFARE REFORM INFORMATION

23 CLEARINGHOUSE

24 ‘‘SEC. 453A. (a)(1) In order to assist States in ad25 ministering their State plans under this part and parts
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1 A, F, and G, and for the other purposes specified in this

2 section, the Secretary shall establish and operate a Na3 tional Welfare Reform Information Clearinghouse, per4 forming the functions and meeting the requirements speci5 fied in this section, and containing the registries and di6 rectory specified in paragraph (2).

7 ‘‘(2) COMPONENTS SPECIFIED.—The registries and

8 directory specified in this paragraph, for purposes of para9 graph (1), are—

10 ‘‘(A) the National Child Support Registry es11 tablished pursuant to subsection (b);

12 ‘‘(B) the National Directory of New Hires es13 tablished pursuant to subsection (c);

14 ‘‘(C) the Federal Parent Locater Service estab15 lished pursuant to section 453; and

16 ‘‘(D) the National Welfare Receipt Registry es17 tablished pursuant section 411.

18 ‘‘(3) USE OF TERM.—For purposes of this section,

19 references to registries maintained under this section shall

20 be considered to include the National Directory of New

21 Hires and the Federal Parent Locator Service.

22 ‘‘(b) NATIONAL CHILD SUPPORT REGISTRY.—(1) IN

23 GENERAL.—The Secretary shall establish by October 1,

24 1997, and maintain thereafter, an automated registry, to

25 be known as the National Child Support Registry, contain-
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1 ing minimal information (in accordance with paragraph

2 (2)) on each case in each State central case registry main3 tained pursuant to section 454A(e), as furnished (and reg4 ularly updated), pursuant to section 454A(f), by State

5 agencies administering programs under this part.

6 ‘‘(2) CASE INFORMATION.—The case information re7 quired to be furnished pursuant to this subsection, as

8 specified by the Secretary, shall include sufficient informa9 tion (including names, social security numbers or other

10 uniform identification numbers, and State case identifica11 tion numbers) to identify the individuals who owe or are

12 owed support (or with respect to or on behalf of whom

13 support obligations are sought to be established), and the

14 State or States which have established or modified, or are

15 enforcing or seeking to establish, such an order.

16 ‘‘(c) NATIONAL DIRECTORY OF NEW HIRES.—(1) IN

17 GENERAL.—The Secretary shall establish by October 1,

18 1997, and maintain thereafter, an automated directory, to

19 be known as the National Directory of New Hires, con20 taining—

21 ‘‘(A) information supplied by employers on each

22 newly hired individual, in accordance with paragraph

23 (2); and
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1 ‘‘(B) information supplied by State agencies ad2 ministering State unemployment compensation laws,

3 in accordance with paragraph (3).

4 ‘‘(2) EMPLOYER INFORMATION.—(A) INFORMATION

5 REQUIRED.—Subject to subparagraph (D), each employer

6 shall furnish to the Secretary, for inclusion in the direc7 tory under this subsection, not later than 10 days after

8 the date (on or after October 1, 1997) on which the em9 ployer hires a new employee (as defined in subparagraph

10 (C)), a report containing the name, date of birth, and so11 cial security number of such employee, and the employer

12 identification number of the employer.

13 ‘‘(B) REPORTING METHOD AND FORMAT.—The Sec14 retary shall provide for transmission of the reports re15 quired under subparagraph (A) using formats and meth16 ods which minimize the burden on employers, which shall

17 include—

18 ‘‘(i) automated or electronic transmission of

19 such reports;

20 ‘‘(ii) transmission by regular mail; and

21 ‘‘(iii) transmission of a copy of the form re22 quired for purposes of compliance with section 3402

23 of the Internal Revenue Code of 1986.

24 ‘‘(C) EMPLOYEE DEFINED.—For purposes of this

25 paragraph, the term ‘‘employee’’—
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1 ‘‘(i) means (subject to clause (ii)) any individual

2 subject to the requirement of section 3402(f)(2) of

3 the Internal Revenue Code of 1986; and

4 ‘‘(ii) does not include an employee of a Federal

5 or State agency performing law enforcement func6 tions, or of a Federal agency performing intelligence

7 or counterintelligence functions, where the head of

8 such agency has determined that reporting pursuant

9 to this paragraph with respect to such employee

10 could endanger the safety of the employee or com11 promise an ongoing investigation or intelligence mis12 sion.

13 ‘‘(D) PAPERWORK REDUCTION REQUIREMENT.—As

14 required by the information resources management poli15 cies published by the Director of the Office of Manage16 ment and Budget pursuant to 44 U.S.C. 3504(b)(1), the

17 Secretary, in order to minimize the cost and reporting bur18 den on employers, shall not require reporting pursuant to

19 this paragraph if an alternative reporting mechanism can

20 be developed that either relies on existing Federal or State

21 reporting or enables the Secretary to collect the needed

22 information in a more cost-effective and equally expedi23 tious manner, taking into account the reporting costs on

24 employers.
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1 ‘‘(E) CIVIL MONEY PENALTY ON NONCOMPLYING

2 EMPLOYERS.—(i) Any employer that fails to make a time3 ly report in accordance with this paragraph with respect

4 to an individual shall be subject to a civil money penalty,

5 for each calendar year in which the failure occurs, of the

6 lesser of $500 or 1 percent of the wages or other com7 pensation paid by such employer to such individual during

8 such calendar year.

9 ‘‘(ii) Subject to clause (iii), the provisions of section

10 1128A (other than subsections (a) and (b) thereof) shall

11 apply to a civil money penalty under clause (i) in the same

12 manner as they apply to a civil money penalty or proceed13 ing under section 1128A(a).

14 ‘‘(iii) Any employer with respect to whom a penalty

15 under this subparagraph is upheld after an administrative

16 hearing shall be liable to pay all costs of the Secretary

17 with respect to such hearing.

18 ‘‘(3) EMPLOYMENT SECURITY INFORMATION.—(A)

19 REPORTING REQUIREMENT.—Each State agency admin20 istering a State unemployment compensation law approved

21 by the Secretary of Labor under the Federal Unemploy22 ment Tax Act shall furnish to the Secretary of Health and

23 Human Services extracts of the reports to the Secretary

24 of Labor concerning the wages and unemployment com-
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1 pensation paid to individuals required under section

2 303(a)(6), in accordance with subparagraph (B).

3 ‘‘(B) MANNER OF COMPLIANCE.—The extracts re4 quired under subparagraph (A) shall be furnished to the

5 Secretary of Health and Human Services on a quarterly

6 basis, with respect to calendar quarters beginning on and

7 after October 1, 1995, by such dates, in such format, and

8 containing such information as required by that Secretary

9 in regulations.

10 ‘‘(d) DATA MATCHES AND OTHER DISCLOSURES.—

11 (1) VERIFICATION BY SOCIAL SECURITY ADMINISTRA12 TION.—(A) The Secretary shall transmit data on individ13 uals and employers in the registries maintained under this

14 section to the Social Security Administration to the extent

15 necessary for verification in accordance with subparagraph

16 (B).

17 ‘‘(B) The Social Security Administration shall verify

18 the accuracy of, correct or supply to the extent necessary

19 and feasible, and report to the Secretary, the following in20 formation in data supplied by the Secretary pursuant to

21 subparagraph (A):

22 ‘‘(i) the name, social security number, and birth

23 date of each individual; and

24 ‘‘(ii) the employer identification number of each

25 employer.
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1 ‘‘(2) CHILD SUPPORT LOCATOR MATCHES.—For the

2 purpose of locating individuals for purposes of paternity

3 establishment and establishment and enforcement of child

4 support, the Secretary shall—

5 ‘‘(A) match data in the New Hire Directory

6 against data in the Child Support Registry not less

7 often than every 2 working days; and

8 ‘‘(B) report information obtained from such a

9 match to concerned State agencies operating pro10 grams under this part not later than 2 working days

11 after such match.

12 ‘‘(3) DATA MATCHES AND DISCLOSURES OF DATA IN

13 ALL REGISTRIES.—(A) FOR TITLE IV PROGRAM PUR14 POSES.—The Secretary shall—

15 ‘‘(i) perform matches of data in each registry

16 maintained under this section against data in each

17 other such registry (other than the matches required

18 pursuant to paragraph (1)), and report information

19 resulting from such matches to State agencies oper20 ating programs under this part and parts A, F, and

21 G; and

22 ‘‘(ii) disclose data in such registries to such

23 State agencies—
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1 to the extent, and with the frequency, that the Secretary

2 determines to be effective in assisting such States to carry

3 out their responsibilities under such programs.

4 ‘‘(B) FOR INCOME ELIGIBILITY VERIFICATION SYS5 TEM.—The Secretary shall disclose data in the registries

6 maintained under this section to the programs specified

7 in section 1137(b), to the extent necessary to enable such

8 programs to meet requirements for an income eligibility

9 verification system under such section 1137.

10 ‘‘(C) TO SOCIAL SECURITY ADMINISTRATION.—The

11 Secretary shall disclose data in the registries maintained

12 under this section to the Social Security Administration—

13 ‘‘(i) for the purpose of determining the accu14 racy of payments under the supplemental security

15 income program under title XVI; or

16 ‘‘(ii) for use in connection with benefits under

17 title II.

18 ‘‘(4) OTHER DISCLOSURES OF NEW HIRE DATA.—

19 The Secretary shall disclose data in the New Hire Direc20 tory under subsection (c)—

21 ‘‘(A) to the Secretary of the Treasury for pur22 poses directly connected with—

23 ‘‘(i) the administration of the earned in24 come tax credit under section 32 of the Internal

25 Revenue Code of 1986, or the advance payment
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•S 2224 IS

1 of such credit under section 3507 of such Code;

2 or

3 ‘‘(ii) verification of a claim with respect to

4 employment in an individual tax return; and

5 ‘‘(B) to State agencies operating employment

6 security and workers compensation programs, for

7 the purpose of assisting such agencies to determine

8 the allowability of claims for benefits under such

9 programs.

10 ‘‘(5) DISCLOSURES FOR RESEARCH PURPOSES.—The

11 Secretary is authorized to disclose data in registries main12 tained under this section for research purposes found by

13 the Secretary to be likely to contribute to achieving the

14 purposes of this part or part A, F, or G, but without per15 sonal identifiers.

16 ‘‘(f) FEES.—(1) FOR SSA VERIFICATION.—The Sec17 retary shall reimburse the Commissioner of Social Secu18 rity, at a rate negotiated between the Secretary and the

19 Commissioner, the costs incurred by the Commissioner in

20 performing the verification services specified in subsection

21 (d).

22 ‘‘(2) FOR INFORMATION FROM SESAS.—The Sec23 retary shall reimburse costs incurred by State employment

24 security agencies in furnishing data as required by sub25 section (c)(3), at rates which the Secretary determines to
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•S 2224 IS

1 be reasonable (which rates shall not include payment for

2 the costs of obtaining, compiling, or maintaining such

3 data).

4 ‘‘(3) FOR INFORMATION FURNISHED TO STATE AND

5 FEDERAL AGENCIES.—State and Federal agencies receiv6 ing data or information from the Secretary pursuant to

7 this section shall reimburse the costs incurred by the Sec8 retary in furnishing such data or information, at rates

9 which the Secretary determines to be reasonable (which

10 rates shall include payment for the costs of obtaining, veri11 fying, maintaining, and matching such data or informa12 tion).

13 ‘‘(g) RESTRICTION ON DISCLOSURE AND USE.—Data

14 in registries maintained pursuant to this section, and in15 formation resulting from matches using data maintained

16 in such registries, shall not be used or disclosed except

17 as specifically provided in this section.

18 ‘‘(h) RETENTION OF DATA.—Data in registries main19 tained pursuant to this title, and data resulting from

20 matches performed pursuant to this section, shall be re21 tained for such period (determined by the Secretary) as

22 appropriate for the data uses specified in this section.

23 ‘‘(i) INFORMATION INTEGRITY AND SECURITY.—The

24 Secretary shall establish and implement safeguards with
262

•S 2224 IS

1 respect to the entities established under this section de2 signed to—

3 ‘‘(1) ensure the accuracy and completeness of

4 information in the system; and

5 ‘‘(2) restrict access to confidential information

6 in the registries to authorized persons, and restrict

7 use of such information to authorized purposes.

8 ‘‘(j) LIMIT ON LIABILITY.—The Secretary shall not

9 be liable to either a State or an individual for inaccurate

10 information provided to a registry maintained under this

11 section and disclosed by the Secretary in accordance with

12 this section.’’.

13 (b) CONFORMING AMENDMENTS.—

14 (1) TO TITLE IV–D.—Section 454(8) is amend15 ed—

16 (A) by striking ‘‘, and’’ at the end of sub17 paragraph (A);

18 (B) in subparagraph (B), to read as fol19 lows:

20 ‘‘(B) the Federal Parent Locator Service

21 established under section 453; and’’; and

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

23 subparagraph:
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•S 2224 IS

1 ‘‘(C) the National Welfare Reform Infor2 mation Clearinghouse established under section

3 453A;’’.

4 (2) TO FEDERAL UNEMPLOYMENT TAX ACT.—

5 26 U.S.C. 3304 is amended in paragraph (16)—

6 (A) by striking ‘‘Secretary of Health, Edu7 cation, and Welfare’’ each place it appears and

8 inserting ‘‘Secretary of Health and Human

9 Services’’;

10 (B) in subparagraph (B), by striking

11 ‘‘such information’’ and all that follows and in12 serting ‘‘information furnished under subpara13 graph (A) or (B) is used only for the purposes

14 authorized under such subparagraph;’’;

15 (C) by striking ‘‘and’’ at the end of sub16 paragraph (A);

17 (D) by redesignating subparagraph (B) as

18 subparagraph (C); and

19 (E) by inserting after subparagraph (A)

20 the following new subparagraph:

21 ‘‘(B) wage and unemployment compensa22 tion information contained in the records of

23 such agency shall be furnished to the Secretary

24 of Health and Human Services (in accordance

25 with regulations promulgated by such Sec-
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1 retary) as necessary for the purposes of the Na2 tional Directory of New Hires established under

3 section 453A(b) of the Social Security Act,

4 and’’.

5 (3) TO STATE GRANT PROGRAM UNDER TITLE

6 III OF THE SOCIAL SECURITY ACT.—Section 303(a)

7 is amended—

8 (A) by striking ‘‘and’’ at the end of para9 graph (8);

10 (B) by striking the period at the end of

11 paragraph (9) and inserting ‘‘; and’’; and

12 (C) by adding after paragraph (9) the fol13 lowing new paragraph:

14 ‘‘(10) The making of quarterly electronic re15 ports, at such dates, in such format, and containing

16 such information, as required by the Secretary of

17 Health and Human Services under section

18 453A(b)(3), and compliance with such provisions as

19 such Secretary may find necessary to ensure the cor20 rectness and verification of such reports.’’.

21 SEC. 626. EXPANDED LOCATE AUTHORITY.

22 (a) EXPANDED AUTHORITY TO LOCATE INDIVIDUALS

23 AND ASSETS.—Section 453 is amended—

24 (1) in subsection (a), by striking all that follows

25 ‘‘subsection (c))’’ and inserting the following:
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•S 2224 IS

1 ‘‘, for the purpose of establishing, setting the amount of,

2 or enforcing child support obligations—

3 ‘‘(1) information on, or facilitating the discov4 ery of, the location of any individual—

5 ‘‘(A) who is under an obligation to pay

6 child support;

7 ‘‘(B) against whom such an obligation is

8 sought; or

9 ‘‘(C) to whom such an obligation is owed,

10 including such individual’s social security num11 ber (or numbers), most recent residential ad12 dress, and the name, address, and employer

13 identification number of such individual’s em14 ployer; and

15 ‘‘(2) information on the individual’s wages (or

16 other income) from, and benefits of, employment (in17 cluding rights to or enrollment in group health care

18 coverage); and

19 ‘‘(3) information on the type, status, location,

20 and amount of any assets of, or debts owed by or

21 to, any such individual.’’; and

22 (2) in subsection (b)—

23 (A) in the matter preceding paragraph (1),

24 by striking ‘‘social security’’ and all that follows
266

•S 2224 IS

1 through ‘‘absent parent’’ and inserting ‘‘infor2 mation specified in subsection (a)’’; and

3 (B) in paragraph (2), by inserting before

4 the period ‘‘, or from any consumer reporting

5 agency (as defined in section 603(f) of the Fair

6 Credit Reporting Act (15 U.S.C. 1681a(f))’’;

7 (3) in subsection (e)(1), by inserting before the

8 period ‘‘, or by consumer reporting agencies’’.

9 (b) REIMBURSEMENT FOR DATA FROM FEDERAL

10 AGENCIES.—Section 453(e)(2) is amended in the fourth

11 sentence by inserting before the period ‘‘in an amount

12 which the Secretary determines to be reasonable payment

13 for the data exchange (which amount shall not include

14 payment for the costs of obtaining, compiling, or main15 taining the data)’’.

16 (c) ACCESS TO CONSUMER REPORTS UNDER FAIR

17 CREDIT REPORTING ACT.—(1) Section 608 of the Fair

18 Credit Reporting Act (15 U.S.C. 1681f) is amended—

19 (A) by striking ‘‘, limited to’’ and inserting ‘‘to

20 a governmental agency (including the entire

21 consumer report, in the case of a Federal, State, or

22 local agency administering a program under part D

23 of title IV of the Social Security Act, and limited

24 to’’; and
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•S 2224 IS

1 (B) by striking ‘‘employment, to a govern2 mental agency’’ and inserting ‘‘employment, in the

3 case of any other governmental agency)’’.

4 (2) REIMBURSEMENT FOR REPORTS BY STATE AGEN5 CIES AND CREDIT BUREAUS.—Section 453 is amended by

6 adding at the end the following new subsection:

7 ‘‘(g) The Secretary is authorized to reimburse costs

8 to State agencies and consumer credit reporting agencies

9 the costs incurred by such entities in furnishing informa10 tion requested by the Secretary pursuant to this section

11 in an amount which the Secretary determines to be rea12 sonable payment for the data exchange (which amount

13 shall not include payment for the costs of obtaining, com14 piling, or maintaining the data).’’.

15 (d) DISCLOSURE OF TAX RETURN INFORMATION.—

16 (1) Section 6103(1)(6)(A)(ii) of the Internal Revenue

17 Code of 1986 (26 U.S.C. 6103(1)(6)(A)(ii) is amended by

18 striking ‘‘, but only if’’ and all that follows and inserting

19 a period.

20 (2) Section 6103(1)(8)(A) of the Internal Revenue

21 Code of 1986 (26 U.S.C. 6103(1)(8)(A)) is amended by

22 inserting ‘‘Federal,’’ before ‘‘State or local’’.

23 (e) TECHNICAL AMENDMENTS.—
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1 (1) Sections 452(a)(9), 453(a), 453(b), 463(a),

2 and 463(e) are each amended by inserting ‘‘Fed3 eral’’ before ‘‘Parent’’ each place it appears.

4 (2) Section 453 is amended in the heading by

5 adding ‘‘FEDERAL’’ before ‘‘PARENT’’.

6 SEC. 627. STUDIES AND DEMONSTRATIONS CONCERNING

7 LOCATOR ACTIVITIES.

8 (a) STUDIES.—The Secretary of Health and Human

9 Services shall study, and report and make recommenda10 tions to the Congress concerning—

11 (1) whether access to information available

12 through the Federal Parent Locator Service under

13 section 453 of the Social Security Act should be af14 forded to noncustodial parents seeking to locate

15 their children and, if so, whether custodial parents

16 at risk of harm by such noncustodial parents could

17 be adequately protected; and

18 (2) the feasibility, implications, and costs of es19 tablishing and operating electronic data interchanges

20 between such Service and major consumer credit re21 porting bureaus.

22 (b) DEMONSTRATIONS.—The Secretary shall make

23 grants to States, from funds available under section 452(j)

24 of the Social Security Act, for demonstrations designed to

25 test the utility of automated data exchanges with State
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•S 2224 IS

1 data bases that have the potential to improve the States’

2 effectiveness in locating individuals and resources for pur3 poses of establishing paternity and establishing and en4 forcing support obligations.

5 SEC. 628. USE OF SOCIAL SECURITY NUMBERS.

6 (a) STATE LAW REQUIREMENT.—Section 466(a) is

7 amended by adding at the end the following new para8 graph:

9 ‘‘(13) SOCIAL SECURITY NUMBERS RE10 QUIRED.—Procedures requiring the recording of so11 cial security numbers—

12 ‘‘(A) of both parties on marriage licenses

13 and divorce decrees; and

14 ‘‘(B) of both parents, on birth records and

15 child support and paternity orders.’’.

16 (b) CLARIFICATION OF FEDERAL POLICY.—Section

17 205(c)(2)(C)(ii) is amended by striking the third sentence

18 and inserting ‘‘This clause shall not be considered to au19 thorize disclosure of such numbers except as provided in

20 the preceding sentence.’’.

21 Part D—Streamlining and Uniformity of Procedures

22 SEC. 635. ADOPTION OF UNIFORM STATE LAWS.

23 (a) Section 466(a) is amended by adding at the end

24 the following new paragraph:
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1 ‘‘(14) INTERSTATE ENFORCEMENT.—(A) ADOP2 TION OF UIFSA.—Procedures under which the State

3 adopts in its entirety (with the modifications and ad4 ditions specified in this paragraph) not later than

5 January 1, 1996, and uses on and after such date,

6 the Uniform Interstate Family Support Act, as ap7 proved by the National Conference of Commissioners

8 on Uniform State Laws in August, 1992.

9 ‘‘(B) EXPANDED APPLICATION OF UIFSA.—The

10 State law adopted pursuant to subparagraph (A)

11 shall be applied to any case—

12 ‘‘(i) involving an order established or modi13 fied in one State and for which a subsequent

14 modification is sought in another State; or

15 ‘‘(ii) in which interstate activity is required

16 to enforce an order.

17 ‘‘(C) LONG-ARM JURISDICTION, BASED ON RES18 IDENCE OF CHILD.—The State law adopted pursu19 ant to subparagraph (A) shall presume that, in the

20 case where a child meets the criteria for residence in

21 the State, a tribunal of the State having jurisdiction

22 over such child has jurisdiction over both parents of

23 such child, if parentage has been legally established

24 or acknowledged, or may be presumed under the

25 laws of the State.
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•S 2224 IS

1 ‘‘(D) JURISDICTION TO MODIFY ORDERS.—For

2 purposes of the State law adopted pursuant to sub3 paragraph (A), section 611(a)(1) of such Uniform

4 Act shall be amended to read as follows:

5 ‘‘ ‘(1) the following requirements are met:

6 ‘‘ ‘(i) the child, the individual obligee, and the

7 obligor—

8 ‘‘ ‘(I) do not reside in the issuing State;

9 and

10 ‘‘ ‘(II) either reside in this State or are

11 subject to the jurisdiction of this State pursu12 ant to section 201; and

13 ‘‘ ‘(ii) (in any case where another State is exer14 cising or seeks to exercise jurisdiction to modify the

15 order) the conditions of section 204 are met to the

16 same extent as required for proceedings to establish

17 orders; or’.

18 ‘‘(E) PARTIES’ OPTION CONCERNING JURISDIC19 TION.—The State law adopted pursuant to subpara20 graph (A) shall allow parties, by agreement, to per21 mit a State that issued an order to retain jurisdic22 tion which the State would otherwise lose under the

23 provisions of such law.

24 ‘‘(F) SERVICE OF PROCESS.—The State law

25 adopted pursuant to subparagraph (A) shall recog-
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•S 2224 IS

1 nize as valid, for purposes of any proceeding subject

2 to such State law, service of process upon persons

3 in the State (and proof of such service) by any

4 means acceptable in another State which is the initi5 ating or responding State in such proceeding.

6 ‘‘(G) COOPERATION BY EMPLOYERS.—The

7 State law adopted pursuant to subparagraph (A)

8 shall provide for the use of procedures (including

9 sanctions for noncompliance) under which all entities

10 in the State (including for-profit, nonprofit, and gov11 ernmental employers) are required to provide

12 promptly, in response to a request by the State

13 agency of that or any other State administering a

14 program under this part, information on the employ15 ment, compensation, and benefits of any individual

16 employed by such entity as an employee or contrac17 tor.’’.

18 (b) EXPEDITED APPEAL OF CONSTITUTIONAL CHAL19 LENGE.—(1) An appeal may be taken directly to the Su20 preme Court of the United States from any interlocutory

21 or final judgment, decree, or order issued by a United

22 States district court ruling upon the constitutionality of

23 section 466(a)(14)(C) of the Act, as added by subsection

24 (a).
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1 (2) The Supreme Court shall, if it has not previously

2 ruled on the question, accept jurisdiction over, and ad3 vance on the docket, and expedite to the greatest extent

4 possible, such appeal. All cases raising such question shall

5 be consolidated to the maximum extent permissible under

6 applicable rules of civil procedure.

7 SEC. 636. STATE LAWS PROVIDING EXPEDITED PROCE8 DURES.

9 (a) STATE LAW REQUIREMENTS.—Section 466 is

10 amended—

11 (1) in subsection (a)(2), in the first sentence, to

12 read as follows: ‘‘Expedited administrative and judi13 cial procedures (including the procedures specified in

14 subsection (c)) for establishing paternity and for es15 tablishing, modifying, and enforcing support obliga16 tions.’’; and

17 (2) by adding after subsection (b) the following

18 new subsection:

19 ‘‘(c) EXPEDITED PROCEDURES.—(1) ADMINISTRA20 TIVE ACTION BY STATE AGENCY.—Procedures which give

21 the State agency the authority (and recognize and enforce

22 the authority of State agencies of other States), without

23 the necessity of obtaining an order from any other judicial

24 or administrative tribunal (but subject to due process safe25 guards, including (as appropriate) requirements for notice,
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•S 2224 IS

1 opportunity to contest the action, and opportunity for an

2 appeal on the record to an independent administrative or

3 judicial tribunal), to take the following actions relating to

4 establishment or enforcement of orders:

5 ‘‘(A) ESTABLISH OR MODIFY SUPPORT

6 AMOUNT.—To establish the amount of support

7 awards in all cases in which services are being pro8 vided under this part, and to modify the amount of

9 such awards under all orders included in the central

10 case registry established under section 454A(e) (in11 cluding orders entered by a court), in accordance

12 with the guidelines established under section 467.

13 ‘‘(B) GENETIC TESTING.—To order genetic

14 testing for the purpose of paternity establishment as

15 provided in section 466(a)(5).

16 ‘‘(C) DEFAULT ORDERS.—To enter a default

17 order, upon a showing of service of process and any

18 additional showing required by State law—

19 ‘‘(i) establishing paternity, in the case of

20 any putative father who refuses to submit to ge21 netic testing; and

22 ‘‘(ii) establishing or modifying a support

23 obligation, in the case of a parent (or other ob24 ligor or obligee) who fails to respond to notice

25 to appear at a proceeding for such purpose.
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•S 2224 IS

1 ‘‘(D) SUBPOENAS.—To subpoena any financial

2 or other information needed to establish, modify, or

3 enforce an order, and to sanction failure to respond

4 to any such subpoena.

5 ‘‘(E) ACCESS TO PERSONAL AND FINANCIAL IN6 FORMATION.—To obtain access, subject to safe7 guards on privacy and information security, to the

8 following records (including automated access, in the

9 case of records maintained in automated data

10 bases):

11 ‘‘(i) records of other State and local gov12 ernment agencies, including:

13 ‘‘(I) vital statistics (including records

14 of marriage, birth, and divorce);

15 ‘‘(II) State and local tax and revenue

16 records (including information on residence

17 address, employer, income and assets);

18 ‘‘(III) records concerning real and ti19 tled personal property;

20 ‘‘(IV) records of occupational and pro21 fessional licenses, and records concerning

22 the ownership and control of corporations,

23 partnerships, and other business entities;

24 ‘‘(V) employment security records;
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•S 2224 IS

1 ‘‘(VI) records of agencies administer2 ing public assistance programs;

3 ‘‘(VII) records of the motor vehicle

4 department; and

5 ‘‘(VIII) corrections records; and

6 ‘‘(ii) certain records held by private enti7 ties, including—

8 ‘‘(I) customer records of public utili9 ties and cable television companies; and

10 ‘‘(II) information (including informa11 tion on assets and liabilities) on individuals

12 who owe or are owed support (or against

13 or with respect to whom a support obliga14 tion is sought) held by financial institu15 tions (subject to limitations on liability of

16 such entities arising from affording such

17 access).

18 ‘‘(F) INCOME WITHHOLDING.—To order income

19 withholding in accordance with section 466(a)(1)

20 and (b).

21 ‘‘(G) CHANGE IN PAYEE.—(In cases where sup22 port is subject to an assignment under section

23 402(a)(26), 471(a)(17), or 1912, or to a require24 ment to pay through the centralized collections unit

25 under section 454B) upon providing notice to obligor
277

•S 2224 IS

1 and obligee, to direct the obligor or other payor to

2 change the payee to the appropriate government en3 tity.

4 ‘‘(H) SECURE ASSETS TO SATISFY ARREAR5 AGES.—For the purpose of securing overdue sup6 port—

7 ‘‘(i) to intercept and seize any periodic or

8 lump-sum payment to the obligor by or through

9 a State or local government agency, including—

10 ‘‘(I) unemployment compensation,

11 workers’ compensation, and other benefits;

12 ‘‘(II) judgments and settlements in

13 cases under the jurisdiction of the State or

14 local government; and

15 ‘‘(III) lottery winnings;

16 ‘‘(ii) to attach and seize assets of the obli17 gor held by financial institutions;

18 ‘‘(iii) to attach public and private retire19 ment funds in appropriate cases, as determined

20 by the Secretary; and

21 ‘‘(iv) to impose liens in accordance with

22 paragraph (a)(4) and, in appropriate cases, to

23 force sale of property and distribution of pro24 ceeds.
278

•S 2224 IS

1 ‘‘(I) INCREASE MONTHLY PAYMENTS.—For the

2 purpose of securing overdue support, to increase the

3 amount of monthly support payments to include

4 amounts for arrearages (subject to such conditions

5 or restrictions as the State may provide).

6 ‘‘(J) SUSPENSION OF DRIVERS’ LICENSES.—To

7 suspend drivers’ licenses of individuals owing past8 due support, in accordance with subsection (a)(16).

9 ‘‘(2) SUBSTANTIVE AND PROCEDURAL RULES.—The

10 expedited procedures required under subsection (a)(2)

11 shall include the following rules and authority, applicable

12 with respect to all proceedings to established paternity or

13 to establish, modify, or enforce support orders:

14 ‘‘(A) LOCATOR INFORMATION; PRESUMPTIONS

15 CONCERNING NOTICE.—Procedures under which—

16 ‘‘(i) the parties to any paternity or child

17 support proceedings are required (subject to

18 privacy safeguards) to file with the tribunal be19 fore entry of an order, and to update as appro20 priate, information on location and identity (in21 cluding social security number, residential and

22 mailing addresses, telephone number, driver’s li23 cense number, and name, address, and tele24 phone number of employer); and
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•S 2224 IS

1 ‘‘(ii) in any subsequent child support en2 forcement action between the same parties, the

3 tribunal shall be authorized, upon sufficient

4 showing that deligent effort has been made to

5 ascertain such a party’s current location, to

6 deem due process requirements for notice and

7 service of process to be met, with respect to

8 such party, by delivery to the most recent resi9 dential or employer address so filed pursuant to

10 clause (i).

11 ‘‘(B) STATEWIDE JURISDICTION.—Procedures

12 under which—

13 ‘‘(i) the State agency and any administra14 tive or judicial tribunal with authority to hear

15 child support and paternity cases exerts state16 wide jurisdiction over the parties, and orders is17 sued in such cases have statewide effect; and

18 ‘‘(ii) (in the case of a State in which orders

19 in such cases are issued by local jurisdictions)

20 a case may be transferred between jurisdictions

21 in the State without need for any additional fil22 ing by the petitioner, or service of process upon

23 the respondent, to retain jurisdiction over the

24 parties.’’.
280

•S 2224 IS

1 (c) EXCEPTIONS FROM STATE LAW REQUIRE2 MENTS.—Section 466(d) is amended—

3 (1) by striking ‘‘(d) If’’ and inserting ‘‘(d) EX4 EMPTIONS FROM REQUIREMENTS.—(1) IN GEN5 ERAL.—Subject to paragraph (2), if’’; and

6 (2) by adding at the end the following new

7 paragraph:

8 ‘‘(2) NON-EXEMPT REQUIREMENTS.—The Sec9 retary shall not grant an exemption from the re10 quirements of—

11 ‘‘(A) subsection (a)(5) (concerning proce12 dures for paternity establishment);

13 ‘‘(B) subsection (a)(10) (concerning modi14 fication of orders);

15 ‘‘(C) subsection (a)(12) (concerning re16 cording of orders in the central State case reg17 istry);

18 ‘‘(D) subsection (a)(13) (concerning re19 cording of social security numbers);

20 ‘‘(E) subsection (a)(14) (concerning inter21 state enforcement); or

22 ‘‘(F) subsection (c) (concerning expedited

23 procedures), other than paragraph (1)(A) there24 of (concerning establishment or modification of

25 support amount).’’.
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•S 2224 IS

1 (d) AUTOMATION OF STATE AGENCY FUNCTIONS.—

2 Section 454A, as added by section 614 and amended by

3 sections 621 and 622, is further amended by adding at

4 the end the following new subsection:

5 ‘‘(h) EXPEDITED ADMINISTRATIVE PROCEDURES.—

6 The automated system required under this section shall

7 be used, to the maximum extent feasible, to implement the

8 expedited administrative procedures required under sec9 tion 466(c).’’.

10 PART E—PATERNITY ESTABLISHMENT

11 SEC. 640. STATE LAWS CONCERNING PATERNITY ESTAB12 LISHMENT.

13 (a) STATE LAWS REQUIRED.—Section 466(a)(5) is

14 amended—

15 (1) by striking ‘‘(5)’’ and inserting ‘‘(5) PRO16 CEDURES CONCERNING PATERNITY ESTABLISH17 MENT.—’’;

18 (2) in subparagraph (A)—

19 (A) by striking ‘‘(A)’’ and inserting ‘‘(A)

20 ESTABLISHMENT PROCESS AVAILABLE FROM

21 BEFORE BIRTH UNTIL AGE EIGHTEEN.—’’;

22 (B) by indenting clause (ii) an additional

23 unit of indentation from the left margin; and

24 (C) by adding after and below clause (ii)

25 the following new clause:
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•S 2224 IS

1 ‘‘(iii) Procedures which permit the ini2 tiation of proceedings to establish paternity

3 before the birth of the child concerned.’’;

4 (3) in subparagraph (B)—

5 (A) by striking ‘‘(B)’’ and inserting ‘‘(B)

6 PROCEDURES CONCERNING GENETIC TEST7 ING.—(i)’’;

8 (B) in clause (i), as redesignated, by in9 serting before the period ‘‘, where such request

10 is supported by a sworn statement by such

11 party setting forth facts establishing a reason12 able possibility of the requisite sexual contact’’;

13 (C) by inserting after and below clause (i)

14 (as redesignated) the following new clause:

15 ‘‘(ii) Procedures which require the

16 State agency, in any case in which such

17 agency orders genetic testing—

18 ‘‘(I) to pay costs of such tests,

19 subject to recoupment (where the

20 State so elects) from the putative fa21 ther if paternity is established; and

22 ‘‘(II) to obtain additional testing

23 in any case where an original test re24 sult is disputed, upon request and ad-
283

•S 2224 IS

1 vance payment by the disputing

2 party.’’;

3 (4) in subparagraph (C), to read as follows:

4 ‘‘(C) VOLUNTARY ACKNOWLEDGMENT PRO5 CEDURE.—Procedures for a simple civil process

6 for voluntarily acknowledging paternity under

7 which—

8 ‘‘(i) the benefits, rights and respon9 sibilities of acknowledging paternity are ex10 plained to unwed parents;

11 ‘‘(ii) due process safeguards are af12 forded; and

13 ‘‘(iii) hospitals and other health

14 care facilities providing inpatient or

15 outpatient maternity and pediatric

16 services are required, as a condition of

17 participation in the State program

18 under title XIX—

19 ‘‘(I) to explain to unwed parents

20 the matters specified in clause (i);

21 ‘‘(II) to make available the vol22 untary acknowledgment procedure re23 quired under this subparagraph; and

24 ‘‘(III) (in the case of hospitals

25 providing maternity services) to have
284

•S 2224 IS

1 facilities for obtaining blood or other

2 genetic samples from the mother, pu3 tative father, and child for genetic

4 testing; to inform the mother and pu5 tative father of the availability of such

6 testing (at their expense); and to ob7 tain such samples upon request of

8 both such individuals;’’;

9 (5) in subparagraphs (D) and (E), to read as

10 follows:

11 ‘‘(D) LEGAL STATUS OF ACKNOWLEDG12 MENT.—Procedures under which—

13 ‘‘(i) a voluntary acknowledgment of

14 paternity creates, at State option, either—

15 ‘‘(I) a conclusive presumption of

16 paternity, or

17 ‘‘(II) a rebuttable presumption

18 which becomes a conclusive presump19 tion within one year, unless rebutted

20 or invalidated by an intervening deter21 mination which reaches a contrary

22 conclusion;

23 ‘‘(ii) (at State option), notwithstand24 ing clause (i), upon the request of a party,

25 a determination of paternity based on an
285

•S 2224 IS

1 acknowledgment may be vacated on the

2 basis of new evidence, the existence of

3 fraud, or the best interests of the child;

4 and

5 ‘‘(iii) a voluntary acknowledgment of

6 paternity is admissible as evidence of pa7 ternity, and as a basis for seeking a sup8 port order, without requiring any further

9 proceedings to establish paternity.

10 ‘‘(E) BAR ON ACKNOWLEDGMENT RATIFI11 CATION PROCEEDINGS.—Procedures under

12 which no judicial or administrative proceedings

13 are required or permitted to ratify an unchal14 lenged acknowledgment of paternity.’’;

15 (6) in subparagraph (F), to read as follows:

16 ‘‘(F) ADMISSIBILITY OF GENETIC TESTING

17 RESULTS.—Procedures—

18 ‘‘(i) requiring that the State admit

19 into evidence, for purposes of establishing

20 paternity, results of any genetic test that

21 is—

22 ‘‘(I) of a type generally acknowl23 edged, by accreditation bodies des24 ignated by the Secretary, as reliable

25 evidence of paternity; and
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•S 2224 IS

1 ‘‘(II) performed by a laboratory

2 approved by such an accreditation

3 body;

4 ‘‘(ii) that any objection to genetic

5 testing results must be made in writing not

6 later than a specified number of days be7 fore any hearing at which such results may

8 be introduced into evidence (or, at State

9 option, not later than a specified number

10 of days after receipt of such results); and

11 ‘‘(iii) that, if no objection is made, the

12 test results are admissible as evidence of

13 paternity without the need for foundation

14 testimony or other proof of authenticity or

15 accuracy.’’; and

16 ‘‘(7) by adding after subparagraph (H) the fol17 lowing new paragraphs:

18 ‘‘(I) NO RIGHT TO JURY

19 TRIAL.—Procedures providing that

20 the parties to an action to establish

21 paternity are not entitled to jury trial.

22 ‘‘(J) TEMPORARY SUPPORT ORDER BASED

23 ON PROBABLE PATERNITY IN CONTESTED

24 CASES.—Procedures which require that a tem25 porary order be issued, upon motion by a party,
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•S 2224 IS

1 requiring the provision of child support pending

2 an administrative or judicial determination of

3 parentage, where there is clear and convincing

4 evidence of paternity (on the basis of genetic

5 tests or other evidence).

6 ‘‘(K) PROOF OF CERTAIN SUPPORT AND

7 PATERNITY ESTABLISHMENT COSTS.—Proce8 dures under which bills for pregnancy, child9 birth, and genetic testing are admissible as evi10 dence without requiring third-party foundation

11 testimony, and shall constitute prima facie evi12 dence of amounts incurred for such services and

13 testing on behalf of the child.

14 ‘‘(L) WAIVER OF STATE DEBTS FOR CO15 OPERATION.—Procedures under which the tri16 bunal establishing paternity and support has

17 discretion to waive rights to all or part of

18 amounts owed to the State (but not to the

19 mother) for costs related to pregnancy, child20 birth, and genetic testing and for public assist21 ance paid to the family where the father cooper22 ates or acknowledges paternity before or after

23 genetic testing.

24 ‘‘(M) STANDING OF PUTATIVE FATHERS.—

25 Procedures ensuring that the putative father
288

•S 2224 IS

1 has a reasonable opportunity to initiate a pater2 nity action.’’.

3 (b) TECHNICAL AMENDMENT.—Section 468 is

4 amended by striking ‘‘a simple civil process for voluntarily

5 acknowledging paternity and’’.

6 SEC. 641. OUTREACH FOR VOLUNTARY PATERNITY ESTAB7 LISHMENT.

8 (a) STATE PLAN REQUIREMENT.—Section 454(23),

9 as amended by section 606, is further amended by adding

10 at the end the following new subparagraph:

11 ‘‘(C) publicize the availability and encour12 age the use of procedures for voluntary estab13 lishment of paternity and child support through

14 a variety of means, which—

15 ‘‘(i) include distribution of written

16 materials at health care facilities (includ17 ing hospitals and clinics), and other loca18 tions such as schools;

19 ‘‘(ii) may include pre-natal programs

20 to educate expectant couples on individual

21 and joint rights and responsibilities with

22 respect to paternity (and may require all

23 expectant recipients of assistance under

24 part A to participate in such pre-natal pro25 grams, as an element of cooperation with
289

•S 2224 IS

1 efforts to establish paternity and child sup2 port);

3 ‘‘(iii) include, with respect to each

4 child discharged from a hospital after birth

5 for whom paternity or child support has

6 not been established, reasonable follow-up

7 efforts (including at least one contact of

8 each parent whose whereabouts are known,

9 except where there is reason to believe

10 such follow-up efforts would put mother or

11 child at risk), providing—

12 ‘‘(I) in the case of a child for

13 whom paternity has not been estab14 lished, information on the benefits of

15 and procedures for establishing pater16 nity; and

17 ‘‘(II) in the case of a child for

18 whom paternity has been established

19 but child support has not been estab20 lished, information on the benefits of

21 and procedures for establishing a

22 child support order, and an applica23 tion for child support services;’’.

24 (b) ENHANCED FEDERAL MATCHING.—Section

25 455(a)(1)(C) is amended—
290

•S 2224 IS

1 (1) by inserting ‘‘(i)’’ before ‘‘laboratory costs’’,

2 and

3 (2) by inserting before the semicolon ‘‘, and (ii)

4 costs of outreach programs designed to encourage

5 voluntary acknowledgment of paternity’’.

6 (c) EFFECTIVE DATES.—(1) The amendments made

7 by subsection (a) shall become effective October 1, 1996.

8 (2) The amendments made by subsection (b) shall be

9 effective with respect to calendar quarters beginning on

10 and after October 1, 1995.

11 SEC. 642. PENALTY FOR FAILURE TO ESTABLISH PATER12 NITY PROMPTLY.

13 Section 403 is amended—

14 (1) in subsection (a), as amended by section

15 612(e), by striking ‘‘subsection (h)’’ and inserting

16 ‘‘subsections (h) and (i)—’’; and

17 (2) by adding after subsection (h) the following

18 new subsection:

19 ‘‘(i) PENALTY FOR FAILURE TO ESTABLISH PATER20 NITY PROMPTLY.—(1) IN GENERAL.—The amounts other21 wise payable to a State under subsection (a) for any cal22 endar quarter beginning 10 months or more after enact23 ment of this subsection shall be reduced by an amount,

24 determined pursuant to regulations in accordance with
291

•S 2224 IS

1 paragraph (2), for certain children for whom paternity has

2 not been established.

3 ‘‘(2) REDUCTION FORMULA.—The Secretary shall

4 promulgate regulations specifying the formula for the re5 duction required under this subsection, which formula

6 shall provide for a reduction in Federal matching pay7 ments to a State under this section by an amount equal

8 to the product of—

9 ‘‘(A) the number (after allowing for the toler10 ance level established under paragraph (3)) of chil11 dren born on or after the date 10 months after en12 actment of this provision who are receiving aid

13 under the State plan under part A, whose custodial

14 relatives have, throughout the preceding 12-month

15 period, complied with the cooperation requirements

16 specified in section 454(25)(D), but for whom pater17 nity has not been established;

18 ‘‘(B) the average monthly assistance payment

19 under the State plan under this part; and

20 ‘‘(C) the Federal matching rate applicable to

21 such assistance payment.

22 ‘‘(3) TOLERANCE LEVEL.—(A) The tolerance level,

23 for purposes of paragraph (2)(A), shall not be higher than

24 the percentage specified in subparagraph (B) of children

25 in the State described in paragraph (1), and may decrease
292

•S 2224 IS

1 over time to make allowance for a State’s inability to es2 tablish paternity in all cases.

3 ‘‘(B) The percentage specified in this paragraph shall

4 be 25 percent for fiscal years 1997 and 1998, 20 percent

5 for fiscal years 1999 and 2000, 15 percent for fiscal years

6 2001 and 2002, and 10 percent for fiscal year 2003 and

7 each succeeding fiscal year.’’.

8 SEC. 643. INCENTIVES TO PARENTS TO ESTABLISH PATER9 NITY.

10 (a) OPTIONAL STATE ACTIVITIES.—Section 455 is

11 amended by adding at the end the following new sub12 section:

13 ‘‘(f) PATERNITY ESTABLISHMENT INCENTIVES TO

14 FAMILIES.—(1) The Secretary, in accordance with regula15 tions, may approve proposals by States to amend State

16 plans under this part to provide for incentive payments

17 to families to encourage paternity establishment.

18 ‘‘(2) Federal financial participation shall be available

19 in accordance with subsection (a) for expenditures by a

20 State pursuant to a plan amendment approved under

21 paragraph (1).

22 (b) DEMONSTRATIONS.—(1) PROJECTS AUTHOR23 IZED.—The Secretary shall authorize up to 3 States to

24 conduct demonstrations providing financial incentives to

25 families for establishment of paternity.
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•S 2224 IS

1 (2) FEDERAL FUNDING.—(A) Subject to subpara2 graph (B), a State participating in a demonstration under

3 this section shall be entitled to Federal payments pursuant

4 to section 455(f) of the Social Security Act for 90 percent

5 of the payments to families under such demonstration.

6 (B) FUNDING LIMITATION.—Total Federal expendi7 tures for demonstrations under this section shall not ex8 ceed $1,000,000.

9 PART F—ESTABLISHMENT AND

10 MODIFICATION OF SUPPORT ORDERS

11 SEC. 651. NATIONAL COMMISSION ON CHILD SUPPORT

12 GUIDELINES.

13 (a) ESTABLISHMENT.—The Secretary is authorized

14 to establish, in accordance with this section, a commission

15 to be known as the ‘‘National Commission on Child Sup16 port Guidelines’’ (in this section referred to as the ‘‘Com17 mission’’).

18 (b) GENERAL DUTIES.—The Commission shall con19 sider whether a national child support guideline is advis20 able and, if it so determines, shall develop and propose

21 for congressional consideration such a guideline (or pa22 rameters for State guidelines), reflecting the Commission’s

23 study of various guideline models and its conclusions con24 cerning their strengths and deficiencies, and specifically

25 reflecting consideration of the need for simplicity and ease
294

•S 2224 IS

1 of application of guidelines, and of the matters enumer2 ated in subsection (c).

3 (c) MATTERS FOR CONSIDERATION BY THE COMMIS4 SION.—In making the recommendations concerning guide5 lines required pursuant to subsection (b), the Commission

6 shall consider—

7 (1) the adequacy of State child support guide8 lines established pursuant to section 467;

9 (2) matters generally applicable to all support

10 orders, including—

11 (A) the feasibility of adopting uniform

12 terms in all child support orders;

13 (B) how to define income and under what

14 circumstances income should be imputed; and

15 (C) tax treatment of child support pay16 ments;

17 (3) the appropriate treatment of cases in which

18 either or both parents have financial obligations to

19 more than one family, including the effect (if any)

20 to be given to—

21 (A) the income of either parent’s spouse;

22 and

23 (B) the financial responsibilities of either

24 parent for other children or stepchildren;
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•S 2224 IS

1 (4) the appropriate treatment of expenses for

2 child care (including care of the children of either

3 parent, and work-related or job-training-related child

4 care);

5 (5) the appropriate treatment of expenses for

6 health care (including uninsured health care) and

7 other extraordinary expenses for children with spe8 cial needs;

9 (6) the appropriate duration of support by one

10 or both parents, including—

11 (A) support (including shared support) for

12 post-secondary or vocational education; and

13 (B) support for disabled adult children;

14 and

15 (7) whether, or to what extent, support levels

16 should be adjusted in cases where custody is shared

17 or where the noncustodial parent has extended visi18 tation rights.

19 (d) MEMBERSHIP.—

20 (1) NUMBER; APPOINTMENT.—

21 (A) IN GENERAL.—The Commission shall

22 be composed of 12 individuals appointed not

23 later than March 1, 1995, of which—

24 (i) two shall be appointed by the

25 Chairman of the Senate Committee on Fi-
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•S 2224 IS

1 nance, and one shall be appointed by the

2 Ranking Minority Member of such Com3 mittee;

4 (ii) two shall be appointed by the

5 Chairman of the House Committee on

6 Ways and Means, and one shall be ap7 pointed by the Ranking Minority Member

8 of such Committee; and

9 (iii) six shall be appointed by the Sec10 retary of Health and Human Services.

11 (B) QUALIFICATIONS OF MEMBERS.—

12 Members of the Commission shall have exper13 tise and experience in the evaluation and devel14 opment of child support guidelines. At least one

15 member shall represent advocacy groups for

16 custodial parents, at least one member shall

17 represent advocacy groups for noncustodial par18 ents, and at least one member shall be the di19 rector of a State program under title IV–D of

20 the Social Security Act.

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

22 appointed for the life of the Commission. A vacancy

23 in the Commission shall be filled in the manner in

24 which the original appointment was made.
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•S 2224 IS

1 (e) COMMISSION POWERS, COMPENSATION, ACCESS

2 TO INFORMATION, AND SUPERVISION.—The first sentence

3 of subparagraph (C), the first and third sentences of sub4 paragraph (D), subparagraph (F) (except with respect to

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

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

7 1886(e)(6) of the Social Security Act shall apply to the

8 Commission in the same manner in which such provisions

9 apply to the Prospective Payment Assessment Commis10 sion, except that references in such section to the Office

11 of Technology Assessment shall be disregarded.

12 (f) REPORT.—Not later than July 1, 1997, the Com13 mission shall report to the President and the Congress on

14 the results of the studies required under this section.

15 (g) The Commission shall terminate 6 months after

16 submission of the report required under subsection (f).

17 (h) AUTHORIZATION OF APPROPRIATIONS.—There

18 are authorized to be appropriated to carry out this section

19 $1,000,000 for each of fiscal years 1995 and 1996, to re20 main available until expended.

21 SEC. 652. STATE LAWS CONCERNING MODIFICATION OF

22 CHILD SUPPORT ORDERS.

23 (a) STATE LAW REQUIREMENTS.—Section

24 466(a)(10) is amended—
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•S 2224 IS

1 (1) by inserting ‘‘PROCEDURES FOR MODIFICA2 TION OF SUPPORT ORDERS.—’’ after ‘‘(10)’’;

3 (2) by redesignating subparagraph (C) as sub4 paragraph (E) and inserting after subparagraph (B)

5 the following new subparagraphs:

6 ‘‘(C)(i) Procedures to ensure that, begin7 ning October 1, 1999 (or such earlier date as

8 the State may select), the State agency (or, at

9 the option of the State, the local agency) re10 views and adjusts, in accordance with guidelines

11 established pursuant to section 467(a), judicial

12 and administrative child support orders in13 cluded in the State registry established pursu14 ant to section 454A(d), under which (subject to

15 clauses (ii) and (iii) the order—

16 ‘‘(I) is to be reviewed not later than

17 36 months after the establishment of the

18 order or the most recent adjustment of (or

19 determination not to adjust) such order;

20 and

21 ‘‘(II) (at State option) may not be re22 viewed during a minimum period estab23 lished by the State following the establish24 ment or most recent review of the order.
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•S 2224 IS

1 ‘‘(ii) The requirement of clause (i)(I) shall

2 not apply in any case where—

3 ‘‘(I) the State has determined, in ac4 cordance with regulations of the Secretary,

5 that such a review would not be in the best

6 interests of the child; or

7 ‘‘(II) both parents have been informed

8 of the modified support amount that would

9 be imposed under the guidelines and have

10 declined such modification in writing.

11 ‘‘(iii) The State shall provide for review of

12 a child support order upon the request of either

13 parent, notwithstanding the requirement of

14 clause (i)(II), whenever, subsequent to the es15 tablishment or most recent review—

16 ‘‘(I) either parent’s income has

17 changed by more than 20 percent, or

18 ‘‘(II) other substantial changes have

19 occurred in either parent’s circumstances.

20 ‘‘(D) AMOUNT OF MODIFICATION BASED

21 ON GUIDELINES.—Procedures under which sup22 port orders reviewed in accordance with sub23 paragraph (C) must be adjusted in accordance

24 with the guidelines established pursuant to sec25 tion 467(a), without a requirement for any
300

•S 2224 IS

1 other change in circumstances (except that the

2 State may refuse to modify an order in any

3 case where the change in the support amount,

4 if so modified, would not exceed a threshold

5 percentage (which may not be greater than 10

6 percent)).’’;

7 (3) in subparagraph (E), as redesignated—

8 (i) by striking ‘‘(E)’’ and inserting ‘‘(E)

9 DUE PROCESS SAFEGUARDS.—’’;

10 (ii) in the matter preceding clause (i), by

11 striking ‘‘this part—’’ and inserting ‘‘this part,

12 in accordance with State due process require13 ments—’’;

14 (iii) in clause (i), by striking ‘‘, at least 30

15 days before the commencement of such review’’;

16 and

17 (iv) in clause (iii), by striking ‘‘not less

18 than 30 days’’ and inserting ‘‘a reasonable

19 time’’.

20 (b) AUTOMATED PROCEDURES.—Section 454A, as

21 previously added and amended by this Act, is further

22 amended by adding at the end the following new sub23 section:

24 ‘‘(i) MODIFICATION OF SUPPORT ORDERS.—The

25 automated system required under this section shall be
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•S 2224 IS

1 used, to the maximum extent feasible, to assist in the re2 view and modification of support orders in accordance

3 with the timetable under section 466(a)(10) and the

4 guidelines under section 467.’’.

5 SEC. 653. STUDY ON USE OF TAX RETURN INFORMATION

6 FOR MODIFICATION OF CHILD SUPPORT OR7 DERS.

8 (a) REQUIREMENT FOR STUDY.—The Secretary of

9 Health and Human Services and the Secretary of the

10 Treasury shall conduct a study to determine how return

11 information (as defined in section 6103(b) of the Internal

12 Revenue Code of 1986) filed with the Secretary of the

13 Treasury might be used to facilitate the process of deter14 mining the amount (if any) by which child support award

15 amounts should be modified in accordance with guidelines

16 established under section 467.

17 (b) AMENDMENT TO INTERNAL REVENUE CODE.—

18 Section 6103(1)(6) of the Internal Revenue Code of 1986

19 is amended by adding at the end the following new sub20 paragraph:

21 ‘‘(C) Upon written request by the Sec22 retary of Health and Human Services, the Sec23 retary may disclose return information to offi24 cers and employees of the Department of the

25 Treasury and the Department of Health and
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1 Human Services, as may be specified in such

2 written request, to be used in conducting the

3 study required under section 653 of the Work

4 and Responsibility Act of 1994. Return infor5 mation disclosed pursuant to this subparagraph

6 shall be used only for purposes of conducting

7 such study.’’.

8 PART G—ENFORCEMENT OF SUPPORT ORDERS

9 SEC. 661. REVOLVING LOAN FUND FOR PROGRAM IM10 PROVEMENTS TO INCREASE COLLECTIONS.

11 Part D of title IV is amended by inserting after sec12 tion 455 the following new section:

13 ‘‘REVOLVING FUND FOR PROGRAM IMPROVEMENTS TO

14 INCREASE COLLECTIONS

15 ‘‘SEC. 455A. (a) PURPOSE; AUTHORIZATION OF AP16 PROPRIATIONS.—The Secretary is authorized to establish

17 a revolving fund for loans to States operating programs

18 under this part, for short-term projects by such States

19 (and political subdivisions of such States) for making

20 operational improvements in such programs with the po21 tential for achieving substantial increases in child support

22 collections. There are authorized to be appropriated for

23 payment to such fund $10,000,000 for each of fiscal years

24 1998 and 1999, and $20,000,000 for each of fiscal years

25 2000 through 2003: Provided, That payment may be made
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1 to this fund only to the extent, and in such amounts, as

2 are provided for in advance in appropriations Acts.

3 ‘‘(b) CRITERIA FOR LOAN AWARDS.—Criteria for

4 evaluating applications for loans under this section must

5 include—

6 ‘‘(1) the likelihood that the proposed project

7 will increase child support collections, and

8 ‘‘(2) the availability to the State (or political

9 subdivision) of funding for the project from other

10 sources.

11 ‘‘(c) AMOUNT AND DURATION OF LOANS.—

12 ‘‘(1) AMOUNT.—Loans may be made to a State

13 under this section in amounts not to exceed

14 $5,000,000 per State or $1,000,000 per project (or

15 $5,000,000 for a single Statewide project in a large

16 State). States may supplement loan funds under this

17 section with funds from other sources, and may re18 quire contributions from local jurisdictions served by

19 the project.

20 ‘‘(2) DURATION.—Loan payments to a State

21 for a project under this section may not be made for

22 a period longer than 3 years.

23 ‘‘(d) RECOUPMENT.—A loan to a State under this

24 section shall be recovered from the State over 3 fiscal

25 years, beginning in the fourth calendar quarter beginning
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1 after the project ends (or, if earlier, the sixteenth calendar

2 quarter beginning after loan payments for the project

3 began) through—

4 ‘‘(1) an offset of one-half of the increase in in5 centive payments due to the State under section 458

6 for each calendar quarter until funds are fully re7 paid, plus

8 ‘‘(2) an offset from payments due to the State

9 under section 455(a) for each calendar quarter equal

10 to the amount, if any, by which one-twelfth of the

11 total loan (plus interest) exceeds the amount de12 scribed under paragraph (1),

13 with such amounts recovered being credited to the revolv14 ing fund under this section.

15 ‘‘(e) AVAILABILITY AS STATE SHARE.—Funds re16 ceived by a State under this section may be used by the

17 State as the non-Federal share of expenditures under the

18 State program under this part.’’.

19 SEC. 662. FEDERAL INCOME TAX REFUND OFFSET.

20 (a) CHANGED ORDER OF REFUND DISTRIBUTION

21 UNDER INTERNAL REVENUE CODE.—(1) Section 6402(c)

22 of the Internal Revenue Code of 1986 is amended—

23 (A) by striking ‘‘The amount’’ and inserting

24 ‘‘(1) IN GENERAL.—The amount’’;
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1 (B) by striking ‘‘paid to the State. A reduction’’

2 and inserting ‘‘paid to the State.

3 ‘‘(2) Priorities for offset. A reduction’’;

4 (C) by striking ‘‘shall be applied first’’and in5 serting ‘‘shall be applied (after any reduction under

6 subsection (d) on account of a debt owed to the De7 partment of Education or Department of Health and

8 Human Services with respect to a student loan)

9 first’’;

10 (D) by striking ‘‘has been assigned’’ and insert11 ing ‘‘has not been assigned’’; and

12 (E) by striking ‘‘and shall be applied’’ and all

13 that follows and inserting ‘‘and shall thereafter be

14 applied to satisfy any past-due support that has

15 been so assigned.’’.

16 (2) Section 6402(d)(2) of such Code is amended by

17 striking ‘‘after such overpayment’’ and all that follows

18 through ‘‘Social Security Act and’’ and inserting ‘‘(A) be19 fore such overpayment is reduced pursuant to subsection

20 (c), in the case of a debt owed to the Department of Edu21 cation or Department of Health and Human Services with

22 respect to a student loan, (B) after such overpayment is

23 reduced pursuant to subsection (c), in the case of any

24 other debt, and (C) in either case,’’.
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1 (b) ELIMINATION OF DISPARITIES IN TREATMENT

2 OF ASSIGNED AND NON-ASSIGNED ARREARAGES.—(1)

3 Section 464(a) is amended—

4 (A) by striking ‘‘(a)’’ and inserting ‘‘(a) Offset

5 Authorized.—’’;

6 (B) in paragraph (1)—

7 (i) in the first sentence, by striking ‘‘which

8 has been assigned to such State pursuant to

9 section 402(a)(26) or section 471(a)(17)’’; and

10 (ii) in the second sentence, by striking ‘‘in

11 accordance with section 457(b)(4) or (d)(3)’’

12 and inserting ‘‘as provided in paragraph (2)’’;

13 (C) in paragraph (2), to read as follows:

14 ‘‘(2) The State agency shall distribute amounts

15 paid by the Secretary of the Treasury pursuant to

16 paragraph (1)—

17 ‘‘(A) in accordance with section 457(a)(4)

18 or (d)(3), in the case of past-due support as19 signed to a State pursuant to section

20 402(a)(26) or section 471(a)(17); and

21 ‘‘(B) to or on behalf of the child to whom

22 the support was owed, in the case of past-due

23 support not so assigned.’’;

24 (C) in paragraph (3)—
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1 (i) by striking ‘‘or (2)’’ each place it

2 appears; and

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

4 ‘‘under paragraph (2)’’ and inserting ‘‘on

5 account of past-due support described in

6 paragraph (2)(B)’’;

7 (2) Section 464(b) is amended—

8 (A) by striking ‘‘(b)(1)’’ and inserting ‘‘(b)

9 REGULATIONS.—’’; and

10 (B) by striking paragraph (2).

11 (3) Section 464(c) is amended—

12 (A) by striking ‘‘(c)(1) Except as provided

13 in paragraph (2), as’’ and inserting ‘‘(c) DEFI14 NITION.—As’’; and

15 (B) by striking paragraphs (2) and (3).

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

17 this section shall become effective October 1, 1996.

18 SEC. 663. INTERNAL REVENUE SERVICE COLLECTION OF

19 ARREARS.

20 (a) AMENDMENT TO INTERNAL REVENUE CODE.—

21 Section 6305(a) of the Internal Revenue Code of 1986 is

22 amended—

23 (1) in paragraph (1), by inserting ‘‘except as

24 provided in paragraph (5)’’ after ‘‘collected’’;
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1 (2) by striking ‘‘and’’ at the end of paragraph

2 (3);

3 (3) by striking the period at the end of para4 graph (4) and inserting a comma;

5 (4) by adding after paragraph (4) the following

6 new paragraph:

7 ‘‘(5) no additional fee may be assessed for ad8 justments to an amount previously certified pursu9 ant to such section 452(b) with respect to the same

10 obligor.’’; and

11 (5) by striking ‘‘Secretary of Health, Edu12 cation, and Welfare’’ each place it appears and in13 serting ‘‘Secretary of Health and Human Services’’.

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

15 this section shall become effective October 1, 1996.

16 SEC. 664. AUTHORITY TO COLLECT SUPPORT FROM EM17 PLOYMENT-RELATED PAYMENTS BY UNITED

18 STATES.

19 (a) CONSOLIDATION AND STREAMLINING OF AU20 THORITIES.—

21 (1) Section 459 is amended in the caption by

22 inserting ‘‘INCOME WITHHOLDING,’’ before

23 ‘‘GARNISHMENT’’.

24 (2) Section 459(a) is amended—
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1 (A) by striking ‘‘(a)’’ and inserting ‘‘(a)

2 CONSENT TO SUPPORT ENFORCEMENT.—

3 (B) by striking ‘‘section 207’’ and insert4 ing ‘‘section 207 of this Act and 38 U.S.C.

5 5301’’; and

6 (C) by striking all that follows ‘‘a private

7 person,’’ and inserting ‘‘to withholding in ac8 cordance with State law pursuant to subsections

9 (a)(1) and (b) of section 466 and regulations of

10 the Secretary thereunder, and to any other legal

11 process brought, by a State agency administer12 ing a program under this part or by an individ13 ual obligee, to enforce the legal obligation of

14 such individual to provide child support or ali15 mony.’’.

16 (3) Section 459(b) is amended to read as fol17 lows:

18 ‘‘(b) CONSENT TO REQUIREMENTS APPLICABLE TO

19 PRIVATE PERSON.— Except as otherwise provided herein,

20 each entity specified in subsection (a) shall be subject,

21 with respect to notice to withhold income pursuant to sec22 tion 466(a)(1) or (b), or to any other order or process

23 to enforce support obligations against an individual (if

24 such order or process contains or is accompanied by suffi25 cient data to permit prompt identification of the individual
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•S 2224 IS

1 and the moneys involved), to the same requirements as

2 would apply if such entity were a private person.’’.

3 (4) Section 459(c) is redesignated and relocated

4 as paragraph (2) of subsection (f), and is amend5 ed—

6 (A) by striking ‘‘responding to interrog7 atories pursuant to requirements imposed by

8 section 461(b)(3)’’ and inserting ‘‘taking ac9 tions necessary to comply with the requirements

10 of subsection (A) with regard to any individ11 ual’’; and

12 (B) by striking ‘‘any of his duties’’ and all

13 that follows and inserting ‘‘such duties.’’.

14 (5) Section 461(b) is relocated and redesignated

15 as section 459(c)(1), and is amended to read as fol16 lows:

17 ‘‘(c) DESIGNATION OF AGENT; RESPONSE TO NOTICE

18 OR PROCESS.—(1) The head of each agency subject to the

19 requirements of this section shall—

20 ‘‘(A) designate an agent or agents to receive or21 ders and accept service of process; and

22 ‘‘(B) publish (i) in the appendix of such regula23 tions, (ii) in each subsequent republication of such

24 regulations, and (iii) annually in the Federal Reg25 ister, the designation of such agent or agents, identi-
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1 fied by title of position, mailing address, and tele2 phone number.’’.

3 (6) Section 459(d) is redesignated as paragraph

4 (2) of section 459(c), and is amended to read as fol5 lows:

6 ‘‘(2) Whenever an agent designated pursuant to

7 paragraph (1) receives notice pursuant to section

8 466(a)(1) or (b), or is effectively served with any

9 order, process, or interrogatories, with respect to an

10 individual’s child support or alimony payment obli11 gations, such agent shall—

12 ‘‘(A) as soon as possible (but not later

13 than fifteen days) thereafter, send written no14 tice of such notice or service (together with a

15 copy thereof) to such individual at his duty sta16 tion or last-known home address;

17 ‘‘(B) within 30 days (or such longer period

18 as may be prescribed by applicable State law)

19 after receipt of a notice pursuant to section

20 466(a)(1) or (b), comply with all applicable pro21 visions of such section 466; and

22 ‘‘(C) within 30 days (or such longer period

23 as may be prescribed by applicable State law)

24 after effective service of any other such order,

25 process, or interrogatories, respond thereto.’’.
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1 (7) Section 461(c) is relocated and redesignated

2 as section 459(d), and is amended to read as fol3 lows:

4 ‘‘(d) PRIORITY OF CLAIMS.—In the event that a gov5 ernmental entity receives notice or is served with process,

6 as provided in this section, concerning amounts owed by

7 an individual to more than one person—

8 ‘‘(A) support collection under section 466(b)

9 must be given priority over any other process, as

10 provided in section 466(b)(7);

11 ‘‘(B) allocation of moneys due or payable to an

12 individual among claimants under section 466(b)

13 shall be governed by the provisions of such section

14 466(b) and regulations thereunder; and

15 ‘‘(C) such moneys as remain after compliance

16 with subparagraphs (A) and (B) shall be available to

17 satisfy any other such processes on a first-come,

18 first-served basis, with any such process being satis19 fied out of such moneys as remain after the satisfac20 tion of all such processes which have been previously

21 served.’’.

22 (8) Section 459(e) is amended by striking ‘‘(e)’’

23 and inserting ‘‘(e) NO REQUIREMENT TO VARY PAY

24 CYCLES.—’’.
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1 (9) Section 459(f) is amended by striking ‘‘(f)’’

2 and inserting ‘‘(f) RELIEF FROM LIABILITY.—(1)’’.

3 (10) Section 461(a) is redesignated and relo4 cated as section 459(g), and is amended—

5 (A) by striking ‘‘(g)’’ and inserting ‘‘(g)

6 REGULATIONS.—’’; and

7 (B) by striking ‘‘section 459’’ and insert8 ing ‘‘this section’’.

9 (11) Section 462(f) is relocated and redesig10 nated as section 459(h), and is amended to read as

11 follows:

12 ‘‘(h) MONEYS SUBJECT TO PROCESS.—(1) Subject to

13 subsection (i), moneys paid or payable to an individual

14 which are considered to be based upon remuneration for

15 employment, for purposes of this section—

16 ‘‘(A) consist of—

17 ‘‘(i) compensation paid or payable for per18 sonal services of such individual, whether such

19 compensation is denominated as wages, salary,

20 commission, bonus, pay, allowances, or other21 wise (including severance pay, sick pay, and in22 centive pay); and

23 ‘‘(ii) periodic benefits (including a periodic

24 benefit as defined in section 228(h)(3)) or other

25 payments—
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1 ‘‘(I) under the insurance system es2 tablished by title II; and

3 ‘‘(II) under any other system or fund

4 established by the United States which

5 provides for the payment of pensions, re6 tirement or retired pay, annuities, depend7 ents’ or survivors’ benefits, or similar

8 amounts payable on account of personal

9 services performed by the individual or any

10 other individual;

11 ‘‘(B) do not include any payment—

12 ‘‘(i) as compensation for death under any

13 Federal program;

14 ‘‘(ii) under any Federal program estab15 lished to provide ‘black lung’ benefits;

16 ‘‘(iii) by the Secretary of Veterans Affairs

17 as pension, or as compensation for a service18 connected disability or death (except any com19 pensation paid by such Secretary to a former

20 member of the Armed Forces who is in receipt

21 of retired or retainer pay if such former mem22 ber has waived a portion of his retired pay in

23 order to receive such compensation);

24 ‘‘(iv) by way of reimbursement or other25 wise, to defray expenses incurred by such indi-
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1 vidual in carrying out duties associated with his

2 employment; or

3 ‘‘(v) as allowances for members of the uni4 formed services payable pursuant to chapter 7

5 of 37 U.S.C., as prescribed by the Secretaries

6 concerned (defined by 37 U.S.C. 101(5)) as

7 necessary for the efficient performance of

8 duty.’’.

9 (12) Section 462(g) is redesignated and relo10 cated as section 459(i).

11 (13)(A) Section 462 is amended—

12 (i) in subsection (e)(1), by redesignating

13 subparagraphs (A), (B), and (C) as clauses (i),

14 (ii), and (iii); and

15 (ii) in subsection (e), by redesignating

16 paragraphs (1) and (2) as subparagraphs (A)

17 and (B).

18 (B) Section 459 is amended by adding at the

19 end the following:

20 ‘‘(j) DEFINITIONS.—For purposes of this

21 section—’’.

22 (C) Subsections (a) through (e) of section 462,

23 as amended by subparagraph (A), are relocated and

24 redesignated as paragraphs (1) through (4) of sec25 tion 459(j), and are indented accordingly.
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1 (b) CONFORMING AMENDMENTS.—

2 (1) TO TITLE IV–D.—Sections 461 and 462 are

3 repealed.

4 (2) TO 5 U.S.C.—5 U.S.C. 5520a is amended,

5 in subsections (h)(2) and (i), by striking ‘‘sections

6 459, 461, and 462 of the Social Security Act (42

7 U.S.C. 659, 661, and 662)’’ and inserting ‘‘section

8 459 of the Social Security Act (42 U.S.C. 659)’’.

9 (d) MILITARY RETIRED AND RETAINER PAY.—(1)

10 DEFINITION OF COURT.—10 U.S.C. 1408(a)(1) is amend11 ed—

12 (A) by striking ‘‘and’’ at the end of subpara13 graph (B);

14 (B) by striking the period at the end of sub15 paragraph (C) and inserting ‘‘; and’’; and

16 (C) by adding after subparagraph (C) the fol17 lowing new paragraph:

18 ‘‘(D) any administrative or judicial tribu19 nal of a State competent to enter orders for

20 support or maintenance (including a State

21 agency administering a State program under

22 part D of title IV of the Social Security Act).’’;

23 (2) DEFINITION OF COURT ORDER.—10 U.S.C.

24 1408(a)(2) is amended by inserting ‘‘or a court order for

25 the payment of child support not included in or accom-
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1 panied by such a decree or settlement,’’ before

2 ‘‘which—’’.

3 (3) PUBLIC PAYEE.—10 U.S.C. 1408(d) is amend4 ed—

5 (A) in the heading, by striking ‘‘to spouse’’ and

6 inserting ‘‘to (or for benefit of)’’; and

7 (B) in paragraph (1), in the first sentence, by

8 inserting ‘‘(or for the benefit of such spouse or

9 former spouse to a State central collections unit or

10 other public payee designated by a State, in accord11 ance with part D of title IV of the Social Security

12 Act, as directed by court order, or as otherwise di13 rected in accordance with such part D)’’ before ‘‘in

14 an amount sufficient’’.

15 (4) RELATIONSHIP TO TITLE IV–D.—10 U.S.C. 1408

16 is amended by adding at the end the following new sub17 section:

18 ‘‘(j) RELATIONSHIP TO OTHER LAWS.—In any case

19 involving a child support order against a member who has

20 never been married to the other parent of the child, the

21 provisions of this section shall not apply, and the case

22 shall be subject to the provisions of section 459 of the

23 Social Security Act.’’.
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1 (e) EFFECTIVE DATE.—The amendments made by

2 this section shall become effective on the date six months

3 after enactment of this Act.

4 SEC. 665. MOTOR VEHICLE LIENS.

5 Section 466(a)(4) is amended—

6 (1) by striking ‘‘(4) PROCEDURES’’ and insert7 ing ‘‘(4) LIENS.—(A) IN GENERAL.—’’; and

8 (2) by adding at the end the following new sub9 paragraph:

10 ‘‘(B) MOTOR VEHICLE LIENS.—Procedures

11 for placing liens for arrears of child support on

12 motor vehicle titles of individuals owing such

13 arrears equal to or exceeding two months of

14 support, under which—

15 ‘‘(i) any person owed such arrears

16 may place such a lien;

17 ‘‘(ii) the State agency administering

18 the program under this part shall system19 atically place such liens;

20 ‘‘(iii) expedited methods are provided

21 for—

22 ‘‘(I) ascertaining the amount of

23 arrears;

24 ‘‘(II) affording the person owing

25 the arrears or other titleholder to con-
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1 test the amount of arrears or to ob2 tain a release upon fulfilling the sup3 port obligation;

4 ‘‘(iv) such a lien has precedence over

5 all other encumbrances on a vehicle title

6 other than a purchase money security in7 terest; and

8 ‘‘(v) the individual or State agency

9 owed the arrears may execute on, seize,

10 and sell the property in accordance with

11 State law.’’.

12 SEC. 666. VOIDING OF FRAUDULENT TRANSFERS.

13 Section 466(a) is amended by adding at the end the

14 following new paragraph:

15 ‘‘(15) FRAUDULENT TRANSFERS.—Procedures

16 under which—

17 ‘‘(A) the State has in effect—

18 ‘‘(i) the Uniform Fraudulent Convey19 ance Act of 1981,

20 ‘‘(ii) the Uniform Fraudulent Trans21 fer Act of 1984, or

22 ‘‘(iii) another law, specifying indicia of

23 fraud which create a prima facie case that

24 a debtor transferred income or property to

25 avoid payment to a child support creditor,
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1 which the Secretary finds affords com2 parable rights to child support creditors;

3 and

4 ‘‘(B) in any case in which the State knows

5 of a transfer by a child support debtor with re6 spect to which such a prima facie case is estab7 lished, the State must—

8 ‘‘(i) seek to void such transfer; or

9 ‘‘(ii) obtain a settlement in the best

10 interests of the child support creditor.’’.

11 SEC. 667. STATE LAW AUTHORIZING SUSPENSION OF

12 LICENSES.

13 Section 466(a) is amended by adding at the end the

14 following new paragraph:

15 ‘‘(16) AUTHORITY TO WITHHOLD OR SUSPEND

16 LICENSES.—Procedures under which the State has

17 (and uses in appropriate cases) authority (subject to

18 appropriate due process safeguards) to withhold or

19 suspend, or to restrict the use of driver’s licenses,

20 professional and occupational licenses, and rec21 reational licenses of individuals owing overdue child

22 support or failing, after receiving appropriate notice,

23 to comply with subpoenas or warrants relating to

24 paternity or child support proceedings.’’.
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1 SEC. 668. REPORTING ARREARAGES TO CREDIT BUREAUS.

2 Section 466(a)(7) is amended to read as follows:

3 ‘‘(7) REPORTING ARREARAGES TO CREDIT BU4 REAUS.—(A) Procedures (subject to safeguards pur5 suant to subparagraph (B)) requiring the State to

6 report periodically to consumer reporting agencies

7 (as defined in section 603(f) of the Fair Credit Re8 porting Act (15 U.S.C. 1681a(f)) the name of any

9 absent parent who is delinquent by one month or

10 more in the payment of support, and the amount of

11 overdue support owed by such parent.

12 ‘‘(B) Procedures ensuring that, in carrying out

13 subparagraph (A), information with respect to an

14 absent parent is reported—

15 ‘‘(i) only after such parent has been af16 forded all due process required under State law,

17 including notice and a reasonable opportunity

18 to contest the accuracy of such information;

19 and

20 ‘‘(ii) only to an entity that has furnished

21 evidence satisfactory to the State that the en22 tity is a consumer reporting agency.’’.

23 SEC. 669. EXTENDED STATUTE OF LIMITATION FOR COL24 LECTION OF ARREARAGES.

25 (a) AMENDMENTS.—Section 466(a)(9) is amended—
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•S 2224 IS

1 (1) by striking ‘‘(9) PROCEDURES’’ and insert2 ing ‘‘(9) LEGAL TREATMENT OF ARREARS.—(A) FI3 NALITY.—’’;

4 (2) by redesignating indented subparagraphs

5 (A), (B), and (C) as clauses (i), (ii), and (iii), re6 spectively; and

7 (3) by adding after and below subparagraph

8 (A), as redesignated, the following new subpara9 graph:

10 ‘‘(B) STATUTE OF LIMITATIONS.—Proce11 dures under which the statute of limitations on

12 any arrearages of child support extends at least

13 until the child owed such support is 30 years of

14 age.’’.

15 (b) APPLICATION OF REQUIREMENT.—The amend16 ment made by this section shall not be read to require

17 any State law to revive any payment obligation which had

18 lapsed prior to the effective date of such State law.

19 SEC. 670. CHARGES FOR ARREARAGES.

20 (a) STATE LAW REQUIREMENT.—Section 466(a) is

21 amended by adding at the end the following new para22 graph:

23 ‘‘(17) CHARGES FOR ARREARAGES.—Proce24 dures providing for the calculation and collection of

25 interest or penalties for arrearages of child support,
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1 and for distribution of such interest or penalties col2 lected for the benefit of the child (except where the

3 right to support has been assigned to the State).’’.

4 (b) REGULATIONS.—The Secretary of Health and

5 Human Services shall establish by regulation a rule to re6 solve choice of law conflicts arising in the implementation

7 of the amendment made by subsection (a).

8 (c) CONFORMING AMENDMENT.—Section 454(21) is

9 repealed.

10 (d) EFFECTIVE DATE.—The amendments made by

11 this section shall be effective with respect to arrearages

12 accruing on or after October 1, 1997.

13 SEC. 671. VISITATION ISSUES BARRED.

14 Section 466(a) is amended by adding at the end the

15 following new paragraph:

16 ‘‘(18) VISITATION ISSUE BARRED.—Procedures

17 under which failure to pay child support is not a de18 fense to denial of visitation rights, and denial of visi19 tation rights is not a defense to failure to pay child

20 support.’’.

21 SEC. 672. TREATMENT OF SUPPORT OBLIGATIONS UNDER

22 BANKRUPTCY CODE.

23 (a) NO STAY OF PROCEEDINGS.—Section 362(b)(2)

24 of title 11, United States Code, is amended to read as

25 follows:
324

•S 2224 IS

1 ‘‘(2) under subsection (a) of this section—

2 ‘‘(A) of the commencement or continuation

3 of a judicial or administrative proceeding, or

4 other action under State or territorial law by a

5 governmental unit, against the debtor to estab6 lish paternity, to establish or modify an obliga7 tion to pay for the support of a spouse, former

8 spouse, or child of the debtor, or to establish a

9 schedule for payment of such support (including

10 any arrearages); or

11 ‘‘(B) of the collection of alimony, mainte12 nance, or support from property that is not

13 property of the estate;’’.

14 (b) STREAMLINED FILING PROCEDURE FOR SUP15 PORT CREDITOR.—Section 501 of title 11, United States

16 Code, is amended by adding at the end the following new

17 subsection:

18 ‘‘(e)(1) The creditor of a claim that is excepted from

19 discharge under section 523(a)(5) may file such claim by

20 delivering to the clerk of the bankruptcy court in which

21 a petition under this title is pending, in person or by reg22 istered mail, the claim form promulgated under paragraph

23 (2). Such a creditor, filing a claim in such a manner, shall

24 not be required to make a personal appearance before the

25 court, to be represented by counsel admitted to practice
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1 in the jurisdiction in which such court is located, to comply

2 with any local rules not specified pursuant to paragraph

3 (2), or to pay any filing fees or other charges in connection

4 with the filing of such claim.

5 ‘‘(2) The Judicial Conference of the United States

6 shall promulgate, not later than June 30, 1995—

7 ‘‘(A) a standardized, simplified form for filing

8 claims described in paragraph (1); and

9 ‘‘(B) procedural guidelines for the use of such

10 form, which rules shall be designed to minimize the

11 burden on support creditors of filing such claims.’’.

12 (c) TREATMENT AS PREFERRED UNSECURED CREDI13 TOR.—Section 507(a) of title 11, United States Code, is

14 amended—

15 (1) by striking ‘‘(8) Eighth,’’ and inserting ‘‘(9)

16 Ninth,’’; and

17 (2) by inserting after paragraph (7) the follow18 ing new paragraph:

19 ‘‘(8) Eighth, unsecured claims for alimony,

20 maintenance, or support of a spouse, former spouse,

21 or child of the debtor allowed under section 502 of

22 this title, to the full extent of such claims, and in

23 accordance with any payment schedule established

24 as described in section 362(b)(2).’’.
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1 (d) PAYMENT SCHEDULE IN CHAPTER 13 PLANS.—

2 Section 1322(a)(2) of title 11, United States Code, is

3 amended by inserting before the semicolon ‘‘(except that

4 the plan shall provide, in the case of a debt not subject

5 to discharge under section 523(a)(5), for payment in ac6 cordance with any payment schedule included in the order

7 providing for alimony, maintenance, or support)’’.

8 (e) EFFECTIVE DATE.—The amendments made by

9 this section shall become effective October 1, 1995.

10 SEC. 673. DENIAL OF PASSPORTS FOR NONPAYMENT OF

11 CHILD SUPPORT.

12 (a) HHS CERTIFICATION PROCEDURE.—(1) SEC13 RETARIAL RESPONSIBILITY.—Section 452 is amended by

14 adding at the end the following new subsection:

15 ‘‘(k) CERTIFICATIONS FOR PURPOSES OF PASSPORT

16 RESTRICTIONS.—(1) IN GENERAL.—Where the Secretary

17 receives a certification by a State agency in accordance

18 with the requirements of section 454(29) that an individ19 ual owes arrearages of child support in excess of $5,000,

20 the Secretary shall transmit such certification to the Sec21 retary of State for action (with respect to denial, revoca22 tion, or limitation of passports) pursuant to section 219

23 of title 22, United States Code.
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1 ‘‘(2) LIMIT ON LIABILITY.—The Secretary shall not

2 be liable to an individual for any action with respect to

3 a certification by a State agency under this section.’’.

4 (2) STATE CSE AGENCY RESPONSIBILITY.—Section

5 454, as previously amended by sections 601, 605, 615,

6 and 622, is further amended—

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

8 (27);

9 (B) by striking the period at the end of para10 graph (28) and inserting ‘‘; and’’; and

11 (C) by adding after paragraph (28) the follow12 ing new paragraph:

13 ‘‘(29) provide that the State agency will have in effect

14 a procedure (which may be combined with the procedure

15 for tax refund offset under section 464) for certifying to

16 the Secretary, for purposes of the procedure under section

17 452(k) (concerning denial of passports) determinations

18 that individuals owe child support arrearages of $5,000

19 or more, under which procedure—

20 ‘‘(A) each individual concerned is afforded no21 tice of such determination and the consequences

22 thereof, and an opportunity to contest the deter23 mination; and

24 ‘‘(B) the certification by the State agency is

25 furnished to the Secretary in such format, and ac-
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1 companied by such supporting documentation, as the

2 Secretary may require.’’.

3 (b) STATE DEPARTMENT PROCEDURE FOR DENIAL

4 OF PASSPORTS.—Chapter 4 of title 22, United States

5 Code, is amended by adding at the end the following new

6 section:

7 ‘‘§ 219. Denial of passport for nonpayment of child

8 support.

9 ‘‘(a) IN GENERAL.—The Secretary, upon certification

10 by the Secretary of Health and Human Services, in ac11 cordance with section 452(k) of the Social Security Act,

12 that an individual owes arrearages of child support in ex13 cess of $5,000, shall refuse to issue a passport to such

14 individual, and may revoke, restrict, or limit a passport

15 issued previously to such individual.

16 ‘‘(b) LIMIT ON LIABILITY.—The Secretary shall not

17 be liable to an individual for any action with respect to

18 a certification by a State agency under this section.’’.

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

20 this section shall become effective October 1, 1995.

21 PART H—DEMONSTRATIONS

22 SEC. 681. CHILD SUPPORT ENFORCEMENT AND ASSURANCE

23 DEMONSTRATIONS.

24 (a) DEMONSTRATIONS AUTHORIZED.—(1) INITIAL

25 PROJECTS.—The Secretary shall make grants to three
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1 States for demonstrations under this section to determine

2 the effectiveness of programs to provide assured levels of

3 child support to custodial parents of children for whom

4 paternity and support obligations have been established.

5 (b) DURATION OF PROJECTS.—(1) TOTAL PROJECT

6 PERIOD.—The Secretary shall make grants to States for

7 demonstrations under this section beginning in fiscal year

8 1997, for periods of from 7 to 10 years.

9 (2) PHASEDOWN PERIOD.—Each State implementing

10 a demonstration project under this section shall—

11 (A) phase out activities under such demonstra12 tion during the final two years of the project; and

13 (B) obtain the Secretary’s approval, before the

14 beginning of such phasedown period, of a plan for

15 accomplishing such phasedown.

16 (c) CONSIDERATIONS IN SELECTION OF PROJECTS.—

17 (1) SCOPE.—Projects under this section may, but need

18 not, be statewide in scope.

19 (2) STATE ADMINISTRATION.—(A) RESPONSIBLE

20 STATE AGENCY.—A State demonstration project under

21 this section shall be administered either by the State agen22 cy administering the program under title IV–D of the So23 cial Security Act or the State department of revenue and

24 taxation.
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1 (B) AUTOMATION.—The State agency described in

2 subparagraph (A) shall operate (or have automated access

3 to) the automated data system required under section

4 454(16) of the Social Security Act, and shall have ade5 quate automated capacity to carry out the project under

6 this section (including the timely distribution of child sup7 port assurance benefits).

8 (3) CONTROLS.—At least one demonstration project

9 under this section shall include randomly assigned control

10 groups.

11 (d) ELIGIBILITY.—(1) IN GENERAL.—Child support

12 assurance payments under projects under this section

13 shall be available only to children for whom paternity and

14 support obligations have been established (or with respect

15 to whom a determination has been made that efforts to

16 establish paternity or support would not be in the best

17 interests of the child).

18 (2) FAMILIES WITH SHARED CUSTODY.—In cases

19 where both parents share custody of a child, a parent and

20 child shall not be eligible for benefits under a demonstra21 tion under this section unless—

22 (A) a support order is in effect entitling such

23 parent to support payments in excess of the mini24 mum benefit; or
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•S 2224 IS

1 (B) the agency or tribunal which issued the

2 order certifies that the child support award would be

3 below such minimum benefit if either parent was

4 awarded sole custody and the guidelines under sec5 tion 467 were applied.

6 (3) STATE OPTION TO BASE ELIGIBILITY ON

7 NEED.—At State option, eligibility for benefits under a

8 demonstration under this section may be limited to fami9 lies with incomes and resources below a standard of need

10 established by the State.

11 (f) BENEFIT AMOUNTS.—(1) RANGE OF BENEFIT

12 LEVELS.—States shall have flexibility to set annual bene13 fit levels under demonstrations under this section, pro14 vided that (subject to the remaining provisions of this sub15 section) such levels—

16 (A) are not lower than $1,500 for a family with

17 one child or $3,000 for a family with four or more

18 children; and

19 (B) are not higher than $3,000 for a family

20 with one child or $4,500 for a family with four or

21 more children;

22 (2) INDEXING.—Annual benefit levels for each fiscal

23 year after fiscal year 1996 shall be indexed to reflect the

24 change in the Consumer Price Index.
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1 (3) UNMATCHED EXCESS BENEFITS.—The Secretary

2 may permit States to pay benefits higher than a maximum

3 specified in paragraphs (1) and (2), but Federal matching

4 of such payments shall not be available for benefits in ex5 cess of the amounts specified in paragraph (1) (as ad6 justed in accordance with paragraph (2)) by more than

7 $25 per month.

8 (g) TREATMENT OF BENEFITS.—(1) FOR PURPOSES

9 OF AFDC.—The amount of aid otherwise payable to a

10 family under title IV–A of the Social Security Act shall

11 be reduced by an amount equal to the amount of child

12 support assurance paid to such family (or, at the Sec13 retary’s discretion, by a percentage of such amount paid

14 specified by the Secretary).

15 (2) FOR PURPOSES OF OTHER BENEFIT PRO16 GRAMS.—(A) IN GENERAL.—Except as provided in sub17 paragraph (B), child support assurance paid to a family

18 shall be considered ordinary income for purposes of deter19 mining eligibility for and benefits under any Federal or

20 State program.

21 (B) DEEMED AFDC ELIGIBILITY.—At State option,

22 a child (or family) that is ineligible for aid under title IV–

23 A of the Social Security Act because of payments under

24 a demonstration under this section may be deemed to be
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•S 2224 IS

1 receiving such aid for purposes of determining eligibility

2 for other Federal and State programs.

3 (3) FOR TAX PURPOSES.—Child support assurance

4 which is paid to a family under this section and is not

5 reimbursed from a child support collection from a

6 noncustodial parent shall be considered ordinary income

7 for purposes of Federal and State tax liability.

8 (h) WORK PROGRAM OPTION.—At the option of the

9 State grantee, a demonstration under this section may in10 clude a work program for unemployed noncustodial par11 ents of eligible children.

12 (i) AVAILABILITY OF APPROPRIATIONS FOR PAY13 MENTS TO STATES.—(1) STATE ENTITLEMENT TO IV–D

14 FUNDING.—A State administering an approved dem15 onstration under this section in a calendar quarter shall

16 be entitled to payments for such quarter, pursuant to sec17 tion 455 of the Social Security Act for the Federal share

18 of reasonable and necessary expenditures (including ex19 penditures for benefit payments and for associated admin20 istrative costs) under such project, in an amount (subject

21 to paragraphs (2) and (3)) equal to—

22 (A) with respect to that portion of such expend23 itures equal to the reduction of expenditures under

24 title IV–A of the Social Security Act pursuant to

25 subsection (g)(1), a percentage equal to the percent-
334

•S 2224 IS

1 age that would have been paid if such expenditures

2 had been made under such title IV–A; and

3 (B) 90 percent of the remainder of such ex4 penditures.

5 (2) STATES WITH LOW AFDC BENEFITS.—In the

6 case of a State in which benefit levels under title IV–A

7 of the Act are below the national median for such pay8 ments, the Secretary may elect to provide 90 percent Fed9 eral matching of a portion of expenditures under a project

10 under this section that would otherwise be matched at the

11 rate specified in paragraph (1)(A).

12 (3) FUNDING LIMITS; PRO RATA REDUCTIONS OF

13 STATE MATCHING.—(A) FUNDS AVAILABLE.—There

14 shall be available to the Secretary, from amounts appro15 priated to carry our part D of title IV of the Social Secu16 rity Act, for purposes of carrying out demonstrations

17 under this section, amounts not to exceed—

18 (i) $27,000,000 for fiscal year 1997;

19 (ii) $55,000,000 for fiscal year 1998;

20 (iii) $70,000,000 for each of fiscal years 1999

21 through 2002; and

22 (iv) $55,000,000 for fiscal year 2003.

23 (B) PRO RATA REDUCTIONS.—The Secretary shall

24 make pro rata reductions in the amounts otherwise pay-
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1 able to States under this section as necessary to comply

2 with the funding limitation specified in subparagraph (A).

3 (j) DISTRIBUTION OF CHILD SUPPORT COLLEC4 TIONS.—Notwithstanding section 457 of the Social Secu5 rity Act, support payments collected from the noncustodial

6 parent of a child receiving (or who has received) child sup7 port assurance payments under this section shall be dis8 tributed as follows:

9 (1) first, amounts equal to the total support

10 owed for such month shall be paid to the family;

11 (2) second, from any remainder, amounts owed

12 to the State on account of child support assurance

13 payments to the family shall be paid to the State

14 (with appropriate reimbursement to the Federal

15 Government of its share to such payments);

16 (3) third, from any remainder, arrearages of

17 support owed to the family shall be paid to the fam18 ily; and

19 (4) fourth, from any remainder, amounts owed

20 to the State on account of current or past payments

21 of aid under title IV–A of the Social Security Act

22 shall be paid to the State (with appropriate reim23 bursement to the Federal Government of its share of

24 such payments).
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1 (k) EVALUATIONS AND REPORTS.—(1) STATE EVAL2 UATIONS.—Each State administering a demonstration

3 project under this section shall—

4 (A) provide for ongoing and retrospective eval5 uation of the project, meeting such conditions and

6 standards as the Secretary may require; and

7 (B) submit to the Secretary such reports (at

8 such times, in such format, and containing such in9 formation) as the Secretary may require, including

10 at least an interim report not later than 90 days

11 after the end of the fourth year of the project, and

12 a final report not later than one year after the com13 pletion of the project, which shall include informa14 tion on and analysis of the effect of the project with

15 respect to—

16 (i) the economic circumstances of both

17 noncustodial and custodial parents;

18 (ii) the rate of compliance by noncustodial

19 parents with support orders;

20 (iii) work-force participation by both custo21 dial and noncustodial parents;

22 (iv) need for or amount of aid to families

23 with dependent children under title IV–A of the

24 Social Security Act;

25 (v) paternity establishment rates; and
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1 (vi) any other matters the Secretary may

2 specify.

3 (2) REPORTS TO CONGRESS.—The Secretary shall,

4 on the basis of reports received from States administering

5 projects under this section, make the following reports,

6 containing an assessment of the effectiveness of the

7 projects and any recommendations the Secretary considers

8 appropriate:

9 (A) an interim report, not later than six months

10 following receipt of the interim State reports re11 quired by subsection (c); and

12 (B) a final report, not later than six months

13 following receipt of the final State reports required

14 under subsection (i).

15 (3) FUNDING FOR COSTS TO SECRETARY.—There

16 are authorized to be appropriated $10,000,000 for fiscal

17 year 1997, to remain available under expended for pay18 ment of the cost of evaluations by the Secretary of dem19 onstrations under this section.

20 SEC. 682. SOCIAL SECURITY ACT DEMONSTRATIONS.

21 Section 1115(c)(3) is amended by striking ‘‘increased

22 cost’’ and all that follows and inserting ‘‘an increase in

23 total costs to the Federal Government.’’.
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1 Part I—Access and Visitation Grants

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

3 PROGRAMS.

4 (a) IN GENERAL.—Part D of title IV is amended by

5 adding at the end the following new section:

6 ‘‘GRANTS TO STATES FOR ACCESS AND VISITATION

7 PROGRAMS

8 ‘‘SEC. 469A. (a) PURPOSES; AUTHORIZATION OF AP9 PROPRIATIONS.—For the purposes of enabling States to

10 establish and administer programs to support and facili11 tate absent parents’ access to and visitation of their chil12 dren, by means of activities including mediation (both vol13 untary and mandatory), counseling, education, develop14 ment of parenting plans, visitation enforcement (including

15 monitoring, supervision and neutral drop-off and pickup),

16 and development of guidelines for visitation and alter17 native custody arrangements, there are authorized to be

18 appropriated $5,000,000 for each of fiscal years 1996 and

19 1997, and $10,000,000 for each succeeding fiscal year.

20 ‘‘(b) PAYMENTS TO STATES.—(1) Each State shall

21 be entitled to payment under this section for each fiscal

22 year in an amount equal to its allotment under subsection

23 (c) for such fiscal year, to be used for payment of 90 per24 cent of State expenditures for the purposes specified in

25 subsection (a).
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•S 2224 IS

1 ‘‘(2) Payments under this section shall be used by

2 a State to supplement (and not to substitute for) expendi3 tures by the State, for activities specified in subsection

4 (a), at a level at least equal to the level of such expendi5 tures for fiscal year 1994.

6 ‘‘(c) ALLOTMENTS TO STATES.—(1) IN GENERAL.—

7 For purposes of subsection (b), each State shall be entitled

8 (subject to paragraph (1)) to an amount for each fiscal

9 year bearing the same ratio to the amount authorized to

10 be appropriated pursuant to subsection (a) for such fiscal

11 year as the number of children in the State living with

12 only one biological parent bears to the total number of

13 such children in all States.

14 ‘‘(2) MINIMUM ALLOTMENT.—Allotments to States

15 under subparagraph (A) shall be adjusted as necessary to

16 ensure that no State is allotted less than $50,000 for fiscal

17 year 1996 or 1997, or $100,000 for any succeeding fiscal

18 year.

19 ‘‘(d) FEDERAL ADMINISTRATION.—The program

20 under this section shall be administered by the Adminis21 tration for Children and Families.

22 ‘‘(e) STATE PROGRAM ADMINISTRATION.—(1) Each

23 State may administer the program under this section di24 rectly or through grants to or contracts with courts, local

25 public agencies, or non-profit private entities.
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1 ‘‘(2) State programs under this section may, but need

2 not, be Statewide.

3 ‘‘(3) States administering programs under this sec4 tion shall monitor, evaluate, and report on such programs

5 in accordance with requirements established by the Sec6 retary.

7 Part J—Effect of Enactment

8 SEC. 695. EFFECTIVE DATES.

9 (a) IN GENERAL.—Except as otherwise specifically

10 provided (but subject to subsections (b) and (c))—

11 (1) provisions of this title requiring enactment

12 or amendment of State laws under section 466 of

13 the Act, or revision of State plans under section 454

14 of the Act, shall be effective with respect to periods

15 beginning on and after October 1, 1995; and

16 (2) all other provisions of this title shall become

17 effective upon enactment.

18 (b) GRACE PERIOD FOR STATE LAW CHANGES.—The

19 provisions of this title shall become effective with respect

20 to a State on the later of—

21 (1) the date specified in this title, or

22 (2) the effective date of laws enacted by the leg23 islature of such State implementing such provisions,

24 but in no event later than the first day of the first cal25 endar quarter beginning after the close of the first regular
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1 session of the State legislature that begins after the date

2 of enactment of this Act. For purposes of the previous

3 sentence, in the case of a State that has a 2-year legisla4 tive session, each year of such session shall be deemed to

5 be a separate regular session of the State legislature.

6 (c) GRACE PERIOD FOR STATE CONSTITUTIONAL

7 AMENDMENT.—A State shall not be found out of compli8 ance with any requirement enacted by this title if it is

9 unable to comply without amending the State constitution

10 until the earlier of—

11 (1) the date one year after the effective date of

12 the necessary State constitutional amendment, or

13 (2) the date five years after enactment of this

14 title.

15 SEC. 696. SEVERABILITY.

16 If any provision of this title or the application thereof

17 to any person or circumstance is held invalid, the invalid18 ity shall not affect other provisions or applications of this

19 title which can be given effect without regard to the invalid

20 provision or application, and to this end the provisions of

21 this title shall be severable.
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1 TITLE VII—IMPROVING GOVERNMENT

2 ASSISTANCE AND PREVENTING FRAUD

3 Part A—AFDC Amendments

4 SEC. 701. PERMANENT REQUIREMENT FOR UNEMPLOYED

5 PARENT PROGRAM.

6 (a) IN GENERAL.—Section 401(h) of the Family

7 Support Act of 1988 (terminating the requirement that

8 States provide benefits to two-parent families based on the

9 unemployment of the principal earner) is repealed.

10 (b) APPLICABILITY TO PUERTO RICO, AMERICAN

11 SAMOA, GUAM, AND THE VIRGIN ISLANDS.—Section

12 401(g)(2) of the Family Support Act of 1988 is amended,

13 effective on the date of enactment of such Act, to read

14 as follows:

15 ‘‘(2) The amendments made by this section

16 (other than those made by subsection (c)) shall not

17 become effective with respect to Puerto Rico, Amer18 ican Samoa, Guam, or the Virgin Islands unless the

19 jurisdiction involved notifies the Secretary of Health

20 and Human Services that it chooses to have such

21 amendments apply and submits the necessary plan

22 amendment.’’.
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1 SEC. 702. STATE OPTIONS REGARDING UNEMPLOYED PAR2 ENT PROGRAM.

3 (a) DURATION OF UNEMPLOYMENT AND RECENCY4 OF-WORK TESTS.—(1) Section 407(b)(1)(A) of the Act

5 (in the matter preceding clause (i)) is amended to read

6 as follows:

7 ‘‘(A) subject to paragraph (2), shall provide for

8 the payment of aid to families with dependent chil9 dren with respect to a dependent child within the

10 meaning of subsection (a)—’’.

11 (2) Such section is further amended—

12 (A) by striking out ‘‘whichever’’ in clause (i)

13 and inserting in lieu thereof ‘‘when, if the State

14 chooses to so require (and specifies in its State

15 plan), whichever’’,

16 (B) by inserting ‘‘when’’ before such parent in

17 clause (ii), and

18 (C) by striking out ‘‘(iii)(I)’’ and inserting in

19 lieu thereof ‘‘(iii) when, if the State chooses to so re20 quire (and specifies in its State plan) (I)’’.

21 (b) STATE OPTION TO DEFINE ‘‘UNEMPLOY22 MENT’’.—At its option, a State may provide aid under

23 part A to children of employed parents and may apply,

24 for purposes of section 407 of the Act, a definition of un25 employment that includes some or all of the individuals

26 who, solely by reasons of the standards prescribed by the
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1 Secretary of Health and Human Services under subsection

2 (a) of such section and in effect on the date of enactment

3 of this Act, would not have been eligible for aid to families

4 with dependent children, and shall include such definition

5 in its State plan approved under part A of title IV of the

6 Act.

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

8 this section and the provisions of this section shall become

9 effective October 1, 1996.

10 SEC. 703. DEFINITION OF ESSENTIAL PERSON.

11 (1) GENERAL REQUIREMENT.—Section 402 of the

12 Act is amended by adding immediately after and below

13 subsection (c) the following new subsection:

14 ‘‘(d) In order that the State may include the needs

15 of an individual in determining the needs of the dependent

16 child and relative with whom the child is living, such indi17 vidual must be living in the same home as such child and

18 relative and—

19 ‘‘(1) furnishing personal services required be20 cause of the relative’s physical or mental inability to

21 provide care necessary for herself or himself or for

22 the dependent child (which, for purposes of this sub23 section only, includes a child receiving supplemental

24 security income benefits under title XVI), or
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•S 2224 IS

1 ‘‘(2) furnishing child care services, or care for

2 an incapacitated member of the family, that is nec3 essary to permit the caretaker relative—

4 ‘‘(A) to engage in full or part-time employ5 ment outside the home, or

6 ‘‘(B) to attend a course of education de7 signed to lead to a high school diploma (or its

8 equivalent) or a course of training on a full or

9 part-time basis, or to participate in the pro10 gram under part F on a full or part-time

11 basis.’’.

12 SEC. 704. EXPANDED STATE OPTION FOR RETROSPECTIVE

13 BUDGETING.

14 Section 402(a)(13) of the Act is amended—

15 (1) by striking out in the matter that precedes

16 subparagraph (A) ‘‘but only with respect to any one

17 or more categories of families required to report

18 monthly to the State agency pursuant to paragraph

19 (14),’’; and

20 (2) by striking out in each of subparagraphs

21 (A) and (B) ‘‘(but only where the Secretary deter22 mines it to be appropriate, in the case of families

23 who are required to report monthly to the State

24 agency pursuant to paragraph (14),’’.
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1 SEC. 705. DISREGARDS OF INCOME.

2 ‘‘(a) STUDENT EARNINGS.—(1) IN GENERAL.—Sec3 tion 402(a)(8)(A)(i) of the Act is amended by striking out

4 ‘‘dependent child’’ and all that follows and inserting in lieu

5 thereof ‘‘individual under age 19 who is an elementary or

6 secondary school student’’.

7 ‘‘(2) CONFORMING AMENDMENTS.—Section 402(a)

8 of the Act is amended—

9 (A)(i) by striking out ‘‘a dependent child who is

10 a full-time student’’ in paragraph (8)(A)(vii) and in11 serting in lieu thereof ‘‘an individual under age 19

12 who is an elementary or secondary school student’’,

13 and

14 (ii) by striking out ‘‘such child’’ in such para15 graph and inserting in lieu thereof ‘‘such individ16 ual’’, and

17 (B) by striking out in paragraph (18) ‘‘of a de18 pendent child’’ and inserting in lieu thereof ‘‘of an

19 individual under age 19’’.

20 (b) STANDARD EARNED INCOME DISREGARD

21 AMOUNT.—(1) Section 402(a)(8)(a)(ii) of the Act is

22 amended by striking out ‘‘$90’’ and inserting in lieu there23 of ‘‘$120, or if greater, $120 adjusted by the CPI (as pre24 scribed in section 406(i))’’.

25 (2) The amendment made by this subsection shall be26 come effective October 1, 1996.
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1 (c) STATE OPTION TO DISREGARD EARNED IN2 COME.—(1) IN GENERAL.—Section 402(a)(8)(A)(iv) of

3 the Act is amended to read as follows:

4 ‘‘(iv) may, at its option, disregard amounts

5 of earned income in addition to those required

6 or permitted to be disregarded under this para7 graph, and shall specify in its State plan any

8 such additional amounts and the circumstances

9 (including whether they will be disregarded for

10 applicants as well as for recipients) under which

11 they will be disregarded;’’

12 (2) CONFORMING AMENDMENTS.—

13 (A) Clause (ii) of section 402(a)(8)(B) of the

14 Act is repealed.

15 (B)(i) Section 402(a)(37) of the Act is amended

16 by striking out ‘‘or because of paragraph

17 (8)(B)(ii)(II)’’.

18 (ii) Section 1925(a) of the Act is amended by

19 striking out ‘‘or because of section

20 402(a)(8)(B)(ii)(II) (providing for a time-limited

21 earned income disregard)’’.

22 (C) Section 402(g)(1)(A)(ii) of the Act is

23 amended by striking out ‘‘increased income’’ and all

24 that follows down to the period and inserting in lieu
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1 thereof ‘‘amount of earnings from such employ2 ment’’.

3 (3) EFFECTIVE DATE.—The amendments made by

4 this subsection shall become effective October 1, 1996.

5 (d) DISREGARD OF TRAINING STIPENDS.—Section

6 402(a)(8)(A)(v) of the Act is amended to read as follows:

7 ‘‘(v) shall disregard from the income of

8 any individual applying for or receiving aid to

9 families with dependent children any amount

10 received as a stipend or allowance under the

11 Job Training Partnership Act or under any

12 other training or similar program;’’.

13 (e) MANDATORY CHILD SUPPORT PASS-THROUGH.—

14 (1) Section 402(a)(8)(A)(vi) of the Act is amended—

15 (A) by striking out ‘‘$50’’ (in two places) and

16 inserting in lieu thereof ‘‘$50, or, if greater, $50 ad17 justed by the CPI (as prescribed in section 406(i));’’,

18 and

19 (B) by striking out the semicolon at the end

20 and inserting in lieu thereof ‘‘or, in lieu of the

21 amount specified in two places in this clause, such

22 greater amount as the State many choose (and pro23 vide for in its State plan);’’.
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1 (2) CPI ADJUSTMENT.—Section 406 of the Act is

2 amended by adding at the end thereof the following new

3 subsection:

4 ‘‘(i) For purposes of this part, an amount is ‘adjusted

5 by the CPI’ for any month in a calendar year by multiply6 ing the amount involved by the ratio of—

7 ‘‘(1) the Consumer Price Index (as prepared by

8 the Department of Labor) for the third quarter of

9 the preceding calendar year, to

10 ‘‘(2) such Consumer Price Index for the third

11 quarter of calendar year 1996,

12 and rounding the product, if not a multiple of $10, to the

13 nearer multiple of $10.’’.

14 (f) LUMP-SUM INCOME.—(1) IN GENERAL.—Section

15 402(a)(8)(A) of the Act is amended—

16 (A) by striking out ‘‘and’’ after clause (viii),

17 and

18 (B) by adding after and below clause (viii) the

19 following new clause:

20 ‘‘(ix) shall disregard from the income of

21 any family member any amounts of income re22 ceived in the form of nonrecurring lump-sum

23 payments;’’.

24 (2) REPEAL.—Section 402(a)(17) of the Act is re25 pealed.
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1 (g) EDUCATIONAL ASSISTANCE.—Section

2 402(a)(8)(A) of the Act is further amended by adding

3 after and below clause (ix) the following new clause:

4 ‘‘(x) shall disregard all educational assist5 ance provided to a family member;’’.

6 (h) IN-KIND INCOME.—Such section is further

7 amended by adding after and below clause (x) the follow8 ing new clause:

9 ‘‘(xi) shall disregard all in-kind income

10 provided to a family member;’’

11 (i) BENEFITS UNDER THE NATIONAL AND COMMU12 NITY SERVICE ACT.—Such section is further amended by

13 adding after and below clause (xi) the following new

14 clause:

15 ‘‘(xii) shall disregard any living allowance,

16 child care allowance, stipend, or educational

17 award paid under section 140 of the National

18 and Community Service Act of 1990 to a family

19 member participating in a national service pro20 gram carried out with assistance from the Cor21 poration for National and Community Serv22 ice;’’.

23 (j) ‘‘FILL-THE-GAP’’ DISREGARDS.—(1) Such section

24 is further amended by adding after and below clauses (xii)

25 the following new clause:
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1 ‘‘(xiii) may disregard, in addition to any

2 other amounts required or permitted by this

3 paragraph, income described in the State plan

4 by type or source and by amount, but no

5 amount in excess of the difference between the

6 State’s standard of need applicable to the fam7 ily involved and the State’s payment amount for

8 a family of the same size with no other in9 come;’’.

10 (2) The amendment made by this subsection shall be11 come effective October 1, 1996.

12 SEC. 706. STEPPARENT INCOME.

13 (a) Section 402(a)(31) of the Act is amended by

14 striking out ‘‘$90’’ and inserting in lieu thereof ‘‘$120’’

15 and by striking out the semicolon at the end and inserting

16 in lieu thereof ‘‘, or, at the option of the State, so much

17 of such income as exceeds any greater amount or amounts

18 as the State agency finds appropriate to strengthen family

19 life and provide incentives to increase earnings;’’.

20 (b) The amendment made by this section shall be21 come effective October 1, 1996.

22 SEC. 707. INCREASE IN RESOURCE LIMIT.

23 Section 402(a)(7)(B) of the Act is amended (in the

24 matter preceding clause (i)) by striking out ‘‘$1000 or

25 such lower amount as the State may determine’’ and in-
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•S 2224 IS

1 serting in lieu thereof ‘‘$2000 or, in the case of a family

2 with a member who is 60 years of age or older, $3000’’.

3 SEC. 708. EXCLUSIONS FROM RESOURCES.

4 (a) LIFE INSURANCE.—Section 402(a)(7)(B)(ii) of

5 the Act is amended by striking out the semicolon at the

6 end and inserting in lieu thereof ‘‘, and the cash value

7 of life insurance policies;’’.

8 (b) REAL PROPERTY WHICH MUST BE DISPOSED

9 OF.—Section 402(a)(7)(B)(iii) of the Act is amended to

10 read as follows: ‘‘real property which the family is making

11 a good faith effort to dispose of at a reasonable price;’’.

12 (c) EXCLUSION OF PAYMENTS OF THE EITC.—Sec13 tion 402(a)(7)(B) of the Act is amended—

14 (1) by striking out ‘‘or’’ after clause (iii), and

15 (2) by amending clause (iv) (pertaining to pay16 ments by reason of the Earned Income Tax Credit)

17 by striking out ‘‘the following month’’ and inserting

18 in lieu thereof ‘‘the following eleven-month period’’,

19 and by striking out the semicolon at the end and in20 serting in lieu thereof ‘‘and any lump-sum payment

21 of State earned income tax credits and any pay22 ments described in this clause shall be deemed to be

23 expended prior to other resources that are not ex24 cluded;’’.
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1 (d) LUMP-SUM PAYMENTS FOR MEDICAL EXPENSES

2 OR REPLACEMENT OF LOST RESOURCES.—Section

3 402(a)(7)(B) of the Act is amended—

4 (1) by striking out ‘‘and’’ after clause (iv), and

5 (2) by adding after clause (iv) the following new

6 clause: ‘‘(v) for the month of receipt and the follow7 ing eleven-month period, amounts that have been

8 paid as reimbursement (or payment in advance) for

9 medical expenses or for the cost of repairing or re10 placing resources of the family;’’.

11 (e) INDIVIDUAL DEVELOPMENT ACCOUNTS.—Section

12 402(a)(7)(B) of the Act is amended by adding after clause

13 (v) the following new clause: ‘‘(vi) amounts, not to exceed

14 $10,000 (including interest) in total, in one or more Indi15 vidual Development Accounts established in accordance

16 with (I) section 529 of the Internal Revenue Code of 1986

17 by any member of a family receiving aid to families with

18 dependent children, or (II) under a demonstration project

19 conducted under the Individual Development Account

20 Demonstration Act of 1994, but only such amounts (in21 cluding interest) that were credited to such account in a

22 month for which such aid was paid, or food stamps pro23 vided, with respect to such individual or in any month

24 after such a month;’’.
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1 (f) RESOURCES FOR SELF-EMPLOYMENT.—Section

2 402(a)(7)(B) of the Act is amended by adding after clause

3 (vi) the following new clause: ‘‘(vii) liquid and nonliquid

4 resources that are or will be used for the self-employment

5 of a family member, to the extent and under the cir6 cumstances allowed by the State agency in accordance

7 with regulations issued by the Secretary after consultation

8 with the Secretary of Agriculture;’’.

9 SEC. 710. TRANSFER OF RESOURCES.

10 Section 402(a)(7) of the Act is amended—

11 (1) by adding ‘‘and’’ after subparagraph (C),

12 and

13 (2) by adding after and below subparagraph (C)

14 the following new subparagraph:

15 ‘‘(D) shall determine ineligible for aid any

16 family member who knowingly transfers re17 sources for the purpose of qualifying or at18 tempting to qualify for such aid for such period,

19 not in excess of one year from the date of dis20 covery of the transfer, determined in accordance

21 with regulations of the Secretary;’’.

22 SEC. 711. LIMITATION ON UNDERPAYMENTS.

23 Section 402(a)(22)(C) of the Act is amended by strik24 ing out ‘‘an underpayment’’ and inserting in lieu thereof

25 ‘‘an underpayment, the corrective payment shall be made
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1 regardless of whether the family is, at the time payment

2 is made, receiving current payment of aid under the State

3 plan but such payment shall not exceed the amount nec4 essary to correct for the underpayment of aid during the

5 twelve-month period immediately preceding the month in

6 which the State agency first learned of the underpayment,

7 and’’.

8 SEC. 712. COLLECTION OF AFDC OVERPAYMENTS FROM

9 FEDERAL TAX REFUNDS.

10 (a) AUTHORITY TO INTERCEPT TAX REFUND.—(1)

11 Part A of title IV of the Act is amended by adding at

12 the end thereof the following new section:

13 ‘‘COLLECTION OF OVERPAYMENTS FROM FEDERAL TAX

14 REFUNDS

15 ‘‘Sec. 418.(a). Upon receiving notice from a State

16 agency administering a plan approved under this part that

17 a named individual has been overpaid under the State plan

18 approved under this part, the Secretary of the Treasury

19 shall determine whether any amounts as refunds of Fed20 eral taxes paid are payable to such individual, regardless

21 of whether such individual filed a tax return as a married

22 or unmarried individual. If the Secretary of the Treasury

23 finds that any such amount is payable, he shall withhold

24 from such refunds an amount equal to the overpayment

25 sought to be collected by the State and pay such amount

26 to the State agency.
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1 ‘‘(b) The Secretary of the Treasury shall issue regula2 tions, approved by the Secretary of Health and Human

3 Services, that provide—

4 ‘‘(1) that a State may only submit under sub5 section (a) requests for collection of overpayments

6 with respect to individuals (A) who are no longer re7 ceiving aid under the State plan approved under this

8 part, (B) with respect to whom the State has al9 ready taken appropriate action under State law

10 against the income or resources of the individuals or

11 families involved as required under section

12 402(a)(22) (B), and (C) to whom the State agency

13 has given notice of its intent to request withholding

14 by the Secretary of the Treasury from their income

15 tax refunds;

16 ‘‘(2) that the Secretary of the Treasury will

17 give a timely and appropriate notice to any other

18 person filing a joint return with the individual whose

19 refund is subject to withholding under subsection

20 (a); and

21 ‘‘(3) the procedures that the State and the Sec22 retary of the Treasury will follow in carrying out

23 this section which, to the maximum extent feasible

24 and consistent with the specific provisions of this

25 section, will be the same as those issued pursuant to
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1 section 464(b) applicable to collection of past-due

2 child support.’’.

3 (2) Section 6402 of the Internal Revenue Code of

4 1986 (as previously amended by section 662 of this Act)

5 is further amended—

6 (A) in subsection (a), by striking ‘‘(c) and (d)’’

7 and inserting ‘‘(c), (d), and (e)’’;

8 (B) by redesignating subsections (e) through (i)

9 as subsections (f) through (j), respectively; and

10 (C) by inserting after subsection (d) the follow11 ing new subsection:

12 ‘‘(g) COLLECTION OF OVERPAYMENTS UNDER TITLE

13 IV–A OF SOCIAL SECURITY ACT.—The amount of any

14 overpayment to be refunded to the person making the

15 overpayment shall be reduced (after reductions pursuant

16 to subsections (c) and (d), but before a credit against fu17 ture liability for an internal revenue tax) in accordance

18 with section 418 of the Social Security Act (concerning

19 recovery of overpayments to individuals under State plans

20 approved under part A of title IV of such Act).’’.

21 (b) CONFORMING AMENDMENT.—Section

22 552a(a)(8)(B)(iv)(III) of title 5 of the United States Code

23 is amended by striking out ‘‘section 464 or 1137 of the

24 Social Security Act’’ and inserting in lieu thereof ‘‘section

25 419, 464, or 1137 of the Social Security Act.’’
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1 SEC. 713. VERIFICATION OF STATUS OF CITIZENS AND

2 ALIENS.

3 (a) IN GENERAL.—Section 1137(d) of the Act is

4 amended by adding at the end thereof the following:

5 ‘‘(6) A State shall be deemed to meet the re6 quirements of paragraph (1) with respect to the eli7 gibility of each member of a family applying for aid

8 under the State plan approved under part A of title

9 IV, if the State requires, as a condition for such eli10 gibility, a declaration in writing by an adult member

11 of the family, under penalty of perjury, that each

12 family member is a citizen of the United States or

13 an alien eligible for aid under such State plan (and,

14 with respect to a child born into a family receiving

15 such aid, such declaration must be made no later

16 than the time of the next redetermination of such

17 family’s eligibility following the birth of such

18 child).’’.

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

20 subsection (a) shall become effective upon enactment.

21 SEC. 714. REPEAL OF REQUIREMENT TO MAKE CERTAIN

22 SUPPLEMENTAL PAYMENTS IN STATES PAY23 ING LESS THAN THEIR NEEDS STANDARDS.

24 Section 402(a)(28) of the Act is repealed.
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1 SEC. 715. CALCULATION OF 185 PERCENT OF NEED STAND2 ARD.

3 Section 402(a)(18) of the Act is amended by striking

4 out ‘‘without application of paragraph (8)(A)(viii),’’ and

5 inserting in lieu thereof ‘‘applying only the disregard pro6 visions of paragraph (8)(A) that appear in clauses (v) (in7 come from a program under the Job Training Partnership

8 Act and similar programs), (viii) (payments related to the

9 Earned Income Tax Credit), (ix) (certain lump-sum pay10 ments), (x) (educational assistance), (xi) (in-kind income),

11 and (xii) (certain payments under the National and Com12 munity Service Act of 1990),’’.

13 SEC. 716. TERRITORIES.

14 (a) Section 1108(a) of the Act is amended by amend15 ing paragraphs (1), (2), and (3) to read as follows:

16 ‘‘(1) for payment to Puerto Rico shall not ex17 ceed—

18 ‘‘(A) $82,000,000 with respect to fiscal

19 years 1994, 1995, and 1996, and

20 ‘‘(B) $102,500,000 or, if greater, such

21 amount adjusted by the CPI (as prescribed in

22 subsection (f)) for fiscal year 1997 and each

23 fiscal year thereafter;

24 ‘‘(2) for payment to the Virgin Islands shall not

25 exceed—
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1 ‘‘(A) $2,800,000 with respect to fiscal

2 years 1994, 1995, and 1996, and

3 ‘‘(B) $3,500,000 or, if greater, such

4 amount adjusted by the CPI (as prescribed in

5 subsection (f)) for fiscal year 1997 and each

6 fiscal year thereafter; and

7 ‘‘(3) for payment to Guam shall not exceed—

8 ‘‘(A) $3,800,000 with respect to fiscal year

9 1994, 1995, and 1996, and

10 ‘‘(B) $4,750,000 or, if greater, such

11 amount adjusted by the CPI (as prescribed in

12 subsection (f)), for fiscal year 1997 and each

13 fiscal year thereafter.’’.

14 (b) CPI ADJUSTMENT.—Section 1108 of the Act is

15 amended by adding at the end thereof the following new

16 subsection:

17 ‘‘(f) For purposes of subsection (a), an amount is ‘ad18 justed by the CPI’ for months in calendar year by mul19 tiplying that amount by the ratio of the Consumer Price

20 Index as prepared by the Department of Labor for—

21 ‘‘(1) the third quarter of the preceding calendar

22 year, to

23 ‘‘(2) the third quarter of calendar year 1996,

24 and rounding the product, if not a multiple of

25 $10,000, to the nearer multiple of $10,000.’’.
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1 PART B—FOOD STAMP ACT AMENDMENTS

2 SEC. 721. INCONSEQUENTIAL INCOME.

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

4 U.S.C. 2014(d)(2)) is amended to read as follows—

5 ‘‘(2) any inconsequential payments, as defined by the

6 Secretary, received during the certification period, but not

7 to exceed a total of such payments of $30 per household

8 member in any quarter, whether the household’s income

9 is calculated on a prospective or retrospective basis,’’.

10 SEC. 722. EDUCATIONAL ASSISTANCE.

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

12 2014) is amended by—

13 (1) striking clause (3) of subsection (d) and in14 serting in lieu thereof the following—

15 ‘‘(3) all educational assistance provided to a

16 household member,’’;

17 (2) in the proviso of clause (5) of subsection

18 (d), striking ‘‘and no portion of any educational

19 loan’’ and all that follows through ‘‘provided for liv20 ing expenses,’’; and

21 (3) striking clause (3) of subsection (k).

22 SEC. 723. EARNINGS OF STUDENTS.

23 Effective on and after September 1, 1994, section

24 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C.

25 2014(d)(7)) is amended by—
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1 (1) striking ‘‘a child who is a member of the

2 household, who is’’; and

3 (2) striking ‘‘, and who is 21’’ and inserting in

4 lieu thereof ‘‘who is 18’’.

5 SEC. 724. TRAINING STIPENDS AND ALLOWANCES; INCOME

6 FROM ON-THE-JOB TRAINING PROGRAMS.

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

8 2014) is amended by—

9 (1) striking ‘‘and (16)’’ in subsection (d) and

10 inserting in lieu thereof ‘‘(16)’’;

11 (2) inserting before the period at the end of

12 subsection (d) ‘‘, and (17) any amount received by

13 any member of a household as a stipend or allow14 ance under the Job training Partnership Act (29

15 U.S.C. 1501 et seq.) or under any other training or

16 similar program’’; and

17 (3) striking in subsection (1) the language be18 ginning with ‘‘under section 204(b)(1)(C)’’ and all

19 that follows through ‘‘19 years of age.’’ and insert20 ing in lieu thereof ‘‘shall be considered earned in21 come for purposes of the Food Stamp program.’’.

22 SEC. 725. EARNED INCOME TAX CREDITS.

23 Effective on and after September 1, 1994, the second

24 sentence of section (5)(g)(3) of the Food Stamp Act of

25 1977 (7 U.S.C. 2014(g)(3)) is amended by—
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1 (1) inserting ‘‘Federal or State lump-sum’’ im2 mediately preceding ‘‘earned income tax credits’’;

3 and

4 (2) striking the language beginning with ‘‘if

5 such member was participating’’ and all that follows

6 through ‘‘the 12-month period’’.

7 SEC. 726. RESOURCES NECESSARY FOR SELF-EMPLOY8 MENT.

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

10 U.S.C. 2014(g)(3)) is amended by adding the following

11 new third and fourth sentences: ‘‘The Secretary shall also

12 exclude from financial resources loans obtained for the

13 purposes of starting or operating a business. The Sec14 retary may exclude from financial resources liquid or

15 nonliquid resources that are or will be used for the self16 employment of any member of a household to the extent

17 and under the circumstances allowed in regulations issued

18 by the Secretary after consultation with and the Secretary

19 of Health and Human Services.’’.

20 SEC. 727. LUMP-SUM PAYMENTS FOR MEDICAL EXPENSES

21 OR REPLACEMENT OF LOST RESOURCES.

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

23 U.S.C. 2014(g)(3)) as amended by this Act is further

24 amended by adding the following new fifth sentence: ‘‘The

25 Secretary shall also exclude from financial resources, for
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1 a period of one year from their receipt, amounts that have

2 been paid as reimbursements (or payment in advance) for

3 medical expenses or for the cost of repairing or replacing

4 resources of the family.’’.

5 SEC. 728. INDIVIDUAL DEVELOPMENT ACCOUNTS.

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

7 U.S.C. 2014(g)(3)) as amended by this Act is further

8 amended by adding the following new sixth and seventh

9 sentences: ‘‘The Secretary shall also exclude from financial

10 resources amounts, not to exceed $10,000 (including inter11 est) in total, in one or more Individual Development Ac12 counts established in accordance with (A) section 529 of

13 the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.)

14 by any member of a household applying for or receiving

15 assistance under this Act or (B) a demonstration project

16 conducted under the Individual Development Account

17 Demonstration Act of 1994, but only such amounts (in18 cluding interest) that were credited to such account in a

19 month for which assistance was provided under this Act

20 or aid to families with dependent children was provided

21 pursuant to part A of title IV of the Social Security Act,

22 with respect to such individual, or in any month after such

23 a month. The Secretary shall also exclude from financial

24 resources, for the month of its receipt and the following

25 month, a nonrecurring lump-sum payment received by any
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1 household member if the household member represents

2 that the payment will be deposited in an Individual Devel3 opment Account established as described in the preceding

4 sentence.’’.

5 SEC. 729. CONFORMING AMENDMENT.

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

7 U.S.C 2014(d)(8)) is amended in the proviso by inserting

8 ‘‘paragraph (3) of subsection (g) of this section or’’ imme9 diately preceding ‘‘other laws’’.

10 PART C—ECONOMIC INDEPENDENCE

11 SEC. 731. SHORT TITLE.

12 This title may be cited as the ‘‘Individual Develop13 ment Account Demonstration Act of 1994’’.

14 SEC. 732. DECLARATION OF POLICY AND STATEMENT OF

15 PURPOSE.

16 (a) DECLARATION OF POLICY.—It is the policy of the

17 United States—

18 (1) to eliminate barriers that prevent recipients

19 of Aid to Families with Dependent Children (AFDC)

20 from becoming self-sufficient through self-employ21 ment and asset accumulation;

22 (2) to identify and implement cost-effective

23 strategies to encourage saving and entrepreneurship

24 among the broadest possible range of low-income

25 families, particularly families eligible for AFDC, and
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1 that have the potential to reduce Federal spending

2 on transfers and services to the disadvantaged;

3 (3) to enhance private-sector opportunities for

4 low-income families by enabling them to use their

5 own human and financial resources through expan6 sion of business investment, job creation, home own7 ership, and human capital investment; and

8 (4) to expand the capacity of local organizations

9 to provide asset-related services that help people to

10 help themselves such as savings mechanisms, loan

11 funds, technical assistance, and entrepreneurial

12 training.

13 (b) STATEMENT OF PURPOSE.—The purpose of the

14 demonstration projects authorized under this title is to

15 provide for a means of determining—

16 (1) the social, psychological, and economic ef17 fects of providing low-income individuals the oppor18 tunity to accumulate assets and develop and utilize

19 entrepreneurial skills; and

20 (2) the extent to which an asset-based assist21 ance policy may be used to enable individuals with

22 low-income to achieve economic self-sufficiency.
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1 SEC. 733. INDIVIDUAL DEVELOPMENT ACCOUNT DEM2 ONSTRATION PROJECTS.

3 (a) IN GENERAL.—Not later than one year after the

4 date of enactment of this Act, any State or local govern5 ment, or any qualified organization may apply to the Ad6 ministrator/Chairperson of the Community Development

7 Bank and Financial Institutions Fund (hereinafter the

8 Administrator/Chairperson) for a grant to conduct individ9 ual development account demonstration projects for eligi10 ble persons.

11 (b) CONTENTS.—Each application shall—

12 (1) describe the demonstration project;

13 (2) describe the persons who will participate in

14 the project;

15 (3) demonstrate the ability of the applicant—

16 (A) to assist project participants in achiev17 ing economic self-sufficiency through the

18 project; and

19 (B) to assist project participants in devel20 oping greater knowledge about savings, invest21 ments, and other financial matters;

22 (C) to oversee the use of grant funds, in23 cluding the documentation and verification of

24 start-up expenses in the case of entrepreneurial

25 assistance; and

26 (D) to effectively administer the project;
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1 (4) in the case of a qualified organization, docu2 ment a commitment by the State in which the

3 project is to be conducted to provide a specified

4 amount of funds to the qualified organization for the

5 project, and any similar commitment made to the

6 qualified organization by any other non-Federal pub7 lic entity or any private entity;

8 (5) contain a plan for maintaining data and

9 other information concerning assistance provided to

10 project participants sufficient to evaluate the project

11 and a certification that the applicant will fully co12 operate and provide access to all information con13 cerning the project in connection with any evaluation

14 of the project conducted pursuant to subsection (1);

15 and

16 (6) contain such other information as the Ad17 ministrator/Chair may prescribe.

18 (c) CRITERIA.—In considering whether to approve an

19 application, the Administrator/Chairperson shall assess

20 the following:

21 (1) The degree to which the project described in

22 the application is likely to aid project participants in

23 achieving economic self-sufficiency through activities

24 requiring qualified expenses. In making such assess25 ment, the Administrator/Chairperson shall consider
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1 the overall quality of project activities and shall not

2 consider any particular kind or combination of such

3 qualified expenses to be an essential feature of any

4 project.

5 (2) The ability of the applicant to responsibly

6 administer the project.

7 (3) The amount of funds from non-Federal

8 sources that are committed to the project.

9 (4) The adequacy of the plan for maintaining

10 information necessary to evaluate the project.

11 (d) APPROVAL.—

12 (1) The Administrator/Chairperson shall, on a

13 competitive basis, approve such applications to con14 duct demonstration projects under this section as

15 the Administrator/Chairperson deems appropriate on

16 the basis of the criteria described in subsection (c).

17 (2) No court shall have jurisdiction to review

18 the approval or nonapproval of any application by

19 the Administrator/Chairperson.

20 (e) DEMONSTRATION AUTHORITY; ANNUAL

21 GRANTS.—

22 (1) DEMONSTRATION AUTHORITY.—The ap23 proval by the Administrator of an application shall

24 authorize the applicant (hereinafter the grantee) to

25 conduct the project for five project years in accord-
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1 ance with the approved application and the require2 ments of this section.

3 (2) ANNUAL GRANTS.—The Administrator/

4 Chairperson shall make a grant to each grantee on

5 the first day of each project year.

6 (f) RESERVE FUND.—

7 (1) ESTABLISHMENT.—Each grantee shall es8 tablish a reserve fund that shall be used in accord9 ance with this subsection.

10 (2) DEPOSITS.—

11 (A) As soon after receipt as is practicable,

12 a grantee shall deposit into the reserve fund—

13 (i) all annual grants made by the Ad14 ministrator/Chairperson;

15 (ii) all funds provided to the grantee

16 by any non-Federal public or private entity

17 to conduct the demonstration project;

18 (iii) all proceeds from any investments

19 made pursuant to paragraph (4); and

20 (iv) all amounts title to which vests in

21 the grantee pursuant to subsection (h)(5).

22 (3) EXPENDITURES.—A grantee shall use

23 amounts in the reserve fund only—

24 (A) to assist project participants in obtain25 ing the skills and information necessary to
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1 achieve economic self-sufficiency through activi2 ties requiring the payment of qualified ex3 penses;

4 (B) to provide financial assistance in ac5 cordance with subsection (h) to project partici6 pants;

7 (C) to administer the project; and

8 (D) to maintain and provide information

9 necessary for the evaluation of the project pur10 suant to subsection (1).

11 (4) ACCOUNTING STANDARDS.—The Adminis12 trator/Chairperson shall prescribe regulations gov13 erning the accounting of amounts deposited in and

14 withdrawn from reserve funds.

15 (5) TERMINATION OF PROJECT.—Notwithstand16 ing paragraph (3), upon the termination of any dem17 onstration project approved under this section, re18 maining amounts in the reserve fund established

19 with respect to such project and remaining invest20 ments made from amounts in the reserve fund shall

21 be distributed to the Administrator/Chairperson and

22 each non-Federal public or private entity that con23 tributed to the project in proportion to their con24 tributions.
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1 (g) SELECTION OF ELIGIBLE PERSONS TO RECEIVE

2 ASSISTANCE.—A grantee shall provide individual develop3 ment account assistance to eligible persons whom the

4 grantee deems to be best situated to benefit from such

5 assistance, taking into account the amount of grants made

6 by the Administrator/Chairperson and other funds avail7 able to the grantee for such assistance.

8 (h) FINANCIAL ASSISTANCE FOR INDIVIDUAL DE9 VELOPMENT ACCOUNTS.—

10 (1) IN GENERAL.—A grantee shall provide ini11 tial financial assistance to a project participant who

12 establishes an individual development account, not to

13 exceed $500 per participant. Such financial assist14 ance shall be deposited in the individual development

15 account established by a project participant.

16 (2) MATCHING CONTRIBUTIONS.—The Adminis17 trator/Chairperson or a grantee may make matching

18 contributions of not less than 50 cents and not more

19 than $4 for every $1 deposited into an individual de20 velopment account by a project participant, not to

21 exceed $2,500 for any project participant.

22 (3) LIMITATION ON USE.—

23 (A) Financial assistance provided pursuant

24 to paragraph (1) shall not be available for use

25 by a project participant until—
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•S 2224 IS

1 (i) the individual development account

2 is closed; and

3 (ii) a project participant has deposited

4 into the individual development account an

5 amount equal to the initial financial assist6 ance provided pursuant to paragraph (1).

7 (B) Financial assistance provided pursuant

8 to paragraph (1) or (2) shall be used by a

9 project participant only for the payment of

10 qualified expenses.

11 (4) APPLICABILITY OF OTHER LAW.—The pro12 visions of section 529 of the Internal Revenue Code

13 of 1986 (26 U.S.C. 529) and such rules, regulations

14 and procedures as may be prescribed by the Sec15 retary of the Treasury under such Code shall apply

16 to an individual development account for which fi17 nancial assistance is provided pursuant to this sub18 section.

19 (5) EFFECT OF PROHIBITED TRANSACTIONS.—

20 In the event that an individual development account

21 ceases to be an individual development account

22 under the provisions of section 529(e)(2) of the In23 ternal Revenue Code of 1986 (26 U.S.C. 529(e)(2)),

24 or any portion of an individual development account

25 is treated as distributed under the provisions of sec-
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•S 2224 IS

1 tion 529(e)(3) of the Internal Revenue Code of 1986

2 (26 U.S.C. 529(e)(3)), title to all amounts in such

3 an account, or such portion of an account, attrib4 utable to financial assistance provided pursuant to

5 paragraph (1) or (2) shall vest in the grantee pro6 viding financial assistance pursuant to paragraph

7 (1) and such amounts shall be paid to such grantee.

8 (i) LOCAL CONTROL OVER DEMONSTRATION.—

9 (1) Each grantee shall, subject to the provisions

10 of subsection (k), have sole responsibility for the ad11 ministration of demonstration projects approved by

12 the Administrator/Chairperson.

13 (2) The Administrator/Chairperson may pre14 scribe such regulations as may be necessary to en15 sure that grantees comply with the terms of ap16 proved applications and the requirements of this sec17 tion.

18 (j) ANNUAL REPORTS.—

19 (1) IN GENERAL.—Each grantee shall annually

20 report to the Administrator/Chairperson concerning

21 the progress of each approved demonstration project

22 administered by such grantee. The report shall, at a

23 minimum—

24 (A) describe project participants;
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•S 2224 IS

1 (B) contain an audited financial statement

2 for the reserve fund established with respect to

3 the project;

4 (C) provide information on amounts depos5 ited in individual development accounts of

6 project participants to whom such assistance is

7 provided under the project; and

8 (D) such other information as the Admin9 istrator/Chairperson may require with respect

10 to the evaluation of the project pursuant to sub11 section (1).

12 (2) SUBMISSION.—Reports required by para13 graph (1) shall be submitted annually not later than

14 the anniversary of the date the Administrator/Chair15 person approved the application for the demonstra16 tion project.

17 (3) COORDINATION WITH STATE GOVERN18 MENT.—A grantee shall transmit a copy of each re19 port required by paragraph (1) to the Treasurer (or

20 equivalent official) of the State in which the project

21 is conducted at the time prescribed by paragraph

22 (2).

23 (k) SANCTIONS.—

24 (1) REVOCATION OF DEMONSTRATION AUTHOR25 ITY.—If the Administrator/Chairperson determines a
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•S 2224 IS

1 grantee is not conducting a demonstration project in

2 accordance with the approved application and the re3 quirements of this section, and has failed to under4 take corrective action satisfactory to the Adminis5 trator/Chairperson, the Administrator/Chairperson

6 may revoke the approval to conduct the project. A

7 determination by the Administrator/Chairperson to

8 revoke the approval for a demonstration project shall

9 not be subject to review by any court.

10 (2) ACTIONS REQUIRED UPON REVOCATION.—

11 (A) If the Administrator/Chairperson re12 vokes approval to conduct a demonstration

13 project pursuant to paragraph (1), the Adminis14 trator/Chairperson—

15 (i) shall suspend the project;

16 (ii) shall take control of the reserve

17 fund established pursuant to subsection (f)

18 with respect to such project; and

19 (iii) shall solicit applications from en20 tities described in subsection (a) to con21 duct the suspended project in accordance

22 with the approved application (or under

23 such terms and conditions as the Adminis24 trator may prescribe) and the requirements

25 of this section.
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•S 2224 IS

1 (B) If the Administrator/Chairperson ap2 proves an application to conduct the suspended

3 project, the Administrator/Chairperson shall

4 transfer to the new grantee control of the re5 serve fund established pursuant to subsection

6 (f) for the project, and such grantee shall be

7 considered to be the original grantee for pur8 poses of this section. The date the Adminis9 trator/Chairperson approved the application of

10 the new grantee to conduct the suspended

11 project shall apply for purposes of the annual

12 reports required by subsection (j).

13 (C) If the Administrator/Chairperson has

14 not approved an application to conduct a

15 project by the date that is one year after ap16 proval to conduct the project was revoked, the

17 Administrator/Chairperson shall—

18 (i) terminate the project; and

19 (ii) distribute remaining amounts in

20 the reserve fund for such project and in21 vestments made from amounts in the re22 serve fund in accordance with the provi23 sions of subsection (f)(6).

24 (l) PROJECT EVALUATIONS.—
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•S 2224 IS

1 (1) IN GENERAL.—Not later than six months

2 after the date of enactment of this Act, the Adminis3 trator/Chairperson, in consultation with the Sec4 retary of the Treasury and the Secretary of the De5 partment of Health and Human Services, shall enter

6 into a contract with an independent organization

7 (hereinafter ‘‘evaluator’’) for the evaluation of indi8 vidual demonstration projects conducted pursuant to

9 this section and the effectiveness of assistance pro10 vided to eligible persons pursuant to this section.

11 (2) EVALUATIONS.—In entering into the con12 tract provided for in paragraph (1), the Adminis13 trator/Chairperson should consider providing for

14 evaluation of—

15 (A) the types of information and public

16 education efforts that attract project partici17 pants;

18 (B) the accessibility of the demonstration

19 project by participants and the ease of partici20 pation;

21 (C) the level of financial assistance re22 quired to stimulate participation in the dem23 onstration project, and whether such level var24 ies among different demographic populations;
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•S 2224 IS

1 (D) whether project features utilized in

2 conjunction with individual development ac3 counts (such as peer support, structured plan4 ning exercises, mentoring, and case manage5 ment) contribute to participation in the project;

6 (E) the level of self-sufficiency achieved by

7 project participants as measured by employ8 ment or self-employment rates, earned and in9 vestment income, exit rates, poverty rates, and

10 recidivism rates, particularly for program par11 ticipants eligible for food stamp benefits and

12 AFDC;

13 (F) the reduction in the level of public ex14 penditure on project participants as measured

15 by changes in overall support payments includ16 ing AFDC, food stamp benefits, Federal child

17 care assistance, Federal housing assistance,

18 JOBS, and other benefits, taking into account

19 costs incurred by the Federal Government in

20 support of demonstration projects;

21 (G) the level of asset accumulation by

22 project participants as measured by savings

23 rates, net worth, business start-ups, human

24 capital investments, new homes, number of

25 loans to low-income and AFDC eligible families,
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•S 2224 IS

1 and whether asset accumulation continued after

2 a subsidy or other assistance;

3 (H) the economic, psychological, and social

4 effects of asset accumulation; and

5 (I) the circumstances concerning and the

6 extent to which asset accumulation by project

7 participants contributes to—

8 (i) a greater sense of security and

9 control and positive outlook;

10 (ii) greater household stability;

11 (iii) increased long-term planning;

12 (iv) increased efforts to maintain and

13 develop assets;

14 (v) greater knowledge about savings,

15 investments, and other financial matters;

16 (vi) increased effort and success in

17 educational achievement within the house18 hold;

19 (vii) increased specialization in career

20 development;

21 (viii) improved social status;

22 (ix) increased political participation;

23 (x) increased community involvement;

24 (xi) increased earned income;
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•S 2224 IS

1 (xii) decreased reliance on traditional

2 forms of public assistance, with particular

3 emphasis on food stamp benefits and

4 AFDC; and

5 (xiii) increased tendency to save dur6 ing and after the period of project partici7 pation.

8 (3) METHODOLOGICAL REQUIREMENT.—In

9 evaluating any demonstration project conducted

10 under this section, the evaluator should obtain such

11 quantitative data before, during, and after the

12 project, as is necessary to evaluate the project and

13 include randomly assigned control groups.

14 (m) DEFINITIONS.—As used in this section:

15 (1) HOUSEHOLD.—The term ‘‘household’’

16 means all individuals who share use of a dwelling

17 unit as primary quarters for living and eating sepa18 rately from other individuals in the living quarters.

19 (2) NET WORTH.—

20 (A) IN GENERAL.—Except as provided in

21 subparagraph (B), the term ‘‘net worth’’

22 means, with respect to a household, the aggre23 gate fair market value of all assets that are

24 owned in whole or in part by any member of the
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•S 2224 IS

1 household, less the obligations or debts of any

2 member of the household.

3 (B) ASSETS EXCLUDED.—Net worth shall

4 be determined without taking into account the

5 fair market value and the obligations or debts

6 of—

7 (i) the primary dwelling unit of the

8 household;

9 (ii) the motor vehicle having the

10 greatest equity value; and

11 (iii) items essential for daily living,

12 such as clothes, furniture, and similar

13 items of limited value.

14 (3) INDIVIDUAL DEVELOPMENT ACCOUNT.—

15 The term ‘‘individual development account’’ shall

16 have the same meaning given such term in section

17 529 of the Internal Revenue Code of 1986 (26

18 U.S.C. 529).

19 (4) PROJECT YEAR.—The term ‘‘project year’’

20 means with respect to a demonstration project, any

21 of the six consecutive 12-month periods beginning on

22 the date the project is approved by the Adminis23 trator.

24 (5) QUALIFIED ORGANIZATION.—The term

25 ‘‘qualified organization’’ means a community devel-
383

•S 2224 IS

1 opment financial institution as defined in section of

2 the Community Development Banking and Financial

3 Institutions Act of 1994.

4 (6) ELIGIBLE PERSON DEFINED.—The term

5 ‘‘eligible person’’ means any person who is a member

6 of a household that meets all of the following re7 quirements:

8 (A) EITC TEST.—The household has at

9 least one individual who is an eligible individual

10 within the meaning of section 32(c)(1) of the

11 Internal Revenue Code of 1986 for purposes of

12 the earned income tax credit.

13 (B) INCOME TEST.—The household did not

14 have adjusted gross income (as determined pur15 suant to the Internal Revenue Code of 1986) in

16 the immediately preceding calendar year in ex17 cess of $18,000.

18 (C) NET WORTH TEST.—The net worth of

19 the household, as of the close of the imme20 diately preceding calendar year, did not exceed

21 $20,000.

22 (7) QUALIFIED EXPENSES.—The term ‘‘quali23 fied expenses’’ shall have the same meaning as pro24 vided in section 529(c)(1) of the Internal Revenue

25 Code of 1986 (26 U.S.C. 529(C)(1)).
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•S 2224 IS

1 (n) AUTHORIZATION OF APPROPRIATIONS.—To carry

2 out the purposes of this section there are authorized to

3 be appropriated to the Administrator/Chairperson—

4 (1) $10,000,000 for fiscal year 1997,

5 (2) $20,000,000 for each of fiscal years 1998,

6 1999, 2000, and 2001, and

7 (3) $10,000,000 for fiscal year 2002.

8 SEC. 734. INDIVIDUAL DEVELOPMENT ACCOUNTS.

9 (a) IN GENERAL.—Subchapter F of chapter 1 of the

10 Internal Revenue Code of 1986 (relating to additional

11 itemized deductions for individuals) is amended by adding

12 at the end of the following new part:

13 ‘‘PART VIII—INDIVIDUAL DEVELOPMENT ACCOUNTS

14 ‘‘SEC. 529. INDIVIDUAL DEVELOPMENT ACCOUNTS.

15 ‘‘(a) ESTABLISHMENT OF ACCOUNTS.—

16 ‘‘(1) IN GENERAL.—An individual development

17 account may be established by or on behalf of an eli18 gible individual for the purpose of accumulating

19 funds to pay the qualified expenses of such individ20 ual.

21 ‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible

22 individual’ means an individual—

23 ‘‘(A) for whom assistance is provided

24 under section 733(h) of the Individual Develop25 ment Account Demonstration Act;
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•S 2224 IS

1 ‘‘(B) receiving assistance under 42 U.S.C.

2 601 et seq.; or

3 ‘‘(C) receiving assistance under 7 U.S.C.

4 2011 et seq.

5 ‘‘(b) LIMITATIONS.—

6 ‘‘(1) ACCOUNT TO BENEFIT ONE INDIVIDUAL.—

7 An individual development account may not be es8 tablished for the benefit of more than one individual.

9 ‘‘(2) MULTIPLE ACCOUNTS.—If, at any time

10 during a calendar year, two or more individual devel11 opment accounts are maintained for the benefit of

12 an eligible individual, such individual shall be treat13 ed as an eligible individual for such year only with

14 respect to the account first established.

15 ‘‘(3) WHO MAY CONTRIBUTE.—Contributions to

16 an individual development account, other than con17 tributions made pursuant to section 733(h) of the

18 Individual Development Account Demonstration Act,

19 may be made only by an eligible individual and in

20 the case of an eligible individual described in sub21 section (e)(2)(A), by another eligible individual who

22 is a member of the same household as the eligible

23 individual.

24 ‘‘(4) ANNUAL LIMIT.—Contributions to an indi25 vidual development account by or on behalf of an eli-
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•S 2224 IS

1 gible individual for any taxable year shall not exceed

2 the lesser of $1,000 or 100 percent of the earned in3 come, within the meaning of section 32(c)(2), of the

4 eligible individual making such contribution. No con5 tribution to the account under section 733(h) of the

6 Individual Development Account Demonstration Act

7 shall be taken into account for the purposes of this

8 limitation. No contribution may be made to an indi9 vidual development account by or on behalf of any

10 individual after such individual has ceased to be an

11 eligible individual.

12 ‘‘(5) LIMIT ON TOTAL CONTRIBUTIONS.—Total

13 contributions to an individual development account

14 for all years may not exceed $10,000.

15 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For the

16 purposes of this section—

17 ‘‘(1) QUALIFIED EXPENSES.—In the case of an

18 eligible individual described in subsection (a)(2)(A),

19 the term ‘qualified expenses’ means one or more of

20 the expenses described in subparagraphs (A), (B),

21 (C), and (D), as provided by the entity providing as22 sistance to the eligible individual under section

23 733(h) of the Individual Development Account Dem24 onstration Act. In the case of any other eligible indi25 vidual, the term ‘qualified expenses’ means one or
387

•S 2224 IS

1 more of the expenses described in subparagraphs

2 (A), (B), (C), and (D).

3 ‘‘(A) POST-SECONDARY EDUCATION EX4 PENSES.—Post-secondary educational expenses

5 paid from an individual development account di6 rectly to an eligible educational institution. For

7 the purposes of this subparagraph—

8 ‘‘(i) the term ‘post-secondary edu9 cational expenses’ means—

10 ‘‘(I) tuition and fees required for

11 the enrollment or attendance of a stu12 dent at an eligible educational institu13 tion;

14 ‘‘(II) fees, books, supplies, and

15 equipment required for courses of in16 struction at an eligible educational in17 stitution; and

18 ‘‘(III) a reasonable allowance for

19 meals, lodging, transportation, and

20 child care, while attending an eligible

21 educational institution; and

22 ‘‘(ii) the term ‘eligible educational in23 stitution’ means—

24 ‘‘(I) an institution described in

25 section 481(a)(1) or 1201(a) of the
388

•S 2224 IS

1 Higher Education Act of 1965 (20

2 U.S.C. 1088(a)(1) or 1141(a)), as

3 such sections are in effect on the date

4 of the enactment of this section; and

5 ‘‘(II) an area vocational edu6 cation school (as defined in subpara7 graph (C) or (D) of section 521(4) of

8 the Carl D. Perkins Vocational and

9 Applied Technology Education Act

10 Amendments of 1990 (20 U.S.C.

11 2471(4))) in any State (as defined in

12 section 521(33) of such Act), as such

13 section is in effect on the date of the

14 enactment of this section.

15 ‘‘(B) FIRST-HOME PURCHASE.—Qualified

16 acquisition costs with respect to a qualified

17 principal residence for a qualified first-time

18 homebuyer, if paid from an individual develop19 ment account directly to the persons to whom

20 the amounts are due. For purposes of this sub21 paragraph—

22 ‘‘(i) the term ‘qualified acquisition

23 costs’ means the costs of acquiring, con24 structing, or reconstructing a residence,
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•S 2224 IS

1 and includes any usual or reasonable set2 tlement, financing, or other closing costs;

3 ‘‘(ii) the term ‘qualified principal resi4 dence’ means a principal residence (within

5 the meaning of section 1034), the qualified

6 acquisition costs of which do not exceed 80

7 percent of the average area purchase price

8 applicable to such residence (determined in

9 accordance with paragraphs (2) and (3) of

10 section 143(e));

11 ‘‘(iii) the term ‘qualified first-time

12 home-buyer’ means a taxpayer (and, if

13 married, the taxpayer’s spouse) who has no

14 present ownership interest in a principal

15 residence during the three-year period end16 ing on the date on which a binding con17 tract was entered into to acquire, con18 struct, or reconstruct the principal resi19 dence to which this subparagraph applies.

20 ‘‘(C) BUSINESS CAPITALIZATION.—

21 Amounts paid from an individual development

22 account directly into a business capitalization

23 account which is established in a federally in24 sured financial institution and is restricted to
390

•S 2224 IS

1 use solely for qualified business capitalization

2 expenses. For purposes of this subparagraph—

3 ‘‘(i) the term ‘qualified business cap4 italization expenses’ means qualified ex5 penditures for the capitalization of a quali6 fied business pursuant to a qualified plan;

7 ‘‘(ii) the term ‘qualified expenditures’

8 means expenditures included in a qualified

9 plan, including capital, plant, equipment,

10 working capital, and inventory expenses;

11 ‘‘(iii) the term ‘qualified business’

12 means any business that does not con13 travene any law or public policy (as deter14 mined by the Administrator of the Com15 munity Development Bank and Financial

16 Institutions Fund);

17 ‘‘(iv) the term ‘qualified plan’ means

18 a business plan

19 ‘‘(I) that is approved by a finan20 cial institution, or any other institu21 tion designated as a community devel22 opment financial institution, having

23 demonstrated fiduciary integrity;

24 ‘‘(II) that includes a description

25 of services or goods to be sold, a mar-
391

•S 2224 IS

1 keting plan, and projected financial

2 statements; and

3 ‘‘(III) that may require the eligi4 ble individual to obtain assistance of

5 an experienced entrepreneurial advi6 sor.

7 ‘‘(D) TRANSFERS TO IDAS OF FAMILY

8 MEMBERS.—Amounts in an individual develop9 ment account may be paid or transferred di10 rectly into another such account established for

11 the benefit of an eligible individual who is—

12 ‘‘(i) the taxpayer’s spouse; or

13 ‘‘(ii) any dependent of the taxpayer

14 with respect to whom the taxpayer is al15 lowed a deduction under section 151.

16 ‘‘(2) INDIVIDUAL DEVELOPMENT ACCOUNT.—

17 The term ‘individual development account’ means a

18 trust created or organized in the United States ex19 clusively for the purpose of paying the qualified ex20 penses of an individual who was an eligible individ21 ual at the time when contributions were made to

22 such trust, but only if the written instrument creat23 ing the trust meets the following requirements:

24 ‘‘(A) No contribution will be accepted un25 less it is in cash or check.
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•S 2224 IS

1 ‘‘(B) The trustee is a financial institution

2 insured by an instrumentality of the Federal

3 Government.

4 ‘‘(C) The assets of the account will be in5 vested only in federally insured deposits and/or

6 stock of a regulated investment company within

7 the meaning of section 851(a), in accordance

8 with the direction of the eligible individual.

9 ‘‘(D) The assets of the trust will not be

10 commingled with other property except in a

11 common trust fund or common investment

12 fund.

13 ‘‘(E) Except as provided in subparagraph

14 (F), any amount in the account which is attrib15 utable to assistance provided under section

16 733(h) of the Individual Development Account

17 Demonstration Act may be paid or distributed

18 out of the account only for the purpose of pay19 ing the qualified expenses of the eligible individ20 ual.

21 ‘‘(F)(i) Any balance in the account on the

22 day after the date on which the individual for

23 whose benefit the trust is established dies will

24 be transferred within 60 days of such date as

25 directed by such individual to another individual
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•S 2224 IS

1 development account established for the benefit

2 of an individual who is a family member de3 scribed in subsection (c)(1)(D) and who is an

4 eligible individual, or who was an eligible indi5 vidual on the day immediately preceding the

6 date on which the individual for whose benefit

7 the trust is established dies.

8 ‘‘(ii) In any case where clause (i) does not

9 apply, the portion of the account attributable to

10 contributions other than those provided under

11 section 733(h) of the Individual Development

12 Account Demonstration Act shall be paid out

13 within five years of the date of death to the

14 beneficiaries of the individual for whose benefit

15 the account was established, and the balance

16 shall vest in the grantee providing assistance

17 under section 733(h) of the Individual Develop18 ment Account Demonstration Act and shall be

19 paid to such grantee within 60 days of the day

20 after the date of death.

21 ‘‘(3) TIME WHEN CONTRIBUTIONS DEEMED

22 MADE.—A taxpayer shall be deemed to have made a

23 contribution to an individual development account on

24 the last day of the preceding taxable year if the con25 tribution is made on account of such taxable year
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•S 2224 IS

1 and is made not later than the time prescribed by

2 law for filing the return for such taxable year (not

3 including extensions thereof).

4 ‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—

5 ‘‘(1) IN GENERAL.—Except as otherwise pro6 vided in this subsection, any amount paid or distrib7 uted out of an individual development account shall

8 be included in gross income of the payee or distribu9 tee for the taxable year in the manner provided in

10 section 72.

11 ‘‘(2) TREATMENT OF ASSISTANCE CONTRIBU12 TIONS.—

13 ‘‘(A) DISTRIBUTIONS USED TO PAY QUALI14 FIED EXPENSES.—If a distribution or payment

15 from an individual development account is used

16 exclusively to pay the qualified expenses in17 curred by the individual for whose benefit the

18 account is established, then, for purposes of

19 section 72, assistance contributions made to

20 such individual development account under sec21 tion 733(h) of the Individual Development Ac22 count Demonstration Act shall be treated in the

23 same manner as contributions made by the in24 dividual.
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•S 2224 IS

1 ‘‘(B) DISTRIBUTIONS NOT USED TO PAY

2 QUALIFIED EXPENSES.—If a distribution or

3 payment from an individual development ac4 count is not used exclusively to pay the quali5 fied expenses incurred by the individual for

6 whose benefit the account is established, then,

7 for purposes of section 72, assistance contribu8 tions made to such individual development ac9 count under section 733(h) of the Individual

10 Development Account Demonstration Act shall

11 be treated in the same manner as earnings on

12 the account.

13 ‘‘(e) TAX TREATMENT OF ACCOUNTS.—

14 ‘‘(1) EXEMPTION FROM TAX.—An individual

15 development account is exempt from taxation under

16 this subtitle unless such account has ceased to be an

17 individual development account by reason of para18 graph (2). Notwithstanding the preceding sentence,

19 any such account is subject to the taxes imposed by

20 section 511 (relating to imposition of tax on unre21 lated business income of charitable, etc. organiza22 tions).

23 ‘‘(2) LOSS OF EXEMPTION OF ACCOUNT WHERE

24 INDIVIDUAL ENGAGES IN PROHIBITED TRANS25 ACTION.—
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•S 2224 IS

1 ‘‘(A) IN GENERAL.—If the individual for

2 whose benefit an individual development ac3 count is established or any individual who con4 tributes to such account engages in any trans5 action prohibited by section 4975 with respect

6 to the account, the account shall cease to be an

7 individual development account as of the first

8 day of the taxable year (of the individual so en9 gaging in such transaction) during which such

10 transaction occurs.

11 ‘‘(B) ACCOUNT TREATED AS DISTRIBUTING

12 ALL ITS ASSETS.—In any case in which any ac13 count ceases to be an individual development

14 account by reason of subparagraph (A) as of

15 the first day of any taxable year—

16 ‘‘(i) all assets in the account on such

17 first day that are attributable to assistance

18 provided under section 733(h)(1) and (2)

19 of the Individual Development Account

20 Demonstration Act shall be paid as pro21 vided in section 733(h)(5) of such Act; and

22 ‘‘(ii) the provisions of subsection

23 (d)(1) shall apply as if there was a dis24 tribution on such first day in an amount
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•S 2224 IS

1 equal to the fair market value of all other

2 assets in the account on such first day.

3 ‘‘(3) EFFECT OF PLEDGING ACCOUNT AS SECU4 RITY.—If, during any taxable year, the individual for

5 whose benefit an individual development account is

6 established, or any individual who contributes to

7 such account, uses the account or any portion there8 of as security for a loan—

9 ‘‘(A) an amount equal to the part of the

10 portion so used which is attributable to assist11 ance provided under section 733(h)(1) and (2)

12 of the Individual Account Demonstration Act

13 shall be paid as provided in section 733(h)(5)

14 of such Act; and

15 ‘‘(B) the remaining part of the portion so

16 used shall be treated as distributed under the

17 provisions of subsection (d)(1) to the individual

18 so using such portion.

19 ‘‘(f) ADDITIONAL TAX ON CERTAIN AMOUNTS IN20 CLUDED IN GROSS INCOME.—

21 ‘‘(1) DISTRIBUTION NOT USED FOR QUALIFIED

22 EXPENSES.—In the case of any payment or distribu23 tion that is not used exclusively to pay qualified ex24 penses incurred by the eligible individual for whose

25 benefit the account is established, the tax liability of
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•S 2224 IS

1 each payee or distributee under this chapter for the

2 taxable year in which the payment or distribution is

3 received shall be increased by an amount equal to 10

4 percent of the amount of the distribution that is in5 cluded in the gross income of such payee or distribu6 tee for such taxable year.

7 ‘‘(2) DISQUALIFICATION CASES.—If any

8 amount includible in the gross income of an individ9 ual for a taxable year because such amount is re10 quired to be treated as a distribution under para11 graph (2) or (3) of subsection (e), the tax liability

12 of such individual under this chapter for such tax13 able year shall be increased by an amount equal to

14 10 percent of such amount required to be treated as

15 a distribution and included in the gross income of

16 such individual.

17 ‘‘(3) DISABILITY OR DEATH CASES.—Para18 graphs (1) and (2) shall not apply if the payment

19 or distribution is made after the individual for whose

20 benefit the individual development account becomes

21 disabled within the meaning of section 72(m)(7) or

22 dies.

23 ‘‘(g) COMMUNITY PROPERTY LAWS.—This section

24 shall be applied without regard to any community property

25 laws.
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1 ‘‘(h) CUSTODIAL ACCOUNTS.—For purposes of this

2 section, a custodial account shall be treated as a trust if

3 the assets of such account are held by a bank (as defined

4 in section 408(n)) or another person who demonstrates,

5 to the satisfaction of the Administrator of the Community

6 Development Bank and Financial Institutions Fund, that

7 the manner in which he will administer the account will

8 be consistent with the requirements of this section, and

9 if the custodial account would, except for the fact that it

10 is not a trust, constitute an individual development ac11 count described in subsection (c)(2). For purposes of this

12 title, in the case of a custodial account treated as a trust

13 by reason of the preceding sentence, the custodian of such

14 account shall be treated as the trustee thereof.

15 ‘‘(i) REPORTS.—

16 ‘‘(1) The trustee of an individual development

17 account established by or on behalf of an eligible in18 dividual described in subsection (a)(2)(A) shall—

19 ‘‘(A) prepare reports regarding the account

20 with respect to contributions, distributions, and

21 any other matter required by the Administrator

22 of the Community Development Bank and Fi23 nancial Institutions Fund under regulations;

24 and
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1 ‘‘(B) submit such reports, at the time and

2 in the manner prescribed by the Administrator

3 of the Community Development Bank and Fi4 nancial Institutions Fund in regulations to—

5 ‘‘(i) the individual for whose benefit

6 the account is maintained;

7 ‘‘(ii) the organization providing assist8 ance to the individual under section 733(h)

9 of the Individual Development Account

10 Demonstration Act; and

11 ‘‘(iii) the Administrator of the Com12 munity Development Bank and Financial

13 Institutions Fund.

14 ‘‘(2) The trustee of any individual development

15 account shall make such reports regarding such ac16 count to the Secretary and to the individual for

17 whom the account is, or is to be, maintained with re18 spect to contributions (and the years to which they

19 relate), distributions, and such other matters as the

20 Secretary may require under forms or regulations.

21 The reports required by this subsection—

22 ‘‘(A) shall be filed at such time and in

23 such manner as the Secretary prescribes in

24 such forms or regulations, and

25 ‘‘(B) shall be furnished to individuals—
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1 ‘‘(i) not later than January 31 of the

2 calendar year following the calendar year

3 to which such reports relate, and

4 ‘‘(ii) in such manner as the Secretary

5 prescribes in such forms or regulations.’’.

6 (b) CONTRIBUTION NOT SUBJECT TO THE GIFT

7 TAX.—Section 2503 of the Internal Revenue Code of 1986

8 (26 U.S.C. 2503) (relating to taxable gifts) is amended

9 by adding at the end thereof the following new subsection:

10 ‘‘(h) INDIVIDUAL DEVELOPMENT ACCOUNTS.—Any

11 contribution made by an individual to an individual devel12 opment account described in section 529(c)(2) shall not

13 be treated as a transfer of property by gift for purposes

14 of this chapter.’’.

15 (c) TAX ON PROHIBITED TRANSACTIONS.—Section

16 4975 of the Internal Revenue Code of 1986 (26 U.S.C.

17 4975) (relating to prohibited transactions) is amended—

18 (1) by adding at the end of subsection (c) the

19 following new paragraph:

20 ‘‘(4) SPECIAL RULE FOR INDIVIDUAL DEVELOP21 MENT ACCOUNTS.—An individual for whose benefit

22 an individual development account is established and

23 any contributor to such account shall be exempt

24 from tax imposed by this section with respect to any

25 transaction concerning such account (which would
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1 otherwise be taxable under this section) if, with re2 spect to such transaction, the account ceases to be

3 an individual development account by reason of sec4 tion 529(e)(2)(A) to such account.’’; and

5 (2) in subsection (e)(1), by inserting ‘‘, an indi6 vidual development account described in section

7 529(c)(2)’’ after ‘‘section 408(a)’’.

8 (d) INFORMATION REPORTING.—Section 6047 of the

9 Internal Revenue Code of 1986 (26 U.S.C. 6693) (relating

10 to information returns) is amended by adding at the end

11 of subsection (c) the following new sentence: ‘‘To the ex12 tent provided by forms or regulations prescribed by the

13 Secretary, the provisions of this section shall apply to any

14 transaction of any trust described in section 529.’’.

15 (e) FAILURE TO PROVIDE REPORTS ON INDIVIDUAL

16 DEVELOPMENT ACCOUNTS.—Section 6693 of the Internal

17 Revenue Code of 1986 (26 U.S.C. 6693) (relating to fail18 ure to provide reports on individual retirement accounts

19 or annuities) is amended—

20 (1) in the heading of such section, by inserting

21 ‘‘OR ON INDIVIDUAL DEVELOPMENT ACCOUNTS’’

22 after ‘‘ANNUITIES’’; and

23 (2) by adding at the end of subsection (a) the

24 following new sentence: ‘‘The person required by sec25 tion 529(i) to file a report regarding an individual
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1 development account at the time and in the manner

2 required by such section shall pay a penalty of $50

3 for each failure, unless it is shown that such failure

4 is due to reasonable cause.’’.

5 (f) SPECIAL RULE FOR DETERMINING AMOUNTS OF

6 SUPPORT FOR DEPENDENT.—Section 152(b) of the Inter7 nal Revenue Code of 1986 (26 U.S.C. 152(b)) (relating

8 to definition of dependent) is amended by adding at the

9 end the following new paragraph:

10 ‘‘(6) A distribution from an individual develop11 ment account described in section 529(c)(2) used ex12 clusively to pay qualified expenses described in sec13 tion 529(c)(1) of the individual for whose benefit the

14 account is established shall not be taken into ac15 count in determining support for such individual for

16 purposes of this section.’’.

17 (g) CLERICAL AMENDMENTS.—

18 (1) The table of parts for subchapter F of

19 chapter 1 of such Code is amended by inserting at

20 the end the following new item:

‘‘PART VIII. INDIVIDUAL DEVELOPMENT ACCOUNTS.’’.

21 (2) The table of sections for subchapter B of

22 chapter 68 of such Code is amended by amending

23 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.’’.
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1 (h) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to contributions made after the en3 actment of the Act.

4 PART D—ADVANCE EITC STATE

5 DEMONSTRATIONS

6 SEC. 741. ADVANCE PAYMENT OF EARNED INCOME TAX

7 CREDIT THROUGH STATE DEMONSTRATION

8 PROGRAMS.

9 (A) IN GENERAL.—Section 3507 (relating to the ad10 vance payment of the earned income tax credit) of the In11 ternal Revenue Code of 1986 is amended by adding at the

12 end the following subsection (g);

13 ‘‘(g) STATE DEMONSTRATIONS.—

14 ‘‘(1) IN GENERAL.—In lieu of receiving earned

15 income advance amounts from an employer under

16 subsection (a), a participating resident shall receive

17 advance earned income payments from a responsible

18 State agency pursuant to a State Advance Payment

19 Program that is designated pursuant to paragraph

20 (2).

21 ‘‘(2) DESIGNATIONS.—

22 ‘‘(A) IN GENERAL.—From among the

23 States submitting proposals satisfying the re24 quirements of subsection (g)(3), the Secretary

25 (in consultation with the Secretary of Health
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1 and Human Services) may designate not more

2 than 4 State Advance Payment Demonstra3 tions. States selected for the demonstrations

4 may have, in the aggregate, no more than 5

5 percent of the total number of household par6 ticipating in the program under the Food

7 Stamp program in the immediately preceding

8 fiscal year, Administrative costs of a State in

9 conducting a demonstration under this section

10 may be included for matching under section

11 403(a) of the Social Security Act and section

12 16(a) of the Food Stamp Act of 1977.

13 ‘‘(B) WHEN DESIGNATION MAY BE

14 MADE.—Any designation under this paragraph

15 shall be made no later than December 31,

16 1995.

17 ‘‘(C) PERIOD FOR WHICH DESIGNATION IS

18 IN EFFECT.—

19 ‘‘(i) IN GENERAL.—Designations

20 made under this paragraph shall be effec21 tive for advance earned income payments

22 made after December 31, 1995, and before

23 January 1, 1999.

24 ‘‘(ii) SPECIAL RULES.—
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1 ‘‘(I) REVOCATION OF DESIGNA2 TIONS.—The Secretary may revoke

3 the designation under this paragraph

4 if the Secretary determines that the

5 State is not complying substantially

6 with the proposal described in para7 graph (3) submitted by the State.

8 ‘‘(II) AUTOMATIC TERMINATION

9 OF DESIGNATIONS.—Any failure by a

10 State to comply with the reporting re11 quirements described in paragraphs

12 (3)(F) and (3)(G) has the effect of

13 immediately terminating the designa14 tion under this paragraph (2) and

15 rendering paragraph (5)(A)(ii) inap16 plicable to subsequent payments.

17 ‘‘(3) PROPOSALS.—No State may be designated

18 under subsection (g)(2) unless the State’s proposal

19 for such designation—

20 ‘‘(A) identifies the responsible State agen21 cy,

22 ‘‘(B) describes how and when the advance

23 earned income payments will be made by that

24 agency, including a description of any other
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•S 2224 IS

1 State or Federal benefits with which such pay2 ments will be coordinated,

3 ‘‘(C) describes how the State will obtain

4 the information on which the amount of ad5 vance earned income payments made to each

6 participating resident will be determined in ac7 cordance with paragraph (4),

8 ‘‘(D) describes how State residents who

9 will be eligible to receive advance earned income

10 payments will be selected, notified of the oppor11 tunity to receive advance earned income pay12 ments from the responsible State agency, and

13 given the opportunity to elect to participate in

14 the program,

15 ‘‘(E) describes how the State will verify, in

16 addition to receiving the certifications and

17 statement described in paragraph (7)(D)(iv),

18 the eligibility of participating residents for the

19 earned tax credit,

20 ‘‘(F) commits the State to furnishing to

21 each participating resident to the Secretary by

22 January 31 of each year a written statement

23 showing—
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1 ‘‘(i) the name and taxpayer identifica2 tion number of the participating resident,

3 and

4 ‘‘(ii) the total amount of advance

5 earned income payments made to the par6 ticipating resident during the prior cal7 endar year,

8 ‘‘(G) commits the State to furnishing to

9 the Secretary by December 1 of each year a

10 written statement showing the name and tax11 payer identification number of each participat12 ing resident,

13 ‘‘(H) commits the State to treat the ad14 vanced earned income payments as described in

15 subsection (g)(5) and any repayments of exces16 sive advance earned income payments as de17 scribed in subsection (g)(6),

18 ‘‘(I) commits the State to assess the devel19 opment and implementation of its State Ad20 vance Payment Program, including an agree21 ment to share its findings and lessons with

22 other interested States in a manner to be de23 scribed by the Secretary, and

24 ‘‘(J) is submitted to the Secretary on or

25 before June 30, 1995.
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1 ‘‘(4) AMOUNT AND TIMING OF ADVANCE

2 EARNED INCOME PAYMENTS.—

3 ‘‘(A) AMOUNT.—

4 ‘‘(i) IN GENERAL.—The method for

5 determining the amount of advance earned

6 income payments made to each participat7 ing resident is to conform to the full extent

8 possible with the provisions of subsection

9 (c).

10 ‘‘(ii) SPECIAL RULE.—A State may,

11 at its election, apply the rules of subsection

12 (c)(2)(B) by substituting ‘between 60 per13 cent and 75 percent of the credit percent14 age in effect under section 32(b)(1) for an

15 individual with the corresponding number

16 of qualifying children’ for ‘60 percent of

17 the credit percentage in effect under sec18 tion 32(b)(1) for such an eligible individual

19 with 1 qualifying child’ in clause (i) and

20 ‘the same percentage (as applied in clause

21 (i))’ for ‘60 percent’ in clause (ii).

22 ‘‘(B) TIMING.—The frequency of advance

23 earned income payments may be made on the

24 basis of the payroll periods of participating resi25 dents, on a single statewide schedule, or on any
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•S 2224 IS

1 other reasonable basis prescribed by the State

2 in its proposal; however, in no event may ad3 vance earned income payments be made to any

4 participating resident less frequently than on a

5 calendar-quarter basis.

6 ‘‘(5) PAYMENTS TO BE TREATED AS PAYMENTS

7 OF WITHHOLDING AND FICA TAXES.—

8 ‘‘(A) IN GENERAL.—For purposes of this

9 title, advance earned income payments during

10 any calendar quarter—

11 ‘‘(i) shall neither be treated as a pay12 ment of compensation nor be included in

13 gross income, and

14 ‘‘(ii) shall be treated as made out of—

15 ‘‘(I) amounts required to be de16 ducted by the State and withheld for

17 the calendar quarter by the State

18 under section 3401 (relating to wage

19 withholding), and

20 ‘‘(II) amounts required to be de21 ducted for the calendar quarter under

22 section 3102 (relating to FICA em23 ployee taxes), and

24 ‘‘(III) amounts of the taxes im25 posed on the State for the calendar
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1 quarter under section 3111 (relating

2 to FICA employer taxes),

3 as if the State had paid to the Secretary,

4 on the day on which payments are made to

5 participating residents, an amount equal to

6 such payments.

7 ‘‘(B) ADVANCE PAYMENTS EXCEED TAXES

8 DUE.—If for any calendar quarter the aggre9 gate amount of advance earned income pay10 ments made by the responsible State agency

11 under a State Advance Payment Program ex12 ceeds the sum of the amounts referred to in

13 subparagraph (A)(ii) (without regard to para14 graph (6)(A)), each such advance earned in15 come payment shall be reduced by an amount

16 which bears the same ratio to such excess as

17 such advance earned income payment bears to

18 the aggregate amount of all such advance

19 earned income payments.

20 ‘‘(6) STATE REPAYMENT OF EXCESSIVE AD21 VANCE EARNED INCOME PAYMENTS.—

22 ‘‘(A) IN GENERAL.—Notwithstanding any

23 other provision of law, in the case of an exces24 sive advance earned income payment a State

25 shall be treated as having deducted and with-
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1 held under section 3401 (relating to wage with2 holding), and therefore is required to pay to the

3 United States, the repayment amount during

4 the repayment calendar quarter.

5 ‘‘(B) EXCESSIVE ADVANCE EARNED IN6 COME PAYMENT.—For purposes of this section,

7 an excessive advance income payment is that

8 portion of any advance earned income payment

9 that, when combined with other advance earned

10 income payments previously made to the same

11 participating resident during the same calendar

12 year, exceeds the amount of earned income tax

13 credit to which that participating resident is en14 titled under section 32 for that year.

15 ‘‘(C) REPAYMENT AMOUNT.—The repay16 ment amount is equal to 50 percent of the ex17 cess of—

18 ‘‘(i) excessive advance earned income

19 payments made by a State during a par20 ticular calendar year, over

21 ‘‘(ii) the sum of—

22 ‘‘(I) 4 percent of all advance

23 earned income payments made by the

24 State during that calendar year, and
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•S 2224 IS

1 ‘‘(II) the excessive advance

2 earned income payments made by the

3 State during that calendar year that

4 have been collected from participating

5 residents by the Secretary.

6 ‘‘(D) REPAYMENT CALENDAR QUARTER.—

7 The repayment calendar quarter is the second

8 calendar quarter of the third calendar year

9 after the calendar year in which an excessive

10 earned income payment is made.

11 ‘‘(7) DEFINITIONS.—For purposes of this sec12 tion—

13 ‘‘(A) STATE ADVANCE PAYMENT PRO14 GRAM.—The term ‘State Advance Payment

15 Program’ means the program described in a

16 proposal submitted for designation under para17 graph (1) and designated by the Secretary

18 under paragraph (2).

19 ‘‘(B) RESPONSIBLE STATE AGENCY.—The

20 term ‘responsible State agency’ means the sin21 gle State agency that will be making the ad22 vance earned income payments to residents of

23 the State who elect to participate in a State Ad24 vance Payment Program.
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1 ‘‘(C) ADVANCE EARNED INCOME PAY2 MENTS.—The term ‘advance earned income

3 payments’ means an amount paid by a respon4 sible State agency to residents of the State pur5 suant to a State Advance Payment Program.

6 ‘‘(D) PARTICIPATING RESIDENT.—The

7 term ‘participating resident’ means an individ8 ual who—

9 ‘‘(i) is a resident of a State that has

10 in effect a designated State Advance Pay11 ment Program,

12 ‘‘(ii) makes the election described in

13 paragraph (3)(C) pursuant to guidelines

14 prescribed by the State,

15 ‘‘(iii) certifies to the State the number

16 of qualifying children the individual has,

17 and

18 ‘‘(iv) provides to the State the certifi19 cations and statement set forth in sub20 sections (b)(1), (b)(2), (b)(3), and (b)(4)

21 (except that for purposes of this clause

22 (iv), the term ‘any employer’ shall be sub23 stituted for ‘another employer’ in sub24 section (b)(3)), along with any other infor25 mation required by the State.’’.
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1 (b) TECHNICAL ASSISTANCE.—The Secretaries of

2 Treasury and Health and Human Services shall jointly en3 sure that technical assistance is provided to State Advance

4 Payment Programs and that these programs are rigor5 ously evaluated.

6 (c) ANNUAL REPORTS.—The Secretary shall issue

7 annual reports detailing the extent to which—

8 (1) residents participate in the State Advance

9 Payment Programs,

10 (2) participating residents file Federal and

11 State tax returns,

12 (3) participating residents report accurately the

13 amount of the advance earned income payments

14 made to them by the responsible State agency dur15 ing the year, and

16 (4) recipients of excessive advance earned in17 come payments repaid those amounts.

18 The report shall also contain an estimate of the amount

19 of advance earned income payments made by each respon20 sible State agency but not reported on the tax returns of

21 a participating resident and the amount of excessive ad22 vance earned income payments.

23 (d) AUTHORIZATION OF APPROPRIATIONS.—For pur24 poses of providing technical assistance described in sub25 section (b), preparing the reports described in subsection
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•S 2224 IS

1 (c), and providing grants to States in support of des2 ignated State Advance Payment Programs, there are au3 thorized to be appropriated in advance to the Secretary

4 of the Treasury and the Secretary of Health and Human

5 Services a total of $1,400,000 for fiscal years 1996

6 through 1999.

7 TITLE VIII—SELF EMPLOYMENT/

8 MICROENTERPRISE DEMONSTRATIONS

9 SEC. 801. DEMONSTRATION PROGRAM TO PROVIDE SELF10 EMPLOYMENT OPPORTUNITIES TO WELFARE

11 RECIPIENTS AND LOW-INCOME INDIVIDUALS.

12 (a) IN GENERAL.—The Secretary of Health and

13 Human Services (hereinafter in this section referred to as

14 the ‘‘Secretary’’) and the Administrator of the Small Busi15 ness Administration (hereinafter in this section referred

16 to as the ‘‘Administrator’’), shall, subject to the availabil17 ity of appropriations in advance for this purpose, jointly

18 develop a self-employment/microenterprise demonstration

19 program for at least five years in length that will build

20 on the experience of microenterprise and self-employment

21 programs previously carried out by the Federal Govern22 ment and other entities. The program shall be designed—

23 (1) to identify regulatory and other barriers

24 that prevent welfare recipients and low-income indi25 viduals from increasing self-sufficiency through self-
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•S 2224 IS

1 employment and microenterprise development, and

2 to identify and test effective means to eliminate such

3 barriers;

4 (2) to develop and evaluate promising program

5 models, based upon existing effective practices,

6 which have the potential to (A) increase the number

7 of welfare recipients and low-income individuals who

8 become self-sufficient or increase self-sufficiency

9 through self-employment and microenterprise devel10 opment and (B) reduce Federal spending on transfer

11 payments and services to welfare recipients and low12 income individuals; and

13 (3) to demonstrate the potential for expanding

14 the capacity of local organizations to provide serv15 ices, technical assistance and loans which help wel16 fare recipients and low-income individuals start or

17 expand self-employment or microenterprises.

18 (b) USE OF INTERMEDIARIES.—To carry out such

19 program, the Secretary and Administrator shall jointly

20 enter into agreements with local intermediaries that—

21 (1) apply to participate in such program, and

22 (2) demonstrate that they are capable of imple23 menting the provisions of the agreement.

24 (c) PROGRAM DESIGN.—In order to facilitate a ran25 domized evaluation, as provided for in subsection (i)(1)
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•S 2224 IS

1 below, the Secretary and Administrator shall identify

2 those predominant and effective program models currently

3 used by existing intermediaries to provide self-employment

4 and related services to low-income individuals, and shall

5 design the demonstration program in order to evaluate at

6 least two distinct types of program models with contrast7 ing levels of technical assistance. In designing the dem8 onstration program, the Secretary and Administrator shall

9 consult with appropriate parties, such as—

10 (1) State and local agencies and private, non11 profit organizations with experience in administering

12 self-employment programs that serve low-income in13 dividuals; and

14 (2) other persons with recognized expertise in

15 conducting randomized evaluations of self-employ16 ment programs or other related programs.

17 (d) ASSISTANCE TO INTERMEDIARIES.—

18 (1) IN GENERAL.—To carry out the program,

19 the Secretary and Administrator may provide the

20 following assistance to intermediaries selected to

21 participate in the program—

22 (A) grants for providing technical assist23 ance to eligible individuals, for operating costs

24 and for costs associated with participating in
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•S 2224 IS

1 the evaluation provided for in subsection (i)(1)

2 below;

3 (B) loan guarantees; and

4 (C) loans.

5 (2) TECHNICAL ASSISTANCE TO INTER6 MEDIARIES.—The Secretary and Administrator may

7 provide grants to intermediaries or third-party tech8 nical assistance providers for the provision of tech9 nical assistance to intermediaries selected to partici10 pate in this program.

11 (3) TERMINATION OF ASSISTANCE.—Assistance

12 awarded pursuant to this section may fully fund

13 project periods of up to five years. The Secretary

14 and Administrator may revoke, terminate or reduce

15 assistance to an intermediary if the intermediary

16 fails to comply with the terms of any agreement it

17 enters into with the Secretary and Administrator.

18 (e) SELECTION OF INTERMEDIARIES.—

19 (1) IN GENERAL.—In determining whether to

20 enter into an agreement with an intermediary under

21 this section, the Secretary and Administrator shall

22 take into consideration—

23 (A) the intermediary’s record of success in

24 serving low-income individuals;
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•S 2224 IS

1 (B) the intermediary’s record of success in

2 providing technical assistance or loans to low3 income individuals for the purpose of self-em4 ployment;

5 (C) the nature, types, and costs of tech6 nical assistance and/or lending methods the

7 intermediary will employ in serving the target

8 population;

9 (D) the intermediary’s ability to obtain

10 matching funds from private sources; and

11 (E) such other matters as the Secretary

12 and Administrator deem appropriate.

13 (2) ADDITIONAL PROGRAMS.—In addition to

14 the demonstration program provided for in sub15 section (c) above, the Secretary and Administrator

16 may select up to five intermediaries that would em17 ploy program models that would operate independ18 ently of the randomized evaluation provided for in

19 subsection (i)(1) below, where such program models

20 demonstrate promising, innovative strategies that

21 could not readily be evaluated by a randomized ex22 perimental design.

23 (f) ELIGIBLE INDIVIDUALS.—An individual eligible to

24 participate in a program conducted under this section is

25 any low-income individual or welfare recipient. The Sec-
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•S 2224 IS

1 retary and Administrator shall ensure that an appropriate

2 minimum percentage of welfare recipients will participate

3 in each demonstration program funded under this section.

4 (g) PROVISIONS OF AGREEMENTS.—Any agreement

5 entered into with an intermediary under this section shall

6 provide that—

7 (1) the intermediary has or will have an agree8 ment with the State agency responsible for admin9 istering the job opportunities and basic skills train10 ing program (as provided for under part F of title

11 IV of the Social Security Act) (hereinafter in this

12 section referred to as the ‘‘JOBS’’ programs) and

13 the Work Program (as provided under part G of

14 title IV of such Act) such that JOBS and Work Pro15 gram funds will be used to provide support services,

16 including training and technical assistance, to wel17 fare recipients who are participating in the dem18 onstration programs funded under this section;

19 (2) the intermediary will implement a program

20 that is approved by the Secretary and Adminis21 trator;

22 (3) the intermediary will cooperate with any

23 independent evaluator(s) selected pursuant to sub24 section (i) below; and
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•S 2224 IS

1 (4) the intermediary will meet any other obliga2 tions required by the Secretary and Administrator,

3 including any fund matching requirements.

4 (h) PROGRAM ADMINISTRATION.—

5 (1) IN GENERAL.—The Secretary and Adminis6 trator shall enter into a memorandum of under7 standing for the joint administration of the dem8 onstration programs provided for by this section.

9 The designation of intermediaries to participate in

10 the program shall be completed no later than 12

11 months after the date of appropriation of funds for

12 this Act.

13 (2) COORDINATION WITH OTHER AGENCIES.—

14 The Secretary and Administrator shall also coordi15 nate and consult with the Secretaries of the Depart16 ment of Agriculture, the Department of Housing

17 and Urban Development, and the Department of

18 Labor, on regulatory or other reforms or coordinated

19 efforts by such agencies that may further eliminate

20 barriers to self-employment and legitimize

21 microenterprise development by low-income individ22 uals and welfare recipients.

23 (i) EVALUATION AND REPORT.—

24 (1) IN GENERAL.—The Secretary, in consulta25 tion with the Administrator, shall conduct or provide
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•S 2224 IS

1 for an evaluation of the effectiveness of the dem2 onstration program provided for in subsection (c)

3 above and shall prepare and submit to the President

4 and Congress a preliminary report of the evaluation

5 no later than three years following the designation

6 of intermediaries and a final report no later than

7 seven years following such designation, together with

8 such recommendations, including recommendations

9 for legislation, as the Secretary and Administrator

10 deem appropriate. Such evaluation shall be based on

11 an experimental design with random assignment be12 tween a treatment group and a control group. In de13 signing the evaluation, the Secretary shall consider

14 testing for—

15 (A) greater self-sufficiency as measured by

16 employment and self-employment rates, amount

17 of earned income, poverty rates, and exit and

18 recidivism rates for Aid to Families With De19 pendent Children (hereinafter in this section re20 ferred to as ‘‘AFDC’’), Food Stamps and other

21 public assistance programs;

22 (B) reduced costs of public support as

23 measured by changes in overall support pay24 ments for items such as income maintenance,
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•S 2224 IS

1 food, child care, health care, housing, job train2 ing and other benefits;

3 (C) number of businesses and jobs created,

4 number of loans to welfare recipients and low5 income individuals, repayment rates for loans,

6 and business performance after welfare or other

7 public assistance ends;

8 (D) the relative effectiveness, cost-to-bene9 fit ratio, and degree of financial self-sufficiency

10 of the different program models employed by

11 the intermediaries participating in the dem12 onstration program; and

13 (E) the program’s impact and effectiveness

14 in serving participants in a time-limited welfare

15 system, as compared to other low-income indi16 viduals.

17 (2) EVALUATION OF ADDITIONAL PROGRAMS.—

18 The Secretary, in consultation with the Adminis19 trator, shall also conduct or provide for an independ20 ent evaluation of the effectiveness of any program

21 models selected pursuant to subsection (e)(2) above

22 and shall prepare and submit to the President and

23 Congress a preliminary report of the evaluation no

24 later than three years following the designation of

25 intermediaries, and a final report no later than five
425

•S 2224 IS

1 years following such designation, together with such

2 recommendations, including recommendations for

3 legislation, as the Secretary and Administrator deem

4 appropriate.

5 (3) PRELIMINARY REPORTS TO CONGRESS.—

6 The preliminary reports provided for in paragraphs

7 (1) and (2) of this subsection shall include an analy8 sis of any regulatory or other barriers that prevent

9 welfare recipients and low-income individuals from

10 becoming self-sufficient through self-employment

11 and microenterprise development.

12 (4) REQUIRED INFORMATION.—The Secretary

13 may require each intermediary selected pursuant to

14 this section to provide the Secretary with such infor15 mation as the Secretary determines is necessary to

16 carrying out the duties of this subsection.

17 (5) EARLY AND REGULAR INFORMATION SHAR18 ING WITH INTERMEDIARIES.—The Secretary, in con19 sultation with the Administrator, shall provide early

20 and regular feedback and summaries to

21 intermediaries selected to participate pursuant to

22 this section of the progress of the evaluation, the

23 data collected during the evaluation, preliminary

24 findings and such other information as the Secretary

25 deems appropriate. The Secretary shall provide such
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•S 2224 IS

1 feedback and summaries at least once a year for the

2 life of the demonstration.

3 (j) AUTHORIZATION OF APPROPRIATIONS.—To carry

4 out the purposes of this section there are authorized to

5 be appropriated to the Secretary and Administrator—

6 (1) $4,000,000 for fiscal year 1997,

7 (2) $8,000,000 for each of fiscal years 1998,

8 1999, 2000, and 2001, and

9 (3) $4,000,000 for fiscal year 2002.

10 (k) DEFINITIONS.—For the purposes of this sec11 tion—

12 (1) the term ‘‘intermediary’’ means an organi13 zation, partnership, or consortium of organizations

14 that acts as a lender and/or as a technical assistance

15 provider to individuals who wish to start or expand

16 a microenterprise;

17 (2) the term ‘‘low-income individual’’ means an

18 individual whose income level does not exceed 130

19 percent of the official poverty line as defined by the

20 Office of Management and Budget;

21 (3) the term ‘‘microenterprise’’ generally means

22 a business that has a net worth of less than

23 $15,000;

24 (4) the term ‘‘technical assistance’’ as it relates

25 to assisting a welfare recipient or low-income indi-
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•S 2224 IS

1 vidual to become self-employed includes business

2 technical assistance, entrepreneurial training, and/or

3 personal development services; and

4 (5) the term ‘‘welfare recipient’’ means a par5 ticipant in a time-limited welfare program who is eli6 gible for the JOBS or Work program or a person

7 who is receiving assistance from AFDC.

8 TITLE IX—FINANCING

9 SEC. 901. LIMITATION ON FEDERAL PAYMENTS FOR EMER10 GENCY ASSISTANCE.

11 Section 403(a)(5) of the Act is amended to read as

12 follows:

13 ‘‘(5)(A) Each State shall be entitled to payment

14 from the Secretary in an amount equal to 50 percent

15 of the total amounts expended under the State plan

16 in a fiscal year as emergency assistance to needy

17 families with children, but such payment may not

18 exceed the greater of—

19 ‘‘(i) such State’s share of the limitation in

20 subparagraph (B) for such fiscal year, or

21 ‘‘(ii) the amount paid by the Secretary

22 with respect to such State’s expenditures for

23 emergency assistance to needy families with

24 children for fiscal year 1991.
428

•S 2224 IS

1 ‘‘(B) The limitation referred to in subparagraph

2 (A) is $418,000,000 for fiscal year 1995, and for

3 fiscal year 1996 and for each fiscal year thereafter,

4 $418,000,000 multiplied by the ratio of the

5 Consumer Price Index (prepared by the Department

6 of Labor) for the third quarter of the preceding fis7 cal year to such Index for the third quarter of fiscal

8 year 1994.

9 ‘‘(C) For purposes of this paragraph, a ‘State’s

10 share of the limitation in subparagraph (B)’ for a

11 fiscal year means—

12 ‘‘(i) such State’s share of the EA portion

13 of the limitation (as defined in subparagraph

14 (D)), plus

15 ‘‘(ii) such State’s share of the AFDC por16 tion of the limitation (as defined in subpara17 graph (E)) for the fiscal year involved.

18 ‘‘(D) For the purposes of this paragraph, the

19 EA portion of the limitation is—

20 ‘‘(i) for fiscal year 1995 and each fiscal

21 year thereafter, the limitation for such year,

22 multiplied by—

23 ‘‘(I) 90 percent, minus

24 ‘‘(II) 10 percentage points for each

25 year after 1995.
429

•S 2224 IS

1 but never less than zero.

2 ‘‘(E) For purposes of this paragraph, the

3 AFDC portion of the limitation is—

4 ‘‘(i) for fiscal year 1995, the limitation for

5 such year, multiplied by 10 percent, and

6 ‘‘(ii) for fiscal year 1996 and each fiscal

7 year thereafter, the limitation for such year

8 multiplied by—

9 ‘‘(I) 10 percent, plus

10 ‘‘(II) 10 percentage points for each

11 year after 1995,

12 but never more than 100.

13 ‘‘(F) For purposes of this paragraph—

14 ‘‘(i) a State’s share of the EA portion of

15 the limitation for a fiscal year is the limitation

16 for such year multiplied by the ratio of the esti17 mated expenditures in such State for emergency

18 assistance to needy families with children for

19 quarters in fiscal year 1994 to the sum of such

20 estimated expenditures in all the States for

21 quarters in such year, and

22 ‘‘(ii) a State’s share of the AFDC portion

23 of the limitation for a fiscal year is the limita24 tion for such year multiplied by the ratio of the

25 estimated expenditures in such State for aid to
430

•S 2224 IS

1 families with dependent children for quarters in

2 the preceding fiscal year to the sum of such ex3 penditures in all the States for quarters in such

4 preceding fiscal year.’’.

5 SEC. 902. UNIFORM ALIEN ELIGIBILITY CRITERIA FOR PUB6 LIC ASSISTANCE PROGRAMS.

7 (a) FEDERAL AND FEDERALLY-ASSISTED PRO8 GRAMS.—

9 (1) PROGRAM ELIGIBILITY CRITERIA.—

10 (A) AID TO FAMILIES WITH DEPENDENT

11 CHILDREN.—Section 402(a)(33) of the Social

12 Security Act is amended by striking ‘‘(A) a citi13 zen’’ and all that follows and inserting the fol14 lowing:

15 ‘‘(A) a citizen or national of the United

16 States, or

17 ‘‘(B) a qualified alien (as defined in section

18 1101(a)(10)), provided that such alien is not

19 disqualified from receiving aid under a State

20 plan approved under a State plan approved

21 under this part by or pursuant to section 210(f)

22 or 245A(h) of the Immigration and Nationality

23 Act or any other provision of law;’’.
431

•S 2224 IS

1 (B) SUPPLEMENTAL SECURITY INCOME.—

2 Section 1614(a)(1)(B)(i) of such Act is amend3 ed to read as follows:

4 ‘‘(B)(i) is a resident of the United States,

5 and is either (I) a citizen or national of the

6 United States, or (II) a qualified alien (as de7 fined in section 1101(a)(10)), or’’.

8 (C) MEDICAID—

9 (i) Section 1903(v)(1) of such Act is

10 amended to read as follows:

11 ‘‘(v)(1) Notwithstanding the preceding provisions of

12 this section, (A) no payment may be made to a State

13 under this section for medical assistance furnished to an

14 individual who is disqualified from receiving such assist15 ance by or pursuant to section 210(f) or 245A(h) of the

16 Immigration and Nationality Act or any other provision

17 of law, and (B) except as provided in paragraph (2), no

18 such payment may be made for medical assistance fur19 nished to an individual who is not a (i) citizen or national

20 of the United States, or (ii) qualified alien (as defined in

21 section 1101(a)(10)).’’.

22 (ii) Section 1903(v)(2) of such Act is

23 amended by—

24 (I) striking ‘‘paragraph (1)’’ and

25 inserting ‘‘paragraph (1)(B)’’; and
432

•S 2224 IS

1 (II) striking ‘‘alien’’ each place it

2 appears and inserting ‘‘individual’’.

3 (iii) Section 1902(a) of such Act is

4 amended in the last sentence by striking

5 ‘‘alien’’ and all that follows and inserting

6 ‘‘individual who is not (A) a citizen or na7 tional of the United States, or (B) a quali8 fied alien (as defined in section

9 1101(a)(10)) only in accordance with sec10 tion 1903(v).’’.

11 (iv) Section 1902(b)(3) of such Act is

12 amended by inserting ‘‘or national’’ after

13 ‘‘citizen’’.

14 (2) DEFINITION OF TERM ‘‘QUALIFIED ALIEN’’.—

15 Section 1101(a) of such Act is amended by adding at the

16 end the following new paragraph:

17 ‘‘(10) The term ‘qualified alien’ means an

18 alien—

19 ‘‘(A) who is lawfully admitted for perma20 nent residence within the meaning of section

21 101(a)(20) of the Immigration and Nationality

22 Act;

23 ‘‘(B) who is admitted as a refugee pursu24 ant to section 207 of such Act;
433

•S 2224 IS

1 ‘‘(C) who is granted asylum pursuant to

2 section 208 of such Act;

3 ‘‘(D) whose deportation is withheld pursu4 ant to section 243(h) of such Act;

5 ‘‘(E) whose deportation is suspended pur6 suant to section 244 of such Act;

7 ‘‘(F) who is granted conditional entry pur8 suant to section 203(a)(7) of such Act as in ef9 fect prior to April 1, 1980;

10 ‘‘(G) who is lawfully admitted for tem11 porary residence pursuant to section 210 or

12 245A of such Act;

13 ‘‘(H) who is within a class of aliens law14 fully present within the United States pursuant

15 to any other provision of such Act, provided

16 that—

17 ‘‘(i) the Attorney General determines

18 that the continued presence of such class

19 of aliens serves a humanitarian or other

20 compelling public interest, and

21 ‘‘(ii) the Secretary of Health and

22 Human Services determines that such in23 terest would be further served by treating

24 each alien within such class as a ‘qualified

25 alien’ for purposes of this Act; or
434

•S 2224 IS

1 ‘‘(I) who is the spouse or unmarried child

2 under 21 years of age of a citizen of the United

3 States, or the parent of such a citizen if the cit4 izen is 21 years of age or older, and with re5 spect to whom an application for adjustment to

6 lawful permanent residence is pending;

7 such status not having changed.’’.

8 (3) CONFORMING AMENDMENT.—Section

9 244A(f)(1) of the Immigration and Nationality Act

10 is amended by inserting ‘‘and shall not be considered

11 to be a ‘qualified alien’ within the meaning of sec12 tion 1101(a)(10) of the Social Security Act’’ imme13 diately before the semicolon.

14 (b) STATE AND LOCAL PROGRAMS.—A State or polit15 ical subdivision therein may provide that an alien is not

16 eligible for any program of assistance based on need that

17 is furnished by such State or political subdivision unless

18 such alien is a ‘‘qualified alien’’ within the meaning of sec19 tion 1101(a)(10) of the Social Security Act (as added by

20 subsection (a)(2) of this section).

21 (c) EFFECTIVE DATE.—

22 (1) The amendments made by subsection (a)

23 are effective with respect to benefits payable on the

24 basis of any application filed after the date of enact25 ment of this Act.
435

•S 2224 IS

1 (2) Subsection (b) is effective upon the date of

2 enactment of this Act.

3 SEC. 903. ELIGIBILITY OF SPONSORED ALIENS FOR CER4 TAIN PROGRAMS.

5 (a) DEEMING OF SPONSOR’S INCOME AND RE6 SOURCES TO AN ALIEN UNDER THE SUPPLEMENTAL SE7 CURITY INCOME, AID TO FAMILIES WITH DEPENDENT

8 CHILDREN, AND FOOD STAMP PROGRAMS.—

9 (1) LENGTH OF DEEMING PERIOD.—

10 (A) MAKING THE SSI 5-YEAR PERIOD PER11 MANENT.—Subsection (b) of section 7 of the

12 Unemployment Compensation Amendments of

13 1993 (Public Law 103–152) is repealed.

14 (B) INCREASING THE AFDC PERIOD FROM

15 3 TO 5 YEARS.—Section 415 of the Social Secu16 rity Act is amended by striking ‘‘three years’’

17 each place such phrase appears and inserting

18 ‘‘5 years’’.

19 (C) INCREASING THE FOOD STAMP PERIOD

20 FROM 3 TO 5 YEARS.—Section 5(i) of the Food

21 Stamp Act of 1977 is amended by striking

22 ‘‘three years’’ each place such phase appears

23 and inserting ‘‘5 years’’.
436

•S 2224 IS

1 (2) INAPPLICABILITY IN THE CASE OF ANY

2 ALIEN WHOSE SPONSOR RECEIVES SSI OR AFDC

3 BENEFITS.—

4 (A) SSI.—Section 1621(f) of the Social

5 Security Act is amended by adding at the end

6 the following new paragraph:

7 ‘‘(3) The provisions of this section shall not

8 apply to any alien for any month for which such

9 alien’s sponsor receives a benefit under this title

10 (which includes, for purposes of this paragraph, the

11 program of federally administered State supple12 mentary payments made pursuant to section

13 1616(a) of this Act or section 212(b) of Public Law

14 93–66) or the program of aid to families with de15 pendent children authorized by part A of title IV of

16 this Act.’’.

17 (B) AFDC.—Section 415(f) of the Social

18 Security Act is amended—

19 (i) by redesignating paragraphs (1)

20 through (5) as subparagraphs (A) through

21 (E), respectively;

22 (ii) by striking ‘‘(f)’’ and inserting

23 ‘‘(f)(1)’’; and

24 (iii) by adding at the end the follow25 ing new paragraph:
437

•S 2224 IS

1 ‘‘(2) The provisions of this section shall not

2 apply to any alien for any month for which such

3 alien’s sponsor receives a benefit under the program

4 authorized by this part, or the program of supple5 mental security income authorized by title XVI of

6 this Act (which includes, for purposes of this para7 graph, the program of federally administered State

8 supplementary payments made pursuant to section

9 1616(a) of this Act or section 212(b) of Public Law

10 93–66).’’.

11 (C) FOOD STAMPS.—Section 5(i)(2)(E) of

12 the Food Stamp Act of 1977 is amended—

13 (i) by striking ‘‘(E)’’ and inserting

14 ‘‘(E)(i)’’; and

15 (ii) by adding at the end the follow16 ing:

17 ‘‘(ii) The provisions of this subsection shall not

18 apply to any alien for any month for which such

19 alien’s sponsor receives a benefit under the program

20 of aid to families with dependent children authorized

21 by part A of title IV of the Social Security Act or

22 the program of supplemental security income author23 ized by title XVI of such Act (which includes, for

24 purposes of this paragraph, the program of federally

25 administered State supplementary payments made
438

•S 2224 IS

1 pursuant to section 1616(a) of such Act or section

2 212(b) of Public Law 93–66).’’.

3 (3) INEQUITABLE CIRCUMSTANCES.—

4 (A) SSI.—Section 1621 of the Social Secu5 rity Act is amended by adding at the end the

6 following new subsection:

7 ‘‘(g) The Secretary may, pursuant to regulations pro8 mulgated after consultation with the Secretary of Agri9 culture, alter or suspend the application of this section in

10 any case in which the Secretary determines that such ap11 plication would be inequitable under the circumstances.’’

12 (B) AFDC.—Section 415 of the Social Se13 curity Act is amended by adding at the end the

14 following new subsection:

15 ‘‘(g) The Secretary may, pursuant to regulations pro16 mulgated after consultation with the Secretary of Agri17 culture, alter or suspend the application of this section in

18 any case in which the Secretary determines that such ap19 plication would be inequitable under the circumstances.’’

20 (C) FOOD STAMPS.—Section 5(i)(2) of the

21 Food Stamp Act of 1977 is amended by adding

22 at the end the following new subparagraph:

23 ‘‘(F) The Secretary may, pursuant to regulations pro24 mulgated after consultation with the Secretary of Health

25 and Human Services, alter or suspend the application of
439

•S 2224 IS

1 this section in any case in which the Secretary determines

2 that such application would be inequitable under the cir3 cumstances.’’

4 (4) FOOD STAMPS EXEMPTION FOR BLIND OR

5 DISABLED ALIENS.—Section 5(i)(2)(E) of the Food

6 Stamp Act of 1977 (as previously amended by sub7 section (a)(2)(C)) is further amended by adding at

8 the end the following:

9 ‘‘(iii) The provisions of this subsection shall not

10 apply with respect to any individual for any month

11 for which such individual receives a benefit under

12 the program of supplemental security income author13 ized by title XVI of the Social Security Act by rea14 son of blindness (as determined under section

15 1614(a)(2) of such Act) or disability (as determined

16 under section 1614(a)(3) of such Act), provided that

17 such blindness or disability commenced after the

18 date of such individual’s admission into the United

19 States for permanent residence.’’.

20 (5) INCREASE IN FOOD STAMP RESOURCE LIMI21 TATION.—Section 5(i)(2)(B)(ii) of the Food Stamp

22 Act of 1977 is amended by striking ‘‘$1,500’’ and

23 inserting ‘‘$2,000’’.

24 (b) DISQUALIFICATION OF CERTAIN SPONSORED

25 ALIENS AFTER THE 60TH MONTH AFTER ENTRY INTO
440

•S 2224 IS

1 THE UNITED STATES UNDER THE SUPPLEMENTAL SECU2 RITY INCOME, AID TO FAMILIES WITH DEPENDENT

3 CHILDREN, AND FOOD STAMP PROGRAMS.—

4 (1) IN GENERAL.—

5 (A) SSI.—Section 1611(e) of the Social

6 Security Act is amended by inserting between

7 paragraphs (3) and (5) a new paragraph (4) as

8 follows:

9 ‘‘(4)(A) No individual (other than an individual

10 described in section 1621(f)(1)) who is an alien shall

11 be an eligible individual or eligible spouse for pur12 poses of this title with respect to any month begin13 ning after the 60th month after such individual’s

14 entry into the United States if the adjusted gross in15 come (as defined in section 62 of the Internal Reve16 nue Code of 1986) of any person who (as a sponsor

17 of such individual’s entry into the United States) ex18 ecuted an affidavit of support with respect to such

19 individual plus the adjusted gross income of such

20 person’s spouse and dependent children (if any) for

21 the most recently completed year for which—

22 ‘‘(i)(I) a return has been filed in connec23 tion with the taxes imposed by subtitle A of the

24 Internal Revenue Code of 1986 by or on behalf
441

•S 2224 IS

1 of such person (and such person’s spouse and

2 dependent children, if any), or

3 ‘‘(II) no such return is required by such

4 Code to be so filed, and

5 ‘‘(ii) the Secretary has published the

6 United States median income for all families

7 pursuant to subparagraph (B)(i)(I),

8 exceeds the applicable measure of United States me9 dian income for all families (determined in accord10 ance with subparagraph (B)(i)(II)) for such year.

11 ‘‘(B)(i) The Secretary shall publish twice yearly

12 in the Federal Register a notice—

13 ‘‘(I) setting out the United States median

14 income for all families for not fewer than five

15 of the years immediately preceding the year in

16 which such notice is published, and

17 ‘‘(II) identifying the months for which each

18 such figure shall be deemed to be the applicable

19 measure for the purpose of making the deter20 mination required by subparagraph (A).

21 ‘‘(ii) The United States median income for all

22 families for any year published by the Secretary pur23 suant to clause (i) shall be the amount reported for

24 such year by the Census Bureau pursuant to its

25 Current Population Survey, except that if such
442

•S 2224 IS

1 amount has not been so reported for such year at

2 the time such notice is published, then the measure

3 of the United States median income for all families

4 for such year shall be derived by increasing the

5 amount reported by the Census Bureau for the im6 mediately preceding year by a percentage equal to

7 the percentage (rounded to the nearest one-tenth of

8 one percent), if any, by which the Consumer Price

9 Index (as prepared by the Department of Labor) for

10 such year has increased over such immediately pre11 ceding year.’’.

12 (B) AFDC.—Section 402(a) of the Social

13 Security Act is amended by—

14 (i) striking ‘‘and’’ at the end of para15 graph (44);

16 (ii) striking the period at the end of

17 paragraph (45) and inserting ‘‘; and’’; and

18 (iii) adding at the end a new para19 graph as follows:

20 ‘‘(46) provide that an individual who is an alien

21 may not be considered a dependent child, a care22 taker relative whose needs are to be taken into ac23 count in making the determination under paragraph

24 (7), or any other person whose needs should be

25 taken into account in making such a determination
443

•S 2224 IS

1 with respect to the child or relative, with respect to

2 any month beginning after the 60th month after

3 such individual’s entry into the United States if the

4 adjusted gross income (as defined in section 62 of

5 the Internal Revenue Code of 1986) of any person

6 who (as a sponsor of such individual’s entry into the

7 United States) executed an affidavit of support with

8 respect to such individual plus the adjusted gross in9 come of such person’s spouse and dependent chil10 dren (if any) for the most recently completed year

11 for which—

12 ‘‘(A)(i) a return has been filed in connec13 tion with the taxes imposed by subtitle A of the

14 Internal Revenue Code of 1986 by or on behalf

15 of such person (and such person’s spouse and

16 dependent children, if any), or

17 ‘‘(ii) no such return is required by such

18 Code to be so filed, and

19 ‘‘(B) the United States median income for

20 all families has been published, exceeds the ap21 plicable measure of United States median in22 come for all families for such year. For pur23 poses of the preceding sentence, the require24 ment for the publication of the United States

25 median income for all families for any year
444

•S 2224 IS

1 shall be satisfied by the publication of such

2 data for such year pursuant to section

3 1611(e)(4)(B)(i)(I), and the ‘applicable meas4 ure of United States median income for all fam5 ilies’ for any year shall be the measure applica6 ble for such year pursuant to section

7 1611(e)(4)(B)(i)(II).’’.

8 (C) FOOD STAMPS.—Section 6 of the Food

9 Stamp Act of 1977 is amended by adding at

10 the end a new subsection as follows:

11 ‘‘(i) No alien who is a member of a household other12 wise eligible to participate in the food stamp program

13 under this section shall be eligible to participate in such

14 program as a member of that or any other household with

15 respect to any month beginning after the 60th month after

16 such alien’s entry into the United States if the adjusted

17 gross income (as defined in section 62 of the Internal Rev18 enue Code of 1986) of any person who (as a sponsor of

19 such alien’s entry into the United States) executed an affi20 davit of support with respect to such alien plus the ad21 justed gross income of such person’s spouse and depend22 ent children (if any) for the most recently completed year

23 for which—

24 ‘‘(1)(A) a return has been filed in connection

25 with the taxes imposed by subtitle A of the Internal
445

•S 2224 IS

1 Revenue Code of 1986 by or on behalf of such per2 son (and such person’s spouse and dependent chil3 dren, if any), or

4 ‘‘(B) no such return is required by such Code

5 to be so filed, and

6 ‘‘(2) the United States median income for all

7 families has been published,

8 exceeds the applicable measure of United States median

9 income for all families for such year. For purposes of the

10 preceding sentence, the requirement for the publication of

11 the United States median income for all families for any

12 year shall be satisfied by the publication of such data for

13 such year pursuant to section 1611(e)(4)(B)(i)(I) of the

14 Social Security Act, and the ‘applicable measure of United

15 States median income for all families’ for any year shall

16 be the measure applicable for such year pursuant to sec17 tion 1611(e)(4)(B)(i)(II) of such Act.’’.

18 (2) CONFORMING AMENDMENTS.—

19 (A) COOPERATION REQUIREMENT.—

20 (i) SSI.—Section 1621(d)(1) of the

21 Social Security Act is amended in the first

22 sentence by—

23 (I) striking ‘‘during the period of

24 5 years after entry into the United

25 States,’’; and
446

•S 2224 IS

1 (II) inserting ‘‘or section

2 1611(e)(4)’’ after ‘‘this section’’.

3 (ii) AFDC.—The second sentence of

4 section 415(c)(1) of the Social Security

5 Act (as previously amended by subsection

6 (a)(1)(B) of this section) is further amend7 ed by—

8 (I) striking ‘‘during the period of

9 5 years after his or her entry into the

10 United States’’; and

11 (II) inserting ‘‘or section

12 402(a)(46)’’ after ‘‘this section’’.

13 (iii) FOOD STAMPS.—The first sen14 tence of section 5(i)(2)(C)(i) of the Food

15 Stamp Act of 1977 (as previously amended

16 by subsection (a)(1)(C) of this section) is

17 further amended by—

18 (I) striking ‘‘during the period of

19 5 years after entry into the United

20 States,’’; and

21 (II) inserting ‘‘or section 6(i)’’

22 after ‘‘this section’’.

23 (B) LIABILITY FOR OVERPAYMENTS.—

24 (i) SSI.—Section 1621(e) of the So25 cial Security Act is amended by—
447

•S 2224 IS

1 (I) striking ‘‘during the period of

2 5 years after such alien’s entry into

3 the United States,’’;

4 (II) inserting ‘‘or section

5 1611(e)(4)’’ after ‘‘this section’’; and

6 (III) adding at the end the fol7 lowing sentence: ‘‘If an individual who

8 is an alien subject to this subsection

9 is naturalized as a citizen of the Unit10 ed States, such naturalization shall

11 have no effect upon the continued ap12 plication of this subsection to such in13 dividual or to such individual’s spon14 sor.’’.

15 (ii) AFDC.—Section 415(d) of the

16 Social Security Act (as previously amended

17 by subsection (a)(1)(B)) is further amend18 ed by—

19 (I) striking ‘‘during the period of

20 5 years after such alien’s entry into

21 the United States,’’;

22 (II) inserting ‘‘or section

23 402(a)(46)’’ after ‘‘this section’’; and

24 (III) adding at the end the fol25 lowing sentence: ‘‘If an individual who
448

•S 2224 IS

1 is an alien subject to this subsection

2 is naturalized as a citizen of the Unit3 ed States, such naturalization shall

4 have no effect upon the continued ap5 plication of this subsection to such in6 dividual or to such individual’s spon7 sor.’’.

8 (iii) FOOD STAMPS.—Section

9 5(i)(2)(D) of the Food Stamp Act of 1977

10 (as previously amended by subsection

11 (a)(1)(C)) is further amended by—

12 (I) striking ‘‘during the period of

13 5 years after such alien’s entry into

14 the United States,’’;

15 (II) inserting ‘‘or section 6(i)’’

16 after ‘‘this section’’; and

17 (III) adding at the end the fol18 lowing sentence: ‘‘If an individual who

19 is an alien subject to this subpara20 graph is naturalized as a citizen of

21 the United States, such naturalization

22 shall have no effect upon the contin23 ued application of this subparagraph

24 to such individual or to such individ25 ual’s sponsor.’’.
449

•S 2224 IS

1 (3) DISCLOSURE OF TAX RETURN INFORMA2 TION.—Section 6103(l)(7)(B) of the Internal Reve3 nue Code of 1986 is amended by designating the ex4 isting matter as clause (i) and adding at the end the

5 following:

6 ‘‘(ii) The Secretary shall disclose, upon request, re7 turn information with respect to adjusted gross income (as

8 defined in section 62) from returns filed by, or with re9 spect to, any individual (and such individual’s spouse and

10 dependent children, if any) who (as a sponsor of an alien’s

11 entry into the United States) executed an affidavit of sup12 port with respect to such alien and whose income is consid13 ered in connection with determining such alien’s eligibility

14 for a program described in clause (i), (iii), or (vi) of sub15 paragraph (D) to any Federal, State, or local agency ad16 ministering such program, but only for the purpose of, and

17 to the extent necessary, in determining the eligibility of

18 such alien for benefits under such program.

19 ‘‘(iii) Information regarding any determination made

20 pursuant to section 402(a)(46) of 415 of the Social Secu21 rity Act (relating to the aid to families with dependent

22 children program), section 1611(e)(4) or 1621 of such Act

23 (relating to the supplemental security income program),

24 or section 5(i) or 6(i) of the Food Stamp Act of 1977

25 (relating to the program of assistance under that Act) in
450

•S 2224 IS

1 connection with determining an alien’s eligibility for bene2 fits under any such program shall not be considered to

3 be return information subject to the limitations on disclo4 sure or redisclosure imposed by this section.’’.

5 (c) STATE AND LOCAL PROGRAMS.—A State or polit6 ical subdivision therein may provide that an alien is not

7 eligible for any program of assistance based on need that

8 is furnished by such State or political subdivision for any

9 month if such alien has been determined to be ineligible

10 for such month for benefits under—

11 (A) the program of aid to families with depend12 ent children authorized by part A of title IV of the

13 Social Security Act, as a result of the application of

14 section 402(a)(46) or 415 of such Act;

15 (B) the program of supplemental security in16 come authorized by title XVI of the Social Security

17 Act, as a result of the application of section

18 1611(e)(4) or 1621 of such Act; or

19 (C) the Food Stamp Act of 1977, as a result

20 of the application of section 5(i) or 6(i) of such Act.

21 (d) EFFECTIVE DATE.—

22 (1) Except as otherwise provided in paragraph

23 (2), the amendments made by subsections (a) and

24 (b) are effective with respect to benefits under the

25 program of aid to families with dependent children
451

•S 2224 IS

1 authorized by part A of title IV of the Social Secu2 rity Act, the program of supplemental security in3 come authorized by title XVI of the Social Security

4 Act, and the program authorized by the Food Stamp

5 Act of 1977, payable for months beginning after

6 September 30, 1994, on the basis of—

7 (A) an application filed after such date, or

8 (B) an application filed on or before such

9 date by or on behalf of an individual subject to

10 the provisions of section 1621(a) or section

11 415(a) of the Social Security Act or section

12 5(i)(1) of the Food Stamp Act of 1977 (as the

13 case may be) on such date.

14 (2) The amendments made by clauses (i)(III),

15 (ii)(III), and (iii)(III) of subsection (b)(2)(B) are ef16 fective upon the date of enactment of this Act.

17 (3) Subsection (c) is effective on October 1,

18 1994.

19 SEC. 904. FAMILY DAY CARE HOMES.

20 (a) Section 17(c) of the National School Lunch Act

21 (42 U.S.C. 1766(c)) is amended—

22 (1) in paragraph (1), by inserting ‘‘except as

23 provided in paragraphs (4) and (5) of this sub24 section,’’ after ‘‘For purposes of this section,’’;
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1 (2) in paragraph (2), by inserting ‘‘except as

2 provided in paragraphs (4) and (5) of this sub3 section,’’ after ‘‘For purposes of this section,’’;

4 (3) in paragraph (3), by inserting ‘‘except as

5 provided in paragraphs (4) and (5) of this sub6 section,’’ after ‘‘For purposes of this section,’’;

7 (4) by redesignating paragraph (4) as para8 graph (6); and

9 (5) by inserting after paragraph (3) the follow10 ing new paragraphs:

11 ‘‘(4) For purposes of this section, the level one

12 reimbursement factor for family or group day care

13 homes shall be $1.5050 for lunches or suppers,

14 $.8275 for breakfasts, and $.4475 for supplements.

15 The reimbursement factor under this paragraph

16 shall be adjusted on July 1, 1996, to reflect changes

17 in the Consumer Price Index for food away from

18 home for the most recent 24-month period for which

19 data are available, and on July 1 of each year, start20 ing July 1, 1997, to reflect changes in the Consumer

21 Price Index for food away from home for the most

22 recent 12-month period for which data are available.

23 The reimbursement factor under this paragraph

24 shall be rounded to the nearest one-fourth cent.
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1 ‘‘(5) For purposes of this section, the level two

2 reimbursement factor for family or group day care

3 homes shall be $1.2675 for lunches or suppers,

4 $.5375 for breakfasts, and $.25 for supplements.

5 The reimbursement factor under this paragraph

6 shall be adjusted on July 1, 1996, to reflect changes

7 in the Consumer Price Index for food away from

8 home for the most recent 24-month period for which

9 data are available, and on July 1 of each year, start10 ing July 1, 1997, to reflect changes in the Consumer

11 Price Index for food away from home for the most

12 recent 12-month period for which data are available.

13 The reimbursement factor under this paragraph

14 shall be rounded to the nearest one-fourth cent.’’.

15 (b) Section 17(f)(3) of the National School Lunch

16 Act (42 U.S.C. 1766(f)(3)) is amended—

17 (1) by adding after subparagraph (C) the fol18 lowing new subparagraph:

19 ‘‘(D) The Secretary shall make payments,

20 totalling not more than $2,000,000 in fiscal

21 year 1995 and $5,000,000 in fiscal year 1996,

22 to provide grants to States for the purpose of

23 providing assistance, including grants to family

24 or group day care home sponsoring organiza25 tions and other appropriate organizations; for
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1 securing and providing training, materials,

2 automated data processing assistance, and

3 other assistance for the staff of such sponsoring

4 organizations; and for providing training and

5 other assistance to family or group day care

6 homes in order to assist in the implementation

7 of the requirements contained in this sub8 section. Of the amount of funds made available

9 to each State under this subparagraph, an

10 amount not to exceed 30 percent may be re11 tained by the State to carry out the purposes

12 of this subparagraph;’’;

13 (2) in subparagraph (A), by deleting ‘‘, except

14 that reimbursement shall not be provided’’ and all

15 that follows through ‘‘nearest one-fourth cent.’’ and

16 inserting in lieu thereof ‘‘as set forth in subpara17 graphs (B) and (C).’’;

18 (3) by redesignating subparagraphs (B), (C),

19 and (D) (as added by paragraph (1)) as subpara20 graphs (D), (E), and (L) respectively;

21 (4) by inserting after subparagraph (A) the fol22 lowing new subparagraphs:

23 ‘‘(B) Sponsoring organizations of family or

24 group day care homes located in low-income

25 areas shall be reimbursed for meals or supple-
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1 ments served to children in those homes at the

2 level one reimbursement rates established in

3 subsection (c)(4) of this section.

4 ‘‘(C) Sponsoring organizations of family or

5 group day care homes, except family or group

6 day care homes covered under subparagraph

7 (B) of this subsection, shall be reimbursed for

8 meals or supplements served to children in

9 those homes, at the election of the family or

10 group day care home, either—

11 ‘‘(i) at the level two reimbursement

12 rates established in subsection (c)(5) of

13 this section; or

14 ‘‘(ii)(I) for meals and supplements

15 served to children from households that

16 meet the income eligibility guidelines for

17 free or reduced price meals and supple18 ments set forth in section 9(b) of this Act,

19 at the level one reimbursement rates estab20 lished in subsection (c)(4) of this section;

21 and

22 ‘‘(II) for meals and supplements

23 served to children from families who do not

24 meet the requirements of paragraph

25 (C)(ii)(I) of this subsection, at the level
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1 two reimbursement rates established in

2 subsection (c)(5); or

3 ‘‘(iii) for meals and supplements

4 served to children in family or group day

5 care homes in which the family or group

6 day care home provider meets the income

7 eligibility guidelines for free or reduced

8 price meals and supplements set forth in

9 section 9(b) of this Act, at the level one re10 imbursement rates established in section

11 (c)(4) of this section.’’;

12 (5) by adding at the end of subparagraph (D)

13 (as redesignated by paragraph (3)) the following:

14 ‘‘In addition, family or group day care home spon15 soring organizations shall receive for their adminis16 trative expenses an additional $10 per month for

17 each home located in a low-income area.’’; and

18 (6) by adding after subparagraph (E) (as redes19 ignated by paragraph (3)) the following new sub20 paragraphs:

21 ‘‘(F) Notwithstanding subparagraph (C),

22 reimbursement shall not be provided for meals

23 or supplements served to the children of a per24 son acting as a family or group day care home

25 provider unless such children meet the income
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1 eligibility guidelines for free or reduced price

2 meals under section 9(b) of this Act. Where so

3 qualifying, the family or group day care home

4 sponsoring organization shall be reimbursed for

5 those meals and supplements at the level one

6 rates established in subsection (c)(4).

7 ‘‘(G) For family or group day care home

8 providers who elect to use the procedures under

9 paragraph (3)(C)(ii) of this subsection, the Sec10 retary shall implement streamlined and sim11 plified counting and claiming procedures, pro12 vided that such procedures do not compromise

13 program accountability.

14 ‘‘(H) Sponsoring organizations of family or

15 group day care homes (other than those located

16 in low-income areas) may receive the level one

17 reimbursement rates for meals and supplements

18 established in subsection (c)(4) of this section

19 for those children with a parent participating in

20 the programs established under part F or G of

21 title IV of the Social Security Act, the at-risk

22 child care program under title IV of such Act,

23 or a Federal or a State child care program with

24 an income eligibility limit that does not exceed

25 the income eligibility guidelines for free or re-
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1 duced price meals and supplements set forth in

2 section 9(b) of this Act.

3 ‘‘(I) For purposes of this section, ‘low-in4 come areas’ is defined to mean ‘areas in which

5 poor economic conditions exist’ as defined in

6 section 13(a)(1)(C) of this Act.

7 ‘‘(J) For purposes of this section, deter8 minations made by the State agency which es9 tablish that a family or a group day care home

10 is located in a ‘low income area’ shall be in ef11 fect for 3 years, unless the State agency deter12 mines that the area in which the home is lo13 cated is no longer a ‘low income area’.

14 ‘‘(K) The Secretary shall make payments,

15 totalling not more than $5,000,000 in each of

16 fiscal years 1997, 1998, 1999, and 2000 to pro17 vide grants to States for the purpose of provid18 ing assistance, including grants to family or

19 group day care home sponsoring organizations,

20 to assist family or group day care homes in low21 income areas to become licensed or approved for

22 the program under this section. Of the amount

23 of funds available to each State under this sub24 paragraph, an amount not to exceed 30 percent

25 may be retained by the State to carry out the
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1 purposes of this subparagraph. Any payments

2 received under this subparagraph shall be in ad3 dition to payments which States receive under

4 subsection (b) of this section.’’.

5 (c) EFFECTIVE DATES.—

6 (1) Except as provided in paragraph (2), the

7 amendments made by subsections (a) and (b) shall

8 take effect on July 1, 1996.

9 (2) The amendment made by subsection (b)(1)

10 shall take effect on the date of enactment of this

11 Act.

12 SEC. 905. STATE RETENTION OF AMOUNTS RECOVERED.

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

14 U.S.C. 2025(a)) is amended by striking ‘‘1995’’ both

15 places it appears in the proviso of the first sentence and

16 inserting in both places in lieu thereof ‘‘2004’’.

17 SEC. 906. COMMODITY PROGRAM INCOME INELIGIBILITY.

18 Notwithstanding any other provision of law, a person

19 with annual off-farm adjusted gross income in excess of

20 $100,000, as determined by the Secretary of Agriculture,

21 shall not be eligible to receive from the Commodity Credit

22 Corporation income support and price support through

23 loans, purchases, payments, and other operations. The

24 Secretary of Agriculture shall issue regulations defining

25 the term ‘‘person’’ which shall conform, to the extent prac-
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1 ticable, to the regulations issued in accordance with sec2 tion 1001 of the Food Security Act of 1985, as amended.

3 SEC. 907. AMENDMENTS RELATED TO SUPERFUND TAX

4 EXTENSION.

5 (a) EXTENSION OF TERMINATION DATE.—Para6 graph (1) of section 59A(e) of the Internal Revenue Code

7 of 1986 (26 U.S.C. 59A(e)(1)) is amended by striking

8 ‘‘January 1, 1996’’ and inserting ‘‘February 1, 1998’’.

9 (b) ADJUSTMENTS TO AMOUNTS COLLECTED.—

10 Paragraph (3) of section 4611(e) of the Internal Revenue

11 Code of 1986 (26 U.S.C. 4611(e)(3)) is amended—

12 (1) by striking ‘‘December 31, 1995’’ and in13 serting ‘‘September 30, 1998’’;

14 (2) by striking ‘‘$11,970,000,000’’ each time it

15 appears and inserting ‘‘$15,500,000,000’’; and

16 (3) by striking ‘‘January 1, 1996’’ and insert17 ing ‘‘October 1, 1998’’.

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

19 subsections (a) and (b) shall apply to amounts collected

20 and amounts credited after the date of the enactment of

21 this Act.

22 SEC. 908. FEDERAL RAILROAD ADMINISTRATION USER

23 FEES.

24 Section 216 of the Federal Railroad Safety Act of

25 1970 (45 U.S.C. 447) is amended—
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1 (1) by striking subsection (a)(3) and inserting

2 the following:

3 ‘‘(3) Fees established under this section shall be

4 assessed to railroads subject to this chapter and

5 shall cover all costs incurred by the Federal Railroad

6 Administration in administering this chapter, and

7 those laws transferred to the jurisdiction of the Sec8 retary of Transportation by subsections (e)(1), (2),

9 and (6)(A) of section 1655 of title 49, other than ac10 tivities described in section 431(a)(2) of this title.’’;

11 (2) by inserting before the period in subsection

12 (c) ‘‘, and those laws transferred to the jurisdiction

13 of the Secretary of Transportation by subsections

14 (e)(1), (2), and (6)(A) of section 1655 of title 49’’;

15 and

16 (3) by striking subsections (e) and (f).

17 SEC. 909. SPECIAL EARNED INCOME TAX CREDIT RULES

18 FOR MILITARY PERSONNEL.

19 (a) MODIFIED RESIDENCY REQUIREMENT.—Sub20 paragraph (E) of section 32(c)(3) (defining qualifying

21 child) of the Internal Revenue Code of 1986 is amended

22 by adding at the end the following sentence: ‘‘The preced23 ing sentence does not apply during any period during

24 which the taxpayer is stationed outside the United States

25 while serving on extended active duty (as defined in sec-
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1 tion 1034(h)(3)) with the Armed Forces of the United

2 States.’’

3 (b) REPORTING MILITARY EARNED INCOME.—Sub4 section (a) of section 6051 (relating to receipts for employ5 ees) of the Internal Revenue Code of 1986 is amended

6 by striking ‘‘and’’ at the end of paragraph (8), by striking

7 the period at the end of paragraph (9) and inserting in

8 lieu thereof ‘‘, and’’, and by inserting after paragraph (9)

9 the following paragraph:

10 ‘‘(10) in the case of an employee who is a mem11 ber of the Armed Forces of the United States, the

12 total amount of earned income (as defined in section

13 32(c)(2)).’’.

14 (c) ADVANCE PAYMENT OF EARNED INCOME TAX

15 CREDIT.—Paragraph (1) of section 3507(c) (defining

16 earned income advance amount) of the Internal Revenue

17 Code of 1986 is amended by adding at the end the follow18 ing sentence: ‘‘For purposes of subparagraph (A) in the

19 case of an employee who is a member of the Armed Forces

20 of the United States, the employee’s earned income (as

21 defined in section 32(c)(2)) shall be taken into account

22 rather than the employee’s wages.’’.

23 (d) EFFECTIVE DATES.—The amendments made by

24 this section shall apply to taxable years beginning and re25 muneration paid after December 31, 1994.
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1 SEC. 910. NONRESIDENT ALIENS NOT ELIGIBLE FOR

2 EARNED INCOME TAX CREDIT.

3 (a) IN GENERAL.—Section 32(c)(1) (defining eligible

4 individual) of the Internal Revenue Code of 1986 is

5 amended by adding at the end the following new subpara6 graph:

7 ‘‘(E) EXCEPTION FOR NONRESIDENT ALIENS.—

8 The term ‘eligible individual’ does not include a non9 resident alien unless an election under section

10 6013(g) (relating to treating a nonresident alien in11 dividual as a resident of the United States) or sec12 tion 6013(h) (relating to the year in which a non13 resident alien becomes a resident of the United

14 States) is in effect for the taxable year with respect

15 to the nonresident alien.’’.

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

17 this section shall apply to taxable years beginning after

18 December 31, 1994.

19 SEC. 911. EXTENSION OF CERTAIN CUSTOMS FEES.

20 Subsection (j)(3) of section 13031 of the Consoli21 dated Omnibus Budget Reconciliation Act of 1985, as

22 amended, (19 U.S.C. 58c), is amended to read as follows:

23 ‘‘(3) Fees may not be charged under subsection (a)

24 of this section after September 30, 2004.’’.
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1 TITLE X—EFFECTIVE DATES

2 SEC. 1001. EFFECTIVE DATES.

3 (a) IN GENERAL.—Except as otherwise provided and

4 subject to subsection (b), the amendments and repeals

5 made by this Act, other than title VI, shall become effec6 tive with respect to periods beginning on or after October

7 1, 1995.

8 (b) The Secretary of Health and Human Services

9 may, upon the request of a State, delay the effective date

10 prescribed by subsection (a) with respect to such State

11 upon a showing of circumstances beyond the State’s con12 trol, but such extension may not extend beyond October

13 1, 1996.

14 (c) Notwithstanding any other provision of law, no

15 State shall be found to have failed to comply with any

16 requirement imposed on such State’s programs by or pur17 suant to the amendments made by titles I and II of this

18 Act by reason of its failure to have such program (or re19 quirements) in effect Statewide if such program is in ef20 fect Statewide not later than 2 years after the effective

21 date specified in subsection (a), or 2 years after such later

22 date as is approved by the Secretary pursuant to sub23 section (b).

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