Union Calendar No. 330

104TH CONGRESS

2D SESSION H. R. 3734

[Report No. 104–651]

A BILL

To provide for reconciliation pursuant to section

budget for fiscal year 1997.201(a)(1) of the concurrent resolution on the

JUNE 27, 1996

Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed
IB

Union Calendar No. 330

104TH CONGRESS

2D SESSION H. R. 3734

[Report No. 104–651]

To provide for reconciliation pursuant to section 201(a)(1) of the concurrent

resolution on the budget for fiscal year 1997.

IN THE HOUSE OF REPRESENTATIVES

JUNE 27, 1996

Mr. KASICH, from the Committee on the Budget, reported the following bill;

which was committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

A BILL

To provide for reconciliation pursuant to section 201(a)(1)

of the concurrent resolution on the budget for fiscal

year 1997.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Welfare and Medicaid

5 Reform Act of 1996’’.

6 SEC. 2. TABLE OF CONTENTS.

Title I—Committee on Agriculture.
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Title II—Committee on Commerce.

Title III—Committee on Economic and Educational Opportunities.

Title IV—Committee on Ways and Means: Welfare Reform.

1 TITLE I—COMMITTEE ON

2 AGRICULTURE

3 SEC. 1001. SHORT TITLE.

4 This title may be cited as the ‘‘Food Stamp Reform

5 and Commodity Distribution Act of 1996’’.

6 SEC. 1002. TABLE OF CONTENTS.

7 The table of contents of this title is as follows:

TITLE I—FOOD STAMPS AND COMMODITY DISTRIBUTION

Sec. 1001. Short title.

Sec. 1002. Table of contents.

Subtitle A—Food Stamp Program

Sec. 1011. Definition of certification period.

Sec. 1012. Definition of coupon.

Sec. 1013. Treatment of children living at home.

Sec. 1014. Optional additional criteria for separate household determinations.

Sec. 1015. Adjustment of thrifty food plan.

Sec. 1016. Definition of homeless individual.

Sec. 1017. State option for eligibility standards.

Sec. 1018. Earnings of students.

Sec. 1019. Energy assistance.

Sec. 1020. Deductions from income.

Sec. 1021. Vehicle allowance.

Sec. 1022. Vendor payments for transitional housing counted as income.

Sec. 1023. Doubled penalties for violating food stamp program requirements.

Sec. 1024. Disqualification of convicted individuals.

Sec. 1025. Disqualification.

Sec. 1026. Caretaker exemption.

Sec. 1027. Employment and training.

Sec. 1028. Comparable treatment for disqualification.

Sec. 1029. Disqualification for receipt of multiple food stamp benefits.

Sec. 1030. Disqualification of fleeing felons.

Sec. 1031. Cooperation with child support agencies.

Sec. 1032. Disqualification relating to child support arrears.

Sec. 1033. Work requirement.

Sec. 1034. Encourage electronic benefit transfer systems.

Sec. 1035. Value of minimum allotment.

Sec. 1036. Benefits on recertification.

Sec. 1037. Optional combined allotment for expedited households.

Sec. 1038. Failure to comply with other means-tested public assistance programs.

Sec. 1039. Allotments for households residing in centers.
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Sec. 1040. Condition precedent for approval of retail food stores and wholesale

food concerns.

Sec. 1041. Authority to establish authorization periods.

Sec. 1042. Information for verifying eligibility for authorization.

Sec. 1043. Waiting period for stores that fail to meet authorization criteria.

Sec. 1044. Operation of food stamp offices.

Sec. 1045. State employee and training standards.

Sec. 1046. Exchange of law enforcement information.

Sec. 1047. Expedited coupon service.

Sec. 1048. Withdrawing fair hearing requests.

Sec. 1049. Income, eligibility, and immigration status verification systems.

Sec. 1050. Disqualification of retailers who intentionally submit falsified applications.

Sec. 1051. Disqualification of retailers who are disqualified under the WIC program.

Sec. 1052. Collection of overissuances.

Sec. 1053. Authority to suspend stores violating program requirements pending

administrative and judicial review.

Sec. 1054. Expanded criminal forfeiture for violations.

Sec. 1055. Limitation of Federal match.

Sec. 1056. Standards for administration.

Sec. 1057. Work supplementation or support program.

Sec. 1058. Waiver authority.

Sec. 1059. Response to waivers.

Sec. 1060. Employment initiatives program.

Sec. 1061. Reauthorization.

Sec. 1062. Simplified food stamp program.

Sec. 1063. State food assistance block grant.

Sec. 1064. A study of the use of food stamps to purchase vitamins and minerals.

Sec. 1065. Investigations.

Sec. 1066. Food stamp eligibility.

Sec. 1067. Report by the Secretary.

Sec. 1068. Deficit reduction.

Subtitle B—Commodity Distribution Programs

Sec. 1071. Emergency food assistance program.

Sec. 1072. Food bank demonstration project.

Sec. 1073. Hunger prevention programs.

Sec. 1074. Report on entitlement commodity processing.

Subtitle C—Electronic Benefit Transfer Systems

Sec. 1091. Provisions to encourage electronic benefit transfer systems.

1 Subtitle A—Food Stamp Program

2 SEC. 1011. DEFINITION OF CERTIFICATION PERIOD.

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

4 U.S.C. 2012(c)) is amended by striking ‘‘Except as pro5 vided’’ and all that follows and inserting the following:
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1 ‘‘The certification period shall not exceed 12 months, ex2 cept that the certification period may be up to 24 months

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

4 State agency shall have at least 1 contact with each cer5 tified household every 12 months.’’.

6 SEC. 1012. DEFINITION OF COUPON.

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

8 U.S.C. 2012(d)) is amended by striking ‘‘or type of certifi9 cate’’ and inserting ‘‘type of certificate, authorization

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

11 device, including an electronic benefit transfer card or per12 sonal identification number,’’.

13 SEC. 1013. TREATMENT OF CHILDREN LIVING AT HOME.

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

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

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

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

18 SEC. 1014. OPTIONAL ADDITIONAL CRITERIA FOR SEPA19 RATE HOUSEHOLD DETERMINATIONS.

20 Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C.

21 2012(i)) is amended by inserting after the third sentence

22 the following: ‘‘Notwithstanding the preceding sentences,

23 a State may establish criteria that prescribe when individ24 uals who live together, and who would be allowed to par25 ticipate as separate households under the preceding sen-
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1 tences, shall be considered a single household, without re2 gard to the common purchase of food and preparation of

3 meals.’’.

4 SEC. 1015. ADJUSTMENT OF THRIFTY FOOD PLAN.

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

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

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

8 the following: ‘‘shall—

9 ‘‘(1) make’’;

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

11 ‘‘scale;

12 ‘‘(2) make’’;

13 (3) by striking ‘‘Alaska, (3) make’’ and insert14 ing the following: ‘‘Alaska;

15 ‘‘(3) make’’; and

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

17 that follows through the end of the subsection and

18 inserting the following: ‘‘Columbia; and

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

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

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

22 the result to the nearest lower dollar increment for

23 each household size, except that on October 1, 1996,

24 the Secretary may not reduce the cost of the diet in

25 effect on September 30, 1996.’’.
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1 SEC. 1016. DEFINITION OF HOMELESS INDIVIDUAL.

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

3 (7 U.S.C. 2012(s)(2)(C)) is amended by inserting ‘‘for not

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

5 SEC. 1017. STATE OPTION FOR ELIGIBILITY STANDARDS.

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

7 U.S.C. 2014(d)) is amended by striking ‘‘(b) The Sec8 retary’’ and inserting the following:

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

10 provided in this Act, the Secretary’’.

11 SEC. 1018. EARNINGS OF STUDENTS.

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

13 U.S.C. 2014(d)(7)) is amended by striking ‘‘21’’ and in14 serting ‘‘19’’.

15 SEC. 1019. ENERGY ASSISTANCE.

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

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

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

19 payment or allowance made under a Federal or State law

20 for the costs of weatherization or emergency repair or re21 placement of an unsafe or inoperative furnace or other

22 heating or cooling device,’’.

23 (b) CONFORMING AMENDMENTS.—

24 (1) Section 5(k) of the Act (7 U.S.C. 2014(k))

25 is amended—

26 (A) in paragraph (1)—
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1 (i) in subparagraph (A), by striking

2 ‘‘plan for aid to families with dependent

3 children approved’’ and inserting ‘‘program

4 funded’’; and

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

6 ‘‘, not including energy or utility-cost as7 sistance,’’;

8 (B) in paragraph (2), by striking subpara9 graph (C) and inserting the following:

10 ‘‘(C) a payment or allowance described in sub11 section (d)(11);’’; and

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

13 ‘‘(4) THIRD PARTY ENERGY ASSISTANCE PAY14 MENTS.—

15 ‘‘(A) ENERGY ASSISTANCE PAYMENTS.—

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

17 made under a Federal or State law to provide

18 energy assistance to a household shall be con19 sidered money payable directly to the house20 hold.

21 ‘‘(B) ENERGY ASSISTANCE EXPENSES.—

22 For purposes of subsection (e)(7), an expense

23 paid on behalf of a household under a Federal

24 or State law to provide energy assistance shall
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1 be considered an out-of-pocket expense incurred

2 and paid by the household.’’.

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

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

5 is amended—

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

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

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

9 stamps,’’; and

10 (C) by striking paragraph (2).

11 SEC. 1020. DEDUCTIONS FROM INCOME.

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

13 of 1977 (7 U.S.C. 2014) is amended by striking sub14 section (e) and inserting the following:

15 ‘‘(e) DEDUCTIONS FROM INCOME.—

16 ‘‘(1) STANDARD DEDUCTION.—The Secretary

17 shall allow a standard deduction for each household

18 in the 48 contiguous States and the District of Co19 lumbia, Alaska, Hawaii, Guam, and the Virgin Is20 lands of the United States of $134, $229, $189,

21 $269, and $118, respectively.

22 ‘‘(2) EARNED INCOME DEDUCTION.—

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

24 In this paragraph, the term ‘earned income’

25 does not include income excluded by subsection
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1 (d) or any portion of income earned under a

2 work supplementation or support program, as

3 defined under section 16(b), that is attributable

4 to public assistance.

5 ‘‘(B) DEDUCTION.—Except as provided in

6 subparagraph (C), a household with earned in7 come shall be allowed a deduction of 20 percent

8 of all earned income to compensate for taxes,

9 other mandatory deductions from salary, and

10 work expenses.

11 ‘‘(C) EXCEPTION.—The deduction de12 scribed in subparagraph (B) shall not be al13 lowed with respect to determining an overissu14 ance due to the failure of a household to report

15 earned income in a timely manner.

16 ‘‘(3) DEPENDENT CARE DEDUCTION.—

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

18 entitled, with respect to expenses (other than

19 excluded expenses described in subparagraph

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

21 deduction, the maximum allowable level of

22 which shall be $200 per month for each depend23 ent child under 2 years of age and $175 per

24 month for each other dependent, for the actual

25 cost of payments necessary for the care of a de-
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1 pendent if the care enables a household member

2 to accept or continue employment, or training

3 or education that is preparatory for employ4 ment.

5 ‘‘(B) EXCLUDED EXPENSES.—The ex6 cluded expenses referred to in subparagraph

7 (A) are—

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

9 household by a third party;

10 ‘‘(ii) amounts made available and ex11 cluded for the expenses referred to in sub12 paragraph (A) under subsection (d)(3);

13 and

14 ‘‘(iii) expenses that are paid under

15 section 6(d)(4).

16 ‘‘(4) DEDUCTION FOR CHILD SUPPORT PAY17 MENTS.—

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

19 entitled to a deduction for child support pay20 ments made by a household member to or for

21 an individual who is not a member of the

22 household if the household member is legally

23 obligated to make the payments.

24 ‘‘(B) METHODS FOR DETERMINING

25 AMOUNT.—The Secretary may prescribe by reg-
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1 ulation the methods, including calculation on a

2 retrospective basis, that a State agency shall

3 use to determine the amount of the deduction

4 for child support payments.

5 ‘‘(5) HOMELESS SHELTER ALLOWANCE.—A

6 State agency may develop a standard homeless shel7 ter allowance, which shall not exceed $143 per

8 month, for such expenses as may reasonably be ex9 pected to be incurred by households in which all

10 members are homeless individuals but are not receiv11 ing free shelter throughout the month. A State agen12 cy that develops the allowance may use the allow13 ance in determining eligibility and allotments for the

14 households, except that the State agency may pro15 hibit the use of the allowance for households with

16 extremely low shelter costs.

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

18 ‘‘(A) IN GENERAL.—A household contain19 ing an elderly or disabled member shall be enti20 tled, with respect to expenses other than ex21 penses paid on behalf of the household by a

22 third party, to an excess medical expense de23 duction for the portion of the actual costs of al24 lowable medical expenses, incurred by the elder-
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1 ly or disabled member, exclusive of special diets,

2 that exceeds $35 per month.

3 ‘‘(B) METHOD OF CLAIMING DEDUC4 TION.—

5 ‘‘(i) IN GENERAL.—A State agency

6 shall offer an eligible household under sub7 paragraph (A) a method of claiming a de8 duction for recurring medical expenses that

9 are initially verified under the excess medi10 cal expense deduction in lieu of submitting

11 information or verification on actual ex12 penses on a monthly basis.

13 ‘‘(ii) METHOD.—The method de14 scribed in clause (i) shall—

15 ‘‘(I) be designed to minimize the

16 burden for the eligible elderly or dis17 abled household member choosing to

18 deduct the recurrent medical expenses

19 of the member pursuant to the meth20 od;

21 ‘‘(II) rely on reasonable estimates

22 of the expected medical expenses of

23 the member for the certification pe24 riod (including changes that can be

25 reasonably anticipated based on avail-
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1 able information about the medical

2 condition of the member, public or

3 private medical insurance coverage,

4 and the current verified medical ex5 penses incurred by the member); and

6 ‘‘(III) not require further report7 ing or verification of a change in med8 ical expenses if such a change has

9 been anticipated for the certification

10 period.

11 ‘‘(7) EXCESS SHELTER EXPENSE DEDUC12 TION.—

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

14 entitled, with respect to expenses other than ex15 penses paid on behalf of the household by a

16 third party, to an excess shelter expense deduc17 tion to the extent that the monthly amount ex18 pended by a household for shelter exceeds an

19 amount equal to 50 percent of monthly house20 hold income after all other applicable deduc21 tions have been allowed.

22 ‘‘(B) MAXIMUM AMOUNT OF DEDUC23 TION.—In the case of a household that does not

24 contain an elderly or disabled individual, the ex-
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1 cess shelter expense deduction shall not ex2 ceed—

3 ‘‘(i) in the 48 contiguous States and

4 the District of Columbia, $247 per month;

5 and

6 ‘‘(ii) in Alaska, Hawaii, Guam, and

7 the Virgin Islands of the United States,

8 $429, $353, $300, and $182 per month,

9 respectively.

10 ‘‘(C) STANDARD UTILITY ALLOWANCE.—

11 ‘‘(i) IN GENERAL.—In computing the

12 excess shelter expense deduction, a State

13 agency may use a standard utility allow14 ance in accordance with regulations pro15 mulgated by the Secretary, except that a

16 State agency may use an allowance that

17 does not fluctuate within a year to reflect

18 seasonal variations.

19 ‘‘(ii) RESTRICTIONS ON HEATING AND

20 COOLING EXPENSES.—An allowance for a

21 heating or cooling expense may not be used

22 in the case of a household that—

23 ‘‘(I) does not incur a heating or

24 cooling expense, as the case may be;
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1 ‘‘(II) does incur a heating or

2 cooling expense but is located in a

3 public housing unit that has central

4 utility meters and charges households,

5 with regard to the expense, only for

6 excess utility costs; or

7 ‘‘(III) shares the expense with,

8 and lives with, another individual not

9 participating in the food stamp pro10 gram, another household participating

11 in the food stamp program, or both,

12 unless the allowance is prorated be13 tween the household and the other in14 dividual, household, or both.

15 ‘‘(iii) MANDATORY ALLOWANCE.—

16 ‘‘(I) IN GENERAL.—A State

17 agency may make the use of a stand18 ard utility allowance mandatory for all

19 households with qualifying utility

20 costs if—

21 ‘‘(aa) the State agency has

22 developed 1 or more standards

23 that include the cost of heating

24 and cooling and 1 or more stand-
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1 ards that do not include the cost

2 of heating and cooling; and

3 ‘‘(bb) the Secretary finds

4 that the standards will not result

5 in an increased cost to the Sec6 retary.

7 ‘‘(II) HOUSEHOLD ELECTION.—

8 A State agency that has not made the

9 use of a standard utility allowance

10 mandatory under subclause (I) shall

11 allow a household to switch, at the

12 end of a certification period, between

13 the standard utility allowance and a

14 deduction based on the actual utility

15 costs of the household.

16 ‘‘(iv) AVAILABILITY OF ALLOWANCE

17 TO RECIPIENTS OF ENERGY ASSISTANCE.—

18 ‘‘(I) IN GENERAL.—Subject to

19 subclause (II), if a State agency elects

20 to use a standard utility allowance

21 that reflects heating or cooling costs,

22 the standard utility allowance shall be

23 made available to households receiving

24 a payment, or on behalf of which a

25 payment is made, under the Low-In-
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1 come Home Energy Assistance Act of

2 1981 (42 U.S.C. 8621 et seq.) or

3 other similar energy assistance pro4 gram, if the household still incurs out5 of-pocket heating or cooling expenses

6 in excess of any assistance paid on be7 half of the household to an energy

8 provider.

9 ‘‘(II) SEPARATE ALLOWANCE.—A

10 State agency may use a separate

11 standard utility allowance for house12 holds on behalf of which a payment

13 described in subclause (I) is made,

14 but may not be required to do so.

15 ‘‘(III) STATES NOT ELECTING TO

16 USE SEPARATE ALLOWANCE.—A State

17 agency that does not elect to use a

18 separate allowance but makes a single

19 standard utility allowance available to

20 households incurring heating or cool21 ing expenses (other than a household

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

23 subparagraph (C)(ii)) may not be re24 quired to reduce the allowance due to

25 the provision (directly or indirectly) of
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1 assistance under the Low-Income

2 Home Energy Assistance Act of 1981

3 (42 U.S.C. 8621 et seq.).

4 ‘‘(IV) PRORATION OF ASSIST5 ANCE.—For the purpose of the food

6 stamp program, assistance provided

7 under the Low-Income Home Energy

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

9 8621 et seq.) shall be considered to be

10 prorated over the entire heating or

11 cooling season for which the assist12 ance was provided.’’.

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

14 the Act (7 U.S.C. 2020(e)(3)) is amended by striking

15 ‘‘Under rules prescribed’’ and all that follows through

16 ‘‘verifies higher expenses;’’.

17 SEC. 1021. VEHICLE ALLOWANCE.

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

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

20 inserting the following:

21 ‘‘(2) INCLUDED ASSETS.—

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

23 provisions of this paragraph, the Secretary

24 shall, in prescribing inclusions in, and exclu25 sions from, financial resources, follow the regu-
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1 lations in force as of June 1, 1982 (other than

2 those relating to licensed vehicles and inacces3 sible resources).

4 ‘‘(B) ADDITIONAL INCLUDED ASSETS.—

5 The Secretary shall include in financial re6 sources—

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

8 used for recreational purposes;

9 ‘‘(ii) any vacation home;

10 ‘‘(iii) any mobile home used primarily

11 for vacation purposes;

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

13 licensed vehicle that is used for household

14 transportation or to obtain or continue em15 ployment to the extent that the fair market

16 value of the vehicle exceeds $4,600; and

17 ‘‘(v) any savings or retirement ac18 count (including an individual account), re19 gardless of whether there is a penalty for

20 early withdrawal.

21 ‘‘(C) EXCLUDED VEHICLES.—A vehicle

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

23 extent the property is directly related to the

24 maintenance or use of the vehicle) shall not be
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1 included in financial resources under this para2 graph if the vehicle is—

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

4 ‘‘(ii) necessary for the transportation

5 of a physically disabled household member;

6 or

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

8 carry fuel for heating or water for home

9 use and provides the primary source of fuel

10 or water, respectively, for the household.’’.

11 SEC. 1022. VENDOR PAYMENTS FOR TRANSITIONAL HOUS12 ING COUNTED AS INCOME.

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

14 U.S.C. 2014(k)(2)) is amended—

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

16 (2) by redesignating subparagraphs (G) and

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

18 SEC. 1023. DOUBLED PENALTIES FOR VIOLATING FOOD

19 STAMP PROGRAM REQUIREMENTS.

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

21 U.S.C. 2015(b)(1)) is amended—

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

23 inserting ‘‘1 year’’; and

24 (2) in clause (ii), by striking ‘‘1 year’’ and in25 serting ‘‘2 years’’.
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1 SEC. 1024. DISQUALIFICATION OF CONVICTED INDIVID2 UALS.

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

4 (7 U.S.C. 2015(b)(1)(iii)) is amended—

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

6 end;

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

8 the end and inserting ‘‘; or’’; and

9 (3) by inserting after subclause (III) the follow10 ing:

11 ‘‘(IV) a conviction of an offense under sub12 section (b) or (c) of section 15 involving an

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

14 15 having a value of $500 or more.’’.

15 SEC. 1025. DISQUALIFICATION.

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

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

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

19 all that follows through the end of paragraph (1) and in20 serting the following:

21 ‘‘(d) CONDITIONS OF PARTICIPATION.—

22 ‘‘(1) WORK REQUIREMENTS.—

23 ‘‘(A) IN GENERAL.—No physically and

24 mentally fit individual over the age of 15 and

25 under the age of 60 shall be eligible to partici-
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1 pate in the food stamp program if the individ2 ual—

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

4 and every 12 months thereafter, to register

5 for employment in a manner prescribed by

6 the Secretary;

7 ‘‘(ii) refuses without good cause to

8 participate in an employment and training

9 program under paragraph (4), to the ex10 tent required by the State agency;

11 ‘‘(iii) refuses without good cause to

12 accept an offer of employment, at a site or

13 plant not subject to a strike or lockout at

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

15 than the higher of—

16 ‘‘(I) the applicable Federal or

17 State minimum wage; or

18 ‘‘(II) 80 percent of the wage that

19 would have governed had the mini20 mum hourly rate under section

21 6(a)(1) of the Fair Labor Standards

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

23 been applicable to the offer of employ24 ment;
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1 ‘‘(iv) refuses without good cause to

2 provide a State agency with sufficient in3 formation to allow the State agency to de4 termine the employment status or the job

5 availability of the individual;

6 ‘‘(v) voluntarily and without good

7 cause—

8 ‘‘(I) quits a job; or

9 ‘‘(II) reduces work effort and,

10 after the reduction, the individual is

11 working less than 30 hours per week;

12 or

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

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

15 individual who is the head of a household be16 comes ineligible to participate in the food stamp

17 program under subparagraph (A), the house18 hold shall, at the option of the State agency,

19 become ineligible to participate in the food

20 stamp program for a period, determined by the

21 State agency, that does not exceed the lesser

22 of—

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

24 the individual determined under subpara25 graph (C); or
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1 ‘‘(ii) 180 days.

2 ‘‘(C) DURATION OF INELIGIBILITY.—

3 ‘‘(i) FIRST VIOLATION.—The first

4 time that an individual becomes ineligible

5 to participate in the food stamp program

6 under subparagraph (A), the individual

7 shall remain ineligible until the later of—

8 ‘‘(I) the date the individual be9 comes eligible under subparagraph

10 (A);

11 ‘‘(II) the date that is 1 month

12 after the date the individual became

13 ineligible; or

14 ‘‘(III) a date determined by the

15 State agency that is not later than 3

16 months after the date the individual

17 became ineligible.

18 ‘‘(ii) SECOND VIOLATION.—The sec19 ond time that an individual becomes ineli20 gible to participate in the food stamp pro21 gram under subparagraph (A), the individ22 ual shall remain ineligible until the later

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

3 (A);

4 ‘‘(II) the date that is 3 months

5 after the date the individual became

6 ineligible; or

7 ‘‘(III) a date determined by the

8 State agency that is not later than 6

9 months after the date the individual

10 became ineligible.

11 ‘‘(iii) THIRD OR SUBSEQUENT VIOLA12 TION.—The third or subsequent time that

13 an individual becomes ineligible to partici14 pate in the food stamp program under sub15 paragraph (A), the individual shall remain

16 ineligible until the later of—

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

19 (A);

20 ‘‘(II) the date that is 6 months

21 after the date the individual became

22 ineligible;

23 ‘‘(III) a date determined by the

24 State agency; or
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1 ‘‘(IV) at the option of the State

2 agency, permanently.

3 ‘‘(D) ADMINISTRATION.—

4 ‘‘(i) GOOD CAUSE.—The Secretary

5 shall determine the meaning of good cause

6 for the purpose of this paragraph.

7 ‘‘(ii) VOLUNTARY QUIT.—The Sec8 retary shall determine the meaning of vol9 untarily quitting and reducing work effort

10 for the purpose of this paragraph.

11 ‘‘(iii) DETERMINATION BY STATE

12 AGENCY.—

13 ‘‘(I) IN GENERAL.—Subject to

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

15 a State agency shall determine—

16 ‘‘(aa) the meaning of any

17 term in subparagraph (A);

18 ‘‘(bb) the procedures for de19 termining whether an individual

20 is in compliance with a require21 ment under subparagraph (A);

22 and

23 ‘‘(cc) whether an individual

24 is in compliance with a require25 ment under subparagraph (A).
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1 ‘‘(II) NOT LESS RESTRICTIVE.—

2 A State agency may not determine a

3 meaning, procedure, or determination

4 under subclause (I) to be less restric5 tive than a comparable meaning, pro6 cedure, or determination under a

7 State program funded under part A of

8 title IV of the Social Security Act (42

9 U.S.C. 601 et seq.).

10 ‘‘(iv) STRIKE AGAINST THE GOVERN11 MENT.—For the purpose of subparagraph

12 (A)(v), an employee of the Federal Govern13 ment, a State, or a political subdivision of

14 a State, who is dismissed for participating

15 in a strike against the Federal Govern16 ment, the State, or the political subdivision

17 of the State shall be considered to have

18 voluntarily quit without good cause.

19 ‘‘(v) SELECTING A HEAD OF HOUSE20 HOLD.—

21 ‘‘(I) IN GENERAL.—For the pur22 pose of this paragraph, the State

23 agency shall allow the household to se24 lect any adult parent of a child in the

25 household as the head of the house-
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1 hold if all adult household members

2 making application under the food

3 stamp program agree to the selection.

4 ‘‘(II) TIME FOR MAKING DES5 IGNATION.—A household may des6 ignate the head of the household

7 under subclause (I) each time the

8 household is certified for participation

9 in the food stamp program, but may

10 not change the designation during a

11 certification period unless there is a

12 change in the composition of the

13 household.

14 ‘‘(vi) CHANGE IN HEAD OF HOUSE15 HOLD.—If the head of a household leaves

16 the household during a period in which the

17 household is ineligible to participate in the

18 food stamp program under subparagraph

19 (B)—

20 ‘‘(I) the household shall, if other21 wise eligible, become eligible to par22 ticipate in the food stamp program;

23 and

24 ‘‘(II) if the head of the household

25 becomes the head of another house-
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1 hold, the household that becomes

2 headed by the individual shall become

3 ineligible to participate in the food

4 stamp program for the remaining pe5 riod of ineligibility.’’.

6 (b) CONFORMING AMENDMENT.—

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

8 the Act (7 U.S.C. 2026(b)(2)) is amended by strik9 ing ‘‘6(d)(1)(i)’’ and inserting ‘‘6(d)(1)(A)(i)’’.

10 (2) Section 20 of the Act (7 U.S.C. 2029) is

11 amended by striking subsection (f) and inserting the

12 following:

13 ‘‘(f) DISQUALIFICATION.—An individual or a house14 hold may become ineligible under section 6(d)(1) to par15 ticipate in the food stamp program for failing to comply

16 with this section.’’.

17 SEC. 1026. CARETAKER EXEMPTION.

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

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

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

21 member of a household with responsibility for the care of

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

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

24 of 1, or (ii) an incapacitated person;’’.
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1 SEC. 1027. EMPLOYMENT AND TRAINING.

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

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

4 (1) in subparagraph (A)—

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

6 1987, each’’ and inserting ‘‘Each’’;

7 (B) by inserting ‘‘work,’’ after ‘‘skills,

8 training,’’; and

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

10 ‘‘Each component of an employment and train11 ing program carried out under this paragraph

12 shall be delivered through a statewide workforce

13 development system, unless the component is

14 not available locally through the statewide

15 workforce development system.’’;

16 (2) in subparagraph (B)—

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

18 striking the colon at the end and inserting the

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

20 retain the option to apply employment require21 ments prescribed under this subparagraph to a

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

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

24 and conditions’’ and all that follows through

25 ‘‘time of application’’; and

26 (C) in clause (iv)—
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1 (i) by striking subclauses (I) and (II);

2 and

3 (ii) by redesignating subclauses (III)

4 and (IV) as subclauses (I) and (II), respec5 tively;

6 (3) in subparagraph (D)—

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

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

9 days or less’’;

10 (B) in clause (ii), by striking ‘‘but with re11 spect’’ and all that follows through ‘‘child

12 care’’; and

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

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

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

16 be valid’’;

17 (4) in subparagraph (E), by striking the third

18 sentence;

19 (5) in subparagraph (G)—

20 (A) by striking ‘‘(G)(i) The State’’ and in21 serting ‘‘(G) The State’’; and

22 (B) by striking clause (ii);

23 (6) in subparagraph (H), by striking ‘‘(H)(i)

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

25 Federal funds’’ and inserting ‘‘(H) Federal funds’’;
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1 (7) in subparagraph (I)(i)(II), by striking ‘‘, or

2 was in operation,’’ and all that follows through ‘‘So3 cial Security Act’’ and inserting the following: ‘‘),

4 except that no such payment or reimbursement shall

5 exceed the applicable local market rate’’;

6 (8)(A) by striking subparagraphs (K) and (L)

7 and inserting the following:

8 ‘‘(K) LIMITATION ON FUNDING.—Notwith9 standing any other provision of this paragraph,

10 the amount of funds a State agency uses to

11 carry out this paragraph (including under sub12 paragraph (I)) for participants who are receiv13 ing benefits under a State program funded

14 under part A of title IV of the Social Security

15 Act (42 U.S.C. 601 et seq.) shall not exceed the

16 amount of funds the State agency used in fiscal

17 year 1995 to carry out this paragraph for par18 ticipants who were receiving benefits in fiscal

19 year 1995 under a State program funded under

20 part A of title IV of the Act (42 U.S.C. 601 et

21 seq.).’’; and

22 (B) by redesignating subparagraphs (M) and

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

24 (9) in subparagraph (L), as redesignated by

25 paragraph (8)(B)—
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1 (A) by striking ‘‘(L)(i) The Secretary’’ and

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

3 (B) by striking clause (ii).

4 (b) FUNDING.—Section 16(h) of the Act (7 U.S.C.

5 2025(h)) is amended by striking ‘‘(h)(1)(A) The Sec6 retary’’ and all that follows through the end of paragraph

7 (1) and inserting the following:

8 ‘‘(h) FUNDING OF EMPLOYMENT AND TRAINING

9 PROGRAMS.—

10 ‘‘(1) IN GENERAL.—

11 ‘‘(A) AMOUNTS.—To carry out employ12 ment and training programs, the Secretary

13 shall reserve for allocation to State agencies

14 from funds made available for each fiscal year

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

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

17 ‘‘(ii) for fiscal year 1997,

18 $79,000,000;

19 ‘‘(iii) for fiscal year 1998,

20 $81,000,000;

21 ‘‘(iv) for fiscal year 1999,

22 $84,000,000;

23 ‘‘(v) for fiscal year 2000,

24 $86,000,000;
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1 ‘‘(vi) for fiscal year 2001,

2 $88,000,000; and

3 ‘‘(vii) for fiscal year 2002,

4 $90,000,000.

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

6 allocate the amounts reserved under subpara7 graph (A) among the State agencies using a

8 reasonable formula (as determined by the Sec9 retary) that gives consideration to the popu10 lation in each State affected by section 6(o).

11 ‘‘(C) REALLOCATION.—

12 ‘‘(i) NOTIFICATION.—A State agency

13 shall promptly notify the Secretary if the

14 State agency determines that the State

15 agency will not expend all of the funds al16 located to the State agency under subpara17 graph (B).

18 ‘‘(ii) REALLOCATION.—On notification

19 under clause (i), the Secretary shall reallo20 cate the funds that the State agency will

21 not expend as the Secretary considers ap22 propriate and equitable.

23 ‘‘(D) MINIMUM ALLOCATION.—Notwith24 standing subparagraphs (A) through (C), the

25 Secretary shall ensure that each State agency
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1 operating an employment and training program

2 shall receive not less than $50,000 in each fis3 cal year.’’.

4 (c) ADDITIONAL MATCHING FUNDS.—Section

5 16(h)(2) of the Act (7 U.S.C. 2025(h)(2)) is amended by

6 inserting before the period at the end the following: ‘‘, in7 cluding the costs for case management and casework to

8 facilitate the transition from economic dependency to self9 sufficiency through work’’.

10 (d) REPORTS.—Section 16(h) of the Act (7 U.S.C.

11 2025(h)) is amended—

12 (1) in paragraph (5)—

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

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

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

16 (2) by striking paragraph (6).

17 SEC. 1028. COMPARABLE TREATMENT FOR DISQUALIFICA18 TION.

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

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

21 the following:

22 ‘‘(i) COMPARABLE TREATMENT FOR DISQUALIFICA23 TION.—

24 ‘‘(1) IN GENERAL.—If a disqualification is im25 posed on a member of a household for a failure of
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1 the member to perform an action required under a

2 Federal, State, or local law relating to a means-test3 ed public assistance program, the State agency may

4 impose the same disqualification on the member of

5 the household under the food stamp program.

6 ‘‘(2) RULES AND PROCEDURES.—If a disquali7 fication is imposed under paragraph (1) for a failure

8 of an individual to perform an action required under

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

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

11 rules and procedures that apply under part A of title

12 IV of the Act to impose the same disqualification

13 under the food stamp program.

14 ‘‘(3) APPLICATION AFTER DISQUALIFICATION

15 PERIOD.—A member of a household disqualified

16 under paragraph (1) may, after the disqualification

17 period has expired, apply for benefits under this Act

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

19 a prior disqualification under subsection (d) shall be

20 considered in determining eligibility.’’.

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

22 Act (7 U.S.C. 2020(e)) is amended—

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

24 end;
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1 (2) in paragraph (25), by striking the period at

2 the end and inserting a semicolon; and

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

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

5 carrying out section 6(i); and’’.

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

7 of the Act (7 U.S.C. 2015(d)(2)(A)) is amended by strik8 ing ‘‘that is comparable to a requirement of paragraph

9 (1)’’.

10 SEC. 1029. DISQUALIFICATION FOR RECEIPT OF MULTIPLE

11 FOOD STAMP BENEFITS.

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

13 2015), as amended by section 1028, is amended by adding

14 at the end the following:

15 ‘‘(j) DISQUALIFICATION FOR RECEIPT OF MULTIPLE

16 FOOD STAMP BENEFITS.—An individual shall be ineligible

17 to participate in the food stamp program as a member

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

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

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

21 statement or representation with respect to the identity

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

23 multiple benefits simultaneously under the food stamp

24 program.’’.
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1 SEC. 1030. DISQUALIFICATION OF FLEEING FELONS.

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

3 2015), as amended by sections 1028 and 1029, is amend4 ed by adding at the end the following:

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

6 member of a household who is otherwise eligible to partici7 pate in the food stamp program shall be eligible to partici8 pate in the program as a member of that or any other

9 household during any period during which the individual

10 is—

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

12 confinement after conviction, under the law of the

13 place from which the individual is fleeing, for a

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

15 under the law of the place from which the individual

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

17 high misdemeanor under the law of New Jersey; or

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

19 imposed under a Federal or State law.’’.

20 SEC. 1031. COOPERATION WITH CHILD SUPPORT AGENCIES.

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

22 2015), as amended by sections 1028 through 1030, is

23 amended by adding at the end the following:

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

25 CHILD SUPPORT AGENCIES.—
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1 ‘‘(1) IN GENERAL.—At the option of a State

2 agency, subject to paragraphs (2) and (3), no natu3 ral or adoptive parent or other individual (collec4 tively referred to in this subsection as ‘the individ5 ual’) who is living with and exercising parental con6 trol over a child under the age of 18 who has an ab7 sent parent shall be eligible to participate in the food

8 stamp program unless the individual cooperates with

9 the State agency administering the program estab10 lished under part D of title IV of the Social Security

11 Act (42 U.S.C. 651 et seq.)—

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

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

14 ‘‘(B) in obtaining support for—

15 ‘‘(i) the child; or

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

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

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

19 good cause is found for refusing to cooperate, as de20 termined by the State agency in accordance with

21 standards prescribed by the Secretary in consulta22 tion with the Secretary of Health and Human Serv23 ices. The standards shall take into consideration cir24 cumstances under which cooperation may be against

25 the best interests of the child.
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1 ‘‘(3) FEES.—Paragraph (1) shall not require

2 the payment of a fee or other cost for services pro3 vided under part D of title IV of the Social Security

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

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

6 CHILD SUPPORT AGENCIES.—

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

8 agency, subject to paragraphs (2) and (3), a puta9 tive or identified noncustodial parent of a child

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

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

12 in the food stamp program if the individual refuses

13 to cooperate with the State agency administering the

14 program established under part D of title IV of the

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

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

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

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

19 ‘‘(2) REFUSAL TO COOPERATE.—

20 ‘‘(A) GUIDELINES.—The Secretary, in con21 sultation with the Secretary of Health and

22 Human Services, shall develop guidelines on

23 what constitutes a refusal to cooperate under

24 paragraph (1).
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1 ‘‘(B) PROCEDURES.—The State agency

2 shall develop procedures, using guidelines devel3 oped under subparagraph (A), for determining

4 whether an individual is refusing to cooperate

5 under paragraph (1).

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

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

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

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

11 safeguards to restrict the use of information col12 lected by a State agency administering the program

13 established under part D of title IV of the Social Se14 curity Act (42 U.S.C. 651 et seq.) to purposes for

15 which the information is collected.’’.

16 SEC. 1032. DISQUALIFICATION RELATING TO CHILD SUP17 PORT ARREARS.

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

19 2015), as amended by sections 1028 through 1031, is

20 amended by adding at the end the following:

21 ‘‘(n) DISQUALIFICATION FOR CHILD SUPPORT AR22 REARS.—

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

24 agency, no individual shall be eligible to participate

25 in the food stamp program as a member of any
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1 household during any month that the individual is

2 delinquent in any payment due under a court order

3 for the support of a child of the individual.

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

5 apply if—

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

7 delay payment; or

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

9 payment plan approved by a court or the State

10 agency designated under part D of title IV of

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

12 to provide support for the child of the individ13 ual.’’.

14 SEC. 1033. WORK REQUIREMENT.

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

16 of 1977 (7 U.S.C. 2015), as amended by sections 1028

17 through 1032, is amended by adding at the end the follow18 ing:

19 ‘‘(o) WORK REQUIREMENT.—

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

21 subsection, the term ‘work program’ means—

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

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

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

25 Trade Act of 1974 (19 U.S.C. 2296); or
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1 ‘‘(C) a program of employment and train2 ing operated or supervised by a State or politi3 cal subdivision of a State that meets standards

4 approved by the Governor of the State, includ5 ing a program under section 6(d)(4), other than

6 a job search program or a job search training

7 program.

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

9 other provisions of this subsection, no individual

10 shall be eligible to participate in the food stamp pro11 gram as a member of any household if, during the

12 preceding 12-month period, the individual received

13 food stamp benefits for not less than 4 months dur14 ing which the individual did not—

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

16 averaged monthly; or

17 ‘‘(B) participate in and comply with the re18 quirements of a work program for 20 hours or

19 more per week, as determined by the State

20 agency; or

21 ‘‘(C) participate in a program under sec22 tion 20 or a comparable program established by

23 a State or political subdivision of a State.

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

25 apply to an individual if the individual is—
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1 ‘‘(A) under 18 or over 50 years of age;

2 ‘‘(B) medically certified as physically or

3 mentally unfit for employment;

4 ‘‘(C) a parent or other member of a house5 hold with responsibility for a dependent child;

6 ‘‘(D) otherwise exempt under section

7 6(d)(2); or

8 ‘‘(E) a pregnant woman.

9 ‘‘(4) WAIVER.—

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

11 State agency, the Secretary may waive the ap12 plicability of paragraph (2) to any group of in13 dividuals in the State if the Secretary makes a

14 determination that the area in which the indi15 viduals reside—

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

17 10 percent; or

18 ‘‘(ii) does not have a sufficient num19 ber of jobs to provide employment for the

20 individuals.

21 ‘‘(B) REPORT.—The Secretary shall report

22 the basis for a waiver under subparagraph (A)

23 to the Committee on Agriculture of the House

24 of Representatives and the Committee on Agri25 culture, Nutrition, and Forestry of the Senate.
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1 ‘‘(5) SUBSEQUENT ELIGIBILITY.—

2 ‘‘(A) IN GENERAL.—Paragraph (2) shall

3 cease to apply to an individual if, during a 30-

4 day period, the individual—

5 ‘‘(i) works 80 or more hours;

6 ‘‘(ii) participates in and complies with

7 the requirements of a work program for 80

8 or more hours, as determined by a State

9 agency; or

10 ‘‘(iii) participates in a program under

11 section 20 or a comparable program estab12 lished by a State or political subdivision of

13 a State.

14 ‘‘(B) LIMITATION.—During the subsequent

15 12-month period, the individual shall be eligible

16 to participate in the food stamp program for

17 not more than 4 months during which the indi18 vidual does not—

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

20 averaged monthly;

21 ‘‘(ii) participate in and comply with

22 the requirements of a work program for 20

23 hours or more per week, as determined by

24 the State agency; or
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1 ‘‘(iii) participate in a program under

2 section 20 or a comparable program estab3 lished by a State or political subdivision of

4 a State.’’.

5 (b) TRANSITION PROVISION.—Prior to 1 year after

6 the date of enactment of this Act, the term ‘‘preceding

7 12-month period’’ in section 6(o) of the Food Stamp Act

8 of 1977, as amended by subsection (a), means the preced9 ing period that begins on the date of enactment of this

10 Act.

11 SEC. 1034. ENCOURAGE ELECTRONIC BENEFIT TRANSFER

12 SYSTEMS.

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

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

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

16 following:

17 ‘‘(1) ELECTRONIC BENEFIT TRANSFERS.—

18 ‘‘(A) IMPLEMENTATION.—Each State

19 agency shall implement an electronic benefit

20 transfer system in which household benefits de21 termined under section 8(a) or 26 are issued

22 from and stored in a central databank before

23 October 1, 2002, unless the Secretary provides

24 a waiver for a State agency that faces unusual
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1 barriers to implementing an electronic benefit

2 transfer system.

3 ‘‘(B) TIMELY IMPLEMENTATION.—State

4 agencies are encouraged to implement an elec5 tronic benefit transfer system under subpara6 graph (A) as soon as practicable.

7 ‘‘(C) STATE FLEXIBILITY.—Subject to

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

9 implement an electronic benefit transfer system

10 under the terms, conditions, and design that

11 the State agency considers appropriate.

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

13 transfer system should take into account gen14 erally accepted standard operating rules based

15 on—

16 ‘‘(i) commercial electronic funds

17 transfer technology;

18 ‘‘(ii) the need to permit interstate op19 eration and law enforcement monitoring;

20 and

21 ‘‘(iii) the need to permit monitoring

22 and investigations by authorized law en23 forcement agencies.’’;

24 (2) in paragraph (2)—
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1 (A) by striking ‘‘effective no later than

2 April 1, 1992,’’;

3 (B) in subparagraph (A)—

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

5 (ii) by striking ‘‘on-line’’;

6 (C) by striking subparagraph (D) and in7 serting the following:

8 ‘‘(D)(i) measures to maximize the security of a

9 system using the most recent technology available

10 that the State agency considers appropriate and cost

11 effective and which may include personal identifica12 tion numbers, photographic identification on elec13 tronic benefit transfer cards, and other measures to

14 protect against fraud and abuse; and

15 ‘‘(ii) effective not later than 2 years after the

16 effective date of this clause, to the extent prac17 ticable, measures that permit a system to differen18 tiate items of food that may be acquired with an al19 lotment from items of food that may not be acquired

20 with an allotment.’’;

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

22 ‘‘and’’ at the end;

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

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

25 (F) by adding at the end the following:
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1 ‘‘(I) procurement standards.’’; and

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

3 ‘‘(7) REPLACEMENT OF BENEFITS.—Regula4 tions issued by the Secretary regarding the replace5 ment of benefits and liability for replacement of ben6 efits under an electronic benefit transfer system

7 shall be similar to the regulations in effect for a

8 paper food stamp issuance system.

9 ‘‘(8) REPLACEMENT CARD FEE.—A State agen10 cy may collect a charge for replacement of an elec11 tronic benefit transfer card by reducing the monthly

12 allotment of the household receiving the replacement

13 card.

14 ‘‘(9) OPTIONAL PHOTOGRAPHIC IDENTIFICA15 TION.—

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

17 require that an electronic benefit card contain

18 a photograph of 1 or more members of a house19 hold.

20 ‘‘(B) OTHER AUTHORIZED USERS.—If a

21 State agency requires a photograph on an elec22 tronic benefit card under subparagraph (A), the

23 State agency shall establish procedures to en24 sure that any other appropriate member of the
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1 household or any authorized representative of

2 the household may utilize the card.

3 ‘‘(10) APPLICATION OF ANTI-TYING RESTRIC4 TIONS TO ELECTRONIC BENEFIT TRANSFER SYS5 TEMS.—

6 ‘‘(A) IN GENERAL.—A company shall not

7 sell or provide electronic benefit transfer serv8 ices, or fix or vary the consideration for such

9 services, on the condition or requirement that

10 the customer—

11 ‘‘(i) obtain some additional point-of12 sale service from the company or any affili13 ate of the company; or

14 ‘‘(ii) not obtain some additional point15 of-sale service from a competitor of the

16 company or competitor of any affiliate of

17 the company.

18 ‘‘(B) DEFINITIONS.—In this paragraph—

19 ‘‘(i) AFFILIATE.—The term ‘affiliate’

20 shall have the same meaning as in section

21 2(k) of the Bank Holding Company Act.

22 ‘‘(ii) COMPANY.—The term ‘company’

23 shall have the same meaning as in section

24 106(a) of the Bank Holding Company Act

25 Amendments of 1970, but shall not include
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1 a bank, bank holding company, or any sub2 sidiary of a bank holding company.

3 ‘‘(iii) ELECTRONIC BENEFIT TRANS4 FER SERVICE.—The term ‘electronic bene5 fit transfer service’ means the processing

6 of electronic transfers of household bene7 fits determined under section 8(a) or 26

8 where the benefits are—

9 ‘‘(I) issued from and stored in a

10 central databank;

11 ‘‘(II) electronically accessed by

12 household members at the point of

13 sale; and

14 ‘‘(III) provided by a Federal or

15 state government.

16 ‘‘(iv) POINT-OF-SALE SERVICE.—The

17 term ‘point-of-sale service’ means any

18 product or service related to the electronic

19 authorization and processing of payments

20 for merchandise at a retail food store, in21 cluding but not limited to credit or debit

22 card services, automated teller machines,

23 point-of-sale terminals, or access to on-line

24 systems.
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1 ‘‘(C) CONSULTATION WITH THE FEDERAL

2 RESERVE BOARD.—Before promulgating regula3 tions or interpretations of regulations to carry

4 out this paragraph, the Secretary shall consult

5 with the Board of Governors of the Federal Re6 serve System.’’.

7 (b) SENSE OF CONGRESS.—It is the sense of Con8 gress that a State that operates an electronic benefit

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

10 U.S.C. 2011 et seq.) should operate the system in a man11 ner that is compatible with electronic benefit transfer sys12 tems operated by other States.

13 SEC. 1035. VALUE OF MINIMUM ALLOTMENT.

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

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

16 shall be adjusted’’ and all that follows through ‘‘$5’’.

17 SEC. 1036. BENEFITS ON RECERTIFICATION.

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

19 (7 U.S.C. 2017(c)(2)(B)) is amended by striking ‘‘of more

20 than one month’’.

21 SEC. 1037. OPTIONAL COMBINED ALLOTMENT FOR EXPE22 DITED HOUSEHOLDS.

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

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

25 inserting the following:
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1 ‘‘(3) OPTIONAL COMBINED ALLOTMENT FOR

2 EXPEDITED HOUSEHOLDS.—A State agency may

3 provide to an eligible household applying after the

4 15th day of a month, in lieu of the initial allotment

5 of the household and the regular allotment of the

6 household for the following month, an allotment that

7 is equal to the total amount of the initial allotment

8 and the first regular allotment. The allotment shall

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

10 the case of a household that is not entitled to expe11 dited service and in accordance with paragraphs (3)

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

13 that is entitled to expedited service.’’.

14 SEC. 1038. FAILURE TO COMPLY WITH OTHER MEANS15 TESTED PUBLIC ASSISTANCE PROGRAMS.

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

17 2017) is amended by striking subsection (d) and inserting

18 the following:

19 ‘‘(d) REDUCTION OF PUBLIC ASSISTANCE BENE20 FITS.—

21 ‘‘(1) IN GENERAL.—If the benefits of a house22 hold are reduced under a Federal, State, or local law

23 relating to a means-tested public assistance program

24 for the failure of a member of the household to per-
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1 form an action required under the law or program,

2 for the duration of the reduction—

3 ‘‘(A) the household may not receive an in4 creased allotment as the result of a decrease in

5 the income of the household to the extent that

6 the decrease is the result of the reduction; and

7 ‘‘(B) the State agency may reduce the al8 lotment of the household by not more than 25

9 percent.

10 ‘‘(2) RULES AND PROCEDURES.—If the allot11 ment of a household is reduced under this subsection

12 for a failure to perform an action required under

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

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

15 rules and procedures that apply under part A of title

16 IV of the Act to reduce the allotment under the food

17 stamp program.’’.

18 SEC. 1039. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN

19 CENTERS.

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

21 2017) is amended by adding at the end the following:

22 ‘‘(f) ALLOTMENTS FOR HOUSEHOLDS RESIDING IN

23 CENTERS.—

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

25 who resides in a center for the purpose of a drug or
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1 alcoholic treatment program described in the last

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

3 an allotment for the individual to—

4 ‘‘(A) the center as an authorized represent5 ative of the individual for a period that is less

6 than 1 month; and

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

8 the center.

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

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

11 designate the center in which the individual resides

12 as the authorized representative of the individual for

13 the purpose of receiving an allotment.’’.

14 SEC. 1040. CONDITION PRECEDENT FOR APPROVAL OF RE15 TAIL FOOD STORES AND WHOLESALE FOOD

16 CONCERNS.

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

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

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

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

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

22 be approved to be authorized or reauthorized for participa23 tion in the food stamp program unless an authorized em24 ployee of the Department of Agriculture, a designee of the

25 Secretary, or, if practicable, an official of the State or local
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1 government designated by the Secretary has visited the

2 store or concern for the purpose of determining whether

3 the store or concern should be approved or reauthorized,

4 as appropriate.’’.

5 SEC. 1041. AUTHORITY TO ESTABLISH AUTHORIZATION PE6 RIODS.

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

8 U.S.C. 2018(a)) is amended by adding at the end the fol9 lowing:

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

11 shall establish specific time periods during which au12 thorization to accept and redeem coupons, or to re13 deem benefits through an electronic benefit transfer

14 system, shall be valid under the food stamp pro15 gram.’’.

16 SEC. 1042. INFORMATION FOR VERIFYING ELIGIBILITY FOR

17 AUTHORIZATION.

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

19 U.S.C. 2018(c)) is amended—

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

21 may include relevant income and sales tax filing doc22 uments,’’ after ‘‘submit information’’; and

23 (2) by inserting after the first sentence the fol24 lowing: ‘‘The regulations may require retail food

25 stores and wholesale food concerns to provide writ-
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1 ten authorization for the Secretary to verify all rel2 evant tax filings with appropriate agencies and to

3 obtain corroborating documentation from other

4 sources so that the accuracy of information provided

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

6 SEC. 1043. WAITING PERIOD FOR STORES THAT FAIL TO

7 MEET AUTHORIZATION CRITERIA.

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

9 U.S.C. 2018(d)) is amended by adding at the end the fol10 lowing: ‘‘A retail food store or wholesale food concern that

11 is denied approval to accept and redeem coupons because

12 the store or concern does not meet criteria for approval

13 established by the Secretary may not, for at least 6

14 months, submit a new application to participate in the

15 program. The Secretary may establish a longer time pe16 riod under the preceding sentence, including permanent

17 disqualification, that reflects the severity of the basis of

18 the denial.’’.

19 SEC. 1044. OPERATION OF FOOD STAMP OFFICES.

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

21 2020), as amended by sections 1020(b) and 1028(b), is

22 amended—

23 (1) in subsection (e)—

24 (A) by striking paragraph (2) and insert25 ing the following:
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1 ‘‘(2)(A) that the State agency shall establish

2 procedures governing the operation of food stamp of3 fices that the State agency determines best serve

4 households in the State, including households with

5 special needs, such as households with elderly or dis6 abled members, households in rural areas with low7 income members, homeless individuals, households

8 residing on reservations, and households in areas in

9 which a substantial number of members of low-in10 come households speak a language other than Eng11 lish;

12 ‘‘(B) that in carrying out subparagraph (A), a

13 State agency—

14 ‘‘(i) shall provide timely, accurate, and fair

15 service to applicants for, and participants in,

16 the food stamp program;

17 ‘‘(ii) shall develop an application contain18 ing the information necessary to comply with

19 this Act;

20 ‘‘(iii) shall permit an applicant household

21 to apply to participate in the program on the

22 same day that the household first contacts a

23 food stamp office in person during office hours;

24 ‘‘(iv) shall consider an application that

25 contains the name, address, and signature of
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1 the applicant to be filed on the date the appli2 cant submits the application;

3 ‘‘(v) shall require that an adult representa4 tive of each applicant household certify in writ5 ing, under penalty of perjury, that—

6 ‘‘(I) the information contained in the

7 application is true; and

8 ‘‘(II) all members of the household

9 are citizens or are aliens eligible to receive

10 food stamps under section 6(f);

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

12 and issuing coupons to eligible homeless individ13 uals, to ensure that participation in the food

14 stamp program is limited to eligible households;

15 and

16 ‘‘(vii) may establish operating procedures

17 that vary for local food stamp offices to reflect

18 regional and local differences within the State;

19 ‘‘(C) that nothing in this Act shall prohibit the

20 use of signatures provided and maintained electroni21 cally, storage of records using automated retrieval

22 systems only, or any other feature of a State agen23 cy’s application system that does not rely exclusively

24 on the collection and retention of paper applications

25 or other records;
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1 ‘‘(D) that the signature of any adult under this

2 paragraph shall be considered sufficient to comply

3 with any provision of Federal law requiring a house4 hold member to sign an application or statement;’’;

5 (B) in paragraph (3), as amended by sec6 tion 1020(b)—

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

8 follows through ‘‘provide each’’ and insert9 ing ‘‘shall provide each’’; and

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

11 that follows through ‘‘representative of the

12 State agency;’’;

13 (C) by striking paragraphs (14) and (25);

14 (D)(i) by redesignating paragraphs (15)

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

16 respectively; and

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

18 added by section 1028(b), as paragraph (24);

19 and

20 (2) in subsection (i)—

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

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

23 following:

24 ‘‘(i) APPLICATION AND DENIAL PROCEDURES.—
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1 ‘‘(1) APPLICATION PROCEDURES.—Notwith2 standing any other provision of law,’’; and

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

4 that follows through ‘‘title IV of the Social Se5 curity Act. No’’ and inserting a period and the

6 following:

7 ‘‘(2) DENIAL AND TERMINATION.—Other than

8 in a case of disqualification as a penalty for failure

9 to comply with a public assistance program rule or

10 regulation, no’’.

11 SEC. 1045. STATE EMPLOYEE AND TRAINING STANDARDS.

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

13 U.S.C. 2020(e)(6)) is amended—

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

15 ‘‘that—

16 ‘‘(A) the’’;

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

18 ‘‘Act; and

19 ‘‘(B) the’’;

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

21 States Civil Service Commission’’ and inserting ‘‘Of22 fice of Personnel Management’’; and

23 (4) by striking subparagraphs (C) through (E).
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1 SEC. 1046. EXCHANGE OF LAW ENFORCEMENT INFORMA2 TION.

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

4 U.S.C. 2020(e)(8)) is amended—

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

6 the following: ‘‘that—

7 ‘‘(A) the’’;

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

9 inserting the following: ‘‘law;

10 ‘‘(B) notwithstanding’’;

11 (3) by striking ‘‘Act, and (C) such’’ and insert12 ing the following: ‘‘Act;

13 ‘‘(C) the’’; and

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

15 ‘‘(D) notwithstanding any other provision

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

17 if available, photograph of any member of a

18 household shall be made available, on request,

19 to any Federal, State, or local law enforcement

20 officer if the officer furnishes the State agency

21 with the name of the member and notifies the

22 agency that—

23 ‘‘(i) the member—

24 ‘‘(I) is fleeing to avoid prosecu25 tion, or custody or confinement after

26 conviction, for a crime (or attempt to
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1 commit a crime) that, under the law

2 of the place the member is fleeing, is

3 a felony (or, in the case of New Jer4 sey, a high misdemeanor), or is violat5 ing a condition of probation or parole

6 imposed under Federal or State law;

7 or

8 ‘‘(II) has information that is nec9 essary for the officer to conduct an of10 ficial duty related to subclause (I);

11 ‘‘(ii) locating or apprehending the

12 member is an official duty; and

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

14 proper exercise of an official duty; and

15 ‘‘(E) the safeguards shall not prevent com16 pliance with paragraph (16);’’.

17 SEC. 1047. EXPEDITED COUPON SERVICE.

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

19 U.S.C. 2020(e)(9)) is amended—

20 (1) in subparagraph (A)—

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

22 ‘‘7 days’’; and

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

24 (2) by striking subparagraphs (B) and (C);
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1 (3) by redesignating subparagraph (D) as sub2 paragraph (B); and

3 (4) in subparagraph (B), as redesignated by

4 paragraph (3), by striking ‘‘, (B), or (C)’’.

5 SEC. 1048. WITHDRAWING FAIR HEARING REQUESTS.

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

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

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

9 option of a State, at any time prior to a fair hearing deter10 mination under this paragraph, a household may with11 draw, orally or in writing, a request by the household for

12 the fair hearing. If the withdrawal request is an oral re13 quest, the State agency shall provide a written notice to

14 the household confirming the withdrawal request and pro15 viding the household with an opportunity to request a

16 hearing’’.

17 SEC. 1049. INCOME, ELIGIBILITY, AND IMMIGRATION STA18 TUS VERIFICATION SYSTEMS.

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

20 2020) is amended—

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

22 section 1044(1)(D)—

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

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

25 that information may be’’; and
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1 (B) by striking ‘‘shall be requested’’ and

2 inserting ‘‘may be requested’’; and

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

4 ‘‘(p) STATE VERIFICATION OPTION.—Notwithstand5 ing any other provision of law, in carrying out the food

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

7 use an income and eligibility or an immigration status ver8 ification system established under section 1137 of the So9 cial Security Act (42 U.S.C. 1320b–7).’’.

10 SEC. 1050. DISQUALIFICATION OF RETAILERS WHO INTEN11 TIONALLY SUBMIT FALSIFIED APPLICATIONS.

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

13 U.S.C. 2021(b)) is amended—

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

15 end;

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

17 the end and inserting ‘‘; and’’; and

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

19 ‘‘(4) for a reasonable period of time to be deter20 mined by the Secretary, including permanent dis21 qualification, on the knowing submission of an appli22 cation for the approval or reauthorization to accept

23 and redeem coupons that contains false information

24 about a substantive matter that was a part of the

25 application.’’.
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1 SEC. 1051. DISQUALIFICATION OF RETAILERS WHO ARE

2 DISQUALIFIED UNDER THE WIC PROGRAM.

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

4 2021) is amended by adding at the end the following:

5 ‘‘(g) DISQUALIFICATION OF RETAILERS WHO ARE

6 DISQUALIFIED UNDER THE WIC PROGRAM.—

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

8 regulations providing criteria for the disqualification

9 under this Act of an approved retail food store and

10 a wholesale food concern that is disqualified from

11 accepting benefits under the special supplemental

12 nutrition program for women, infants, and children

13 established under section 17 of the Child Nutrition

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

15 ‘‘(2) TERMS.—A disqualification under para16 graph (1)—

17 ‘‘(A) shall be for the same length of time

18 as the disqualification from the program re19 ferred to in paragraph (1);

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

21 disqualification from the program referred to in

22 paragraph (1); and

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

24 be subject to judicial or administrative review.’’.
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1 SEC. 1052. COLLECTION OF OVERISSUANCES.

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

3 the Food Stamp Act of 1977 (7 U.S.C. 2022) is amend4 ed—

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

6 following:

7 ‘‘(b) COLLECTION OF OVERISSUANCES.—

8 ‘‘(1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, a State agency shall collect

10 any overissuance of coupons issued to a household

11 by—

12 ‘‘(A) reducing the allotment of the house13 hold;

14 ‘‘(B) withholding amounts from unemploy15 ment compensation from a member of the

16 household under subsection (c);

17 ‘‘(C) recovering from Federal pay or a

18 Federal income tax refund under subsection

19 (d); or

20 ‘‘(D) any other means.

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

22 shall not apply if the State agency demonstrates to

23 the satisfaction of the Secretary that all of the

24 means referred to in paragraph (1) are not cost ef25 fective.
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1 ‘‘(3) MAXIMUM REDUCTION ABSENT FRAUD.—

2 If a household received an overissuance of coupons

3 without any member of the household being found

4 ineligible to participate in the program under section

5 6(b)(1) and a State agency elects to reduce the allot6 ment of the household under paragraph (1)(A), the

7 State agency shall not reduce the monthly allotment

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

9 amount in excess of the greater of—

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

11 of the household; or

12 ‘‘(B) $10.

13 ‘‘(4) PROCEDURES.—A State agency shall col14 lect an overissuance of coupons issued to a house15 hold under paragraph (1) in accordance with the re16 quirements established by the State agency for pro17 viding notice, electing a means of payment, and es18 tablishing a time schedule for payment.’’; and

19 (2) in subsection (d)—

20 (A) by striking ‘‘as determined under sub21 section (b) and except for claims arising from

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

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

24 (B) by inserting before the period at the

25 end the following: ‘‘or a Federal income tax re-
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1 fund as authorized by section 3720A of title 31,

2 United States Code’’.

3 (b) CONFORMING AMENDMENTS.—Section 11(e)(8)

4 of the Act (7 U.S.C. 2020(e)(8)) is amended—

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

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

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

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

9 authorized by section 3720A of title 31, United

10 States Code’’.

11 (c) RETENTION RATE.—Section 16(a) of the Act (7

12 U.S.C. 2025(a)) is amended by striking ‘‘25 percent dur13 ing the period beginning October 1, 1990’’ and all that

14 follows through ‘‘error of a State agency’’ and inserting

15 the following: ‘‘25 percent of the overissuances collected

16 by the State agency under section 13, except those

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

18 SEC. 1053. AUTHORITY TO SUSPEND STORES VIOLATING

19 PROGRAM REQUIREMENTS PENDING ADMIN20 ISTRATIVE AND JUDICIAL REVIEW.

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

22 U.S.C. 2023(a)) is amended—

23 (1) by redesignating the first through seven24 teenth sentences as paragraphs (1) through (17), re25 spectively; and
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1 (2) by adding at the end the following:

2 ‘‘(18) SUSPENSION OF STORES PENDING RE3 VIEW.—Notwithstanding any other provision of this

4 subsection, any permanent disqualification of a retail

5 food store or wholesale food concern under para6 graph (3) or (4) of section 12(b) shall be effective

7 from the date of receipt of the notice of disqualifica8 tion. If the disqualification is reversed through ad9 ministrative or judicial review, the Secretary shall

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

11 the disqualification period.’’.

12 SEC. 1054. EXPANDED CRIMINAL FORFEITURE FOR VIOLA13 TIONS.

14 (a) FORFEITURE OF ITEMS EXCHANGED IN FOOD

15 STAMP TRAFFICKING.—The first sentence of section

16 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g))

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

18 (b) CRIMINAL FORFEITURE.—Section 15 of the Act

19 (7 U.S.C. 2024) is amended by adding at the end the fol20 lowing:

21 ‘‘(h) CRIMINAL FORFEITURE.—

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

23 a person convicted of an offense in violation of sub24 section (b) or (c), a court shall order, in addition to

25 any other sentence imposed under this subsection,
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1 that the person forfeit to the United States all prop2 erty described in paragraph (2).

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

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

5 attempted transaction, to commit, or to facilitate the

6 commission of, a violation (other than a mis7 demeanor) of subsection (b) or (c), or proceeds

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

9 be subject to forfeiture to the United States under

10 paragraph (1).

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

12 property shall be forfeited under this subsection as

13 the result of any act or omission established by the

14 owner of the interest to have been committed or

15 omitted without the knowledge or consent of the

16 owner.

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

18 of forfeited property and any monies forfeited under

19 this subsection shall be used—

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

21 Justice for the costs incurred by the Depart22 ment to initiate and complete the forfeiture pro23 ceeding;

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

25 of Agriculture Office of Inspector General for
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1 any costs the Office incurred in the law enforce2 ment effort resulting in the forfeiture;

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

4 State law enforcement agency for any costs in5 curred in the law enforcement effort resulting

6 in the forfeiture; and

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

8 the approval, reauthorization, and compliance

9 investigations of retail stores and wholesale

10 food concerns under section 9.’’.

11 SEC. 1055. LIMITATION OF FEDERAL MATCH.

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

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

14 comma at the end the following: ‘‘but not including re15 cruitment activities,’’.

16 SEC. 1056. STANDARDS FOR ADMINISTRATION.

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

18 of 1977 (7 U.S.C. 2025) is amended by striking sub19 section (b).

20 (b) CONFORMING AMENDMENTS.—

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

22 Act (7 U.S.C. 2020(g)) is amended by striking ‘‘the

23 Secretary’s standards for the efficient and effective

24 administration of the program established under sec25 tion 16(b)(1) or’’.
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1 (2) Section 16(c)(1)(B) of the Act (7 U.S.C.

2 2025(c)(1)(B)) is amended by striking ‘‘pursuant to

3 subsection (b)’’.

4 SEC. 1057. WORK SUPPLEMENTATION OR SUPPORT PRO5 GRAM.

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

7 2025), as amended by section 1056(a), is amended by in8 serting after subsection (a) the following:

9 ‘‘(b) WORK SUPPLEMENTATION OR SUPPORT PRO10 GRAM.—

11 ‘‘(1) DEFINITION OF WORK SUPPLEMENTATION

12 OR SUPPORT PROGRAM.—In this subsection, the

13 term ‘work supplementation or support program’

14 means a program under which, as determined by the

15 Secretary, public assistance (including any benefits

16 provided under a program established by the State

17 and the food stamp program) is provided to an em18 ployer to be used for hiring and employing a public

19 assistance recipient who was not employed by the

20 employer at the time the public assistance recipient

21 entered the program.

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

23 use an amount equal to the allotment that would

24 otherwise be issued to a household under the food

25 stamp program, but for the operation of this sub-
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1 section, for the purpose of subsidizing or supporting

2 a job under a work supplementation or support pro3 gram established by the State.

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

5 election under paragraph (2) and identifies each

6 household that participates in the food stamp pro7 gram that contains an individual who is participat8 ing in the work supplementation or support pro9 gram—

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

11 agency an amount equal to the value of the al12 lotment that the household would be eligible to

13 receive but for the operation of this subsection;

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

15 amount received under subparagraph (A) in ac16 cordance with the work supplementation or sup17 port program in lieu of providing the allotment

18 that the household would receive but for the op19 eration of this subsection;

20 ‘‘(C) for purposes of—

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

22 received under this subsection shall be ex23 cluded from household income and re24 sources; and
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1 ‘‘(ii) section 8(b), the amount received

2 under this subsection shall be considered to

3 be the value of an allotment provided to

4 the household; and

5 ‘‘(D) the household shall not receive an al6 lotment from the State agency for the period

7 during which the member continues to partici8 pate in the work supplementation or support

9 program.

10 ‘‘(4) OTHER WORK REQUIREMENTS.—No indi11 vidual shall be excused, by reason of the fact that

12 a State has a work supplementation or support pro13 gram, from any work requirement under section

14 6(d), except during the periods in which the individ15 ual is employed under the work supplementation or

16 support program.

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

18 agency shall provide a description of how the public

19 assistance recipients in the program shall, within a

20 specific period of time, be moved from supplemented

21 or supported employment to employment that is not

22 supplemented or supported.

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

24 or support program shall not displace the employ-
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1 ment of individuals who are not supplemented or

2 supported.’’.

3 SEC. 1058. WAIVER AUTHORITY.

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

5 U.S.C. 2026(b)(1)) is amended—

6 (1) by redesignating subparagraph (B) as sub7 paragraph (C); and

8 (2) in subparagraph (A)—

9 (A) by striking the second sentence; and

10 (B) by striking ‘‘benefits to eligible house11 holds, including’’ and inserting the following:

12 ‘‘benefits to eligible households, and may waive

13 any requirement of this Act to the extent nec14 essary for the project to be conducted.

15 ‘‘(B) PROJECT REQUIREMENTS.—

16 ‘‘(i) PROGRAM GOAL.—The Secretary

17 may not conduct a project under subpara18 graph (A) unless the project is consistent

19 with the goal of the food stamp program of

20 providing food assistance to raise levels of

21 nutrition among low-income individuals.

22 ‘‘(ii) PERMISSIBLE PROJECTS.—The

23 Secretary may conduct a project under

24 subparagraph (A) to—
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1 ‘‘(I) improve program adminis2 tration;

3 ‘‘(II) increase the self-sufficiency

4 of food stamp recipients;

5 ‘‘(III) test innovative welfare re6 form strategies; and

7 ‘‘(IV) allow greater conformity

8 with the rules of other programs than

9 would be allowed but for this para10 graph.

11 ‘‘(iii) IMPERMISSIBLE PROJECTS.—

12 The Secretary may not conduct a project

13 under subparagraph (A) that—

14 ‘‘(I) involves the payment of the

15 value of an allotment in the form of

16 cash, unless the project was approved

17 prior to the date of enactment of this

18 subparagraph;

19 ‘‘(II) substantially transfers

20 funds made available under this Act

21 to services or benefits provided pri22 marily through another public assist23 ance program; or

24 ‘‘(III) is not limited to a specific

25 time period.
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1 ‘‘(iv) ADDITIONAL INCLUDED

2 PROJECTS.—Pilot or experimental projects

3 may include’’.

4 SEC. 1059. RESPONSE TO WAIVERS.

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

6 U.S.C. 2026(b)(1)), as amended by section 1058, is

7 amended by adding at the end the following:

8 ‘‘(D) RESPONSE TO WAIVERS.—

9 ‘‘(i) RESPONSE.—Not later than 60

10 days after the date of receiving a request

11 for a waiver under subparagraph (A), the

12 Secretary shall provide a response that—

13 ‘‘(I) approves the waiver request;

14 ‘‘(II) denies the waiver request

15 and explains any modification needed

16 for approval of the waiver request;

17 ‘‘(III) denies the waiver request

18 and explains the grounds for the de19 nial; or

20 ‘‘(IV) requests clarification of the

21 waiver request.

22 ‘‘(ii) FAILURE TO RESPOND.—If the

23 Secretary does not provide a response in

24 accordance with clause (i), the waiver shall
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1 be considered approved, unless the ap2 proval is specifically prohibited by this Act.

3 ‘‘(iii) NOTICE OF DENIAL.—On denial

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

5 the Secretary shall provide a copy of the

6 waiver request and a description of the

7 reasons for the denial to the Committee on

8 Agriculture of the House of Representa9 tives and the Committee on Agriculture,

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

11 SEC. 1060. EMPLOYMENT INITIATIVES PROGRAM.

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

13 2026) is amended by striking subsection (d) and inserting

14 the following:

15 ‘‘(d) EMPLOYMENT INITIATIVES PROGRAM.—

16 ‘‘(1) ELECTION TO PARTICIPATE.—

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

18 provisions of this subsection, a State may elect

19 to carry out an employment initiatives program

20 under this subsection.

21 ‘‘(B) REQUIREMENT.—A State shall be eli22 gible to carry out an employment initiatives

23 program under this subsection only if not less

24 than 50 percent of the households that received

25 food stamp benefits during the summer of 1993
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1 also received benefits under a State program

2 funded under part A of title IV of the Social

3 Security Act (42 U.S.C. 601 et seq.) during the

4 summer of 1993.

5 ‘‘(2) PROCEDURE.—

6 ‘‘(A) IN GENERAL.—A State that has

7 elected to carry out an employment initiatives

8 program under paragraph (1) may use amounts

9 equal to the food stamp allotments that would

10 otherwise be issued to a household under the

11 food stamp program, but for the operation of

12 this subsection, to provide cash benefits in lieu

13 of the food stamp allotments to the household

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

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

16 to each State that has elected to carry out an

17 employment initiatives program under para18 graph (1) an amount equal to the value of the

19 allotment that each household would be eligible

20 to receive under this Act but for the operation

21 of this subsection.

22 ‘‘(C) OTHER PROVISIONS.—For purposes

23 of the food stamp program (other than this

24 subsection)—
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1 ‘‘(i) cash assistance under this sub2 section shall be considered to be an allot3 ment; and

4 ‘‘(ii) each household receiving cash

5 benefits under this subsection shall not re6 ceive any other food stamp benefit for the

7 period for which the cash assistance is pro8 vided.

9 ‘‘(D) ADDITIONAL PAYMENTS.—Each

10 State that has elected to carry out an employ11 ment initiatives program under paragraph (1)

12 shall—

13 ‘‘(i) increase the cash benefits pro14 vided to each household under this sub15 section to compensate for any State or

16 local sales tax that may be collected on

17 purchases of food by any household receiv18 ing cash benefits under this subsection, un19 less the Secretary determines on the basis

20 of information provided by the State that

21 the increase is unnecessary on the basis of

22 the limited nature of the items subject to

23 the State or local sales tax; and

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

25 cash benefits required by clause (i).
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1 ‘‘(3) ELIGIBILITY.—A household shall be eligi2 ble to receive cash benefits under paragraph (2) if

3 an adult member of the household—

4 ‘‘(A) has worked in unsubsidized employ5 ment for not less than the preceding 90 days;

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

7 month from the employment referred to in sub8 paragraph (A) for not less than the preceding

9 90 days;

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

11 program funded under part A of title IV of the

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

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

14 program funded under part A of title IV of the

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

16 the time the member first received cash benefits

17 under this subsection and is no longer eligible

18 for the State program because of earned in19 come;

20 ‘‘(D) is continuing to earn not less than

21 $350 per month from the employment referred

22 to in subparagraph (A); and

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

24 of food stamp benefits under this subsection.
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1 ‘‘(4) EVALUATION.—A State that operates a

2 program under this subsection for 2 years shall pro3 vide to the Secretary a written evaluation of the im4 pact of cash assistance under this subsection. The

5 State agency, with the concurrence of the Secretary,

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

7 SEC. 1061. REAUTHORIZATION.

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

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

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

11 through 2002’’.

12 SEC. 1062. SIMPLIFIED FOOD STAMP PROGRAM.

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

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

15 the following:

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

17 ‘‘(a) DEFINITION OF FEDERAL COSTS.—In this sec18 tion, the term ‘Federal costs’ does not include any Federal

19 costs incurred under section 17.

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

21 may elect to carry out a Simplified Food Stamp Program

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

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

24 this section.
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1 ‘‘(c) OPERATION OF PROGRAM.—If a State elects to

2 carry out a Program, within the State or a political sub3 division of the State—

4 ‘‘(1) a household in which all members receive

5 assistance under a State program funded under part

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

7 601 et seq.) shall automatically be eligible to partici8 pate in the Program; and

9 ‘‘(2) subject to subsection (f), benefits under

10 the Program shall be determined under rules and

11 procedures established by the State under—

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

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

14 601 et seq.);

15 ‘‘(B) the food stamp program (other than

16 section 27); or

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

18 funded under part A of title IV of the Social

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

20 food stamp program (other than section 27).

21 ‘‘(d) APPROVAL OF PROGRAM.—

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

23 operate a Program unless the Secretary approves a

24 State plan for the operation of the Program under

25 paragraph (2).
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1 ‘‘(2) APPROVAL OF PLAN.—The Secretary shall

2 approve any State plan to carry out a Program if

3 the Secretary determines that the plan—

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

5 ‘‘(B) contains sufficient documentation

6 that the plan will not increase Federal costs for

7 any fiscal year.

8 ‘‘(e) INCREASED FEDERAL COSTS.—

9 ‘‘(1) DETERMINATION.—During each fiscal

10 year and not later than 90 days after the end of

11 each fiscal year, the Secretary shall determine

12 whether a Program being carried out by a State

13 agency is increasing Federal costs under this Act

14 above the Federal costs incurred under the food

15 stamp program in operation in the State or political

16 subdivision of the State for the fiscal year prior to

17 the implementation of the Program, adjusted for any

18 changes in—

19 ‘‘(A) participation;

20 ‘‘(B) the income of participants in the food

21 stamp program that is not attributable to pub22 lic assistance; and

23 ‘‘(C) the thrifty food plan under section

24 3(o).
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1 ‘‘(2) NOTIFICATION.—If the Secretary deter2 mines that the Program has increased Federal costs

3 under this Act for any fiscal year or any portion of

4 any fiscal year, the Secretary shall notify the State

5 not later than 30 days after the Secretary makes the

6 determination under paragraph (1).

7 ‘‘(3) ENFORCEMENT.—

8 ‘‘(A) CORRECTIVE ACTION.—Not later

9 than 90 days after the date of a notification

10 under paragraph (2), the State shall submit a

11 plan for approval by the Secretary for prompt

12 corrective action that is designed to prevent the

13 Program from increasing Federal costs under

14 this Act.

15 ‘‘(B) TERMINATION.—If the State does not

16 submit a plan under subparagraph (A) or carry

17 out a plan approved by the Secretary, the Sec18 retary shall terminate the approval of the State

19 agency operating the Program and the State

20 agency shall be ineligible to operate a future

21 Program.

22 ‘‘(f) RULES AND PROCEDURES.—

23 ‘‘(1) IN GENERAL.—In operating a Program, a

24 State or political subdivision of a State may follow

25 the rules and procedures established by the State or
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1 political subdivision under a State program funded

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

3 (42 U.S.C. 601 et seq.) or under the food stamp

4 program.

5 ‘‘(2) STANDARDIZED DEDUCTIONS.—In operat6 ing a Program, a State or political subdivision of a

7 State may standardize the deductions provided

8 under section 5(e). In developing the standardized

9 deduction, the State shall consider the work ex10 penses, dependent care costs, and shelter costs of

11 participating households.

12 ‘‘(3) REQUIREMENTS.—In operating a Pro13 gram, a State or political subdivision shall comply

14 with the requirements of—

15 ‘‘(A) subsections (a) through (g) of section

16 7;

17 ‘‘(B) section 8(a) (except that the income

18 of a household may be determined under a

19 State program funded under part A of title IV

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

21 seq.));

22 ‘‘(C) subsection (b) and (d) of section 8;

23 ‘‘(D) subsections (a), (c), (d), and (n) of

24 section 11;
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1 ‘‘(E) paragraphs (8), (12), (16), (18),

2 (20), (24), and (25) of section 11(e);

3 ‘‘(F) section 11(e)(10) (or a comparable

4 requirement established by the State under a

5 State program funded under part A of title IV

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

7 seq.)); and

8 ‘‘(G) section 16.

9 ‘‘(4) LIMITATION ON ELIGIBILITY.—Notwith10 standing any other provision of this section, a house11 hold may not receive benefits under this section as

12 a result of the eligibility of the household under a

13 State program funded under part A of title IV of the

14 Social Security Act (42 U.S.C. 601 et seq.), unless

15 the Secretary determines that any household with in16 come above 130 percent of the poverty guidelines is

17 not eligible for the program.’’.

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

19 Act (7 U.S.C. 2020(e)), as amended by sections 1020(b),

20 1028(b), and 1044, is amended by adding at the end the

21 following:

22 ‘‘(25) if a State elects to carry out a Simplified

23 Food Stamp Program under section 26, the plans of

24 the State agency for operating the program, includ25 ing—
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1 ‘‘(A) the rules and procedures to be fol2 lowed by the State agency to determine food

3 stamp benefits;

4 ‘‘(B) how the State agency will address the

5 needs of households that experience high shelter

6 costs in relation to the incomes of the house7 holds; and

8 ‘‘(C) a description of the method by which

9 the State agency will carry out a quality control

10 system under section 16(c).’’.

11 (c) CONFORMING AMENDMENTS.—

12 (1) Section 8 of the Act (7 U.S.C. 2017), as

13 amended by section 1039, is amended—

14 (A) by striking subsection (e); and

15 (B) by redesignating subsection (f) as sub16 section (e).

17 (2) Section 17 of the Act (7 U.S.C. 2026) is

18 amended—

19 (A) by striking subsection (i); and

20 (B) by redesignating subsections (j)

21 through (l) as subsections (i) through (k), re22 spectively.
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1 SEC. 1063. STATE FOOD ASSISTANCE BLOCK GRANT.

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

3 U.S.C. 2011 et seq.), as amended by section 1062, is

4 amended by adding at the end the following:

5 ‘‘SEC. 27. STATE FOOD ASSISTANCE BLOCK GRANT.

6 ‘‘(a) DEFINITIONS.—In this section:

7 ‘‘(1) FOOD ASSISTANCE.—The term ‘food as8 sistance’ means assistance that may be used only to

9 obtain food, as defined in section 3(g).

10 ‘‘(2) STATE.—The term ‘State’ means each of

11 the 50 States, the District of Columbia, Guam, and

12 the Virgin Islands of the United States.

13 ‘‘(b) ESTABLISHMENT.—The Secretary shall estab14 lish a program to make grants to States in accordance

15 with this section to provide—

16 ‘‘(1) food assistance to needy individuals and

17 families residing in the State; and

18 ‘‘(2) funds for administrative costs incurred in

19 providing the assistance.

20 ‘‘(c) ELECTION.—

21 ‘‘(1) IN GENERAL.—A State may annually elect

22 to participate in the program established under sub23 section (b) if the State—

24 ‘‘(A) has fully implemented an electronic

25 benefit transfer system that operates in the en26 tire State;
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1 ‘‘(B) has a payment error rate under sec2 tion 16(c) that is not more than 6 percent as

3 announced most recently by the Secretary; or

4 ‘‘(C) has a payment error rate in excess of

5 6 percent and agrees to contribute non-Federal

6 funds for the fiscal year of the grant, for bene7 fits and administration of the State’s food as8 sistance program, the amount determined under

9 paragraph (2).

10 ‘‘(2) STATE MANDATORY CONTRIBUTIONS.—

11 ‘‘(A) IN GENERAL.—In the case of a State

12 that elects to participate in the program under

13 paragraph (1)(C), the State shall agree to con14 tribute, for a fiscal year, an amount equal to—

15 ‘‘(i) the benefits issued in the State;

16 multiplied by

17 ‘‘(ii) the payment error rate of the

18 State; minus

19 ‘‘(B)(i) the benefits issued in the State;

20 multiplied by

21 ‘‘(ii) 6 percent.

22 ‘‘(B) DETERMINATION.—Notwithstanding

23 sections 13 and 14, the calculation of the con24 tribution shall be based solely on the determina25 tion of the Secretary of the payment error rate.
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1 ‘‘(C) DATA.—For purposes of implement2 ing subparagraph (A) for a fiscal year, the Sec3 retary shall use the data for the most recent

4 fiscal year available.

5 ‘‘(3) ELECTION LIMITATION.—

6 ‘‘(A) RE-ENTERING FOOD STAMP PRO7 GRAM.—A State that elects to participate in the

8 program under paragraph (1) may in a subse9 quent year decline to elect to participate in the

10 program and instead participate in the food

11 stamp program in accordance with the other

12 sections of this Act.

13 ‘‘(B) LIMITATION.—Subsequent to re-en14 tering the food stamp program under subpara15 graph (A), the State shall only be eligible to

16 participate in the food stamp program in ac17 cordance with the other sections of this Act and

18 shall not be eligible to elect to participate in the

19 program established under subsection (b).

20 ‘‘(4) PROGRAM EXCLUSIVE.—

21 ‘‘(A) IN GENERAL.—A State that is par22 ticipating in the program established under sub23 section (b) shall not be subject to, or receive

24 any benefit under, this Act except as provided

25 in this section.
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1 ‘‘(B) CONTRACT WITH FEDERAL GOVERN2 MENT.—Nothing in this section shall prohibit a

3 State from contracting with the Federal Gov4 ernment for the provision of services or mate5 rials necessary to carry out a program under

6 this section.

7 ‘‘(d) LEAD AGENCY.—A State desiring to receive a

8 grant under this section shall designate, in an application

9 submitted to the Secretary under subsection (e)(1), an ap10 propriate State agency responsible for the administration

11 of the program under this section as the lead agency.

12 ‘‘(e) APPLICATION AND PLAN.—

13 ‘‘(1) APPLICATION.—To be eligible to receive

14 assistance under this section, a State shall prepare

15 and submit to the Secretary an application at such

16 time, in such manner, and containing such informa17 tion as the Secretary shall by regulation require, in18 cluding—

19 ‘‘(A) an assurance that the State will com20 ply with the requirements of this section;

21 ‘‘(B) a State plan that meets the require22 ments of paragraph (3); and

23 ‘‘(C) an assurance that the State will com24 ply with the requirements of the State plan

25 under paragraph (3).
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1 ‘‘(2) ANNUAL PLAN.—The State plan contained

2 in the application under paragraph (1) shall be sub3 mitted for approval annually.

4 ‘‘(3) REQUIREMENTS OF PLAN.—

5 ‘‘(A) LEAD AGENCY.—The State plan shall

6 identify the lead agency.

7 ‘‘(B) USE OF BLOCK GRANT FUNDS.—The

8 State plan shall provide that the State shall use

9 the amounts provided to the State for each fis10 cal year under this section—

11 ‘‘(i) to provide food assistance to

12 needy individuals and families residing in

13 the State, other than residents of institu14 tions who are ineligible for food stamps

15 under section 3(i); and

16 ‘‘(ii) to pay administrative costs in17 curred in providing the assistance.

18 ‘‘(C) GROUPS SERVED.—The State plan

19 shall describe how and to what extent the pro20 gram will serve specific groups of individuals

21 and families and how the treatment will differ

22 from treatment under the food stamp program

23 under the other sections of this Act of the indi24 viduals and families, including—

25 ‘‘(i) elderly individuals and families;
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1 ‘‘(ii) migrants or seasonal farm2 workers;

3 ‘‘(iii) homeless individuals and fami4 lies;

5 ‘‘(iv) individuals and families who live

6 in institutions eligible under section 3(i);

7 ‘‘(v) individuals and families with

8 earnings; and

9 ‘‘(vi) members of Indian tribes or trib10 al organizations.

11 ‘‘(D) ASSISTANCE FOR ENTIRE STATE.—

12 The State plan shall provide that benefits under

13 this section shall be available throughout the

14 entire State.

15 ‘‘(E) NOTICE AND HEARINGS.—The State

16 plan shall provide that an individual or family

17 who applies for, or receives, assistance under

18 this section shall be provided with notice of, and

19 an opportunity for a hearing on, any action

20 under this section that adversely affects the in21 dividual or family.

22 ‘‘(F) ASSESSMENT OF NEEDS.—The State

23 plan shall assess the food and nutrition needs

24 of needy persons residing in the State.
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1 ‘‘(G) ELIGIBILITY STANDARDS.—The State

2 plan shall describe the income, resource, and

3 other eligibility standards that are established

4 for the receipt of assistance under this section.

5 ‘‘(H) DISQUALIFICATION OF FLEEING FEL6 ONS.—The State plan shall provide for the dis7 qualification of any individual who would be

8 disqualified from participating in the food

9 stamp program under section 6(k).

10 ‘‘(I) RECEIVING BENEFITS IN MORE THAN

11 1 JURISDICTION.—The State plan shall estab12 lish a system for the exchange of information

13 with other States to verify the identity and re14 ceipt of benefits by recipients.

15 ‘‘(J) PRIVACY.—The State plan shall pro16 vide for safeguarding and restricting the use

17 and disclosure of information about any individ18 ual or family receiving assistance under this

19 section.

20 ‘‘(K) OTHER INFORMATION.—The State

21 plan shall contain such other information as

22 may be required by the Secretary.

23 ‘‘(4) APPROVAL OF APPLICATION AND PLAN.—

24 The Secretary shall approve an application and
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1 State plan that satisfies the requirements of this

2 section.

3 ‘‘(f) NO INDIVIDUAL OR FAMILY ENTITLEMENT TO

4 ASSISTANCE.—Nothing in this section—

5 ‘‘(1) entitles any individual or family to assist6 ance under this section; or

7 ‘‘(2) limits the right of a State to impose addi8 tional limitations or conditions on assistance under

9 this section.

10 ‘‘(g) BENEFITS FOR ALIENS.—

11 ‘‘(1) ELIGIBILITY.—No individual who is an

12 alien shall be eligible to receive benefits under a

13 State plan approved under subsection (e)(4) if the

14 individual is not eligible to participate in the food

15 stamp program due to the alien status of the indi16 vidual.

17 ‘‘(2) INCOME.—The State plan shall provide

18 that the income of an alien shall be determined in

19 accordance with section 5(i).

20 ‘‘(h) EMPLOYMENT AND TRAINING.—

21 ‘‘(1) WORK REQUIREMENTS.—No individual or

22 household shall be eligible to receive benefits under

23 a State plan funded under this section if the individ24 ual or household is not eligible to participate in the
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1 food stamp program under subsection (d) or (o) of

2 section 6.

3 ‘‘(2) WORK PROGRAMS.—Each State shall im4 plement an employment and training program in ac5 cordance with the terms and conditions of section

6 6(d)(4) for individuals under the program and shall

7 be eligible to receive funding under section 16(h).

8 ‘‘(i) ENFORCEMENT.—

9 ‘‘(1) REVIEW OF COMPLIANCE WITH STATE

10 PLAN.—The Secretary shall review and monitor

11 State compliance with this section and the State

12 plan approved under subsection (e)(4).

13 ‘‘(2) NONCOMPLIANCE.—

14 ‘‘(A) IN GENERAL.—If the Secretary, after

15 reasonable notice to a State and opportunity for

16 a hearing, finds that—

17 ‘‘(i) there has been a failure by the

18 State to comply substantially with any pro19 vision or requirement set forth in the State

20 plan approved under subsection (e)(4); or

21 ‘‘(ii) in the operation of any program

22 or activity for which assistance is provided

23 under this section, there is a failure by the

24 State to comply substantially with any pro25 vision of this section;
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1 the Secretary shall notify the State of the find2 ing and that no further grants will be made to

3 the State under this section (or, in the case of

4 noncompliance in the operation of a program or

5 activity, that no further grants to the State will

6 be made with respect to the program or activ7 ity) until the Secretary is satisfied that there

8 is no longer any failure to comply or that the

9 noncompliance will be promptly corrected.

10 ‘‘(B) OTHER PENALTIES.—In the case of a

11 finding of noncompliance made pursuant to

12 subparagraph (A), the Secretary may, in addi13 tion to, or in lieu of, imposing the penalties de14 scribed in subparagraph (A), impose other ap15 propriate penalties, including recoupment of

16 money improperly expended for purposes pro17 hibited or not authorized by this section and

18 disqualification from the receipt of financial as19 sistance under this section.

20 ‘‘(C) NOTICE.—The notice required under

21 subparagraph (A) shall include a specific identi22 fication of any additional penalty being imposed

23 under subparagraph (B).

24 ‘‘(3) ISSUANCE OF REGULATIONS.—The Sec25 retary shall establish by regulation procedures for—
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1 ‘‘(A) receiving, processing, and determin2 ing the validity of complaints made to the Sec3 retary concerning any failure of a State to com4 ply with the State plan or any requirement of

5 this section; and

6 ‘‘(B) imposing penalties under this section.

7 ‘‘(j) GRANT.—

8 ‘‘(1) IN GENERAL.—For each fiscal year, the

9 Secretary shall pay to a State that has an applica10 tion approved by the Secretary under subsection

11 (e)(4) an amount that is equal to the grant of the

12 State under subsection (m) for the fiscal year.

13 ‘‘(2) METHOD OF GRANT.—The Secretary shall

14 make a grant to a State for a fiscal year under this

15 section by issuing 1 or more letters of credit for the

16 fiscal year, with necessary adjustments on account

17 of overpayments or underpayments, as determined

18 by the Secretary.

19 ‘‘(3) SPENDING OF GRANTS BY STATE.—

20 ‘‘(A) IN GENERAL.—Except as provided in

21 subparagraph (B), a grant to a State deter22 mined under subsection (m)(1) for a fiscal year

23 may be expended by the State only in the fiscal

24 year.
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1 ‘‘(B) CARRYOVER.—The State may reserve

2 up to 10 percent of a grant determined under

3 subsection (m)(1) for a fiscal year to provide

4 assistance under this section in subsequent fis5 cal years, except that the reserved funds may

6 not exceed 30 percent of the total grant re7 ceived under this section for a fiscal year.

8 ‘‘(4) FOOD ASSISTANCE AND ADMINISTRATIVE

9 EXPENDITURES.—In each fiscal year, not more than

10 6 percent of the Federal and State funds required

11 to be expended by a State under this section shall

12 be used for administrative expenses.

13 ‘‘(5) PROVISION OF FOOD ASSISTANCE.—A

14 State may provide food assistance under this section

15 in any manner determined appropriate by the State,

16 such as electronic benefit transfer limited to food

17 purchases, coupons limited to food purchases, or di18 rect provision of commodities.

19 ‘‘(k) QUALITY CONTROL.—Each State participating

20 in the program established under this section shall main21 tain a system in accordance with, and shall be subject to

22 section 16(c), including sanctions and eligibility for incen23 tive payment under section 16(c), adjusted for State spe24 cific characteristics under regulations issued by the Sec25 retary.
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1 ‘‘(l) NONDISCRIMINATION.—

2 ‘‘(1) IN GENERAL.—The Secretary shall not

3 provide financial assistance for any program,

4 project, or activity under this section if any person

5 with responsibilities for the operation of the pro6 gram, project, or activity discriminates with respect

7 to the program, project, or activity because of race,

8 religion, color, national origin, sex, or disability.

9 ‘‘(2) ENFORCEMENT.—The powers, remedies,

10 and procedures set forth in title VI of the Civil

11 Rights Act of 1964 (42 U.S.C. 2000d et seq.) may

12 be used by the Secretary to enforce paragraph (1).

13 ‘‘(m) GRANT CALCULATION.—

14 ‘‘(1) STATE GRANT.—

15 ‘‘(A) IN GENERAL.—Except as provided in

16 subparagraph (B), from the amounts made

17 available under section 18 for each fiscal year,

18 the Secretary shall provide a grant to each

19 State participating in the program established

20 under this section an amount that is equal to

21 the sum of—

22 ‘‘(i) the greater of, as determined by

23 the Secretary—

24 ‘‘(I) the total dollar value of all

25 benefits issued under the food stamp
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1 program established under this Act by

2 the State during fiscal year 1994; or

3 ‘‘(II) the average per fiscal year

4 of the total dollar value of all benefits

5 issued under the food stamp program

6 by the State during each of fiscal

7 years 1992 through 1994; and

8 ‘‘(ii) the greater of, as determined by

9 the Secretary—

10 ‘‘(I) the total amount received by

11 the State for administrative costs

12 under section 16(a) (not including any

13 adjustment under section 16(c)) for

14 fiscal year 1994; or

15 ‘‘(II) the average per fiscal year

16 of the total amount received by the

17 State for administrative costs under

18 section 16(a) (not including any ad19 justment under section 16(c)) for each

20 of fiscal years 1992 through 1994.

21 ‘‘(B) INSUFFICIENT FUNDS.—If the Sec22 retary finds that the total amount of grants to

23 which States would otherwise be entitled for a

24 fiscal year under subparagraph (A) will exceed

25 the amount of funds that will be made available
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1 to provide the grants for the fiscal year, the

2 Secretary shall reduce the grants made to

3 States under this subsection, on a pro rata

4 basis, to the extent necessary.

5 ‘‘(2) REDUCTION.—The Secretary shall reduce

6 the grant of a State by the amount a State has

7 agreed to contribute under subsection (c)(1)(C).’’.

8 (b) EMPLOYMENT AND TRAINING FUNDING.—Sec9 tion 16(h) of the Act (7 U.S.C. 2025(a)), as amended by

10 section 1027(d)(2), is amended by adding at the end the

11 following:

12 ‘‘(6) BLOCK GRANT STATES.—Each State elect13 ing to operate a program under section 27 shall—

14 ‘‘(A) receive the greater of—

15 ‘‘(i) the total dollar value of the funds

16 received under paragraph (1) by the State

17 during fiscal year 1994; or

18 ‘‘(ii) the average per fiscal year of the

19 total dollar value of all funds received

20 under paragraph (1) by the State during

21 each of fiscal years 1992 through 1994;

22 and

23 ‘‘(B) be eligible to receive funds under

24 paragraph (2), within the limitations in section

25 6(d)(4)(K).’’.
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1 (c) RESEARCH ON OPTIONAL STATE FOOD ASSIST2 ANCE BLOCK GRANT.—Section 17 of the Act (7 U.S.C.

3 2026), as amended by section 1062(c)(2), is amended by

4 adding at the end the following:

5 ‘‘(l) RESEARCH ON OPTIONAL STATE FOOD ASSIST6 ANCE BLOCK GRANT.—The Secretary may conduct re7 search on the effects and costs of a State program carried

8 out under section 27.’’.

9 SEC. 1064. A STUDY OF THE USE OF FOOD STAMPS TO PUR10 CHASE VITAMINS AND MINERALS.

11 The Secretary of Agriculture shall, in consultation

12 with the National Academy of Sciences and the Center for

13 Disease Control and Prevention, conduct a study of the

14 use of food stamps to purchase vitamins and minerals.

15 The study shall include an analysis of scientific findings

16 on the efficacy of and need for vitamins and minerals, in17 cluding the adequacy of vitamin and mineral intake in low

18 income populations, as shown by existing research and

19 surveys, and the potential value of nutritional supplements

20 in filling nutrient gaps that may exist in the population

21 as a whole or in vulnerable subgroups in the U.S. popu22 lation; the impact of nutritional improvements (including

23 vitamin or mineral supplementation) on health status and

24 health care costs for women of childbearing age, pregnant

25 or lactating women, and the elderly; the cost of vitamin
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1 and mineral supplements commercially available; the pur2 chasing habits of low income populations with regard to

3 vitamins and minerals; the impact on the food purchases

4 of low income households; and the economic impact on ag5 ricultural commodities. The Secretary shall report the re6 sults of the study to the Committee on Agriculture of the

7 U.S. House of Representatives not later than December

8 15, 1996.’’.

9 SEC. 1065. INVESTIGATIONS.

10 Section 12(a) of the Food Stamp Act of 1977 (7

11 U.S.C. 2021(a)) is amended by adding at the end the fol12 lowing:

13 ‘‘Regulations issued pursuant to this Act shall provide cri14 teria for the finding of violations and the suspension or

15 disqualification of a retail food store or wholesale food con16 cern on the basis of evidence which may include, but is

17 not limited to, facts established through on-site investiga18 tions, inconsistent redemption data or evidence obtained

19 through transaction reports under electronic benefit trans20 fer systems.’’.

21 SEC. 1066. FOOD STAMP ELIGIBILITY.

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

23 U.S.C. 2015(f)) is amended by striking the third sentence

24 and inserting the following:
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1 ‘‘The State agency shall, at its option, consider either all

2 income and financial resources of the individual rendered

3 ineligible to participate in the food stamp program under

4 this subsection, or such income, less a pro rata share, and

5 the financial resources of the ineligible individual, to deter6 mine the eligibility and the value of the allotment of the

7 household of which such individual is a member.’’.

8 SEC. 1067. REPORT BY THE SECRETARY.

9 The Secretary of Agriculture may report to the Com10 mittee on Agriculture of the House of Representatives, not

11 later than January 1, 2000, on the effect of the food

12 stamp reforms in the Welfare and Medicaid Reform Act

13 of 1996 and the ability of State and local governments

14 to deal with people in poverty. The report must answer

15 the question: ‘‘Did people become more personally respon16 sible and were work opportunities provided such that pov17 erty in America is better managed?’’.

18 SEC. 1068. DEFICIT REDUCTION.

19 It is the sense of the Committee on Agriculture of

20 the House of Representatives that reductions in outlays

21 resulting from this title shall not be taken into account

22 for purposes of section 552 of the Balanced Budget and

23 Emergency Deficit Control Act of 1985.
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1 Subtitle B—Commodity

2 Distribution Programs

3 SEC. 1071. EMERGENCY FOOD ASSISTANCE PROGRAM.

4 (a) DEFINITIONS.—Section 201A of the Emergency

5 Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.

6 612c note) is amended to read as follows:

7 ‘‘SEC. 201A. DEFINITIONS.

8 ‘‘In this Act:

9 ‘‘(1) ADDITIONAL COMMODITIES.—The term

10 ‘additional commodities’ means commodities made

11 available under section 214 in addition to the com12 modities made available under sections 202 and

13 203D.

14 ‘‘(2) AVERAGE MONTHLY NUMBER OF UNEM15 PLOYED PERSONS.—The term ‘average monthly

16 number of unemployed persons’ means the average

17 monthly number of unemployed

18 persons in each State in the most recent fiscal year

19 for which information concerning the number of un20 employed persons is available, as determined by the

21 Bureau of Labor Statistics of the Department of

22 Labor.

23 ‘‘(3) ELIGIBLE RECIPIENT AGENCY.—The term

24 ‘eligible recipient agency’ means a public or non25 profit organization—
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1 ‘‘(A) that administers—

2 ‘‘(i) an emergency feeding organiza3 tion;

4 ‘‘(ii) a charitable institution (including

5 a hospital and a retirement home, but ex6 cluding a penal institution) to the extent

7 that the institution serves needy persons;

8 ‘‘(iii) a summer camp for children, or

9 a child nutrition program providing food

10 service;

11 ‘‘(iv) a nutrition project operating

12 under the Older Americans Act of 1965

13 (42 U.S.C. 3001 et seq.), including a

14 project that operates a congregate nutri15 tion site and a project that provides home16 delivered meals; or

17 ‘‘(v) a disaster relief program;

18 ‘‘(B) that has been designated by the ap19 propriate State agency, or by the Secretary;

20 and

21 ‘‘(C) that has been approved by the Sec22 retary for participation in the program estab23 lished under this Act.

24 ‘‘(4) EMERGENCY FEEDING ORGANIZATION.—

25 The term ‘emergency feeding organization’ means a
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1 public or nonprofit organization that administers ac2 tivities and projects (including the activities and

3 projects of a charitable institution, a food bank, a

4 food pantry, a hunger relief center, a soup kitchen,

5 or a similar public or private nonprofit eligible recip6 ient agency) providing nutrition assistance to relieve

7 situations of emergency and distress through the

8 provision of food to needy persons, including low-in9 come and unemployed persons.

10 ‘‘(5) FOOD BANK.—The term ‘food bank’

11 means a public or charitable institution that main12 tains an established operation involving the provision

13 of food or edible commodities, or the products of

14 food or edible commodities, to food pantries, soup

15 kitchens, hunger relief centers, or other food or feed16 ing centers that, as an integral part of their normal

17 activities, provide meals or food to feed needy per18 sons on a regular basis.

19 ‘‘(6) FOOD PANTRY.—The term ‘food pantry’

20 means a public or private nonprofit organization

21 that distributes food to low-income and unemployed

22 households, including food from sources other than

23 the Department of Agriculture, to relieve situations

24 of emergency and distress.
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1 ‘‘(7) POVERTY LINE.—The term ‘poverty line’

2 has the same meaning given the term in section

3 673(2) of the Community Services Block Grant Act

4 (42 U.S.C. 9902(2)).

5 ‘‘(8) SOUP KITCHEN.—The term ‘soup kitchen’

6 means a public or charitable institution that, as an

7 integral part of the normal activities of the institu8 tion, maintains an established feeding operation to

9 provide food to needy homeless persons on a regular

10 basis.

11 ‘‘(9) TOTAL VALUE OF ADDITIONAL COMMOD12 ITIES.—The term ‘total value of additional commod13 ities’ means the actual cost of all additional com14 modities made available under section 214 that are

15 paid by the Secretary (including the distribution and

16 processing costs incurred by the Secretary).

17 ‘‘(10) VALUE OF ADDITIONAL COMMODITIES

18 ALLOCATED TO EACH STATE.—The term ‘value of

19 additional commodities allocated to each State’

20 means the actual cost of additional commodities

21 made available under section 214 and allocated to

22 each State that are paid by the Secretary (including

23 the distribution and processing costs incurred by the

24 Secretary).’’.
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1 (b) STATE PLAN.—Section 202A of the Act (7 U.S.C.

2 612c note) is amended to read as follows:

3 ‘‘SEC. 202A. STATE PLAN.

4 ‘‘(a) IN GENERAL.—To receive commodities under

5 this Act, a State shall submit a plan of operation and ad6 ministration every 4 years to the Secretary for approval.

7 The plan may be amended at any time, with the approval

8 of the Secretary.

9 ‘‘(b) REQUIREMENTS.—Each plan shall—

10 ‘‘(1) designate the State agency responsible for

11 distributing the commodities received under this Act;

12 ‘‘(2) set forth a plan of operation and adminis13 tration to expeditiously distribute commodities under

14 this Act;

15 ‘‘(3) set forth the standards of eligibility for re16 cipient agencies; and

17 ‘‘(4) set forth the standards of eligibility for in18 dividual or household recipients of commodities,

19 which shall require—

20 ‘‘(A) individuals or households to be com21 prised of needy persons; and

22 ‘‘(B) individual or household members to

23 be residing in the geographic location served by

24 the distributing agency at the time of applying

25 for assistance.
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1 ‘‘(c) STATE ADVISORY BOARD.—The Secretary shall

2 encourage each State receiving commodities under this Act

3 to establish a State advisory board consisting of represent4 atives of all interested entities, both public and private,

5 in the distribution of commodities received under this Act

6 in the State.’’.

7 (c) AUTHORIZATION OF APPROPRIATIONS FOR AD8 MINISTRATIVE FUNDS.—Section 204(a)(1) of the Act (7

9 U.S.C. 612c note) is amended—

10 (1) in the first sentence by striking ‘‘for State

11 and local’’ and all that follows through ‘‘under this

12 title’’ and inserting ‘‘to pay for the direct and indi13 rect administrative costs of the State related to the

14 processing, transporting, and distributing to eligible

15 recipient agencies of commodities provided by the

16 Secretary under this Act and commodities secured

17 from other sources’’; and

18 (2) by striking the fourth sentence.

19 (d) DELIVERY OF COMMODITIES.—Section 214 of the

20 Act (7 U.S.C. 612c note) is amended—

21 (1) by striking subsections (a) through (e) and

22 (j);

23 (2) by redesignating subsections (f) through (i)

24 as subsections (a) through (d), respectively;
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1 (3) in subsection (b), as redesignated by para2 graph (2)—

3 (A) in the first sentence, by striking ‘‘sub4 section (f) or subsection (j) if applicable,’’ and

5 inserting ‘‘subsection (a)’’; and

6 (B) in the second sentence, by striking

7 ‘‘subsection (f)’’ and inserting ‘‘subsection (a)’’;

8 (4) by striking subsection (c), as redesignated

9 by paragraph (2), and inserting the following:

10 ‘‘(c) ADMINISTRATION.—

11 ‘‘(1) IN GENERAL.—Commodities made avail12 able for each fiscal year under this section shall be

13 delivered at reasonable intervals to States based on

14 the grants calculated under subsection (a), or reallo15 cated under subsection (b), before December 31 of

16 the following fiscal year.

17 ‘‘(2) ENTITLEMENT.—Each State shall be enti18 tled to receive the value of additional commodities

19 determined under subsection (a).’’; and

20 (5) in subsection (d), as redesignated by para21 graph (2), by striking ‘‘or reduce’’ and all that fol22 lows through ‘‘each fiscal year’’.

23 (e) TECHNICAL AMENDMENTS.—The Act (7 U.S.C.

24 612c note) is amended—
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1 (1) in the first sentence of section 203B(a), by

2 striking ‘‘203 and 203A of this Act’’ and inserting

3 ‘‘203A’’;

4 (2) in section 204(a), by striking ‘‘title’’ each

5 place it appears and inserting ‘‘Act’’;

6 (3) in the first sentence of section 210(e), by

7 striking ‘‘(except as otherwise provided for in section

8 214(j))’’; and

9 (4) by striking section 212.

10 (f) REPORT ON EFAP.—Section 1571 of the Food

11 Security Act of 1985 (Public Law 99–198; 7 U.S.C. 612c

12 note) is repealed.

13 (g) AVAILABILITY OF COMMODITIES UNDER THE

14 FOOD STAMP PROGRAM.—The Food Stamp Act of 1977

15 (7 U.S.C. 2011 et seq.), as amended by sections 1062 and

16 1063, is amended by adding at the end the following:

17 ‘‘SEC. 28. AVAILABILITY OF COMMODITIES FOR THE EMER18 GENCY FOOD ASSISTANCE PROGRAM.

19 ‘‘(a) PURCHASE OF COMMODITIES.—From amounts

20 appropriated under this Act, for each of fiscal years 1997

21 through 2002, the Secretary shall purchase $300,000,000

22 of a variety of nutritious and useful commodities of the

23 types that the Secretary has the authority to acquire

24 through the Commodity Credit Corporation or under sec25 tion 32 of the Act entitled ‘An Act to amend the Agricul-
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1 tural Adjustment Act, and for other purposes’, approved

2 August 24, 1935 (7 U.S.C. 612c), and distribute the com3 modities to States for distribution in accordance with sec4 tion 214 of the Emergency Food Assistance Act of 1983

5 (Public Law 98–8; 7 U.S.C. 612c note).

6 ‘‘(b) BASIS FOR COMMODITY PURCHASES.—In pur7 chasing commodities under subsection (a), the Secretary

8 shall, to the extent practicable and appropriate, make pur9 chases based on—

10 ‘‘(1) agricultural market conditions;

11 ‘‘(2) preferences and needs of States and dis12 tributing agencies; and

13 ‘‘(3) preferences of recipients.’’.

14 (h) EFFECTIVE DATE.—The amendments made by

15 subsection (d) shall become effective on October 1, 1996.

16 SEC. 1072. FOOD BANK DEMONSTRATION PROJECT.

17 Section 3 of the Charitable Assistance and Food

18 Bank Act of 1987 (Public Law 100–232; 7 U.S.C. 612c

19 note) is repealed.

20 SEC. 1073. HUNGER PREVENTION PROGRAMS.

21 The Hunger Prevention Act of 1988 (Public Law

22 100–435; 7 U.S.C. 612c note) is amended—

23 (1) by striking section 110;

24 (2) by striking subtitle C of title II; and

25 (3) by striking section 502.
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1 SEC. 1074. REPORT ON ENTITLEMENT COMMODITY PROC2 ESSING.

3 Section 1773 of the Food, Agriculture, Conservation,

4 and Trade Act of 1990 (Public Law 101–624; 7 U.S.C.

5 612c note) is amended by striking subsection (f).

6 Subtitle C—Electronic Benefit

7 Transfer Systems

8 SEC. 1091. PROVISIONS TO ENCOURAGE ELECTRONIC BEN9 EFIT TRANSFER SYSTEMS.

10 Section 904 of the Electronic Fund Transfer Act (15

11 U.S.C. 1693b) is amended—

12 (1) by striking ‘‘(d) In the event’’ and inserting

13 ‘‘(d) APPLICABILITY TO SERVICE PROVIDERS

14 OTHER THAN CERTAIN FINANCIAL INSTITU15 TIONS.—

16 ‘‘(1) IN GENERAL.—In the event’’; and

17 (2) by adding at the end the following new

18 paragraph:

19 ‘‘(2) STATE AND LOCAL GOVERNMENT ELEC20 TRONIC BENEFIT TRANSFER PROGRAMS.—

21 ‘‘(A) EXEMPTION GENERALLY.—The dis22 closures, protections, responsibilities, and rem23 edies established under this title, and any regu24 lation prescribed or order issued by the Board

25 in accordance with this title, shall not apply to

26 any electronic benefit transfer program estab-
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1 lished under State or local law or administered

2 by a State or local government.

3 ‘‘(B) EXCEPTION FOR DIRECT DEPOSIT

4 INTO RECIPIENT’S ACCOUNT.—Subparagraph

5 (A) shall not apply with respect to any elec6 tronic funds transfer under an electronic benefit

7 transfer program for deposits directly into a

8 consumer account held by the recipient of the

9 benefit.

10 ‘‘(C) RULE OF CONSTRUCTION.—No provi11 sion of this paragraph may be construed as—

12 ‘‘(i) affecting or altering the protec13 tions otherwise applicable with respect to

14 benefits established by Federal, State, or

15 local law; or

16 ‘‘(ii) otherwise superseding the appli17 cation of any State or local law.

18 ‘‘(D) ELECTRONIC BENEFIT TRANSFER

19 PROGRAM DEFINED.—For purposes of this

20 paragraph, the term ‘electronic benefit transfer

21 program’—

22 ‘‘(i) means a program under which a

23 government agency distributes needs-tested

24 benefits by establishing accounts to be

25 accessed by recipients electronically, such
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1 as through automated teller machines, or

2 point-of-sale terminals; and

3 ‘‘(ii) does not include employment-re4 lated payments, including salaries and pen5 sion, retirement, or unemployment benefits

6 established by Federal, State, or local gov7 ernments.’’.

8 TITLE II—COMMITTEE ON

9 COMMERCE

10 TABLE OF CONTENTS OF TITLE

Subtitle A—Restructuring Medicaid

Sec. 2001. Short title of subtitle.

Sec. 2002. Finding; goals for medicaid restructuring.

Sec. 2003. Restructuring the medicaid program.

‘‘Sec. 1500. Purpose; State plans.

‘‘PART A—ELIGIBILITY AND BENEFITS

‘‘Sec. 1501. Guaranteed eligibility and benefits.

‘‘Sec. 1502. Other provisions relating to eligibility and benefits.

‘‘Sec. 1503. Limitations on premiums and cost-sharing.

‘‘Sec. 1504. Description of process for developing capitation payment

rates.

‘‘Sec. 1505. Preventing spousal impoverishment.

‘‘Sec. 1506. Preventing family impoverishment.

‘‘Sec. 1507. State flexibility.

‘‘Sec. 1508. Private rights of action.

‘‘PART B—PAYMENTS TO STATES

‘‘Sec. 1511. Allotment of funds among States.

‘‘Sec. 1512. Payments to States.

‘‘Sec. 1513. Limitation on use of funds; disallowance.

‘‘PART C—ESTABLISHMENT AND AMENDMENT OF STATE PLANS

‘‘Sec. 1521. Description of strategic objectives and performance goals.

‘‘Sec. 1522. Annual reports.

‘‘Sec. 1523. Periodic, independent evaluations.

‘‘Sec. 1524. Description of process for State plan development.

‘‘Sec. 1525. Consultation in State plan development.

‘‘Sec. 1526. Submittal and approval of State plans.

‘‘Sec. 1527. Submittal and approval of plan amendments.

‘‘Sec. 1528. Process for State withdrawal from program.
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‘‘Sec. 1529. Sanctions for noncompliance.

‘‘Sec. 1530. Secretarial authority.

‘‘PART D—PROGRAM INTEGRITY AND QUALITY

‘‘Sec. 1551. Use of audits to achieve fiscal integrity.

‘‘Sec. 1552. Fraud prevention program.

‘‘Sec. 1553. Information concerning sanctions taken by State licensing authorities against health care practitioners and providers.

‘‘Sec. 1554. State fraud control units.

‘‘Sec. 1555. Recoveries from third parties and others.

‘‘Sec. 1556. Assignment of rights of payment.

‘‘Sec. 1557. Quality assurance requirements for nursing facilities.

‘‘Sec. 1558. Other provisions promoting program integrity.

‘‘PART E—GENERAL PROVISIONS

‘‘Sec. 1571. Definitions.

‘‘Sec. 1572. Treatment of territories.

‘‘Sec. 1573. Description of treatment of Indian Health Service facilities.

‘‘Sec. 1574. Application of certain general provisions.

‘‘Sec. 1575. Optional master drug rebate agreements.

Sec. 2004. State election; termination of current program; and transition.

Sec. 2005. Integration demonstration project.

Subtitle B—Other Provisions

PART 1—INVOLVEMENT OF COMMERCE COMMITTEE IN FEDERAL

GOVERNMENT POSITION REDUCTIONS

Sec. 2101. Involvement of Commerce Committee in Federal government position reductions.

PART 2—RESTRICTING PUBLIC BENEFITS FOR ALIENS

SUBPART A—ELIGIBILITY FOR FEDERAL BENEFITS

Sec. 2211. Aliens who are not qualified aliens ineligible for Federal public benefits.

Sec. 2212. Limited eligibility of qualified aliens for medical assistance.

Sec. 2213. Five-year limited eligibility of qualified aliens for Federal meanstested public benefit.

Sec. 2214. Notification.

SUBPART B—GENERAL PROVISIONS

Sec. 2221. Definitions.

Sec. 2222. Verification of eligibility for Federal public benefits.

PART 3—ENERGY ASSISTANCE

Sec. 2131. Energy assistance.
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1 Subtitle A—Restructuring

2 Medicaid

3 SEC. 2001. SHORT TITLE OF SUBTITLE.

4 This subtitle may be cited as the ‘‘Medicaid Restruc5 turing Act of 1996’’.

6 SEC. 2002. FINDING; GOALS FOR MEDICAID RESTRUCTUR7 ING.

8 (a) FINDING.—The Congress finds that the National

9 Governors’ Association on February 6, 1996, adopted

10 unanimously and on a bipartisan basis goals to guide the

11 restructuring of the medicaid program.

12 (b) GOALS FOR RESTRUCTURING.—The following are

13 the 4 primary goals so adopted:

14 (1) The basic health care needs of the nation’s

15 most vulnerable populations must be guaranteed.

16 (2) The growth in health care expenditures

17 must be brought under control.

18 (3) States must have maximum flexibility in the

19 design and implementation of cost-effective systems

20 of care.

21 (4) States must be protected from unantici22 pated program costs resulting from economic fluc23 tuations in the business cycle, changing demo24 graphics, and natural disasters.
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1 SEC. 2003. RESTRUCTURING THE MEDICAID PROGRAM.

2 The Social Security Act is amended by inserting after

3 title XIV the following new title:

4 ‘‘TITLE XV—PROGRAM OF MEDICAL ASSIST5 ANCE FOR LOW-INCOME INDIVIDUALS AND

6 FAMILIES

‘‘TABLE OF CONTENTS OF TITLE

‘‘Sec. 1500. Purpose; State plans.

‘‘PART A—ELIGIBILITY AND BENEFITS

‘‘Sec. 1501. Guaranteed eligibility and benefits.

‘‘Sec. 1502. Other provisions relating to eligibility and benefits.

‘‘Sec. 1503. Limitations on premiums and cost-sharing.

‘‘Sec. 1504. Description of process for developing capitation payment rates.

‘‘Sec. 1505. Preventing spousal impoverishment.

‘‘Sec. 1506. Preventing family impoverishment.

‘‘Sec. 1507. State flexibility.

‘‘Sec. 1508. Private rights of action.

‘‘PART B—PAYMENTS TO STATES

‘‘Sec. 1511. Allotment of funds among States.

‘‘Sec. 1512. Payments to States.

‘‘Sec. 1513. Limitation on use of funds; disallowance.

‘‘PART C—ESTABLISHMENT AND AMENDMENT OF STATE PLANS

‘‘Sec. 1521. Description of strategic objectives and performance goals.

‘‘Sec. 1522. Annual reports.

‘‘Sec. 1523. Periodic, independent evaluations.

‘‘Sec. 1524. Description of process for State plan development.

‘‘Sec. 1525. Consultation in State plan development.

‘‘Sec. 1526. Submittal and approval of State plans.

‘‘Sec. 1527. Submittal and approval of plan amendments.

‘‘Sec. 1528. Process for State withdrawal from program.

‘‘Sec. 1529. Sanctions for noncompliance.

‘‘Sec. 1530. Secretarial authority.

‘‘PART D—PROGRAM INTEGRITY AND QUALITY

‘‘Sec. 1551. Use of audits to achieve fiscal integrity.

‘‘Sec. 1552. Fraud prevention program.

‘‘Sec. 1553. Information concerning sanctions taken by State licensing authorities against health care practitioners and providers.

‘‘Sec. 1554. State fraud control units.

‘‘Sec. 1555. Recoveries from third parties and others.

‘‘Sec. 1556. Assignment of rights of payment.

‘‘Sec. 1557. Quality assurance requirements for nursing facilities.
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‘‘Sec. 1558. Other provisions promoting program integrity.

‘‘PART E—GENERAL PROVISIONS

‘‘Sec. 1571. Definitions.

‘‘Sec. 1572. Treatment of territories.

‘‘Sec. 1573. Description of treatment of Indian Health Service facilities.

‘‘Sec. 1574. Application of certain general provisions.

‘‘Sec. 1575. Optional master drug rebate agreements.

1 ‘‘SEC. 1500. PURPOSE; STATE PLANS.

2 ‘‘(a) PURPOSE.—The purpose of this title is to pro3 vide funds to States to enable them to provide medical

4 assistance to low-income individuals and families in a

5 more effective, efficient, and responsive manner.

6 ‘‘(b) STATE PLAN REQUIRED.—A State is not eligible

7 for payment under section 1512 unless the State has sub8 mitted to the Secretary under part C a plan (in this title

9 referred to as a ‘State plan’) that—

10 ‘‘(1) sets forth how the State intends to use the

11 funds provided under this title to provide medical as12 sistance to needy individuals and families consistent

13 with the provisions of this title, and

14 ‘‘(2) is approved under such part.

15 ‘‘(c) CONTINUED APPROVAL.—An approved State

16 plan shall continue in effect unless and until—

17 ‘‘(1) the State amends the plan under section

18 1527,

19 ‘‘(2) the State terminates participation under

20 this title under section 1528, or
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1 ‘‘(3) the Secretary finds substantial noncompli2 ance of the plan with the requirements of this title

3 under section 1529.

4 ‘‘(d) STATE ENTITLEMENT.—This title constitutes

5 budget authority in advance of appropriations Acts and

6 represents the obligation of the Federal Government to

7 provide for the payment to States of amounts provided

8 under part B.

9 ‘‘(e) EFFECTIVE DATE.—No State is eligible for pay10 ments under section 1512 for any calendar quarter begin11 ning before October 1, 1996.

12 ‘‘PART A—ELIGIBILITY AND BENEFITS

13 ‘‘SEC. 1501. GUARANTEED ELIGIBILITY AND BENEFITS.

14 ‘‘(a) GUARANTEED COVERAGE AND BENEFITS FOR

15 CERTAIN POPULATIONS.—

16 ‘‘(1) IN GENERAL.—Each State plan shall pro17 vide for making medical assistance available for ben18 efits in the guaranteed benefit package (as defined

19 in paragraph (2)) to individuals within each of the

20 following categories:

21 ‘‘(A) POOR PREGNANT WOMEN.—Pregnant

22 women with family income below 133 percent of

23 the poverty line.
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1 ‘‘(B) CHILDREN UNDER 6.—Children

2 under 6 years of age whose family income does

3 not exceed 133 percent of the poverty line.

4 ‘‘(C) CHILDREN 6 TO 19.—Children born

5 after September 30, 1983, who are over 5 years

6 of age, but under 19 years of age, whose family

7 income does not exceed 100 percent of the pov8 erty line.

9 ‘‘(D) DISABLED INDIVIDUALS.—As elected

10 by the State under paragraph (3), either—

11 ‘‘(i) disabled individuals (as defined

12 by the State) who meet the income and re13 source standards established under the

14 plan, or

15 ‘‘(ii) individuals who are under 65

16 years of age, who are disabled (as deter17 mined under section 1614(a)(3)), and who,

18 using the methodology provided for deter19 mining eligibility for payment of supple20 mental security income benefits under title

21 XVI, meet the income and resource stand22 ards for payment of such benefits.

23 ‘‘(E) POOR ELDERLY INDIVIDUALS.—Sub24 ject to paragraph (4), elderly individuals who,

25 using the methodology provided for determining
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1 eligibility for payment of supplemental security

2 income benefits under title XVI, meet the in3 come and resource standards for payment of

4 such benefits.

5 ‘‘(F) CHILDREN RECEIVING FOSTER CARE

6 OR ADOPTION ASSISTANCE.—Subject to para7 graph (5), children who meet the requirements

8 for receipt of foster care maintenance payments

9 or adoption assistance under title IV.

10 ‘‘(G) CERTAIN LOW-INCOME FAMILIES.—

11 Subject to paragraph (6), individuals and mem12 bers of families who meet current AFDC in13 come and resource standards (as defined in

14 paragraph (6)(C)) in the State, determined

15 using the methodology for determining eligi16 bility for aid under the State plan under part

17 A or part E of title IV (as in effect as of May

18 1, 1996).

19 ‘‘(2) GUARANTEED BENEFITS PACKAGE.—In

20 this title, the term ‘guaranteed benefit package’

21 means benefits (in an amount, duration, and scope

22 specified under the State plan) for at least the fol23 lowing categories of services:

24 ‘‘(A) Inpatient and outpatient hospital

25 services.
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1 ‘‘(B) Physicians’ surgical and medical serv2 ices.

3 ‘‘(C) Laboratory and x-ray services.

4 ‘‘(D) Nursing facility services.

5 ‘‘(E) Home health care.

6 ‘‘(F) Federally-qualified health center serv7 ices and rural health clinic services.

8 ‘‘(G) Immunizations for children (in ac9 cordance with a schedule for immunizations es10 tablished by the Health Department of the

11 State in consultation with the State agency re12 sponsible for the administration of the plan).

13 ‘‘(H) Prepregnancy family planning serv14 ices and supplies (as specified by the State).

15 ‘‘(I) Prenatal care.

16 ‘‘(J) Physician assistance services, pedi17 atric and family nurse practitioner services and

18 nurse midwife services.

19 ‘‘(K) EPSDT services (as defined in sec20 tion 1571(e)) for individuals who are under the

21 age of 21.

22 A State may establish criteria, including utilization

23 review, and cost effectiveness of alternative covered

24 services, for purposes of specifying the amount, du-
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1 ration, and scope of benefits provided under the

2 State plan.

3 ‘‘(3) STATE ELECTION OF DISABLED INDIVID4 UALS TO BE GUARANTEED COVERAGE.—

5 ‘‘(A) IN GENERAL.—Each State shall

6 specify in its State plan, before the beginning of

7 each Federal fiscal year, whether to guarantee

8 coverage of disabled individuals under the plan

9 under the option described in paragraph

10 (1)(D)(i) or under the option described in para11 graph (1)(D)(ii). An election under this para12 graph shall continue in effect for the subse13 quent fiscal year unless the election is changed

14 before the beginning of the fiscal year.

15 ‘‘(B) CONSEQUENCES OF ELECTION.—

16 ‘‘(i) STATE FLEXIBLE DEFINITION OP17 TION.—If a State elects the option de18 scribed in paragraph (1)(D)(i) for a fiscal

19 year—

20 ‘‘(I) the State plan must provide

21 under section 1502(c) for a set aside

22 of funds for disabled individuals for

23 the fiscal year, and

24 ‘‘(II) disabled individuals are not

25 taken into account in determining a
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1 State supplemental umbrella allotment

2 under section 1511(g).

3 ‘‘(ii) SSI DEFINITION OPTION.—If a

4 State elects the option described in para5 graph (1)(D)(ii) for a fiscal year—

6 ‘‘(I) section 1502(c) shall not

7 apply for the fiscal year, and

8 ‘‘(II) the State is eligible for an

9 increase under section 1511(g) in its

10 outlay allotment for the fiscal year

11 based on an increase in the number of

12 guaranteed and optional disabled indi13 viduals covered under the plan.

14 ‘‘(4) CONTINUATION OF SPECIAL ELIGIBILITY

15 STANDARDS FOR SECTION 209(b) STATES.—

16 ‘‘(A) IN GENERAL.—A section 209(b)

17 State (as defined in subparagraph (B)) may

18 elect to treat any reference in paragraph (1)(E)

19 to ‘elderly individuals who meet the income and

20 resource standards for the payment of supple21 mental security income benefits under title

22 XVI’ as a reference to ‘elderly individuals who

23 meet the standards described in the first sen24 tence of section 1902(f) (as in effect on the day

25 before the date of the enactment of this title)’.
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1 ‘‘(B) SECTION 209(b) STATE DEFINED.—

2 In subparagraph (A), the term ‘section 209(b)

3 State’ means a State to which section 1902(f)

4 applied as of the day before the date of the en5 actment of this title.

6 ‘‘(5) OPTION FOR APPLICATION OF CURRENT

7 REQUIREMENTS FOR CERTAIN CHILDREN.—A State

8 may elect to apply paragraph (1)(F) by treating any

9 reference to ‘requirements for receipt of foster care

10 maintenance payments or adoption assistance under

11 title IV’ as a reference to ‘requirements for receipt

12 of foster care maintenance payments or adoption as13 sistance as in effect under its State plan under part

14 E of title IV as of the date of the enactment of this

15 title’.

16 ‘‘(6) SPECIAL RULES FOR LOW-INCOME FAMI17 LIES.—

18 ‘‘(A) OPTIONAL USE OF LOWER NATIONAL

19 AVERAGE STANDARDS.—In the case of a State

20 in which the current AFDC income and re21 source standards are above the national average

22 of the current AFDC income and resource

23 standards for the 50 States and the District of

24 Columbia, as determined and published by the

25 Secretary, in applying paragraph (1)(G), the
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1 State may elect to substitute such national av2 erage income and resource standards for the

3 current AFDC income and resource standards

4 in that State.

5 ‘‘(B) OPTIONAL ELIGIBILITY BASED ON

6 LINK TO OTHER ASSISTANCE.—

7 ‘‘(i) IN GENERAL.—Subject to clause

8 (ii), in the case of a State which maintains

9 a link between eligibility for aid or assist10 ance under one or more parts of title IV

11 and eligibility for medical assistance under

12 this title, in applying paragraph (1)(G),

13 the State may elect to treat any reference

14 in such paragraph to ‘individuals and

15 members of families who meet current

16 AFDC income and resource standards in

17 the State’ as a reference to ‘members of

18 families who are receiving assistance under

19 a State plan under part A or E of title

20 IV’.

21 ‘‘(ii) LIMITATION ON ELECTION.—A

22 State may only make the election described

23 in clause (i) if, and so long as, the State

24 demonstrates to the satisfaction of the Sec25 retary that the such election does not re-
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1 sult in Federal expenditures under this

2 title (taking into account any supplemental

3 amounts provided pursuant to section

4 1511(g)) that are greater than the Federal

5 expenditures that would have been made

6 under this title if the State had not made

7 such election.

8 ‘‘(C) CURRENT AFDC INCOME AND RE9 SOURCE STANDARDS DEFINED.—In this sub10 section, the term ‘current AFDC income and

11 resource standards’ means, with respect to a

12 State, the income and resource standards for

13 the payment of assistance under the State plan

14 under part A or E of title IV (as in effect as

15 of May 1, 1996).

16 ‘‘(D) MEDICAL ASSISTANCE REQUIRED TO

17 BE PROVIDED FOR 1 YEAR FOR FAMILIES BE18 COMING INELIGIBLE FOR FAMILY ASSISTANCE

19 DUE TO INCREASED EARNINGS FROM EMPLOY20 MENT OR COLLECTION OF CHILD SUPPORT.—A

21 State plan shall provide that if any family be22 comes ineligible to receive assistance under the

23 State program funded under part A of title IV

24 as a result of increased earnings from employ25 ment or as a result of the collection or in-
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1 creased collection of child or spousal support, or

2 a combination thereof, having received such as3 sistance in at least 3 of the 6 months imme4 diately preceding the month in which such ineli5 gibility begins, the family shall be eligible for

6 medical assistance under the State plan during

7 the immediately succeeding 12-month period for

8 so long as family income is less than the pov9 erty line, and that the family will be appro10 priately notified of such eligibility.

11 ‘‘(7) METHODOLOGY.—Family income shall be

12 determined for purposes of subparagraphs (A)

13 through (C) of paragraph (1) in the same manner

14 (and using the same methodology) as income was

15 determined under the State medicaid plan under sec16 tion 1902(l) (as in effect as of May 1, 1996).

17 ‘‘(b) GUARANTEED COVERAGE OF MEDICARE PRE18 MIUMS AND COST-SHARING FOR CERTAIN MEDICARE

19 BENEFICIARIES.—

20 ‘‘(1) GUARANTEED ELIGIBILITY.—Each State

21 plan shall provide—

22 ‘‘(A) for making medical assistance avail23 able for required medicare cost-sharing (as de24 fined in paragraph (2)) for qualified medicare

25 beneficiaries described in paragraph (3);
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1 ‘‘(B) for making medical assistance avail2 able for payment of medicare premiums under

3 section 1818A for qualified disabled and work4 ing individuals described in paragraph (4); and

5 ‘‘(C) for making medical assistance avail6 able for payment of medicare premiums under

7 section 1839 for individuals who would be quali8 fied medicare beneficiaries described in para9 graph (3) but for the fact that their income ex10 ceeds 100 percent, but is less than 120 percent,

11 of the poverty line for a family of the size in12 volved.

13 ‘‘(2) REQUIRED MEDICARE COST-SHARING DE14 FINED.—

15 ‘‘(A) IN GENERAL.—In this subsection, the

16 term ‘required medicare cost-sharing’ means,

17 with respect to an individual, costs incurred for

18 medicare cost-sharing described in paragraphs

19 (1) through (4) of section 1571(c) (and, at the

20 option of a State, section 1571(c)(5)) without

21 regard to whether the costs incurred were for

22 items and services for which medical assistance

23 is otherwise available under the plan.

24 ‘‘(B) LIMITATION ON OBLIGATION FOR

25 CERTAIN COST-SHARING ASSISTANCE.—In the
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1 case of medical assistance furnished under this

2 title for medicare cost-sharing described in

3 paragraph (2), (3), or (4) of section 1571(c) re4 lating to the furnishing of a service or item to

5 a medicare beneficiary, nothing in this title

6 shall be construed as preventing a State plan—

7 ‘‘(i) from limiting the assistance to

8 the amount (if any) by which (I) the

9 amount that is otherwise payable under

10 the plan for the item or service for eligible

11 individuals who are not such medicare

12 beneficiaries (or, if payments for such

13 items or services are made on a capitated

14 basis, an amount reasonably related or de15 rived from such capitated payment

16 amount), exceeds (II) the amount of pay17 ment (if any) made under title XVIII with

18 respect to the service or item, and

19 ‘‘(ii) if the amount described in sub20 clause (II) of clause (i) exceeds the amount

21 described in subclause (I) of such clause,

22 from treating the amount paid under title

23 XVIII as payment in full and not requiring

24 or providing for any additional medical as25 sistance under this subsection.
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1 ‘‘(3) QUALIFIED MEDICARE BENEFICIARY DE2 FINED.—In this subsection, the term ‘qualified med3 icare beneficiary’ means an individual—

4 ‘‘(A) who is entitled to hospital insurance

5 benefits under part A of title XVIII (including

6 an individual entitled to such benefits pursuant

7 to an enrollment under section 1818, but not

8 including an individual entitled to such benefits

9 only pursuant to an enrollment under section

10 1818A),

11 ‘‘(B) whose income (as determined under

12 section 1612 for purposes of the supplemental

13 security income program, except as provided in

14 paragraph (5)) does not exceed 100 percent of

15 the poverty line applicable to a family of the

16 size involved, and

17 ‘‘(C) whose resources (as determined under

18 section 1613 for purposes of the supplemental

19 security income program) do not exceed twice

20 the maximum amount of resources that an indi21 vidual may have and obtain benefits under that

22 program.

23 ‘‘(4) QUALIFIED DISABLED AND WORKING INDI24 VIDUAL DEFINED.—In this subsection, the term
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1 ‘qualified disabled and working individual’ means an

2 individual—

3 ‘‘(A) who is entitled to enroll for hospital

4 insurance benefits under part A of title XVIII

5 under section 1818A;

6 ‘‘(B) whose income (as determined under

7 section 1612 for purposes of the supplemental

8 security income program) does not exceed 200

9 percent of the poverty line applicable to a fam10 ily of the size involved;

11 ‘‘(C) whose resources (as determined under

12 section 1613 for purposes of the supplemental

13 security income program) do not exceed twice

14 the maximum amount of resources that an indi15 vidual or a couple (in the case of an individual

16 with a spouse) may have and obtain benefits for

17 supplemental security income benefits under

18 title XVI; and

19 ‘‘(D) who is not otherwise eligible for med20 ical assistance under this title.

21 ‘‘(5) INCOME DETERMINATIONS.—

22 ‘‘(A) IN GENERAL.—In determining under

23 this subsection the income of an individual who

24 is entitled to monthly insurance benefits under

25 title II for a transition month (as defined in
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1 subparagraph (B)) in a year, such income shall

2 not include any amounts attributable to an in3 crease in the level of monthly insurance benefits

4 payable under such title which have occurred

5 pursuant to section 215(i) for benefits payable

6 for months beginning with December of the

7 previous year.

8 ‘‘(B) TRANSITION MONTH DEFINED.—For

9 purposes of subparagraph (A), the term ‘transi10 tion month’ means each month in a year

11 through the month following the month in

12 which the annual revision of the poverty line is

13 published.

14 ‘‘SEC. 1502. OTHER PROVISIONS RELATING TO ELIGIBILITY

15 AND BENEFITS.

16 ‘‘(a) OPTIONAL ELIGIBILITY GROUPS FOR WHICH

17 UMBRELLA SUPPLEMENTAL FUNDING IS AVAILABLE.—

18 In addition to the guaranteed coverage categories de19 scribed in section 1501(a)(1), the following are population

20 groups with respect to which supplemental allotments may

21 be made under section 1511(g), but only if (for the indi22 vidual involved) medical assistance is made available under

23 the State plan for the guaranteed benefit package (as de24 fined in section 1501(a)(2)):
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1 ‘‘(1) CERTAIN DISABLED INDIVIDUALS.—Indi2 viduals (not described in section 1501(a)(1)(D)(ii))

3 who are disabled (as determined under section

4 1614(a)(3)), covered under the State plan, and meet

5 the eligibility standards for coverage under the State

6 medicaid plan under title XIX (as in effect as of

7 May 1, 1996).

8 ‘‘(2) CERTAIN ELDERLY INDIVIDUALS.—Elderly

9 individuals (not described in section 1501(a)(1)(E))

10 who are covered under the State plan and who meet

11 the eligibility standards for coverage under the State

12 medicaid plan under title XIX (as in effect as of

13 May 1, 1996) other than solely on the basis of being

14 an individual described in section 1902(a)(10)(E).

15 Eligibility under paragraphs (1) and (2) shall be deter16 mined using the methodologies that are not more restric17 tive than the methodologies used under the State medicaid

18 plan as in effect as of May 1, 1996.

19 ‘‘(b) OTHER PROVISIONS RELATING TO GENERAL

20 ELIGIBILITY AND BENEFITS.—

21 ‘‘(1) GENERAL DESCRIPTION.—Each State plan

22 shall include a description (consistent with this title)

23 of the following:

24 ‘‘(A) ELIGIBILITY GUIDELINES FOR THE

25 NON-GUARANTEED, NON-UMBRELLA POPU-
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1 LATION.—The general eligibility guidelines of

2 the plan for eligible low-income individuals who

3 are not covered under subsection (a) or (b) of

4 section 1501 or under subsection (a) of this

5 section.

6 ‘‘(B) SCOPE OF ASSISTANCE.—The

7 amount, duration, and scope of health care

8 services and items covered under the plan, in9 cluding differences among different eligible pop10 ulation groups.

11 ‘‘(C) DELIVERY METHOD.—The State’s

12 approach to delivery of medical assistance, in13 cluding a general description of—

14 ‘‘(i) the use (or intended use) of

15 vouchers, fee-for-service, or managed care

16 arrangements (such as capitated health

17 care plans, case management, and case co18 ordination); and

19 ‘‘(ii) utilization control systems.

20 ‘‘(D) FEE-FOR-SERVICE BENEFITS.—To

21 the extent that medical assistance is furnished

22 on a fee-for-service basis—

23 ‘‘(i) how the State determines the

24 qualifications of health care providers eligi25 ble to provide such assistance; and
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1 ‘‘(ii) how the State determines rates

2 of reimbursement for providing such as3 sistance.

4 ‘‘(E) COST-SHARING.—Beneficiary cost5 sharing (if any), including variations in such

6 cost-sharing by population group or type of

7 service and financial responsibilities of parents

8 of recipients who are children and the spouses

9 of recipients.

10 ‘‘(F) UTILIZATION INCENTIVES.—Incen11 tives or requirements (if any) to encourage the

12 appropriate utilization of services.

13 ‘‘(G) SUPPORT FOR CERTAIN HOS14 PITALS.—

15 ‘‘(i) IN GENERAL.—With respect to

16 hospitals described in clause (ii) located in

17 the State, a description of the extent to

18 which provisions are made for expenditures

19 for items and services furnished by such

20 hospitals and covered under the State plan.

21 ‘‘(ii) HOSPITALS DESCRIBED.—A hos22 pital described in this clause is a short23 term acute care general hospital or a chil24 dren’s hospital, the low-income utilization

25 rate of which exceeds the lesser of—
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1 ‘‘(I) 1 standard deviation above

2 the mean low-income utilization rate

3 for hospitals receiving payments under

4 a State plan in the State in which

5 such hospital is located, or

‘‘(II) 11 6 ⁄4 standard deviations

7 above the mean low-income utilization

8 rate for hospitals receiving such pay9 ments in the 50 States and the Dis10 trict of Columbia.

11 ‘‘(iii) LOW-INCOME UTILIZATION

12 RATE.—For purposes of clause (ii), the

13 term ‘low-income utilization rate’ means,

14 for a hospital, a fraction (expressed as a

15 percentage), the numerator of which is the

16 hospital’s number of patient days attrib17 utable to patients who (for such days) were

18 eligible for medical assistance under a

19 State plan or were uninsured in a period,

20 and the denominator of which is the total

21 number of the hospital’s patient days in

22 that period.

23 ‘‘(iv) PATIENT DAYS.—For purposes

24 of clause (iii), the term ‘patient day’ in25 cludes each day in which—
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1 ‘‘(I) an individual, including a

2 newborn, is an inpatient in the hos3 pital, whether or not the individual is

4 in a specialized ward and whether or

5 not the individual remains in the hos6 pital for lack of suitable placement

7 elsewhere; or

8 ‘‘(II) an individual makes one or

9 more outpatient visits to the hospital.

10 ‘‘(2) CONDITIONS FOR GUARANTEES AND RELA11 TION OF GUARANTEES TO FINANCING.—The guaran12 tees of States required under subsections (a) and (b)

13 of section 1501 and subsection (d) of this section

14 are subject to the limitations on payment to the

15 States provided under section 1511 (including the

16 provisions of subsection (g), relating to supplemental

17 umbrella allotments). In submitting a plan under

18 this title, a State voluntarily agrees to accept pay19 ment amounts provided under such section as full

20 payment from the Federal Government in return for

21 providing for the benefits (including the guaranteed

22 benefit package) under this title.

23 ‘‘(3) SECONDARY PAYMENT.—Nothing in this

24 section shall be construed as preventing a State

25 from denying benefits to an individual to the extent
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1 such benefits are available to the individual under

2 the medicare program under title XVIII or under

3 another public or private health care insurance pro4 gram.

5 ‘‘(4) RESIDENCY REQUIREMENT.—In the case

6 of an individual who—

7 ‘‘(A) is described in section 1501(a)(1),

8 ‘‘(B) changed residence from another State

9 to the State, and

10 ‘‘(C) has resided in the State for less than

11 180 days,

12 the State may limit the benefits provided to such in13 dividual in the guaranteed benefits package under

14 paragraph (2) of section 1501(a) to the amount, du15 ration, and scope of benefits available under the

16 State plan of the individual’s previous State of resi17 dence.

18 ‘‘(c) SET-ASIDE OF FUNDS FOR THE LOW-INCOME

19 DISABLED.—

20 ‘‘(1) IN GENERAL.—In the case of a State that

21 has elected the option described in section

22 1501(a)(1)(D)(i) for a fiscal year, the State plan

23 shall provide that the percentage of funds expended

24 under the plan for medical assistance for eligible

25 low-income individuals who are not elderly individ-
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1 uals and who are eligible for such assistance on the

2 basis of a disability, including being blind, for the

3 fiscal year is not less than the minimum low-income4 disabled percentage specified in paragraph (2) of the

5 total funds expended under the plan for medical as6 sistance for the fiscal year.

7 ‘‘(2) MINIMUM LOW-INCOME-DISABLED PER8 CENTAGE.—The minimum low-income-disabled per9 centage specified in this paragraph for a State is

10 equal to 90 percent of the percentage of the expendi11 tures under title XIX for medical assistance in the

12 State during Federal fiscal year 1995 which was at13 tributable to expenditures for medical assistance for

14 benefits furnished to individuals whose coverage (at

15 such time) was on a basis directly related to disabil16 ity status, including being blind.

17 ‘‘(3) COMPUTATIONS.—States shall calculate

18 the minimum percentage under paragraph (2) in a

19 reasonable manner consistent with reports submitted

20 to the Secretary for the fiscal years involved and

21 medical assistance attributable to the exception pro22 vided under section 1903(v)(2) shall not be consid23 ered to be expenditures for medical assistance.

24 ‘‘(d) TRANSITIONAL PAYMENT FOR FEDERALLY25 QUALIFIED HEALTH CENTER SERVICES AND RURAL
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1 HEALTH CLINIC SERVICES.—Each State plan shall pro2 vide that, for Federally-qualified health center services

3 and rural health clinic services (as defined in section

4 1571(f)) furnished under the plan during the first 8 cal5 endar quarters in which the plan is in effect and for which

6 payment is made under the plan, payment shall be made

7 for such services at a rate based on 100 percent of costs

8 which are reasonable and related to the cost of furnishing

9 such services or based on such other tests of reasonable10 ness, as the Secretary prescribes in regulations under sec11 tion 1833(a)(3), or, in the case of services to which those

12 regulations do not apply, on the same methodology used

13 under section 1833(a)(3).

14 ‘‘(e) PREEXISTING CONDITION EXCLUSIONS.—Not15 withstanding any other provision of this title—

16 ‘‘(1) a State plan may not deny or exclude cov17 erage of any item or service for an eligible individual

18 for benefits under the State plan for such item or

19 service on the basis of a preexisting condition; and

20 ‘‘(2) if a State contracts or makes other ar21 rangements (through the eligible individual or

22 through another entity) with a capitated health care

23 organization, insurer, or other entity, for the provi24 sion of items or services to eligible individuals under

25 the State plan and the State permits such organiza-
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1 tion, insurer, or other entity to exclude coverage of

2 a covered item or service on the basis of a preexist3 ing condition, the State shall provide, through its

4 State plan, for such coverage (through direct pay5 ment or otherwise) for any such covered item or

6 service denied or excluded on the basis of a preexist7 ing condition.

8 ‘‘(f) SOLVENCY STANDARDS FOR CAPITATED

9 HEALTH CARE ORGANIZATIONS.—

10 ‘‘(1) IN GENERAL.—A State may not contract

11 with a capitated health care organization, as defined

12 in section 1504(c)(1), for the provision of medical

13 assistance under a State plan under which the orga14 nization is—

15 ‘‘(A) at full financial risk, as defined by

16 the State, unless the organization meets sol17 vency standards established by the State for

18 private health maintenance organizations or is

19 described in paragraph (4) and meets other sol20 vency standards established by the State, or

21 ‘‘(B) is not at such risk, unless the organi22 zation meets solvency standards that are estab23 lished under the State plan.

24 ‘‘(2) TREATMENT OF PUBLIC ENTITIES.—Para25 graph (1) shall not apply to an organization that is
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1 a public entity or if the solvency of such organiza2 tion is guaranteed by the State.

3 ‘‘(3) TRANSITION.—In the case of a capitated

4 health care organization that as of the date of the

5 enactment of this title has entered into a contract

6 with a State for the provision of medical assistance

7 under title XIX under which the organization as8 sumes full financial risk and is receiving capitation

9 payments, paragraph (1) shall not apply to such or10 ganization until 3 years after the date of the enact11 ment of this title.

12 ‘‘(4) ORGANIZATION DESCRIBED.—An organiza13 tion described in this paragraph is a capitated health

14 organization which is (or is controlled by) one or

15 more Federally-qualified health centers or rural

16 health clinics. For purposes of this paragraph, the

17 term ‘control’ means the possession, whether direct

18 or indirect, of the power to direct or cause the direc19 tion of the management and policies of a capitated

20 health organization through membership, board rep21 resentation, or an ownership interest equal to or

22 greater than 50.1 percent.

23 ‘‘(g) FOR SERVICES PROVIDED AT FEDERALLY24 QUALIFIED HEALTH CENTERS AND RURAL HEALTH

25 CLINICS.—
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a

2 State plan shall provide that the amount of funds

3 expended under the plan for medical assistance for

4 services provided at rural health clinics (as defined

5 in section 1861(aa)(2)) and Federally-qualified

6 health centers (as defined in section 1861(aa)(4)),

7 for eligible low-income individuals for a fiscal year is

8 not less than 85 percent of the average annual ex9 penditures under title XIX for medical assistance in

10 the State during Federal fiscal year 1995 which

11 were attributable to expenditures for medical assist12 ance for rural health clinic services and Federally13 qualified health center services (as defined in section

14 1905(l)).

15 ‘‘(2) ALTERNATIVE MINIMUM SET-ASIDES.—

16 ‘‘(A) IN GENERAL.—Beginning with fiscal

17 year 2001, a State may provide in its State

18 plan (through an amendment to the plan) for a

19 lower percentage of expenditures than the mini20 mum percentages specified in paragraph (1) if

21 the State determines to the satisfaction of the

22 Secretary that—

23 ‘‘(i) the health care needs of the low24 income populations described in such para25 graph who are eligible for medical assist-
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1 ance under the plan during the previous

2 fiscal year can be reasonably met without

3 the expenditure of the percentage other4 wise required to be expended;

5 ‘‘(ii) the performance goals estab6 lished under section 1521 relating to such

7 population can reasonably be met with the

8 expenditure of such lower percentage of

9 funds; and

10 ‘‘(iii) the health care needs of eligible

11 low-income individuals residing in medi12 cally underserved rural areas can reason13 ably be met without the level of expendi14 ture for such services otherwise required

15 and the performance goals established

16 under section 1521 relating to such indi17 viduals can reasonably be met with such

18 lower level of expenditures.

19 ‘‘(B) PERIOD OF APPLICATION.—The de20 termination under subparagraph (A) shall be

21 made for such period as a State may request,

22 but may not be made for a period of more than

23 3 consecutive Federal fiscal years (beginning

24 with the first fiscal year for which the lower

25 percentage is sought). A new determination
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1 must be made under such subparagraph for any

2 subsequent period.

3 ‘‘SEC. 1503. LIMITATIONS ON PREMIUMS AND COST-SHAR4 ING.

5 ‘‘(a) LIMITATION ON PREMIUMS.—

6 ‘‘(1) NONE FOR GUARANTEED POPULATION.—

7 The State plan shall not impose any enrollment fee,

8 premium, or similar charge for eligible individuals

9 described in subsection (a) or (b) of section 1501 or

10 section 1502(a).

11 ‘‘(2) INCOME-RELATED FOR OTHER POPU12 LATIONS.—The State plan may impose an enroll13 ment fee, premium, or similar charge for eligible in14 dividuals not described in paragraph (1) if it is re15 lated to the individual’s income (and does not exceed

16 2 percent of the individual’s gross income).

17 ‘‘(b) LIMITATION ON COST-SHARING.—Subject to

18 subsection (c)—

19 ‘‘(1) GUARANTEED POPULATIONS.—With re20 spect to individuals covered under subsection (a) or

21 (b) of section 1501 or section 1502, the State may

22 not impose any cost-sharing with respect to items

23 and services unless the amount is nominal in

24 amount. For purposes of this paragraph, an amount
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1 is nominal if it does not exceed 6 percent of the

2 amount otherwise payable, or, if greater, 50 cents.

3 ‘‘(2) OTHER POPULATIONS.—With respect to

4 individuals not described in paragraph (1), the State

5 may not impose any cost-sharing with respect to

6 items and services unless such cost sharing is pursu7 ant to a public cost-sharing schedule and such cost8 sharing is not in excess of the average, nominal cost9 sharing imposed in the State for health plans offered

10 by health maintenance organizations (and similar or11 ganizations) for the same or similar items and serv12 ices, as determined by the State insurance commis13 sioner.

14 ‘‘(c) CERTAIN COST-SHARING PERMITTED.—

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

16 State may—

17 ‘‘(A) impose additional cost-sharing to dis18 courage the inappropriate use of emergency

19 medical services delivered through a hospital

20 emergency room, a medical transportation pro21 vider, or otherwise;

22 ‘‘(B) impose additional cost-sharing dif23 ferentially in order to encourage the use of pri24 mary and preventive care and discourage un25 necessary or less economical care; and
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1 ‘‘(C) from imposing additional cost-sharing

2 based on the failure to participate in employ3 ment training programs, drug or alcohol abuse

4 treatment, counseling programs, or other pro5 grams promoting personal responsibility.

6 ‘‘(2) LIMITATION.—The additional cost-sharing

7 imposed under paragraph (1) may not result—

8 ‘‘(A) in the case of an individual described

9 in subsection (b)(1), in aggregate cost-sharing

10 that exceeds the maximum amount of cost-shar11 ing that may be imposed under subsection

12 (b)(2) (determined without regard to this sub13 section); or

14 ‘‘(B) in the case of an individual described

15 in subsection (b)(2), in aggregate cost-sharing

16 that exceeds twice the maximum amount of

17 cost-sharing that may be imposed under such

18 subsection (determined without regard to this

19 subsection).

20 ‘‘(d) PROHIBITION ON BALANCE BILLING.—An indi21 vidual eligible for benefits for items and services under the

22 State plan who is furnished such an items or service by

23 a provider under the plan may not be billed by the provider

24 for such item or service, other than such amount of cost25 sharing as is permitted with this section.
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1 ‘‘(e) COST-SHARING DEFINED.—In this section, the

2 term ‘cost-sharing’ includes copayments, deductibles, coin3 surance, and other charges for the provision of health care

4 services.

5 ‘‘SEC. 1504. DESCRIPTION OF PROCESS FOR DEVELOPING

6 CAPITATION PAYMENT RATES.

7 ‘‘(a) IN GENERAL.—If a State contracts (or intends

8 to contract) with a capitated health care organization (as

9 defined in subsection (c)(1)) under which the State makes

10 a capitation payment (as defined in subsection (c)(2)) to

11 the organization for providing or arranging for the provi12 sion of medical assistance under the State plan for a group

13 of services, including at least inpatient hospital services

14 and physicians’ services, the plan shall include a descrip15 tion of the following:

16 ‘‘(1) USE OF ACTUARIAL SCIENCE.—The extent

17 and manner in which the State uses actuarial

18 science—

19 ‘‘(A) to analyze and project health care ex20 penditures and utilization for individuals en21 rolled (or to be enrolled) in such an organiza22 tion under the State plan, and

23 ‘‘(B) to develop capitation payment rates,

24 including a brief description of the general

25 methodologies used by actuaries.
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1 ‘‘(2) QUALIFICATIONS OF ORGANIZATIONS.—

2 The general qualifications, including any accredita3 tion, State licensure or certification, or provider net4 work standards, required by the State for participa5 tion of capitated health care organizations under the

6 State plan.

7 ‘‘(3) DISSEMINATION PROCESS.—The process

8 used by the State under subsection (b) and other9 wise to disseminate, before entering into contracts

10 with capitated health care organizations, actuarial

11 information to such organizations on the historical

12 fee-for-service costs (or, if not available, other recent

13 financial data associated with providing covered

14 services) and utilization associated with individuals

15 described in paragraph (1)(A).

16 ‘‘(b) PUBLIC NOTICE AND COMMENT.—Under the

17 State plan the State shall provide a process for providing,

18 before the beginning of each contract year—

19 ‘‘(1) public notice of—

20 ‘‘(A) the amounts of the capitation pay21 ments (if any) made under the plan for the con22 tract year preceding the public notice, and

23 ‘‘(B)(i) the information described under

24 subsection (a)(1) with respect to capitation pay25 ments for the contract year involved, or (ii)
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1 amounts of the capitation payments the State

2 expects to make for the contract year involved,

3 unless such information is designated as proprietary

4 and not subject to public disclosure under State law,

5 and

6 ‘‘(2) an opportunity for receiving public com7 ment on the amounts and information for which no8 tice is provided under paragraph (1).

9 ‘‘(c) DEFINITIONS.—In this title:

10 ‘‘(1) CAPITATED HEALTH CARE ORGANIZA11 TION.—The term ‘capitated health care organiza12 tion’ means a health maintenance organization or

13 any other entity (including a health insuring organi14 zation, managed care organization, prepaid health

15 plan, integrated service network, or similar entity)

16 which under State law is permitted to accept capita17 tion payments for providing (or arranging for the

18 provision of) a group of items and services including

19 at least inpatient hospital services and physicians’

20 services.

21 ‘‘(2) CAPITATION PAYMENT.—The term ‘capita22 tion payment’ means, with respect to payment, pay23 ment on a prepaid capitation basis or any other risk

24 basis to an entity for the entity’s provision (or ar25 ranging for the provision) of a group of items and
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1 services, including at least inpatient hospital services

2 and physicians’ services.

3 ‘‘SEC. 1505. PREVENTING SPOUSAL IMPOVERISHMENT.

4 ‘‘(a) SPECIAL TREATMENT FOR INSTITUTIONALIZED

5 SPOUSES.—

6 ‘‘(1) SUPERSEDES OTHER PROVISIONS.—In de7 termining the eligibility for medical assistance of an

8 institutionalized spouse (as defined in subsection

9 (h)(1)), the provisions of this section supersede any

10 other provision of this title which is inconsistent

11 with them.

12 ‘‘(2) DOES NOT AFFECT CERTAIN DETERMINA13 TIONS.—Except as this section specifically provides,

14 this section does not apply to—

15 ‘‘(A) the determination of what constitutes

16 income or resources, or

17 ‘‘(B) the methodology and standards for

18 determining and evaluating income and re19 sources.

20 ‘‘(3) NO APPLICATION IN COMMONWEALTHS

21 AND TERRITORIES.—This section shall only apply to

22 a State that is one of the 50 States or the District

23 of Columbia.

24 ‘‘(b) RULES FOR TREATMENT OF INCOME.—
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1 ‘‘(1) SEPARATE TREATMENT OF INCOME.—Dur2 ing any month in which an institutionalized spouse

3 is in the institution, except as provided in paragraph

4 (2), no income of the community spouse shall be

5 deemed available to the institutionalized spouse.

6 ‘‘(2) ATTRIBUTION OF INCOME.—In determin7 ing the income of an institutionalized spouse or com8 munity spouse for purposes of the post-eligibility in9 come determination described in subsection (d), ex10 cept as otherwise provided in this section and re11 gardless of any State laws relating to community

12 property or the division of marital property, the fol13 lowing rules apply:

14 ‘‘(A) NON-TRUST PROPERTY.—Subject to

15 subparagraphs (C) and (D), in the case of in16 come not from a trust, unless the instrument

17 providing the income otherwise specifically pro18 vides—

19 ‘‘(i) if payment of income is made

20 solely in the name of the institutionalized

21 spouse or the community spouse, the in22 come shall be considered available only to

23 that respective spouse,

24 ‘‘(ii) if payment of income is made in

25 the names of the institutionalized spouse
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and the community spouse, 1 1 ⁄2 of the in2 come shall be considered available to each

3 of them, and

4 ‘‘(iii) if payment of income is made in

5 the names of the institutionalized spouse

6 or the community spouse, or both, and to

7 another person or persons, the income

8 shall be considered available to each spouse

9 in proportion to the spouse’s interest (or,

10 if payment is made with respect to both

11 spouses and no such interest is specified,

1 12 ⁄2 of the joint interest shall be considered

13 available to each spouse).

14 ‘‘(B) TRUST PROPERTY.—In the case of a

15 trust—

16 ‘‘(i) except as provided in clause (ii),

17 income shall be attributed in accordance

18 with the provisions of this title; and

19 ‘‘(ii) income shall be considered avail20 able to each spouse as provided in the

21 trust, or, in the absence of a specific provi22 sion in the trust—

23 ‘‘(I) if payment of income is

24 made solely to the institutionalized

25 spouse or the community spouse, the
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1 income shall be considered available

2 only to that respective spouse,

3 ‘‘(II) if payment of income is

4 made to both the institutionalized

spouse and the community spouse, 1 5 ⁄2

6 of the income shall be considered

7 available to each of them, and

8 ‘‘(III) if payment of income is

9 made to the institutionalized spouse

10 or the community spouse, or both,

11 and to another person or persons, the

12 income shall be considered available to

13 each spouse in proportion to the

14 spouse’s interest (or, if payment is

15 made with respect to both spouses

and no such interest is specified, 1 16 ⁄2 of

17 the joint interest shall be considered

18 available to each spouse).

19 ‘‘(C) PROPERTY WITH NO INSTRUMENT.—

20 In the case of income not from a trust in which

21 there is no instrument establishing ownership,

subject to subparagraph (D), 1 22 ⁄2 of the income

23 shall be considered to be available to the institutionalized spouse and 1 24 ⁄2 to the community

25 spouse.
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1 ‘‘(D) REBUTTING OWNERSHIP.—The rules

2 of subparagraphs (A) and (C) are superseded to

3 the extent that an institutionalized spouse can

4 establish, by a preponderance of the evidence,

5 that the ownership interests in income are other

6 than as provided under such subparagraphs.

7 ‘‘(c) RULES FOR TREATMENT OF RESOURCES.—

8 ‘‘(1) COMPUTATION OF SPOUSAL SHARE AT

9 TIME OF INSTITUTIONALIZATION.—

10 ‘‘(A) TOTAL JOINT RESOURCES.—There

11 shall be computed (as of the beginning of the

12 first continuous period of institutionalization of

13 the institutionalized spouse)—

14 ‘‘(i) the total value of the resources to

15 the extent either the institutionalized

16 spouse or the community spouse has an

17 ownership interest, and

18 ‘‘(ii) a spousal share which is equal to

1 19 ⁄2 of such total value.

20 ‘‘(B) ASSESSMENT.—At the request of an

21 institutionalized spouse or community spouse,

22 at the beginning of the first continuous period

23 of institutionalization of the institutionalized

24 spouse and upon the receipt of relevant docu25 mentation of resources, the State shall promptly
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1 assess and document the total value described

2 in subparagraph (A)(i) and shall provide a copy

3 of such assessment and documentation to each

4 spouse and shall retain a copy of the assess5 ment for use under this section. If the request

6 is not part of an application for medical assist7 ance under this title, the State may, at its op8 tion as a condition of providing the assessment,

9 require payment of a fee not exceeding the rea10 sonable expenses of providing and documenting

11 the assessment. At the time of providing the

12 copy of the assessment, the State shall include

13 a notice indicating that the spouse will have a

14 right to a fair hearing under subsection (e)(2).

15 ‘‘(2) ATTRIBUTION OF RESOURCES AT TIME OF

16 INITIAL ELIGIBILITY DETERMINATION.—In deter17 mining the resources of an institutionalized spouse

18 at the time of application for medical assistance

19 under this title, regardless of any State laws relating

20 to community property or the division of marital

21 property—

22 ‘‘(A) except as provided in subparagraph

23 (B), all the resources held by either the institu24 tionalized spouse, community spouse, or both,
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1 shall be considered to be available to the insti2 tutionalized spouse, and

3 ‘‘(B) resources shall be considered to be

4 available to an institutionalized spouse, but only

5 to the extent that the amount of such resources

6 exceeds the amount computed under subsection

7 (f)(2)(A) (as of the time of application for med8 ical assistance).

9 ‘‘(3) ASSIGNMENT OF SUPPORT RIGHTS.—The

10 institutionalized spouse shall not be ineligible by rea11 son of resources determined under paragraph (2) to

12 be available for the cost of care where—

13 ‘‘(A) the institutionalized spouse has as14 signed to the State any rights to support from

15 the community spouse,

16 ‘‘(B) the institutionalized spouse lacks the

17 ability to execute an assignment due to physical

18 or mental impairment but the State has the

19 right to bring a support proceeding against a

20 community spouse without such assignment, or

21 ‘‘(C) the State determines that denial of

22 eligibility would work an undue hardship.

23 ‘‘(4) SEPARATE TREATMENT OF RESOURCES

24 AFTER ELIGIBILITY FOR MEDICAL ASSISTANCE ES25 TABLISHED.—During the continuous period in which
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1 an institutionalized spouse is in an institution and

2 after the month in which an institutionalized spouse

3 is determined to be eligible for medical assistance

4 under this title, no resources of the community

5 spouse shall be deemed available to the institutional6 ized spouse.

7 ‘‘(5) RESOURCES DEFINED.—In this section,

8 the term ‘resources’ does not include—

9 ‘‘(A) resources excluded under subsection

10 (a) or (d) of section 1613, and

11 ‘‘(B) resources that would be excluded

12 under section 1613(a)(2)(A) but for the limita13 tion on total value described in such section.

14 ‘‘(d) PROTECTING INCOME FOR COMMUNITY

15 SPOUSE.—

16 ‘‘(1) ALLOWANCES TO BE OFFSET FROM IN17 COME OF INSTITUTIONALIZED SPOUSE.—After an

18 institutionalized spouse is determined or redeter19 mined to be eligible for medical assistance, in deter20 mining the amount of the spouse’s income that is to

21 be applied monthly to payment for the costs of care

22 in the institution, there shall be deducted from the

23 spouse’s monthly income the following amounts in

24 the following order:
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1 ‘‘(A) A personal needs allowance (described

2 in paragraph (2)(A)), in an amount not less

3 than the amount specified in paragraph (2)(C).

4 ‘‘(B) A community spouse monthly income

5 allowance (as defined in paragraph (3)), but

6 only to the extent income of the institutional7 ized spouse is made available to (or for the ben8 efit of) the community spouse.

9 ‘‘(C) A family allowance, for each family

member, equal to at least 1 10 ⁄3 of the amount by

11 which the amount described in paragraph

12 (4)(A)(i) exceeds the amount of the monthly in13 come of that family member.

14 ‘‘(D) Amounts for incurred expenses for

15 medical or remedial care for the institutional16 ized spouse as provided under paragraph (6).

17 In subparagraph (C), the term ‘family member’ only

18 includes minor or dependent children, dependent

19 parents, or dependent siblings of the institutional20 ized or community spouse who are residing with the

21 community spouse.

22 ‘‘(2) PERSONAL NEEDS ALLOWANCE.—

23 ‘‘(A) IN GENERAL.—The State plan must

24 provide that, in the case of an institutionalized

25 individual or couple described in subparagraph
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1 (B), in determining the amount of the individ2 ual’s or couple’s income to be applied monthly

3 to payment for the cost of care in an institu4 tion, there shall be deducted from the monthly

5 income (in addition to other allowances other6 wise provided under the plan) a monthly per7 sonal needs allowance—

8 ‘‘(i) which is reasonable in amount for

9 clothing and other personal needs of the

10 individual (or couple) while in an institu11 tion, and

12 ‘‘(ii) which is not less (and may be

13 greater) than the minimum monthly per14 sonal needs allowance described in sub15 paragraph (C).

16 ‘‘(B) INSTITUTIONALIZED INDIVIDUAL OR

17 COUPLE DEFINED.—In this paragraph, the

18 term ‘institutionalized individual or couple’

19 means an individual or married couple—

20 ‘‘(i) who is an inpatient (or who are

21 inpatients) in a medical institution or

22 nursing facility for which payments are

23 made under this title throughout a month,

24 and
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1 ‘‘(ii) who is or are determined to be

2 eligible for medical assistance under the

3 State plan.

4 ‘‘(C) MINIMUM ALLOWANCE.—The mini5 mum monthly personal needs allowance de6 scribed in this subparagraph is $40 for an insti7 tutionalized individual and $80 for an institu8 tionalized couple (if both are aged, blind, or dis9 abled, and their incomes are considered avail10 able to each other in determining eligibility).

11 ‘‘(3) COMMUNITY SPOUSE MONTHLY INCOME

12 ALLOWANCE DEFINED.—

13 ‘‘(A) IN GENERAL.—In this section (except

14 as provided in subparagraph (B)), the commu15 nity spouse monthly income allowance for a

16 community spouse is an amount by which—

17 ‘‘(i) except as provided in subsection

18 (e), the minimum monthly maintenance

19 needs allowance (established under and in

20 accordance with paragraph (4)) for the

21 spouse, exceeds

22 ‘‘(ii) the amount of monthly income

23 otherwise available to the community

24 spouse (determined without regard to such

25 an allowance).
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1 ‘‘(B) COURT ORDERED SUPPORT.—If a

2 court has entered an order against an institu3 tionalized spouse for monthly income for the

4 support of the community spouse, the commu5 nity spouse monthly income allowance for the

6 spouse shall be not less than the amount of the

7 monthly income so ordered.

8 ‘‘(4) ESTABLISHMENT OF MINIMUM MONTHLY

9 MAINTENANCE NEEDS ALLOWANCE.—

10 ‘‘(A) IN GENERAL.—Each State shall es11 tablish a minimum monthly maintenance needs

12 allowance for each community spouse which,

13 subject to subparagraph (B), is equal to or ex14 ceeds—

‘‘(i) 150 percent of 1 15 ⁄12 of the poverty

16 line applicable to a family unit of 2 mem17 bers, plus

18 ‘‘(ii) an excess shelter allowance (as

19 defined in paragraph (4)).

20 A revision of the poverty line referred to in

21 clause (i) shall apply to medical assistance fur22 nished during and after the second calendar

23 quarter that begins after the date of publication

24 of the revision.
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1 ‘‘(B) CAP ON MINIMUM MONTHLY MAINTE2 NANCE NEEDS ALLOWANCE.—The minimum

3 monthly maintenance needs allowance estab4 lished under subparagraph (A) may not exceed

5 $1,500 (subject to adjustment under sub6 sections (e) and (g)).

7 ‘‘(5) EXCESS SHELTER ALLOWANCE DE8 FINED.—In paragraph (4)(A)(ii), the term ‘excess

9 shelter allowance’ means, for a community spouse,

10 the amount by which the sum of—

11 ‘‘(A) the spouse’s expenses for rent or

12 mortgage payment (including principal and in13 terest), taxes and insurance and, in the case of

14 a condominium or cooperative, required mainte15 nance charge, for the community spouse’s prin16 cipal residence, and

17 ‘‘(B) the standard utility allowance (used

18 by the State under section 5(e) of the Food

19 Stamp Act of 1977) or, if the State does not

20 use such an allowance, the spouse’s actual util21 ity expenses,

22 exceeds 30 percent of the amount described in para23 graph (4)(A)(i), except that, in the case of a con24 dominium or cooperative, for which a maintenance

25 charge is included under subparagraph (A), any al-
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1 lowance under subparagraph (B) shall be reduced to

2 the extent the maintenance charge includes utility

3 expenses.

4 ‘‘(6) TREATMENT OF INCURRED EXPENSES.—

5 With respect to the post-eligibility treatment of in6 come under this section, there shall be disregarded

7 reparation payments made by the Federal Republic

8 of Germany and, there shall be taken into account

9 amounts for incurred expenses for medical or reme10 dial care that are not subject to payment by a third

11 party, including—

12 ‘‘(A) medicare and other health insurance

13 premiums, deductibles, or coinsurance, and

14 ‘‘(B) necessary medical or remedial care

15 recognized under State law but not covered

16 under the State plan under this title, subject

17 to reasonable limits the State may establish on

18 the amount of these expenses.

19 ‘‘(e) NOTICE AND FAIR HEARING.—

20 ‘‘(1) NOTICE.—Upon—

21 ‘‘(A) a determination of eligibility for med22 ical assistance of an institutionalized spouse, or

23 ‘‘(B) a request by either the institutional24 ized spouse, or the community spouse, or a rep25 resentative acting on behalf of either spouse,
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1 each State shall notify both spouses (in the case de2 scribed in subparagraph (A)) or the spouse making

3 the request (in the case described in subparagraph

4 (B)) of the amount of the community spouse month5 ly income allowance (described in subsection

6 (d)(1)(B)), of the amount of any family allowances

7 (described in subsection (d)(1)(C)), of the method

8 for computing the amount of the community spouse

9 resources allowance permitted under subsection (f),

10 and of the spouse’s right to a fair hearing under the

11 State plan respecting ownership or availability of in12 come or resources, and the determination of the

13 community spouse monthly income or resource al14 lowance.

15 ‘‘(2) FAIR HEARING.—

16 ‘‘(A) IN GENERAL.—If either the institu17 tionalized spouse or the community spouse is

18 dissatisfied with a determination of—

19 ‘‘(i) the community spouse monthly

20 income allowance;

21 ‘‘(ii) the amount of monthly income

22 otherwise available to the community

23 spouse (as applied under subsection

24 (d)(3)(A)(ii));
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1 ‘‘(iii) the computation of the spousal

2 share of resources under subsection (c)(1);

3 ‘‘(iv) the attribution of resources

4 under subsection (c)(2); or

5 ‘‘(v) the determination of the commu6 nity spouse resource allowance (as defined

7 in subsection (f)(2));

8 such spouse is entitled to a fair hearing under

9 the State plan with respect to such determina10 tion if an application for benefits under this

11 title has been made on behalf of the institu12 tionalized spouse. Any such hearing respecting

13 the determination of the community spouse re14 source allowance shall be held within 30 days of

15 the date of the request for the hearing.

16 ‘‘(B) REVISION OF MINIMUM MONTHLY

17 MAINTENANCE NEEDS ALLOWANCE.—If either

18 such spouse establishes that the community

19 spouse needs income, above the level otherwise

20 provided by the minimum monthly maintenance

21 needs allowance, due to exceptional cir22 cumstances resulting in significant financial du23 ress, there shall be substituted, for the mini24 mum monthly maintenance needs allowance in
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1 subsection (d)(3)(A)(i), an amount adequate to

2 provide such additional income as is necessary.

3 ‘‘(C) REVISION OF COMMUNITY SPOUSE

4 RESOURCE ALLOWANCE.—If either such spouse

5 establishes that the community spouse resource

6 allowance (in relation to the amount of income

7 generated by such an allowance) is inadequate

8 to raise the community spouse’s income to the

9 minimum monthly maintenance needs allow10 ance, there shall be substituted, for the commu11 nity spouse resource allowance under subsection

12 (f)(2), an amount adequate to provide such a

13 minimum monthly maintenance needs allow14 ance.

15 ‘‘(f) PERMITTING TRANSFER OF RESOURCES TO

16 COMMUNITY SPOUSE.—

17 ‘‘(1) IN GENERAL.—An institutionalized spouse

18 may, without regard to any other provision of the

19 State plan to the contrary, transfer an amount equal

20 to the community spouse resource allowance (as de21 fined in paragraph (2)), but only to the extent the

22 resources of the institutionalized spouse are trans23 ferred to, or for the sole benefit of, the community

24 spouse. The transfer under the preceding sentence

25 shall be made as soon as practicable after the date
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1 of the initial determination of eligibility, taking into

2 account such time as may be necessary to obtain a

3 court order under paragraph (3).

4 ‘‘(2) COMMUNITY SPOUSE RESOURCE ALLOW5 ANCE DEFINED.—In paragraph (1), the ‘community

6 spouse resource allowance’ for a community spouse

7 is an amount (if any) by which—

8 ‘‘(A) the greatest of—

9 ‘‘(i) $12,000 (subject to adjustment

10 under subsection (g)), or, if greater (but

11 not to exceed the amount specified in

12 clause (ii)(II)) an amount specified under

13 the State plan,

14 ‘‘(ii) the lesser of (I) the spousal

15 share computed under subsection (c)(1), or

16 (II) $60,000 (subject to adjustment under

17 subsection (g)),

18 ‘‘(iii) the amount established under

19 subsection (e)(2), or

20 ‘‘(iv) the amount transferred under a

21 court order under paragraph (3);

22 exceeds

23 ‘‘(B) the amount of the resources other24 wise available to the community spouse (deter25 mined without regard to such an allowance).
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1 ‘‘(3) TRANSFERS UNDER COURT ORDERS.—If a

2 court has entered an order against an institutional3 ized spouse for the support of the community

4 spouse, any provisions under the plan relating to

5 transfers or disposals of assets for less than fair

6 market value shall not apply to amounts of resources

7 transferred pursuant to such order for the support

8 of the spouse or a family member (as defined in sub9 section (d)(1)).

10 ‘‘(g) INDEXING DOLLAR AMOUNTS.—For services

11 furnished during a calendar year after 1989, the dollar

12 amounts specified in subsections (d)(3)(C), (f)(2)(A)(i),

13 and (f)(2)(A)(ii)(II) shall be increased by the same per14 centage as the percentage increase in the consumer price

15 index for all urban consumers (all items; U.S. city aver16 age) between September 1988 and the September before

17 the calendar year involved.

18 ‘‘(h) DEFINITIONS.—In this section:

19 ‘‘(1) INSTITUTIONALIZED SPOUSE.—The term

20 ‘institutionalized spouse’ means an individual—

21 ‘‘(A)(i) who is in a medical institution or

22 nursing facility, or

23 ‘‘(ii) at the option of the State (I) who

24 would be eligible under the State plan under

25 this title if such individual was in a medical in-
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1 stitution, (II) with respect to whom there has

2 been a determination that but for the provision

3 of home or community-based services such indi4 vidual would require the level of care provided

5 in a hospital, nursing facility or intermediate

6 care facility for the mentally retarded the cost

7 of which could be reimbursed under the plan,

8 and (III) who will receive home or community9 based services pursuant the plan; and

10 ‘‘(B) who is married to a spouse who is not

11 in a medical institution or nursing facility;

12 but does not include any such individual who is not

13 likely to meet the requirements of subparagraph (A)

14 for at least 30 consecutive days.

15 ‘‘(2) COMMUNITY SPOUSE.—The term ‘commu16 nity spouse’ means the spouse of an institutionalized

17 spouse.

18 ‘‘SEC. 1506. PREVENTING FAMILY IMPOVERISHMENT.

19 ‘‘(a) RESPONSIBILITIES FOR LONG-TERM AND INSTI20 TUTIONAL CARE GENERALLY.—A State plan may not—

21 ‘‘(1) require an adult child or any other individ22 ual (other than the applicant or recipient of services

23 or the spouse of such an applicant or recipient) to

24 contribute to the cost of covered nursing facility
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1 services, other long-term care services, and hospital

2 and other institutional services under the plan; and

3 ‘‘(2) take into account with respect to such

4 services the financial responsibility of any individual

5 for any applicant or recipient of assistance under the

6 plan unless such applicant or recipient is such indi7 vidual’s spouse or such individual’s child who is

8 under age 21 or (with respect to States eligible to

9 participate in the State program established under

10 title XVI), is blind or permanently and totally dis11 abled, or is blind or disabled as defined in section

12 1614 (with respect to States which are not eligible

13 to participate in such program).

14 ‘‘(b) LIMITATIONS ON LIENS.—

15 ‘‘(1) IN GENERAL.—No lien may be imposed

16 against the property of any individual prior to the

17 individual’s death on account of medical assistance

18 paid or to be paid on the individual’s behalf under

19 a State plan, except—

20 ‘‘(A) pursuant to the judgment of a court

21 on account of benefits incorrectly paid on behalf

22 of such individual; or

23 ‘‘(B) in the case of the real property of an

24 individual—
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1 ‘‘(i) who is an inpatient in a nursing

2 facility, intermediate care facility for the

3 mentally retarded, or other medical institu4 tion, if such individual is required, as a

5 condition of receiving services in such insti6 tution under the plan, to spend for costs of

7 medical care all but a minimal amount of

8 the individual’s income required for per9 sonal needs, and

10 ‘‘(ii) with respect to whom the State

11 determines, after notice and opportunity

12 for a hearing (in accordance with proce13 dures established by the State), that the

14 individual cannot reasonably be expected to

15 be discharged from the medical institution

16 and to return home,

17 except as provided in paragraph (2).

18 ‘‘(2) EXCEPTION.—No lien may be imposed

19 under paragraph (1)(B) on such individual’s home

20 if—

21 ‘‘(A) the spouse of such individual,

22 ‘‘(B) such individual’s child who is under

23 age 21, or (with respect to States eligible to

24 participate in the State program established

25 under title XVI) is blind or permanently and to-
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1 tally disabled, or (with respect to States which

2 are not eligible to participate in such program)

3 is blind or disabled as defined in section 1614,

4 or

5 ‘‘(C) a sibling of such individual (who has

6 an equity interest in such home and who was

7 residing in such individual’s home for a period

8 of at least one year immediately before the date

9 of the individual’s admission to the medical in10 stitution),

11 is lawfully residing in such home.

12 ‘‘(3) DISSOLUTION UPON RETURN HOME.—Any

13 lien imposed with respect to an individual pursuant

14 to paragraph (1)(B) shall dissolve upon that individ15 ual’s discharge from the medical institution and re16 turn home.

17 ‘‘SEC. 1507. STATE FLEXIBILITY.

18 ‘‘(a) STATE FLEXIBILITY IN BENEFITS, GEOGRAPHI19 CAL COVERAGE AREA, AND SELECTION OF PROVIDERS.—

20 The State under its State plan may—

21 ‘‘(1) specify those items and services for which

22 medical assistance is provided (consistent with guar23 antees under subsections (a) and (b) of section

24 1501), the providers which may provide such items

25 and services, and the amount and frequency of pro-
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1 viding such items and services (consistent with the

2 requirements of section 1502(d));

3 ‘‘(2) specify the extent to which the same medi4 cal assistance will be provided in all geographical

5 areas or political subdivisions of the State, so long

6 as medical assistance is made available in all such

7 areas or subdivisions;

8 ‘‘(3) specify the extent to which the medical as9 sistance made available to any individual eligible for

10 medical assistance is comparable in amount, dura11 tion, or scope to the medical assistance made avail12 able to any other such individual; and

13 ‘‘(4) specify the extent to which an individual

14 eligible for medical assistance with respect to an

15 item or service may choose to obtain such assistance

16 from any institution, agency, or person qualified to

17 provide the item or service.

18 ‘‘(b) STATE FLEXIBILITY WITH RESPECT TO MAN19 AGED CARE.—Nothing in this title shall be construed—

20 ‘‘(1) to limit a State’s ability to contract with,

21 on a capitated basis or otherwise, health care plans

22 or individual health care providers for the provision

23 or arrangement of medical assistance,

24 ‘‘(2) to limit a State’s ability to contract with

25 health care plans or other entities for case manage-
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1 ment services or for coordination of medical assist2 ance, or

3 ‘‘(3) to restrict a State from establishing capi4 tation rates on the basis of competition among

5 health care plans or negotiations between the State

6 and one or more health care plans.

7 ‘‘SEC. 1508. PRIVATE RIGHTS OF ACTION.

8 ‘‘(a) LIMITATION ON FEDERAL CAUSES OF AC9 TION.—Except as provided in this section, no person or

10 entity may bring an action against a State in Federal

11 court based on its failure to comply with any requirement

12 of this title.

13 ‘‘(b) STATE CAUSES OF ACTION.—

14 ‘‘(1) ADMINISTRATIVE AND JUDICIAL PROCE15 DURES.—A State plan shall provide for—

16 ‘‘(A) an administrative procedure whereby

17 an individual alleging a denial of eligibility for

18 benefits or a denial of benefits under the State

19 plan may receive a hearing regarding such de20 nial, and

21 ‘‘(B) judicial review, through a private

22 right of action in a State court by an individual

23 or class of individuals, regarding such a denial,

24 but a State may require exhaustion of adminis-
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1 trative remedies before such an action may be

2 taken.

3 The administrative procedure under subparagraph

4 (A) shall include impartial decision makers and a

5 fair process and timely decisions.

6 ‘‘(2) WRIT OF CERTIORARI.—An individual or

7 class may file a petition for certiorari before the Su8 preme Court of the United States in a case of a de9 nial of benefits under the State plan to review a de10 termination of the highest court of a State regarding

11 such denial.

12 ‘‘(3) CONSTRUCTION.—Nothing in this sub13 section shall be construed as requiring a State to

14 provide a private right of action in State court by

15 a provider, health plan, or a class of providers or

16 health plans.

17 ‘‘(c) SECRETARIAL RELIEF.—

18 ‘‘(1) IN GENERAL.—The Secretary may bring

19 an action in Federal court against a State and on

20 behalf of an individual or class of individuals in

21 order to assure that a State provides benefits to in22 dividuals and classes of individuals as guaranteed

23 under subsection (a) or (b) of section 1501 under its

24 State plan.
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1 ‘‘(2) NO PRIVATE RIGHT.—No action may be

2 brought in any court against the Secretary based on

3 the Secretary’s bringing, or failure to bring, an ac4 tion under paragraph (1).

5 ‘‘(3) CONSTRUCTION.—Nothing in this title

6 shall be construed as authorizing the Secretary to

7 bring an action on behalf of a provider, health plan,

8 or a class of providers or health plans.

9 ‘‘PART B—PAYMENTS TO STATES

10 ‘‘SEC. 1511. ALLOTMENT OF FUNDS AMONG STATES.

11 ‘‘(a) ALLOTMENTS.—

12 ‘‘(1) COMPUTATION.—The Secretary shall pro13 vide for the computation of State obligation and out14 lay allotments in accordance with this section for

15 each fiscal year beginning with fiscal year 1997.

16 Nothing in this part shall be construed as authoriz17 ing payment under this part to any State for fiscal

18 year 1996.

19 ‘‘(2) LIMITATION ON OBLIGATIONS.—

20 ‘‘(A) IN GENERAL.—Subject to the suc21 ceeding provisions of this paragraph, the Sec22 retary shall not enter into obligations with any

23 State under this title for a fiscal year in excess

24 of the sum of the following allotments for the

25 State for the fiscal year:
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1 ‘‘(i) BASE OBLIGATION ALLOT2 MENT.—The amount of the base obligation

3 allotment for that State for the fiscal year

4 under paragraph (4).

5 ‘‘(ii) SUPPLEMENTAL ALLOTMENT

6 FOR CERTAIN ALIENS.—The amount of

7 any supplemental allotment for that State

8 for the fiscal year under subsection (f).

9 ‘‘(iii) SUPPLEMENTAL PER BENE10 FICIARY UMBRELLA ALLOTMENT.—The

11 amount of any supplemental per bene12 ficiary umbrella allotment for that State

13 for the fiscal year under subsection (g).

14 ‘‘(iv) SUPPLEMENTAL ALLOTMENT

15 FOR INDIAN HEALTH SERVICES.—The

16 amount of any supplemental allotment for

17 that State for the fiscal year under sub18 section (h).

19 The sum of the base obligation allotments for all

20 States in any fiscal year (excluding amounts carried

21 over under subparagraph (B) and excluding changes

22 in allotments effected under paragraph (4)(D)) shall

23 not exceed the aggregate limit on new base obliga24 tion authority specified in paragraph (3) for that fis25 cal year.
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1 ‘‘(B) ADJUSTMENTS.—

2 ‘‘(i) CARRYOVER OF BASE ALLOTMENT

3 PERMITTED.—Subject to clauses (ii), if the

4 amount of obligations entered into under

5 this part with a State for quarters in a fis6 cal year is less than the amount of the ob7 ligation allotment under this section to the

8 State for the fiscal year, the amount of the

9 difference (less any amount computed

10 under clause (iii)) shall be added to the

11 amount of the State obligation allotment

12 otherwise provided under this section for

13 the succeeding fiscal year.

14 ‘‘(ii) NO CARRYOVER PERMITTED FOR

15 STATES RECEIVING SUPPLEMENTAL UM16 BRELLA ALLOTMENTS.—Clause (i) shall

17 not apply, insofar as it permits a carryover

18 for a State from a particular year to the

19 next year, if in the particular year the

20 State receives a supplemental umbrella al21 lotment under subsection (g).

22 ‘‘(iii) NO CARRYOVER OF ALIEN AND

23 INDIAN SUPPLEMENTAL ALLOTMENTS.—

24 The amount of any carryover under clause

25 (i) from a fiscal year shall be reduced by
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1 the amount (if any) by which the amount

2 of the outlays for expenditures described in

3 subsection (f) or (h) for the fiscal year is

4 less than the amount of any supplemental

5 allotment provided under the respective

6 subsection for the State and fiscal year in7 volved.

8 ‘‘(C) REDUCTION FOR NEW OBLIGATIONS

9 UNDER TITLE XIX IN FISCAL YEAR 1997.—The

10 amount of the base obligation allotment other11 wise provided under this section for fiscal year

12 1997 for a State shall be reduced by the

13 amount of the obligations entered into with re14 spect to the State under section 1903(a) during

15 such fiscal year.

16 ‘‘(D) NO EFFECT ON PRIOR YEAR OBLIGA17 TIONS.—Subparagraph (A) shall not apply to or

18 affect obligations for a fiscal year prior to fiscal

19 year 1997.

20 ‘‘(E) OBLIGATION.—For purposes of this

21 section, the Secretary’s establishment of an es22 timate under section 1512(b) of the amount a

23 State is entitled to receive for a quarter (taking

24 into account any adjustments described in such

25 subsection) beginning during or after fiscal year
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1 1997 shall be treated as the obligation of such

2 amount for the State as of the first day of the

3 quarter.

4 ‘‘(F) RELATION TO GUARANTEES.—The

5 Federal Government’s obligations for payments

6 under this title are limited as provided under

7 subparagraph (A) and are only subject to ad8 justment based on any guarantee provided

9 under section 1501 as provided under sub10 section (g).

11 ‘‘(3) AGGREGATE LIMIT ON NEW BASE OBLIGA12 TION AUTHORITY.—

13 ‘‘(A) IN GENERAL.—For purposes of this

14 subsection, subject to subparagraph (C), the

15 ‘aggregate limit on new base obligation author16 ity’, for a fiscal year, is the base pool amount

17 under subsection (b) for the fiscal year, divided

18 by the payout adjustment factor (described in

19 subparagraph (B)) for the fiscal year.

20 ‘‘(B) PAYOUT ADJUSTMENT FACTOR.—For

21 purposes of this subsection, the ‘payout adjust22 ment factor’—

23 ‘‘(i) for fiscal year 1997 is 0.950,

24 ‘‘(ii) for fiscal year 1998 is 0.986, and
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1 ‘‘(iii) for a subsequent fiscal year is

2 0.998.

3 ‘‘(C) TRANSITIONAL ADJUSTMENT FOR

4 PRE-FISCAL YEAR 1997-OBLIGATION OUTLAYS.—

5 In order to account for pre-fiscal year 1997-ob6 ligation outlays described in paragraph

7 (4)(C)(iv), in determining the aggregate limit

8 on new obligation authority under subpara9 graph (A) for fiscal year 1997, the pool amount

10 for such fiscal year is equal to—

11 ‘‘(i) the pool amount for such year,

12 reduced by

13 ‘‘(ii) $12,000,000,000.

14 ‘‘(4) BASE OBLIGATION ALLOTMENTS.—

15 ‘‘(A) GENERAL RULE FOR 50 STATES AND

16 THE DISTRICT OF COLUMBIA.—Except as pro17 vided in this paragraph, the ‘base obligation al18 lotment’ for any of the 50 States or the District

19 of Columbia for a fiscal year (beginning with

20 fiscal year 1997) is an amount that bears the

21 same ratio to the base outlay allotment under

22 subsection (c)(2) for such State or District (not

23 taking into account any adjustment due to an

24 election under subsection (c)(4)) for the fiscal

25 year as the ratio of—
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1 ‘‘(i) the aggregate limit on new base

2 obligation authority (less the total of the

3 obligation allotments under subparagraph

4 (B)) for the fiscal year, to

5 ‘‘(ii) the base pool amount (less the

6 sum of the base outlay allotments for the

7 territories) for such fiscal year.

8 ‘‘(B) TERRITORIES.—The base obligation

9 allotment for each of the Commonwealths and

10 territories for a fiscal year is the base outlay al11 lotment for such Commonwealth or Territory

12 (as determined under subsection (c)(5)) for the

13 fiscal year divided by the payout adjustment

14 factor for the fiscal year (as defined in para15 graph (3)(B)).

16 ‘‘(C) TRANSITIONAL RULE FOR FISCAL

17 YEAR 1997.—

18 ‘‘(i) IN GENERAL.—The obligation

19 amount for fiscal year 1997 for any State

20 (including the District of Columbia, a

21 Commonwealth, or Territory) is deter22 mined according to the formula:

23 A=(B¥C)/D, where—

24 ‘‘(I) ‘A’ is the base obligation

25 amount for such State,
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1 ‘‘(II) ‘B’ is the base outlay allot2 ment of such State for fiscal year

3 1997, as determined under subsection

4 (c),

5 ‘‘(III) ‘C’ is the amount of the

6 pre-enactment-obligation outlays (as

7 established for such State under

8 clause (ii)), and

9 ‘‘(IV) ‘D’ is the payout adjust10 ment factor for such fiscal year (as

11 defined in paragraph (3)(B)).

12 ‘‘(ii) PRE-FISCAL YEAR 1997-OBLIGA13 TION OUTLAY AMOUNTS.—Not later than

14 November 1, 1996, the Secretary shall es15 timate (based on the best data available)

16 and publish in the Federal Register the

17 amount of the pre-fiscal year 1997-obliga18 tion outlays (as defined in clause (iv)) for

19 each State (including the District of Co20 lumbia, Commonwealths, and Territories).

21 The total of such amounts shall equal the

22 dollar amount specified in paragraph

23 (3)(C)(ii).

24 ‘‘(iii) AGREEMENT.—The submission

25 of a State plan by a State under this title
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1 is deemed to constitute the State’s accept2 ance of the obligation allotment limitations

3 under this subsection, including the for4 mula for computing the amount of the

5 base obligation allotment and any supple6 mental obligation allotments.

7 ‘‘(iv) PRE-FISCAL YEAR 1997-OBLIGA8 TION OUTLAYS DEFINED.—In this sub9 section, the term ‘pre-fiscal year 1997-obli10 gation outlays’ means, for a State, the out11 lays of the Federal Government that result

12 from obligations that have been incurred

13 under title XIX with respect to the State

14 before October 1, 1996, but for which pay15 ments to States have not been made as of

16 such date.

17 ‘‘(D) ADJUSTMENT TO REFLECT ADOPTION

18 OF ALTERNATIVE GROWTH FORMULA.—Any

19 State that has elected an alternative growth

20 formula under subsection (c)(4) which increases

21 or decreases the dollar amount of an outlay al22 lotment for a fiscal year is deemed to have in23 creased or decreased, respectively, its obligation

24 amount for such fiscal year by the amount of

25 such increase or decrease.
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1 ‘‘(E) TRANSITIONAL CORRECTION FOR FIS2 CAL YEAR 1997.—

3 ‘‘(i) IN GENERAL.—The base obliga4 tion amount for fiscal year 1998 for any

5 State described in clause (ii) shall be in6 creased by the amount by which the

7 amount described in clause (ii)(I) exceeds

8 the amount described in clause (ii)(II), di9 vided by the payout adjustment factor

10 specified in paragraph (3)(B) for fiscal

11 year 1997. The increase under this clause

12 shall be paid to a State in the first quarter

13 of fiscal year 1998.

14 ‘‘(ii) STATES DESCRIBED.—A State

15 described in this clause is a State for

16 which—

17 ‘‘(I) the amount of the pre-fiscal

18 year 1997-obligation outlays (as es19 tablished for such State under sub20 paragraph (C)(ii)), exceeded

21 ‘‘(II) the outlays of the Federal

22 Government during fiscal year 1997

23 that are attributable to obligations

24 that were incurred under title XIX

25 with respect to the State before Octo-
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1 ber 1, 1996, but for which payments

2 to States had not been made as of

3 such date.

4 ‘‘(5) SEQUENCE OF OBLIGATIONS.—For pur5 poses of carrying out this title, payments under sec6 tion 1512 to a State eligible for a supplemental out7 lay allotment that are attributable to—

8 ‘‘(A) expenditures for medical assistance

9 described in the second sentence of subsection

10 (f)(1) or the second sentence of subsection

11 (h)(1) shall first be counted toward the supple12 mental outlay allotment provided under sub13 section (f) or (h), respectively, rather than to14 ward the base outlay allotment otherwise pro15 vided under this section; or

16 ‘‘(B) subsection (g) (relating to the um17 brella fund) shall first be counted toward the

18 allotment provided other than under such sub19 section, and then to such subsection.

20 ‘‘(b) BASE POOL OF AVAILABLE FUNDS.—

21 ‘‘(1) IN GENERAL.—For purposes of this sec22 tion, the ‘base pool amount’ under this subsection

23 for—

24 ‘‘(A) fiscal year 1996 is $96,601,037,894,

25 ‘‘(B) fiscal year 1997 is $103,447,755,053,
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1 ‘‘(C) fiscal year 1998 is $108,430,173,129,

2 ‘‘(D) fiscal year 1999 is

3 $113,652,562,483,

4 ‘‘(E) fiscal year 2000 is $119,126,480,999,

5 ‘‘(F) fiscal year 2001 is $124,864,043,230,

6 ‘‘(G) fiscal year 2002 is $130,877,947,213,

7 and

8 ‘‘(H) each subsequent fiscal year is the

9 pool amount under this paragraph for the pre10 vious fiscal year increased by the lesser of 4.82

11 percent or the annual percentage increase in

12 the gross domestic product for the 12-month

13 period ending in June before the beginning of

14 that subsequent fiscal year.

15 ‘‘(2) NATIONAL GROWTH PERCENTAGE.—For

16 purposes of this section for a fiscal year (beginning

17 with fiscal year 1997), the ‘national growth percent18 age’ is the percentage by which—

19 ‘‘(A) the base pool amount under para20 graph (1) for the fiscal year, exceeds

21 ‘‘(B) such base pool amount for the pre22 vious fiscal year.

23 ‘‘(c) STATE BASE OUTLAY ALLOTMENTS.—

24 ‘‘(1) FISCAL YEAR 1996.—For each of the 50

25 States and the District of Columbia, the amount of
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1 the State base outlay allotment under this sub2 section for fiscal year 1996 is, subject to paragraph

3 (4), determined in accordance with the following

4 table:

‘‘State or District: Outlay allotment (in dollars):

Alabama ......................................... 1,517,652,207

Alaska ............................................ 204,933,213

Arizona .......................................... 1,385,781,297

Arkansas ........................................ 1,011,457,933

California ....................................... 8,946,838,461

Colorado ......................................... 757,492,679

Connecticut .................................... 1,463,011,635

Delaware ........................................ 212,327,763

District of Columbia ...................... 501,412,091

Florida ........................................... 3,715,624,180

Georgia .......................................... 2,426,320,602

Hawaii ........................................... 323,124,375

Idaho .............................................. 278,329,686

Illinois ............................................ 3,467,274,342

Indiana .......................................... 1,952,467,267

Iowa ............................................... 835,235,895

Kansas ........................................... 713,700,869

Kentucky ....................................... 1,577,828,832

Louisiana ....................................... 2,622,000,000

Maine ............................................. 694,220,790

Maryland ....................................... 1,369,699,847

Massachusetts ................................ 2,870,346,862

Michigan ........................................ 3,465,182,886

Minnesota ...................................... 1,793,776,356

Mississippi ..................................... 1,261,781,330

Missouri ......................................... 1,849,248,945

Montana ......................................... 312,212,472

Nebraska ....................................... 463,900,417

Nevada ........................................... 257,896,453

New Hampshire ............................. 560,000,000

New Jersey .................................... 2,854,621,241

New Mexico ................................... 634,756,945

New York ....................................... 12,901,793,038

North Carolina .............................. 2,587,883,809

North Dakota ................................ 241,168,563

Ohio ............................................... 4,034,049,690

Oklahoma ....................................... 911,198,775

Oregon ........................................... 1,088,670,440

Pennsylvania .................................. 4,454,423,400

Rhode Island ................................. 545,686,262

South Carolina ............................... 1,621,021,815

South Dakota ................................ 262,804,959

Tennessee ...................................... 2,519,934,251

Texas ............................................. 6,351,909,343

Utah ............................................... 484,274,254

Vermont ......................................... 248,158,729
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‘‘State or District: Outlay allotment (in dollars):

Virginia .......................................... 1,144,962,509

Washington .................................... 1,763,460,996

West Virginia ................................. 1,156,813,157

Wisconsin ....................................... 1,709,500,642

Wyoming ........................................ 132,915,390.

1 ‘‘(2) FOR SUBSEQUENT FISCAL YEARS.—

2 ‘‘(A) IN GENERAL.—Subject to the suc3 ceeding provisions of this subsection, the

4 amount of the State base outlay allotment

5 under this subsection for one of the 50 States

6 and the District of Columbia for a fiscal year

7 (beginning with fiscal year 1997) is equal to the

8 product of—

9 ‘‘(i) the needs-based amount deter10 mined under subparagraph (B) for such

11 State or District for the fiscal year, and

12 ‘‘(ii) the adjustment factor described

13 in subparagraph (C) for the fiscal year.

14 ‘‘(B) NEEDS-BASED AMOUNT.—The needs15 based amount under this subparagraph for a

16 State or the District of Columbia for a fiscal

17 year is equal to the product of—

18 ‘‘(i) the State’s or District’s aggregate

19 expenditure need for the fiscal year (as de20 termined under subsection (d)), and

21 ‘‘(ii) the State’s or District’s old Fed22 eral medical assistance percentage (as de-
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1 fined in section 1512(d)) for the fiscal year

2 (or, in the case of fiscal year 1997, the

3 Federal medical assistance percentage de4 termined under section 1905(b) for fiscal

5 year 1996).

6 ‘‘(C) ADJUSTMENT FACTOR.—The adjust7 ment factor under this subparagraph for a fis8 cal year is such proportion so that, when it is

9 applied under subparagraph (A)(ii) for the fis10 cal year (taking into account the floors and ceil11 ings under paragraph (3)), the total of the base

12 outlay allotments under this subsection for all

13 the 50 States and the District of Columbia for

14 the fiscal year (not taking into account any in15 crease in a base outlay allotment for a fiscal

16 year attributable to the election of an alter17 native growth formula under paragraph (4)) is

18 equal to the amount by which (i) the base pool

19 amount for the fiscal year (as determined under

20 subsection (b)), exceeds (ii) the sum of the base

21 outlay allotments provided under paragraph (5)

22 for the Commonwealths and Territories for the

23 fiscal year.

24 ‘‘(3) FLOORS AND CEILINGS.—
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1 ‘‘(A) FLOORS.—Subject to the ceiling es2 tablished under subparagraph (B), in no case

3 shall the amount of the State base outlay allot4 ment under paragraph (2) for a fiscal year be

5 less than the greatest of the following:

6 ‘‘(i) IN GENERAL.—Beginning with

7 fiscal year 1998, 0.24 percent of the pool

8 amount for the fiscal year.

9 ‘‘(ii) FLOOR BASED ON PREVIOUS

10 YEAR’S OUTLAY ALLOTMENT.—Subject to

11 clause (iii)—

12 ‘‘(I) for fiscal year 1997, 103.5

13 percent of the amount of the State

14 base outlay allotment under this sub15 section for fiscal year 1996,

16 ‘‘(II) for fiscal year 1998, 103

17 percent of the amount of the State

18 base outlay allotment under this sub19 section for fiscal year 1997,

20 ‘‘(III) for fiscal year 1999, 102.5

21 percent of the amount of the State

22 base outlay allotment under this sub23 section for fiscal year 1998,

24 ‘‘(IV) for fiscal year 2000,

25 102.25 percent of the amount of the
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1 State base outlay allotment under this

2 subsection for fiscal year 1999, and

3 ‘‘(V) for each of fiscal years 2001

4 and 2002, 102 percent of the amount

5 of the State base outlay allotment

6 under this subsection for the previous

7 fiscal year.

8 ‘‘(iii) FLOOR BASED ON OUTLAY AL9 LOTMENT GROWTH RATE IN FIRST

10 YEAR.—Beginning with fiscal year 1998,

11 in the case of a State for which the outlay

12 allotment under this subsection for fiscal

13 year 1997 exceeded its outlay allotment

14 under this subsection for the previous fis15 cal year by more than 95 percent of the

16 national growth percentage for fiscal year

17 1997, 90 percent of the national growth

18 percentage for the fiscal year involved.

19 ‘‘(B) CEILINGS.—

20 ‘‘(i) IN GENERAL.—Subject to clause

21 (ii), in no case shall the amount of the

22 State base outlay allotment under para23 graph (2) for a fiscal year be greater than

24 the product of—
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1 ‘‘(I) the State base outlay allot2 ment under this subsection for the

3 State for the preceding fiscal year,

4 and

5 ‘‘(II) the applicable percent

6 (specified in clause (ii) or (iii)) for the

7 fiscal year involved.

8 ‘‘(ii) GENERAL RULE FOR APPLICA9 BLE PERCENT.—For purposes of clause

10 (i), subject to clause (iii), the ‘applicable

11 percent’ for fiscal year 1997 is 126.98 per12 cent and for a subsequent fiscal year is

13 133 percent of the national growth per14 centage for the fiscal year.

15 ‘‘(iii) SPECIAL RULE.—For a fiscal

16 year after fiscal year 1997, in the case of

17 a State (among the 50 States and the Dis18 trict of Columbia) that is one of the 10

19 States with the lowest Federal spending

20 per resident-in-poverty rates (as deter21 mined under clause (iv)) for the fiscal

22 year, the ‘applicable percent’ is 150 per23 cent of the national growth percentage for

24 the fiscal year.
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1 ‘‘(iv) DETERMINATION OF FEDERAL

2 SPENDING PER RESIDENT-IN-POVERTY

3 RATE.—For purposes of clause (iii), the

4 ‘Federal spending per resident-in-poverty

5 rate’ for a State for a fiscal year is equal

6 to—

7 ‘‘(I) the State’s outlay allotment

8 under this subsection for the previous

9 fiscal year (determined without regard

10 to paragraph (4)), divided by

11 ‘‘(II) the average annual number

12 of residents of the State in poverty

13 (as defined in subsection (d)(2)) with

14 respect to the fiscal year.

15 ‘‘(C) SPECIAL RULE.—

16 ‘‘(i) IN GENERAL.—Notwithstanding

17 the preceding subparagraphs of this para18 graph, the State base outlay allotment

19 for—

20 ‘‘(I) Louisiana, subject to sub21 clause (II), for each of the fiscal years

22 1997 through 2000, is

23 $2,622,000,000,

24 ‘‘(II) Louisiana for fiscal year

25 1997 only, as otherwise determined,
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1 shall be increased by $37,048,207,

2 and

3 ‘‘(III) Nevada for each of fiscal

4 years 1997, 1998, and 1999, as other5 wise determined, shall be increased by

6 $90,000,000.

7 ‘‘(ii) EXCEPTION.—A State described

8 in subclause (I) of clause (i) may apply to

9 the Secretary for use of the State base out10 lay allotment otherwise determined under

11 this subsection for any fiscal year, if such

12 State notifies the Secretary not later than

13 March 1 preceding such fiscal year that

14 such State will be able to expend sufficient

15 State funds in such fiscal year to qualify

16 for such allotment.

17 ‘‘(iii) TREATMENT OF INCREASE AS

18 SUPPLEMENTAL ALLOTMENT.—Any in19 crease in an outlay allotment under clause

20 (i)(II) or (i)(III) shall not be taken into ac21 count for purposes of determining—

22 ‘‘(I) the adjustment factor under

23 paragraph (2) for fiscal year 1997,
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1 ‘‘(II) any State base outlay allot2 ment for a fiscal year after fiscal year

3 1997,

4 ‘‘(III) the base pool amount for a

5 fiscal year after fiscal year 1997, or

6 ‘‘(IV) determination of the na7 tional growth percentage for any fiscal

8 year.

9 ‘‘(4) ELECTION OF ALTERNATIVE GROWTH

10 FORMULA.—

11 ‘‘(A) ELECTION.—In order to reduce vari12 ations in increases in outlay allotments over

13 time, any of the 50 States or the District of Co14 lumbia may elect (by notice provided to the Sec15 retary by not later than April 1, 1997) to adopt

16 an alternative growth rate formula under this

17 paragraph for the determination of the State’s

18 base outlay allotment in fiscal year 1997 and

19 for the increase in the amount of such allot20 ment in subsequent fiscal years.

21 ‘‘(B) FORMULA.—The alternative growth

22 formula under this paragraph may be any for23 mula under which a portion of the State base

24 outlay allotment for fiscal year 1997 under

25 paragraph (1) is deferred and applied to in-
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1 crease the amount of its base outlay allotment

2 for one or more subsequent fiscal years, so long

3 as the total amount of such increases for all

4 such subsequent fiscal years does not exceed the

5 amount of the base outlay allotment deferred

6 from fiscal year 1997.

7 ‘‘(5) COMMONWEALTHS AND TERRITORIES.—

8 ‘‘(A) IN GENERAL.—The base outlay allot9 ment for each of the Commonwealths and Ter10 ritories for a fiscal year is the maximum

11 amount that could have been certified under

12 section 1108(c) (as in effect on the day before

13 the date of the enactment of this title) with re14 spect to the Commonwealth or Territory for the

15 fiscal year with respect to title XIX, if the na16 tional growth percentage (as determined under

17 subsection (b)(2)) for the fiscal year had been

18 substituted (beginning with fiscal year 1997)

19 for the percentage increase referred to in sec20 tion 1108(c)(1)(B) (as so in effect).

21 ‘‘(B) DISREGARD OF ROUNDING REQUIRE22 MENTS.—For purposes of subparagraph (A),

23 the rounding requirements under section

24 1108(c) shall not apply.
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1 ‘‘(C) LIMITATION ON TOTAL AMOUNT FOR

2 FISCAL YEAR 1996.—Notwithstanding the provi3 sions of subparagraph (A), the total amount of

4 the base outlay allotments for the Common5 wealths and Territories for fiscal year 1996

6 may not exceed $139,950,000.

7 ‘‘(d) STATE AGGREGATE EXPENDITURE NEED DE8 TERMINED.—

9 ‘‘(1) IN GENERAL.—For purposes of subsection

10 (c), the ‘State aggregate expenditure need’ for a

11 State or the District of Columbia for a fiscal year

12 is equal to the product of the following 4 factors:

13 ‘‘(A) PROGRAM NEED.—The program need

14 for the State for the fiscal year, as determined

15 under paragraph (2).

16 ‘‘(B) HEALTH CARE COST INDEX.—The

17 health care cost index for the State (as deter18 mined under paragraph (3)) for the most recent

19 fiscal year for which data are available.

20 ‘‘(C) PROJECTED INFLATION.—The CPI

21 increase factor for the fiscal year (as defined in

22 subsection (g)(4)(C)).

23 ‘‘(D) NATIONAL AVERAGE SPENDING PER

24 RESIDENT IN POVERTY.—The national average
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1 spending per resident in poverty (as determined

2 under paragraph (4)).

3 ‘‘(2) PROGRAM NEED.—

4 ‘‘(A) IN GENERAL.—In this subsection and

5 subject to subparagraph (D), the ‘program

6 need’ of a State for a fiscal year is equal to the

7 sum, for each of the population groups de8 scribed in subparagraph (B), of the product de9 scribed in subparagraph (C) for that population

10 group.

11 ‘‘(B) POPULATION GROUPS DESCRIBED.—

12 The population groups described in this sub13 paragraph are as follows:

14 ‘‘(i) INDIVIDUALS BETWEEN 60 AND

15 85.—Individuals who are least 60, but less

16 than 85, years of age.

17 ‘‘(ii) INDIVIDUALS 85 OR OLDER.—In18 dividuals who are 85 years of age or older.

19 ‘‘(iii) DISABLED INDIVIDUALS.—Indi20 viduals who are eligible for medical assist21 ance because such individuals are blind or

22 disabled and are not described in clause (i)

23 or (ii).

24 ‘‘(iv) CHILDREN.—Individuals de25 scribed in subsection (g)(2)(B).
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1 ‘‘(v) OTHER INDIVIDUALS.—Individ2 uals not described in a previous clause of

3 this subparagraph.

4 ‘‘(C) PRODUCT DESCRIBED.—The product

5 described in this subparagraph, with respect to

6 a population group for a fiscal year for a State

7 (or District), is the product of the following 2

8 factors for that group, year, and State (or Dis9 trict):

10 ‘‘(i) WEIGHTING FACTOR REFLECTING

11 RELATIVE NEED FOR THE GROUP.—For all

12 States, the national average per recipient

13 expenditures under this title in the 50

14 States and the District of Columbia for in15 dividuals in such group, as determined

16 under subparagraph (E), divided by the

17 national average of such averages for all

18 such groups (weighted by the number of

19 recipients in each group).

20 ‘‘(ii) NUMBER OF NEEDY IN GROUP.—

21 The product of—

22 ‘‘(I) for all groups, the average

23 annual number of residents in poverty

24 in such State or District (based on

25 data made generally available by the
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1 Bureau of the Census from the Cur2 rent Population Survey) for the most

3 recent 3-calendar-year period (ending

4 before the fiscal year) for which such

5 data are available; and

6 ‘‘(II) the proportion, of all indi7 viduals who received medical assist8 ance under this title in such State or

9 District, that were individuals in such

10 group.

11 In clause (ii)(II), the term ‘resident in pov12 erty’ means an individual whose family in13 come does not exceed the poverty threshold

14 (as such terms are defined by the Office of

15 Management and Budget and are generally

16 interpreted and applied by the Bureau of

17 the Census for the year involved).

18 ‘‘(D) FLOORS AND CEILINGS ON PROGRAM

19 NEED.—

20 ‘‘(i) IN GENERAL.—In no case shall

21 the value of the program need for a State

22 for a fiscal year be less than 90 percent,

23 or be more than 115 percent, of the pro24 gram need based on national averages (de-
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1 termined under clause (ii)) for that State

2 for the fiscal year.

3 ‘‘(ii) PROGRAM NEED BASED ON NA4 TIONAL AVERAGES.—For purposes of

5 clause (i), the ‘program need based on na6 tional average’ for a fiscal year is equal to

7 the sum of the product (for each of the

8 population groups) of the following 3 fac9 tors (for that group, year, and State or

10 District):

11 ‘‘(I) WEIGHTING FACTOR FOR

12 GROUP.—The weighting factor for the

13 group (described in subparagraph

14 (C)(i)).

15 ‘‘(II) TOTAL NUMBER OF NEEDY

16 IN STATE.—For all groups, the aver17 age annual number of residents in

18 poverty in such State or District (as

19 defined in subparagraph (C)(ii)(I)).

20 ‘‘(III) NATIONAL PROPORTION

21 OF NEEDY IN GROUP.—The propor22 tion, of all individuals who received

23 medical assistance under this title in

24 all of the States and the District in all
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1 such groups, that were individuals in

2 such group.

3 ‘‘(E) DETERMINATION OF NATIONAL

4 AVERAGES AND PROPORTIONS.—The national

5 averages per recipient and the proportions re6 ferred to in subparagraph (C)(ii) and (C)(iii),

7 respectively, shall be determined by the Sec8 retary using the most recent data available.

9 ‘‘(F) EXPENDITURE DEFINED.—For pur10 poses of this paragraph, the term ‘expenditure’

11 means medical vendor payments by basis of eli12 gibility as reported by HCFA Form 2082.

13 ‘‘(3) HEALTH CARE COST INDEX.—

14 ‘‘(A) IN GENERAL.—In this section, the

15 ‘health care cost index’ for a State or the Dis16 trict of Columbia for a fiscal year is the sum

17 of—

18 ‘‘(i) 0.15, and

19 ‘‘(ii) 0.85 multiplied by the ratio of

20 (I) the annual average wages for hospital

21 employees in such State or District for the

22 fiscal year (as determined under subpara23 graph (B)), to (II) the annual average

24 wages for hospital employees in the 50

25 States and the District of Columbia for
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1 such year (as determined under such sub2 paragraph).

3 ‘‘(B) DETERMINATION OF ANNUAL AVER4 AGE WAGES OF HOSPITAL EMPLOYEES.—The

5 Secretary shall provide for the determination of

6 annual average wages for hospital employees in

7 a State or the District of Columbia and, collec8 tively, in the 50 States and the District of Co9 lumbia for a fiscal year based on the area wage

10 data applicable to hospitals under section

11 1886(d)(2)(E) (or, if such data no longer ex12 ists, comparable data of hospital wages) for dis13 charges occurring during the fiscal year in14 volved.

15 ‘‘(4) NATIONAL AVERAGE SPENDING PER RESI16 DENT IN POVERTY.—For purposes of this sub17 section, the ‘national average spending per resident

18 in poverty’—

19 ‘‘(A) for fiscal year 1997 is equal to—

20 ‘‘(i) the sum (for each of the 50

21 States and the District of Columbia) of the

22 total of the Federal and State expenditures

23 under title XIX for calendar quarters in

24 fiscal year 1994, increased by the percent25 age by which (I) the base pool amount for
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1 fiscal year 1997, exceeds (II)

2 $83,213,431,458 (which represents Fed3 eral medicaid expenditures for such States

4 and District for fiscal year 1994); divided

5 by

6 ‘‘(ii) the sum of the number of resi7 dents in poverty (as defined in paragraph

8 (2)(C)(ii)(I)) for all of the 50 States and

9 the District of Columbia for fiscal year

10 1994; and

11 ‘‘(B) for a succeeding fiscal year is equal

12 to the national average spending per resident in

13 poverty under this paragraph for the preceding

14 fiscal year increased by the national growth

15 percentage (as defined in subsection (b)(2)) for

16 the fiscal year involved.

17 ‘‘(e) PUBLICATION OF OBLIGATION AND OUTLAY AL18 LOTMENTS.—

19 ‘‘(1) NOTICE OF PRELIMINARY ALLOTMENTS.—

20 Not later than April 1 before the beginning of each

21 fiscal year (beginning with fiscal year 1997), the

22 Secretary shall initially compute, after consultation

23 with the Comptroller General, and publish in the

24 Federal Register notice of the proposed base obliga25 tion allotment, base outlay allotment, and supple-
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1 mental allotments under subsections (f) and (h) for

2 each State under this section (not taking into ac3 count subsection (a)(2)(B)) for the fiscal year. The

4 Secretary shall include in the notice a description of

5 the methodology and data used in deriving such al6 lotments for the year.

7 ‘‘(2) REVIEW BY GAO.—The Comptroller Gen8 eral shall submit to Congress by not later than May

9 15 of each such fiscal year, a report analyzing such

10 allotments and the extent to which they comply with

11 the precise requirements of this section.

12 ‘‘(3) NOTICE OF FINAL ALLOTMENTS.—Not

13 later than July 1 before the beginning of each such

14 fiscal year, the Secretary, taking into consideration

15 the analysis contained in the report of the Comptrol16 ler General under paragraph (2), shall compute and

17 publish in the Federal Register notice of the final al18 lotments under this section (both taking into ac19 count and not taking into account subsection

20 (a)(2)(B)) for the fiscal year. The Secretary shall in21 clude in the notice a description of any changes in

22 such allotments from the initial allotments published

23 under paragraph (1) for the fiscal year and the rea24 sons for such changes. Once published under this
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1 paragraph, the Secretary is not authorized to change

2 such allotments.

3 ‘‘(4) GAO REPORT ON FINAL ALLOTMENTS.—

4 The Comptroller General shall submit to Congress

5 by not later than August 1 of each such fiscal year,

6 a report analyzing the final allotments under para7 graph (3) and the extent to which they comply with

8 the precise requirements of this section.

9 ‘‘(5) TRANSITIONAL RULE FOR FISCAL YEAR

10 1997.—With respect to fiscal year 1997, the dead11 lines under the previous provisions of this subsection

12 shall be extended by a number of days equal to the

13 number of days between May 1, 1996, and the date

14 of the enactment of this title.

15 ‘‘(f) SUPPLEMENTAL ALLOTMENT FOR CERTAIN

16 HEALTH CARE SERVICES TO CERTAIN ALIENS.—

17 ‘‘(1) IN GENERAL.—For purposes of this sec18 tion for each of fiscal years 1998 through 2002 in

19 the case of a subsection (f) supplemental allotment

20 eligible State, the amount of the supplemental allot21 ment under this subsection is the amount provided

22 under paragraph (2) for the State for that year.

23 Such amount may only be used for the purpose of

24 providing medical assistance for care and services

25 for aliens described in paragraph (1) of section
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1 1513(f) and for which the exception described in

2 paragraph (2) of such section applies. Section

3 1512(f)(4) shall apply to such assistance in the same

4 manner as it applies to medical assistance described

5 in such section.

6 ‘‘(2) SUPPLEMENTAL AMOUNT.—

7 ‘‘(A) IN GENERAL.—For purposes of para8 graph (1), the supplemental amount for a sub9 section (f) supplemental allotment eligible State

10 for a fiscal year is equal to the subsection (f)

11 supplemental allotment ratio (as defined in sub12 paragraph (C)) multiplied by the subsection (f)

13 supplemental pool amount (specified in sub14 paragraph (D)) for the fiscal year.

15 ‘‘(B) SUBSECTION (f) SUPPLEMENTAL AL16 LOTMENT ELIGIBLE STATE.—In this subsection,

17 the term ‘subsection (f) supplemental allotment

18 eligible State’ means one of the 15 States with

19 the highest number of undocumented alien resi20 dents of all the States.

21 ‘‘(C) SUBSECTION (f) SUPPLEMENTAL AL22 LOTMENT RATIO.—In this paragraph, the ‘sub23 section (f) supplemental allotment ratio’ for a

24 State is the ratio of—
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1 ‘‘(i) the number of undocumented

2 aliens residing in the State, to

3 ‘‘(ii) the sum of such numbers for all

4 subsection (f) supplemental allotment eligi5 ble States.

6 ‘‘(D) SUBSECTION (f) supplemental pool

7 amount.—In this paragraph, the ‘subsection (f)

8 supplemental pool amount’—

9 ‘‘(i) for fiscal year 1998 is

10 $500,000,000,

11 ‘‘(ii) for fiscal year 1999 is

12 $600,000,000,

13 ‘‘(iii) for fiscal year 2000 is

14 $700,000,000,

15 ‘‘(iv) for fiscal year 2001 is

16 $800,000,000, and

17 ‘‘(v) for fiscal year 2002 is

18 $900,000,000.

19 ‘‘(E) DETERMINATION OF NUMBER.—

20 ‘‘(i) IN GENERAL.—The number of

21 undocumented aliens residing in a State

22 under this paragraph—

23 ‘‘(I) for fiscal year 1998 shall be

24 determined based on estimates of the

25 resident illegal alien population resid-
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1 ing in each State prepared by the Sta2 tistics Division of the Immigration

3 and Naturalization Service as of Octo4 ber 1992, and

5 ‘‘(II) for a subsequent fiscal year

6 shall be determined based on the most

7 recent updated estimate made under

8 clause (ii).

9 ‘‘(ii) UPDATING ESTIMATE.—For each

10 fiscal year beginning with fiscal year 1999,

11 the Secretary, in consultation with the

12 Commission of the Immigration and Natu13 ralization Service, States, and outside ex14 perts, shall estimate the number of un15 documented aliens residing in each of the

16 50 States and the District of Columbia.

17 ‘‘(g) SUPPLEMENTAL PER BENEFICIARY UMBRELLA

18 ALLOTMENT FOR STATES WITH EXCESS GROWTH IN CER19 TAIN POPULATION GROUPS.—

20 ‘‘(1) IN GENERAL.—Subject to paragraphs (5)

21 through (7), for purposes of this section the amount

22 of the supplemental allotment under this subsection

23 for a State for a fiscal year (beginning with fiscal

24 year 1997) is the sum, for each supplemental allot-
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1 ment population group described in paragraph (2),

2 of the product of the following:

3 ‘‘(A) EXCESS NUMBER OF INDIVIDUALS.—

4 The excess number of individuals (if any, deter5 mined under paragraph (3)) for State and the

6 fiscal year who are in the population group.

7 ‘‘(B) APPLICABLE PER BENEFICIARY

8 AMOUNT.—The applicable per beneficiary

9 amount (determined under paragraph (4)) for

10 the State and fiscal year for the population

11 group.

12 ‘‘(C) FMAP.—The old Federal medical as13 sistance percentage (as defined in section

14 1512(d)) for the State and fiscal year.

15 ‘‘(2) SUPPLEMENTAL ALLOTMENT POPULATION

16 GROUP.—In this subsection, each of the following

17 shall be considered to be a separate ‘supplemental

18 allotment population group’:

19 ‘‘(A) POOR PREGNANT WOMEN.—Individ20 uals described in section 1501(a)(1)(A).

21 ‘‘(B) POOR CHILDREN.—Individuals (not

22 described in subparagraph (C))—

23 ‘‘(i) described in subparagraph (B) or

24 (C) of section 1501(a)(1), or
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1 ‘‘(ii) described in subparagraph (F) or

2 (G) of section 1501(a)(1) who are under

3 21 years of age and who are not pregnant

4 women.

5 ‘‘(C) POOR DISABLED INDIVIDUALS.—Only

6 in the case of a State that has elected the op7 tion (of guaranteeing coverage of disabled indi8 viduals) described in section 1501(a)(1)(D)(ii)

9 for the fiscal year (and, in the case of a fiscal

10 year after fiscal year 1997, for the previous fis11 cal year), individuals—

12 ‘‘(i) who are described in such section;

13 or

14 ‘‘(ii) who are described in section

15 1502(a) under paragraph (1) of that sec16 tion.

17 ‘‘(D) POOR ELDERLY INDIVIDUALS.—Indi18 viduals who are—

19 ‘‘(i) described in section

20 1501(a)(1)(E); or

21 ‘‘(ii) described in section 1502(a)

22 under paragraph (2) of that section.

23 ‘‘(E) QUALIFIED MEDICARE BENE24 FICIARIES.—Individuals described in section
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1 1501(b)(1)(A) who are not described in sub2 paragraph (D).

3 ‘‘(F) QUALIFIED DISABLED AND WORKING

4 INDIVIDUALS.—Individuals described in section

5 1501(b)(1)(B) who are not described in sub6 paragraph (D).

7 ‘‘(G) CERTAIN OTHER MEDICARE BENE8 FICIARIES.—Individuals described in section

9 1501(b)(1)(C) who are not described in sub10 paragraph (D).

11 ‘‘(H) OTHER POOR ADULTS.—Individuals

12 described in section 1501(a)(1)(G) who are not

13 within a population group described in a pre14 vious subparagraph.

15 ‘‘(3) EXCESS NUMBER OF INDIVIDUALS.—

16 ‘‘(A) IN GENERAL.—In this subsection, the

17 ‘excess number of individuals’, for a State for

18 a fiscal year with respect to a supplemental al19 lotment population group, is equal to the

20 amount (if any) by which—

21 ‘‘(i) the number of full-year equivalent

22 individuals in the population group for the

23 State and fiscal year, exceeds

24 ‘‘(ii) the anticipated number of such

25 individuals (as determined under subpara-
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1 graph (B)) for the State and fiscal year in

2 such group.

3 ‘‘(B) ANTICIPATED NUMBER.—

4 ‘‘(i) IN GENERAL.—In subparagraph

5 (A)(ii), the ‘anticipated number’ of individ6 uals for a State in a supplemental allot7 ment population group for—

8 ‘‘(I) fiscal year 1997 is equal to

9 the number of full-year equivalent in10 dividuals in such group enrolled in the

11 State medicaid plan under title XIX

12 in fiscal year 1996 increased by the

13 percentage increase factor (described

14 in clause (ii)) for fiscal year 1997; or

15 ‘‘(II) a subsequent fiscal year is

16 equal to the number of full-year equiv17 alent individuals in the population

18 group for the State for the previous

19 fiscal year increased by the percentage

20 increase factor (described in clause

21 (ii)) for that subsequent fiscal year.

22 ‘‘(ii) PERCENTAGE INCREASE FAC23 TOR.—For purposes of this subparagraph,

24 the ‘percentage increase factor’ for a fiscal

25 year is equal to zero or, if greater, the
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1 number of percentage points by which (I)

2 the State percentage growth factor (as de3 fined in subparagraph (C)) for the fiscal

4 year, exceeds (II) the percentage increase

5 in the consumer price index for all urban

6 consumers (U.S. city average) during the

7 12-month period beginning with July be8 fore the beginning of the fiscal year.

9 ‘‘(C) STATE PERCENTAGE GROWTH FAC10 TOR.—In this paragraph, the term ‘State per11 centage growth factor’ means, for a State for a

12 fiscal year, the percentage by which (i) the

13 State outlay allotment for the State for the fis14 cal year (determined under this section without

15 regard to this subsection or subsection (f) or

16 (h)), exceeds (ii) such outlay allotment for such

17 State for the preceding fiscal year (as so deter18 mined).

19 ‘‘(D) INDIVIDUALS COUNT ONLY ONCE.—

20 An individual may at any time not be counted

21 in more than one supplemental allotment popu22 lation group.

23 ‘‘(4) APPLICABLE PER BENEFICIARY

24 AMOUNT.—
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1 ‘‘(A) IN GENERAL.—In this subsection,

2 subject to subparagraph (D), the ‘applicable per

3 beneficiary amount’, for a State for a fiscal

4 year for a supplemental allotment population

5 group, is equal to the base per beneficiary

6 amount (determined under subparagraph (B))

7 for the State for the group, increased by the

8 Secretary’s estimate of the increase in the per

9 beneficiary expenditures under this title (and

10 title XIX) for States between fiscal year 1995

11 and fiscal year 1996, and further increased (for

12 each subsequent fiscal year up to the fiscal year

13 involved and in a compounded manner) by the

14 CPI increase factor (as defined in subparagraph

15 (C)) for each such fiscal year.

16 ‘‘(B) BASE PER BENEFICIARY AMOUNT.—

17 ‘‘(i) IN GENERAL.—The Secretary

18 shall determine for each State a base per

19 beneficiary amount for each supplemental

20 allotment population group equal to—

21 ‘‘(I) the sum of the total expendi22 ture amounts described in clauses (ii)

23 and (iii), divided by

24 ‘‘(II) the full-year equivalent

25 number of such individuals in such
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1 group enrolled under the State plan

2 under title XIX for fiscal year 1995.

3 ‘‘(ii) MEDICAL ASSISTANCE EXPENDI4 TURES.—The total expenditure amount de5 scribed in this clause, with respect to a

6 supplemental allotment population group,

7 is the total amount of expenditures for

8 which Federal financial participation was

9 provided to the State under paragraphs (1)

10 and (5) of section 1903(a) for fiscal year

11 1995 with respect to medical assistance

12 furnished with respect to individuals in13 cluded in such group. Such amount shall

14 not include expenditures attributable to

15 payment adjustments under section 1923.

16 ‘‘(iii) ADMINISTRATIVE EXPENDI17 TURES.—The total expenditure amount de18 scribed in this clause, with respect to a

19 supplemental allotment population group,

20 is the product of—

21 ‘‘(I) the total amount of adminis22 trative expenditures for which Federal

23 financial participation was provided to

24 the State under section 1903(a)
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1 (other than paragraphs (1) and (5) of

2 such section) for fiscal year 1995, and

3 ‘‘(II) the ratio described in clause

4 (iv) for the population group.

5 ‘‘(iv) RATIO DESCRIBED.—The ratio

6 described in this clause for a group is the

7 ratio of—

8 ‘‘(I) the total amount of expendi9 tures described in clause (ii) for the

10 group, to

11 ‘‘(II) the total amount of expend12 itures described in such clause for all

13 individuals under the State plan

14 under title XIX in the base fiscal

15 year.

16 ‘‘(C) CPI INCREASE FACTOR.—In subpara17 graph (A), the ‘CPI increase factor’ for a fiscal

18 year is the percentage by which—

19 ‘‘(i) the Secretary’s estimate of the

20 average value of the consumer price index

21 for all urban consumers (all items, U.S.

22 city average) for months in the fiscal year,

23 exceeds

24 ‘‘(ii) the average value of such index

25 for months in the previous fiscal year.
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1 ‘‘(D) SPECIAL RULES FOR CERTAIN MEDI2 CARE BENEFICIARIES.—

3 ‘‘(i) QUALIFIED DISABLED AND

4 WORKING INDIVIDUALS.—In the case of

5 the supplemental allotment population

6 group described in paragraph (2)(F), the

7 ‘applicable per beneficiary amount’, for all

8 States for a fiscal year is the sum of the

9 medicare premiums applied under section

10 1818A for months in the fiscal year.

11 ‘‘(ii) OTHER MEDICARE BENE12 FICIARIES.—In the case of the supple13 mental allotment population group de14 scribed in paragraph (2)(G), the ‘applica15 ble per beneficiary amount’, for all States

16 for a fiscal year is the sum of the medicare

17 premiums applied under section 1839 for

18 months in the fiscal year.

19 ‘‘(5) CONDITIONS FOR ACCESS TO UMBRELLA

20 SUPPLEMENTAL ALLOTMENT.—

21 ‘‘(A) IN GENERAL.—A State may receive a

22 supplemental umbrella allotment under this

23 subsection for a fiscal year only if the following

24 conditions are met:
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1 ‘‘(i) The State provides assurances

2 satisfactory to the Secretary that it will ob3 ligate during the fiscal year the full

4 amount of the allotment otherwise provided

5 under this section for the fiscal year.

6 ‘‘(ii) The State provides assurances

7 satisfactory to the Secretary that any

8 amount attributable to a carryover from a

9 previous fiscal year under subsection

10 (a)(2)(B) shall also be obligated under the

11 plan by the end of the fiscal year.

12 ‘‘(iii) The State submits to the Sec13 retary on a periodic basis such reports on

14 numbers of individuals within each supple15 mental allotment population group as the

16 Secretary may determine necessary to as17 sure the accuracy of the supplemental um18 brella allotments under this subsection.

19 The Secretary may not require the submis20 sion of such reports more frequently than

21 quarterly.

22 ‘‘(iv) The State provides assurances

23 satisfactory to the Secretary that it has in

24 effect such data collection procedures as
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1 may be necessary to provide for the reports

2 described in clause (iii).

3 ‘‘(B) ESTIMATE.—The amount of any sup4 plemental allotment under this subsection shall

5 be estimated in advance of the fiscal year in6 volved, based on data required to be reported

7 under subparagraph (A)(iii). The Secretary is

8 authorized to adjust such data on a preliminary

9 basis if the Secretary determines that the esti10 mates do not reasonably reflect the actual ex11 cess number of individuals in the supplemental

12 allotment population groups for the fiscal year

13 involved. Section 1512(b)(6) provides for ad14 justment of payments of the supplemental allot15 ment under this subsection based on a final de16 termination using data on actual numbers of in17 dividual in each supplemental allotment popu18 lation group.

19 ‘‘(6) ADJUSTMENT IN ALLOTMENT FOR SAV20 INGS FROM SLOWER POPULATION GROWTH.—

21 ‘‘(A) IN GENERAL.—The amount of the

22 supplemental umbrella allotment to a State

23 under this subsection for a fiscal year shall be

24 reduced (but not below zero) by the sum, for

25 each supplemental allotment population group
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1 described in paragraph (2), of the product of

2 the following:

3 ‘‘(i) LESS-THAN-ANTICIPATED NUM4 BER OF INDIVIDUALS.—The less-than-an5 ticipated number of individuals (if any, de6 termined under subparagraph (B)) for

7 State and the fiscal year who are in the

8 population group.

9 ‘‘(ii) APPLICABLE PER BENEFICIARY

10 AMOUNT.—The applicable per beneficiary

11 amount (determined under paragraph (4))

12 for the State and fiscal year for the popu13 lation group.

14 ‘‘(iii) FMAP.—The old Federal medi15 cal assistance percentage (as defined in

16 section 1512(d)) for the State and fiscal

17 year.

18 ‘‘(B) LESS-THAN-ANTICIPATED NUMBER

19 OF INDIVIDUALS.—In this paragraph, the ‘less20 than-anticipated number of individuals’, for a

21 State for a fiscal year with respect to a supple22 mental allotment population group, is equal to

23 the amount (if any) by which—

24 ‘‘(i) the anticipated number of such

25 individuals (as determined under para-
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1 graph (3)(B)) for the State and fiscal year

2 in such group, exceeds

3 ‘‘(ii) the number of full-year equiva4 lent individuals in the population group for

5 the State and fiscal year.

6 ‘‘(7) SPECIAL RULE FOR FISCAL YEAR 1997.—

7 In applying this subsection to fiscal year 1997—

8 ‘‘(A) in determining the excess number of

9 individuals under paragraph (3)—

10 ‘‘(i) the number of full-year equivalent

11 individuals shall only be determined based

12 on the portion of fiscal year 1997 in which

13 the State plan is in effect under this title,

14 and

15 ‘‘(ii) the anticipated number of such

16 individuals (referred to in paragraph

17 (3)(A)(ii)) shall be the anticipated number

18 otherwise determined multiplied by the

19 proportion of fiscal year 1997 in which

20 such State plan will be in effect; and

21 ‘‘(B) if the State plan is effective before

22 April 1, 1997, the amount of the supplemental

23 allotment otherwise determined under this sub24 section shall be multiplied by the ratio of the

25 portion of fiscal year 1997 that occurs on or
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1 after April 1, 1997, to the total portion of such

2 fiscal year in which the State plan is in effect.

3 ‘‘(h) ALLOTMENT FOR MEDICAL ASSISTANCE FOR

4 SERVICES PROVIDED IN INDIAN HEALTH SERVICE AND

5 RELATED FACILITIES.—

6 ‘‘(1) IN GENERAL.—For purposes of this sec7 tion for each of fiscal years 1998 through 2002 in

8 the case of a subsection (h) supplemental allotment

9 eligible State, the amount of the supplemental allot10 ment under this subsection is the amount provided

11 under paragraph (2) for the State for that year.

12 Such amount may only be used for the purpose of

13 providing medical assistance described in section

14 1512(f)(3) (relating to services provided by the In15 dian Health Service and related facilities).

16 ‘‘(2) SUPPLEMENTAL OUTLAY ALLOTMENT.—

17 ‘‘(A) IN GENERAL.—For purposes of para18 graph (1), the amount under this paragraph for

19 a subsection (h) supplemental allotment eligible

20 State for a fiscal year is equal to the subsection

21 (h) supplemental allotment ratio (as defined in

22 subparagraph (C)) multiplied by the subsection

23 (h) supplemental pool amount (specified in sub24 paragraph (D)) for the fiscal year.
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1 ‘‘(B) SUBSECTION (h) SUPPLEMENTAL AL2 LOTMENT ELIGIBLE STATE.—In this subsection,

3 the term ‘subsection (h) supplemental allotment

4 eligible State’ means a State that has one or

5 more facilities described in section

6 1512(f)(3)(A).

7 ‘‘(C) SUBSECTION (h) supplemental allot8 ment ratio.—In this paragraph, the ‘subsection

9 (h) supplemental allotment ratio’ for a State is

10 the ratio of—

11 ‘‘(i) the number of Indians residing in

12 the State, to

13 ‘‘(ii) the sum of such numbers for all

14 subsection (h) supplemental allotment eli15 gible States.

16 ‘‘(D) SUBSECTION (h) SUPPLEMENTAL

17 POOL AMOUNT.—In this paragraph, the ‘sub18 section (h) supplemental pool amount’, for—

19 ‘‘(i) fiscal year 1998 is $89,090,082,

20 ‘‘(ii) fiscal year 1999 is $94,238,788,

21 ‘‘(iii) fiscal year 2000 is $99,685,050,

22 ‘‘(iv) fiscal year 2001 is

23 $105,446,063, and

24 ‘‘(v) fiscal year 2002 is $111,540,017.
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1 ‘‘(E) DETERMINATION OF NUMBER.—The

2 number of Indians residing in a State under

3 this paragraph for a fiscal year shall be based

4 on the most recent available estimate of the

5 Secretary of the Interior.

6 ‘‘(3) INDIAN DEFINED.—The term ‘Indian’ has

7 the meaning given such term in section 4(d) of the

8 Indian Self-Determination and Education Assistance

9 Act (25 U.S.C. 450b(d)).

10 ‘‘SEC. 1512. PAYMENTS TO STATES.

11 ‘‘(a) AMOUNT OF PAYMENT.—From the allotment of

12 a State under section 1511 for a fiscal year, subject to

13 the succeeding provisions of this title, the Secretary shall

14 pay to each State which has a State plan approved under

15 part C, for each quarter in the fiscal year—

16 ‘‘(1) an amount equal to the applicable Federal

17 medical assistance percentage (as defined in sub18 section (c)) of the total amount expended during

19 such quarter as medical assistance under the plan;

20 plus

21 ‘‘(2) an amount equal to the applicable Federal

22 medical assistance percentage of the total amount

23 expended during such quarter for medically-related

24 services (as defined in section 1571(g)); plus

25 ‘‘(3) subject to section 1513(c)—
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1 ‘‘(A) an amount equal to 90 percent of the

2 amounts expended during such quarter for the

3 design, development, and installation of infor4 mation systems and for providing incentives to

5 promote the enforcement of medical support or6 ders, plus

7 ‘‘(B) an amount equal to 75 percent of the

8 amounts expended during such quarter for

9 medical personnel, administrative support of

10 medical personnel, operation and maintenance

11 of information systems, modification of infor12 mation systems, quality assurance activities,

13 utilization review, medical and peer review,

14 anti-fraud activities, independent evaluations,

15 coordination of benefits, and meeting reporting

16 requirements under this title, plus

17 ‘‘(C) an amount equal to 50 percent of so

18 much of the remainder of the amounts ex19 pended during such quarter as are expended by

20 the State in the administration of the State

21 plan.

22 ‘‘(b) PAYMENT PROCESS.—

23 ‘‘(1) QUARTERLY ESTIMATES.—Prior to the be24 ginning of each quarter, the Secretary shall estimate

25 the amount to which a State will be entitled under
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1 subsection (a) for such quarter, such estimates to be

2 based on (A) a report filed by the State containing

3 its estimate of the total sum to be expended in such

4 quarter in accordance with the provisions of such

5 subsections, and stating the amount appropriated or

6 made available by the State and its political subdivi7 sions for such expenditures in such quarter, and if

8 such amount is less than the State’s proportionate

9 share of the total sum of such estimated expendi10 tures, the source or sources from which the dif11 ference is expected to be derived, and (B) such other

12 investigation as the Secretary may find necessary.

13 ‘‘(2) PAYMENT.—

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

15 then pay to the State, in such installments as

16 the Secretary may determine and in accordance

17 with section 6503(a) of title 31, United States

18 Code, the amount so estimated, reduced or in19 creased to the extent of any overpayment or

20 underpayment which the Secretary determines

21 was made under this section (or section 1903)

22 to such State for any prior quarter and with re23 spect to which adjustment has not already been

24 made under this subsection (or under section

25 1903(d)).
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1 ‘‘(B) TREATMENT AS OVERPAYMENTS.—

2 Expenditures for which payments were made to

3 the State under subsection (a) shall be treated

4 as an overpayment to the extent that the State

5 or local agency administering such plan has

6 been reimbursed for such expenditures by a

7 third party pursuant to the provisions of its

8 plan in compliance with section 1555.

9 ‘‘(C) RECOVERY OF OVERPAYMENTS.—For

10 purposes of this subsection, when an overpay11 ment is discovered, which was made by a State

12 to a person or other entity, the State shall have

13 a period of 60 days in which to recover or at14 tempt to recover such overpayment before ad15 justment is made in the Federal payment to

16 such State on account of such overpayment.

17 Except as otherwise provided in subparagraph

18 (D), the adjustment in the Federal payment

19 shall be made at the end of the 60 days, wheth20 er or not recovery was made.

21 ‘‘(D) NO ADJUSTMENT FOR

22 UNCOLLECTABLES.—In any case where the

23 State is unable to recover a debt which rep24 resents an overpayment (or any portion thereof)

25 made to a person or other entity on account of
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1 such debt having been discharged in bankruptcy

2 or otherwise being uncollectable, no adjustment

3 shall be made in the Federal payment to such

4 State on account of such overpayment (or por5 tion thereof).

6 ‘‘(3) FEDERAL SHARE OF RECOVERIES.—The

7 pro rata share to which the United States is equi8 tably entitled, as determined by the Secretary, of the

9 net amount recovered during any quarter by the

10 State or any political subdivision thereof with re11 spect to medical assistance furnished under the

12 State plan shall be considered an overpayment to be

13 adjusted under this subsection.

14 ‘‘(4) TIMING OF OBLIGATION OF FUNDS.—

15 Upon the making of any estimate by the Secretary

16 under this subsection, any appropriations available

17 for payments under this section shall be deemed ob18 ligated.

19 ‘‘(5) DISALLOWANCES.—In any case in which

20 the Secretary estimates that there has been an over21 payment under this section to a State on the basis

22 of a claim by such State that has been disallowed by

23 the Secretary under section 1116(d) or in the case

24 described in paragraph (6)(C), and such State dis25 putes such disallowance or an adjustment under
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1 such paragraph, the amount of the Federal payment

2 in controversy shall, at the option of the State, be

3 retained by such State or recovered by the Secretary

4 pending a final determination with respect to such

5 payment amount. If such final determination is to

6 the effect that any amount was properly disallowed,

7 and the State chose to retain payment of the

8 amount in controversy, the Secretary shall offset,

9 from any subsequent payments made to such State

10 under this title, an amount equal to the proper

11 amount of the disallowance plus interest on such

12 amount disallowed for the period beginning on the

13 date such amount was disallowed and ending on the

14 date of such final determination at a rate (deter15 mined by the Secretary) based on the average of the

16 bond equivalent of the weekly 90-day treasury bill

17 auction rates during such period.

18 ‘‘(6) ADJUSTMENTS IN PAYMENTS REFLECTING

19 OVER- AND UNDER-ESTIMATIONS OF SUPPLEMENTAL

20 UMBRELLA ALLOTMENT.—

21 ‘‘(A) IN GENERAL.—Based on data re22 ported under section 1511(g)(5)(A)(iii) and an23 nual audits provided for under section 1551(a)

24 on the actual excess number of individuals in

25 each population group for a fiscal year, the Sec-
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1 retary shall determine the final amount of the

2 supplemental umbrella allotment for each State

3 for the fiscal year and whether, based on such

4 final amount, the amount of payment made for

5 the fiscal year was greater, or less, than the

6 amount that should have been paid if payments

7 had been made based on such final amount.

8 ‘‘(B) PAYMENT IN CASE OF UNDERESTI9 MATION.—If the Secretary determines under

10 subparagraph (A) there was an underpayment

11 to a State, the Secretary shall increase the

12 amount of the next quarterly payment under

13 this section to the State by the amount of such

14 underpayment.

15 ‘‘(C) OFFSETTING OF PAYMENTS IN CASE

16 OF OVERESTIMATION.—If the Secretary deter17 mines under subparagraph (A) there was an

18 overpayment to a State, the Secretary shall,

19 subject to the procedures provided under para20 graph (5), decrease the amount of the payment

21 for the next quarter (or, at the discretion of the

22 Secretary, over a period of not more than 4 cal23 endar quarters) by the amount of such overpay24 ment. In the case in which a State seeks review

25 of such a determination in accordance with the
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1 procedures under paragraph (5), the Secretary

2 shall provide for completion of such review

3 process within 1 year after the date the State

4 requests such review.

5 ‘‘(c) APPLICABLE FEDERAL MEDICAL ASSISTANCE

6 PERCENTAGE DEFINED.—In this section, except as pro7 vided in subsection (f), the term ‘applicable Federal medi8 cal assistance percentage’ means, with respect to one of

9 the 50 States or the District of Columbia, at the State’s

10 or District’s option—

11 ‘‘(1) the old Federal medical assistance percent12 age (as determined in subsection (d));

13 ‘‘(2) the lesser of—

14 ‘‘(A) new Federal medical assistance per15 centage (as determined under subsection (e)) or

16 ‘‘(B) the old Federal medical assistance

17 percentage plus 10 percentage points; or

18 ‘‘(3) 60 percent.

19 ‘‘(d) OLD FEDERAL MEDICAL ASSISTANCE PER20 CENTAGE.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2) and subsection (f), the term ‘old Federal

23 medical assistance percentage’ for any State is 100

24 percent less the State percentage; and the State per25 centage is that percentage which bears the same
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1 ratio to 45 percent as the square of the per capita

2 income of such State bears to the square of the per

3 capita income of the continental United States (in4 cluding Alaska) and Hawaii.

5 ‘‘(2) LIMITATION ON RANGE.—In no case shall

6 the old Federal medical assistance percentage be less

7 than 50 percent or more than 83 percent.

8 ‘‘(3) PROMULGATION.—The old Federal medical

9 assistance percentage for any State shall be deter10 mined and promulgated in accordance with the pro11 visions of section 1101(a)(8)(B).

12 ‘‘(e) NEW FEDERAL MEDICAL ASSISTANCE PER13 CENTAGE DEFINED.—

14 ‘‘(1) IN GENERAL.—

15 ‘‘(A) TERM DEFINED.—Except as provided

16 in paragraph (3) and subsection (f), the term

17 ‘new Federal medical assistance percentage’

18 means, for each of the 50 States and the Dis19 trict of Columbia, 100 percent reduced by the

20 product 0.39 and the ratio of—

21 ‘‘(i)(I) for each of the 50 States, the

22 total taxable resources (TTR) ratio of the

23 State specified in subparagraph (B), or
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1 ‘‘(II) for the District of Columbia, the

2 per capita income ratio specified in sub3 paragraph (C),

4 to—

5 ‘‘(ii) the aggregate expenditure need

6 ratio of the State or District, as described

7 in subparagraph (D).

8 ‘‘(B) TOTAL TAXABLE RESOURCES (TTR)

9 RATIO.—For purposes of subparagraph

10 (A)(i)(I), the total taxable resources (TTR)

11 ratio for each of the 50 States is—

12 ‘‘(i) an amount equal to the most re13 cent 3-year average of the total taxable re14 sources (TTR) of the State, as determined

15 by the Secretary of the Treasury, divided

16 by

17 ‘‘(ii) an amount equal to the sum of

18 the 3-year averages determined under

19 clause (i) for each of the 50 States.

20 ‘‘(C) PER CAPITA INCOME RATIO.—For

21 purposes of subparagraph (A)(i)(II), the per

22 capita income ratio of the District of Columbia

23 is—

24 ‘‘(i) an amount equal to the most re25 cent 3-year average of the total personal
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1 income of the District of Columbia, as de2 termined in accordance with the provisions

3 of section 1101(a)(8)(B), divided by

4 ‘‘(ii) an amount equal to the total per5 sonal income of the continental United

6 States (including Alaska) and Hawaii, as

7 determined under section 1101(a)(8)(B).

8 ‘‘(D) AGGREGATE EXPENDITURE NEED

9 RATIO.—For purposes of subparagraph (A),

10 with respect to each of the 50 States and the

11 District of Columbia for a fiscal year, the ag12 gregate expenditure need ratio is—

13 ‘‘(i) the State aggregate expenditure

14 need (as defined in section 1511(d)) for

15 the State for the fiscal year, divided by

16 ‘‘(ii) the sum of such State aggregate

17 expenditure needs for the 50 States and

18 the District of Columbia for the fiscal year.

19 ‘‘(2) LIMITATION ON RANGE.—Except as pro20 vided in subsection (f), the new Federal medical as21 sistance percentage shall in no case be less than 40

22 percent or greater than 83 percent.

23 ‘‘(3) PROMULGATION.—The new Federal medi24 cal assistance percentage for any State shall be pro25 mulgated in a timely manner consistent with the
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1 promulgation of the old Federal medical assistance

2 percentage under section 1101(a)(8)(B).

3 ‘‘(f) SPECIAL RULES.—For purposes of this title:

4 ‘‘(1) COMMONWEALTHS AND TERRITORIES.—In

5 the case of Puerto Rico, the Virgin Islands, Guam,

6 the Northern Mariana Islands, and American

7 Samoa, the old and new Federal medical assistance

8 percentages are 50 percent.

9 ‘‘(2) ALASKA.—In the case of Alaska, the old

10 Federal medical assistance percentage is that per11 centage which bears the same ratio to 45 percent as

12 the square of the adjusted per capita income of such

13 State bears to the square of the per capita income

14 of the continental United States. For purposes of

15 the preceding sentence, the adjusted per capita in16 come for Alaska shall be determined by dividing the

17 State’s most recent 3-year average per capita by the

18 health care cost index for such State (as determined

19 under section 1511(d)(3)).

20 ‘‘(3) INDIAN HEALTH SERVICE AND RELATED

21 FACILITIES.—The old and new Federal medical as22 sistance percentages shall be 100 percent with re23 spect to the amounts expended as medical assistance

24 for services provided by—

25 ‘‘(A) an Indian Health Service facility;
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1 ‘‘(B) an Indian health program operated

2 by an Indian tribe or tribal organization (as de3 fined in section 4 of the Indian Health Care

4 Improvement Act) pursuant to a contract,

5 grant, cooperative agreement, or compact with

6 the Indian Health Service under the Indian

7 Self-Determination Act; or

8 ‘‘(C) an urban Indian health program op9 erated by an urban Indian organization pursu10 ant to a grant or contract with the Indian

11 Health Service under title V of the Indian

12 Health Care Improvement Act.

13 ‘‘(4) NO STATE MATCHING REQUIRED FOR CER14 TAIN EXPENDITURES.—In applying subsection (a)(1)

15 with respect to medical assistance provided to unlaw16 ful aliens pursuant to the exception specified in sec17 tion 1513(f)(2), payment shall be made for the

18 amount of such assistance without regard to any

19 need for a State match.

20 ‘‘(5) SPECIAL TRANSITIONAL RULE.—

21 ‘‘(A) IN GENERAL.—Notwithstanding sub22 section (a), in order to receive the full State

23 outlay allotment described in section

24 1511(c)(3)(C)(i), a State described in subpara25 graph (C) shall expend State funds in a fiscal
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1 year (before fiscal year 2000) under a State

2 plan under this title in an amount not less than

3 the adjusted base year State expenditures, plus

4 the applicable percentage of the difference be5 tween such expenditures and the amount nec6 essary to qualify for the full State outlay allot7 ment so described in such fiscal year as deter8 mined under this section without regard to this

9 paragraph.

10 ‘‘(B) REDUCTION IN ALLOTMENT IF EX11 PENDITURE NOT MET.—In the event a State

12 described in subparagraph (C) fails to expend

13 State funds in an amount required by subpara14 graph (A) for a fiscal year, the outlay allotment

15 described in section 1511(c)(3)(C)(i) for such

16 year for such State shall be reduced by an

17 amount which bears the same ratio to such out18 lay allotment as the State funds expended in

19 such fiscal year bears to the amount required

20 by subparagraph (A).

21 ‘‘(C) ADJUSTED BASE YEAR STATE EX22 PENDITURES.—For purposes of this paragraph,

23 the term ‘adjusted base year State expendi24 tures’ means, for Louisiana, $355,000,000.
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1 ‘‘(D) APPLICABLE PERCENTAGE.—For

2 purposes of this paragraph, the applicable per3 centage for a fiscal year is specified in the fol4 lowing table:

Applicable

‘‘Fiscal year: Percentage:

1996 ......................................................................................... 20

1997 ......................................................................................... 40

1998 ......................................................................................... 60

1999 ......................................................................................... 80.

5 ‘‘(6) TREATMENT OF EXPENDITURES ATTRIB6 UTABLE TO UMBRELLA FUND.—The ‘applicable Fed7 eral medical assistance percentage’ with respect to

8 amounts attributable to supplemental amounts de9 scribed in section 1511(g), is the old Federal medi10 cal assistance percentage.

11 ‘‘(g) USE OF LOCAL FUNDS.—

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

13 State may use local funds to meet the non-Federal

14 share of the expenditures under the State plan with

15 respect to which payments may be made under this

16 section.

17 ‘‘(2) LIMITATION.—For any fiscal year local

18 funds may not exceed 40 percent of the total of the

19 non-Federal share of such expenditures for the fiscal

20 year.

21 ‘‘(h) PERMITTING INTER-GOVERNMENTAL FUNDS

22 TRANSFERS.—
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1 ‘‘(1) IN GENERAL.—Public funds, as defined in

2 paragraph (2), may be considered as the State’s

3 share in determining State financial participation

4 under this title.

5 ‘‘(2) PUBLIC FUNDS DEFINED.—For purposes

6 of this subsection, the term ‘public funds’ means

7 funds—

8 ‘‘(A) that are—

9 ‘‘(i) appropriated directly to the State

10 or to the local agency administering the

11 State plan under this title, or transferred

12 from other public agencies (including In13 dian tribes) to the State or local agency

14 and under its administrative control, or

15 ‘‘(ii) certified by the contributing pub16 lic agency as representing expenditures eli17 gible for Federal financial participation

18 under this title; and

19 ‘‘(B) that—

20 ‘‘(i) are not Federal funds, or

21 ‘‘(ii) are Federal funds authorized by

22 Federal law to be used to match other

23 Federal funds.

24 ‘‘(i) APPLICATION OF PROVIDER TAX AND DONATION

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

2 the provisions of section 1903(w) (as in effect on

3 June 1, 1996) shall apply under this title in the

4 same manner as they applied under title XIX (as of

5 such date).

6 ‘‘(2) WAIVER AUTHORITY.—Beginning 2 years

7 after the date of the enactment of this title, the Sec8 retary, taking into account the report submitted

9 under section 1513(j)(2), may waive, upon the appli10 cation of a State, paragraph (1) as it applies in that

11 State if the Secretary determines that the waiver

12 would not financially undermine the program under

13 this title and would not otherwise be abusive.

14 ‘‘SEC. 1513. LIMITATION ON USE OF FUNDS; DISALLOW15 ANCE.

16 ‘‘(a) IN GENERAL.—Funds provided to a State under

17 this title shall only be used to carry out the purposes of

18 this title.

19 ‘‘(b) DISALLOWANCES FOR EXCLUDED PROVID20 ERS.—

21 ‘‘(1) IN GENERAL.—Payment shall not be made

22 to a State under this part for expenditures for items

23 and services furnished—

24 ‘‘(A) by a provider who was excluded from

25 participation under title V, XVIII, or XX or
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1 under this title pursuant to section 1128,

2 1128A, 1156, or 1842(j)(2), or

3 ‘‘(B) under the medical direction or on the

4 prescription of a physician who was so excluded,

5 if the provider of the services knew or had rea6 son to know of the exclusion.

7 ‘‘(2) EXCEPTION FOR EMERGENCY SERVICES.—

8 Paragraph (1) shall not apply to emergency items or

9 services, not including hospital emergency room serv10 ices.

11 ‘‘(c) LIMITATIONS ON PAYMENTS FOR MEDICALLY12 RELATED SERVICES AND ADMINISTRATIVE EXPENSES.—

13 ‘‘(1) IN GENERAL.—No Federal financial assist14 ance is available for expenditures under the State

15 plan for—

16 ‘‘(A) medically-related services for a quar17 ter to the extent such expenditures exceed 5

18 percent of the total expenditures under the plan

19 for the quarter, or

20 ‘‘(B) total administrative expenses (other

21 than expenses described in paragraph (2) dur22 ing the first 8 quarters in which the plan is in

23 effect under this title) for quarters in a fiscal

24 year to the extent such expenditures exceed the
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1 sum of $20,000,000 plus 10 percent of the total

2 expenditures under the plan for the year.

3 ‘‘(2) ADMINISTRATIVE EXPENSES NOT SUBJECT

4 TO LIMITATION.—The administrative expenses re5 ferred to in this paragraph are expenditures under

6 the State plan for the following activities:

7 ‘‘(A) Quality assurance.

8 ‘‘(B) The development and operation of the

9 certification program for nursing facilities and

10 intermediate care facilities for the mentally re11 tarded under section 1557.

12 ‘‘(C) Utilization review activities, including

13 medical activities and activities of peer review

14 organizations.

15 ‘‘(D) Inspection and oversight of providers

16 and capitated health care organizations.

17 ‘‘(E) Anti-fraud activities.

18 ‘‘(F) Independent evaluations.

19 ‘‘(G) Activities required to meet reporting

20 requirements under this title.

21 ‘‘(d) TREATMENT OF THIRD PARTY LIABILITY.—No

22 payment shall be made to a State under this part for ex23 penditures for medical assistance provided for an individ24 ual under its State plan to the extent that a private in25 surer (as defined by the Secretary by regulation and in-
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1 cluding a group health plan (as defined in section 607(1)

2 of the Employee Retirement Income Security Act of

3 1974), a service benefit plan, and a health maintenance

4 organization) would have been obligated to provide such

5 assistance but for a provision of its insurance contract

6 which has the effect of limiting or excluding such obliga7 tion because the individual is eligible for or is provided

8 medical assistance under the plan.

9 ‘‘(e) SECONDARY PAYER PROVISIONS.—Except as

10 otherwise provided by law, no payment shall be made to

11 a State under this part for expenditures for medical assist12 ance provided for an individual under its State plan to

13 the extent that payment has been made or can reasonably

14 be expected to be made promptly (as determined in accord15 ance with regulations) under any other federally operated

16 or financed health care insurance program, other than an

17 insurance program operated or financed by the Indian

18 Health Service, as identified by the Secretary. For pur19 poses of this subsection, rules similar to the rules for over20 payments under section 1512(b) shall apply.

21 ‘‘(f) LIMITATION ON PAYMENTS FOR SERVICES TO

22 NONLAWFUL ALIENS.—

23 ‘‘(1) IN GENERAL.—Notwithstanding the pre24 ceding provisions of this section, except as provided

25 in paragraph (2), no payment may be made to a
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1 State under this part for medical assistance fur2 nished to an alien who is not lawfully admitted for

3 permanent residence or otherwise permanently resid4 ing in the United States under color of law.

5 ‘‘(2) EXCEPTION.—Payment may be made

6 under this section for care and services that are fur7 nished to an alien described in paragraph (1) only

8 if—

9 ‘‘(A) such care and services are necessary

10 for the treatment of an emergency medical con11 dition of the alien (or, at the option of the

12 State, for prenatal care),

13 ‘‘(B) such alien otherwise meets the eligi14 bility requirements for medical assistance under

15 the State plan (other than a requirement of the

16 receipt of aid or assistance under title IV, sup17 plemental security income benefits under title

18 XVI, or a State supplementary payment), and

19 ‘‘(C) such care and services are not related

20 to an organ transplant procedure.

21 ‘‘(3) EMERGENCY MEDICAL CONDITION DE22 FINED.—For purposes of this subsection, the term

23 ‘emergency medical condition’ means a medical con24 dition (including emergency labor and delivery)

25 manifesting itself by acute symptoms of sufficient
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1 severity (including severe pain) such that the ab2 sence of immediate medical attention could reason3 ably be expected to result in—

4 ‘‘(A) placing the patient’s health in serious

5 jeopardy,

6 ‘‘(B) serious impairment to bodily func7 tions, or

8 ‘‘(C) serious dysfunction of any bodily

9 organ or part.

10 ‘‘(g) LIMITATION ON PAYMENT FOR CERTAIN OUT11 PATIENT PRESCRIPTION DRUGS.—

12 ‘‘(1) IN GENERAL.—No payment may be made

13 to a State under this part for medical assistance for

14 covered outpatient drugs (as defined in section

15 1575(i)(2)) of a manufacturer provided under the

16 State plan unless the manufacturer (as defined in

17 section 1575(i)(4)) of the drug—

18 ‘‘(A) has entered into a master rebate

19 agreement with the Secretary under section

20 1575,

21 ‘‘(B) is otherwise complying with the provi22 sions of such section,

23 ‘‘(C) subject to paragraph (4), is comply24 ing with the provisions of section 8126 of title

25 38, United States Code, including the require-
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1 ment of entering into a master agreement with

2 the Secretary of Veterans Affairs under such

3 section, and

4 ‘‘(D) subject to paragraph (4), is comply5 ing with the provisions of section 340B of the

6 Public Health Service Act, including the re7 quirement of entering into an agreement with

8 the Secretary under such section.

9 ‘‘(2) CONSTRUCTION.—Nothing in this sub10 section shall be construed as requiring a State to

11 participate in the master rebate agreement under

12 section 1575.

13 ‘‘(3) EFFECT OF SUBSEQUENT AMEND14 MENTS.—For purposes of subparagraphs (C) and

15 (D) of paragraph (1), in determining whether a

16 manufacturer is in compliance with the requirements

17 of section 8126 of title 38, United States Code, or

18 section 340B of the Public Health Service Act—

19 ‘‘(A) the Secretary shall not take into ac20 count any amendments to such sections that

21 are enacted after the enactment of title VI of

22 the Veterans Health Care Act of 1992, and

23 ‘‘(B) a manufacturer is deemed to meet

24 such requirements if the manufacturer estab25 lishes to the satisfaction of the Secretary that
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1 the manufacturer would comply (and has of2 fered to comply) with the provisions of such

3 sections (as in effect immediately after the en4 actment of the Veterans Health Care Act of

5 1992) and would have entered into an agree6 ment under such section (as such section was in

7 effect at such time), but for a legislative change

8 in such section after the date of the enactment

9 of the Veterans Health Care Act of 1992.

10 ‘‘(4) EFFECT OF ESTABLISHMENT OF ALTER11 NATIVE MECHANISM UNDER PUBLIC HEALTH SERV12 ICE ACT.—If the Secretary does not establish a

13 mechanism to ensure against duplicate discounts or

14 rebates under section 340B(a)(5)(A) of the Public

15 Health Service Act within 12 months of the date of

16 the enactment of such section, the following require17 ments shall apply:

18 ‘‘(A) Each covered entity under such sec19 tion shall inform the State when it is seeking

20 reimbursement from the State plan for medical

21 assistance with respect to a unit of any covered

22 outpatient drug which is subject to an agree23 ment under section 340B(a) of such Act.

24 ‘‘(B) Each such State shall provide a

25 means by which such an entity shall indicate on
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1 any drug reimbursement claims form (or for2 mat, where electronic claims management is

3 used) that a unit of the drug that is the subject

4 of the form is subject to an agreement under

5 section 340B of such Act, and not submit to

6 any manufacturer a claim for a rebate payment

7 with respect to such a drug.

8 ‘‘(h) LIMITATION ON PAYMENT FOR ABORTIONS.—

9 ‘‘(1) IN GENERAL.—Payment shall not be made

10 to a State under this part for any amount expended

11 under the State plan to pay for any abortion or to

12 assist in the purchase, in whole or in part, of health

13 benefit coverage that includes coverage of abortion.

14 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

15 apply to an abortion—

16 ‘‘(A) if the pregnancy is the result of an

17 act of rape or incest, or

18 ‘‘(B) in the case where a woman suffers

19 from a physical disorder, illness, or injury that

20 would, as certified by a physician, place the

21 woman in danger of death unless an abortion is

22 performed.

23 ‘‘(i) LIMITATION ON PAYMENT FOR ASSISTING

24 DEATHS.—Payment shall not be made to a State under

25 this part for amounts expended under the State plan to
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1 pay for, or to assist in the purchase, in whole or in part,

2 of health benefit coverage that includes payment for any

3 drug, biological product, or service which was furnished

4 for the purpose of causing, or assisting in causing, the

5 death, suicide, euthanasia, or mercy killing of a person.

6 ‘‘(j) STUDY AND REPORT ON STATE FUNDING.—

7 ‘‘(1) STUDY.—The Comptroller General shall

8 provide for a study of the methods by which States

9 provide for financing their share of expenditures

10 under this title. Such study shall include an exam11 ination of the use of provider taxes and donations,

12 as well as intergovernmental transfers.

13 ‘‘(2) REPORT.—Not later than 2 years after the

14 date of the enactment of this title, the Comptroller

15 General shall submit to Congress a report on such

16 study. The report shall include such recommenda17 tions as the Comptroller General deems appropriate.

18 ‘‘PART C—ESTABLISHMENT AND AMENDMENT OF

19 STATE PLANS

20 ‘‘SEC. 1521. DESCRIPTION OF STRATEGIC OBJECTIVES AND

21 PERFORMANCE GOALS.

22 ‘‘(a) DESCRIPTION.—A State plan shall include a de23 scription of the strategic objectives and performance goals

24 the State has established for providing health care services

25 to low-income populations under this title, including a gen-
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1 eral description of the manner in which the plan is de2 signed to meet these objectives and goals.

3 ‘‘(b) CERTAIN OBJECTIVES AND GOALS RE4 QUIRED.—A State plan shall include strategic objectives

5 and performance goals relating to rates of childhood im6 munizations, reductions in infant mortality and morbidity,

7 and access to services for children with special health care

8 needs (as defined by the State).

9 ‘‘(c) CONSIDERATIONS.—In specifying these objec10 tives and goals the State may consider factors such as the

11 following:

12 ‘‘(1) The State’s priorities with respect to pro13 viding assistance to low-income populations.

14 ‘‘(2) The State’s priorities with respect to the

15 general public health and the health status of indi16 viduals eligible for assistance under the State plan.

17 ‘‘(3) The State’s financial resources, the par18 ticular economic conditions in the State, and relative

19 adequacy of the health care infrastructure in dif20 ferent regions of the State.

21 ‘‘(d) PERFORMANCE MEASURES.—To the extent

22 practicable—

23 ‘‘(1) one or more performance goals shall be es24 tablished by the State for each strategic objective

25 identified in the State plan; and
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1 ‘‘(2) the State plan shall describe, how program

2 performance will be—

3 ‘‘(A) measured through objective, inde4 pendently verifiable means, and

5 ‘‘(B) compared against performance goals,

6 in order to determine the State’s performance

7 under this title.

8 ‘‘(e) PERIOD COVERED.—

9 ‘‘(1) STRATEGIC OBJECTIVES.—The strategic

10 objectives shall cover a period of not less than 5

11 years and shall be updated and revised at least every

12 3 years.

13 ‘‘(2) PERFORMANCE GOALS.—The performance

14 goals shall be established for dates that are not more

15 than 3 years apart.

16 ‘‘SEC. 1522. ANNUAL REPORTS.

17 ‘‘(a) IN GENERAL.—In the case of a State with a

18 State plan that is in effect for part or all of a fiscal year,

19 no later than March 31 following such fiscal year the State

20 shall prepare and submit to the Secretary and the Con21 gress a report on program activities and performance

22 under this title for such fiscal year.

23 ‘‘(b) CONTENTS.—Each annual report under this sec24 tion for a fiscal year shall include the following:
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1 ‘‘(1) EXPENDITURE AND BENEFICIARY SUM2 MARY.—

3 ‘‘(A) INITIAL SUMMARY.—For the report

4 for fiscal year 1997, a summary of all expendi5 tures under the State plan during the fiscal

6 year as follows:

7 ‘‘(i) Aggregate medical assistance ex8 penditures, disaggregated to the extent re9 quired to determine compliance with the

10 set-aside requirement of section 1502(c)

11 and to determine the program need of the

12 State under section 1511(d)(2).

13 ‘‘(ii) For each general category of eli14 gible individuals (specified in subsection

15 (c)(1)), aggregate medical assistance ex16 penditures and the total and average num17 ber of eligible individuals under the State

18 plan.

19 ‘‘(iii) By each general category of eli20 gible individuals, total expenditures for

21 each of the categories of health care items

22 and services (specified in subsection (c)(2))

23 which are covered under the State plan

24 and provided on a fee-for-service basis.
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1 ‘‘(iv) By each general category of eli2 gible individuals, total expenditures for

3 payments to capitated health care organi4 zations (as defined in section 1504(c)(1)).

5 ‘‘(v) Total administrative expendi6 tures.

7 ‘‘(B) SUBSEQUENT SUMMARIES.—For re8 ports for each succeeding fiscal year, a sum9 mary of—

10 ‘‘(i) all expenditures under the State

11 plan, and

12 ‘‘(ii) the total and average number of

13 eligible individuals under the State plan for

14 each general category of eligible individ15 uals.

16 ‘‘(2) UTILIZATION SUMMARY.—

17 ‘‘(A) INITIAL SUMMARY.—For the report

18 for fiscal year 1997, summary statistics on the

19 utilization of health care services under the

20 State plan during the year as follows:

21 ‘‘(i) For each general category of eli22 gible individuals and for each of the cat23 egories of health care items and services

24 which are covered under the State plan

25 and provided on a fee-for-service basis, the
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1 number and percentage of persons who re2 ceived such a type of service or item dur3 ing the period covered by the report.

4 ‘‘(ii) Summary of health care utiliza5 tion data reported to the State by

6 capitated health care organizations.

7 ‘‘(B) SUBSEQUENT SUMMARIES.—For re8 ports for each succeeding fiscal year, summary

9 statistics on the utilization of health care serv10 ices under the State plan.

11 ‘‘(3) ACHIEVEMENT OF PERFORMANCE

12 GOALS.—With respect to each performance goal es13 tablished under section 1521 and applicable to the

14 year involved—

15 ‘‘(A) a brief description of the goal;

16 ‘‘(B) a description of the methods to be

17 used to measure the attainment of such goal;

18 ‘‘(C) data on the actual performance with

19 respect to the goal;

20 ‘‘(D) a review of the extent to which the

21 goal was achieved, based on such data; and

22 ‘‘(E) if a performance goal has not been

23 met—

24 ‘‘(i) why the goal was not met, and
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1 ‘‘(ii) actions to be taken in response

2 to such performance, including adjust3 ments in performance goals or program ac4 tivities for subsequent years.

5 ‘‘(4) PROGRAM EVALUATIONS.—A summary of

6 the findings of evaluations under section 1523 com7 pleted during the fiscal year covered by the report.

8 ‘‘(5) FRAUD AND ABUSE AND QUALITY CON9 TROL ACTIVITIES.—A general description of the

10 State’s activities under part D to detect and deter

11 fraud and abuse and to assure quality of services

12 provided under the program.

13 ‘‘(6) PLAN ADMINISTRATION.—

14 ‘‘(A) A description of the administrative

15 roles and responsibilities of entities in the State

16 responsible for administration of this title.

17 ‘‘(B) Organizational charts for each entity

18 in the State primarily responsible for activities

19 under this title.

20 ‘‘(C) A brief description of each interstate

21 compact (if any) the State has entered into

22 with other States with respect to activities

23 under this title.
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1 ‘‘(D) General citations to the State stat2 utes and administrative rules governing the

3 State’s activities under this title.

4 ‘‘(c) DESCRIPTION OF CATEGORIES.—In this section:

5 ‘‘(1) GENERAL CATEGORIES OF ELIGIBLE INDI6 VIDUALS.—Each of the following is a general cat7 egory of eligible individuals:

8 ‘‘(A) Pregnant women.

9 ‘‘(B) Children.

10 ‘‘(C) Blind or disabled adults who are not

11 elderly individuals.

12 ‘‘(D) Elderly individuals.

13 ‘‘(E) Other adults.

14 ‘‘(2) CATEGORIES OF HEALTH CARE ITEMS AND

15 SERVICES.—The health care items and services de16 scribed in each paragraph of section 1571(a) shall

17 be considered a separate category of health care

18 items and services.

19 ‘‘SEC. 1523. PERIODIC, INDEPENDENT EVALUATIONS.

20 ‘‘(a) IN GENERAL.—During fiscal year 1999 and

21 every third fiscal year thereafter, each State shall provide

22 for an evaluation of the operation of its State plan under

23 this title.

24 ‘‘(b) INDEPENDENT.—Each such evaluation with re25 spect to an activity under the State plan shall be con-
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1 ducted by an entity that is neither responsible under State

2 law for the submission of the State plan (or part thereof)

3 nor responsible for administering (or supervising the ad4 ministration of) the activity. If consistent with the pre5 vious sentence, such an entity may be a college or univer6 sity, a State agency, a legislative branch agency in a State,

7 or an independent contractor.

8 ‘‘(c) RESEARCH DESIGN.—Each such evaluation

9 shall be conducted in accordance with a research design

10 that is based on generally accepted models of survey de11 sign and sampling and statistical analysis.

12 ‘‘SEC. 1524. DESCRIPTION OF PROCESS FOR STATE PLAN

13 DEVELOPMENT.

14 ‘‘Each State plan shall include a description of the

15 process under which the plan shall be developed and imple16 mented in the State (consistent with section 1525).

17 ‘‘SEC. 1525. CONSULTATION IN STATE PLAN DEVELOPMENT.

18 ‘‘(a) PUBLIC NOTICE PROCESS.—Before submitting

19 a State plan or a plan amendment described in subsection

20 (c) to the Secretary under this part, a State shall pro21 vide—

22 ‘‘(1) public notice respecting the submittal of

23 the proposed plan or amendment, including a gen24 eral description of the plan or amendment,
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1 ‘‘(2) a means for the public to inspect or obtain

2 a copy (at reasonable charge) of the proposed plan

3 or amendment,

4 ‘‘(3) an opportunity for submittal and consider5 ation of public comments on the proposed plan or

6 amendment, and

7 ‘‘(4) for consultation with one or more advisory

8 committees established and maintained by the State.

9 The previous sentence shall not apply to a revision of a

10 State plan (or revision of an amendment to a plan) made

11 by a State under section 1529(c)(1) or to a plan amend12 ment withdrawal described in section 1529(c)(4).

13 ‘‘(b) CONTENTS OF NOTICE.—A notice under sub14 section (a)(1) for a proposed plan or amendment shall in15 clude a description of—

16 ‘‘(1) the general purpose of the proposed plan

17 or amendment (including applicable effective dates),

18 ‘‘(2) where the public may inspect the proposed

19 plan or amendment,

20 ‘‘(3) how the public may obtain a copy of the

21 proposed plan or amendment and the applicable

22 charge (if any) for the copy, and

23 ‘‘(4) how the public may submit comments on

24 the proposed plan or amendment, including any
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1 deadlines applicable to consideration of such com2 ments.

3 ‘‘(c) AMENDMENTS DESCRIBED.—An amendment to

4 a State plan described in this subsection is an amendment

5 which makes a material and substantial change in eligi6 bility under the State plan or the benefits provided under

7 the plan.

8 ‘‘(d) PUBLICATION.—Notices under this section may

9 be published (as selected by the State) in one or more daily

10 newspapers of general circulation in the State or in any

11 publication used by the State to publish State statutes or

12 rules.

13 ‘‘(e) COMPARABLE PROCESS.—A separate notice, or

14 notices, shall not be required under this section for a State

15 if notice of the State plan or an amendment to the plan

16 will be provided under a process specified in State law that

17 is substantially equivalent to the notice process specified

18 in this section.

19 ‘‘SEC. 1526. SUBMITTAL AND APPROVAL OF STATE PLANS.

20 ‘‘(a) SUBMITTAL.—As a condition of receiving fund21 ing under part B, each State shall submit to the Secretary

22 a State plan that meets the applicable requirements of this

23 title.

24 ‘‘(b) APPROVAL.—Except as the Secretary may pro25 vide under section 1529 (including subsection (b) relating
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1 to noncompliance with required guarantees), a State plan

2 submitted under subsection (a)—

3 ‘‘(1) shall be approved for purposes of this title,

4 and

5 ‘‘(2) shall be effective beginning on a date that

6 is specified in the plan, but in no case earlier than

7 60 days after the date the plan is submitted.

8 ‘‘(c) CONSTRUCTION.—Nothing in this section shall

9 be construed as prohibiting a State from submitting a

10 State plan that includes the coverage and benefits (includ11 ing those provided under a waiver granted under section

12 1115) of its State plan under title XIX (as in effect as

13 of the date of the enactment of the Medicaid Restructur14 ing Act of 1996), so long as such plan complies with the

15 applicable requirements of this title, including the guaran16 tees under section 1501, and remains subject to the fund17 ing provisions of section 1511.

18 ‘‘SEC. 1527. SUBMITTAL AND APPROVAL OF PLAN AMEND19 MENTS.

20 ‘‘(a) SUBMITTAL OF AMENDMENTS.—A State may

21 amend, in whole or in part, its State plan at any time

22 through transmittal of a plan amendment under this sec23 tion.

24 ‘‘(b) APPROVAL.—Except as the Secretary may pro25 vide under section 1529 (including subsection (b) relating
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1 to noncompliance with required guarantees), an amend2 ment to a State plan submitted under subsection (a)—

3 ‘‘(1) shall be approved for purposes of this title,

4 and

5 ‘‘(2) shall be effective as provided in subsection

6 (c).

7 ‘‘(c) EFFECTIVE DATES FOR AMENDMENTS.—

8 ‘‘(1) IN GENERAL.—Subject to the succeeding

9 provisions of this subsection, an amendment to a

10 State plan shall take effect on one or more effective

11 dates specified in the amendment.

12 ‘‘(2) AMENDMENTS RELATING TO ELIGIBILITY

13 OR BENEFITS.—Except as provided in paragraph

14 (4)—

15 ‘‘(A) NOTICE REQUIREMENT.—Any plan

16 amendment that eliminates or restricts eligi17 bility or benefits under the plan may not take

18 effect unless the State certifies that it has pro19 vided prior or contemporaneous public notice of

20 the change, in a form and manner provided

21 under applicable State law.

22 ‘‘(B) TIMELY TRANSMITTAL.—Any plan

23 amendment that eliminates or restricts eligi24 bility or benefits under the plan shall not be ef25 fective for longer than a 60-day period unless
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1 the amendment has been transmitted to the

2 Secretary before the end of such period.

3 ‘‘(3) OTHER AMENDMENTS.—Subject to para4 graph (4), any plan amendment that is not described

5 in paragraph (2) which becomes effective in a State

6 fiscal year may not remain in effect after the end of

7 such fiscal year (or, if later, the end of the 90-day

8 period on which it becomes effective) unless the

9 amendment has been transmitted to the Secretary.

10 ‘‘(4) EXCEPTION.—The requirements of para11 graphs (2) and (3) shall not apply to a plan amend12 ment that is submitted on a timely basis pursuant

13 to a court order or an order of the Secretary.

14 ‘‘SEC. 1528. PROCESS FOR STATE WITHDRAWAL FROM PRO15 GRAM.

16 ‘‘(a) IN GENERAL.—A State may rescind its State

17 plan and discontinue participation in the program under

18 this title at any time after providing—

19 ‘‘(1) the public with 90 days prior notice in a

20 publication in one or more daily newspapers of gen21 eral circulation in the State or in any publication

22 used by the State to publish State statutes or rules,

23 and

24 ‘‘(2) the Secretary with 90 days prior written

25 notice.
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1 ‘‘(b) EFFECTIVE DATE.—Such discontinuation shall

2 not apply to payments under part B for expenditures

3 made for items and services furnished under the State

4 plan before the effective date of the discontinuation.

5 ‘‘(c) PRORATION OF ALLOTMENTS.—In the case of

6 any withdrawal under this section other than at the end

7 of a Federal fiscal year, notwithstanding any provision of

8 section 1511 to the contrary, the Secretary shall provide

9 for such appropriate proration of the application of allot10 ments under section 1511 as is appropriate.

11 ‘‘SEC. 1529. SANCTIONS FOR NONCOMPLIANCE.

12 ‘‘(a) PROMPT REVIEW OF PLAN SUBMITTALS.—The

13 Secretary shall promptly review State plans and plan

14 amendments submitted under this part to determine if

15 they substantially comply with the requirements of this

16 title.

17 ‘‘(b) DETERMINATIONS OF NONCOMPLIANCE WITH

18 CERTAIN GUARANTEES.—

19 ‘‘(1) AT TIME OF PLAN OR AMENDMENT SUB20 MITTAL.—If the Secretary determines that a State

21 plan or plan amendment submitted under this part

22 violates the guarantees of coverage and benefits

23 under subsections (a) and (b) of section 1501, the

24 Secretary shall notify the State in writing of such

25 determination and shall issue an order specifying
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1 that the plan or amendment, insofar as it is in viola2 tion with such requirement, shall not be effective,

3 except as provided in subsection (d), as of the date

4 specified in the order.

5 ‘‘(2) VIOLATIONS IN ADMINISTRATION OF

6 PLAN.—If the Secretary determines, after reasonable

7 notice and opportunity for a hearing for the State,

8 that in the administration of a State plan there is

9 a violation of guarantee of coverage and benefits

10 under subsection (a) or (b) of section 1501, the Sec11 retary shall provide the State with written notice of

12 the determination and with an order to remedy such

13 violation. Such an order shall become effective pro14 spectively, as specified in the order, after the date of

15 receipt of such written notice. Such an order may in16 clude the withholding of funds, consistent with sub17 section (g), for parts of the State plan affected by

18 such violation, until the Secretary is satisfied that

19 the violation has been corrected.

20 ‘‘(3) CONSULTATION WITH STATE.—Before

21 making a determination adverse to a State under

22 this section, the Secretary shall—

23 ‘‘(A) reasonably consult with the State in24 volved,
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1 ‘‘(B) offer the State a reasonable oppor2 tunity to clarify the submission and submit fur3 ther information to substantiate compliance

4 with the requirements of subsections (a) and

5 (b) of section 1501, and

6 ‘‘(C) reasonably consider any such clari7 fications and information submitted.

8 ‘‘(4) JUSTIFICATION OF ANY INCONSISTENCIES

9 IN DETERMINATIONS.—If the Secretary makes a de10 termination under this section that is, in whole or in

11 part, inconsistent with any previous determination

12 issued by the Secretary under this title, the Sec13 retary shall include in the determination a detailed

14 explanation and justification for any such difference.

15 ‘‘(c) DETERMINATIONS OF OTHER SUBSTANTIAL

16 NONCOMPLIANCE.—

17 ‘‘(1) AT TIME OF PLAN OR AMENDMENT SUB18 MITTAL.—

19 ‘‘(A) IN GENERAL.—If the Secretary, dur20 ing the 30-day period beginning on the date of

21 submittal of a State plan or plan amendment—

22 ‘‘(i) determines that the plan or

23 amendment substantially violates (within

24 the meaning of paragraph (5)) a require25 ment of this title, and
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1 ‘‘(ii) provides written notice of such

2 determination to the State,

3 the Secretary shall issue an order specifying

4 that the plan or amendment, insofar as it is in

5 substantial violation of such a requirement,

6 shall not be effective, except as provided in sub7 section (d), beginning at the end of a period of

8 not less than 30 days (or 120 days in the case

9 of the initial submission of the State plan) spec10 ified in the order beginning on the date of the

11 notice of the determination.

12 ‘‘(B) EXTENSION OF TIME PERIODS.—The

13 time periods specified in subparagraph (A) may

14 be extended by written agreement of the Sec15 retary and the State involved.

16 ‘‘(2) VIOLATIONS IN ADMINISTRATION OF

17 PLAN.—

18 ‘‘(A) IN GENERAL.—If the Secretary deter19 mines, after reasonable notice and opportunity

20 for a hearing for the State, that in the adminis21 tration of a State plan there is a substantial

22 violation of a requirement of this title, the Sec23 retary shall provide the State with written no24 tice of the determination and with an order to

25 remedy such violation. Such an order shall be-
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1 come effective prospectively, as specified in the

2 order, after the date of receipt of such written

3 notice. Such an order may include the withhold4 ing of funds, consistent with subsection (g), for

5 parts of the State plan affected by such viola6 tion, until the Secretary is satisfied that the

7 violation has been corrected.

8 ‘‘(B) EFFECTIVENESS.—If the Secretary

9 issues an order under paragraph (1), the order

10 shall become effective, except as provided in

11 subsection (d), beginning at the end of a period

12 (of not less than 30 days) specified in the order

13 beginning on the date of the notice of the deter14 mination to the State.

15 ‘‘(C) TIMELINESS OF DETERMINATIONS

16 RELATING TO REPORT-BASED COMPLIANCE.—

17 The Secretary shall make determinations under

18 this paragraph respecting violations relating to

19 information contained in an annual report

20 under section 1522, an independent evaluation

21 under section 1523, or an audit report under

22 section 1551 not later than 30 days after the

23 date of transmittal of the report or evaluation

24 to the Secretary.
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1 ‘‘(3) CONSULTATION WITH STATE.—Before

2 making a determination adverse to a State under

3 this section, the Secretary shall (within any time pe4 riods provided under this section)—

5 ‘‘(A) reasonably consult with the State in6 volved,

7 ‘‘(B) offer the State a reasonable oppor8 tunity to clarify the submission and submit fur9 ther information to substantiate compliance

10 with the requirements of this title, and

11 ‘‘(C) reasonably consider any such clari12 fications and information submitted.

13 ‘‘(4) JUSTIFICATION OF ANY INCONSISTENCIES

14 IN DETERMINATIONS.—If the Secretary makes a de15 termination under this section that is, in whole or in

16 part, inconsistent with any previous determination

17 issued by the Secretary under this title, the Sec18 retary shall include in the determination a detailed

19 explanation and justification for any such difference.

20 ‘‘(5) SUBSTANTIAL VIOLATION DEFINED.—For

21 purposes of this title, a State plan (or amendment

22 to such a plan) or the administration of the State

23 plan is considered to ‘substantially violate’ a require24 ment of this title if a provision of the plan or
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1 amendment (or an omission from the plan or amend2 ment) or the administration of the plan—

3 ‘‘(A) is material and substantial in nature

4 and effect, and

5 ‘‘(B) is inconsistent with an express re6 quirement of this title.

7 A failure to meet a strategic objective or perform8 ance goal (as described in section 1521) shall not be

9 considered to substantially violate a requirement of

10 this title.

11 ‘‘(6) RELATION TO OTHER PROVISION.—This

12 subsection shall not apply to violation of a require13 ment of subsection (a) or (b) of section 1501.

14 ‘‘(d) STATE RESPONSE TO ORDERS.—

15 ‘‘(1) STATE RESPONSE BY REVISING PLAN.—

16 ‘‘(A) IN GENERAL.—Insofar as an order

17 under subsection (b)(1) or (c)(1) relates to a

18 violation by a State plan or plan amendment, a

19 State may respond (before the date the order

20 becomes effective) to such an order by submit21 ting a written revision of the State plan or plan

22 amendment to comply with the requirements of

23 this title.

24 ‘‘(B) REVIEW OF REVISION.—In the case

25 of submission of such a revision, the Secretary
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1 shall promptly review the submission and shall,

2 in the case of an order under subsection (c)(1),

3 withhold any action on the order during the pe4 riod of such review.

5 ‘‘(C) SECRETARIAL RESPONSE.—

6 ‘‘(i) ORDERS RELATING TO GUARAN7 TEES.—In the case of a revision submitted

8 in response to an order under subsection

9 (b)(1), the revision shall not be considered

10 to have corrected the deficiency unless the

11 Secretary determines and notifies the State

12 that the State plan or amendment, as pro13 posed to be revised complies with the re14 quirements of subsections (a) and (b) of

15 section 1501. If the Secretary determines

16 that the revision does not correct the defi17 ciency, the Secretary shall notify the State

18 in writing of such determination and the

19 State may respond by seeking reconsider20 ation or a hearing under paragraph (2).

21 ‘‘(ii) OTHER ORDERS.—In the case of

22 a revision submitted in response to an

23 order under subsection (c)(1), the revision

24 shall be considered to have corrected the

25 deficiency (and the order rescinded insofar
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1 as it relates to such deficiency) unless the

2 Secretary determines and notifies the State

3 in writing, within 15 days after the date

4 the Secretary receives the revision, that the

5 State plan or amendment, as proposed to

6 be revised, still substantially violates a re7 quirement of this title. In such case the

8 State may respond by seeking reconsider9 ation or a hearing under paragraph (2).

10 ‘‘(D) REVISION RETROACTIVE.—If the re11 vision provides for compliance (in the case of an

12 order under subsection (b)(1)) or substantial

13 compliance (in the case of an order under sub14 section (c)(1)), the revision may be treated, at

15 the option of the State, as being effective either

16 as of the effective date of the provision to which

17 it relates or such later date as the State and

18 Secretary may agree.

19 ‘‘(2) STATE RESPONSE BY SEEKING RECONSID20 ERATION OR AN ADMINISTRATIVE HEARING.—A

21 State may respond to an order under subsection (b)

22 or (c) by filing a request with the Secretary for—

23 ‘‘(A) a reconsideration of the determina24 tion, pursuant to subsection (e)(1), or
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1 ‘‘(B) a review of the determination through

2 an administrative hearing, pursuant to sub3 section (e)(2).

4 In such case for an order under subsection (c), the

5 order shall not take effect before the completion of

6 the reconsideration or hearing.

7 ‘‘(3) STATE RESPONSE BY CORRECTIVE ACTION

8 PLAN.—

9 ‘‘(A) IN GENERAL.—In the case of an

10 order described in subsection (b)(2) or (c)(2)

11 that relates to a violation in the administration

12 of the State plan, a State may respond to such

13 an order by submitting a corrective action plan

14 with the Secretary to correct deficiencies in the

15 administration of the plan which are the subject

16 of the order.

17 ‘‘(B) REVIEW OF CORRECTIVE ACTION

18 PLAN.—In the case of a corrective action plan

19 submitted in response to an order under sub20 section (c)(2), the Secretary shall withhold any

21 action on the order for a period (not to exceed

22 30 days) during which the Secretary reviews

23 the corrective action plan.

24 ‘‘(C) SECRETARIAL RESPONSE.—
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1 ‘‘(i) ORDERS RELATING TO GUARAN2 TEES.—In the case of a corrective action

3 plan submitted in response to an order

4 under subsection (b)(2), the plan shall not

5 be considered to have corrected the defi6 ciency unless the Secretary determines and

7 notifies the State that the State’s adminis8 tration of the State plan, as proposed to be

9 corrected in the plan, will not violate a re10 quirement of subsection (a) or (b) of sec11 tion 1501. If the Secretary determines that

12 the plan does not correct the deficiency,

13 the Secretary shall notify the State in writ14 ing of such determination and the State

15 may respond by seeking reconsideration or

16 a hearing under paragraph (2).

17 ‘‘(ii) OTHER ORDERS.—In the case of

18 a corrective action plan submitted in re19 sponse to an order under subsection (c)(2),

20 the corrective action plan shall be consid21 ered to have corrected the deficiency (and

22 the order rescinded insofar as it relates to

23 such deficiency) unless the Secretary deter24 mines and notifies the State in writing,

25 within 15 days after the date the Secretary
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1 receives the corrective action plan, that the

2 State’s administration of the State plan, as

3 proposed to be corrected in the plan, will

4 still substantially violate a requirement of

5 this title. In such case the State may re6 spond by seeking reconsideration or a

7 hearing under paragraph (2).

8 ‘‘(4) STATE RESPONSE BY WITHDRAWAL OF

9 PLAN AMENDMENT; FAILURE TO RESPOND.—Insofar

10 as an order relates to a violation in a plan amend11 ment submitted, a State may respond to such an

12 order by withdrawing the plan amendment and the

13 State plan shall be treated as though the amend14 ment had not been made.

15 ‘‘(e) ADMINISTRATIVE REVIEW AND HEARING.—

16 ‘‘(1) RECONSIDERATION.—Within 30 days after

17 the date of receipt of a request under subsection

18 (d)(2)(A), the Secretary shall notify the State of the

19 time and place at which a hearing will be held for

20 the purpose of reconsidering the Secretary’s deter21 mination. The hearing shall be held not less than 20

22 days nor more than 60 days after the date notice of

23 the hearing is furnished to the State, unless the Sec24 retary and the State agree in writing to holding the

25 hearing at another time. The Secretary shall affirm,
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1 modify, or reverse the original determination within

2 60 days of the conclusion of the hearing.

3 ‘‘(2) ADMINISTRATIVE HEARING.—Within 30

4 days after the date of receipt of a request under

5 subsection (d)(2)(B), an administrative law judge

6 shall schedule a hearing for the purpose of reviewing

7 the Secretary’s determination. The hearing shall be

8 held not less than 20 days nor more than 60 days

9 after the date notice of the hearing is furnished to

10 the State, unless the Secretary and the State agree

11 in writing to holding the hearing at another time.

12 The administrative law judge shall affirm, modify, or

13 reverse the determination within 60 days of the con14 clusion of the hearing.

15 ‘‘(f) JUDICIAL REVIEW.—

16 ‘‘(1) IN GENERAL.—A State which is dissatis17 fied with a final determination made by the Sec18 retary under subsection (e)(1) or a final determina19 tion of an administrative law judge under subsection

20 (e)(2) may, within 60 days after it has been notified

21 of such determination, file with the United States

22 court of appeals for the circuit in which the State

23 is located a petition for review of such determina24 tion. A copy of the petition shall be forthwith trans25 mitted by the clerk of the court to the Secretary
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1 and, in the case of a determination under subsection

2 (e)(2), to the administrative law judge involved. The

3 Secretary (or judge involved) thereupon shall file in

4 the court the record of the proceedings on which the

5 final determination was based, as provided in section

6 1502 of title 28, United States Code. Except as pro7 vided in section 1508, only the Secretary, in accord8 ance with this title, may compel a State under Fed9 eral law to comply with the provisions of this title

10 or a State plan, or otherwise enforce a provision of

11 this title against a State, and no action may be filed

12 under Federal law against a State in relation to the

13 State’s compliance, or failure to comply, with the

14 provisions of this title or of a State plan except

15 under section 1508 or by the Secretary as provided

16 under this subsection.

17 ‘‘(2) STANDARD FOR REVIEW.—The findings of

18 fact by the Secretary or administrative law judge, if

19 supported by substantial evidence, shall be conclu20 sive, but the court, for good cause shown, may re21 mand the case to the Secretary or judge to take fur22 ther evidence, and the Secretary or judge may there23 upon make new or modified findings of fact and may

24 modify a previous determination, and shall certify to

25 the court the transcript and record of the further
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1 proceedings. Such new or modified findings of fact

2 shall likewise be conclusive if supported by substan3 tial evidence.

4 ‘‘(3) JURISDICTION OF APPELLATE COURT.—

5 The court shall have jurisdiction to affirm the action

6 of the Secretary or judge or to set it aside, in whole

7 or in part. The judgment of the court shall be sub8 ject to review by the Supreme Court of the United

9 States upon certiorari or certification as provided in

10 section 1254 of title 28, United States Code.

11 ‘‘(g) WITHHOLDING OF FUNDS.—

12 ‘‘(1) IN GENERAL.—Any order under this sec13 tion relating to the withholding of funds shall be ef14 fective not earlier than the effective date of the

15 order and shall only relate to the portions of a State

16 plan or administration thereof which violate a re17 quirement of subsection (a) or (b) of section 1501

18 or substantially violate another requirement of this

19 title. In the case of a failure to meet a set-aside re20 quirement under section 1502(c), any withholding

21 shall only apply to the extent of such failure.

22 ‘‘(2) SUSPENSION OF WITHHOLDING.—The Sec23 retary may suspend withholding of funds under

24 paragraph (1) during the period reconsideration or
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1 administrative and judicial review is pending under

2 subsection (e) or (f).

3 ‘‘(3) RESTORATION OF FUNDS.—Any funds

4 withheld under this subsection under an order shall

5 be immediately restored to a State—

6 ‘‘(A) to the extent and at the time the

7 order is—

8 ‘‘(i) modified or withdrawn by the

9 Secretary upon reconsideration,

10 ‘‘(ii) modified or reversed by an ad11 ministrative law judge, or

12 ‘‘(iii) set aside (in whole or in part) by

13 an appellate court; or

14 ‘‘(B) when the Secretary determines that

15 the deficiency which was the basis for the order

16 is corrected;

17 ‘‘(C) when the Secretary determines that

18 violation which was the basis for the order is

19 resolved or the amendment which was the basis

20 for the order is withdrawn; or

21 ‘‘(D) at any time upon the initiative of the

22 Secretary.

23 ‘‘(h) INDIVIDUAL COMPLAINT PROCESS.—The Sec24 retary shall provide for a process under which an individ25 ual may notify the Secretary concerning a State’s failure
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1 to provide medical assistance as required under the State

2 plan or otherwise comply with the requirements of this

3 title or such plan, including any failure to comply with

4 a requirement of subsection (a) or (b) of section 1501.

5 If the Secretary finds that there is a pattern of complaints

6 with respect to a State or that a particular failure or find7 ing of noncompliance is egregious, the Secretary shall no8 tify the chief executive officer of the State of such finding

9 and shall notify the Congress if the State fails to respond

10 to such notification within a reasonable period of time.

11 ‘‘SEC. 1530. SECRETARIAL AUTHORITY.

12 ‘‘(a) NEGOTIATED AGREEMENT AND DISPUTE RESO13 LUTION.—

14 ‘‘(1) NEGOTIATIONS.—Nothing in this part

15 shall be construed as preventing the Secretary and

16 a State from at any time negotiating a satisfactory

17 resolution to any dispute concerning the approval of

18 a State plan (or amendments to a State plan) or the

19 compliance of a State plan (including its administra20 tion) with requirements of this title.

21 ‘‘(2) COOPERATION.—The Secretary shall act in

22 a cooperative manner with the States in carrying out

23 this title. In the event of a dispute between a State

24 and the Secretary, the Secretary shall, whenever

25 practicable, engage in informal dispute resolution ac-
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1 tivities in lieu of formal enforcement or sanctions

2 under section 1529.

3 ‘‘(b) LIMITATIONS ON DELEGATION OF DECISION4 MAKING AUTHORITY.—The Secretary may not delegate

5 (other than to the Administrator of the Health Care Fi6 nancing Administration) the authority to make determina7 tions or reconsiderations respecting the approval of State

8 plans (or amendments to such plans) or the compliance

9 of a State plan (including its administration) with require10 ments of this title. Such Administrator may not further

11 delegate such authority to any individual, including any

12 regional official of such Administration.

13 ‘‘(c) REQUIRING FORMAL RULEMAKING FOR

14 CHANGES IN SECRETARIAL ADMINISTRATION.—The Sec15 retary shall carry out the administration of the program

16 under this title only through a prospective formal rule17 making process, including issuing notices of proposed rule18 making, publishing proposed rules or modifications to

19 rules in the Federal Register, and soliciting public com20 ment.

21 ‘‘PART D—PROGRAM INTEGRITY AND QUALITY

22 ‘‘SEC. 1551. USE OF AUDITS TO ACHIEVE FISCAL INTEGRITY.

23 ‘‘(a) FINANCIAL AUDITS OF PROGRAM.—

24 ‘‘(1) IN GENERAL.—Each State plan shall pro25 vide for an annual audit of the State’s expenditures
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1 from amounts received under this title, in compli2 ance with chapter 75 of title 31, United States

3 Code.

4 ‘‘(2) VERIFICATION AUDITS.—If, after consulta5 tion with the State and the Comptroller General and

6 after a fair hearing, the Secretary determines that

7 a State’s audit under paragraph (1) was performed

8 in substantial violation of chapter 75 of title 31,

9 United States Code, the Secretary may—

10 ‘‘(A) require that the State provide for a

11 verification audit in compliance with such chap12 ter, or

13 ‘‘(B) conduct such a verification audit.

14 ‘‘(3) AVAILABILITY OF AUDIT REPORTS.—With15 in 30 days after completion of each audit or verifica16 tion audit under this subsection, the State shall—

17 ‘‘(A) provide the Secretary with a copy of

18 the audit report, including the State’s response

19 to any recommendations of the auditor, and

20 ‘‘(B) make the audit report available for

21 public inspection in the same manner as pro22 posed State plan amendments are made avail23 able under section 1525.

24 ‘‘(b) FISCAL CONTROLS.—
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1 ‘‘(1) IN GENERAL.—With respect to the ac2 counting and expenditure of funds under this title,

3 each State shall adopt and maintain such fiscal con4 trols, accounting procedures, and data processing

5 safeguards as the State deems reasonably necessary

6 to assure the fiscal integrity of the State’s activities

7 under this title.

8 ‘‘(2) CONSISTENCY WITH GENERALLY ACCEPT9 ED ACCOUNTING PRINCIPLES.—Such controls and

10 procedures shall be generally consistent with gen11 erally accepted accounting principles as recognized

12 by the Governmental Accounting Standards Board

13 or the Comptroller General.

14 ‘‘(c) AUDITS OF PROVIDERS.—Each State plan shall

15 provide that the records of any entity providing items or

16 services for which payment may be made under the plan

17 may be audited as necessary to ensure that proper pay18 ments are made under the plan.

19 ‘‘SEC. 1552. FRAUD PREVENTION PROGRAM.

20 ‘‘(a) ESTABLISHMENT.—Each State plan shall pro21 vide for the establishment and maintenance of an effective

22 program for the detection and prevention of fraud and

23 abuse by beneficiaries, providers, and others in connection

24 with the operation of the program.
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1 ‘‘(b) PROGRAM REQUIREMENTS.—The program es2 tablished pursuant to subsection (a) shall include at least

3 the following requirements:

4 ‘‘(1) DISCLOSURE OF INFORMATION.—Any dis5 closing entity (as defined in section 1124(a)) receiv6 ing payments under the State plan shall comply with

7 the requirements of section 1124.

8 ‘‘(2) SUPPLY OF INFORMATION.—An entity

9 (other than an individual practitioner or a group of

10 practitioners) that furnishes, or arranges for the fur11 nishing of, an item or service under the State plan

12 shall supply upon request specifically addressed to

13 the entity by the Secretary or the State agency the

14 information described in section 1128(b)(9).

15 ‘‘(3) EXCLUSION.—

16 ‘‘(A) IN GENERAL.—The State plan shall

17 exclude any specified individual or entity from

18 participation in the plan for the period specified

19 by the Secretary when required by the Sec20 retary to do so pursuant to section 1128 or sec21 tion 1128A, and provide that no payment may

22 be made under the plan with respect to any

23 item or service furnished by such individual or

24 entity during such period.
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1 ‘‘(B) AUTHORITY.—In addition to any

2 other authority, a State may exclude any indi3 vidual or entity for purposes of participating

4 under the State plan for any reason for which

5 the Secretary could exclude the individual or

6 entity from participation in a program under

7 title XVIII or under section 1128, 1128A, or

8 1866(b)(2).

9 ‘‘(4) NOTICE.—The State plan shall provide

10 that whenever a provider of services or any other

11 person is terminated, suspended, or otherwise sanc12 tioned or prohibited from participating under the

13 plan, the State agency responsible for administering

14 the plan shall promptly notify the Secretary and, in

15 the case of a physician, the State medical licensing

16 board of such action.

17 ‘‘(5) ACCESS TO INFORMATION.—The State

18 plan shall provide that the State will provide infor19 mation and access to certain information respecting

20 sanctions taken against health care practitioners and

21 providers by State licensing authorities in accord22 ance with section 1553.
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1 ‘‘SEC. 1553. INFORMATION CONCERNING SANCTIONS TAKEN

2 BY STATE LICENSING AUTHORITIES AGAINST

3 HEALTH CARE PRACTITIONERS AND PROVID4 ERS.

5 ‘‘(a) INFORMATION REPORTING REQUIREMENT.—

6 The requirement referred to in section 1552(b)(5) is that

7 the State must provide for the following:

8 ‘‘(1) INFORMATION REPORTING SYSTEM.—The

9 State must have in effect a system of reporting the

10 following information with respect to formal proceed11 ings (as defined by the Secretary in regulations)

12 concluded against a health care practitioner or entity

13 by any authority of the State (or of a political sub14 division thereof) responsible for the licensing of

15 health care practitioners (or any peer review organi16 zation or private accreditation entity reviewing the

17 services provided by health care practitioners) or en18 tities:

19 ‘‘(A) Any adverse action taken by such li20 censing authority as a result of the proceeding,

21 including any revocation or suspension of a li22 cense (and the length of any such suspension),

23 reprimand, censure, or probation.

24 ‘‘(B) Any dismissal or closure of the pro25 ceedings by reason of the practitioner or entity
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1 surrendering the license or leaving the State or

2 jurisdiction.

3 ‘‘(C) Any other loss of the license of the

4 practitioner or entity, whether by operation of

5 law, voluntary surrender, or otherwise.

6 ‘‘(D) Any negative action or finding by

7 such authority, organization, or entity regard8 ing the practitioner or entity.

9 ‘‘(2) ACCESS TO DOCUMENTS.—The State must

10 provide the Secretary (or an entity designated by the

11 Secretary) with access to such documents of the au12 thority described in paragraph (1) as may be nec13 essary for the Secretary to determine the facts and

14 circumstances concerning the actions and determina15 tions described in such paragraph for the purpose of

16 carrying out this Act.

17 ‘‘(b) FORM OF INFORMATION.—The information de18 scribed in subsection (a)(1) shall be provided to the Sec19 retary (or to an appropriate private or public agency,

20 under suitable arrangements made by the Secretary with

21 respect to receipt, storage, protection of confidentiality,

22 and dissemination of information) in such a form and

23 manner as the Secretary determines to be appropriate in

24 order to provide for activities of the Secretary under this
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1 Act and in order to provide, directly or through suitable

2 arrangements made by the Secretary, information—

3 ‘‘(1) to agencies administering Federal health

4 care programs, including private entities administer5 ing such programs under contract,

6 ‘‘(2) to licensing authorities described in sub7 section (a)(1),

8 ‘‘(3) to State agencies administering or super9 vising the administration of State health care pro10 grams (as defined in section 1128(h)),

11 ‘‘(4) to utilization and quality control peer re12 view organizations described in part B of title XI

13 and to appropriate entities with contracts under sec14 tion 1154(a)(4)(C) with respect to eligible organiza15 tions reviewed under the contracts,

16 ‘‘(5) to State fraud control units (as defined in

17 section 1534),

18 ‘‘(6) to hospitals and other health care entities

19 (as defined in section 431 of the Health Care Qual20 ity Improvement Act of 1986), with respect to physi21 cians or other licensed health care practitioners that

22 have entered (or may be entering) into an employ23 ment or affiliation relationship with, or have applied

24 for clinical privileges or appointments to the medical

25 staff of, such hospitals or other health care entities
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1 (and such information shall be deemed to be dis2 closed pursuant to section 427 of, and be subject to

3 the provisions of, that Act),

4 ‘‘(7) to the Attorney General and such other

5 law enforcement officials as the Secretary deems ap6 propriate, and

7 ‘‘(8) upon request, to the Comptroller General,

8 in order for such authorities to determine the fitness

9 of individuals to provide health care services, to pro10 tect the health and safety of individuals receiving

11 health care through such programs, and to protect

12 the fiscal integrity of such programs.

13 ‘‘(c) CONFIDENTIALITY OF INFORMATION PRO14 VIDED.—The Secretary shall provide for suitable safe15 guards for the confidentiality of the information furnished

16 under subsection (a). Nothing in this subsection shall pre17 vent the disclosure of such information by a party which

18 is otherwise authorized, under applicable State law, to

19 make such disclosure.

20 ‘‘(d) APPROPRIATE COORDINATION.—The Secretary

21 shall provide for the maximum appropriate coordination

22 in the implementation of subsection (a) of this section and

23 section 422 of the Health Care Quality Improvement Act

24 of 1986 and section 1128E.
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1 ‘‘SEC. 1554. STATE FRAUD CONTROL UNITS.

2 ‘‘(a) IN GENERAL.—Each State plan shall provide for

3 a State fraud control unit described in subsection (b) that

4 effectively carries out the functions and requirements de5 scribed in such subsection, unless the State demonstrates

6 to the satisfaction of the Secretary that the effective oper7 ation of such a unit in the State would not be cost-effective

8 because minimal fraud exists in connection with the provi9 sion of covered services to eligible individuals under the

10 plan, and that beneficiaries under the plan will be pro11 tected from abuse and neglect in connection with the pro12 vision of medical assistance under the plan without the

13 existence of such a unit.

14 ‘‘(b) UNITS DESCRIBED.—For purposes of this sec15 tion, the term ‘State fraud control unit’ means a single

16 identifiable entity of the State government which meets

17 the following requirements:

18 ‘‘(1) ORGANIZATION.—The entity—

19 ‘‘(A) is a unit of the office of the State At20 torney General or of another department of

21 State government which possesses statewide au22 thority to prosecute individuals for criminal vio23 lations;

24 ‘‘(B) is in a State the constitution of which

25 does not provide for the criminal prosecution of
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1 individuals by a statewide authority and has

2 formal procedures that—

3 ‘‘(i) assure its referral of suspected

4 criminal violations relating to the program

5 under this title to the appropriate author6 ity or authorities in the State for prosecu7 tion, and

8 ‘‘(ii) assure its assistance of, and co9 ordination with, such authority or authori10 ties in such prosecutions; or

11 ‘‘(C) has a formal working relationship

12 with the office of the State Attorney General

13 and has formal procedures (including proce14 dures for its referral of suspected criminal vio15 lations to such office) which provide effective

16 coordination of activities between the entity and

17 such office with respect to the detection, inves18 tigation, and prosecution of suspected criminal

19 violations relating to the program under this

20 title.

21 ‘‘(2) INDEPENDENCE.—The entity is separate

22 and distinct from any State agency that has prin23 cipal responsibilities for administering or supervising

24 the administration of the State plan.
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1 ‘‘(3) FUNCTION.—The entity’s function is con2 ducting a statewide program for the investigation

3 and prosecution of violations of all applicable State

4 laws regarding any and all aspects of fraud in con5 nection with any aspect of the provision of medical

6 assistance and the activities of providers of such as7 sistance under the State plan.

8 ‘‘(4) REVIEW OF COMPLAINTS.—The entity has

9 procedures for reviewing complaints of the abuse

10 and neglect of patients of health care facilities which

11 receive payments under the State plan under this

12 title, and, where appropriate, for acting upon such

13 complaints under the criminal laws of the State or

14 for referring them to other State agencies for action.

15 ‘‘(5) OVERPAYMENTS.—

16 ‘‘(A) IN GENERAL.—The entity provides

17 for the collection, or referral for collection to a

18 single State agency, of overpayments that are

19 made under the State plan to health care pro20 viders and that are discovered by the entity in

21 carrying out its activities.

22 ‘‘(B) TREATMENT OF CERTAIN OVERPAY23 MENTS.—If an overpayment is the direct result

24 of the failure of the provider (or the provider’s

25 billing agent) to adhere to a change in the
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1 State’s billing instructions, the entity may re2 cover the overpayment only if the entity dem3 onstrates that the provider (or the provider’s

4 billing agent) received prior written or elec5 tronic notice of the change in the billing in6 structions before the submission of the claims

7 on which the overpayment is based.

8 ‘‘(6) PERSONNEL.—The entity employs such

9 auditors, attorneys, investigators, and other nec10 essary personnel and is organized in such a manner

11 as is necessary to promote the effective and efficient

12 conduct of the entity’s activities.

13 ‘‘SEC. 1555. RECOVERIES FROM THIRD PARTIES AND OTH14 ERS.

15 ‘‘(a) THIRD PARTY LIABILITY.—Each State plan

16 shall provide for reasonable steps—

17 ‘‘(1) to ascertain the legal liability of third par18 ties to pay for care and services available under the

19 plan, including the collection of sufficient informa20 tion to enable States to pursue claims against third

21 parties, and

22 ‘‘(2) to seek reimbursement for medical assist23 ance provided to the extent legal liability is estab24 lished where the amount expected to be recovered ex25 ceeds the costs of the recovery.
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1 ‘‘(b) BENEFICIARY PROTECTION.—

2 ‘‘(1) IN GENERAL.—Each State plan shall pro3 vide that in the case of a person furnishing services

4 under the plan for which a third party may be liable

5 for payment—

6 ‘‘(A) the person may not seek to collect

7 from the individual (or financially responsible

8 relative) payment of an amount for the service

9 more than could be collected under the plan in

10 the absence of such third party liability, and

11 ‘‘(B) may not refuse to furnish services to

12 such an individual because of a third party’s

13 potential liability for payment for the service.

14 ‘‘(2) PENALTY.—A State plan may provide for

15 a reduction of any payment amount otherwise due

16 with respect to a person who furnishes services

17 under the plan in an amount equal to up to 3 times

18 the amount of any payment sought to be collected by

19 that person in violation of paragraph (1)(A).

20 ‘‘(c) GENERAL LIABILITY.—The State shall prohibit

21 any health insurer, including a group health plan as de22 fined in section 607 of the Employee Retirement Income

23 Security Act of 1974, a service benefit plan, or a health

24 maintenance organization, in enrolling an individual or in

25 making any payments for benefits to the individual or on
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1 the individual’s behalf, from taking into account that the

2 individual is eligible for or is provided medical assistance

3 under a State plan for any State.

4 ‘‘(d) ACQUISITION OF RIGHTS OF BENEFICIARIES.—

5 To the extent that payment has been made under a State

6 plan in any case where a third party has a legal liability

7 to make payment for such assistance, the State shall have

8 in effect laws under which, to the extent that payment

9 has been made under the plan for health care items or

10 services furnished to an individual, the State is considered

11 to have acquired the rights of such individual to payment

12 by any other party for such health care items or services.

13 ‘‘(e) ASSIGNMENT OF MEDICAL SUPPORT RIGHTS.—

14 The State plan shall provide for mandatory assignment

15 of rights of payment for medical support and other medi16 cal care owed to recipients in accordance with section

17 1556.

18 ‘‘(f) REQUIRED LAWS RELATING TO MEDICAL CHILD

19 SUPPORT.—

20 ‘‘(1) IN GENERAL.—Each State with a State

21 plan under this title shall have in effect the following

22 laws:

23 ‘‘(A) A law that prohibits an insurer from

24 denying enrollment of a child under the health
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1 coverage of the child’s parent on the ground

2 that—

3 ‘‘(i) the child was born out of wedlock,

4 ‘‘(ii) the child is not claimed as a de5 pendent on the parent’s Federal income

6 tax return, or

7 ‘‘(iii) the child does not reside with

8 the parent or in the insurer’s service area.

9 ‘‘(B) In any case in which a parent is re10 quired by a court or administrative order to

11 provide health coverage for a child and the par12 ent is eligible for family health coverage

13 through an insurer, a law that requires such in14 surer—

15 ‘‘(i) to permit such parent to enroll

16 under such family coverage any such child

17 who is otherwise eligible for such coverage

18 (without regard to any enrollment season

19 restrictions);

20 ‘‘(ii) if such a parent is enrolled but

21 fails to make application to obtain cov22 erage of such child, to enroll such child

23 under such family coverage upon applica24 tion by the child’s other parent or by the
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1 State agency administering the program

2 under this title or part D of title IV; and

3 ‘‘(iii) not to disenroll, or eliminate

4 coverage of, such a child unless the insurer

5 is provided satisfactory written evidence

6 that—

7 ‘‘(I) such court or administrative

8 order is no longer in effect, or

9 ‘‘(II) the child is or will be en10 rolled in comparable health coverage

11 through another insurer which will

12 take effect not later than the effective

13 date of such disenrollment.

14 ‘‘(C) In any case in which a parent is re15 quired by a court or administrative order to

16 provide health coverage for a child and the par17 ent is eligible for family health coverage

18 through an employer doing business in the

19 State, a law that requires such employer—

20 ‘‘(i) to permit such parent to enroll

21 under such family coverage any such child

22 who is otherwise eligible for such coverage

23 (without regard to any enrollment season

24 restrictions);
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1 ‘‘(ii) if such a parent is enrolled but

2 fails to make application to obtain cov3 erage of such child, to enroll such child

4 under such family coverage upon applica5 tion by the child’s other parent or by the

6 State agency administering the program

7 under this title or part D of title IV; and

8 ‘‘(iii) not to disenroll (or eliminate

9 coverage of) any such child unless—

10 ‘‘(I) the employer is provided sat11 isfactory written evidence that such

12 court or administrative order is no

13 longer in effect, or the child is or will

14 be enrolled in comparable health cov15 erage which will take effect not later

16 than the effective date of such

17 disenrollment, or

18 ‘‘(II) the employer has eliminated

19 family health coverage for all of its

20 employees; and

21 ‘‘(iv) to withhold from such employ22 ee’s compensation the employee’s share (if

23 any) of premiums for health coverage (ex24 cept that the amount so withheld may not

25 exceed the maximum amount permitted to
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1 be withheld under section 303(b) of the

2 Consumer Credit Protection Act), and to

3 pay such share of premiums to the insurer,

4 except that the Secretary may provide by

5 regulation for appropriate circumstances

6 under which an employer may withhold

7 less than such employee’s share of such

8 premiums.

9 ‘‘(D) A law that prohibits an insurer from

10 imposing requirements on a State agency,

11 which has been assigned the rights of an indi12 vidual eligible for medical assistance under this

13 title and covered for health benefits from the

14 insurer, that are different from requirements

15 applicable to an agent or assignee of any other

16 individual so covered.

17 ‘‘(E) A law that requires an insurer, in

18 any case in which a child has health coverage

19 through the insurer of a noncustodial parent—

20 ‘‘(i) to provide such information to the

21 custodial parent as may be necessary for

22 the child to obtain benefits through such

23 coverage,

24 ‘‘(ii) to permit the custodial parent

25 (or provider, with the custodial parent’s
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1 approval) to submit claims for covered

2 services without the approval of the non3 custodial parent, and

4 ‘‘(iii) to make payment on claims sub5 mitted in accordance with clause (ii) di6 rectly to such custodial parent, the pro7 vider, or the State agency.

8 ‘‘(F) A law that permits the State agency

9 under this title to garnish the wages, salary, or

10 other employment income of, and requires with11 holding amounts from State tax refunds to, any

12 person who—

13 ‘‘(i) is required by court or adminis14 trative order to provide coverage of the

15 costs of health services to a child who is el16 igible for medical assistance under this

17 title,

18 ‘‘(ii) has received payment from a

19 third party for the costs of such services to

20 such child, but

21 ‘‘(iii) has not used such payments to

22 reimburse, as appropriate, either the other

23 parent or guardian of such child or the

24 provider of such services,
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1 to the extent necessary to reimburse the State

2 agency for expenditures for such costs under its

3 plan under this title, but any claims for current

4 or past-due child support shall take priority

5 over any such claims for the costs of such serv6 ices.

7 ‘‘(2) DEFINITION.—For purposes of this sub8 section, the term ‘insurer’ includes a group health

9 plan, as defined in section 607(1) of the Employee

10 Retirement Income Security Act of 1974, a health

11 maintenance organization, and an entity offering a

12 service benefit plan.

13 ‘‘(g) ESTATE RECOVERIES AND LIENS PER14 MITTED.—A State may take such actions as it considers

15 appropriate to adjust or recover from the individual or the

16 individual’s estate any amounts paid as medical assistance

17 to or on behalf of the individual under the State plan, in18 cluding through the imposition of liens against the prop19 erty or estate of the individual to the extent consistent

20 with section 1506.

21 ‘‘SEC. 1556. ASSIGNMENT OF RIGHTS OF PAYMENT.

22 ‘‘(a) IN GENERAL.—For the purpose of assisting in

23 the collection of medical support payments and other pay24 ments for medical care owed to recipients of medical as25 sistance under the State plan, each State plan shall—
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1 ‘‘(1) provide that, as a condition of eligibility

2 for medical assistance under the plan to an individ3 ual who has the legal capacity to execute an assign4 ment for himself, the individual is required—

5 ‘‘(A) to assign the State any rights, of the

6 individual or of any other person who is eligible

7 for medical assistance under the plan and on

8 whose behalf the individual has the legal au9 thority to execute an assignment of such rights,

10 to support (specified as support for the purpose

11 of medical care by a court or administrative

12 order) and to payment for medical care from

13 any third party,

14 ‘‘(B) to cooperate with the State (i) in es15 tablishing the paternity of such person (referred

16 to in subparagraph (A)) if the person is a child

17 born out of wedlock, and (ii) in obtaining sup18 port and payments (described in subparagraph

19 (A)) for himself and for such person, unless (in

20 either case) the individual is a pregnant woman

21 or the individual is found to have good cause

22 for refusing to cooperate as determined by the

23 State, and

24 ‘‘(C) to cooperate with the State in identi25 fying, and providing information to assist the
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1 State in pursuing, any third party who may be

2 liable to pay for care and services available

3 under the plan, unless such individual has good

4 cause for refusing to cooperate as determined

5 by the State; and

6 ‘‘(2) provide for entering into cooperative ar7 rangements, including financial arrangements, with

8 any appropriate agency of any State (including, with

9 respect to the enforcement and collection of rights of

10 payment for medical care by or through a parent,

11 with a State’s agency established or designated

12 under section 454(3)) and with appropriate courts

13 and law enforcement officials, to assist the agency or

14 agencies administering the plan with respect to—

15 ‘‘(A) the enforcement and collection of

16 rights to support or payment assigned under

17 this section, and

18 ‘‘(B) any other matters of common con19 cern.

20 ‘‘(b) USE OF AMOUNTS COLLECTED.—Such part of

21 any amount collected by the State under an assignment

22 made under the provisions of this section shall be retained

23 by the State as is necessary to reimburse it for medical

24 assistance payments made on behalf of an individual with

25 respect to whom such assignment was executed (with ap-
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1 propriate reimbursement of the Federal Government to

2 the extent of its participation in the financing of such

3 medical assistance), and the remainder of such amount

4 collected shall be paid to such individual.

5 ‘‘SEC. 1557. QUALITY ASSURANCE REQUIREMENTS FOR

6 NURSING FACILITIES.

7 ‘‘(a) NURSING FACILITY DEFINED.—In this title, the

8 term ‘nursing facility’ means an institution (or a distinct

9 part of an institution) which—

10 ‘‘(1) is primarily engaged in providing to resi11 dents—

12 ‘‘(A) skilled nursing care and related serv13 ices for residents who require medical or nurs14 ing care,

15 ‘‘(B) rehabilitation services for the reha16 bilitation of injured, disabled, or sick persons,

17 or

18 ‘‘(C) on a regular basis, health-related care

19 and services to individuals who because of their

20 mental or physical condition require care and

21 services (above the level of room and board)

22 which can be made available to them only

23 through institutional facilities,

24 and is not primarily for the care and treatment of

25 mental diseases;
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1 ‘‘(2) has in effect a transfer agreement (meet2 ing the requirements of section 1861(l)) with one or

3 more hospitals having agreements in effect under

4 section 1866; and

5 ‘‘(3) meets the requirements for a nursing facil6 ity described in subsections (b), (c), and (d) of this

7 section.

8 Such term also includes any facility which is located in

9 a State on an Indian reservation and is certified by the

10 Secretary as meeting the requirements of paragraph (1)

11 and subsections (b), (c), and (d).

12 ‘‘(b) REQUIREMENTS RELATING TO PROVISION OF

13 SERVICES.—

14 ‘‘(1) QUALITY OF LIFE.—

15 ‘‘(A) IN GENERAL.—A nursing facility

16 must care for its residents in such a manner

17 and in such an environment as will promote

18 maintenance or enhancement of the quality of

19 life of each resident.

20 ‘‘(B) QUALITY ASSESSMENT AND ASSUR21 ANCE.—A nursing facility must maintain a

22 quality assessment and assurance committee,

23 consisting of the director of nursing services, a

24 physician designated by the facility, and at least

25 3 other members of the facility’s staff, which (i)
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1 meets at least quarterly to identify issues with

2 respect to which quality assessment and assur3 ance activities are necessary and (ii) develops

4 and implements appropriate plans of action to

5 correct identified quality deficiencies. A State or

6 the Secretary may not require disclosure of the

7 records of such committee except insofar as

8 such disclosure is related to the compliance of

9 such committee with the requirements of this

10 subparagraph.

11 ‘‘(2) SCOPE OF SERVICES AND ACTIVITIES

12 UNDER PLAN OF CARE.—A nursing facility must

13 provide services and activities to attain or maintain

14 the highest practicable physical, mental, and

15 psychosocial well-being of each resident in accord16 ance with a written plan of care which—

17 ‘‘(A) describes the medical, nursing, and

18 psychosocial needs of the resident and how such

19 needs will be met;

20 ‘‘(B) is initially prepared, with the partici21 pation to the extent practicable of the resident

22 or the resident’s family or legal representative,

23 by a team which includes the resident’s attend24 ing physician and a registered professional

25 nurse with responsibility for the resident; and
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1 ‘‘(C) is periodically reviewed and revised by

2 such team after each assessment under para3 graph (3).

4 ‘‘(3) RESIDENTS’ ASSESSMENT.—

5 ‘‘(A) REQUIREMENT.—A nursing facility

6 must conduct a comprehensive, accurate, stand7 ardized, reproducible assessment of each resi8 dent’s functional capacity, which assessment—

9 ‘‘(i) describes the resident’s capability

10 to perform daily life functions and signifi11 cant impairments in functional capacity;

12 ‘‘(ii) is based on a uniform minimum

13 data set specified by the Secretary under

14 subsection (f)(6)(A);

15 ‘‘(iii) uses an instrument which is

16 specified by the State under subsection

17 (e)(5); and

18 ‘‘(iv) includes the identification of

19 medical problems.

20 ‘‘(B) CERTIFICATION.—

21 ‘‘(i) IN GENERAL.—Each such assess22 ment must be conducted or coordinated

23 (with the appropriate participation of

24 health professionals) by a registered pro25 fessional nurse who signs and certifies the
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1 completion of the assessment. Each indi2 vidual who completes a portion of such an

3 assessment shall sign and certify as to the

4 accuracy of that portion of the assessment.

5 ‘‘(ii) PENALTY FOR FALSIFICATION.—

6 ‘‘(I) An individual who willfully

7 and knowingly certifies under clause

8 (i) a material and false statement in

9 a resident assessment is subject to a

10 civil money penalty of not more than

11 $1,000 with respect to each assess12 ment.

13 ‘‘(II) An individual who willfully

14 and knowingly causes another individ15 ual to certify under clause (i) a mate16 rial and false statement in a resident

17 assessment is subject to a civil money

18 penalty of not more than $5,000 with

19 respect to each assessment.

20 ‘‘(III) The provisions of section

21 1128A (other than subsections (a)

22 and (b)) shall apply to a civil money

23 penalty under this clause in the same

24 manner as such provisions apply to a
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1 penalty or proceeding under section

2 1128A(a).

3 ‘‘(iii) USE OF INDEPENDENT ASSES4 SORS.—If a State determines, under a sur5 vey under subsection (g) or otherwise, that

6 there has been a knowing and willful cer7 tification of false assessments under this

8 paragraph, the State may require (for a

9 period specified by the State) that resident

10 assessments under this paragraph be con11 ducted and certified by individuals who are

12 independent of the facility and who are ap13 proved by the State.

14 ‘‘(C) FREQUENCY.—

15 ‘‘(i) IN GENERAL.—Such an assess16 ment must be conducted—

17 ‘‘(I) promptly upon (but no later

18 than 14 days after the date of) admis19 sion for each individual admitted;

20 ‘‘(II) promptly after a significant

21 change in the resident’s physical or

22 mental condition; and

23 ‘‘(III) in no case less often than

24 once every 12 months.
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1 ‘‘(ii) RESIDENT REVIEW.—The nurs2 ing facility must examine each resident no

3 less frequently than once every 3 months

4 and, as appropriate, revise the resident’s

5 assessment to assure the continuing accu6 racy of the assessment.

7 ‘‘(D) USE.—The results of such an assess8 ment shall be used in developing, reviewing, and

9 revising the resident’s plan of care under para10 graph (2).

11 ‘‘(E) COORDINATION.—Such assessments

12 shall be coordinated with any State-required

13 preadmission screening program to the maxi14 mum extent practicable in order to avoid dupli15 cative testing and effort. In addition, a nursing

16 facility shall notify the State mental health au17 thority or State mental retardation or devel18 opmental disability authority, as applicable,

19 promptly after a significant change in the phys20 ical or mental condition of a resident who is

21 mentally ill or mentally retarded.

22 ‘‘(4) PROVISION OF SERVICES AND ACTIVI23 TIES.—

24 ‘‘(A) IN GENERAL.—To the extent needed

25 to fulfill all plans of care described in para-
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1 graph (2), a nursing facility must provide (or

2 arrange for the provision of)—

3 ‘‘(i) nursing and related services and

4 specialized rehabilitative services to attain

5 or maintain the highest practicable phys6 ical, mental, and psychosocial well-being of

7 each resident;

8 ‘‘(ii) medically-related social services

9 to attain or maintain the highest prac10 ticable physical, mental, and psychosocial

11 well-being of each resident;

12 ‘‘(iii) pharmaceutical services (includ13 ing procedures that assure the accurate ac14 quiring, receiving, dispensing, and admin15 istering of all drugs and biologicals) to

16 meet the needs of each resident;

17 ‘‘(iv) dietary services that assure that

18 the meals meet the daily nutritional and

19 special dietary needs of each resident;

20 ‘‘(v) an on-going program, directed by

21 a qualified professional, of activities de22 signed to meet the interests and the phys23 ical, mental, and psychosocial well-being of

24 each resident;
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1 ‘‘(vi) routine dental services (to the

2 extent covered under the State plan) and

3 emergency dental services to meet the

4 needs of each resident; and

5 ‘‘(vii) treatment and services required

6 by mentally ill and mentally retarded resi7 dents not otherwise provided or arranged

8 for (or required to be provided or arranged

9 for) by the State.

10 The services provided or arranged by the facil11 ity must meet professional standards of quality.

12 ‘‘(B) QUALIFIED PERSONS PROVIDING

13 SERVICES.—Services described in clauses (i),

14 (ii), (iii), (iv), and (vi) of subparagraph (A)

15 must be provided by qualified persons in ac16 cordance with each resident’s written plan of

17 care.

18 ‘‘(C) REQUIRED NURSING CARE; FACILITY

19 WAIVERS.—

20 ‘‘(i) GENERAL REQUIREMENTS.—A

21 nursing facility—

22 ‘‘(I) except as provided in clause

23 (ii), must provide 24-hour licensed

24 nursing services which are sufficient
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1 to meet the nursing needs of its resi2 dents, and

3 ‘‘(II) except as provided in clause

4 (ii), must use the services of a reg5 istered professional nurse for at least

6 8 consecutive hours a day, 7 days a

7 week.

8 ‘‘(ii) WAIVER BY STATE.—To the ex9 tent that a facility is unable to meet the

10 requirements of clause (i), a State may

11 waive such requirements with respect to

12 the facility if—

13 ‘‘(I) the facility demonstrates to

14 the satisfaction of the State that the

15 facility has been unable, despite dili16 gent efforts (including offering wages

17 at the community prevailing rate for

18 nursing facilities), to recruit appro19 priate personnel,

20 ‘‘(II) the State determines that a

21 waiver of the requirement will not en22 danger the health or safety of individ23 uals staying in the facility,

24 ‘‘(III) the State finds that, for

25 any such periods in which licensed
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1 nursing services are not available, a

2 registered professional nurse or a phy3 sician is obligated to respond imme4 diately to telephone calls from the fa5 cility,

6 ‘‘(IV) the State agency granting

7 a waiver of such requirements pro8 vides notice of the waiver to the State

9 long-term care ombudsman (estab10 lished under section 307(a)(12) of the

11 Older Americans Act of 1965) and the

12 protection and advocacy system in the

13 State for the mentally ill and the

14 mentally retarded, and

15 ‘‘(V) the nursing facility that is

16 granted such a waiver by a State noti17 fies residents of the facility (or, where

18 appropriate, the guardians or legal

19 representatives of such residents) and

20 members of their immediate families

21 of the waiver.

22 A waiver under this clause shall be subject

23 to annual review and to the review of the

24 Secretary and subject to clause (iii) shall

25 be accepted by the Secretary for purposes
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1 of this title to the same extent as is the

2 State’s certification of the facility. In

3 granting or renewing a waiver, a State

4 may require the facility to use other quali5 fied, licensed personnel.

6 ‘‘(iii) ASSUMPTION OF WAIVER AU7 THORITY BY SECRETARY.—If the Secretary

8 determines that a State has shown a clear

9 pattern and practice of allowing waivers in

10 the absence of diligent efforts by facilities

11 to meet the staffing requirements, the Sec12 retary shall assume and exercise the au13 thority of the State to grant waivers.

14 ‘‘(5) REQUIRED TRAINING OF NURSE AIDES.—

15 ‘‘(A) IN GENERAL.—(i) Except as provided

16 in clause (ii), a nursing facility must not use on

17 a full-time basis any individual as a nurse aide

18 in the facility, for more than 4 months unless

19 the individual—

20 ‘‘(I) has completed a training and

21 competency evaluation program, or a com22 petency evaluation program, approved by

23 the State under subsection (e)(1)(A), and

24 ‘‘(II) is competent to provide nursing

25 or nursing-related services.
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1 ‘‘(ii) A nursing facility must not use on a

2 temporary, per diem, leased, or on any other

3 basis other than as a permanent employee any

4 individual as a nurse aide in the facility, unless

5 the individual meets the requirements described

6 in clause (i).

7 ‘‘(B) OFFERING COMPETENCY EVALUA8 TION PROGRAMS FOR CURRENT EMPLOYEES.—

9 A nursing facility must provide, for individuals

10 used as a nurse aide by the facility, for a com11 petency evaluation program approved by the

12 State under subsection (e)(1) and such prepara13 tion as may be necessary for the individual to

14 complete such a program.

15 ‘‘(C) COMPETENCY.—The nursing facility

16 must not permit an individual, other than in a

17 training and competency evaluation program

18 approved by the State, to serve as a nurse aide

19 or provide services of a type for which the indi20 vidual has not demonstrated competency and

21 must not use such an individual as a nurse aide

22 unless the facility has inquired of any State

23 registry established under subsection (e)(2)(A)

24 that the facility believes will include information

25 concerning the individual.
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1 ‘‘(D) RE-TRAINING REQUIRED.—For pur2 poses of subparagraph (A), if, since an individ3 ual’s most recent completion of a training and

4 competency evaluation program, there has been

5 a continuous period of 24 consecutive months

6 during none of which the individual performed

7 nursing or nursing-related services for monetary

8 compensation, such individual shall complete a

9 new training and competency evaluation pro10 gram, or a new competency evaluation program.

11 ‘‘(E) REGULAR IN-SERVICE EDUCATION.—

12 The nursing facility must provide such regular

13 performance review and regular in-service edu14 cation as assures that individuals used as nurse

15 aides are competent to perform services as

16 nurse aides, including training for individuals

17 providing nursing and nursing-related services

18 to residents with cognitive impairments.

19 ‘‘(F) NURSE AIDE DEFINED.—In this

20 paragraph, the term ‘nurse aide’ means any in21 dividual providing nursing or nursing-related

22 services to residents in a nursing facility, but

23 does not include an individual—
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1 ‘‘(i) who is a licensed health profes2 sional (as defined in subparagraph (G)) or

3 a registered dietitian, or

4 ‘‘(ii) who volunteers to provide such

5 services without monetary compensation.

6 ‘‘(G) LICENSED HEALTH PROFESSIONAL

7 DEFINED.—In this paragraph, the term ‘li8 censed health professional’ means a physician,

9 physician assistant, nurse practitioner, physical,

10 speech, or occupational therapist, physical or

11 occupational therapy assistant, registered pro12 fessional nurse, licensed practical nurse, or li13 censed or certified social worker.

14 ‘‘(6) PHYSICIAN SUPERVISION AND CLINICAL

15 RECORDS.—A nursing facility must—

16 ‘‘(A) require that the health care of every

17 resident be provided under the supervision of a

18 physician (or, at the option of a State, under

19 the supervision of a nurse practitioner, clinical

20 nurse specialist, or physician assistant who is

21 not an employee of the facility but who is work22 ing in collaboration with a physician);

23 ‘‘(B) provide for having a physician avail24 able to furnish necessary medical care in case

25 of emergency; and
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1 ‘‘(C) maintain clinical records on all resi2 dents, which records include the plans of care

3 (described in paragraph (2)) and the residents’

4 assessments (described in paragraph (3)), as

5 well as the results of any pre-admission screen6 ing conducted under subsection (e)(7).

7 ‘‘(7) REQUIRED SOCIAL SERVICES.—In the case

8 of a nursing facility with more than 120 beds, the

9 facility must have at least one social worker (with at

10 least a bachelor’s degree in social work or similar

11 professional qualifications) employed full-time to

12 provide or assure the provision of social services.

13 ‘‘(c) REQUIREMENTS RELATING TO RESIDENTS’

14 RIGHTS.—

15 ‘‘(1) GENERAL RIGHTS.—

16 ‘‘(A) SPECIFIED RIGHTS.—A nursing facil17 ity must protect and promote the rights of each

18 resident, including each of the following rights:

19 ‘‘(i) FREE CHOICE.—The right to

20 choose a personal attending physician, to

21 be fully informed in advance about care

22 and treatment, to be fully informed in ad23 vance of any changes in care or treatment

24 that may affect the resident’s well-being,

25 and (except with respect to a resident ad-
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1 judged incompetent) to participate in plan2 ning care and treatment or changes in care

3 and treatment.

4 ‘‘(ii) FREE FROM RESTRAINTS.—The

5 right to be free from physical or mental

6 abuse, corporal punishment, involuntary

7 seclusion, and any physical or chemical re8 straints imposed for purposes of discipline

9 or convenience and not required to treat

10 the resident’s medical symptoms. Re11 straints may only be imposed—

12 ‘‘(I) to ensure the physical safety

13 of the resident or other residents, and

14 ‘‘(II) only upon the written order

15 of a physician that specifies the dura16 tion and circumstances under which

17 the restraints are to be used (except

18 in emergency circumstances specified

19 by the Secretary until such an order

20 could reasonably be obtained).

21 ‘‘(iii) PRIVACY.—The right to privacy

22 with regard to accommodations, medical

23 treatment, written and telephonic commu24 nications, visits, and meetings of family

25 and of resident groups.
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1 ‘‘(iv) CONFIDENTIALITY.—The right

2 to confidentiality of personal and clinical

3 records and to access to current clinical

4 records of the resident upon request by the

5 resident or the resident’s legal representa6 tive, within 24 hours (excluding hours oc7 curring during a weekend or holiday) after

8 making such a request.

9 ‘‘(v) ACCOMMODATION OF NEEDS.—

10 The right—

11 ‘‘(I) to reside and receive services

12 with reasonable accommodation of in13 dividual needs and preferences, except

14 where the health or safety of the indi15 vidual or other residents would be en16 dangered, and

17 ‘‘(II) to receive notice before the

18 room or roommate of the resident in

19 the facility is changed.

20 ‘‘(vi) GRIEVANCES.—The right to

21 voice grievances with respect to treatment

22 or care that is (or fails to be) furnished,

23 without discrimination or reprisal for voic24 ing the grievances and the right to prompt

25 efforts by the facility to resolve grievances
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1 the resident may have, including those with

2 respect to the behavior of other residents.

3 ‘‘(vii) PARTICIPATION IN RESIDENT

4 AND FAMILY GROUPS.—The right of the

5 resident to organize and participate in resi6 dent groups in the facility and the right of

7 the resident’s family to meet in the facility

8 with the families of other residents in the

9 facility.

10 ‘‘(viii) PARTICIPATION IN OTHER AC11 TIVITIES.—The right of the resident to

12 participate in social, religious, and commu13 nity activities that do not interfere with

14 the rights of other residents in the facility.

15 ‘‘(ix) EXAMINATION OF SURVEY RE16 SULTS.—The right to examine, upon rea17 sonable request, the results of the most re18 cent survey of the facility conducted by the

19 Secretary or a State with respect to the fa20 cility and any plan of correction in effect

21 with respect to the facility.

22 ‘‘(x) REFUSAL OF CERTAIN TRANS23 FERS.—The right to refuse a transfer to

24 another room within the facility, if a pur25 poses of the transfer is to relocate the resi-
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1 dent from a portion of the facility that is

2 not a skilled nursing facility (for purposes

3 of title XVIII) to a portion of the facility

4 that is such a skilled nursing facility.

5 ‘‘(xi) OTHER RIGHTS.—Any other

6 right established by the Secretary.

7 Clause (i) shall not be construed as precluding

8 a State from requiring a resident of a nursing

9 facility to choose a personal attending physician

10 who participates in a managed care network

11 under a contract with the State to provide med12 ical assistance under this title. Clause (iii) shall

13 not be construed as requiring the provision of

14 a private room. A resident’s exercise of a right

15 to refuse transfer under clause (x) shall not af16 fect the resident’s eligibility or entitlement to

17 medical assistance under this title or a State’s

18 entitlement to Federal medical assistance under

19 this title with respect to services furnished to

20 such a resident.

21 ‘‘(B) NOTICE OF RIGHTS.—A nursing fa22 cility must—

23 ‘‘(i) inform each resident, orally and

24 in writing at the time of admission to the

25 facility, of the resident’s legal rights dur-
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1 ing the stay at the facility and of the re2 quirements and procedures for establishing

3 eligibility for medical assistance under this

4 title, including the right to request an as5 sessment under section 1505(c)(1)(B);

6 ‘‘(ii) make available to each resident,

7 upon reasonable request, a written state8 ment of such rights (which statement is

9 updated upon changes in such rights) in10 cluding the notice (if any) of the State de11 veloped under subsection (e)(6);

12 ‘‘(iii) inform each resident who is enti13 tled to medical assistance under this

14 title—

15 ‘‘(I) at the time of admission to

16 the facility or, if later, at the time the

17 resident becomes eligible for such as18 sistance, of the items and services

19 that are included in nursing facility

20 services under the State plan and for

21 which the resident may not be

22 charged, and of those other items and

23 services that the facility offers and for

24 which the resident may be charged
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1 and the amount of the charges for

2 such items and services, and

3 ‘‘(II) of changes in the items and

4 services described in subclause (I) and

5 of changes in the charges imposed for

6 items and services described in that

7 subclause; and

8 ‘‘(iv) inform each other resident, in

9 writing before or at the time of admission

10 and periodically during the resident’s stay,

11 of services available in the facility and of

12 related charges for such services, including

13 any charges for services not covered under

14 title XVIII or by the facility’s basic per

15 diem charge.

16 The written description of legal rights under

17 this subparagraph shall include a description of

18 the protection of personal funds under para19 graph (6) and a statement that a resident may

20 file a complaint with a State survey and certifi21 cation agency respecting resident abuse and ne22 glect and misappropriation of resident property

23 in the facility.

24 ‘‘(C) RIGHTS OF INCOMPETENT RESI25 DENTS.—In the case of a resident adjudged in-
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1 competent under the laws of a State, the rights

2 of the resident under this title shall devolve

3 upon, and, to the extent judged necessary by a

4 court of competent jurisdiction, be exercised by,

5 the person appointed under State law to act on

6 the resident’s behalf.

7 ‘‘(D) USE OF PSYCHOPHARMACOLOGIC

8 DRUGS.—Psychopharmacologic drugs may be

9 administered only on the orders of a physician

10 and only as part of a plan (included in the writ11 ten plan of care described in paragraph (2)) de12 signed to eliminate or modify the symptoms for

13 which the drugs are prescribed and only if, at

14 least annually an independent, external consult15 ant reviews the appropriateness of the drug

16 plan of each resident receiving such drugs.

17 ‘‘(2) TRANSFER AND DISCHARGE RIGHTS.—

18 ‘‘(A) IN GENERAL.—A nursing facility

19 must permit each resident to remain in the fa20 cility and must not transfer or discharge the

21 resident from the facility unless—

22 ‘‘(i) the transfer or discharge is nec23 essary to meet the resident’s welfare and

24 the resident’s welfare cannot be met in the

25 facility;
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1 ‘‘(ii) the transfer or discharge is ap2 propriate because the resident’s health has

3 improved sufficiently so the resident no

4 longer needs the services provided by the

5 facility;

6 ‘‘(iii) the safety of individuals in the

7 facility is endangered;

8 ‘‘(iv) the health of individuals in the

9 facility would otherwise be endangered;

10 ‘‘(v) the resident has failed, after rea11 sonable and appropriate notice, to pay (or

12 to have paid under this title or title XVIII

13 on the resident’s behalf) for a stay at the

14 facility; or

15 ‘‘(vi) the facility ceases to operate.

16 In each of the cases described in clauses (i)

17 through (iv), the basis for the transfer or dis18 charge must be documented in the resident’s

19 clinical record. In the cases described in clauses

20 (i) and (ii), the documentation must be made

21 by the resident’s physician, and in the case de22 scribed in clause (iv) the documentation must

23 be made by a physician. For purposes of clause

24 (v), in the case of a resident who becomes eligi25 ble for assistance under this title after admis-
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1 sion to the facility, only charges which may be

2 imposed under this title shall be considered to

3 be allowable.

4 ‘‘(B) PRE-TRANSFER AND PRE-DISCHARGE

5 NOTICE.—

6 ‘‘(i) IN GENERAL.—Before effecting a

7 transfer or discharge of a resident, a nurs8 ing facility must—

9 ‘‘(I) notify the resident (and, if

10 known, an immediate family member

11 of the resident or legal representative)

12 of the transfer or discharge and the

13 reasons therefor,

14 ‘‘(II) record the reasons in the

15 resident’s clinical record (including

16 any documentation required under

17 subparagraph (A)), and

18 ‘‘(III) include in the notice the

19 items described in clause (iii).

20 ‘‘(ii) TIMING OF NOTICE.—The notice

21 under clause (i)(I) must be made at least

22 30 days in advance of the resident’s trans23 fer or discharge except—

24 ‘‘(I) in a case described in clause

25 (iii) or (iv) of subparagraph (A);
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1 ‘‘(II) in a case described in

2 clause (ii) of subparagraph (A), where

3 the resident’s health improves suffi4 ciently to allow a more immediate

5 transfer or discharge;

6 ‘‘(III) in a case described in

7 clause (i) of subparagraph (A), where

8 a more immediate transfer or dis9 charge is necessitated by the resi10 dent’s urgent medical needs; or

11 ‘‘(IV) in a case where a resident

12 has not resided in the facility for 30

13 days.

14 In the case of such exceptions, notice must

15 be given as many days before the date of

16 the transfer or discharge as is practicable.

17 ‘‘(iii) ITEMS INCLUDED IN NOTICE.—

18 Each notice under clause (i) must in19 clude—

20 ‘‘(I) notice of the resident’s right

21 to appeal the transfer or discharge

22 under the State process established

23 under subsection (e)(3);

24 ‘‘(II) the name, mailing address,

25 and telephone number of the State
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1 long-term care ombudsman (estab2 lished under title III or VII of the

3 Older Americans Act of 1965);

4 ‘‘(III) in the case of residents

5 with developmental disabilities, the

6 mailing address and telephone number

7 of the agency responsible for the pro8 tection and advocacy system for devel9 opmentally disabled individuals estab10 lished under part C of the Devel11 opmental Disabilities Assistance and

12 Bill of Rights Act; and

13 ‘‘(IV) in the case of mentally ill

14 residents (as defined in subsection

15 (e)(7)(G)(i)), the mailing address and

16 telephone number of the agency re17 sponsible for the protection and advo18 cacy system for mentally ill individ19 uals established under the Protection

20 and Advocacy for Mentally Ill Individ21 uals Act.

22 ‘‘(C) ORIENTATION.—A nursing facility

23 must provide sufficient preparation and orienta24 tion to residents to ensure safe and orderly

25 transfer or discharge from the facility.
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1 ‘‘(D) NOTICE ON BED-HOLD POLICY AND

2 READMISSION.—

3 ‘‘(i) NOTICE BEFORE TRANSFER.—

4 Before a resident of a nursing facility is

5 transferred for hospitalization or thera6 peutic leave, a nursing facility must pro7 vide written information to the resident

8 and an immediate family member or legal

9 representative concerning—

10 ‘‘(I) the provisions of the State

11 plan under this title regarding the pe12 riod (if any) during which the resident

13 will be permitted under the State plan

14 to return and resume residence in the

15 facility, and

16 ‘‘(II) the policies of the facility

17 regarding such a period, which poli18 cies must be consistent with clause

19 (iii).

20 ‘‘(ii) NOTICE UPON TRANSFER.—At

21 the time of transfer of a resident to a hos22 pital or for therapeutic leave, a nursing fa23 cility must provide written notice to the

24 resident and an immediate family member
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1 or legal representative of the duration of

2 any period described in clause (i).

3 ‘‘(iii) PERMITTING RESIDENT TO RE4 TURN.—A nursing facility must establish

5 and follow a written policy under which a

6 resident—

7 ‘‘(I) who is eligible for medical

8 assistance for nursing facility services

9 under a State plan,

10 ‘‘(II) who is transferred from the

11 facility for hospitalization or thera12 peutic leave, and

13 ‘‘(III) whose hospitalization or

14 therapeutic leave exceeds a period

15 paid for under the State plan for the

16 holding of a bed in the facility for the

17 resident,

18 will be permitted to be readmitted to the

19 facility immediately upon the first avail20 ability of a bed in a room (not including a

21 private room) in the facility if, at the time

22 of readmission, the resident requires the

23 services provided by the facility.

24 ‘‘(3) ACCESS AND VISITATION RIGHTS.—A

25 nursing facility must—
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1 ‘‘(A) permit immediate access to any resi2 dent by any representative of the Secretary, by

3 any representative of the State, by an ombuds4 man or agency described in subclause (II),

5 (III), or (IV) of paragraph (2)(B)(iii), or by the

6 resident’s individual physician;

7 ‘‘(B) permit immediate access to a resi8 dent, subject to the resident’s right to deny or

9 withdraw consent at any time, by immediate

10 family or other relatives of the resident;

11 ‘‘(C) permit immediate access to a resi12 dent, subject to reasonable restrictions and the

13 resident’s right to deny or withdraw consent at

14 any time, by others who are visiting with the

15 consent of the resident;

16 ‘‘(D) permit reasonable access to a resi17 dent by any entity or individual that provides

18 health, social, legal, or other services to the

19 resident, subject to the resident’s right to deny

20 or withdraw consent at any time; and

21 ‘‘(E) permit representatives of the State

22 ombudsman (described in paragraph

23 (2)(B)(iii)(II)), with the permission of the resi24 dent (or the resident’s legal representative) and
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1 consistent with State law, to examine a resi2 dent’s clinical records.

3 ‘‘(4) EQUAL ACCESS TO QUALITY CARE.—

4 ‘‘(A) IN GENERAL.—A nursing facility

5 must establish and maintain identical policies

6 and practices regarding transfer, discharge, and

7 the provision of services required under the

8 State plan for all individuals regardless of

9 source of payment.

10 ‘‘(B) CONSTRUCTION.—

11 ‘‘(i) NOTHING PROHIBITING ANY

12 CHARGES FOR NON-MEDICAL ASSISTANCE

13 PATIENTS.—Subparagraph (A) shall not be

14 construed as prohibiting a nursing facility

15 from charging any amount for services fur16 nished, consistent with the notice in para17 graph (1)(B) describing such charges.

18 ‘‘(ii) NO ADDITIONAL SERVICES RE19 QUIRED.—Subparagraph (A) shall not be

20 construed as requiring a State to offer ad21 ditional services on behalf of a resident

22 than are otherwise provided under the

23 State plan.

24 ‘‘(5) ADMISSIONS POLICY.—
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1 ‘‘(A) ADMISSIONS.—With respect to admis2 sions practices, a nursing facility must—

3 ‘‘(i)(I) not require individuals apply4 ing to reside or residing in the facility to

5 waive their rights to benefits under a State

6 plan under this title or title XVIII, (II) not

7 require oral or written assurance that such

8 individuals are not eligible for, or will not

9 apply for, benefits under a State plan

10 under this title or title XVIII, and (III)

11 prominently display in the facility written

12 information, and provide to such individ13 uals oral and written information, about

14 how to apply for and use such benefits and

15 how to receive refunds for previous pay16 ments covered by such benefits;

17 ‘‘(ii) not require a third party guaran18 tee of payment to the facility as a condi19 tion of admission (or expedited admission)

20 to, or continued stay in, the facility; and

21 ‘‘(iii) in the case of an individual who

22 is provided medical assistance for nursing

23 facility services, not charge, solicit, accept,

24 or receive, in addition to any amount oth25 erwise required to be paid under the State
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1 plan under this title, any gift, money, do2 nation, or other consideration as a pre3 condition of admitting (or expediting the

4 admission of) the individual to the facility

5 or as a requirement for the individual’s

6 continued stay in the facility.

7 ‘‘(B) CONSTRUCTION.—

8 ‘‘(i) NO PREEMPTION OF STRICTER

9 STANDARDS.—Subparagraph (A) shall not

10 be construed as preventing States or politi11 cal subdivisions therein from prohibiting,

12 under State or local law, the discrimination

13 against individuals who are provided medi14 cal assistance under the State plan with

15 respect to admissions practices of nursing

16 facilities.

17 ‘‘(ii) CONTRACTS WITH LEGAL REP18 RESENTATIVES.—Subparagraph (A)(ii)

19 shall not be construed as preventing a fa20 cility from requiring an individual, who has

21 legal access to a resident’s income or re22 sources available to pay for care in the fa23 cility, to sign a contract (without incurring

24 personal financial liability) to provide pay-
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1 ment from the resident’s income or re2 sources for such care.

3 ‘‘(iii) CHARGES FOR ADDITIONAL

4 SERVICES REQUESTED.—Subparagraph

5 (A)(iii) shall not be construed as prevent6 ing a facility from charging a resident, eli7 gible for medical assistance under the

8 State plan, for items or services the resi9 dent has requested and received and that

10 are not specified in the State plan as in11 cluded in covered nursing facility services.

12 ‘‘(iv) BONA FIDE CONTRIBUTIONS.—

13 Subparagraph (A)(iii) shall not be con14 strued as prohibiting a nursing facility

15 from soliciting, accepting, or receiving a

16 charitable, religious, or philanthropic con17 tribution from an organization or from a

18 person unrelated to the resident (or poten19 tial resident), but only to the extent that

20 such contribution is not a condition of ad21 mission, expediting admission, or continued

22 stay in the facility.

23 ‘‘(6) PROTECTION OF RESIDENT FUNDS.—

24 ‘‘(A) IN GENERAL.—The nursing facility—
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1 ‘‘(i) may not require residents to de2 posit their personal funds with the facility,

3 and

4 ‘‘(ii) upon the written authorization of

5 the resident, must hold, safeguard, and ac6 count for such personal funds under a sys7 tem established and maintained by the fa8 cility in accordance with this paragraph.

9 ‘‘(B) MANAGEMENT OF PERSONAL

10 FUNDS.—Upon written authorization of a resi11 dent under subparagraph (A)(ii), the facility

12 must manage and account for the personal

13 funds of the resident deposited with the facility

14 as follows:

15 ‘‘(i) DEPOSIT.—The facility must de16 posit any amount of personal funds in ex17 cess of $50 with respect to a resident in an

18 interest bearing account (or accounts) that

19 is separate from any of the facility’s oper20 ating accounts and credits all interest

21 earned on such separate account to such

22 account. With respect to any other per23 sonal funds, the facility must maintain

24 such funds in a non-interest bearing ac25 count or petty cash fund.
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1 ‘‘(ii) ACCOUNTING AND RECORDS.—

2 The facility must assure a full and com3 plete separate accounting of each such

4 resident’s personal funds, maintain a writ5 ten record of all financial transactions in6 volving the personal funds of a resident de7 posited with the facility, and afford the

8 resident (or a legal representative of the

9 resident) reasonable access to such record.

10 ‘‘(iii) NOTICE OF CERTAIN BAL11 ANCES.—The facility must notify each resi12 dent receiving medical assistance under the

13 State plan when the amount in the resi14 dent’s account reaches $200 less than the

15 dollar amount determined under section

16 1611(a)(3)(B) and the fact that if the

17 amount in the account (in addition to the

18 value of the resident’s other nonexempt re19 sources) reaches the amount determined

20 under such section the resident may lose

21 eligibility for such medical assistance or for

22 benefits under title XVI.

23 ‘‘(iv) CONVEYANCE UPON DEATH.—

24 Upon the death of a resident with such an

25 account, the facility must convey promptly
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1 the resident’s personal funds (and a final

2 accounting of such funds) to the individual

3 administering the resident’s estate. All

4 other personal property, including medical

5 records, shall be considered part of the

6 resident’s estate and shall only be released

7 to the administrator of the estate.

8 ‘‘(C) ASSURANCE OF FINANCIAL SECU9 RITY.—The facility must purchase a surety

10 bond, or otherwise provide assurance satisfac11 tory to the State, to assure the security of all

12 personal funds of residents deposited with the

13 facility.

14 ‘‘(D) LIMITATION ON CHARGES TO PER15 SONAL FUNDS.—The facility may not impose a

16 charge against the personal funds of a resident

17 for any item or service for which payment is

18 made under this title or title XVIII.

19 ‘‘(7) LIMITATION ON CHARGES IN CASE OF

20 MEDICAL-ASSISTANCE-ELIGIBLE INDIVIDUALS.—

21 ‘‘(A) IN GENERAL.—A nursing facility may

22 not impose charges, for certain medical-assist23 ance-eligible individuals for nursing facility

24 services covered by the State under its plan

25 under this title, that exceed the payment
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1 amounts established by the State for such serv2 ices under this title.

3 ‘‘(B) CERTAIN MEDICAL-ASSISTANCE-ELI4 GIBLE INDIVIDUALS DEFINED.—In subpara5 graph (A), the term ‘certain medical-assistance6 eligible individual’ means an individual who is

7 entitled to medical assistance for nursing facil8 ity services in the facility under this title but

9 with respect to whom such benefits are not

10 being paid because, in determining the amount

11 of the individual’s income to be applied monthly

12 to payment for the costs of such services, the

13 amount of such income exceeds the payment

14 amounts established by the State for such serv15 ices under this title.

16 ‘‘(8) POSTING OF SURVEY RESULTS.—A nurs17 ing facility must post in a place readily accessible to

18 residents, and family members and legal representa19 tives of residents, the results of the most recent sur20 vey of the facility conducted under subsection (g).

21 ‘‘(d) REQUIREMENTS RELATING TO ADMINISTRA22 TION AND OTHER MATTERS.—

23 ‘‘(1) ADMINISTRATION.—

24 ‘‘(A) IN GENERAL.—A nursing facility

25 must be administered in a manner that enables
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1 it to use its resources effectively and efficiently

2 to attain or maintain the highest practicable

3 physical, mental, and psychosocial well-being of

4 each resident (consistent with requirements es5 tablished under subsection (f)(5)).

6 ‘‘(B) REQUIRED NOTICES.—If a change oc7 curs in—

8 ‘‘(i) the persons with an ownership or

9 control interest (as defined in section

10 1124(a)(3)) in the facility,

11 ‘‘(ii) the persons who are officers, di12 rectors, agents, or managing employees (as

13 defined in section 1126(b)) of the facility,

14 ‘‘(iii) the corporation, association, or

15 other company responsible for the manage16 ment of the facility, or

17 ‘‘(iv) the individual who is the admin18 istrator or director of nursing of the facil19 ity,

20 the nursing facility must provide notice to the

21 State agency responsible for the licensing of the

22 facility, at the time of the change, of the change

23 and of the identity of each new person, com24 pany, or individual described in the respective

25 clause.
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1 ‘‘(C) NURSING FACILITY ADMINIS2 TRATOR.—The administrator of a nursing facil3 ity, whether freestanding or hospital-based,

4 must meet such standards as are established by

5 the Secretary under subsection (f)(4).

6 ‘‘(2) LICENSING AND LIFE SAFETY CODE.—

7 ‘‘(A) LICENSING.—A nursing facility must

8 be licensed under applicable State and local law.

9 ‘‘(B) LIFE SAFETY CODE.—A nursing fa10 cility must meet such provisions of such edition

11 (as specified by the Secretary in regulation) of

12 the Life Safety Code of the National Fire Pro13 tection Association as are applicable to nursing

14 homes; except that—

15 ‘‘(i) the Secretary may waive, for such

16 periods as he deems appropriate, specific

17 provisions of such Code which if rigidly ap18 plied would result in unreasonable hard19 ship upon a facility, but only if such waiver

20 would not adversely affect the health and

21 safety of residents or personnel, and

22 ‘‘(ii) the provisions of such Code shall

23 not apply in any State if the Secretary

24 finds that in such State there is in effect

25 a fire and safety code, imposed by State
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1 law, which adequately protects residents of

2 and personnel in nursing facilities.

3 ‘‘(3) SANITARY AND INFECTION CONTROL AND

4 PHYSICAL ENVIRONMENT.—A nursing facility

5 must—

6 ‘‘(A) establish and maintain an infection

7 control program designed to provide a safe, san8 itary, and comfortable environment in which

9 residents reside and to help prevent the devel10 opment and transmission of disease and infec11 tion, and

12 ‘‘(B) be designed, constructed, equipped,

13 and maintained in a manner to protect the

14 health and safety of residents, personnel, and

15 the general public.

16 ‘‘(4) MISCELLANEOUS.—

17 ‘‘(A) COMPLIANCE WITH FEDERAL, STATE,

18 AND LOCAL LAWS AND PROFESSIONAL STAND19 ARDS.—A nursing facility, whether freestanding

20 or hospital-based, must operate and provide

21 services in compliance with all applicable Fed22 eral, State, and local laws and regulations (in23 cluding the requirements of section 1124) and

24 with accepted professional standards and prin-
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1 ciples which apply to professionals providing

2 services in such a facility.

3 ‘‘(B) OTHER.—A nursing facility must

4 meet such other requirements relating to the

5 health and safety of residents or relating to the

6 physical facilities thereof as the Secretary may

7 find necessary.

8 ‘‘(e) STATE REQUIREMENTS RELATING TO NURSING

9 FACILITY REQUIREMENTS.—A State with a State plan

10 under this title shall provide for the following:

11 ‘‘(1) SPECIFICATION AND REVIEW OF NURSE

12 AIDE TRAINING AND COMPETENCY EVALUATION

13 PROGRAMS AND OF NURSE AIDE COMPETENCY EVAL14 UATION PROGRAMS.—The State must—

15 ‘‘(A) specify those training and competency

16 evaluation programs, and those competency

17 evaluation programs, that the State approves

18 for purposes of subsection (b)(5) and that meet

19 the requirements established under subsection

20 (f)(2), and

21 ‘‘(B) provide for the review and reapproval

22 of such programs, at a frequency and using a

23 methodology consistent with the requirements

24 established under subsection (f)(2)(A)(iii).

25 ‘‘(2) NURSE AIDE REGISTRY.—
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1 ‘‘(A) IN GENERAL.—The State shall estab2 lish and maintain a registry of all individuals

3 who have satisfactorily completed a nurse aide

4 training and competency evaluation program, or

5 a nurse aide competency evaluation program,

6 approved under paragraph (1) in the State, or

7 any individual described in subsection

8 (f)(2)(B)(ii) or in subparagraph (B), (C), or

9 (D) of section 6901(b)(4) of the Omnibus

10 Budget Reconciliation Act of 1989.

11 ‘‘(B) INFORMATION IN REGISTRY.—The

12 registry under subparagraph (A) shall provide

13 (in accordance with regulations of the Sec14 retary) for the inclusion of specific documented

15 findings by a State under subsection (g)(1)(C)

16 of resident neglect or abuse or misappropriation

17 of resident property involving an individual list18 ed in the registry, as well as any brief state19 ment of the individual disputing the findings.

20 The State shall make available to the public in21 formation in the registry. In the case of inquir22 ies to the registry concerning an individual list23 ed in the registry, any information disclosed

24 concerning such a finding shall also include dis25 closure of any such statement in the registry re-
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1 lating to the finding or a clear and accurate

2 summary of such a statement.

3 ‘‘(C) PROHIBITION AGAINST CHARGES.—A

4 State may not impose any charges on a nurse

5 aide relating to the registry established and

6 maintained under subparagraph (A).

7 ‘‘(3) STATE APPEALS PROCESS FOR TRANSFERS

8 AND DISCHARGES.—The State must provide for a

9 fair mechanism, meeting the guidelines established

10 under subsection (f)(3), for hearing appeals on

11 transfers and discharges of residents of such facili12 ties.

13 ‘‘(4) NURSING FACILITY ADMINISTRATOR

14 STANDARDS.—The State must implement and en15 force the nursing facility administrator standards

16 developed under subsection (f)(4) respecting the

17 qualification of administrators of nursing facilities.

18 Any such standards promulgated shall apply to ad19 ministrators of hospital-based facilities as well as ad20 ministrators of freestanding facilities.

21 ‘‘(5) SPECIFICATION OF RESIDENT ASSESSMENT

22 INSTRUMENT.—The State shall specify the instru23 ment to be used by nursing facilities in the State in

24 complying with the requirement of subsection

25 (b)(3)(A)(iii). Such instrument shall be—
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1 ‘‘(A) one of the instruments designated

2 under subsection (f)(6)(B), or

3 ‘‘(B) an instrument which the Secretary

4 has approved as being consistent with the mini5 mum data set of core elements, common defini6 tions, and utilization guidelines specified by the

7 Secretary under subsection (f)(6)(A).

8 ‘‘(6) NOTICE OF RIGHTS.—Each State shall de9 velop (and periodically update) a written notice of

10 the rights and obligations of residents of nursing fa11 cilities (and spouses of such residents) under this

12 title.

13 ‘‘(7) STATE REQUIREMENTS FOR

14 PREADMISSION SCREENING AND RESIDENT RE15 VIEW.—

16 ‘‘(A) PREADMISSION SCREENING.—

17 ‘‘(i) IN GENERAL.—The State must

18 have in effect a preadmission screening

19 program, for identifying mentally ill and

20 mentally retarded individuals (as defined

21 in subparagraph (B)) who are admitted to

22 nursing facilities and for determining

23 whether they require the level of services of

24 such a facility.
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1 ‘‘(ii) STATE REQUIREMENT FOR RESI2 DENT REVIEW.—The State shall notify the

3 State mental health authority or the State

4 mental retardation or developmental dis5 ability authority, as appropriate, of the in6 dividuals so identified.

7 ‘‘(B) DEFINITIONS.—In this paragraph:

8 ‘‘(i) An individual is considered to be

9 ‘mentally ill’ if the individual has a serious

10 mental illness (as defined by the Secretary

11 in consultation with the National Institute

12 of Mental Health) and does not have a pri13 mary diagnosis of dementia (including Alz14 heimer’s disease or a related disorder) or a

15 diagnosis (other than a primary diagnosis)

16 of dementia and a primary diagnosis that

17 is not a serious mental illness.

18 ‘‘(ii) An individual is considered to be

19 ‘mentally retarded’ if the individual is

20 mentally retarded or a person with a relat21 ed condition.

22 ‘‘(f) RESPONSIBILITIES RELATING TO NURSING FA23 CILITY REQUIREMENTS.—

24 ‘‘(1) GENERAL RESPONSIBILITY.—It is the duty

25 and responsibility of the Secretary to assure that re-
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1 quirements which govern the provision of care in

2 nursing facilities under State plans approved under

3 this title, and the enforcement of such requirements,

4 are adequate to protect the health, safety, welfare,

5 and rights of residents and to promote the effective

6 and efficient use of public moneys.

7 ‘‘(2) REQUIREMENTS FOR NURSE AIDE TRAIN8 ING AND COMPETENCY EVALUATION PROGRAMS AND

9 FOR NURSE AIDE COMPETENCY EVALUATION PRO10 GRAMS.—

11 ‘‘(A) IN GENERAL.—For purposes of sub12 sections (b)(5) and (e)(1)(A), the Secretary

13 shall establish—

14 ‘‘(i) requirements for the approval of

15 nurse aide training and competency evalua16 tion programs, including requirements re17 lating to (I) the areas to be covered in

18 such a program (including at least basic

19 nursing skills, personal care skills, recogni20 tion of mental health and social service

21 needs, care of cognitively impaired resi22 dents, basic restorative services, and resi23 dents’ rights) and content of the curricu24 lum, (II) minimum hours of initial and on25 going training and retraining (including
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1 not less than 75 hours in the case of initial

2 training), (III) qualifications of instruc3 tors, and (IV) procedures for determina4 tion of competency;

5 ‘‘(ii) requirements for the approval of

6 nurse aide competency evaluation pro7 grams, including requirement relating to

8 the areas to be covered in such a program,

9 including at least basic nursing skills, per10 sonal care skills, recognition of mental

11 health and social service needs, care of

12 cognitively impaired residents, basic restor13 ative services, and residents’ rights, and

14 procedures for determination of com15 petency;

16 ‘‘(iii) requirements respecting the

17 minimum frequency and methodology to be

18 used by a State in reviewing such pro19 grams’ compliance with the requirements

20 for such programs; and

21 ‘‘(iv) requirements, under both such

22 programs, that—

23 ‘‘(I) provide procedures for deter24 mining competency that permit a

25 nurse aide, at the nurse aide’s option,
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1 to establish competency through pro2 cedures or methods other than the

3 passing of a written examination and

4 to have the competency evaluation

5 conducted at the nursing facility at

6 which the aide is (or will be) employed

7 (unless the facility is described in sub8 paragraph (B)(iii)(I)),

9 ‘‘(II) prohibit the imposition on a

10 nurse aide who is employed by (or

11 who has received an offer of employ12 ment from) a facility on the date on

13 which the aide begins either such pro14 gram of any charges (including any

15 charges for textbooks and other re16 quired course materials and any

17 charges for the competency evalua18 tion) for either such program, and

19 ‘‘(III) in the case of a nurse aide

20 not described in subclause (II) who is

21 employed by (or who has received an

22 offer of employment from) a facility

23 not later than 12 months after com24 pleting either such program, the State

25 shall provide for the reimbursement of
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1 costs incurred in completing such pro2 gram on a prorata basis during the

3 period in which the nurse aide is so

4 employed.

5 ‘‘(B) APPROVAL OF CERTAIN PROGRAMS.—

6 Such requirements—

7 ‘‘(i) may permit approval of programs

8 offered by or in facilities, as well as outside

9 facilities (including employee organiza10 tions);

11 ‘‘(ii) shall permit a State to find that

12 an individual who has completed (before

13 July 1, 1989) a nurse aide training and

14 competency evaluation program shall be

15 deemed to have completed such a program

16 approved under subsection (b)(5) if the

17 State determines that, at the time the pro18 gram was offered, the program met the re19 quirements for approval under such para20 graph; and

21 ‘‘(iii) subject to subparagraph (C),

22 shall prohibit approval of such a pro23 gram—
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1 ‘‘(I) offered by or in a nursing

2 facility which, within the previous 2

3 years—

4 ‘‘(a) has operated under a

5 waiver under subsection

6 (b)(4)(C)(ii) that was granted on

7 the basis of a demonstration that

8 the facility is unable to provide

9 the nursing care required under

10 subsection (b)(4)(C)(i) for a pe11 riod in excess of 48 hours during

12 a week;

13 ‘‘(b) has been subject to an

14 extended (or partial extended)

15 survey under section

16 1819(g)(2)(B)(i) or subsection

17 (g)(2)(B)(i) of this section; or

18 ‘‘(c) has been assessed a

19 civil money penalty described in

20 section 1819(h)(2)(B)(ii) or sub21 section (h)(2)(A)(ii) of this sec22 tion of not less than $5,000, or

23 has been subject to a remedy de24 scribed in subsection (h)(1)(B)(i)

25 of this section, clauses (i), (iii),
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1 or (iv) of subsection (h)(2)(A) of

2 this section, clauses (i) or (iii) of

3 section 1819(h)(2)(B), or section

4 1819(h)(4), or

5 ‘‘(II) offered by or in a nursing

6 facility unless the State makes the de7 termination, upon an individual’s com8 pletion of the program, that the indi9 vidual is competent to provide nursing

10 and nursing-related services in nurs11 ing facilities.

12 A State may not delegate (through sub13 contract or otherwise) its responsibility

14 under clause (iii)(II) to the nursing facil15 ity.

16 ‘‘(C) WAIVER AUTHORIZED.—Clause (iii)

17 of subparagraph (B) shall not apply to a pro18 gram offered in (but not by) a nursing facility

19 in a State if the State—

20 ‘‘(i) determines that there is no other

21 such program offered within a reasonable

22 distance of the facility,

23 ‘‘(ii) assures, through an oversight ef24 fort, that an adequate environment exists
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1 for operating the program in the facility,

2 and

3 ‘‘(iii) provides notice of such deter4 mination and assurances to the State long5 term care ombudsman.

6 ‘‘(3) FEDERAL GUIDELINES FOR STATE AP7 PEALS PROCESS FOR TRANSFERS AND DIS8 CHARGES.—For purposes of subsections

9 (c)(2)(B)(iii) and (e)(3), the Secretary shall estab10 lish guidelines for minimum standards which State

11 appeals processes under subsection (e)(3) must meet

12 to provide a fair mechanism for hearing appeals on

13 transfers and discharges of residents from nursing

14 facilities.

15 ‘‘(4) QUALIFICATION OF ADMINISTRATORS.—

16 For purposes of subsections (d)(1)(C) and (e)(4),

17 the Secretary shall develop standards to be applied

18 in assuring the qualifications of administrators of

19 nursing facilities. Any such standards must apply to

20 administrators of hospital-based facilities as well as

21 administrators of freestanding facilities.

22 ‘‘(5) CRITERIA FOR ADMINISTRATION.—The

23 Secretary shall establish criteria for assessing a

24 nursing facility’s compliance with the requirement of

25 subsection (d)(1) with respect to—
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1 ‘‘(A) its governing body and management,

2 ‘‘(B) agreements with hospitals regarding

3 transfers of residents to and from the hospitals

4 and to and from other nursing facilities,

5 ‘‘(C) disaster preparedness,

6 ‘‘(D) direction of medical care by a physi7 cian,

8 ‘‘(E) laboratory and radiological services,

9 ‘‘(F) clinical records, and

10 ‘‘(G) resident and advocate participation.

11 ‘‘(6) SPECIFICATION OF RESIDENT ASSESSMENT

12 DATA SET AND INSTRUMENTS.—The Secretary

13 shall—

14 ‘‘(A) specify a minimum data set of core

15 elements and common definitions for use by

16 nursing facilities in conducting the assessments

17 required under subsection (b)(3), and establish

18 guidelines for utilization of the data set; and

19 ‘‘(B) designate one or more instruments

20 which are consistent with the specification made

21 under subparagraph (A) and which a State may

22 specify under subsection (e)(5)(A) for use by

23 nursing facilities in complying with the require24 ments of subsection (b)(3)(A)(iii).
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1 ‘‘(7) LIST OF ITEMS AND SERVICES FURNISHED

2 IN NURSING FACILITIES NOT CHARGEABLE TO THE

3 PERSONAL FUNDS OF A RESIDENT.—The Secretary

4 shall issue regulations that define those costs which

5 may be charged to the personal funds of residents

6 in nursing facilities who are individuals receiving

7 medical assistance with respect to nursing facility

8 services under this title and those costs which are to

9 be included in the payment amount under this title

10 for nursing facility services.

11 ‘‘(8) CRITERIA FOR MONITORING STATE WAIV12 ERS.—The Secretary shall develop criteria and pro13 cedures for monitoring State performances in grant14 ing waivers pursuant to subsection (b)(4)(C)(ii).

15 ‘‘(g) SURVEY AND CERTIFICATION PROCESS.—

16 ‘‘(1) STATE AND FEDERAL RESPONSIBILITY.—

17 ‘‘(A) IN GENERAL.—Under each State plan

18 under this title, the State shall be responsible

19 for certifying, in accordance with surveys con20 ducted under paragraph (2), the compliance of

21 nursing facilities (other than facilities of the

22 State) with the requirements of subsections (b),

23 (c), and (d). The Secretary shall be responsible

24 for certifying, in accordance with surveys con25 ducted under paragraph (2), the compliance of
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1 State nursing facilities with the requirements of

2 such subsections.

3 ‘‘(B) EDUCATIONAL PROGRAM.—Each

4 State shall conduct periodic educational pro5 grams for the staff and residents (and their

6 representatives) of nursing facilities in order to

7 present current regulations, procedures, and

8 policies under this section.

9 ‘‘(C) INVESTIGATION OF ALLEGATIONS OF

10 RESIDENT NEGLECT AND ABUSE AND MIS11 APPROPRIATION OF RESIDENT PROPERTY.—The

12 State shall provide, through the agency respon13 sible for surveys and certification of nursing fa14 cilities under this subsection, for a process for

15 the receipt and timely review and investigation

16 of allegations of neglect and abuse and mis17 appropriation of resident property by a nurse

18 aide of a resident in a nursing facility or by an19 other individual used by the facility in providing

20 services to such a resident. The State shall,

21 after notice to the individual involved and a rea22 sonable opportunity for a hearing for the indi23 vidual to rebut allegations, make a finding as to

24 the accuracy of the allegations. If the State

25 finds that a nurse aide has neglected or abused
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1 a resident or misappropriated resident property

2 in a facility, the State shall notify the nurse

3 aide and the registry of such finding. If the

4 State finds that any other individual used by

5 the facility has neglected or abused a resident

6 or misappropriated resident property in a facil7 ity, the State shall notify the appropriate licen8 sure authority. A State shall not make a find9 ing that an individual has neglected a resident

10 if the individual demonstrates that such neglect

11 was caused by factors beyond the control of the

12 individual.

13 ‘‘(2) SURVEYS.—

14 ‘‘(A) ANNUAL STANDARD SURVEY.—

15 ‘‘(i) IN GENERAL.—Each nursing fa16 cility shall be subject to a standard survey,

17 to be conducted without any prior notice to

18 the facility. Any individual who notifies (or

19 causes to be notified) a nursing facility of

20 the time or date on which such a survey is

21 scheduled to be conducted is subject to a

22 civil money penalty of not to exceed

23 $2,000. The provisions of section 1128A

24 (other than subsections (a) and (b)) shall

25 apply to a civil money penalty under the
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1 previous sentence in the same manner as

2 such provisions apply to a penalty or pro3 ceeding under section 1128A(a). The Sec4 retary shall review each State’s procedures

5 for scheduling and conduct of standard

6 surveys to assure that the State has taken

7 all reasonable steps to avoid giving notice

8 of such a survey through the scheduling

9 procedures and the conduct of the surveys

10 themselves.

11 ‘‘(ii) CONTENTS.—Each standard sur12 vey shall include, for a case-mix stratified

13 sample of residents—

14 ‘‘(I) a survey of the quality of

15 care furnished, as measured by indica16 tors of medical, nursing, and rehabili17 tative care, dietary and nutrition serv18 ices, activities and social participation,

19 and sanitation, infection control, and

20 the physical environment,

21 ‘‘(II) written plans of care pro22 vided under subsection (b)(2) and an

23 audit of the residents’ assessments

24 under subsection (b)(3) to determine

25 the accuracy of such assessments and
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1 the adequacy of such plans of care,

2 and

3 ‘‘(III) a review of compliance

4 with residents’ rights under sub5 section (c).

6 ‘‘(iii) FREQUENCY.—

7 ‘‘(I) IN GENERAL.—Each nursing

8 facility shall be subject to a standard

9 survey not later than 15 months after

10 the date of the previous standard sur11 vey conducted under this subpara12 graph. The statewide average interval

13 between standard surveys of a nursing

14 facility shall not exceed 12 months.

15 ‘‘(II) SPECIAL SURVEYS.—If not

16 otherwise conducted under subclause

17 (I), a standard survey (or an abbre18 viated standard survey) may be con19 ducted within 2 months of any change

20 of ownership, administration, manage21 ment of a nursing facility, or director

22 of nursing in order to determine

23 whether the change has resulted in

24 any decline in the quality of care fur25 nished in the facility.
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1 ‘‘(B) EXTENDED SURVEYS.—

2 ‘‘(i) IN GENERAL.—Each nursing fa3 cility which is found, under a standard sur4 vey, to have provided substandard quality

5 of care shall be subject to an extended sur6 vey. Any other facility may, at the Sec7 retary’s or State’s discretion, be subject to

8 such an extended survey (or a partial ex9 tended survey).

10 ‘‘(ii) TIMING.—The extended survey

11 shall be conducted immediately after the

12 standard survey (or, if not practicable, not

13 later than 2 weeks after the date of com14 pletion of the standard survey).

15 ‘‘(iii) CONTENTS.—In such an ex16 tended survey, the survey team shall review

17 and identify the policies and procedures

18 which produced such substandard quality

19 of care and shall determine whether the fa20 cility has complied with all the require21 ments described in subsections (b), (c),

22 and (d). Such review shall include an ex23 pansion of the size of the sample of resi24 dents’ assessments reviewed and a review

25 of the staffing, of in-service training, and,
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1 if appropriate, of contracts with consult2 ants.

3 ‘‘(iv) CONSTRUCTION.—Nothing in

4 this paragraph shall be construed as re5 quiring an extended or partial extended

6 survey as a prerequisite to imposing a

7 sanction against a facility under subsection

8 (h) on the basis of findings in a standard

9 survey.

10 ‘‘(C) SURVEY PROTOCOL.—Standard and

11 extended surveys shall be conducted—

12 ‘‘(i) based upon the protocol which the

13 Secretary has developed, tested, and vali14 dated, as of the date of the enactment of

15 this title, and

16 ‘‘(ii) by individuals, of a survey team,

17 who meet such minimum qualifications as

18 the Secretary establishes.

19 ‘‘(D) CONSISTENCY OF SURVEYS.—Each

20 State shall implement programs to measure and

21 reduce inconsistency in the application of sur22 vey results among surveyors.

23 ‘‘(E) SURVEY TEAMS.—

24 ‘‘(i) IN GENERAL.—Surveys under

25 this subsection shall be conducted by a
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1 multidisciplinary team of professionals (in2 cluding a registered professional nurse).

3 ‘‘(ii) PROHIBITION OF CONFLICTS OF

4 INTEREST.—A State may not use as a

5 member of a survey team under this sub6 section an individual who is serving (or has

7 served within the previous 2 years) as a

8 member of the staff of, or as a consultant

9 to, the facility surveyed respecting compli10 ance with the requirements of subsections

11 (b), (c), and (d), or who has a personal or

12 familial financial interest in the facility

13 being surveyed.

14 ‘‘(iii) TRAINING.—The Secretary shall

15 provide for the comprehensive training of

16 State and Federal surveyors in the conduct

17 of standard and extended surveys under

18 this subsection, including the auditing of

19 resident assessments and plans of care. No

20 individual shall serve as a member of a

21 survey team unless the individual has suc22 cessfully completed a training and testing

23 program in survey and certification tech24 niques that has been approved by the Sec25 retary.
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1 ‘‘(3) VALIDATION SURVEYS.—

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

3 conduct onsite surveys of a representative sam4 ple of nursing facilities in each State, within 2

5 months of the date of surveys conducted under

6 paragraph (2) by the State, in a sufficient num7 ber to allow inferences about the adequacies of

8 each State’s surveys conducted under para9 graph (2). In conducting such surveys, the Sec10 retary shall use the same survey protocols as

11 the State is required to use under paragraph

12 (2). If the State has determined that an indi13 vidual nursing facility meets the requirements

14 of subsections (b), (c), and (d), but the Sec15 retary determines that the facility does not

16 meet such requirements, the Secretary’s deter17 mination as to the facility’s noncompliance with

18 such requirements is binding and supersedes

19 that of the State survey.

20 ‘‘(B) SCOPE.—With respect to each State,

21 the Secretary shall conduct surveys under sub22 paragraph (A) each year with respect to at least

23 5 percent of the number of nursing facilities

24 surveyed by the State in the year, but in no

25 case less than 5 nursing facilities in the State.
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1 ‘‘(C) REDUCTION IN ADMINISTRATIVE

2 COSTS FOR SUBSTANDARD PERFORMANCE.—If

3 the Secretary finds, on the basis of such sur4 veys, that a State has failed to perform surveys

5 as required under paragraph (2) or that a

6 State’s survey and certification performance

7 otherwise is not adequate, the Secretary may

8 provide for the training of survey teams in the

9 State and shall provide for a reduction of the

10 payment otherwise made to the State under sec11 tion 1512(a)(3)(C) with respect to a quarter

12 equal to 33 percent multiplied by a fraction, the

13 denominator of which is equal to the total num14 ber of residents in nursing facilities surveyed by

15 the Secretary that quarter and the numerator

16 of which is equal to the total number of resi17 dents in nursing facilities which were found

18 pursuant to such surveys to be not in compli19 ance with any of the requirements of sub20 sections (b), (c), and (d). A State that is dissat21 isfied with the Secretary’s findings under this

22 subparagraph may obtain reconsideration and

23 review of the findings under section 1116 in the

24 same manner as a State may seek reconsider25 ation and review under that section of the Sec-
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1 retary’s determination under section

2 1116(a)(1).

3 ‘‘(D) SPECIAL SURVEYS OF COMPLI4 ANCE.—Where the Secretary has reason to

5 question the compliance of a nursing facility

6 with any of the requirements of subsections (b),

7 (c), and (d), the Secretary may conduct a sur8 vey of the facility and, on the basis of that sur9 vey, make independent and binding determina10 tions concerning the extent to which the nurs11 ing facility meets such requirements.

12 ‘‘(4) INVESTIGATION OF COMPLAINTS AND MON13 ITORING NURSING FACILITY COMPLIANCE.—Each

14 State shall maintain procedures and adequate staff

15 to—

16 ‘‘(A) investigate complaints of violations of

17 requirements by nursing facilities, and

18 ‘‘(B) monitor, on-site, on a regular, as

19 needed basis, a nursing facility’s compliance

20 with the requirements of subsections (b), (c),

21 and (d), if—

22 ‘‘(i) the facility has been found not to

23 be in compliance with such requirements

24 and is in the process of correcting defi25 ciencies to achieve such compliance;
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1 ‘‘(ii) the facility was previously found

2 not to be in compliance with such require3 ments, has corrected deficiencies to achieve

4 such compliance, and verification of contin5 ued compliance is indicated; or

6 ‘‘(iii) the State has reason to question

7 the compliance of the facility with such re8 quirements.

9 A State may maintain and utilize a specialized team

10 (including an attorney, an auditor, and appropriate

11 health care professionals) for the purpose of identi12 fying, surveying, gathering and preserving evidence,

13 and carrying out appropriate enforcement actions

14 against substandard nursing facilities.

15 ‘‘(5) DISCLOSURE OF RESULTS OF INSPECTIONS

16 AND ACTIVITIES.—

17 ‘‘(A) PUBLIC INFORMATION.—Each State,

18 and the Secretary, shall make available to the

19 public—

20 ‘‘(i) information respecting all surveys

21 and certifications made respecting nursing

22 facilities, including statements of defi23 ciencies, within 14 calendar days after

24 such information is made available to those

25 facilities, and approved plans of correction,
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1 ‘‘(ii) copies of cost reports of such fa2 cilities filed under this title or under title

3 XVIII,

4 ‘‘(iii) copies of statements of owner5 ship under section 1124, and

6 ‘‘(iv) information disclosed under sec7 tion 1126.

8 ‘‘(B) NOTICE TO OMBUDSMAN.—Each

9 State shall notify the State long-term care om10 budsman (established under title III or VII of

11 the Older Americans Act of 1965 in accordance

12 with section 712 of the Act) of the State’s find13 ings of noncompliance with any of the require14 ments of subsections (b), (c), and (d), or of any

15 adverse action taken against a nursing facility

16 under paragraphs (1), (2), or (3) of subsection

17 (h), with respect to a nursing facility in the

18 State.

19 ‘‘(C) NOTICE TO PHYSICIANS AND NURS20 ING FACILITY ADMINISTRATOR LICENSING

21 BOARD.—If a State finds that a nursing facility

22 has provided substandard quality of care, the

23 State shall notify—
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1 ‘‘(i) the attending physician of each

2 resident with respect to which such finding

3 is made, and

4 ‘‘(ii) any State board responsible for

5 the licensing of the nursing facility admin6 istrator of the facility.

7 ‘‘(D) ACCESS TO FRAUD CONTROL

8 UNITS.—Each State shall provide its State

9 fraud and abuse control unit (established under

10 section 1554) with access to all information of

11 the State agency responsible for surveys and

12 certifications under this subsection.

13 ‘‘(h) ENFORCEMENT PROCESS.—

14 ‘‘(1) IN GENERAL.—If a State finds, on the

15 basis of a standard, extended, or partial extended

16 survey under subsection (g)(2) or otherwise, that a

17 nursing facility no longer meets a requirement of

18 subsection (b), (c), or (d)—

19 ‘‘(A) the State shall require the facility to

20 correct the deficiency involved;

21 ‘‘(B) if the State finds that the facility’s

22 deficiencies immediately jeopardize the health

23 or safety of its residents, the State shall take

24 immediate action to remove the jeopardy and

25 correct the deficiencies through the remedy
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1 specified in paragraph (2)(A)(iii), or terminate

2 the facility’s participation under the State plan

3 and may provide, in addition, for one or more

4 of the other remedies described in paragraph

5 (2); and

6 ‘‘(C) if the State finds that the facility’s

7 deficiencies do not immediately jeopardize the

8 health or safety of its residents, the State

9 may—

10 ‘‘(i) terminate the facility’s participa11 tion under the State plan,

12 ‘‘(ii) provide for one or more of the

13 remedies described in paragraph (2), or

14 ‘‘(iii) do both.

15 Nothing in this paragraph shall be construed as re16 stricting the remedies available to a State to remedy

17 a nursing facility’s deficiencies. If a State finds that

18 a nursing facility meets the requirements of sub19 sections (b), (c), and (d), but, as of a previous pe20 riod, did not meet such requirements, the State may

21 provide for a civil money penalty under paragraph

22 (2)(A)(ii) for the days in which it finds that the fa23 cility was not in compliance with such requirements.

24 ‘‘(2) SPECIFIED REMEDIES.—
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1 ‘‘(A) LISTING.—Except as provided in sub2 paragraph (B), each State shall establish by law

3 (whether statute or regulation) at least the fol4 lowing remedies:

5 ‘‘(i) Denial of payment under the

6 State plan with respect to any individual

7 admitted to the nursing facility involved

8 after such notice to the public and to the

9 facility as may be provided for by the

10 State.

11 ‘‘(ii) A civil money penalty assessed

12 and collected, with interest, for each day in

13 which the facility is or was out of compli14 ance with a requirement of subsection (b),

15 (c), or (d). Funds collected by a State as

16 a result of imposition of such a penalty (or

17 as a result of the imposition by the State

18 of a civil money penalty for activities de19 scribed in subsection (b)(3)(B)(ii)(I),

20 (b)(3)(B)(ii)(II), or (g)(2)(A)(i)) shall be

21 applied to the protection of the health or

22 property of residents of nursing facilities

23 that the State or the Secretary finds defi24 cient, including payment for the costs of

25 relocation of residents to other facilities,
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1 maintenance of operation of a facility

2 pending correction of deficiencies or clo3 sure, and reimbursement of residents for

4 personal funds lost.

5 ‘‘(iii) The appointment of temporary

6 management to oversee the operation of

7 the facility and to assure the health and

8 safety of the facility’s residents, where

9 there is a need for temporary management

10 while—

11 ‘‘(I) there is an orderly closure of

12 the facility, or

13 ‘‘(II) improvements are made in

14 order to bring the facility into compli15 ance with all the requirements of sub16 sections (b), (c), and (d).

17 The temporary management under this

18 clause shall not be terminated under sub19 clause (II) until the State has determined

20 that the facility has the management capa21 bility to ensure continued compliance with

22 all the requirements of subsections (b), (c),

23 and (d).

24 ‘‘(iv) The authority, in the case of an

25 emergency, to close the facility, to transfer
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1 residents in that facility to other facilities,

2 or both.

3 The State also shall specify criteria, as to when

4 and how each of such remedies is to be applied,

5 the amounts of any fines, and the severity of

6 each of these remedies, to be used in the impo7 sition of such remedies. Such criteria shall be

8 designed so as to minimize the time between

9 the identification of violations and final imposi10 tion of the remedies and shall provide for the

11 imposition of incrementally more severe fines

12 for repeated or uncorrected deficiencies. In ad13 dition, the State may provide for other specified

14 remedies, such as directed plans of correction.

15 ‘‘(B) GUIDANCE AND ALTERNATIVE REM16 EDIES.—(i) The Secretary shall provide through

17 regulations guidance to States in establishing

18 remedies under clauses (i) through (iv) of sub19 paragraph (A).

20 ‘‘(ii) A State may establish alternative

21 remedies (other than termination of participa22 tion) other than those described in clauses (i)

23 through (iv) of subparagraph (A), if the State

24 demonstrates to the Secretary’s satisfaction

25 that the alternative remedies are as effective in
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1 deterring noncompliance and correcting defi2 ciencies as those described in such subpara3 graph.

4 ‘‘(C) ASSURING PROMPT COMPLIANCE.—If

5 a nursing facility has not complied with any of

6 the requirements of subsections (b), (c), and

7 (d), within 3 months after the date the facility

8 is found to be out of compliance with such re9 quirements, the State shall impose the remedy

10 described in subparagraph (A)(i) for all individ11 uals who are admitted to the facility after such

12 date.

13 ‘‘(D) REPEATED NONCOMPLIANCE.—In the

14 case of a nursing facility which, on 3 consecu15 tive standard surveys conducted under sub16 section (g)(2), has been found to have provided

17 substandard quality of care, the State shall (re18 gardless of what other remedies are provided)—

19 ‘‘(i) impose the remedy described in

20 subparagraph (A)(i), and

21 ‘‘(ii) monitor the facility under sub22 section (g)(4)(B),

23 until the facility has demonstrated, to the satis24 faction of the State, that it is in compliance

25 with the requirements of subsections (b), (c),
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1 and (d), and that it will remain in compliance

2 with such requirements.

3 ‘‘(E) FUNDING.—The reasonable expendi4 tures of a State to provide for temporary man5 agement and other expenses associated with im6 plementing the remedies described in clauses

7 (iii) and (iv) of subparagraph (A) shall be con8 sidered, for purposes of section 1512(a)(3)(C),

9 to be necessary for the proper and efficient ad10 ministration of the State plan.

11 ‘‘(F) INCENTIVES FOR HIGH QUALITY

12 CARE.—In addition to the remedies specified in

13 this paragraph, a State may establish a pro14 gram to reward, through public recognition, in15 centive payments, or both, nursing facilities

16 that provide the highest quality care to resi17 dents who are entitled to medical assistance

18 under this title. For purposes of section

19 1512(a)(3)(C), proper expenses incurred by a

20 State in carrying out such a program shall be

21 considered to be expenses necessary for the

22 proper and efficient administration of the State

23 plan.

24 ‘‘(3) SECRETARIAL AUTHORITY.—
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1 ‘‘(A) FOR STATE NURSING FACILITIES.—

2 With respect to a State nursing facility, the

3 Secretary shall have the authority and duties of

4 a State under this subsection, including the au5 thority to impose remedies described in clauses

6 (i), (ii), and (iii) of paragraph (2)(A). Nothing

7 in this subparagraph shall be construed as re8 stricting the remedies available to the Secretary

9 to remedy a nursing facility’s deficiencies.

10 ‘‘(B) OTHER NURSING FACILITIES.—With

11 respect to any other nursing facility in a State,

12 if the Secretary finds that a nursing facility no

13 longer meets a requirement of subsection (b),

14 (c), (d), or (e), and further finds that the facili15 ty’s deficiencies—

16 ‘‘(i) immediately jeopardize the health

17 or safety of its residents, the Secretary

18 shall take immediate action to remove the

19 jeopardy and correct the deficiencies

20 through the remedy specified in subpara21 graph (C)(iii), or terminate the facility’s

22 participation under the State plan and

23 may provide, in addition, for one or more

24 of the other remedies described in subpara25 graph (C); or
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1 ‘‘(ii) do not immediately jeopardize

2 the health or safety of its residents, the

3 Secretary may impose any of the remedies

4 described in subparagraph (C).

5 Nothing in this subparagraph shall be con6 strued as restricting the remedies available to

7 the Secretary to remedy a nursing facility’s de8 ficiencies. If the Secretary finds that a nursing

9 facility meets such requirements but, as of a

10 previous period, did not meet such require11 ments, the Secretary may provide for a civil

12 money penalty under subparagraph (C)(ii) for

13 the days on which he finds that the facility was

14 not in compliance with such requirements.

15 ‘‘(C) SPECIFIED REMEDIES.—The rem16 edies specified in this subparagraph are as fol17 lows:

18 ‘‘(i) DENIAL OF PAYMENT.—Denial of

19 any further payments to the State in ac20 cordance with section 1529(f) for medical

21 assistance furnished by the facility to all

22 individuals in the facility or to individuals

23 admitted to the facility after the effective

24 date of the finding.
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1 ‘‘(ii) AUTHORITY WITH RESPECT TO

2 CIVIL MONEY PENALTIES.—Imposition of a

3 civil money penalty against the facility in

4 an amount not to exceed $10,000 for each

5 day of noncompliance. The provisions of

6 section 1128A (other than subsections (a)

7 and (b)) shall apply to a civil money pen8 alty under the previous sentence in the

9 same manner as such provisions apply to a

10 penalty or proceeding under section

11 1128A(a).

12 ‘‘(iii) APPOINTMENT OF TEMPORARY

13 MANAGEMENT.—Appointment of tem14 porary management to oversee the oper15 ation of the facility and to assure the

16 health and safety of the facility’s residents,

17 where there is a need for temporary man18 agement while—

19 ‘‘(I) there is an orderly closure of

20 the facility, or

21 ‘‘(II) improvements are made in

22 order to bring the facility into compli23 ance with all the requirements of sub24 sections (b), (c), and (d).
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1 The temporary management under this

2 clause shall not be terminated under sub3 clause (II) until the Secretary has deter4 mined that the facility has the manage5 ment capability to ensure continued com6 pliance with all the requirements of sub7 sections (b), (c), and (d).

8 The Secretary shall specify criteria, as to when

9 and how each of such remedies is to be applied,

10 the amounts of any fines, and the severity of

11 each of these remedies, to be used in the impo12 sition of such remedies. Such criteria shall be

13 designed so as to minimize the time between

14 the identification of violations and final imposi15 tion of the remedies and shall provide for the

16 imposition of incrementally more severe fines

17 for repeated or uncorrected deficiencies. In ad18 dition, the Secretary may provide for other

19 specified remedies, such as directed plans of

20 correction.

21 ‘‘(D) CONTINUATION OF PAYMENTS PEND22 ING REMEDIATION.—The Secretary may con23 tinue payments, over a period of not longer

24 than 6 months after the effective date of the

25 findings, under this title with respect to a nurs-
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1 ing facility not in compliance with a require2 ment of subsection (b), (c), or (d), if—

3 ‘‘(i) the State survey agency finds

4 that it is more appropriate to take alter5 native action to assure compliance of the

6 facility with the requirements than to ter7 minate the certification of the facility,

8 ‘‘(ii) the State has submitted a plan

9 and timetable for corrective action to the

10 Secretary for approval and the Secretary

11 approves the plan of corrective action, and

12 ‘‘(iii) the State agrees to repay to the

13 Federal Government payments received

14 under this subparagraph if the corrective

15 action is not taken in accordance with the

16 approved plan and timetable.

17 The Secretary shall establish guidelines for ap18 proval of corrective actions requested by States

19 under this subparagraph.

20 ‘‘(4) SPECIAL RULES REGARDING PAYMENTS TO

21 FACILITIES.—

22 ‘‘(A) CONTINUATION OF PAYMENTS PEND23 ING REMEDIATION.—The State or the Sec24 retary, as appropriate, may continue payments,

25 over a period of not longer than 6 months after
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1 the effective date of the findings, under this

2 title with respect to a nursing facility not in

3 compliance with a requirement of subsection

4 (b), (c), or (d). The State may continue such

5 payments only if—

6 ‘‘(i) the State survey agency finds

7 that it is more appropriate to take alter8 native action to assure compliance of the

9 facility with the requirements than to ter10 minate the certification of the facility,

11 ‘‘(ii) the State has submitted a plan

12 and timetable for corrective action to the

13 Secretary for approval and the Secretary

14 approves the plan of corrective action, and

15 ‘‘(iii) the State agrees to repay to the

16 Federal Government payments received

17 under this subparagraph if the corrective

18 action is not taken in accordance with the

19 approved plan and timetable.

20 The Secretary shall establish guidelines for ap21 proval of corrective actions requested by States

22 under this subparagraph.

23 ‘‘(B) EFFECTIVE PERIOD OF DENIAL OF

24 PAYMENT.—A finding to deny payment under

25 this subsection shall terminate when the State
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1 or Secretary (as the case may be) finds that the

2 facility is in substantial compliance with all the

3 requirements of subsections (b), (c), and (d).

4 ‘‘(5) IMMEDIATE TERMINATION OF PARTICIPA5 TION FOR FACILITY WHERE STATE OR SECRETARY

6 FINDS NONCOMPLIANCE AND IMMEDIATE JEOP7 ARDY.—If either the State or the Secretary finds

8 that a nursing facility has not met a requirement of

9 subsection (b), (c), or (d), and finds that the failure

10 immediately jeopardizes the health or safety of its

11 residents, the State or the Secretary, respectively

12 shall notify the other of such finding, and the State

13 or the Secretary, respectively, shall take immediate

14 action to remove the jeopardy and correct the defi15 ciencies through the remedy specified in paragraph

16 (2)(A)(iii) or (3)(C)(iii), or terminate the facility’s

17 participation under the State plan. If the facility’s

18 participation in the State plan is terminated by ei19 ther the State or the Secretary, the State shall pro20 vide for the safe and orderly transfer of the resi21 dents eligible under the State plan consistent with

22 the requirements of subsection (c)(2).

23 ‘‘(6) SPECIAL RULES WHERE STATE AND SEC24 RETARY DO NOT AGREE ON FINDING OF NON25 COMPLIANCE.—
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1 ‘‘(A) STATE FINDING OF NONCOMPLIANCE

2 AND NO SECRETARIAL FINDING OF NONCOMPLI3 ANCE.—If the Secretary finds that a nursing

4 facility has met all the requirements of sub5 sections (b), (c), and (d), but a State finds that

6 the facility has not met such requirements and

7 the failure does not immediately jeopardize the

8 health or safety of its residents, the State’s

9 findings shall control and the remedies imposed

10 by the State shall be applied.

11 ‘‘(B) SECRETARIAL FINDING OF NON12 COMPLIANCE AND NO STATE FINDING OF NON13 COMPLIANCE.—If the Secretary finds that a

14 nursing facility has not met all the require15 ments of subsections (b), (c), and (d), and that

16 the failure does not immediately jeopardize the

17 health or safety of its residents, but the State

18 has not made such a finding, the Secretary—

19 ‘‘(i) may impose any remedies speci20 fied in paragraph (3)(C) with respect to

21 the facility, and

22 ‘‘(ii) shall (pending any termination

23 by the Secretary) permit continuation of

24 payments in accordance with paragraph

25 (3)(D).
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1 ‘‘(7) SPECIAL RULES FOR TIMING OF TERMI2 NATION OF PARTICIPATION WHERE REMEDIES OVER3 LAP.—If both the Secretary and the State find that

4 a nursing facility has not met all the requirements

5 of subsections (b), (c), and (d), and neither finds

6 that the failure immediately jeopardizes the health

7 or safety of its residents—

8 ‘‘(A)(i) if both find that the facility’s par9 ticipation under the State plan should be termi10 nated, the State’s timing of any termination

11 shall control so long as the termination date

12 does not occur later than 6 months after the

13 date of the finding to terminate;

14 ‘‘(ii) if the Secretary, but not the State,

15 finds that the facility’s participation under the

16 State plan should be terminated, the Secretary

17 shall (pending any termination by the Sec18 retary) permit continuation of payments in ac19 cordance with paragraph (3)(D); or

20 ‘‘(iii) if the State, but not the Secretary,

21 finds that the facility’s participation under the

22 State plan should be terminated, the State’s de23 cision to terminate, and timing of such termi24 nation, shall control; and
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1 ‘‘(B)(i) if the Secretary or the State, but

2 not both, establishes one or more remedies

3 which are additional or alternative to the rem4 edy of terminating the facility’s participation

5 under the State plan, such additional or alter6 native remedies shall also be applied, or

7 ‘‘(ii) if both the Secretary and the State

8 establish one or more remedies which are addi9 tional or alternative to the remedy of terminat10 ing the facility’s participation under the State

11 plan, only the additional or alternative remedies

12 of the Secretary shall apply.

13 ‘‘(8) CONSTRUCTION.—The remedies provided

14 under this subsection are in addition to those other15 wise available under Federal or State law and shall

16 not be construed as limiting such other remedies, in17 cluding any remedy available to an individual at

18 common law. The remedies described in clauses (i),

19 (iii), and (iv) of paragraph (2)(A) may be imposed

20 during the pendency of any hearing. The provisions

21 of this subsection shall apply to a nursing facility (or

22 portion thereof) notwithstanding that the facility (or

23 portion thereof) also is a skilled nursing facility for

24 purposes of title XVIII.
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1 ‘‘(9) SHARING OF INFORMATION.—Notwith2 standing any other provision of law, all information

3 concerning nursing facilities required by this section

4 to be filed with the Secretary or a State agency shall

5 be made available by such facilities to Federal or

6 State employees for purposes consistent with the ef7 fective administration of programs established under

8 this title and title XVIII, including investigations by

9 State fraud control units.

10 ‘‘(i) CONSTRUCTION.—Where requirements or obliga11 tions under this section are identical to those provided

12 under section 1819 of this Act, the fulfillment of those

13 requirements or obligations under section 1819 shall be

14 considered to be the fulfillment of the corresponding re15 quirements or obligations under this section.

16 ‘‘SEC. 1558. OTHER PROVISIONS PROMOTING PROGRAM IN17 TEGRITY.

18 ‘‘(a) PUBLIC ACCESS TO SURVEY RESULTS.—Each

19 State plan shall provide that upon completion of a survey

20 of any health care facility or organization by a State agen21 cy to carry out the plan, the agency shall make public in

22 readily available form and place the pertinent findings of

23 the survey relating to the compliance of the facility or or24 ganization with requirements of law.
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1 ‘‘(b) RECORD KEEPING.—Each State plan shall pro2 vide for agreements with persons or institutions providing

3 services under the plan under which the person or institu4 tion agrees—

5 ‘‘(1) to keep such records, including ledgers,

6 books, and original evidence of costs, as are nec7 essary to fully disclose the extent of the services pro8 vided to individuals receiving assistance under the

9 plan, and

10 ‘‘(2) to furnish the State agency with such in11 formation regarding any payments claimed by such

12 person or institution for providing services under the

13 plan, as the State agency may from time to time re14 quest.

15 ‘‘(c) QUALITY ASSURANCE.—Each State plan shall

16 provide a program to assure the quality of services pro17 vided under the plan, including such services provided to

18 individuals with chronic mental or physical illness.

19 ‘‘PART E—GENERAL PROVISIONS

20 ‘‘SEC. 1571. DEFINITIONS.

21 ‘‘(a) MEDICAL ASSISTANCE.—For purposes of this

22 title, the term ‘medical assistance’ means payment of part

23 or all of the cost of any of the following, or assistance

24 in the purchase, in whole or in part, of health benefit cov25 erage that includes any of the following, for eligible low-
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1 income individuals (as defined in subsection (b)) as speci2 fied under the State plan:

3 ‘‘(1) Inpatient hospital services.

4 ‘‘(2) Outpatient hospital services.

5 ‘‘(3) Physician services.

6 ‘‘(4) Surgical services.

7 ‘‘(5) Clinic services and other ambulatory

8 health care services.

9 ‘‘(6) Nursing facility services.

10 ‘‘(7) Intermediate care facility services for the

11 mentally retarded.

12 ‘‘(8) Prescription drugs and biologicals and the

13 administration of such drugs and biologicals, only if

14 such drugs and biologicals are not furnished for the

15 purpose of causing, or assisting in causing, the

16 death, suicide, euthanasia, or mercy killing of a per17 son.

18 ‘‘(9) Over-the-counter medications.

19 ‘‘(10) Laboratory and radiological services.

20 ‘‘(11) Prepregnancy family planning services

21 and supplies.

22 ‘‘(12) Inpatient mental health services, includ23 ing services furnished in a State-operated mental

24 hospital and including residential or other 24-hour

25 therapeutically planned structured services.
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1 ‘‘(13) Outpatient mental health services, includ2 ing services furnished in a State-operated mental

3 hospital and including community-based services.

4 ‘‘(14) Durable medical equipment and other

5 medically-related or remedial devices (such as pros6 thetic devices, implants, eyeglasses, hearing aids,

7 dental devices, and adaptive devices).

8 ‘‘(15) Disposable medical supplies.

9 ‘‘(16) Home and community-based health care

10 services and related supportive services (such as

11 home health nursing services, home health aide serv12 ices, personal care, assistance with activities of daily

13 living, chore services, day care services, respite care

14 services, training for family members, and minor

15 modifications to the home).

16 ‘‘(17) Community supported living arrange17 ments, assisted living arrangements, and transitional

18 living arrangements in the community.

19 ‘‘(18) Nursing care services (such as nurse

20 practitioner services, nurse midwife services, ad21 vanced practice nurse services, private duty nursing

22 care, pediatric nurse services, and respiratory care

23 services) in a home, school, or other setting.
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1 ‘‘(19) Abortion only if necessary to save the life

2 of the mother or if the pregnancy is the result of an

3 act of rape or incest.

4 ‘‘(20) Dental services.

5 ‘‘(21) Inpatient substance abuse treatment

6 services and residential substance abuse treatment

7 services.

8 ‘‘(22) Outpatient substance abuse treatment

9 services.

10 ‘‘(23) Case management services.

11 ‘‘(24) Care coordination services.

12 ‘‘(25) Physical therapy, occupational therapy,

13 and services for individuals with speech, hearing,

14 and language disorders.

15 ‘‘(26) Hospice care.

16 ‘‘(27) Any other medical, diagnostic, screening,

17 preventive, restorative, remedial, therapeutic, or re18 habilitative services (whether in a facility, home,

19 school, or other setting) if recognized by State law

20 and only if the service is—

21 ‘‘(A) prescribed by or furnished by a physi22 cian or other licensed or registered practitioner

23 within the scope of practice as defined by State

24 law,
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1 ‘‘(B) performed under the general super2 vision or at the direction of a physician, or

3 ‘‘(C) furnished by a health care facility

4 that is operated by a State or local government

5 or is licensed under State law and operating

6 within the scope of the license.

7 ‘‘(28) Premiums for private health care insur8 ance coverage, including private long-term care in9 surance coverage.

10 ‘‘(29) Medical transportation.

11 ‘‘(30) Medicare cost-sharing (as defined in sub12 section (c)).

13 ‘‘(31) Enabling services (such as transpor14 tation, translation, and outreach services) only if de15 signed to increase the accessibility of primary and

16 preventive health care services for eligible low-in17 come individuals.

18 ‘‘(32) Federally-qualified health center services

19 (as defined in subsection (f)(2)(A)).

20 ‘‘(33) Rural health clinic services (as defined in

21 subsection (f)(1)).

22 ‘‘(34) Physician assistant services.

23 ‘‘(35) Any other health care services or items

24 specified by the Secretary and not excluded under

25 this section.
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1 ‘‘(b) ELIGIBLE LOW-INCOME INDIVIDUAL.—

2 ‘‘(1) STATE PLAN ELIGIBILITY STANDARDS.—

3 ‘‘(A) IN GENERAL.—The term ‘eligible low4 income individual’ means an individual—

5 ‘‘(i) who has been determined eligible

6 by the State for medical assistance under

7 the State plan and is not an inmate of a

8 public institution (except as a patient in a

9 State psychiatric hospital), and

10 ‘‘(ii) whose family income (as deter11 mined under the plan) does not exceed a

12 percentage (specified in the State plan and

13 not to exceed 275 percent) of the poverty

14 line for a family of the size involved.

15 ‘‘(B) CONTINUATION OF KATIE BECKETT

16 ELIGIBILITY.—At the option of a State, sub17 paragraph (A)(ii) shall not apply in the case of

18 an individual who—

19 ‘‘(i) is 18 years of age or younger and

20 qualifies as a disabled individual under sec21 tion 1614(a); and

22 ‘‘(ii) with respect to whom there has

23 been a determination by the State that—

24 ‘‘(I) the individual requires a

25 level of care provided in a hospital,
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1 nursing facility, or intermediate care

2 facility for the mentally retarded; and

3 ‘‘(II) it is appropriate to provide

4 such care for the individual outside

5 such an institution.

6 ‘‘(2) AMOUNT OF INCOME.—In determining the

7 amount of income under paragraph (1)(B), a State

8 may exclude costs incurred for medical care or other

9 types of remedial care recognized by the State.

10 ‘‘(3) COMPUTATION OF INCOME FOR CERTAIN

11 CHILDREN.—In determining the amount of family

12 income under paragraph (1)(B) in the case of a

13 child described in section 1501(a)(1)(F), the State

14 shall only count the income of the child and not that

15 of the family in which the child is placed.

16 ‘‘(c) MEDICARE COST-SHARING.—For purposes of

17 this title, the term ‘medicare cost-sharing’ means any of

18 the following:

19 ‘‘(1)(A) Premiums under section 1839.

20 ‘‘(B) Premiums under section 1818 or 1818A.

21 ‘‘(2) Coinsurance under title XVIII (including

22 coinsurance described in section 1813).

23 ‘‘(3) Deductibles established under title XVIII

24 (including those described in sections 1813 and

25 1833(b)).
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1 ‘‘(4) The difference between the amount that is

2 paid under section 1833(a) and the amount that

3 would be paid under such section if any reference to

4 ‘80 percent’ therein were deemed a reference to ‘100

5 percent’.

6 ‘‘(5) Premiums for enrollment of an individual

7 with an eligible organization under section 1876.

8 ‘‘(d) ADDITIONAL DEFINITIONS.—For purposes of

9 this title:

10 ‘‘(1) CHILD.—The term ‘child’ means an indi11 vidual under 19 years of age.

12 ‘‘(2) ELDERLY INDIVIDUAL.—The term ‘elderly

13 individual’ means an individual who has attained re14 tirement age, as defined under section 216(l)(1).

15 ‘‘(3) POVERTY LINE DEFINED.—The term ‘pov16 erty line’ has the meaning given such term in section

17 673(2) of the Community Services Block Grant Act

18 (42 U.S.C. 9902(2)), including any revision required

19 by such section.

20 ‘‘(4) PREGNANT WOMAN.—The term ‘pregnant

21 woman’ includes a woman during the 60-day period

22 beginning on the last day of the pregnancy.

23 ‘‘(e) EPSDT SERVICES.—In this title, the term

24 ‘EPSDT services’ means the following items and services:

25 ‘‘(1) Screening services—
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1 ‘‘(A) which are provided—

2 ‘‘(i) at intervals which meet reason3 able standards of medical and dental prac4 tice, as determined by the State after con5 sultation with recognized medical and den6 tal organizations involved in child health

7 care and, with respect to immunizations

8 under section 1501(a)(2)(G) in accordance

9 with the schedule referred to in such sec10 tion for pediatric vaccines, and

11 ‘‘(ii) at such other intervals, indicated

12 as medically necessary, to determine the

13 existence of certain physical or mental ill14 nesses or conditions; and

15 ‘‘(B) which shall at a minimum include—

16 ‘‘(i) a comprehensive health and devel17 opmental history (including assessment of

18 both physical and mental health develop19 ment),

20 ‘‘(ii) a comprehensive unclothed phys21 ical exam,

22 ‘‘(iii) appropriate immunizations (ac23 cording to the schedule referred to in sec24 tion 1501(a)(2)(G) for pediatric vaccines)

25 according to age and health history,
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1 ‘‘(iv) laboratory tests (including lead

2 blood level assessment appropriate for age

3 and risk factors), and

4 ‘‘(v) health education (including antic5 ipatory guidance).

6 ‘‘(2) Vision services—

7 ‘‘(A) which are provided—

8 ‘‘(i) at intervals which meet reason9 able standards of medical practice, as de10 termined by the State after consultation

11 with recognized medical organizations in12 volved in child health care, and

13 ‘‘(ii) at such other intervals, indicated

14 as medically necessary, to determine the

15 existence of a suspected illness or condi16 tion; and

17 ‘‘(B) which shall at a minimum include di18 agnosis and treatment for defects in vision, in19 cluding eyeglasses.

20 ‘‘(3) Dental services—

21 ‘‘(A) which are provided—

22 ‘‘(i) at intervals which meet reason23 able standards of dental practice, as deter24 mined by the State after consultation with
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1 recognized dental organizations involved in

2 child health care, and

3 ‘‘(ii) at such other intervals, indicated

4 as medically necessary, to determine the

5 existence of a suspected illness or condi6 tion; and

7 ‘‘(B) which shall at a minimum include re8 lief of pain and infections, restoration of teeth,

9 and maintenance of dental health.

10 ‘‘(4) Hearing services—

11 ‘‘(A) which are provided—

12 ‘‘(i) at intervals which meet reason13 able standards of medical practice, as de14 termined by the State after consultation

15 with recognized medical organizations in16 volved in child health care, and

17 ‘‘(ii) at such other intervals, indicated

18 as medically necessary, to determine the

19 existence of a suspected illness or condi20 tion; and

21 ‘‘(B) which shall at a minimum include di22 agnosis and treatment for defects in hearing,

23 including hearing aids.

24 ‘‘(f) CENTER AND CLINIC SERVICES.—In this title:
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1 ‘‘(1) RURAL HEALTH CLINIC RELATED DEFINI2 TIONS.—The terms ‘rural health clinic services’ and

3 ‘rural health clinic’ have the meanings given such

4 terms in section 1861(aa), except that (A) clause (ii)

5 of section 1861(aa)(2) shall not apply to such terms,

6 and (B) the physician arrangement required under

7 section 1861(aa)(2)(B) shall only apply with respect

8 to rural health clinic services and, with respect to

9 other ambulatory care services, the physician ar10 rangement required shall be only such as may be re11 quired under the State plan for those services.

12 ‘‘(2) FEDERALLY-QUALIFIED HEALTH CENTER

13 RELATED DEFINITIONS.—

14 ‘‘(A) SERVICES.—The term ‘Federally15 qualified health center services’ means services

16 of the type described in subparagraphs (A)

17 through (C) of section 1861(aa)(1), and any

18 other ambulatory care services which are other19 wise included in the State plan, when furnished

20 to an individual as a patient of a Federally21 qualified health center and, for this purpose,

22 any reference to a rural health clinic or a physi23 cian described in section 1861(aa)(2)(B) is

24 deemed a reference to a Federally-qualified
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1 health center or a physician at the center, re2 spectively.

3 ‘‘(B) CENTER.—The term ‘Federally-quali4 fied health center’ means a entity which—

5 ‘‘(i) is receiving a grant under section

6 329, 330, 340, or 340A of the Public

7 Health Service Act,

8 ‘‘(ii)(I) is receiving funding from such

9 a grant under a contract with the recipient

10 of such a grant, and

11 ‘‘(II) meets the requirements to re12 ceive a grant under section 329, 330, 340,

13 or 340A of such Act,

14 ‘‘(iii) based on the recommendation of

15 the Health Resources and Services Admin16 istration within the Public Health Service,

17 is determined by the Secretary to meet the

18 requirements for receiving such a grant, or

19 ‘‘(iv) was treated by the Secretary, for

20 purposes of part B of title XVIII, as a

21 comprehensive Federally funded health

22 center as of January 1, 1990;

23 and includes an outpatient health program or

24 facility operated by a tribe or tribal organiza25 tion under the Indian Self-Determination Act
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1 (Public Law 93–638) or by an urban Indian or2 ganization receiving funds under title V of the

3 Indian Health Care Improvement Act for the

4 provision of primary health services. In apply5 ing clause (ii), the Secretary may waive any re6 quirement referred to in such clause for up to

7 2 years for good cause shown.

8 ‘‘(g) MEDICALLY-RELATED SERVICES.—In this title,

9 the term ‘medically-related services’ means services rea10 sonably related to, or in direct support of, the State’s at11 tainment of one or more of the strategic objectives and

12 performance goals established under section 1521, but

13 does not include items and services included on the list

14 under subsection (a).

15 ‘‘SEC. 1572. TREATMENT OF TERRITORIES.

16 ‘‘Notwithstanding any other requirement of this title,

17 the Secretary may waive or modify any requirement of this

18 title with respect to the medical assistance program for

19 a State other than the 50 States and the District of Co20 lumbia, other than a waiver of—

21 ‘‘(1) the applicable Federal medical assistance

22 percentage,

23 ‘‘(2) the limitation on total payments in a fiscal

24 year to the amount of the allotment under section

25 1511(c), or
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1 ‘‘(3) the requirement that payment may be

2 made for medical assistance only with respect to

3 amounts expended by the State for care and services

4 described in section 1571(a) and medically-related

5 services (as defined in section 1571(g)).

6 ‘‘SEC. 1573. DESCRIPTION OF TREATMENT OF INDIAN

7 HEALTH SERVICE FACILITIES.

8 ‘‘In the case of a State in which one or more facilities

9 of the Indian Health Service is located or in which a facil10 ity of an Indian health program described in section

11 1512(f)(3) is located, the State plan shall include a de12 scription of—

13 ‘‘(1) what provision (if any) has been made for

14 payment for items and services furnished by such fa15 cilities, and

16 ‘‘(2) the manner in which medical assistance for

17 low-income eligible individuals who are Indians will

18 be provided, as determined by the State in consulta19 tion with the appropriate Indian tribes and tribal or20 ganizations.

21 ‘‘SEC. 1574. APPLICATION OF CERTAIN GENERAL PROVI22 SIONS.

23 ‘‘The following sections in part A of title XI shall

24 apply to States under this title in the same manner as

25 they applied to a State under title XIX:
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1 ‘‘(1) Section 1101(a)(1) (relating to definition

2 of State).

3 ‘‘(2) Section 1116 (relating to administrative

4 and judicial review), but only insofar as consistent

5 with the provisions of part B.

6 ‘‘(3) Section 1124 (relating to disclosure of

7 ownership and related information).

8 ‘‘(4) Section 1126 (relating to disclosure of in9 formation about certain convicted individuals).

10 ‘‘(5) Section 1128B(d) (relating to criminal

11 penalties for certain additional charges).

12 ‘‘(6) Section 1132 (relating to periods within

13 which claims must be filed).

14 ‘‘SEC. 1575. OPTIONAL MASTER DRUG REBATE AGREE15 MENTS.

16 ‘‘(a) REQUIREMENT FOR MANUFACTURER TO ENTER

17 INTO AGREEMENT.—

18 ‘‘(1) IN GENERAL.—Pursuant to section

19 1513(f), in order for payment to be made to a State

20 under part B for medical assistance for covered out21 patient drugs of a manufacturer, the manufacturer

22 shall enter into and have in effect a master rebate

23 agreement described in subsection (b) with the Sec24 retary on behalf of States electing to participate in

25 the agreement.
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1 ‘‘(2) COVERAGE OF DRUGS NOT COVERED

2 UNDER REBATE AGREEMENTS.—Nothing in this sec3 tion shall be construed to prohibit a State in its dis4 cretion from providing coverage under its State plan

5 of a covered outpatient drug for which no rebate

6 agreement is in effect under this section.

7 ‘‘(3) EFFECT ON EXISTING AGREEMENTS.—If a

8 State has a rebate agreement in effect with a manu9 facturer on the date of the enactment of this section

10 which provides for a minimum aggregate rebate

11 equal to or greater than the minimum aggregate re12 bate which would otherwise be paid under the mas13 ter agreement under this section, at the option of

14 the State—

15 ‘‘(A) such agreement shall be considered to

16 meet the requirements of the master rebate

17 agreement, and

18 ‘‘(B) the State shall be considered to have

19 elected to participate in the master rebate

20 agreement.

21 ‘‘(4) LIMITATION ON PRICES OF DRUGS PUR22 CHASED BY COVERED ENTITIES.—

23 ‘‘(A) AGREEMENT WITH SECRETARY.—A

24 manufacturer meets the requirements of this

25 paragraph if the manufacturer has entered into
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1 an agreement with the Secretary that meets the

2 requirements of section 340B of the Public

3 Health Service Act with respect to covered out4 patient drugs purchased by a covered entity on

5 or after the first day of the first month that be6 gins after the date of the enactment of title VI

7 of the Veterans Health Care Act of 1992.

8 ‘‘(B) COVERED ENTITY DEFINED.—In this

9 subsection, the term ‘covered entity’ means an

10 entity described in subsection (a)(4) of section

11 340B of the Public Health Service Act if the

12 entity furnishes the drugs to patients at a cost

13 no greater than acquisition cost plus such dis14 pensing fee as may be allowable as determined

15 by the Office of Drug Pricing in the Public

16 Health Service.

17 ‘‘(C) ESTABLISHMENT OF ALTERNATIVE

18 MECHANISM TO ENSURE AGAINST DUPLICATE

19 DISCOUNTS OR REBATES.—If the Secretary

20 does not establish a mechanism under section

21 340B(a)(5)(A) of the Public Health Service Act

22 within 12 months of the date of the enactment

23 of such section, the following requirements shall

24 apply:
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1 ‘‘(i) Each covered entity shall inform

2 the single State agency under this title

3 when it is seeking reimbursement for medi4 cal assistance with respect to a unit of any

5 covered outpatient drug which is subject to

6 an agreement under section 340B(a) of

7 such Act.

8 ‘‘(ii) Each such single State agency

9 shall provide a means by which a covered

10 entity shall indicate on any drug reim11 bursement claims form (or format, where

12 electronic claims management is used) that

13 a unit of the drug that is the subject of the

14 form is subject to an agreement under sec15 tion 340B of such Act, and not submit to

16 any manufacturer a claim for a rebate pay17 ment under subsection (b) with respect to

18 such a drug.

19 ‘‘(D) EFFECT OF SUBSEQUENT AMEND20 MENTS.—In determining whether an agreement

21 under subparagraph (A) meets the require22 ments of section 340B of the Public Health

23 Service Act, the Secretary shall not take into

24 account any amendments to such section that
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1 are enacted after the enactment of title VI of

2 the Veterans Health Care Act of 1992.

3 ‘‘(E) DETERMINATION OF COMPLIANCE.—

4 A manufacturer is deemed to meet the require5 ments of this paragraph if the manufacturer es6 tablishes to the satisfaction of the Secretary

7 that the manufacturer would comply (and has

8 offered to comply) with the provisions of section

9 340B of the Public Health Service Act (as in

10 effect immediately after the enactment title VI

11 of the Veterans Health Care Act of 1992), and

12 would have entered into an agreement under

13 such section (as such section was in effect at

14 such time), but for a legislative change in such

15 section after such enactment.

16 ‘‘(b) TERMS OF REBATE AGREEMENT.—

17 ‘‘(1) PERIODIC REBATES.—The master rebate

18 agreement under this section shall require the manu19 facturer to provide, to the State plan of each State

20 participating in the agreement, a rebate for a rebate

21 period in an amount specified in subsection (c) for

22 covered outpatient drugs of the manufacturer dis23 pensed after the effective date of the agreement, for

24 which payment was made under the plan for such

25 period. Such rebate shall be paid by the manufac-
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1 turer not later than 30 days after the date of receipt

2 of the information described in paragraph (2) for

3 the period involved.

4 ‘‘(2) STATE PROVISION OF INFORMATION.—

5 ‘‘(A) STATE RESPONSIBILITY.—Each State

6 participating in the master rebate agreement

7 shall report to each manufacturer not later

8 than 60 days after the end of each rebate pe9 riod and in a form consistent with a standard

10 reporting format established by the Secretary,

11 information on the total number of units of

12 each dosage form and strength and package

13 size of each covered outpatient drug, for which

14 payment was made under the State plan for the

15 period, and shall promptly transmit a copy of

16 such report to the Secretary.

17 ‘‘(B) AUDITS.—A manufacturer may audit

18 the information provided (or required to be pro19 vided) under subparagraph (A). Adjustments to

20 rebates shall be made to the extent that infor21 mation indicates that utilization was greater or

22 less than the amount previously specified.

23 ‘‘(3) MANUFACTURER PROVISION OF PRICE IN24 FORMATION.—
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1 ‘‘(A) IN GENERAL.—Each manufacturer

2 which is subject to the master rebate agreement

3 under this section shall report to the Sec4 retary—

5 ‘‘(i) not later than 30 days after the

6 last day of each rebate period under the

7 agreement, on the average manufacturer

8 price (as defined in subsection (i)(1)) and,

9 for single source drugs and innovator mul10 tiple source drugs, the manufacturer’s best

11 price (as defined in subsection (c)(1)(C))

12 for each covered outpatient drug for the

13 rebate period under the agreement, and

14 ‘‘(ii) not later than 30 days after the

15 date of entering into an agreement under

16 this section, on the average manufacturer

17 price (as defined in subsection (i)(1)) as of

18 October 1, 1990, for each of the manufac19 turer’s covered outpatient drugs.

20 ‘‘(B) VERIFICATION SURVEYS OF AVERAGE

21 MANUFACTURER PRICE.—The Secretary may

22 survey wholesalers and manufacturers that di23 rectly distribute their covered outpatient drugs,

24 when necessary, to verify manufacturer prices

25 reported under subparagraph (A). The Sec-
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1 retary may impose a civil monetary penalty in

2 an amount not to exceed $10,000 on a whole3 saler, manufacturer, or direct seller, if the

4 wholesaler, manufacturer, or direct seller of a

5 covered outpatient drug refuses a request for

6 information by the Secretary in connection with

7 a survey under this subparagraph. The provi8 sions of section 1128A (other than subsections

9 (a) (with respect to amounts of penalties or ad10 ditional assessments) and (b)) shall apply to a

11 civil money penalty under this subparagraph in

12 the same manner as such provisions apply to a

13 penalty or proceeding under section 1128A(a).

14 ‘‘(C) PENALTIES.—

15 ‘‘(i) FAILURE TO PROVIDE TIMELY IN16 FORMATION.—In the case of a manufac17 turer which is subject to the master rebate

18 agreement that fails to provide information

19 required under subparagraph (A) on a

20 timely basis, the amount of the penalty

21 shall be $10,000 for each day in which

22 such information has not been provided

23 and such amount shall be paid to the

24 Treasury. If such information is not re25 ported within 90 days of the deadline im-
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1 posed, the agreement shall be suspended

2 for services furnished after the end of such

3 90-day period and until the date such in4 formation is reported (but in no case shall

5 such suspension be for a period of less

6 than 30 days).

7 ‘‘(ii) FALSE INFORMATION.—Any

8 manufacturer which is subject to the mas9 ter rebate agreement, or a wholesaler or

10 direct seller, that knowingly provides false

11 information under subparagraph (A) or

12 (B) is subject to a civil money penalty in

13 an amount not to exceed $100,000 for

14 each item of false information. Any such

15 civil money penalty shall be in addition to

16 other penalties as may be prescribed by

17 law. The provisions of section 1128A

18 (other than subsections (a) and (b)) shall

19 apply to a civil money penalty under this

20 subparagraph in the same manner as such

21 provisions apply to a penalty or proceeding

22 under section 1128A(a).

23 ‘‘(D) CONFIDENTIALITY OF INFORMA24 TION.—Notwithstanding any other provision of

25 law, information disclosed by manufacturers or
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1 wholesalers under this paragraph or under an

2 agreement with the Secretary of Veterans Af3 fairs described in section 1513(f) is confidential

4 and shall not be disclosed by the Secretary or

5 the Secretary of Veterans Affairs or a State

6 agency (or contractor therewith) in a form

7 which discloses the identity of a specific manu8 facturer or wholesaler or the prices charged for

9 drugs by such manufacturer or wholesaler, ex10 cept—

11 ‘‘(i) as the Secretary determines to be

12 necessary to carry out this section,

13 ‘‘(ii) to permit the Comptroller Gen14 eral to review the information provided,

15 and

16 ‘‘(iii) to permit the Director of the

17 Congressional Budget Office to review the

18 information provided.

19 ‘‘(4) LENGTH OF AGREEMENT.—

20 ‘‘(A) IN GENERAL.—The master rebate

21 agreement under this section shall be effective

22 for an initial period of not less than 1 year and

23 shall be automatically renewed for a period of

24 not less than 1 year unless terminated under

25 subparagraph (B).
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1 ‘‘(B) TERMINATION.—

2 ‘‘(i) BY THE SECRETARY.—The Sec3 retary may provide for termination of the

4 master rebate agreement with respect to a

5 manufacturer for violation of the require6 ments of the agreement or other good

7 cause shown. Such termination shall not be

8 effective earlier than 60 days after the

9 date of notice of such termination. The

10 Secretary shall provide, upon request, a

11 manufacturer with a hearing concerning

12 such a termination, but such hearing shall

13 not delay the effective date of the termi14 nation. Failure of a State to provide any

15 advance notice of such a termination as re16 quired by regulation shall not affect the

17 State’s right to terminate coverage of the

18 drugs affected by such termination as of

19 the effective date of such termination.

20 ‘‘(ii) BY A MANUFACTURER.—A man21 ufacturer may terminate its participation

22 in the master rebate agreement under this

23 section for any reason. Any such termi24 nation shall not be effective until the cal25 endar quarter beginning at least 60 days
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1 after the date the manufacturer provides

2 notice to the Secretary.

3 ‘‘(iii) EFFECTIVENESS OF TERMI4 NATION.—Any termination under this sub5 paragraph shall not affect rebates due

6 under the agreement before the effective

7 date of its termination.

8 ‘‘(iv) NOTICE TO STATES.—In the

9 case of a termination under this subpara10 graph, the Secretary shall provide notice of

11 such termination to the States within not

12 less than 30 days before the effective date

13 of such termination.

14 ‘‘(v) APPLICATION TO TERMINATIONS

15 OF OTHER AGREEMENTS.—The provisions

16 of this subparagraph shall apply to the ter17 minations of master agreements described

18 in section 8126(a) of title 38, United

19 States Code.

20 ‘‘(C) DELAY BEFORE REENTRY.—In the

21 case of any rebate agreement with a manufac22 turer under this section which is terminated,

23 another such agreement with the manufacturer

24 (or a successor manufacturer) may not be en25 tered into until a period of 1 calendar quarter
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1 has elapsed since the date of the termination,

2 unless the Secretary finds good cause for an

3 earlier reinstatement of such an agreement.

4 ‘‘(5) SETTLEMENT OF DISPUTES.—

5 ‘‘(A) SECRETARY.—The Secretary shall

6 have the authority to resolve, settle, and com7 promise disputes regarding the amounts of re8 bates owed under this section and section 1927.

9 ‘‘(B) STATE.—Each State, with respect to

10 covered outpatient drugs paid for under the

11 State plan, shall have authority, independent of

12 the Secretary’s authority under subparagraph

13 (A), to resolve, settle, and compromise disputes

14 regarding the amounts of rebates owed under

15 this section. Any such action shall be deemed to

16 comply with the requirements of this title, and

17 such covered outpatient drugs shall be eligible

18 for payment under the State plan under this

19 title.

20 ‘‘(C) AMOUNT OF REBATE.—The Secretary

21 shall limit the amount of the rebate payable in

22 any case in which the Secretary determines

23 that, because of unusual circumstances or ques24 tionable data, the provisions of subsection (c)

25 result in a rebate amount that is inequitable or
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1 otherwise inconsistent with the purposes of this

2 section.

3 ‘‘(c) DETERMINATION OF AMOUNT OF REBATE.—

4 ‘‘(1) BASIC REBATE FOR SINGLE SOURCE

5 DRUGS AND INNOVATOR MULTIPLE SOURCE

6 DRUGS.—

7 ‘‘(A) IN GENERAL.—Except as provided in

8 paragraph (2), the amount of the rebate speci9 fied in this subsection with respect to a State

10 participating in the master rebate agreement

11 for a rebate period (as defined in subsection

12 (i)(7)) with respect to each dosage form and

13 strength of a single source drug or an innovator

14 multiple source drug shall be equal to the prod15 uct of—

16 ‘‘(i) the total number of units of each

17 dosage form and strength paid for under

18 the State plan in the rebate period (as re19 ported by the State); and

20 ‘‘(ii) the greater of—

21 ‘‘(I) the difference between the

22 average manufacturer price and the

23 best price (as defined in subparagraph

24 (C)) for the dosage form and strength

25 of the drug, or
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1 ‘‘(II) the minimum rebate per2 centage (specified in subparagraph

3 (B)) of such average manufacturer

4 price,

5 for the rebate period.

6 ‘‘(B) MINIMUM REBATE PERCENTAGE.—

7 For purposes of subparagraph (A)(ii)(II), the

8 ‘minimum rebate percentage’ is 15 percent.

9 ‘‘(C) BEST PRICE DEFINED.—For pur10 poses of this section—

11 ‘‘(i) IN GENERAL.—The term ‘best

12 price’ means, with respect to a single

13 source drug or innovator multiple source

14 drug of a manufacturer, the lowest price

15 available from the manufacturer during the

16 rebate period to any wholesaler, retailer,

17 provider, health maintenance organization,

18 nonprofit entity, or governmental entity

19 within the United States, excluding—

20 ‘‘(I) any prices charged on or

21 after October 1, 1992, to the Indian

22 Health Service, the Department of

23 Veterans Affairs, a State home receiv24 ing funds under section 1741 of title

25 38, United States Code, the Depart-
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1 ment of Defense, the Public Health

2 Service, or a covered entity described

3 in section 340B(a)(4) of the Public

4 Health Service Act,

5 ‘‘(II) any prices charged under

6 the Federal Supply Schedule of the

7 General Services Administration,

8 ‘‘(III) any prices used under a

9 State pharmaceutical assistance pro10 gram, and

11 ‘‘(IV) any depot prices and single

12 award contract prices, as defined by

13 the Secretary, of any agency of the

14 Federal Government.

15 ‘‘(ii) SPECIAL RULES.—The term ‘best

16 price’—

17 ‘‘(I) shall be inclusive of cash dis18 counts, free goods that are contingent

19 on any purchase requirement, volume

20 discounts, and rebates (other than re21 bates under this section),

22 ‘‘(II) shall be determined without

23 regard to special packaging, labeling,

24 or identifiers on the dosage form or

25 product or package,
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1 ‘‘(III) shall not take into account

2 prices that are merely nominal in

3 amount, and

4 ‘‘(IV) shall exclude rebates paid

5 under this section or any other re6 bates paid to a State participating in

7 the master rebate agreement.

8 ‘‘(2) ADDITIONAL REBATE FOR SINGLE SOURCE

9 AND INNOVATOR MULTIPLE SOURCE DRUGS.—

10 ‘‘(A) IN GENERAL.—The amount of the re11 bate specified in this subsection with respect to

12 a State participating in the master rebate

13 agreement for a rebate period, with respect to

14 each dosage form and strength of a single

15 source drug or an innovator multiple source

16 drug, shall be increased by an amount equal to

17 the product of—

18 ‘‘(i) the total number of units of such

19 dosage form and strength dispensed after

20 December 31, 1990, for which payment

21 was made under the State plan for the re22 bate period; and

23 ‘‘(ii) the amount (if any) by which—

24 ‘‘(I) the average manufacturer

25 price for the dosage form and
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1 strength of the drug for the period,

2 exceeds

3 ‘‘(II) the average manufacturer

4 price for such dosage form and

5 strength for the calendar quarter be6 ginning July 1, 1990 (without regard

7 to whether or not the drug has been

8 sold or transferred to an entity, in9 cluding a division or subsidiary of the

10 manufacturer, after the first day of

11 such quarter), increased by the per12 centage by which the Consumer Price

13 Index for All Urban Consumers (Unit14 ed States city average) for the month

15 before the month in which the rebate

16 period begins exceeds such index for

17 September 1990.

18 ‘‘(B) TREATMENT OF SUBSEQUENTLY AP19 PROVED DRUGS.—In the case of a covered out20 patient drug approved by the Food and Drug

21 Administration after October 1, 1990, clause

22 (ii)(II) of subparagraph (A) shall be applied by

23 substituting ‘the first full calendar quarter after

24 the day on which the drug was first marketed’

25 for ‘the calendar quarter beginning July 1,
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1 1990’ and ‘the month prior to the first month

2 of the first full calendar quarter after the day

3 on which the drug was first marketed’ for ‘Sep4 tember 1990’.

5 ‘‘(3) REBATE FOR OTHER DRUGS.—

6 ‘‘(A) IN GENERAL.—The amount of the re7 bate paid to a State participating in the master

8 rebate agreement for a rebate period with re9 spect to each dosage form and strength of cov10 ered outpatient drugs (other than single source

11 drugs and innovator multiple source drugs)

12 shall be equal to the product of—

13 ‘‘(i) the applicable percentage (as de14 scribed in subparagraph (B)) of the aver15 age manufacturer price for the dosage

16 form and strength for the rebate period,

17 and

18 ‘‘(ii) the total number of units of such

19 dosage form and strength dispensed after

20 December 31, 1990, for which payment

21 was made under the State plan for the re22 bate period.

23 ‘‘(B) APPLICABLE PERCENTAGE DE24 FINED.—For purposes of subparagraph (A)(i),

25 the ‘applicable percentage’ is 11 percent.
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1 ‘‘(4) LIMITATION ON AMOUNT OF REBATE TO

2 AMOUNTS PAID FOR CERTAIN DRUGS.—

3 ‘‘(A) IN GENERAL.—Upon request of the

4 manufacturer of a covered outpatient drug, the

5 Secretary shall limit, in accordance with sub6 paragraph (B), the amount of the rebate under

7 this subsection with respect to a dosage form

8 and strength of such drug if the majority of the

9 estimated number of units of such dosage form

10 and strength that are subject to rebates under

11 this section were dispensed to inpatients of

12 nursing facilities.

13 ‘‘(B) AMOUNT OF REBATE.—In the case of

14 a covered outpatient drug subject to subpara15 graph (A), the amount of the rebate specified in

16 this subsection for a rebate period, with respect

17 to each dosage form and strength of such drug,

18 shall not exceed the amount paid under the

19 State plan with respect to such dosage form

20 and strength of the drug in the rebate period

21 (without consideration of any dispensing fees

22 paid).

23 ‘‘(5) SUPPLEMENTAL REBATES PROHIBITED.—

24 No rebates shall be required to be paid by manufac25 turers with respect to covered outpatient drugs fur-
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1 nished to individuals in any State that provides for

2 the collection of such rebates in excess of the rebate

3 amount payable under this section.

4 ‘‘(d) LIMITATIONS ON COVERAGE OF DRUGS BY

5 STATES PARTICIPATING IN MASTER AGREEMENT.—

6 ‘‘(1) PERMISSIBLE RESTRICTIONS.—A State

7 participating in the master rebate agreement under

8 this section may—

9 ‘‘(A) subject to prior authorization under

10 its State plan any covered outpatient drug so

11 long as any such prior authorization program

12 complies with the requirements of paragraph

13 (5); and

14 ‘‘(B) exclude or otherwise restrict coverage

15 under its plan of a covered outpatient drug if—

16 ‘‘(i) the drug is contained in the list

17 referred to in paragraph (2);

18 ‘‘(ii) the drug is subject to such re19 strictions pursuant to the master rebate

20 agreement or any agreement described in

21 subsection (a)(4); or

22 ‘‘(iii) the State has excluded coverage

23 of the drug from its formulary established

24 in accordance with paragraph (4).
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1 ‘‘(2) LIST OF DRUGS SUBJECT TO RESTRIC2 TION.—The following drugs or classes of drugs, or

3 their medical uses, may be excluded from coverage

4 or otherwise restricted by a State participating in

5 the master rebate agreement:

6 ‘‘(A) Agents when used for anorexia,

7 weight loss, or weight gain.

8 ‘‘(B) Agents when used to promote fertil9 ity.

10 ‘‘(C) Agents when used for cosmetic pur11 poses or hair growth.

12 ‘‘(D) Agents when used for the sympto13 matic relief of cough and colds.

14 ‘‘(E) Agents when used to promote smok15 ing cessation.

16 ‘‘(F) Prescription vitamins and mineral

17 products, except prenatal vitamins and fluoride

18 preparations.

19 ‘‘(G) Nonprescription drugs.

20 ‘‘(H) Covered outpatient drugs which the

21 manufacturer seeks to require as a condition of

22 sale that associated tests or monitoring services

23 be purchased exclusively from the manufacturer

24 or its designee.

25 ‘‘(I) Barbiturates.
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1 ‘‘(J) Benzodiazepines.

2 ‘‘(3) ADDITIONS TO DRUG LISTINGS.—The Sec3 retary shall, by regulation, periodically update the

4 list of drugs or classes of drugs described in para5 graph (2), or their medical uses, which the Secretary

6 has determined to be subject to clinical abuse or in7 appropriate use.

8 ‘‘(4) REQUIREMENTS FOR FORMULARIES.—A

9 State participating in the master rebate agreement

10 may establish a formulary if the formulary meets the

11 following requirements:

12 ‘‘(A) The formulary is developed by a com13 mittee consisting of physicians, pharmacists,

14 and other appropriate individuals appointed by

15 the Governor of the State.

16 ‘‘(B) Except as provided in subparagraph

17 (C), the formulary includes the covered out18 patient drugs of any manufacturer which has

19 entered into and complies with the agreement

20 under subsection (a) (other than any drug ex21 cluded from coverage or otherwise restricted

22 under paragraph (2)).

23 ‘‘(C) A covered outpatient drug may be ex24 cluded with respect to the treatment of a spe25 cific disease or condition for an identified popu-
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1 lation (if any) only if, based on the drug’s label2 ing (or, in the case of a drug the prescribed use

3 of which is not approved under the Federal

4 Food, Drug, and Cosmetic Act but is a medi5 cally accepted indication, based on information

6 from the appropriate compendia described in

7 subsection (i)(5)), the excluded drug does not

8 have a significant, clinically meaningful thera9 peutic advantage in terms of safety, effective10 ness, or clinical outcome of such treatment for

11 such population over other drugs included in

12 the formulary and there is a written expla13 nation (available to the public) of the basis for

14 the exclusion.

15 ‘‘(D) The State plan permits coverage of a

16 drug excluded from the formulary (other than

17 any drug excluded from coverage or otherwise

18 restricted under paragraph (2)) pursuant to a

19 prior authorization program that is consistent

20 with paragraph (5).

21 ‘‘(E) The formulary meets such other re22 quirements as the Secretary may impose in

23 order to achieve program savings consistent

24 with protecting the health of program bene25 ficiaries.
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1 A prior authorization program established by a State

2 under paragraph (5) is not a formulary subject to

3 the requirements of this paragraph.

4 ‘‘(5) REQUIREMENTS OF PRIOR AUTHORIZATION

5 PROGRAMS.—The State plan of a State participating

6 in the master rebate agreement may require, as a

7 condition of coverage or payment for a covered out8 patient drug for which Federal financial participa9 tion is available in accordance with this section, the

10 approval of the drug before its dispensing for any

11 medically accepted indication (as defined in sub12 section (i)(5)) only if the system providing for such

13 approval—

14 ‘‘(A) provides response by telephone or

15 other telecommunication device within 24 hours

16 of a request for prior authorization, and

17 ‘‘(B) except with respect to the drugs on

18 the list referred to in paragraph (2), provides

19 for the dispensing of at least a 72-hour supply

20 of a covered outpatient prescription drug in an

21 emergency situation (as defined by the Sec22 retary).

23 ‘‘(6) OTHER PERMISSIBLE RESTRICTIONS.—A

24 State participating in the master rebate agreement

25 may impose limitations, with respect to all such
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1 drugs in a therapeutic class, on the minimum or

2 maximum quantities per prescription or on the num3 ber of refills, if such limitations are necessary to dis4 courage waste, and may address instances of fraud

5 or abuse by individuals in any manner authorized

6 under this Act.

7 ‘‘(e) DRUG USE REVIEW.—

8 ‘‘(1) IN GENERAL.—A State participating in the

9 master rebate agreement may provide for a drug use

10 review program to educate physicians and phar11 macists to identify and reduce the frequency of pat12 terns of fraud, abuse, gross overuse, or inappropri13 ate or medically unnecessary care, among physicians,

14 pharmacists, and patients, or associated with specific

15 drugs or groups of drugs, as well as potential and

16 actual severe adverse reactions to drugs.

17 ‘‘(2) APPLICATION OF STATE STANDARDS.—A

18 State with a drug use review program under this

19 subsection shall establish and operate the program

20 under such standards as it may establish.

21 ‘‘(f) ELECTRONIC CLAIMS MANAGEMENT.—In ac22 cordance with chapter 35 of title 44, United States Code

23 (relating to coordination of Federal information policy),

24 the Secretary shall encourage each State to establish, as

25 its principal means of processing claims for covered out-
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1 patient drugs under its State plan, a point-of-sale elec2 tronic claims management system, for the purpose of per3 forming on-line, real time eligibility verifications, claims

4 data capture, adjudication of claims, and assisting phar5 macists (and other authorized persons) in applying for and

6 receiving payment.

7 ‘‘(g) ANNUAL REPORT.—

8 ‘‘(1) IN GENERAL.—Not later than May 1 of

9 each year, the Secretary shall transmit to the Com10 mittee on Finance of the Senate, and the Committee

11 on Commerce of the House of Representatives, a re12 port on the operation of this section in the preceding

13 fiscal year.

14 ‘‘(2) DETAILS.—Each report shall include infor15 mation on—

16 ‘‘(A) ingredient costs paid under this title

17 for single source drugs, multiple source drugs,

18 and nonprescription covered outpatient drugs,

19 ‘‘(B) the total value of rebates received

20 and number of manufacturers providing such

21 rebates,

22 ‘‘(C) the effect of inflation on the value of

23 rebates required under this section,

24 ‘‘(D) trends in prices paid under this title

25 for covered outpatient drugs, and
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1 ‘‘(E) Federal and State administrative

2 costs associated with compliance with the provi3 sions of this title.

4 ‘‘(h) EXEMPTION FOR CAPITATED HEALTH CARE

5 ORGANIZATIONS, HOSPITALS, AND CERTAIN NURSING

6 FACILITIES.—

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), the requirements of the master rebate

9 agreement under this section shall not apply with re10 spect to covered outpatient drugs dispensed by or

11 through—

12 ‘‘(A) a capitated health care organization

13 (as defined in section 1504(c)(1)),

14 ‘‘(B) a hospital that dispenses covered out15 patient drugs using a drug formulary system

16 and bills the State no more than the hospital’s

17 purchasing costs for covered outpatient drugs,

18 or

19 ‘‘(C) a nursing facility which receives pay20 ment under this title for health care services,

21 including prescription drugs, on a capitated

22 basis or which dispenses covered outpatient

23 drugs using a drug formulary system.

24 ‘‘(2) CONSTRUCTION IN DETERMINING BEST

25 PRICE.—Nothing in paragraph (1) shall be con-
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1 strued as excluding amounts paid by the entities de2 scribed in such paragraph for covered outpatient

3 drugs from the determination of the best price (as

4 defined in subsection (c)(1)(C)) for such drugs.

5 ‘‘(i) DEFINITIONS.—In the section—

6 ‘‘(1) AVERAGE MANUFACTURER PRICE.—The

7 term ‘average manufacturer price’ means, with re8 spect to a covered outpatient drug of a manufacturer

9 for a rebate period, the average price paid to the

10 manufacturer for the drug in the United States by

11 wholesalers for drugs distributed to the retail phar12 macy class of trade, after deducting customary

13 prompt pay discounts.

14 ‘‘(2) COVERED OUTPATIENT DRUG.—Subject to

15 the exceptions in paragraph (3), the term ‘covered

16 outpatient drug’ means—

17 ‘‘(A) of those drugs which are treated as

18 prescribed drugs for purposes of section

19 1571(a)(8), a drug which may be dispensed

20 only upon prescription (except as provided in

21 subparagraph (D)), and—

22 ‘‘(i) which is approved as a prescrip23 tion drug under section 505 or 507 of the

24 Federal Food, Drug, and Cosmetic Act;
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1 ‘‘(ii)(I) which was commercially used

2 or sold in the United States before the

3 date of the enactment of the Drug Amend4 ments of 1962 or which is identical, simi5 lar, or related (within the meaning of sec6 tion 310.6(b)(1) of title 21 of the Code of

7 Federal Regulations) to such a drug, and

8 (II) which has not been the subject of a

9 final determination by the Secretary that it

10 is a ‘new drug’ (within the meaning of sec11 tion 201(p) of the Federal Food, Drug,

12 and Cosmetic Act) or an action brought by

13 the Secretary under section 301, 302(a),

14 or 304(a) of such Act to enforce section

15 502(f) or 505(a) of such Act; or

16 ‘‘(iii)(I) which is described in section

17 107(c)(3) of the Drug Amendments of

18 1962 and for which the Secretary has de19 termined there is a compelling justification

20 for its medical need, or is identical, simi21 lar, or related (within the meaning of sec22 tion 310.6(b)(1) of title 21 of the Code of

23 Federal Regulations) to such a drug, and

24 (II) for which the Secretary has not issued

25 a notice of an opportunity for a hearing
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1 under section 505(e) of the Federal Food,

2 Drug, and Cosmetic Act on a proposed

3 order of the Secretary to withdraw ap4 proval of an application for such drug

5 under such section because the Secretary

6 has determined that the drug is less than

7 effective for some or all conditions of use

8 prescribed, recommended, or suggested in

9 its labeling;

10 ‘‘(B) a biological product, other than a

11 vaccine which—

12 ‘‘(i) may only be dispensed upon pre13 scription,

14 ‘‘(ii) is licensed under section 351 of

15 the Public Health Service Act, and

16 ‘‘(iii) is produced at an establishment

17 licensed under such section to produce

18 such product;

19 ‘‘(C) insulin certified under section 506 of

20 the Federal Food, Drug, and Cosmetic Act; and

21 ‘‘(D) a drug which may be sold without a

22 prescription (commonly referred to as an ‘over23 the-counter drug’), if the drug is prescribed by

24 a physician (or other person authorized to pre25 scribe under State law).
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1 ‘‘(3) LIMITING DEFINITION.—The term ‘covered

2 outpatient drug’ does not include any drug, biologi3 cal product, or insulin provided as part of, or as in4 cident to and in the same setting as, any of the fol5 lowing (and for which payment may be made under

6 a State plan as part of payment for the following

7 and not as direct reimbursement for the drug):

8 ‘‘(A) Inpatient hospital services.

9 ‘‘(B) Hospice services.

10 ‘‘(C) Dental services, except that drugs for

11 which the State plan authorizes direct reim12 bursement to the dispensing dentist are covered

13 outpatient drugs.

14 ‘‘(D) Physicians’ services.

15 ‘‘(E) Outpatient hospital services.

16 ‘‘(F) Nursing facility services and services

17 provided by an intermediate care facility for the

18 mentally retarded.

19 ‘‘(G) Other laboratory and x-ray services.

20 ‘‘(H) Renal dialysis services.

21 Such term also does not include any such drug or

22 product for which a National Drug Code number is

23 not required by the Food and Drug Administration

24 or a drug or biological product used for a medical

25 indication which is not a medically accepted indica-
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1 tion. Any drug, biological product, or insulin ex2 cluded from the definition of such term as a result

3 of this paragraph shall be treated as a covered out4 patient drug for purposes of determining the best

5 price (as defined in subsection (c)(1)(C)) for such

6 drug, biological product, or insulin.

7 ‘‘(4) MANUFACTURER.—The term ‘manufac8 turer’ means, with respect to a covered outpatient

9 drug, the entity holding legal title to or possession

10 of the National Drug Code number for such drug.

11 ‘‘(5) MEDICALLY ACCEPTED INDICATION.—The

12 term ‘medically accepted indication’ means any use

13 for a covered outpatient drug which is approved

14 under the Federal Food, Drug, and Cosmetic Act, or

15 the use of which is supported by one or more cita16 tions included or approved for inclusion in any of the

17 following compendia:

18 ‘‘(A) American Hospital Formulary Service

19 Drug Information.

20 ‘‘(B) United States Pharmacopeia-Drug

21 Information.

22 ‘‘(C) American Medical Association Drug

23 Evaluations.

24 ‘‘(D) The DRUGDEX Information Sys25 tem.
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1 ‘‘(E) The peer-reviewed medical literature.

2 ‘‘(6) MULTIPLE SOURCE DRUG; INNOVATOR

3 MULTIPLE SOURCE DRUG; NONINNOVATOR MUL4 TIPLE SOURCE DRUG; SINGLE SOURCE DRUG.—

5 ‘‘(A) DEFINED.—

6 ‘‘(i) MULTIPLE SOURCE DRUG.—The

7 term ‘multiple source drug’ means, with

8 respect to a rebate period, a covered out9 patient drug (not including any drug de10 scribed in paragraph (2)(D)) for which

11 there are 2 or more drug products which—

12 ‘‘(I) are rated as therapeutically

13 equivalent (under the Food and Drug

14 Administration’s most recent publica15 tion of ‘Approved Drug Products with

16 Therapeutic Equivalence Evalua17 tions’),

18 ‘‘(II) except as provided in sub19 paragraph (B), are pharmaceutically

20 equivalent and bioequivalent, as de21 fined in subparagraph (C) and as de22 termined by the Food and Drug Ad23 ministration, and

24 ‘‘(III) are sold or marketed in

25 the State during the period.
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1 ‘‘(ii) INNOVATOR MULTIPLE SOURCE

2 DRUG.—The term ‘innovator multiple

3 source drug’ means a multiple source drug

4 that was originally marketed under an

5 original new drug application or product li6 censing application approved by the Food

7 and Drug Administration.

8 ‘‘(iii) NONINNOVATOR MULTIPLE

9 SOURCE DRUG.—The term ‘noninnovator

10 multiple source drug’ means a multiple

11 source drug that is not an innovator mul12 tiple source drug.

13 ‘‘(iv) SINGLE SOURCE DRUG.—The

14 term ‘single source drug’ means a covered

15 outpatient drug (other than a drug de16 scribed in subparagraph (C) or (D) of

17 paragraph (2)) which is produced or dis18 tributed under an original new drug appli19 cation approved by the Food and Drug Ad20 ministration, including a drug product

21 marketed by any cross-licensed producers

22 or distributors operating under the new

23 drug application or product licensing appli24 cation.
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1 ‘‘(B) EXCEPTION.—Subparagraph

2 (A)(i)(II) shall not apply if the Food and Drug

3 Administration changes by regulation the re4 quirement that, for purposes of the publication

5 described in subparagraph (A)(i)(I), in order

6 for drug products to be rated as therapeutically

7 equivalent, they must be pharmaceutically

8 equivalent and bioequivalent, as defined in sub9 paragraph (C).

10 ‘‘(C) DEFINITIONS.—For purposes of this

11 paragraph—

12 ‘‘(i) drug products are pharmaceuti13 cally equivalent if the products contain

14 identical amounts of the same active drug

15 ingredient in the same dosage form and

16 meet compendial or other applicable stand17 ards of strength, quality, purity, and iden18 tity,

19 ‘‘(ii) drugs are bioequivalent if they do

20 not present a known or potential bio21 equivalence problem, or, if they do present

22 such a problem, they are shown to meet an

23 appropriate standard of bioequivalence,

24 and
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1 ‘‘(iii) a drug product is considered to

2 be sold or marketed in a State if it appears

3 in a published national listing of average

4 wholesale prices selected by the Secretary,

5 if the listed product is generally available

6 to the public through retail pharmacies in

7 that State.

8 ‘‘(7) REBATE PERIOD.—The term ‘rebate pe9 riod’ means, with respect to an agreement under

10 subsection (a), a calendar quarter or other period

11 specified by the Secretary with respect to the pay12 ment of rebates under such agreement.’’.

13 SEC. 2004. STATE ELECTION; TERMINATION OF CURRENT

14 PROGRAM; AND TRANSITION.

15 (a) TERMINATION OF CURRENT PROGRAM; LIMITA16 TION ON MEDICAID PAYMENTS IN FISCAL YEAR 1997.—

17 (1) REPEAL OF TITLE.—Title XIX of the Social

18 Security Act is repealed effective October 1, 1997,

19 except that the repeal of section 1928 of such Act

20 is effective on the date of the enactment of this Act

21 and the succeeding two sections of such title shall be

22 effective during fiscal year 1996 in the same manner

23 and to the same extent as such sections were effec24 tive during fiscal year 1995.
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1 (2) LIMITATION ON OBLIGATION AUTHORITY.—

2 Notwithstanding any other provision of such title—

3 (A) FISCAL YEAR 1997.—Subject to sub4 paragraph (B), the Secretary of Health and

5 Human Services (in this section referred to as

6 the ‘‘Secretary’’) may enter into obligations

7 under such title with any State (as defined for

8 purposes of such title) for expenses incurred

9 during fiscal year 1997, but not in excess of the

10 sum determined under clauses (i), (ii) and (iv)

11 of section 1511(a)(2)(A) of the Social Security

12 Act (as added by section 2003) for that State

13 for fiscal year 1997.

14 (B) NONE AFTER EFFECTIVE DATE.—The

15 Secretary is not authorized to enter into any

16 obligation with any State under title XIX of

17 such Act for expenses incurred on or after the

18 earlier of—

19 (i) October 1, 1997, or

20 (ii) the first day of the first quarter

21 on which the State plan under title XV of

22 such Act (as added by section 2003) is

23 first effective.

24 (C) AGREEMENT.—A State’s submission of

25 claims for payment under section 1903 of such
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1 Act on or after October 1, 1996, is deemed to

2 constitute the State’s acceptance of the obliga3 tion limitation under subparagraph (A) (includ4 ing the formula for computing the amount of

5 such obligation limitation).

6 (D) EFFECT ON MEDICAL ASSISTANCE.—

7 Effective October 1, 1996—

8 (i) except as provided in this para9 graph, the Federal Government has no ob10 ligation to provide payment with respect to

11 items and services provided under title

12 XIX of the Social Security Act, and

13 (ii) such title and title XV of such Act

14 shall not be construed as providing for an

15 entitlement, under Federal law in relation

16 to the Federal Government, in an individ17 ual or person (including any provider) at

18 the time of provision or receipt of services.

19 (3) REQUIREMENT FOR TIMELY SUBMITTAL OF

20 CLAIMS.—No payment shall be made to a State

21 under title XIX of such Act with respect to an obli22 gation incurred before October 1, 1996, unless the

23 State has submitted to the Secretary, by not later

24 than April 1, 1997, a claim for Federal financial

25 participation for expenses paid by the State with re-
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1 spect to such obligations. Nothing in paragraph (2)

2 shall be construed as affecting the obligation of the

3 Federal Government to pay claims described in the

4 previous sentence.

5 (b) TRANSITION PROVISIONS.—

6 (1) Notwithstanding any other provision of law,

7 in the case where payment has been made under sec8 tion 1903(a) of the Social Security Act to a State

9 before March 1, 1996, and for which a disallowance

10 has not been taken as of such date (or, if so taken,

11 has not been completed, including judicial review, by

12 such date), the Secretary of Health and Human

13 Services shall discontinue the disallowance proceed14 ing and, if such disallowance has been taken as of

15 the date of the enactment of this Act, any payment

16 reductions effected shall be rescinded and the pay17 ments returned to the State.

18 (2) The repeal under subsection (a)(1) of sec19 tion 1928 of the Social Security Act shall not affect

20 the distribution of vaccines purchased and delivered

21 to the States before the date of the enactment of

22 this Act. No vaccine may be purchased after such

23 date by the Federal Government or any State under

24 any contract under section 1928(d) of the Social Se25 curity Act.
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1 (3) No judicial or administrative decision ren2 dered regarding requirements imposed under title

3 XIX of the Social Security Act with respect to a

4 State shall have any application to the State plan of

5 the State under title XV of such Act. A State may,

6 pursuant to the previous sentence, seek the abroga7 tion or modification of any such decision after the

8 date of termination of the State medicaid plan under

9 title XIX of such Act.

10 (4) No cause of action under title XIX of the

11 Social Security Act which seeks to require a State

12 to establish or maintain minimum payment rates

13 under such title or claim which seeks reimbursement

14 for any period before the date of the enactment of

15 this Act based on the alleged failure of the State to

16 comply with such title and which has not become

17 final as of such date shall be brought or continued.

18 (5) Section 6408(a)(3) of the Omnibus Budget

19 Reconciliation Act of 1989 (as amended by section

20 13642 of the Omnibus Budget Reconciliation Act of

21 1993) and section 2 of Public Law 102–276 (as

22 amended by section 13644 of the Omnibus Budget

23 Reconciliation Act of 1993) are each amended by

24 striking ‘‘December 31, 1995’’ and inserting ‘‘Octo25 ber 1, 1997’’.
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1 (c) ANTI-FRAUD PROVISIONS.—Section 1128(h)(1)

2 of the Social Security Act (42 U.S.C. 1320a–7(h)(1)) is

3 amended by inserting ‘‘or a State plan under title XV’’

4 after ‘‘title XIX’’.

5 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

6 (1) SECRETARIAL SUBMISSION OF LEGISLATIVE

7 PROPOSAL.—Not later than 90 days after the date

8 of the enactment of this Act, the Secretary of

9 Health and Human Services, in consultation, as ap10 propriate, with heads of other Federal agencies and

11 the States (as defined in section 1101(a)(8) of the

12 Social Security Act for purposes of title XIX of such

13 Act), shall submit to the appropriate committees of

14 Congress a legislative proposal providing for such

15 technical and conforming amendments in the law as

16 are required by the provisions of, and amendments

17 made by, this title.

18 (2) TRANSITIONAL RULE.—Any reference in

19 any provision of law to title XIX of the Social Secu20 rity Act or any provision thereof shall be deemed to

21 be a reference to such title or provision as in effect

22 on the day before the date of the enactment of this

23 Act.

24 SEC. 2005. INTEGRATION DEMONSTRATION PROJECT.

25 (a) DESCRIPTION OF PROJECTS.—
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1 (1) IN GENERAL.—The Secretary of Health and

2 Human Services (in this section referred to as the

3 ‘‘Secretary’’) may waive such requirements of titles

4 XVIII and XV of the Social Security Act as may be

5 necessary for States to conduct demonstration

6 projects under this section. Such projects shall dem7 onstrate the manner in which States may use funds

8 from the programs under such titles to develop and

9 implement innovative programs for individuals dually

10 eligible for benefits under both titles, including such

11 individuals who are chronically ill. The Secretary

12 shall grant waivers in a manner that permits States

13 flexibility in contracting with medicare risk providers

14 and other providers for services, oversight of con15 tract administration and quality management, and

16 administration of a single enrollment process. Such

17 a waiver may restrict time period during which

18 project participants may disenroll without cause

19 from capitated health plans under the medicare pro20 gram.

21 (2) VOLUNTARY PARTICIPATION.—A State may

22 not require an individual eligible to receive items and

23 services under the medicare and title XV programs

24 to participate in a demonstration project under this

25 section.
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1 (b) BUDGET NEUTRALITY AND REINVESTMENT OF

2 SAVINGS.—

3 (1) BUDGET NEUTRALITY.—The Secretary shall

4 not approve a demonstration project under this sec5 tion for a State unless the State demonstrates that

6 the amount of the Federal expenditures under the

7 program will not exceed the amount of the Federal

8 expenditures that would have been made if the

9 project had not been approve.

10 (2) USE OF SAVINGS.—The Secretary shall per11 mit a State to retain any savings achieved under a

12 project and to use such savings for—

13 (A) expanding eligibility for low income

14 medicare beneficiaries who are risk of institu15 tionalization and who, if institionalized, are

16 likely to qualify for benefits under title XV of

17 the Social Security Act, and

18 (B) providing a scope of services under the

19 project that exceeds the scope of services nor20 mally covered under such title.

21 (c) LIMITATION ON NUMBER OF PROJECTS.—Not

22 more than 10 demonstration projects shall be conducted

23 under this section.

24 (d) DURATION.—
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1 (1) IN GENERAL.—Subject to paragraph (2), a

2 demonstration project conducted under this section

3 shall be conducted for an initial period of 5 years

4 and, upon the request of a State and a finding by

5 the Secretary that the project has been successful,

6 shall be extended indefinitely.

7 (2) TERMINATION.—The Secretary may, with

8 90 days’ notice, terminate any demonstration project

9 conducted under this section that is not in substan10 tial compliance with the terms of the application ap11 proved by the Secretary under this section.

12 (e) APPLICATIONS.—Each State, or a coalition of

13 States, desiring to conduct a demonstration project under

14 this section shall prepare and submit to the Secretary an

15 application at such time, in such manner, and containing

16 such information as the Secretary may require, including

17 an explanation of a plan for evaluating the project. The

18 Secretary shall approve or deny an application not later

19 than 90 days after the receipt of such application.

20 (f) PAYMENTS.—For each calendar quarter occurring

21 during a demonstration project conducted under this sec22 tion, the Secretary shall provide for payments to the State

23 in a manner consistent with subsection (b)(1).

24 (g) OVERSIGHT.—The Secretary shall establish qual25 ity standards for evaluating and monitoring the dem-
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1 onstration projects conducted under this section. Such

2 quality standards shall include reporting requirements

3 which contain the following:

4 (1) A description of the demonstration project.

5 (2) An analysis of beneficiary satisfaction under

6 such project.

7 (3) An analysis of the quality of the services de8 livered under the project.

9 (4) A description of the savings to the medicare

10 and title XV programs as a result of the demonstra11 tion project.

12 Subtitle B—Other Provisions

13 PART 1—INVOLVEMENT OF COMMERCE COMMIT14 TEE IN FEDERAL GOVERNMENT POSITION

15 REDUCTIONS

16 SEC. 2101. INVOLVEMENT OF COMMERCE COMMITTEE IN

17 FEDERAL GOVERNMENT POSITION REDUC18 TIONS.

19 In any provision of law that provides for consultation

20 with (or a report to) a relevant committee of Congress

21 respecting reductions in Federal Government positions, a

22 reference to the Committee on Commerce of the House

23 of Representatives shall be deemed to have been made in

24 relation to matters within the jurisdiction of such Commit25 tee.
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1 PART 2—RESTRICTING PUBLIC BENEFITS FOR

2 ALIENS

3 Subpart A—Eligibility for Federal Benefits

4 SEC. 2211. ALIENS WHO ARE NOT QUALIFIED ALIENS INELI5 GIBLE FOR FEDERAL PUBLIC BENEFITS.

6 (a) IN GENERAL.—Notwithstanding any other provi7 sion of law and except as provided in subsection (b), an

8 alien who is not a qualified alien (as defined in section

9 2221) is not eligible for any Federal public benefit (as de10 fined in subsection (c)).

11 (b) EXCEPTIONS.—Subsection (a) shall not apply

12 with respect to the following Federal public benefits:

13 (1) Emergency medical services under title XIX

14 or XV of the Social Security Act.

15 (2)(A) Public health assistance for immuniza16 tions.

17 (B) Public health assistance for testing and

18 treatment of a serious communicable disease if the

19 Secretary of Health and Human Services determines

20 that it is necessary to prevent the spread of such

21 disease.

22 (c) FEDERAL PUBLIC BENEFIT DEFINED.—

23 (1) Except as provided in paragraph (2), for

24 purposes of this part, the term ‘‘Federal public ben25 efit’’ means—
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1 (A) any grant, contract, loan, professional

2 license, or commercial license provided by an

3 agency of the United States or by appropriated

4 funds of the United States; and

5 (B) any retirement, welfare, health, dis6 ability, or any other similar benefit for which

7 payments or assistance are provided to an indi8 vidual, household, or family eligibility unit by

9 an agency of the United States or by appro10 priated funds of the United States,

11 but only if such grant, contract, loan, or license

12 under subparagraph (A) or program providing bene13 fits under subparagraph (B) is under the jurisdic14 tion of the Committee on Commerce of the House of

15 Representatives.

16 (2) Such term shall not apply—

17 (A) to any contract, professional license, or

18 commercial license for a nonimmigrant whose

19 visa for entry is related to such employment in

20 the United States; or

21 (B) with respect to benefits for an alien

22 who as a work authorized nonimmigrant or as

23 an alien lawfully admitted for permanent resi24 dence under the Immigration and Nationality

25 Act qualified for such benefits and for whom
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1 the United States under reciprocal treaty agree2 ments is required to pay benefits, as determined

3 by the Attorney General, after consultation with

4 the Secretary of State.

5 SEC. 2212. LIMITED ELIGIBILITY OF QUALIFIED ALIENS

6 FOR MEDICAL ASSISTANCE.

7 (a) IN GENERAL.—Notwithstanding any other provi8 sion of law and except as provided in section 2213 and

9 subsection (b), a State is authorized to determine the eligi10 bility of an alien who is a qualified alien (as defined in

11 section 2221) for the program of medical assistance under

12 titles XV and XIX of the Social Security Act.

13 (b) EXCEPTIONS.—Qualified aliens under this sub14 section shall be eligible for benefits under such program:

15 (1) TIME-LIMITED EXCEPTION FOR REFUGEES

16 AND ASYLEES.—

17 (A) An alien who is admitted to the United

18 States as a refugee under section 207 of the

19 Immigration and Nationality Act until 5 years

20 after the date of an alien’s entry into the Unit21 ed States.

22 (B) An alien who is granted asylum under

23 section 208 of such Act until 5 years after the

24 date of such grant of asylum.
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1 (C) An alien whose deportation is being

2 withheld under section 243(h) of such Act until

3 5 years after such withholding.

4 (2) CERTAIN PERMANENT RESIDENT ALIENS.—

5 An alien who—

6 (A) is lawfully admitted to the United

7 States for permanent residence under the Im8 migration and Nationality Act; and

9 (B)(i) has worked 40 qualifying quarters

10 of coverage as defined under title II of the So11 cial Security Act or can be credited with such

12 qualifying quarters as provided under sub13 section (c), and (ii) did not receive any Federal

14 means-tested public benefit (as defined in sec15 tion 2213(c)) during any such quarter.

16 (3) VETERAN AND ACTIVE DUTY EXCEPTION.—

17 An alien who is lawfully residing in any State and

18 is—

19 (A) a veteran (as defined in section 101 of

20 title 38, United States Code) with a discharge

21 characterized as an honorable discharge and not

22 on account of alienage,

23 (B) on active duty (other than active duty

24 for training) in the Armed Forces of the United

25 States, or
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1 (C) the spouse or unmarried dependent

2 child of an individual described in subparagraph

3 (A) or (B).

4 (4) TRANSITION FOR THOSE CURRENTLY RE5 CEIVING BENEFITS.—An alien who on the date of

6 the enactment of this Act is lawfully residing in any

7 State and is receiving benefits under such program

8 on the date of the enactment of this Act shall con9 tinue to be eligible to receive such benefits until Jan10 uary 1, 1997.

11 (c) QUALIFYING QUARTERS.—For purposes of this

12 section, in determining the number of qualifying quarters

13 of coverage under title II of the Social Security Act an

14 alien shall be credited with—

15 (1) all of the qualifying quarters of coverage as

16 defined under title II of the Social Security Act

17 worked by a parent of such alien while the alien was

18 under age 18 if the parent did not receive any Fed19 eral means-tested public benefit (as defined by the

20 Secretary and including the medicaid program) dur21 ing any such quarter, and

22 (2) all of the qualifying quarters worked by a

23 spouse of such alien during their marriage if the

24 spouse did not receive any Federal means-tested

25 public benefit (as so defined) during any such quar-
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1 ter and the alien remains married to such spouse or

2 such spouse is deceased.

3 SEC. 2213. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED

4 ALIENS FOR FEDERAL MEANS-TESTED PUB5 LIC BENEFIT.

6 (a) IN GENERAL.—Notwithstanding any other provi7 sion of law and except as provided in subsection (b), an

8 alien who is a qualified alien (as defined in section 2221)

9 and who enters the United States on or after the date

10 of the enactment of this Act is not eligible for any Federal

11 means-tested public benefit (as defined in subsection (c))

12 for a period of five years beginning on the date of the

13 alien’s entry into the United States with a status within

14 the meaning of the term ‘‘qualified alien’’.

15 (b) EXCEPTIONS.—The limitation under subsection

16 (a) shall not apply to the following aliens:

17 (1) EXCEPTION FOR REFUGEES AND

18 ASYLEES.—

19 (A) An alien who is admitted to the United

20 States as a refugee under section 207 of the

21 Immigration and Nationality Act.

22 (B) An alien who is granted asylum under

23 section 208 of such Act.

24 (C) An alien whose deportation is being

25 withheld under section 243(h) of such Act.
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1 (2) VETERAN AND ACTIVE DUTY EXCEPTION.—

2 An alien who is lawfully residing in any State and

3 is—

4 (A) a veteran (as defined in section 101 of

5 title 38, United States Code) with a discharge

6 characterized as an honorable discharge and not

7 on account of alienage,

8 (B) on active duty (other than active duty

9 for training) in the Armed Forces of the United

10 States, or

11 (C) the spouse or unmarried dependent

12 child of an individual described in subparagraph

13 (A) or (B).

14 (c) FEDERAL MEANS-TESTED PUBLIC BENEFIT DE15 FINED.—

16 (1) Except as provided in paragraph (2), for

17 purposes of this part, the term ‘‘Federal means-test18 ed public benefit’’ means a Federal public benefit

19 described in section 2211(c) in which the eligibility

20 of an individual, household, or family eligibility unit

21 for benefits, or the amount of such benefits, or both

22 are determined on the basis of income, resources, or

23 financial need of the individual, household, or unit.

24 (2) Such term does not include the following:
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1 (A) Emergency medical services under title

2 XV or XIX of the Social Security Act.

3 (B)(i) Public health assistance for immuni4 zations.

5 (ii) Public health assistance for testing and

6 treatment of a serious communicable disease if

7 the Secretary of Health and Human Services

8 determines that it is necessary to prevent the

9 spread of such disease.

10 SEC. 2214. NOTIFICATION.

11 Each Federal agency that administers a program to

12 which section 2211, 2212, or 2213 applies shall, directly

13 or through the States, post information and provide gen14 eral notification to the public and to program recipients

15 of the changes regarding eligibility for any such program

16 pursuant to this subpart.

17 Subpart B—General Provisions

18 SEC. 2221. DEFINITIONS.

19 (a) IN GENERAL.—Except as otherwise provided in

20 this part, the terms used in this part have the same mean21 ing given such terms in section 101(a) of the Immigration

22 and Nationality Act.

23 (b) QUALIFIED ALIEN.—For purposes of this part,

24 the term ‘‘qualified alien’’ means an alien who, at the time
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1 the alien applies for, receives, or attempts to receive a

2 Federal public benefit, is—

3 (1) an alien who is lawfully admitted for perma4 nent residence under the Immigration and National5 ity Act,

6 (2) an alien who is granted asylum under sec7 tion 208 of such Act,

8 (3) a refugee who is admitted to the United

9 States under section 207 of such Act,

10 (4) an alien who is paroled into the United

11 States under section 212(d)(5) of such Act for a pe12 riod of at least 1 year,

13 (5) an alien whose deportation is being withheld

14 under section 243(h) of such Act, or

15 (6) an alien who is granted conditional entry

16 pursuant to section 203(a)(7) of such Act as in ef17 fect prior to April 1, 1980.

18 SEC. 2222. VERIFICATION OF ELIGIBILITY FOR FEDERAL

19 PUBLIC BENEFITS.

20 (a) IN GENERAL.—Not later than 18 months after

21 the date of the enactment of this Act, the Attorney Gen22 eral of the United States, after consultation with the Sec23 retary of Health and Human Services, shall promulgate

24 regulations requiring verification that a person applying

25 for a Federal public benefit (as defined in section
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1 2211(c)), to which the limitation under section 2211 ap2 plies, is a qualified alien and is eligible to receive such

3 benefit. Such regulations shall, to the extent feasible, re4 quire that information requested and exchanged be similar

5 in form and manner to information requested and ex6 changed under section 1137 of the Social Security Act.

7 (b) STATE COMPLIANCE.—Not later than 24 months

8 after the date the regulations described in subsection (a)

9 are adopted, a State that administers a program that pro10 vides a Federal public benefit shall have in effect a ver11 ification system that complies with the regulations.

12 (c) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated such sums as may be

14 necessary to carry out the purpose of this section.

15 PART 3—ENERGY ASSISTANCE

16 SEC. 2131. ENERGY ASSISTANCE.

17 Section 2605(f) of the Low-Income Home Energy As18 sistance Act of 1981 (42 U.S.C. 8624(f)) is amended—

19 (1) by striking ‘‘(f)(1) Notwithstanding’’ and

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

21 (2) by striking paragraph (2).
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1 TITLE III—COMMITTEE ON ECO2 NOMIC AND EDUCATIONAL

3 OPPORTUNITIES

4 SEC. 3001. SHORT TITLE.

5 This title may be cited as the ‘‘Personal Responsibil6 ity and Work Opportunity Act of 1996’’.

7 SEC. 3002. TABLE OF CONTENTS.

8 The table of contents of this title is as follows:

TITLE III—COMMITTEE ON ECONOMIC AND EDUCATIONAL

OPPORTUNITIES

Sec. 3001. Short title.

Sec. 3002. Table of contents.

Subtitle A—Work Requirements

Sec. 3101. Replacement of the JOBS program with mandatory work requirements.

Subtitle B—Child and Family Services Block Grant

Sec. 3201. Child and Family Services Block Grant.

Sec. 3202. Reauthorizations.

Sec. 3203. Repeals.

Subtitle C—Child Care

Sec. 3301. Short title and references.

Sec. 3302. Goals.

Sec. 3303. Authorization of appropriations and entitlement authority.

Sec. 3304. Lead agency.

Sec. 3305. Application and plan.

Sec. 3306. Limitation on State allotments.

Sec. 3307. Activities to improve the quality of child care.

Sec. 3308. Repeal of early childhood development and before- and after-school

care requirement.

Sec. 3309. Administration and enforcement.

Sec. 3310. Payments.

Sec. 3311. Annual report and audits.

Sec. 3312. Report by the Secretary.

Sec. 3313. Allotments.

Sec. 3314. Definitions.

Sec. 3315. Repeals.

Sec. 3316. Effective date.

Subtitle D—Child Nutrition Programs
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CHAPTER 1—NATIONAL SCHOOL LUNCH ACT

Sec. 3401. State disbursement to schools.

Sec. 3402. Nutritional and other program requirements.

Sec. 3403. Free and reduced price policy statement.

Sec. 3404. Special assistance.

Sec. 3405. Miscellaneous provisions and definitions.

Sec. 3406. Summer food service program for children.

Sec. 3407. Commodity distribution.

Sec. 3408. Child care food program.

Sec. 3409. Pilot projects.

Sec. 3410. Reduction of paperwork.

Sec. 3411. Information on income eligibility.

Sec. 3412. Nutrition guidance for child nutrition programs.

Sec. 3413. Information clearinghouse.

CHAPTER 2—CHILD NUTRITION ACT OF 1966

Sec. 3421. Special milk program.

Sec. 3422. Free and reduced price policy statement.

Sec. 3423. School breakfast program authorization.

Sec. 3424. State administrative expenses.

Sec. 3425. Regulations.

Sec. 3426. Prohibitions.

Sec. 3427. Miscellaneous provisions and definitions.

Sec. 3428. Accounts and records.

Sec. 3429. Special supplemental nutrition program for women, infants, and

children.

Sec. 3430. Cash grants for nutrition education.

Sec. 3431. Nutrition education and training.

CHAPTER 3—MISCELLANEOUS PROVISIONS

Sec. 3441. Coordination of school lunch, school breakfast, and summer food

service programs.

Subtitle E—Related Provisions

Sec. 3501. Requirement that data relating to the incidence of poverty in the

United States be published at least every 2 years.

Sec. 3502. Sense of the Congress.

Sec. 3503. Legislative accountability.

1 Subtitle A—Work Requirements

2 SEC. 3101. REPLACEMENT OF THE JOBS PROGRAM WITH

3 MANDATORY WORK REQUIREMENTS.

4 (a) IN GENERAL.—Part F of title IV of the Social

5 Security Act (42 U.S.C. 681–687) is amended to read as

6 follows:
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1 ‘‘PART F—MANDATORY WORK REQUIREMENTS

2 ‘‘SEC. 481. MANDATORY WORK REQUIREMENTS.

3 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.—

4 ‘‘(1) ALL FAMILIES.—A State that is operating

5 a program under part A for a fiscal year shall

6 achieve the minimum participation rate specified in

7 the following table for the fiscal year with respect to

8 all families receiving assistance under the State pro9 gram operated under part A:

The minimum

participation

‘‘If the fiscal year is: rate is:

1996 ............................................................... 20

1997 ............................................................... 25

1998 ............................................................... 30

1999 ............................................................... 35

2000 ............................................................... 40

2001 ............................................................... 45

2002 or thereafter ......................................... 50.

10 ‘‘(2) 2-PARENT FAMILIES.—A State that is op11 erating a program under part A for a fiscal year

12 shall achieve the minimum participation rate speci13 fied in the following table for the fiscal year with re14 spect to 2-parent families receiving assistance under

15 the State program operated under part A:

The minimum

participation

‘‘If the fiscal year is: rate is:

1996 ............................................................... 50

1997 ............................................................... 75

1998 ............................................................... 75

1999 or thereafter ......................................... 90.

16 ‘‘(b) CALCULATION OF PARTICIPATION RATES.—

17 ‘‘(1) ALL FAMILIES.—
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1 ‘‘(A) AVERAGE MONTHLY RATE.—For pur2 poses of subsection (a)(1), the participation

3 rate for all families of a State for a fiscal year

4 is the average of the participation rates for all

5 families of the State for each month in the fis6 cal year.

7 ‘‘(B) MONTHLY PARTICIPATION RATES.—

8 The participation rate of a State for all families

9 of the State for a month, expressed as a per10 centage, is—

11 ‘‘(i) the number of families receiving

12 assistance under the State program oper13 ated under part A that include an adult

14 who is engaged in work for the month; di15 vided by

16 ‘‘(ii) the amount by which—

17 ‘‘(I) the number of families re18 ceiving such assistance during the

19 month that include an adult receiving

20 such assistance; exceeds

21 ‘‘(II) the number of families re22 ceiving such assistance that are sub23 ject in such month to a penalty de24 scribed in subsection (e)(1) but have

25 not been subject to such penalty for
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1 more than 3 months within the pre2 ceding 12-month period (whether or

3 not consecutive).

4 ‘‘(2) 2-PARENT FAMILIES.—

5 ‘‘(A) AVERAGE MONTHLY RATE.—For pur6 poses of subsection (a)(2), the participation

7 rate for 2-parent families of a State for a fiscal

8 year is the average of the participation rates for

9 2-parent families of the State for each month in

10 the fiscal year.

11 ‘‘(B) MONTHLY PARTICIPATION RATES.—

12 The participation rate of a State for 2-parent

13 families of the State for a month shall be cal14 culated by use of the formula set forth in para15 graph (1)(B), except that in the formula the

16 term ‘number of 2-parent families’ shall be sub17 stituted for the term ‘number of families’ each

18 place such latter term appears.

19 ‘‘(3) PRO RATA REDUCTION OF PARTICIPATION

20 RATE DUE TO CASELOAD REDUCTIONS NOT RE21 QUIRED BY FEDERAL LAW.—The Secretary shall

22 prescribe regulations for reducing the minimum par23 ticipation rate otherwise required by this section for

24 a fiscal year by the number of percentage points
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1 equal to the number of percentage points (if any) by

2 which—

3 ‘‘(A) the number of families receiving as4 sistance during the fiscal year under the State

5 plan approved under part A is less than

6 ‘‘(B) the number of families that received

7 aid under the State plan approved under part

8 A during fiscal year 1995.

9 The minimum participation rate shall not be re10 duced to the extent that the Secretary deter11 mines that the reduction in the number of fami12 lies receiving such assistance is required by

13 Federal law.

14 ‘‘(4) STATE OPTION FOR PARTICIPATION RE15 QUIREMENT EXEMPTIONS.—For any fiscal year, a

16 State may, at its option, not require an individual

17 who is a single custodial parent caring for a child

18 who has not attained 12 months of age to engage in

19 work and may disregard such an individual in deter20 mining the participation rates under subsection (a).

21 ‘‘(c) ENGAGED IN WORK.—

22 ‘‘(1) ALL FAMILIES.—For purposes of sub23 section (b)(1)(B)(i), a recipient is engaged in work

24 for a month in a fiscal year if the recipient is par25 ticipating in work activities for at least the minimum
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1 average number of hours per week specified in the

2 following table during the month, not fewer than 20

3 hours per week of which are attributable to an activ4 ity described in paragraph (1), (2), (3), (4), (5), (6),

5 (7), or (8) of subsection (d):

The minimum

‘‘If the month is average number of

in fiscal year: hours per week is:

1996 ............................................................... 20

1997 ............................................................... 20

1998 ............................................................... 20

1999 ............................................................... 25

2000 ............................................................... 30

2001 ............................................................... 30

2002 ............................................................... 35

2003 or thereafter ......................................... 35.

6 ‘‘(2) 2-PARENT FAMILIES.—For purposes of

7 subsection (b)(2)(B)(i), an adult is engaged in work

8 for a month in a fiscal year if the adult is making

9 progress in work activities for at least 35 hours per

10 week during the month, not fewer than 30 hours per

11 week of which are attributable to an activity de12 scribed in paragraph (1), (2), (3), (4), (5), (6), (7),

13 or (8) of subsection (d).

14 ‘‘(3) LIMITATION ON NUMBER OF WEEKS FOR

15 WHICH JOB SEARCH COUNTS AS WORK.—Notwith16 standing paragraphs (1) and (2), an individual shall

17 not be considered to be engaged in work by virtue

18 of participation in an activity described in subsection

19 (d)(6), after the individual has participated in such

20 an activity for 4 weeks (except if the unemployment
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1 rate is above the national average, 12 weeks) in a

2 fiscal year. An individual shall be considered to be

3 participating in such an activity for a week if the

4 individual participates in such an activity at any

5 time during the week.

6 ‘‘(4) LIMITATION ON VOCATIONAL EDUCATION

7 ACTIVITIES COUNTED AS WORK.—For purposes of

8 determining monthly participation rates under para9 graphs (1)(B)(i) and (2)(B)(i) of subsection (b), not

10 more than 20 percent of adults in all families and

11 in 2-parent families determined to be engaged in

12 work in the State for a month may meet the work

13 activity requirement through participation in voca14 tional educational training.

15 ‘‘(5) SINGLE PARENT WITH CHILD UNDER AGE

16 6 DEEMED TO BE MEETING WORK PARTICIPATION

17 REQUIREMENTS IF PARENT IS ENGAGED IN WORK

18 FOR 20 HOURS PER WEEK.—For purposes of deter19 mining monthly participation rates under subsection

20 (b)(1)(B)(i), a recipient in a 1-parent family who is

21 the parent of a child who has not attained 6 years

22 of age is deemed to be engaged in work for a month

23 if the recipient is engaged in work for an average of

24 at least 20 hours per week during the month.
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1 ‘‘(6) TEEN HEAD OF HOUSEHOLD WHO MAIN2 TAINS SATISFACTORY SCHOOL ATTENDANCE

3 DEEMED TO BE MEETING WORK PARTICIPATION RE4 QUIREMENTS.—For purposes of determining month5 ly participation rates under subsection (b)(1)(B)(i),

6 a recipient who is a single head of household and

7 has not attained 20 years of age is deemed to be en8 gaged in work for a month in a fiscal year if the re9 cipient—

10 ‘‘(A) maintains satisfactory attendance at

11 secondary school or the equivalent during the

12 month; or

13 ‘‘(B) participates in education directly re14 lated to employment for at least the minimum

15 average number of hours per week specified in

16 the table set forth in paragraph (1).

17 ‘‘(d) WORK ACTIVITIES DEFINED.—As used in this

18 section, the term ‘work activities’ means—

19 ‘‘(1) unsubsidized employment;

20 ‘‘(2) subsidized private sector employment;

21 ‘‘(3) subsidized public sector employment;

22 ‘‘(4) work experience (including work associated

23 with the refurbishing of publicly assisted housing) if

24 sufficient private sector employment is not available;

25 ‘‘(5) on-the-job training;
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1 ‘‘(6) job search and job readiness assistance;

2 ‘‘(7) community service programs;

3 ‘‘(8) vocational educational training (not to ex4 ceed 12 months with respect to any individual);

5 ‘‘(9) job skills training directly related to em6 ployment;

7 ‘‘(10) education directly related to employment,

8 in the case of a recipient who has not received a

9 high school diploma or a certificate of high school

10 equivalency; and

11 ‘‘(11) satisfactory attendance at secondary

12 school or high school equivalency program, in the

13 case of a recipient who has not completed secondary

14 school.

15 ‘‘(e) SUPPLEMENTAL GRANT FOR OPERATION OF

16 WORK PROGRAM.—

17 ‘‘(1) APPLICATION REQUIREMENTS.—An eligi18 ble State may submit to the Secretary an application

19 for additional funds to meet the requirements of this

20 section with respect to a fiscal year if the Secretary

21 determines that—

22 ‘‘(A) the total expenditures of the State to

23 meet such requirements for the fiscal year ex24 ceed the total expenditures of the State during
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1 fiscal year 1994 to carry out part F (as in ef2 fect on September 30, 1994);

3 ‘‘(B) the work programs of the State under

4 this section are coordinated with the job train5 ing programs established by title II of the Job

6 Training Partnership Act, or (if such title is re7 pealed by the Consolidated and Reformed Edu8 cation, Employment, and Rehabilitation Sys9 tems Act) the Consolidated and Reformed Edu10 cation, Employment, and Rehabilitation Sys11 tems Act; and

12 ‘‘(C) the State needs additional funds to

13 meet such requirements or certifies that it in14 tends to exceed such requirements.

15 ‘‘(2) GRANTS.—The Secretary may make a

16 grant to any eligible State which submits an applica17 tion in accordance with paragraph (1) for a fiscal

18 year in an amount equal to the Federal medical as19 sistance percentage of the amount (if any) by which

20 the total expenditures of the State to meet or exceed

21 the requirements of this section for the fiscal year

22 exceeds the total expenditures of the State during

23 fiscal year 1994 to carry out part F (as in effect on

24 September 30, 1994).
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1 ‘‘(3) REGULATIONS.—The Secretary shall issue

2 regulations providing for the equitable distribution

3 of funds under this subsection.

4 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

5 ‘‘(A) IN GENERAL.—There are authorized

6 to be appropriated for grants under this sub7 section $3,000,000,000 for fiscal year 1999.

8 ‘‘(B) AVAILABILITY.—Amounts appro9 priated pursuant to subparagraph (A) are au10 thorized to remain available until expended.

11 ‘‘(f) PENALTIES.—

12 ‘‘(1) AGAINST INDIVIDUALS.—

13 ‘‘(A) IN GENERAL.—Except as provided in

14 subparagraph (B), if an adult in a family re15 ceiving assistance under the State program op16 erated under part A refuses to engage in work

17 required in accordance with this section, the

18 State shall—

19 ‘‘(i) reduce the amount of assistance

20 otherwise payable to the family pro rata

21 (or more, at the option of the State) with

22 respect to any period during a month in

23 which the adult so refuses; or

24 ‘‘(ii) terminate such assistance,
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1 subject to such good cause and other exceptions as

2 the State may establish.

3 ‘‘(B) EXCEPTION.—Notwithstanding sub4 paragraph (A), a State may not reduce or ter5 minate assistance under the State program op6 erated under part A based on a refusal of an

7 adult to work if the adult is a single custodial

8 parent caring for a child who has not attained

9 11 years of age, and the adult proves that the

10 adult has a demonstrated inability (as deter11 mined by the State) to obtain needed child care,

12 for 1 or more of the following reasons:

13 ‘‘(i) Unavailability of appropriate

14 child care within a reasonable distance

15 from the individual’s home or work site.

16 ‘‘(ii) Unavailability or unsuitability of

17 informal child care by a relative or under

18 other arrangements.

19 ‘‘(iii) Unavailability of appropriate

20 and affordable formal child care arrange21 ments.

22 ‘‘(2) AGAINST STATES.—

23 ‘‘(A) IN GENERAL.—If the Secretary deter24 mines that a State that is operating a program

25 under part A for a fiscal year has failed to com-
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1 ply with this section for the fiscal year, the Sec2 retary shall reduce the total amount otherwise

3 payable to the State under section 403 for the

4 immediately succeeding fiscal year by an

5 amount equal to not more than 5 percent of

6 such otherwise payable amount.

7 ‘‘(B) PENALTY BASED ON SEVERITY OF

8 FAILURE.—The Secretary shall impose reduc9 tions under subparagraph (A) based on the de10 gree of noncompliance.

11 ‘‘(g) NONDISPLACEMENT IN WORK ACTIVITIES.—

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

13 an adult in a family receiving assistance under a

14 State program operated under part A attributable to

15 funds provided by the Federal Government may fill

16 a vacant employment position in order to engage in

17 a work activity described in subsection (d).

18 ‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No

19 adult in a work activity described in subsection (d)

20 which is funded, in whole or in part, by funds pro21 vided by the Federal Government shall be employed

22 or assigned—

23 ‘‘(A) when any other individual is on layoff

24 from the same or any substantially equivalent

25 job; or
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1 ‘‘(B) if the employer has terminated the

2 employment of any regular employee or other3 wise caused an involuntary reduction of its

4 workforce in order to fill the vacancy so created

5 with an adult described in paragraph (1).

6 ‘‘(3) NO PREEMPTION.—Nothing in this sub7 section shall preempt or supersede any provision of

8 State or local law that provides greater protection

9 for employees from displacement.

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

11 the Congress that in complying with this section, each

12 State that operates a program under part A is encouraged

13 to assign the highest priority to requiring adults in 2-par14 ent families and adults in single-parent families that in15 clude older preschool or school-age children to be engaged

16 in work activities.

17 ‘‘(i) SENSE OF THE CONGRESS THAT STATES

18 SHOULD IMPOSE CERTAIN REQUIREMENTS ON NON19 CUSTODIAL, NONSUPPORTING MINOR PARENTS.—It is the

20 sense of the Congress that the States should require non21 custodial, nonsupporting parents who have not attained 18

22 years of age to fulfill community work obligations and at23 tend appropriate parenting or money management classes

24 after school.
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1 ‘‘SEC. 482. INDIVIDUAL RESPONSIBILITY PLANS.

2 ‘‘(a) ASSESSMENT.—The State agency responsible

3 for administering the State program funded under part

4 A shall make an initial assessment of the skills, prior work

5 experience, and employability of each recipient of assist6 ance under the program who—

7 ‘‘(1) has attained 18 years of age; or

8 ‘‘(2) has not completed high school or obtained

9 a certificate of high school equivalency, and is not

10 attending secondary school.

11 ‘‘(b) CONTENTS OF PLANS.—

12 ‘‘(1) IN GENERAL.—On the basis of the assess13 ment made under subsection (a) with respect to an

14 individual, the State agency, in consultation with the

15 individual, shall develop an individual responsibility

16 plan for the individual, which—

17 ‘‘(A) shall provide that participation by the

18 individual in job search activities shall be a con19 dition of eligibility for assistance under the

20 State program funded under part A, except

21 during any period for which the individual is

22 employed full-time in an unsubsidized job in the

23 private sector;

24 ‘‘(B) sets forth an employment goal for the

25 individual and a plan for moving the individual

26 immediately into private sector employment;
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1 ‘‘(C) sets forth the obligations of the indi2 vidual, which may include a requirement that

3 the individual attend school, maintain certain

4 grades and attendance, keep school age children

5 of the individual in school, immunize children,

6 attend parenting and money management class7 es, or do other things that will help the individ8 ual become and remain employed in the private

9 sector;

10 ‘‘(D) to the greatest extent possible shall

11 be designed to move the individual into what12 ever private sector employment the individual is

13 capable of handling as quickly as possible, and

14 to increase the responsibility and amount of

15 work the individual is to handle over time;

16 ‘‘(E) shall describe the services the State

17 will provide the individual so that the individual

18 will be able to obtain and keep employment in

19 the private sector, and describe the job counsel20 ing and other services that will be provided by

21 the State; and

22 ‘‘(F) at the option of the State, may re23 quire the individual to undergo appropriate sub24 stance abuse treatment.
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1 ‘‘(2) TIMING.—The State agency shall comply

2 with paragraph (1) with respect to an individual—

3 ‘‘(A) within 90 days (or, at the option of

4 the State, 180 days) after the effective date of

5 this part, in the case of an individual who, as

6 of such effective date, is a recipient of aid

7 under the State plan approved under part A (as

8 in effect immediately before such effective

9 date); or

10 ‘‘(B) within 30 days (or, at the option of

11 the State, 90 days) after the individual is deter12 mined to be eligible for such assistance, in the

13 case of any other individual.

14 ‘‘(c) PROVISION OF PROGRAM AND EMPLOYMENT IN15 FORMATION.—The State shall inform all applicants for

16 and recipients of assistance under the State program

17 funded under part A of all available services under the

18 program for which they are eligible.

19 ‘‘(d) PENALTY FOR NONCOMPLIANCE BY INDIVID20 UAL.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), the State shall reduce, by such amount

23 as the State considers appropriate, the amount of

24 assistance otherwise payable under the State pro25 gram funded under part A to a family that includes
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1 an individual who fails without good cause to comply

2 with an individual responsibility plan signed by the

3 individual.

4 ‘‘(2) EXCEPTION.—A State may not terminate

5 the provision of assistance to an individual under the

6 State program funded under part A, or reduce the

7 amount of assistance to be provided to an individual

8 under the program, if the State has failed to provide

9 to the individual the services referred to in sub10 section (b)(1)(E) that are described in the individual

11 responsibility plan for the individual.

12 ‘‘(e) The exercise of the authority of this section shall

13 be within the sole discretion of the State.’’.

14 (b) CONFORMING AMENDMENTS.—

15 (1) Section 402(a)(9)(A) of the Social Security

16 Act (42 U.S.C. 602(a)(9)(A)) is amended by striking

17 ‘‘(including activities under part F)’’.

18 (2) Section 402(a) of such Act (42 U.S.C.

19 602(a)) is amended by striking paragraph (19).

20 (3) Section 402(a)(44)(A) of such Act (42

21 U.S.C. 602(a)(44)(A)) is amended by striking

22 ‘‘, part D, and part F’’ and inserting ‘‘and part D’’.

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

24 amended by striking subsections (k) and (l), except

25 that subparagraph (A) of such section 403(l)(3)
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1 shall remain in effect for purposes of applying any

2 reduction in payment rates required by such sub3 paragraph for any of the fiscal years specified in

4 such subparagraph.

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

6 U.S.C. 607(b)(1)(B)) is amended—

7 (A) by striking clauses (i) and (v) and re8 designating clauses (ii), (iii), and (iv) as clauses

9 (i), (ii), and (iii), respectively;

10 (B) by adding ‘‘and’’ at the end of clause

11 (ii) (as so redesignated); and

12 (C) by striking ‘‘; and’’ at the end of

13 clause (iii) (as so redesignated) and inserting a

14 period.

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

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

17 ‘‘(including any activity authorized under section

18 402(a)(19) or under part F)’’.

19 (7) Section 407(b)(2) of such Act (42 U.S.C.

20 607(b)(2)) is amended by striking subparagraph

21 (C).

22 (8) Section 407(c) of such Act (42 U.S.C.

23 607(c)) is amended—

24 (A) by striking ‘‘(A) where’’ and inserting

25 ‘‘where’’; and
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1 (B) by striking ‘‘, and (B)’’ and all that

2 follows through ‘‘part F’’.

3 (9) Section 407(d)(1)(A) of such Act (42

4 U.S.C. 607(d)(1)(A)) is amended by striking ‘‘, or in

5 which such individual participated in a program

6 under part F’’.

7 (10) Section 407(e) of such Act (42 U.S.C.

8 607(e)) is amended—

9 (A) in paragraph (1)—

10 (i) by striking ‘‘in participating in a

11 program under part F and’’; and

12 (ii) by striking ‘‘participate in or’’;

13 and

14 (B) in paragraph (2), by striking ‘‘both

15 part F and’’.

16 (11) Section 417 of such Act (42 U.S.C. 617)

17 is amended by striking ‘‘, part D, and part F’’ and

18 inserting ‘‘and part D’’.

19 (12) Section 471(a)(8)(A) of such Act (42

20 U.S.C. 671(a)(8)(A)) is amended by striking ‘‘(in21 cluding activities under part F)’’.

22 (13) Section 1108 of such Act (42 U.S.C.

23 1308) is amended—
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1 (A) in subsection (a), by striking ‘‘or, in

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

3 and

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

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

7 title, section 403(k) applies)’’.

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

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

10 402(a)(19) (relating to the work incentive pro11 gram)’’.

12 (15) Section 1902(a)(10)(A)(i)(I) of such Act

13 (42 U.S.C. 1396a(a)(19)(A)(i)(I)) is amended by

14 striking ‘‘, or considered by the State to be receiving

15 such aid as authorized under section 482(e)(6)’’.

16 (16) Section 51(c)(2) of the Internal Revenue

17 Code of 1986 is amended by striking subparagraph

18 (B).

19 Subtitle B—Child and Family

20 Services Block Grant

21 SEC. 3201. CHILD AND FAMILY SERVICES BLOCK GRANT.

22 The Child Abuse Prevention and Treatment Act (42

23 U.S.C. 5101 et seq.) is amended to read as follows:
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1 ‘‘SECTION 1. SHORT TITLE.

2 ‘‘This Act may be cited as the ‘Child and Family

3 Services Block Grant Act of 1996’.

4 ‘‘SEC. 2. FINDINGS.

5 ‘‘The Congress finds the following:

6 ‘‘(1) Each year, close to 1,000,000 American

7 children are victims of abuse and neglect.

8 ‘‘(2) Many of these children and their families

9 fail to receive adequate protection or treatment.

10 ‘‘(3) The problem of child abuse and neglect re11 quires a comprehensive approach that—

12 ‘‘(A) integrates the work of social service,

13 legal, health, mental health, education, and sub14 stance abuse agencies and organizations;

15 ‘‘(B) strengthens coordination among all

16 levels of government, and with private agencies,

17 civic, religious, and professional organizations,

18 and individual volunteers;

19 ‘‘(C) emphasizes the need for abuse and

20 neglect prevention, assessment, investigation,

21 and treatment at the neighborhood level;

22 ‘‘(D) ensures properly trained and support

23 staff with specialized knowledge, to carry out

24 their child protection duties; and

25 ‘‘(E) is sensitive to ethnic and cultural di26 versity.
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1 ‘‘(4) The child protection system should be

2 comprehensive, child-centered, family-focused, and

3 community-based, should incorporate all appropriate

4 measures to prevent the occurrence or recurrence of

5 child abuse and neglect, and should promote physical

6 and psychological recovery and social reintegration

7 in an environment that fosters the health, safety,

8 self-respect, and dignity of the child.

9 ‘‘(5) The Federal Government should provide

10 leadership and assist communities in their child and

11 family protection efforts by—

12 ‘‘(A) generating and sharing knowledge

13 relevant to child and family protection, includ14 ing the development of models for service deliv15 ery;

16 ‘‘(B) strengthening the capacity of States

17 to assist communities;

18 ‘‘(C) helping communities to carry out

19 their child and family protection plans by pro20 moting the competence of professional, para21 professional, and volunteer resources; and

22 ‘‘(D) providing leadership to end the abuse

23 and neglect of the Nation’s children and youth.

24 ‘‘SEC. 3. PURPOSES.

25 ‘‘The purposes of this Act are the following:
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1 ‘‘(1) To assist each State in improving the child

2 protective service systems of such State by—

3 ‘‘(A) improving risk and safety assessment

4 tools and protocols;

5 ‘‘(B) developing, strengthening, and facili6 tating training opportunities for individuals who

7 are mandated to report child abuse or neglect

8 or otherwise overseeing, investigating, prosecut9 ing, or providing services to children and fami10 lies who are at risk of abusing or neglecting

11 their children; and

12 ‘‘(C) developing, implementing, or operat13 ing information, education, training, or other

14 programs designed to assist and provide serv15 ices for families of disabled infants with life16 threatening conditions.

17 ‘‘(2) To support State efforts to develop, oper18 ate, expand and enhance a network of community19 based, prevention-focused, family resource and sup20 port programs that are culturally competent and

21 that coordinate resources among existing education,

22 vocational rehabilitation, disability, respite, health,

23 mental health, job readiness, self-sufficiency, child

24 and family development, community action, Head

25 Start, child care, child abuse and neglect prevention,
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1 juvenile justice, domestic violence prevention and

2 intervention, housing, and other human service orga3 nizations within the State.

4 ‘‘(3) To facilitate the elimination of barriers to

5 adoption and to provide permanent and loving home

6 environments for children who would benefit from

7 adoption, particularly children with special needs, in8 cluding disabled infants with life-threatening condi9 tions, by—

10 ‘‘(A) promoting model adoption legislation

11 and procedures in the States and territories of

12 the United States in order to eliminate jurisdic13 tional and legal obstacles to adoption;

14 ‘‘(B) providing a mechanism for the De15 partment of Health and Human Services to—

16 ‘‘(i) promote quality standards for

17 adoption services, preplacement, post18 placement, and post-legal adoption counsel19 ing, and standards to protect the rights of

20 children in need of adoption;

21 ‘‘(ii) maintain a national adoption in22 formation exchange system to bring to23 gether children who would benefit from

24 adoption and qualified prospective adoptive

25 parents who are seeking such children, and
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1 conduct national recruitment efforts in

2 order to reach prospective parents for chil3 dren awaiting adoption; and

4 ‘‘(iii) demonstrate expeditious ways to

5 free children for adoption for whom it has

6 been determined that adoption is the ap7 propriate plan; and

8 ‘‘(C) facilitating the identification and re9 cruitment of foster and adoptive families that

10 can meet children’s needs.

11 ‘‘(4) To respond to the needs of children, in

12 particular those who are drug exposed or afflicted

13 with Acquired Immune Deficiency Syndrome

14 (AIDS), by supporting activities aimed at preventing

15 the abandonment of children, providing support to

16 children and their families, and facilitating the re17 cruitment and training of health and social service

18 personnel.

19 ‘‘(5) To carry out any other activities as the

20 Secretary determines are consistent with this Act.

21 ‘‘SEC. 4. DEFINITIONS.

22 ‘‘As used in this Act:

23 ‘‘(1) CHILD.—The term ‘child’ means a person

24 who has not attained the lesser of—

25 ‘‘(A) the age of 18; or
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1 ‘‘(B) except in the case of sexual abuse,

2 the age specified by the child protection law of

3 the State in which the child resides.

4 ‘‘(2) CHILD ABUSE AND NEGLECT.—The term

5 ‘child abuse and neglect’ means, at a minimum, any

6 recent act or failure to act on the part of a parent

7 or caretaker, which results in death, serious physical

8 or emotional harm, sexual abuse or exploitation, or

9 an act or failure to act which presents an imminent

10 risk of serious harm.

11 ‘‘(3) FAMILY RESOURCE AND SUPPORT PRO12 GRAMS.—The term ‘family resource and support

13 program’ means a community-based, prevention-fo14 cused entity that—

15 ‘‘(A) provides, through direct service, the

16 core services required under this Act, includ17 ing—

18 ‘‘(i) parent education, support and

19 leadership services, together with services

20 characterized by relationships between par21 ents and professionals that are based on

22 equality and respect, and designed to assist

23 parents in acquiring parenting skills, learn24 ing about child development, and respond-
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1 ing appropriately to the behavior of their

2 children;

3 ‘‘(ii) services to facilitate the ability of

4 parents to serve as resources to one an5 other (such as through mutual support and

6 parent self-help groups);

7 ‘‘(iii) early developmental screening of

8 children to assess any needs of children,

9 and to identify types of support that may

10 be provided;

11 ‘‘(iv) outreach services provided

12 through voluntary home visits and other

13 methods to assist parents in becoming

14 aware of and able to participate in family

15 resources and support program activities;

16 ‘‘(v) community and social services to

17 assist families in obtaining community re18 sources; and

19 ‘‘(vi) followup services;

20 ‘‘(B) provides, or arranges for the provi21 sion of, other core services through contracts or

22 agreements with other local agencies; and

23 ‘‘(C) provides access to optional services,

24 directly or by contract, purchase of service, or

25 interagency agreement, including—
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1 ‘‘(i) child care, early childhood devel2 opment and early intervention services;

3 ‘‘(ii) self-sufficiency and life manage4 ment skills training;

5 ‘‘(iii) education services, such as scho6 lastic tutoring, literacy training, and Gen7 eral Educational Degree services;

8 ‘‘(iv) job readiness skills;

9 ‘‘(v) child abuse and neglect preven10 tion activities;

11 ‘‘(vi) services that families with chil12 dren with disabilities or special needs may

13 require;

14 ‘‘(vii) community and social service re15 ferral;

16 ‘‘(viii) peer counseling;

17 ‘‘(ix) referral for substance abuse

18 counseling and treatment; and

19 ‘‘(x) help line services.

20 ‘‘(4) INDIAN TRIBE AND TRIBAL ORGANIZA21 TION.—The terms ‘Indian tribe’ and ‘tribal organi22 zation’ shall have the same meanings given such

23 terms in subsections (e) and (l), respectively, of sec24 tion 4 of the Indian Self-Determination and Edu25 cation Assistance Act (25 U.S.C. 450b (e) and (l)).
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1 ‘‘(5) RESPITE SERVICES.—The term ‘respite

2 services’ means short-term care services provided in

3 the temporary absence of the regular caregiver (par4 ent, other relative, foster parent, adoptive parent, or

5 guardian) to children who—

6 ‘‘(A) are in danger of abuse or neglect;

7 ‘‘(B) have experienced abuse or neglect; or

8 ‘‘(C) have disabilities, chronic, or terminal

9 illnesses.

10 Such services shall be provided within or outside the

11 home of the child, be short-term care (ranging from

12 a few hours to a few weeks of time, per year), and

13 be intended to enable the family to stay together and

14 to keep the child living in the home and community

15 of the child.

16 ‘‘(6) SECRETARY.—The term ‘Secretary’ means

17 the Secretary of Health and Human Services.

18 ‘‘(7) SEXUAL ABUSE.—The term ‘sexual abuse’

19 includes—

20 ‘‘(A) the employment, use, persuasion, in21 ducement, enticement, or coercion of any child

22 to engage in, or assist any other person to en23 gage in, any sexually explicit conduct or simula24 tion of such conduct for the purpose of produc25 ing a visual depiction of such conduct; or
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1 ‘‘(B) the rape, molestation, prostitution, or

2 other form of sexual exploitation of children, or

3 incest with children.

4 ‘‘(8) STATE.—The term ‘State’ means each of

5 the several States, the District of Columbia, the

6 Commonwealth of Puerto Rico, the Virgin Islands,

7 Guam, American Samoa, the Commonwealth of the

8 Northern Mariana Islands, and the Trust Territory

9 of the Pacific Islands.

10 ‘‘(9) WITHHOLDING OF MEDICALLY INDICATED

11 TREATMENT.—The term ‘withholding of medically

12 indicated treatment’ means the failure to respond to

13 the infant’s life-threatening conditions by providing

14 treatment (including appropriate nutrition, hydra15 tion, and medication) which, in the treating physi16 cian’s or physicians’ reasonable medical judgment,

17 will be most likely to be effective in ameliorating or

18 correcting all such conditions, except that the term

19 does not include the failure to provide treatment

20 (other than appropriate nutrition, hydration, or

21 medication) to an infant when, in the treating physi22 cian’s or physicians’ reasonable medical judgment—

23 ‘‘(A) the infant is chronically and irrevers24 ibly comatose;
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1 ‘‘(B) the provision of such treatment

2 would—

3 ‘‘(i) merely prolong dying;

4 ‘‘(ii) not be effective in ameliorating

5 or correcting all of the infant’s life-threat6 ening conditions; or

7 ‘‘(iii) otherwise be futile in terms of

8 the survival of the infant; or

9 ‘‘(C) the provision of such treatment would

10 be virtually futile in terms of the survival of the

11 infant and the treatment itself under such cir12 cumstances would be inhumane.

13 ‘‘TITLE I—GENERAL BLOCK

14 GRANT

15 ‘‘SEC. 101. CHILD AND FAMILY SERVICES BLOCK GRANTS.

16 ‘‘(a) ELIGIBILITY.—The Secretary shall award

17 grants to eligible States that file a State plan that is ap18 proved under section 102 and that otherwise meet the eli19 gibility requirements for grants under this title.

20 ‘‘(b) AMOUNT OF GRANT.—The amount of a grant

21 made to each State under subsection (a) for a fiscal year

22 shall be based on the population of children under the age

23 of 18 residing in each State that applies for a grant under

24 this section.
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1 ‘‘(c) USE OF AMOUNTS.—Amounts received by a

2 State under a grant awarded under subsection (a) shall

3 be used to carry out the purposes described in section 3.

4 ‘‘SEC. 102. ELIGIBLE STATES.

5 ‘‘(a) IN GENERAL.—As used in this title, the term

6 ‘eligible State’ means a State that has submitted to the

7 Secretary, not later than October 1, 1996, and every 3

8 years thereafter, a plan which has been signed by the chief

9 executive officer of the State and that includes the follow10 ing:

11 ‘‘(1) OUTLINE OF CHILD PROTECTION PRO12 GRAM.—A written document that outlines the activi13 ties the State intends to conduct to achieve the pur14 pose of this title, including the procedures to be used

15 for—

16 ‘‘(A) receiving and assessing reports of

17 child abuse or neglect;

18 ‘‘(B) investigating such reports;

19 ‘‘(C) with respect to families in which

20 abuse or neglect has been confirmed, providing

21 services or referral for services for families and

22 children where the State makes a determination

23 that the child may safely remain with the fam24 ily;
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1 ‘‘(D) protecting children by removing them

2 from dangerous settings and ensuring their

3 placement in a safe environment;

4 ‘‘(E) providing training for individuals

5 mandated to report suspected cases of child

6 abuse or neglect;

7 ‘‘(F) protecting children in foster care;

8 ‘‘(G) promoting timely adoptions;

9 ‘‘(H) protecting the rights of families,

10 using adult relatives as the preferred placement

11 for children separated from their parents where

12 such relatives meet the relevant State child pro13 tection standards; and

14 ‘‘(I) providing services to individuals, fami15 lies, or communities, either directly or through

16 referral, that are aimed at preventing the occur17 rence of child abuse and neglect.

18 ‘‘(2) CERTIFICATION OF STATE LAW REQUIRING

19 THE REPORTING OF CHILD ABUSE AND NEGLECT.—

20 A certification that the State has in effect laws that

21 require public officials and other professionals to re22 port, in good faith, actual or suspected instances of

23 child abuse or neglect.

24 ‘‘(3) CERTIFICATION OF PROCEDURES FOR

25 SCREENING, SAFETY ASSESSMENT, AND PROMPT IN-
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1 VESTIGATION.—A certification that the State has in

2 effect procedures for receiving and responding to re3 ports of child abuse or neglect, including the reports

4 described in paragraph (2), and for the immediate

5 screening, safety assessment, and prompt investiga6 tion of such reports.

7 ‘‘(4) CERTIFICATION OF STATE PROCEDURES

8 FOR REMOVAL AND PLACEMENT OF ABUSED OR NE9 GLECTED CHILDREN.—A certification that the State

10 has in effect procedures for the removal from fami11 lies and placement of abused or neglected children

12 and of any other child in the same household who

13 may also be in danger of abuse or neglect.

14 ‘‘(5) CERTIFICATION OF PROVISIONS FOR AP15 POINTMENT OF GUARDIAN AD LITEM.—A certifi16 cation that the State has in effect laws and proce17 dures requiring the appointment of a guardian ad

18 litem in every case involving an abused or neglected

19 child which results in a judicial proceeding.

20 ‘‘(6) CERTIFICATION OF PROVISIONS FOR IMMU21 NITY FROM PROSECUTION.—A certification that the

22 State has in effect laws requiring immunity from

23 prosecution under State and local laws and regula24 tions for individuals making good faith reports of
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1 suspected or known instances of child abuse or ne2 glect.

3 ‘‘(7) CERTIFICATION OF PROVISIONS AND PRO4 CEDURES FOR EXPUNGEMENT OF CERTAIN

5 RECORDS.—A certification that the State has in ef6 fect laws and procedures requiring the facilitation of

7 the prompt expungement of any records that are ac8 cessible to the general public or are used for pur9 poses of employment or other background checks in

10 cases determined to be unsubstantiated or false.

11 ‘‘(8) CERTIFICATION OF STATE PROCEDURES

12 FOR DEVELOPING AND REVIEWING WRITTEN PLANS

13 FOR PERMANENT PLACEMENT OF REMOVED CHIL14 DREN.—A certification that the State has in effect

15 procedures for ensuring that a written plan is pre16 pared for children who have been removed from their

17 families. Such plan shall specify the goals for achiev18 ing a permanent placement for the child in a timely

19 fashion, for ensuring that the written plan is re20 viewed every 6 months (until such placement is

21 achieved), and for ensuring that information about

22 such children is collected regularly and recorded in

23 case records, and include a description of such pro24 cedures.
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1 ‘‘(9) CERTIFICATION OF STATE PROGRAM TO

2 PROVIDE INDEPENDENT LIVING SERVICES.—A cer3 tification that the State has in effect a program to

4 provide independent living services, for assistance in

5 making the transition to self-sufficient adulthood, to

6 individuals in the child protection program of the

7 State who are 16, but who are not 20 (or, at the op8 tion of the State, 22), years of age, and who do not

9 have a family to which to be returned.

10 ‘‘(10) CERTIFICATION OF STATE PROCEDURES

11 TO RESPOND TO REPORTING OF MEDICAL NEGLECT

12 OF DISABLED INFANTS.—A certification that the

13 State has in place for the purpose of responding to

14 the reporting of medical neglect of infants (including

15 instances of withholding of medically indicated treat16 ment from disabled infants with life-threatening con17 ditions), procedures or programs, or both (within the

18 State child protective services system), to provide

19 for—

20 ‘‘(A) coordination and consultation with in21 dividuals designated by and within appropriate

22 health-care facilities;

23 ‘‘(B) prompt notification by individuals

24 designated by and within appropriate health25 care facilities of cases of suspected medical ne-
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1 glect (including instances of withholding of

2 medically indicated treatment from disabled in3 fants with life-threatening conditions); and

4 ‘‘(C) authority, under State law, for the

5 State child protective service to pursue any

6 legal remedies, including the authority to initi7 ate legal proceedings in a court of competent

8 jurisdiction, as may be necessary to prevent the

9 withholding of medically indicated treatment

10 from disabled infants with life-threatening con11 ditions.

12 ‘‘(11) IDENTIFICATION OF CHILD PROTECTION

13 GOALS.—The quantitative goals of the State child

14 protection program.

15 ‘‘(12) CERTIFICATION OF CHILD PROTECTION

16 STANDARDS.—With respect to fiscal years beginning

17 on or after April 1, 1996, a certification that the

18 State—

19 ‘‘(A) has completed an inventory of all

20 children who, before the inventory, had been in

21 foster care under the responsibility of the State

22 for 6 months or more, which determined—

23 ‘‘(i) the appropriateness of, and neces24 sity for, the foster care placement;
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1 ‘‘(ii) whether the child could or should

2 be returned to the parents of the child or

3 should be freed for adoption or other per4 manent placement; and

5 ‘‘(iii) the services necessary to facili6 tate the return of the child or the place7 ment of the child for adoption or legal

8 guardianship;

9 ‘‘(B) is operating, to the satisfaction of the

10 Secretary—

11 ‘‘(i) a statewide information system

12 from which can be readily determined the

13 status, demographic characteristics, loca14 tion, and goals for the placement of every

15 child who is (or, within the immediately

16 preceding 12 months, has been) in foster

17 care;

18 ‘‘(ii) a case review system for each

19 child receiving foster care under the super20 vision of the State;

21 ‘‘(iii) a service program designed to

22 help children—

23 ‘‘(I) where appropriate, return to

24 families from which they have been

25 removed; or
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1 ‘‘(II) be placed for adoption, with

2 a legal guardian, or if adoption or

3 legal guardianship is determined not

4 to be appropriate for a child, in some

5 other planned, permanent living ar6 rangement; and

7 ‘‘(iv) a preplacement preventive serv8 ices program designed to help children at

9 risk for foster care placement remain with

10 their families; and

11 ‘‘(C)(i) has reviewed (or not later than Oc12 tober 1, 1997, will review) State policies and

13 administrative and judicial procedures in effect

14 for children abandoned at or shortly after birth

15 (including policies and procedures providing for

16 legal representation of such children); and

17 ‘‘(ii) is implementing (or not later than Oc18 tober 1, 1997, will implement) such policies and

19 procedures as the State determines, on the

20 basis of the review described in clause (i), to be

21 necessary to enable permanent decisions to be

22 made expeditiously with respect to the place23 ment of such children.

24 ‘‘(13) CERTIFICATION OF REASONABLE EF25 FORTS BEFORE PLACEMENT OF CHILDREN IN FOS-
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1 TER CARE.—A certification that the State in each

2 case will—

3 ‘‘(A) make reasonable efforts prior to the

4 placement of a child in foster care, to prevent

5 or eliminate the need for removal of the child

6 from the child’s home, and to make it possible

7 for the child to return home; and

8 ‘‘(B) with respect to families in which

9 abuse or neglect has been confirmed, provide

10 services or referral for services for families and

11 children where the State makes a determination

12 that the child may safely remain with the fam13 ily.

14 ‘‘(14) CERTIFICATION OF CONFIDENTIALITY

15 AND REQUIREMENTS FOR INFORMATION DISCLO16 SURE.—

17 ‘‘(A) IN GENERAL.—A certification that

18 the State has in effect and operational—

19 ‘‘(i) requirements ensuring that re20 ports and records made and maintained

21 pursuant to the purposes of this part shall

22 only be made available to—

23 ‘‘(I) individuals who are the sub24 ject of the report;
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1 ‘‘(II) Federal, State, or local gov2 ernment entities, or any agent of such

3 entities, having a need for such infor4 mation in order to carry out their re5 sponsibilities under law to protect

6 children from abuse and neglect;

7 ‘‘(III) child abuse citizen review

8 panels;

9 ‘‘(IV) child fatality review panels;

10 ‘‘(V) a grand jury or court, upon

11 a finding that information in the

12 record is necessary for the determina13 tion of an issue before the court or

14 grand jury; and

15 ‘‘(VI) other entities or classes of

16 individuals statutorily authorized by

17 the State to receive such information

18 pursuant to a legitimate State pur19 pose; and

20 ‘‘(ii) provisions that allow for public

21 disclosure of the findings or information

22 about cases of child abuse or neglect that

23 have resulted in a child fatality or near fa24 tality.
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1 ‘‘(B) LIMITATION.—Disclosures made pur2 suant to clause (i) or (ii) shall not include the

3 identifying information concerning the individ4 ual initiating a report or complaint alleging sus5 pected instances of child abuse or neglect.

6 ‘‘(C) DEFINITION.—For purposes of this

7 paragraph, the term ‘near fatality’ means an

8 act that, as certified by a physician, places the

9 child in serious or critical condition.

10 ‘‘(b) DETERMINATIONS.—The Secretary shall deter11 mine whether a plan submitted pursuant to subsection (a)

12 contains the material required by subsection (a). The Sec13 retary may not require a State to include in such a plan

14 any material not described in subsection (a).

15 ‘‘SEC. 103. DATA COLLECTION AND REPORTING.

16 ‘‘(a) NATIONAL CHILD ABUSE AND NEGLECT DATA

17 SYSTEM.—The Secretary shall establish a national data

18 collection and analysis program—

19 ‘‘(1) which, to the extent practicable, coordi20 nates existing State child abuse and neglect reports

21 and which shall include—

22 ‘‘(A) standardized data on substantiated,

23 as well as false, unfounded, or unsubstantiated

24 reports; and
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1 ‘‘(B) information on the number of deaths

2 due to child abuse and neglect; and

3 ‘‘(2) which shall collect, compile, analyze, and

4 make available State child abuse and neglect report5 ing information which, to the extent practical, is uni6 versal and case-specific and integrated with other

7 case-based foster care and adoption data collected by

8 the Secretary.

9 ‘‘(b) ADOPTION AND FOSTER CARE AND ANALYSIS

10 AND REPORTING SYSTEMS.—The Secretary shall imple11 ment a system for the collection of data relating to adop12 tion and foster care in the United States. Such data collec13 tion system shall—

14 ‘‘(1) avoid unnecessary diversion of resources

15 from agencies responsible for adoption and foster

16 care;

17 ‘‘(2) assure that any data that is collected is re18 liable and consistent over time and among jurisdic19 tions through the use of uniform definitions and

20 methodologies;

21 ‘‘(3) provide comprehensive national informa22 tion with respect to—

23 ‘‘(A) the demographic characteristics of

24 adoptive and foster children and their biological

25 and adoptive or foster parents;
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1 ‘‘(B) the status of the foster care popu2 lation (including the number of children in fos3 ter care, length of placement, type of place4 ment, availability for adoption, and goals for

5 ending or continuing foster care);

6 ‘‘(C) the number and characteristics of—

7 ‘‘(i) children placed in or removed

8 from foster care;

9 ‘‘(ii) children adopted or with respect

10 to whom adoptions have been terminated;

11 and

12 ‘‘(iii) children placed in foster care

13 outside the State which has placement and

14 care responsibility; and

15 ‘‘(D) the extent and nature of assistance

16 provided by Federal, State, and local adoption

17 and foster care programs and the characteris18 tics of the children with respect to whom such

19 assistance is provided; and

20 ‘‘(4) utilize appropriate requirements and incen21 tives to ensure that the system functions reliably

22 throughout the United States.

23 ‘‘(c) ADDITIONAL INFORMATION.—The Secretary

24 may require the provision of additional information under

25 the data collection system established under subsection (b)
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1 if the addition of such information is agreed to by a major2 ity of the States.

3 ‘‘(d) ANNUAL REPORT BY THE SECRETARY.—Within

4 6 months after the end of each fiscal year, the Secretary

5 shall prepare a report based on information provided by

6 the States for the fiscal year pursuant to this section, and

7 shall make the report and such information available to

8 the Congress and the public.

9 ‘‘TITLE II—RESEARCH, DEM10 ONSTRATIONS, TRAINING,

11 AND TECHNICAL ASSISTANCE

12 ‘‘SEC. 201. RESEARCH GRANTS.

13 ‘‘(a) IN GENERAL.—The Secretary, in consultation

14 with appropriate Federal officials and recognized experts

15 in the field, shall award grants or contracts for the con16 duct of research in accordance with subsection (b).

17 ‘‘(b) RESEARCH.—Research projects to be conducted

18 using amounts received under this section—

19 ‘‘(1) shall be designed to provide information to

20 better protect children from abuse or neglect and to

21 improve the well-being of abused or neglected chil22 dren, with at least a portion of any such research

23 conducted under a project being field initiated;

24 ‘‘(2) shall at a minimum, focus on—
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1 ‘‘(A) the nature and scope of child abuse

2 and neglect;

3 ‘‘(B) the causes, prevention, assessment,

4 identification, treatment, cultural and socio5 economic distinctions, and the consequences of

6 child abuse and neglect;

7 ‘‘(C) appropriate, effective and culturally

8 sensitive investigative, administrative, and judi9 cial procedures with respect to cases of child

10 abuse; and

11 ‘‘(D) the national incidence of child abuse

12 and neglect, including—

13 ‘‘(i) the extent to which incidents of

14 child abuse are increasing or decreasing in

15 number and severity;

16 ‘‘(ii) the incidence of substantiated

17 and unsubstantiated reported child abuse

18 cases;

19 ‘‘(iii) the number of substantiated

20 cases that result in a judicial finding of

21 child abuse or neglect or related criminal

22 court convictions;

23 ‘‘(iv) the extent to which the number

24 of unsubstantiated, unfounded and false

25 reported cases of child abuse or neglect
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1 have contributed to the inability of a State

2 to respond effectively to serious cases of

3 child abuse or neglect;

4 ‘‘(v) the extent to which the lack of

5 adequate resources and the lack of ade6 quate training of reporters have contrib7 uted to the inability of a State to respond

8 effectively to serious cases of child abuse

9 and neglect;

10 ‘‘(vi) the number of unsubstantiated,

11 false, or unfounded reports that have re12 sulted in a child being placed in substitute

13 care, and the duration of such placement;

14 ‘‘(vii) the extent to which unsubstan15 tiated reports return as more serious cases

16 of child abuse or neglect;

17 ‘‘(viii) the incidence and prevalence of

18 physical, sexual, and emotional abuse and

19 physical and emotional neglect in sub20 stitute care;

21 ‘‘(ix) the incidence and outcomes of

22 abuse allegations reported within the con23 text of divorce, custody, or other family

24 court proceedings, and the interaction be-
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1 tween this venue and the child protective

2 services system; and

3 ‘‘(x) the cases of children reunited

4 with their families or receiving family pres5 ervation services that result in subsequent

6 substantiated reports of child abuse and

7 neglect, including the death of the child;

8 and

9 ‘‘(3) may include the appointment of an advi10 sory board to—

11 ‘‘(A) provide recommendations on coordi12 nating Federal, State, and local child abuse and

13 neglect activities at the State level with similar

14 activities at the State and local level pertaining

15 to family violence prevention;

16 ‘‘(B) consider specific modifications needed

17 in State laws and programs to reduce the num18 ber of unfounded or unsubstantiated reports of

19 child abuse or neglect while enhancing the abil20 ity to identify and substantiate legitimate cases

21 of abuse or neglect which place a child in dan22 ger; and

23 ‘‘(C) provide recommendations for modi24 fications needed to facilitate coordinated na-
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1 tional and Statewide data collection with re2 spect to child protection and child welfare.

3 ‘‘SEC. 202. NATIONAL CLEARINGHOUSE FOR INFORMATION

4 RELATING TO CHILD ABUSE.

5 ‘‘(a) ESTABLISHMENT.—The Secretary shall,

6 through the Department of Health and Human Services,

7 or by one or more contracts of not less than 3 years dura8 tion provided through a competition, establish a national

9 clearinghouse for information relating to child abuse.

10 ‘‘(b) FUNCTIONS.—The Secretary shall, through the

11 clearinghouse established by subsection (a)—

12 ‘‘(1) maintain, coordinate, and disseminate in13 formation on all programs, including private pro14 grams, that show promise of success with respect to

15 the prevention, assessment, identification, and treat16 ment of child abuse and neglect;

17 ‘‘(2) maintain and disseminate information re18 lating to—

19 ‘‘(A) the incidence of cases of child abuse

20 and neglect in the United States;

21 ‘‘(B) the incidence of such cases in popu22 lations determined by the Secretary under sec23 tion 105(a)(1) of the Child Abuse Prevention,

24 Adoption, and Family Services Act of 1988 (as
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1 such section was in effect on the day before the

2 date of enactment of this Act); and

3 ‘‘(C) the incidence of any such cases relat4 ed to alcohol or drug abuse;

5 ‘‘(3) disseminate information related to data

6 collected and reported by States pursuant to section

7 103;

8 ‘‘(4) compile, analyze, and publish a summary

9 of the research conducted under section 201; and

10 ‘‘(5) solicit public comment on the components

11 of such clearinghouse.

12 ‘‘SEC. 203. GRANTS FOR DEMONSTRATION PROJECTS.

13 ‘‘(a) AWARDING OF GENERAL GRANTS.—The Sec14 retary may make grants to, and enter into contracts with,

15 public and nonprofit private agencies or organizations (or

16 combinations of such agencies or organizations) for the

17 purpose of developing, implementing, and operating time

18 limited, demonstration programs and projects for the fol19 lowing purposes:

20 ‘‘(1) INNOVATIVE PROGRAMS AND PROJECTS.—

21 The Secretary may award grants to public agencies

22 that demonstrate innovation in responding to reports

23 of child abuse and neglect including programs of col24 laborative partnerships between the State child pro25 tective service agency, community social service
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1 agencies and family support programs, schools,

2 churches and synagogues, and other community

3 agencies to allow for the establishment of a triage

4 system that—

5 ‘‘(A) accepts, screens and assesses reports

6 received to determine which such reports re7 quire an intensive intervention and which re8 quire voluntary referral to another agency, pro9 gram or project;

10 ‘‘(B) provides, either directly or through

11 referral, a variety of community-linked services

12 to assist families in preventing child abuse and

13 neglect; and

14 ‘‘(C) provides further investigation and in15 tensive intervention where the child’s safety is

16 in jeopardy.

17 ‘‘(2) KINSHIP CARE PROGRAMS AND

18 PROJECTS.—The Secretary may award grants to

19 public entities to assist such entities in developing or

20 implementing procedures using adult relatives as the

21 preferred placement for children removed from their

22 home, where such relatives are determined to be ca23 pable of providing a safe nurturing environment for

24 the child and where, to the maximum extent prac-
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1 ticable, such relatives comply with relevant State

2 child protection standards.

3 ‘‘(3) ADOPTION OPPORTUNITIES.—The Sec4 retary may award grants to public entities to assist

5 such entities in developing or implementing pro6 grams to expand opportunities for the adoption of

7 children with special needs.

8 ‘‘(4) FAMILY RESOURCE CENTERS.—The Sec9 retary may award grants to public or nonprofit pri10 vate entities to provide for the establishment of fam11 ily resource programs and support services that—

12 ‘‘(A) develop, expand, and enhance state13 wide networks of community-based, prevention14 focused centers, programs, or services that pro15 vide comprehensive support for families;

16 ‘‘(B) promote the development of parental

17 competencies and capacities in order to increase

18 family stability;

19 ‘‘(C) support the additional needs of fami20 lies with children with disabilities;

21 ‘‘(D) foster the development of a contin22 uum of preventive services for children and

23 families through State and community-based

24 collaborations and partnerships (both public

25 and private); and
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1 ‘‘(E) maximize funding for the financing,

2 planning, community mobilization, collabora3 tion, assessment, information and referral,

4 startup, training and technical assistance, infor5 mation management, reporting, and evaluation

6 costs for establishing, operating, or expanding a

7 statewide network of community-based, preven8 tion-focused family resource and support serv9 ices.

10 ‘‘(5) OTHER INNOVATIVE PROGRAMS.—The

11 Secretary may award grants to public or private

12 nonprofit organizations to assist such entities in de13 veloping or implementing innovative programs and

14 projects that show promise of preventing and treat15 ing cases of child abuse and neglect (such as Par16 ents Anonymous).

17 ‘‘(b) GRANTS FOR ABANDONED INFANT PRO18 GRAMS.—The Secretary may award grants to public and

19 nonprofit private entities to assist such entities in develop20 ing or implementing procedures—

21 ‘‘(1) to prevent the abandonment of infants and

22 young children, including the provision of services to

23 members of the natural family for any condition that

24 increases the probability of abandonment of an in25 fant or young child;
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1 ‘‘(2) to identify and address the needs of aban2 doned infants and young children;

3 ‘‘(3) to assist abandoned infants and young

4 children to reside with their natural families or in

5 foster care, as appropriate;

6 ‘‘(4) to recruit, train, and retain foster families

7 for abandoned infants and young children;

8 ‘‘(5) to carry out residential care programs for

9 abandoned infants and young children who are un10 able to reside with their families or to be placed in

11 foster care;

12 ‘‘(6) to carry out programs of respite care for

13 families and foster families of infants and young

14 children; and

15 ‘‘(7) to recruit and train health and social serv16 ices personnel to work with families, foster care fam17 ilies, and residential care programs for abandoned

18 infants and young children.

19 ‘‘(c) EVALUATION.—In making grants for demonstra20 tion projects under this section, the Secretary shall require

21 all such projects to be evaluated for their effectiveness.

22 Funding for such evaluations shall be provided either as

23 a stated percentage of a demonstration grant or as a sepa24 rate grant entered into by the Secretary for the purpose
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1 of evaluating a particular demonstration project or group

2 of projects.

3 ‘‘SEC. 204. TECHNICAL ASSISTANCE.

4 ‘‘(a) CHILD ABUSE AND NEGLECT.—

5 ‘‘(1) IN GENERAL.—The Secretary shall provide

6 technical assistance under this title to States to as7 sist such States in planning, improving, developing,

8 and carrying out programs and activities relating to

9 the prevention, assessment identification, and treat10 ment of child abuse and neglect.

11 ‘‘(2) EVALUATION.—Technical assistance pro12 vided under paragraph (1) may include an evalua13 tion or identification of—

14 ‘‘(A) various methods and procedures for

15 the investigation, assessment, and prosecution

16 of child physical and sexual abuse cases;

17 ‘‘(B) ways to mitigate psychological trau18 ma to the child victim; and

19 ‘‘(C) effective programs carried out by the

20 States under this Act.

21 ‘‘(b) ADOPTION OPPORTUNITIES.—The Secretary

22 shall provide, directly or by grant to or contract with pub23 lic or private nonprofit agencies or organizations—

24 ‘‘(1) technical assistance and resource and re25 ferral information to assist State or local govern-
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1 ments with termination of parental rights issues, in

2 recruiting and retaining adoptive families, in the

3 successful placement of children with special needs,

4 and in the provision of pre- and post-placement serv5 ices, including post-legal adoption services; and

6 ‘‘(2) other assistance to help State and local

7 governments replicate successful adoption-related

8 projects from other areas in the United States.

9 ‘‘SEC. 205. TRAINING RESOURCES.

10 ‘‘(a) TRAINING PROGRAMS.—The Secretary may

11 award grants to public or private nonprofit organiza12 tions—

13 ‘‘(1) for the training of professional and para14 professional personnel in the fields of medicine, law,

15 education, law enforcement, social work, and other

16 relevant fields who are engaged in, or intend to work

17 in, the field of prevention, identification, and treat18 ment of child abuse and neglect, including the links

19 between domestic violence and child abuse;

20 ‘‘(2) to provide culturally specific instruction in

21 methods of protecting children from child abuse and

22 neglect to children and to persons responsible for the

23 welfare of children, including parents of and persons

24 who work with children with disabilities; and
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1 ‘‘(3) to improve the recruitment, selection, and

2 training of volunteers serving in private and public

3 nonprofit children, youth and family service organi4 zations in order to prevent child abuse and neglect

5 through collaborative analysis of current recruit6 ment, selection, and training programs and develop7 ment of model programs for dissemination and rep8 lication nationally.

9 ‘‘(b) DISSEMINATION OF INFORMATION.—The Sec10 retary may provide for and disseminate information relat11 ing to various training resources available at the State and

12 local level to—

13 ‘‘(1) individuals who are engaged, or who intend

14 to engage, in the prevention, identification, assess15 ment, and treatment of child abuse and neglect; and

16 ‘‘(2) appropriate State and local officials, in17 cluding prosecutors, to assist in training law en18 forcement, legal, judicial, medical, mental health,

19 education, and child welfare personnel in appropriate

20 methods of interacting during investigative, adminis21 trative, and judicial proceedings with children who

22 have been subjected to abuse.
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1 ‘‘SEC. 206. APPLICATIONS AND AMOUNTS OF GRANTS.

2 ‘‘(a) REQUIREMENT OF APPLICATION.—The Sec3 retary may not make a grant to a State or other entity

4 under this title unless—

5 ‘‘(1) an application for the grant is submitted

6 to the Secretary;

7 ‘‘(2) with respect to carrying out the purpose

8 for which the grant is to be made, the application

9 provides assurances of compliance satisfactory to the

10 Secretary; and

11 ‘‘(3) the application otherwise is in such form,

12 is made in such manner, and contains such agree13 ments, assurances, and information as the Secretary

14 determines to be necessary to carry out this title.

15 ‘‘(b) AMOUNT OF GRANT.—The Secretary shall de16 termine the amount of a grant to be awarded under this

17 title.

18 ‘‘SEC. 207. PEER REVIEW FOR GRANTS.

19 ‘‘(a) ESTABLISHMENT OF PEER REVIEW PROCESS.—

20 ‘‘(1) IN GENERAL.—The Secretary shall, in con21 sultation with experts in the field and other Federal

22 agencies, establish a formal, rigorous, and meritori23 ous peer review process for purposes of evaluating

24 and reviewing applications for grants under this title

25 and determining the relative merits of the projects

26 for which such assistance is requested. The purpose
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1 of this process is to enhance the quality and useful2 ness of research in the field of child abuse and ne3 glect.

4 ‘‘(2) REQUIREMENTS FOR MEMBERS.—In estab5 lishing the process required by paragraph (1), the

6 Secretary shall appoint to the peer review panels

7 only members who are experts in the field of child

8 abuse and neglect or related disciplines, with appro9 priate expertise in the application to be reviewed,

10 and who are not individuals who are officers or em11 ployees of the Administration for Children and Fam12 ilies. The panels shall meet as often as is necessary

13 to facilitate the expeditious review of applications for

14 grants and contracts under this title, but may not

15 meet less than once a year. The Secretary shall en16 sure that the peer review panel utilizes scientifically

17 valid review criteria and scoring guidelines for re18 view committees.

19 ‘‘(b) REVIEW OF APPLICATIONS FOR ASSISTANCE.—

20 Each peer review panel established under subsection

21 (a)(1) that reviews any application for a grant shall—

22 ‘‘(1) determine and evaluate the merit of each

23 project described in such application;

24 ‘‘(2) rank such application with respect to all

25 other applications it reviews in the same priority
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1 area for the fiscal year involved, according to the rel2 ative merit of all of the projects that are described

3 in such application and for which financial assist4 ance is requested; and

5 ‘‘(3) make recommendations to the Secretary

6 concerning whether the application for the project

7 shall be approved.

8 The Secretary shall award grants under this title on the

9 basis of competitive review.

10 ‘‘(c) NOTICE OF APPROVAL.—

11 ‘‘(1) IN GENERAL.—The Secretary shall provide

12 grants under this title from among the projects

13 which the peer review panels established under sub14 section (a)(1) have determined to have merit.

15 ‘‘(2) REQUIREMENT OF EXPLANATION.—In the

16 instance in which the Secretary approves an applica17 tion for a program under this title without having

18 approved all applications ranked above such applica19 tion, the Secretary shall append to the approved ap20 plication a detailed explanation of the reasons relied

21 on for approving the application and for failing to

22 approve each pending application that is superior in

23 merit.
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1 ‘‘SEC. 208. NATIONAL RANDOM SAMPLE STUDY OF CHILD

2 WELFARE.

3 ‘‘(a) IN GENERAL.—The Secretary shall conduct a

4 national study based on random samples of children who

5 are at risk of child abuse or neglect, or are determined

6 by States to have been abused or neglected, and such other

7 research as may be necessary.

8 ‘‘(b) REQUIREMENTS.—The study required by sub9 section (a) shall—

10 ‘‘(1) have a longitudinal component; and

11 ‘‘(2) yield data reliable at the State level for as

12 many States as the Secretary determines is feasible.

13 ‘‘(c) PREFERRED CONTENTS.—In conducting the

14 study required by subsection (a), the Secretary should—

15 ‘‘(1) collect data on the child protection pro16 grams of different small States (or different groups

17 of such States) in different years to yield an occa18 sional picture of the child protection programs of

19 such States;

20 ‘‘(2) carefully consider selecting the sample

21 from cases of confirmed abuse or neglect; and

22 ‘‘(3) follow each case for several years while ob23 taining information on, among other things—

24 ‘‘(A) the type of abuse or neglect involved;

25 ‘‘(B) the frequency of contact with State

26 or local agencies;
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1 ‘‘(C) whether the child involved has been

2 separated from the family, and, if so, under

3 what circumstances;

4 ‘‘(D) the number, type, and characteristics

5 of out-of-home placements of the child; and

6 ‘‘(E) the average duration of each place7 ment.

8 ‘‘(d) REPORTS.—

9 ‘‘(1) IN GENERAL.—From time to time, the

10 Secretary shall prepare reports summarizing the re11 sults of the study required by subsection (a).

12 ‘‘(2) AVAILABILITY.—The Secretary shall make

13 available to the public any report prepared under

14 paragraph (1), in writing or in the form of an elec15 tronic data tape.

16 ‘‘(3) AUTHORITY TO CHARGE FEE.—The Sec17 retary may charge and collect a fee for the furnish18 ing of reports under paragraph (2).

19 ‘‘(4) FUNDING.—The Secretary shall carry out

20 this section using amounts made available under sec21 tion 425 of the Social Security Act.
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1 ‘‘TITLE III—GENERAL

2 PROVISIONS

3 ‘‘SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

4 ‘‘(a) TITLE I.—There are authorized to be appro5 priated to carry out title I, $230,000,000 for fiscal year

6 1996, and such sums as may be necessary for each of the

7 fiscal years 1997 through 2002.

8 ‘‘(b) TITLE II.—

9 ‘‘(1) IN GENERAL.—Of the amount appro10 priated under subsection (a) for a fiscal year, the

11 Secretary shall make available 12 percent of such

12 amount to carry out title II (except for sections 203

13 and 208).

14 ‘‘(2) GRANTS FOR DEMONSTRATION

15 PROJECTS.—Of the amount made available under

16 paragraph (1) for a fiscal year, the Secretary shall

17 make available not less than 40 percent of such

18 amount to carry out section 203.

19 ‘‘(c) INDIAN TRIBES.—Of the amount appropriated

20 under subsection (a) for a fiscal year, the Secretary shall

21 make available 1 percent of such amount to provide grants

22 and contracts to Indian tribes and Tribal Organizations.

23 ‘‘(d) AVAILABILITY OF APPROPRIATIONS.—Amounts

24 appropriated under subsection (a) shall remain available

25 until expended.
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1 ‘‘SEC. 302. GRANTS TO STATES FOR PROGRAMS RELATING

2 TO THE INVESTIGATION AND PROSECUTION

3 OF CHILD ABUSE AND NEGLECT CASES.

4 ‘‘(a) GRANTS TO STATES.—The Secretary, in con5 sultation with the Attorney General, is authorized to make

6 grants to the States for the purpose of assisting States

7 in developing, establishing, and operating programs de8 signed to improve—

9 ‘‘(1) the handling of child abuse and neglect

10 cases, particularly cases of child sexual abuse and

11 exploitation, in a manner which limits additional

12 trauma to the child victim;

13 ‘‘(2) the handling of cases of suspected child

14 abuse or neglect related fatalities; and

15 ‘‘(3) the investigation and prosecution of cases

16 of child abuse and neglect, particularly child sexual

17 abuse and exploitation.

18 ‘‘(b) ELIGIBILITY REQUIREMENTS.—In order for a

19 State to qualify for assistance under this section, such

20 State shall—

21 ‘‘(1) be an eligible State under section 102;

22 ‘‘(2) establish a task force as provided in sub23 section (c);

24 ‘‘(3) fulfill the requirements of subsection (d);

25 ‘‘(4) submit annually an application to the Sec26 retary at such time and containing such information
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1 and assurances as the Secretary considers necessary,

2 including an assurance that the State will—

3 ‘‘(A) make such reports to the Secretary as

4 may reasonably be required; and

5 ‘‘(B) maintain and provide access to

6 records relating to activities under subsection

7 (a); and

8 ‘‘(5) submit annually to the Secretary a report

9 on the manner in which assistance received under

10 this program was expended throughout the State,

11 with particular attention focused on the areas de12 scribed in paragraphs (1) through (3) of subsection

13 (a).

14 ‘‘(c) STATE TASK FORCES.—

15 ‘‘(1) GENERAL RULE.—Except as provided in

16 paragraph (2), a State requesting assistance under

17 this section shall establish or designate, and main18 tain, a State multidisciplinary task force on chil19 dren’s justice (hereafter in this section referred to as

20 ‘State task force’) composed of professionals with

21 knowledge and experience relating to the criminal

22 justice system and issues of child physical abuse,

23 child neglect, child sexual abuse and exploitation,

24 and child maltreatment related fatalities. The State

25 task force shall include—
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1 ‘‘(A) individuals representing the law en2 forcement community;

3 ‘‘(B) judges and attorneys involved in both

4 civil and criminal court proceedings related to

5 child abuse and neglect (including individuals

6 involved with the defense as well as the prosecu7 tion of such cases);

8 ‘‘(C) child advocates, including both attor9 neys for children and, where such programs are

10 in operation, court appointed special advocates;

11 ‘‘(D) health and mental health profes12 sionals;

13 ‘‘(E) individuals representing child protec14 tive service agencies;

15 ‘‘(F) individuals experienced in working

16 with children with disabilities;

17 ‘‘(G) parents; and

18 ‘‘(H) representatives of parents’ groups.

19 ‘‘(2) EXISTING TASK FORCE.—As determined

20 by the Secretary, a State commission or task force

21 established after January 1, 1983, with substantially

22 comparable membership and functions, may be con23 sidered the State task force for purposes of this sub24 section.
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1 ‘‘(d) STATE TASK FORCE STUDY.—Before a State

2 receives assistance under this section, and at 3-year inter3 vals thereafter, the State task force shall comprehen4 sively—

5 ‘‘(1) review and evaluate State investigative, ad6 ministrative and both civil and criminal judicial han7 dling of cases of child abuse and neglect, particularly

8 child sexual abuse and exploitation, as well as cases

9 involving suspected child maltreatment related fatali10 ties and cases involving a potential combination of

11 jurisdictions, such as interstate, Federal-State, and

12 State-Tribal; and

13 ‘‘(2) make policy and training recommendations

14 in each of the categories described in subsection (e).

15 The task force may make such other comments and rec16 ommendations as are considered relevant and useful.

17 ‘‘(e) ADOPTION OF STATE TASK FORCE REC18 OMMENDATIONS.—

19 ‘‘(1) GENERAL RULE.—Subject to the provi20 sions of paragraph (2), before a State receives as21 sistance under this section, a State shall adopt rec22 ommendations of the State task force in each of the

23 following categories—

24 ‘‘(A) investigative, administrative, and ju25 dicial handling of cases of child abuse and ne-
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1 glect, particularly child sexual abuse and exploi2 tation, as well as cases involving suspected child

3 maltreatment related fatalities and cases involv4 ing a potential combination of jurisdictions,

5 such as interstate, Federal-State, and State6 Tribal, in a manner which reduces the addi7 tional trauma to the child victim and the vic8 tim’s family and which also ensures procedural

9 fairness to the accused;

10 ‘‘(B) experimental, model and demonstra11 tion programs for testing innovative approaches

12 and techniques which may improve the prompt

13 and successful resolution of civil and criminal

14 court proceedings or enhance the effectiveness

15 of judicial and administrative action in child

16 abuse and neglect cases, particularly child sex17 ual abuse and exploitation cases, including the

18 enhancement of performance of court-appointed

19 attorneys and guardians ad litem for children;

20 and

21 ‘‘(C) reform of State laws, ordinances, reg22 ulations, protocols and procedures to provide

23 comprehensive protection for children from

24 abuse, particularly child sexual abuse and ex-
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1 ploitation, while ensuring fairness to all affected

2 persons.

3 ‘‘(2) EXEMPTION.—As determined by the Sec4 retary, a State shall be considered to be in fulfill5 ment of the requirements of this subsection if—

6 ‘‘(A) the State adopts an alternative to the

7 recommendations of the State task force, which

8 carries out the purpose of this section, in each

9 of the categories under paragraph (1) for which

10 the State task force’s recommendations are not

11 adopted; or

12 ‘‘(B) the State is making substantial

13 progress toward adopting recommendations of

14 the State task force or a comparable alternative

15 to such recommendations.

16 ‘‘(f) FUNDS AVAILABLE.—For grants under this sec17 tion, the Secretary shall use the amount authorized by sec18 tion 1404A of the Victims of Crime Act of 1984.

19 ‘‘SEC. 303. TRANSITIONAL PROVISION.

20 ‘‘A State or other entity that has a grant, contract,

21 or cooperative agreement in effect, on the date of enact22 ment of this Act, under the Family Resource and Support

23 Program, the Community-Based Family Resource Pro24 gram, the Family Support Center Program, the Emer25 gency Child Abuse Prevention Grant Program, the Aban-
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1 doned Infants Assistance Act of 1988, or the Temporary

2 Child Care for Children with Disabilities and Crisis Nurs3 eries Programs shall continue to receive funds under such

4 grant, contract, or cooperative agreement, subject to the

5 original terms under which such funds were provided,

6 through the end of the applicable grant, contract, or

7 agreement cycle.

8 ‘‘SEC. 304. RULE OF CONSTRUCTION.

9 ‘‘(a) IN GENERAL.—Nothing in this Act, or in part

10 B or E of title IV of the Social Security Act, shall be con11 strued—

12 ‘‘(1) as establishing a Federal requirement that

13 a parent or legal guardian provide a child any medi14 cal service or treatment against the religious beliefs

15 of the parent or legal guardian; and

16 ‘‘(2) to require that a State find, or to prohibit

17 a State from finding, abuse or neglect in cases in

18 which a parent or legal guardian relies solely or par19 tially upon spiritual means rather than medical

20 treatment, in accordance with the religious beliefs of

21 the parent or legal guardian.

22 ‘‘(b) STATE REQUIREMENT.—Notwithstanding sub23 section (a), a State shall have in place authority under

24 State law to permit the child protective service system of

25 the State to pursue any legal remedies, including the au-
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1 thority to initiate legal proceedings in a court of competent

2 jurisdiction, to provide medical care or treatment for a

3 child when such care or treatment is necessary to prevent

4 or remedy serious harm to the child, or to prevent the

5 withholding of medically indicated treatment from children

6 with life threatening conditions. Except with respect to the

7 withholding of medically indicated treatments from dis8 abled infants with life threatening conditions, case by case

9 determinations concerning the exercise of the authority of

10 this subsection shall be within the sole discretion of the

11 State.’’.

12 SEC. 3202. REAUTHORIZATIONS.

13 (a) MISSING CHILDREN’S ASSISTANCE ACT.—Section

14 408 of the Missing Children’s Assistance Act (42 U.S.C.

15 5777) is amended—

16 (1) by striking ‘‘To’’ and inserting ‘‘(a) IN

17 GENERAL.—To’’

18 (2) by striking ‘‘and 1996’’ and inserting

19 ‘‘1996, and 1997’’; and

20 (3) by adding at the end thereof the following

21 new subsection:

22 ‘‘(b) EVALUATION.—The Administrator shall use not

23 more than 5 percent of the amount appropriated for a fis24 cal year under subsection (a) to conduct an evaluation of
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1 the effectiveness of the programs and activities established

2 and operated under this title.’’.

3 (b) VICTIMS OF CHILD ABUSE ACT OF 1990.—Sec4 tion 214B of the Victims of Child Abuse Act of 1990 (42

5 U.S.C. 13004) is amended—

6 (1) in subsection (a)(2), by striking ‘‘and 1996’’

7 and inserting ‘‘1996, and 1997’’; and

8 (2) in subsection (b)(2), by striking ‘‘and

9 1996’’ and inserting ‘‘1996 and 1997’’.

10 SEC. 3203. REPEALS.

11 (a) IN GENERAL.—The following provisions of law

12 are repealed:

13 (1) Title II of the Child Abuse Prevention and

14 Treatment and Adoption Reform Act of 1978 (42

15 U.S.C. 5111 et seq.).

16 (2) The Abandoned Infants Assistance Act of

17 1988 (42 U.S.C. 670 note).

18 (3) The Temporary Child Care for Children

19 with Disabilities and Crisis Nurseries Act of 1986

20 (42 U.S.C. 5117 et seq.).

21 (4) Subtitle F of title VII of the Stewart B.

22 McKinney Homeless Assistance Act (42 U.S.C.

23 11481 et seq.).

24 (b) CONFORMING AMENDMENTS.—
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1 (1) RECOMMENDED LEGISLATION.—After con2 sultation with the appropriate committees of the

3 Congress and the Director of the Office of Manage4 ment and Budget, the Secretary of Health and

5 Human Services shall prepare and submit to the

6 Congress a legislative proposal in the form of an im7 plementing bill containing technical and conforming

8 amendments to reflect the repeals made by this sec9 tion.

10 (2) SUBMISSION TO CONGRESS.—Not later than

11 6 months after the date of enactment of this chap12 ter, the Secretary of Health and Human Services

13 shall submit the implementing bill referred to under

14 paragraph (1).

15 Subtitle C—Child Care

16 SEC. 3301. SHORT TITLE AND REFERENCES.

17 (a) SHORT TITLE.—This subtitle may be cited as the

18 ‘‘Child Care and Development Block Grant Amendments

19 of 1996’’.

20 (b) REFERENCES.—Except as otherwise expressly

21 provided, whenever in this subtitle an amendment or re22 peal is expressed in terms of an amendment to, or repeal

23 of, a section or other provision, the reference shall be con24 sidered to be made to a section or other provision of the
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1 Child Care and Development Block Grant Act of 1990 (42

2 U.S.C. 9858 et seq.).

3 SEC. 3302. GOALS.

4 Section 658A (42 U.S.C. 9801 note) is amended—

5 (1) in the section heading by inserting ‘‘AND

6 GOALS’’ after ‘‘TITLE’’;

7 (2) by inserting ‘‘(a) SHORT TITLE.—’’ before

8 ‘‘This’’; and

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

10 ‘‘(b) GOALS.—The goals of this subchapter are—

11 ‘‘(1) to allow each State maximum flexibility in

12 developing child care programs and policies that best

13 suit the needs of children and parents within such

14 State;

15 ‘‘(2) to promote parental choice to empower

16 working parents to make their own decisions on the

17 child care that best suits their family’s needs;

18 ‘‘(3) to encourage States to provide consumer

19 education information to help parents make in20 formed choices about child care;

21 ‘‘(4) to assist States to provide child care to

22 parents trying to achieve independence from public

23 assistance; and
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1 ‘‘(5) to assist States in implementing the

2 health, safety, licensing, and registration standards

3 established in State regulations.’’.

4 SEC. 3303. AUTHORIZATION OF APPROPRIATIONS AND EN5 TITLEMENT AUTHORITY.

6 (a) IN GENERAL.—Section 658B (42 U.S.C. 9858)

7 is amended to read as follows:

8 ‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

9 ‘‘There is authorized to be appropriated to carry out

10 this subchapter $1,000,000,000 for each of the fiscal

11 years 1996 through 2002.’’.

12 (b) SOCIAL SECURITY ACT.—Part A of title IV of

13 the Social Security Act (42 U.S.C. 601–617) is amended

14 by adding at the end the following new section:

15 ‘‘SEC. 418. FUNDING FOR CHILD CARE.

16 ‘‘(a) GENERAL CHILD CARE ENTITLEMENT.—

17 ‘‘(1) GENERAL ENTITLEMENT.—Subject to the

18 amount appropriated under paragraph (3), each

19 State shall, for the purpose of providing child care

20 assistance, be entitled to payments under a grant

21 under this subsection for a fiscal year in an amount

22 equal to—

23 ‘‘(A) the sum of the total amount required

24 to be paid to the State under section 403 for

25 fiscal year 1994 or 1995 (whichever is greater)
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1 with respect to amounts expended for child care

2 under section—

3 ‘‘(i) 402(g) of this Act (as such sec4 tion was in effect before October 1, 1995);

5 and

6 ‘‘(ii) 402(i) of this Act (as so in ef7 fect); or

8 ‘‘(B) the average of the total amounts re9 quired to be paid to the State for fiscal years

10 1992 through 1994 under the sections referred

11 to in subparagraph (A);

12 whichever is greater.

13 ‘‘(2) REMAINDER.—

14 ‘‘(A) GRANTS.—The Secretary shall use

15 any amounts appropriated for a fiscal year

16 under paragraph (3), and remaining after the

17 reservation described in paragraph (4) and

18 after grants are awarded under paragraph (1),

19 to make grants to States under this paragraph.

20 ‘‘(B) AMOUNT.—Subject to subparagraph

21 (C), the amount of a grant awarded to a State

22 for a fiscal year under this paragraph shall be

23 based on the formula used for determining the

24 amount of Federal payments to the State under
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1 section 403(n) (as such section was in effect be2 fore October 1, 1995).

3 ‘‘(C) MATCHING REQUIREMENT.—The Sec4 retary shall pay to each eligible State in a fiscal

5 year an amount, under a grant under subpara6 graph (A), equal to the Federal medical assist7 ance percentage for such State for fiscal year

8 1995 (as defined in section 1905(b)) of so

9 much of the expenditures by the State for child

10 care in such year as exceed the State set-aside

11 for such State under paragraph (1)(A) for such

12 year and the amount of State expenditures in

13 fiscal year 1994 or 1995 (whichever is greater)

14 that equal the non-Federal share for the pro15 grams described in subparagraph (A) of para16 graph (1).

17 ‘‘(D) REDISTRIBUTION.—

18 ‘‘(i) IN GENERAL.—With respect to

19 any fiscal year, if the Secretary determines

20 (in accordance with clause (ii)) that

21 amounts under any grant awarded to a

22 State under this paragraph for such fiscal

23 year will not be used by such State during

24 such fiscal year for carrying out the pur25 pose for which the grant is made, the Sec-
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1 retary shall make such amounts available

2 in the subsequent fiscal year for carrying

3 out such purpose to 1 or more States

4 which apply for such funds to the extent

5 the Secretary determines that such States

6 will be able to use such additional amounts

7 for carrying out such purpose. Such avail8 able amounts shall be redistributed to a

9 State pursuant to section 402(i) (as such

10 section was in effect before October 1,

11 1995) by substituting ‘the number of chil12 dren residing in all States applying for

13 such funds’ for ‘the number of children re14 siding in the United States in the second

15 preceding fiscal year’.

16 ‘‘(ii) TIME OF DETERMINATION AND

17 DISTRIBUTION.—The determination of the

18 Secretary under clause (i) for a fiscal year

19 shall be made not later than the end of the

20 first quarter of the subsequent fiscal year.

21 The redistribution of amounts under clause

22 (i) shall be made as close as practicable to

23 the date on which such determination is

24 made. Any amount made available to a

25 State from an appropriation for a fiscal
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1 year in accordance with this subparagraph

2 shall, for purposes of this part, be re3 garded as part of such State’s payment (as

4 determined under this subsection) for the

5 fiscal year in which the redistribution is

6 made.

7 ‘‘(3) APPROPRIATION.—For grants under this

8 section, there are appropriated—

9 ‘‘(A) $1,967,000,000 for fiscal year 1997;

10 ‘‘(B) $2,067,000,000 for fiscal year 1998;

11 ‘‘(C) $2,167,000,000 for fiscal year 1999;

12 ‘‘(D) $2,367,000,000 for fiscal year 2000;

13 ‘‘(E) $2,567,000,000 for fiscal year 2001;

14 and

15 ‘‘(F) $2,717,000,000 for fiscal year 2002.

16 ‘‘(4) INDIAN TRIBES.—The Secretary shall re17 serve not more than 1 percent of the aggregate

18 amount appropriated to carry out this section in

19 each fiscal year for payments to Indian tribes and

20 tribal organizations.

21 ‘‘(b) USE OF FUNDS.—

22 ‘‘(1) IN GENERAL.—Amounts received by a

23 State under this section shall only be used to provide

24 child care assistance. Amounts received by a State

25 under a grant under subsection (a)(1) shall be avail-
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1 able for use by the State without fiscal year limita2 tion.

3 ‘‘(2) USE FOR CERTAIN POPULATIONS.—A

4 State shall ensure that not less than 70 percent of

5 the total amount of funds received by the State in

6 a fiscal year under this section are used to provide

7 child care assistance to families who are receiving

8 assistance under a State program under this part,

9 families who are attempting through work activities

10 to transition off of such assistance program, and

11 families who are at risk of becoming dependent on

12 such assistance program.

13 ‘‘(c) APPLICATION OF CHILD CARE AND DEVELOP14 MENT BLOCK GRANT ACT of 1990.—Notwithstanding any

15 other provision of law, amounts provided to a State under

16 this section shall be transferred to the lead agency under

17 the Child Care and Development Block Grant Act of 1990,

18 integrated by the State into the programs established by

19 the State under such Act, and be subject to requirements

20 and limitations of such Act.

21 ‘‘(d) DEFINITION.—As used in this section, the term

22 ‘State’ means each of the 50 States or the District of Co23 lumbia.’’.

24 SEC. 3304. LEAD AGENCY.

25 Section 658D(b) (42 U.S.C. 9858b(b)) is amended—
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1 (1) in paragraph (1)—

2 (A) in subparagraph (A), by striking

3 ‘‘State’’ the first place that such appears and

4 inserting ‘‘governmental or nongovernmental’’;

5 and

6 (B) in subparagraph (C), by inserting

7 ‘‘with sufficient time and Statewide distribution

8 of the notice of such hearing,’’ after ‘‘hearing in

9 the State’’; and

10 (2) in paragraph (2), by striking the second

11 sentence.

12 SEC. 3305. APPLICATION AND PLAN.

13 Section 658E (42 U.S.C. 9858c) is amended—

14 (1) in subsection (b)—

15 (A) by striking ‘‘implemented—’’ and all

16 that follows through ‘‘(2)’’ and inserting ‘‘im17 plemented’’; and

18 (B) by striking ‘‘for subsequent State

19 plans’’;

20 (2) in subsection (c)—

21 (A) in paragraph (2)—

22 (i) in subparagraph (A)—

23 (I) in clause (i) by striking ‘‘,

24 other than through assistance pro25 vided under paragraph (3)(C),’’; and
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1 (II) by striking ‘‘except’’ and all

2 that follows through ‘‘1992’’, and in3 serting ‘‘and provide a detailed de4 scription of the procedures the State

5 will implement to carry out the re6 quirements of this subparagraph’’;

7 (ii) in subparagraph (B)—

8 (I) by striking ‘‘Provide assur9 ances’’ and inserting ‘‘Certify’’; and

10 (II) by inserting before the pe11 riod at the end ‘‘and provide a de12 tailed description of such procedures’’;

13 (iii) in subparagraph (C)—

14 (I) by striking ‘‘Provide assur15 ances’’ and inserting ‘‘Certify’’; and

16 (II) by inserting before the pe17 riod at the end ‘‘and provide a de18 tailed description of how such record

19 is maintained and is made available’’;

20 (iv) by amending subparagraph (D) to

21 read as follows:

22 ‘‘(D) CONSUMER EDUCATION INFORMA23 TION.—Certify that the State will collect and

24 disseminate to parents of eligible children and

25 the general public, consumer education informa-
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1 tion that will promote informed child care

2 choices.’’;

3 (v) in subparagraph (E), to read as

4 follows:

5 ‘‘(E) COMPLIANCE WITH STATE LICENSING

6 REQUIREMENTS.—

7 ‘‘(i) IN GENERAL.—Certify that the

8 State has in effect licensing requirements

9 applicable to child care services provided

10 within the State, and provide a detailed de11 scription of such requirements and of how

12 such requirements are effectively enforced.

13 Nothing in the preceding sentence shall be

14 construed to require that licensing require15 ments be applied to specific types of pro16 viders of child care services.

17 ‘‘(ii) INDIAN TRIBES AND TRIBAL OR18 GANIZATIONS.—In lieu of any licensing

19 and regulatory requirements applicable

20 under State and local law, the Secretary,

21 in consultation with Indian tribes and trib22 al organizations, shall develop minimum

23 child care standards (that appropriately re24 flect tribal needs and available resources)

25 that shall be applicable to Indian tribes
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1 and tribal organization receiving assistance

2 under this subchapter.’’;

3 (vi) in subparagraph (G) by striking

4 ‘‘Provide assurances’’ and inserting ‘‘Cer5 tify’’; and

6 (vii) by striking subparagraphs (H),

7 (I), and (J) and inserting the following:

8 ‘‘(H) MEETING THE NEEDS OF CERTAIN

9 POPULATIONS.—Demonstrate the manner in

10 which the State will meet the specific child care

11 needs of families who are receiving assistance

12 under a State program under part A of title IV

13 of the Social Security Act, families who are at14 tempting through work activities to transition

15 off of such assistance program, and families

16 that are at risk of becoming dependent on such

17 assistance program.’’;

18 (B) in paragraph (3)—

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

20 ‘‘(B) and (C)’’ and inserting ‘‘(B) through

21 (D)’’;

22 (ii) in subparagraph (B)—

23 (I) by striking ‘‘.—Subject to the

24 reservation contained in subparagraph
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1 (C), the’’ and inserting ‘‘AND RELAT2 ED ACTIVITIES.—The’’;

3 (II) in clause (i) by striking ‘‘;

4 and’’ at the end and inserting a pe5 riod;

6 (III) by striking ‘‘for—’’ and all

7 that follows through ‘‘section

8 658E(c)(2)(A)’’ and inserting ‘‘for

9 child care services on sliding fee scale

10 basis, activities that improve the qual11 ity or availability of such services, and

12 any other activity that the State

13 deems appropriate to realize any of

14 the goals specified in paragraphs (2)

15 through (5) of section 658A(b)’’; and

16 (IV) by striking clause (ii);

17 (iii) by amending subparagraph (C) to

18 read as follows:

19 ‘‘(C) LIMITATION ON ADMINISTRATIVE

20 COSTS.—Not more than 5 percent of the aggre21 gate amount of funds available to the State to

22 carry out this subchapter by a State in each fis23 cal year may be expended for administrative

24 costs incurred by such State to carry out all of

25 its functions and duties under this subchapter.
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1 As used in the preceding sentence, the term

2 ‘administrative costs’ shall not include the costs

3 of providing direct services.’’; and

4 (iv) by adding at the end thereof the

5 following:

6 ‘‘(D) ASSISTANCE FOR CERTAIN FAMI7 LIES.—A State shall ensure that a substantial

8 portion of the amounts available (after the

9 State has complied with the requirement of sec10 tion 418(b)(2) of the Social Security Act with

11 respect to each of the fiscal years 1997 through

12 2002) to the State to carry out activities under

13 this subchapter in each fiscal year is used to

14 provide assistance to low-income working fami15 lies other than families described in paragraph

16 (2)(H).’’; and

17 (C) in paragraph (4)(A)—

18 (i) by striking ‘‘provide assurances’’

19 and inserting ‘‘certify’’;

20 (ii) in the first sentence by inserting

21 ‘‘and shall provide a summary of the facts

22 relied on by the State to determine that

23 such rates are sufficient to ensure such ac24 cess’’ before the period; and

25 (iii) by striking the last sentence.
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1 SEC. 3306. LIMITATION ON STATE ALLOTMENTS.

2 Section 658F(b)(1) (42 U.S.C. 9858d(b)(1)) is

3 amended by striking ‘‘No’’ and inserting ‘‘Except as pro4 vided for in section 658O(c)(6), no’’.

5 SEC. 3307. ACTIVITIES TO IMPROVE THE QUALITY OF

6 CHILD CARE.

7 Section 658G (42 U.S.C. 9858e) is amended to read

8 as follows:

9 ‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF

10 CHILD CARE.

11 ‘‘A State that receives funds to carry out this sub12 chapter for a fiscal year, shall use not less than 4 percent

13 of the amount of such funds for activities that are de14 signed to provide comprehensive consumer education to

15 parents and the public, activities that increase parental

16 choice, and activities designed to improve the quality and

17 availability of child care (such as resource and referral

18 services).’’.

19 SEC. 3308. REPEAL OF EARLY CHILDHOOD DEVELOPMENT

20 AND BEFORE- AND AFTER-SCHOOL CARE RE21 QUIREMENT.

22 Section 658H (42 U.S.C. 9858f) is repealed.

23 SEC. 3309. ADMINISTRATION AND ENFORCEMENT.

24 Section 658I(b) (42 U.S.C. 9858g(b)) is amended—

25 (1) in paragraph (1), by striking ‘‘, and shall

26 have’’ and all that follows through ‘‘(2)’’; and
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1 (2) in the matter following clause (ii) of para2 graph (2)(A), by striking ‘‘finding and that’’ and all

3 that follows through the period and inserting ‘‘find4 ing and shall require that the State reimburse the

5 Secretary for any funds that were improperly ex6 pended for purposes prohibited or not authorized by

7 this subchapter, that the Secretary deduct from the

8 administrative portion of the State allotment for the

9 following fiscal year an amount that is less than or

10 equal to any improperly expended funds, or a com11 bination of such options.’’.

12 SEC. 3310. PAYMENTS.

13 Section 658J(c) (42 U.S.C. 9858h(c)) is amended by

14 striking ‘‘expended’’ and inserting ‘‘obligated’’.

15 SEC. 3311. ANNUAL REPORT AND AUDITS.

16 Section 658K (42 U.S.C. 9858i) is amended—

17 (1) in the section heading by striking ‘‘ANNUAL

18 REPORT’’ and inserting ‘‘REPORTS’’;

19 (2) in subsection (a), to read as follows:

20 ‘‘(a) REPORTS.—

21 ‘‘(1) COLLECTION OF INFORMATION BY

22 STATES.—

23 ‘‘(A) IN GENERAL.—A State that receives

24 funds to carry out this subchapter shall collect
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1 the information described in subparagraph (B)

2 on a monthly basis.

3 ‘‘(B) REQUIRED INFORMATION.—The in4 formation required under this subparagraph

5 shall include, with respect to a family unit re6 ceiving assistance under this subchapter infor7 mation concerning—

8 ‘‘(i) family income;

9 ‘‘(ii) county of residence;

10 ‘‘(iii) the gender, race, and age of

11 children receiving such assistance;

12 ‘‘(iv) whether the family includes only

13 1 parent;

14 ‘‘(v) the sources of family income, in15 cluding the amount obtained from (and

16 separately identified)—

17 ‘‘(I) employment, including self18 employment;

19 ‘‘(II) cash or other assistance

20 under part A of title IV of the Social

21 Security Act;

22 ‘‘(III) housing assistance;

23 ‘‘(IV) assistance under the Food

24 Stamp Act of 1977; and

25 ‘‘(V) other assistance programs;
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1 ‘‘(vi) the number of months the family

2 has received benefits;

3 ‘‘(vii) the type of child care in which

4 the child was enrolled (such as family child

5 care, home care, or center-based child

6 care);

7 ‘‘(viii) whether the child care provider

8 involved was a relative;

9 ‘‘(ix) the cost of child care for such

10 families; and

11 ‘‘(x) the average hours per week of

12 such care;

13 during the period for which such information is

14 required to be submitted.

15 ‘‘(C) SUBMISSION TO SECRETARY.—A

16 State described in subparagraph (A) shall, on a

17 quarterly basis, submit the information required

18 to be collected under subparagraph (B) to the

19 Secretary.

20 ‘‘(D) SAMPLING.—The Secretary may dis21 approve the information collected by a State

22 under this paragraph if the State uses sampling

23 methods to collect such information.

24 ‘‘(2) BIANNUAL REPORTS.—Not later than De25 cember 31, 1997, and every 6 months thereafter, a
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1 State described in paragraph (1)(A) shall prepare

2 and submit to the Secretary a report that includes

3 aggregate data concerning—

4 ‘‘(A) the number of child care providers

5 that received funding under this subchapter as

6 separately identified based on the types of pro7 viders listed in section 658P(5);

8 ‘‘(B) the monthly cost of child care serv9 ices, and the portion of such cost that is paid

10 for with assistance provided under this sub11 chapter, listed by the type of child care services

12 provided;

13 ‘‘(C) the number of payments made by the

14 State through vouchers, contracts, cash, and

15 disregards under public benefit programs, listed

16 by the type of child care services provided;

17 ‘‘(D) the manner in which consumer edu18 cation information was provided to parents and

19 the number of parents to whom such informa20 tion was provided; and

21 ‘‘(E) the total number (without duplica22 tion) of children and families served under this

23 subchapter;

24 during the period for which such report is required

25 to be submitted.’’; and
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1 (2) in subsection (b)—

2 (A) in paragraph (1) by striking ‘‘a appli3 cation’’ and inserting ‘‘an application’’;

4 (B) in paragraph (2) by striking ‘‘any

5 agency administering activities that receive’’

6 and inserting ‘‘the State that receives’’; and

7 (C) in paragraph (4) by striking ‘‘entitles’’

8 and inserting ‘‘entitled’’.

9 SEC. 3312. REPORT BY THE SECRETARY.

10 Section 658L (42 U.S.C. 9858j) is amended—

11 (1) by striking ‘‘1993’’ and inserting ‘‘1997’’;

12 (2) by striking ‘‘annually’’ and inserting ‘‘bien13 nially’’; and

14 (3) by striking ‘‘Education and Labor’’ and in15 serting ‘‘Economic and Educational Opportunities’’.

16 SEC. 3313. ALLOTMENTS.

17 Section 658O (42 U.S.C. 9858m) is amended—

18 (1) in subsection (a)—

19 (A) in paragraph (1)

20 (i) by striking ‘‘POSSESSIONS’’ and in21 serting ‘‘POSSESSIONS’’;

22 (ii) by inserting ‘‘and’’ after

23 ‘‘States,’’; and

24 (iii) by striking ‘‘, and the Trust Ter25 ritory of the Pacific Islands’’; and
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1 (B) in paragraph (2), by striking ‘‘3 per2 cent’’ and inserting ‘‘1 percent’’;

3 (2) in subsection (c)—

4 (A) in paragraph (5) by striking ‘‘our’’ and

5 inserting ‘‘out’’; and

6 (B) by adding at the end thereof the fol7 lowing new paragraph:

8 ‘‘(6) CONSTRUCTION OR RENOVATION OF FA9 CILITIES.—

10 ‘‘(A) REQUEST FOR USE OF FUNDS.—An

11 Indian tribe or tribal organization may submit

12 to the Secretary a request to use amounts pro13 vided under this subsection for construction or

14 renovation purposes.

15 ‘‘(B) DETERMINATION.—With respect to a

16 request submitted under subparagraph (A), and

17 except as provided in subparagraph (C), upon a

18 determination by the Secretary that adequate

19 facilities are not otherwise available to an In20 dian tribe or tribal organization to enable such

21 tribe or organization to carry out child care

22 programs in accordance with this subchapter,

23 and that the lack of such facilities will inhibit

24 the operation of such programs in the future,

25 the Secretary may permit the tribe or organiza-
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1 tion to use assistance provided under this sub2 section to make payments for the construction

3 or renovation of facilities that will be used to

4 carry out such programs.

5 ‘‘(C) LIMITATION.—The Secretary may not

6 permit an Indian tribe or tribal organization to

7 use amounts provided under this subsection for

8 construction or renovation if such use will re9 sult in a decrease in the level of child care serv10 ices provided by the tribe or organization as

11 compared to the level of such services provided

12 by the tribe or organization in the fiscal year

13 preceding the year for which the determination

14 under subparagraph (A) is being made.

15 ‘‘(D) UNIFORM PROCEDURES.—The Sec16 retary shall develop and implement uniform

17 procedures for the solicitation and consideration

18 of requests under this paragraph.’’; and

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

20 thereof the following new paragraph:

21 ‘‘(4) INDIAN TRIBES OR TRIBAL ORGANIZA22 TIONS.—Any portion of a grant or contract made to

23 an Indian tribe or tribal organization under sub24 section (c) that the Secretary determines is not

25 being used in a manner consistent with the provision
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1 of this subchapter in the period for which the grant

2 or contract is made available, shall be allotted by the

3 Secretary to other tribes or organizations that have

4 submitted applications under subsection (c) in ac5 cordance with their respective needs.’’.

6 SEC. 3314. DEFINITIONS.

7 Section 658P (42 U.S.C. 9858n) is amended—

8 (1) in paragraph (2), in the first sentence by

9 inserting ‘‘or as a deposit for child care services if

10 such a deposit is required of other children being

11 cared for by the provider’’ after ‘‘child care serv12 ices’’; and

13 (2) by striking paragraph (3);

14 (3) in paragraph (4)(B), by striking ‘‘75 per15 cent’’ and inserting ‘‘85 percent’’;

16 (4) in paragraph (5)(B)—

17 (A) by inserting ‘‘great grandchild, sibling

18 (if such provider lives in a separate residence),’’

19 after ‘‘grandchild,’’;

20 (B) by striking ‘‘is registered and’’; and

21 (C) by striking ‘‘State’’ and inserting ‘‘ap22 plicable’’.

23 (5) by striking paragraph (10);

24 (6) in paragraph (13)—

25 (A) by inserting ‘‘or’’ after ‘‘Samoa,’’; and
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1 (B) by striking ‘‘, and the Trust Territory

2 of the Pacific Islands’’;

3 (7) in paragraph (14)—

4 (A) by striking ‘‘The term’’ and inserting

5 the following:

6 ‘‘(A) IN GENERAL.—The term’’; and

7 (B) by adding at the end thereof the fol8 lowing new subparagraph:

9 ‘‘(B) OTHER ORGANIZATIONS.—Such term

10 includes a Native Hawaiian Organization, as

11 defined in section 4009(4) of the Augustus F.

12 Hawkins-Robert T. Stafford Elementary and

13 Secondary School Improvement Amendments of

14 1988 (20 U.S.C. 4909(4)) and a private non15 profit organization established for the purpose

16 of serving youth who are Indians or Native Ha17 waiians.’’.

18 SEC. 3315. REPEALS.

19 (a) CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP

20 ASSISTANCE ACT OF 1985.—Title VI of the Human Serv21 ices Reauthorization Act of 1986 (42 U.S.C. 10901–

22 10905) is repealed.

23 (b) STATE DEPENDENT CARE DEVELOPMENT

24 GRANTS ACT.—Subchapter E of chapter 8 of subtitle A
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1 of title VI of the Omnibus Budget Reconciliation Act of

2 1981 (42 U.S.C. 9871–9877) is repealed.

3 (c) PROGRAMS OF NATIONAL SIGNIFICANCE.—Title

4 X of the Elementary and Secondary Education Act of

5 1965, as amended by Public Law 103–382 (108 Stat.

6 3809 et seq.), is amended—

7 (1) in section 10413(a) by striking paragraph

8 (4),

9 (2) in section 10963(b)(2) by striking subpara10 graph (G), and

11 (3) in section 10974(a)(6) by striking subpara12 graph (G).

13 (d) NATIVE HAWAIIAN FAMILY-BASED EDUCATION

14 CENTERS.—Section 9205 of the Native Hawaiian Edu15 cation Act (Public Law 103–382; 108 Stat. 3794) is re16 pealed.

17 (e) CERTAIN CHILD CARE PROGRAMS UNDER THE

18 SOCIAL SECURITY ACT.—

19 (1) AFDC AND TRANSITIONAL CHILD CARE

20 PROGRAMS.—Section 402 of the Social Security Act

21 (42 U.S.C. 602) is amended by striking subsection

22 (g).

23 (2) AT-RISK CHILD CARE PROGRAM.—
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1 (A) AUTHORIZATION.—Section 402 of the

2 Social Security Act (42 U.S.C. 602) is amended

3 by striking subsection (i).

4 (B) FUNDING PROVISIONS.—Section 403

5 of the Social Security Act (42 U.S.C. 603) is

6 amended by striking subsection (n).

7 SEC. 3316. EFFECTIVE DATE.

8 (a) IN GENERAL.—Except as provided in subsection

9 (b), this subtitle and the amendments made by this sub10 title shall take effect on October 1, 1996.

11 (b) EXCEPTION.—The amendment made by section

12 3303(a) shall take effect on the date of enactment of this

13 Act.

14 Subtitle D—Child Nutrition

15 Programs

16 CHAPTER 1—NATIONAL SCHOOL LUNCH

17 ACT

18 SEC. 3401. STATE DISBURSEMENT TO SCHOOLS.

19 (a) IN GENERAL.—Section 8 of the National School

20 Lunch Act (42 U.S.C. 1757) is amended—

21 (1) in the third sentence, by striking ‘‘Nothing’’

22 and all that follows through ‘‘educational agency to’’

23 and inserting ‘‘The State educational agency may’’;

24 (2) by striking the fourth and fifth sentences;
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1 (3) by redesignating the first through sixth sen2 tences, as amended by paragraph (1), as subsections

3 (a) through (f), respectively;

4 (4) in subsection (b), as redesignated by para5 graph (3), by striking ‘‘the preceding sentence’’ and

6 inserting ‘‘subsection (a)’’; and

7 (5) in subsection (d), as redesignated by para8 graph (3), by striking ‘‘Such food costs’’ and insert9 ing ‘‘Use of funds paid to States’’.

10 (b) DEFINITION OF CHILD.—Section 12(d) of the Act

11 (42 U.S.C. 1760(d)) is amended by adding at the end the

12 following:

13 ‘‘(9) ‘child’ includes an individual, regardless of

14 age, who—

15 ‘‘(A) is determined by a State educational

16 agency, in accordance with regulations pre17 scribed by the Secretary, to have 1 or more

18 mental or physical disabilities; and

19 ‘‘(B) is attending any institution, as de20 fined in section 17(a), or any nonresidential

21 public or nonprofit private school of high school

22 grade or under, for the purpose of participating

23 in a school program established for individuals

24 with mental or physical disabilities.
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1 No institution that is not otherwise eligible to par2 ticipate in the program under section 17 shall be

3 considered eligible because of this paragraph.’’.

4 SEC. 3402. NUTRITIONAL AND OTHER PROGRAM REQUIRE5 MENTS.

6 (a) NUTRITIONAL STANDARDS.—Section 9(a) of the

7 National School Lunch Act (42 U.S.C. 1758(a)) is amend8 ed—

9 (1) in paragraph (2)—

10 (A) by striking ‘‘(2)(A) Lunches’’ and in11 serting ‘‘(2) Lunches’’;

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

13 (C) by redesignating clauses (i) and (ii) as

14 subparagraphs (A) and (B), respectively;

15 (2) by striking paragraph (3); and

16 (3) by redesignating paragraph (4) as para17 graph (3).

18 (b) ELIGIBILITY GUIDELINES.—Section 9(b) of the

19 Act is amended—

20 (1) in paragraph (2)—

21 (A) by striking subparagraph (A); and

22 (B) by redesignating subparagraphs (B)

23 and (C) as subparagraphs (A) and (B), respec24 tively;
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1 (2) in paragraph (5), by striking the third sen2 tence; and

3 (3) in paragraph (6), by striking ‘‘paragraph

4 (2)(C)’’ and inserting ‘‘paragraph (2)(B)’’.

5 (c) UTILIZATION OF AGRICULTURAL COMMOD6 ITIES.—Section 9(c) of the Act is amended by striking the

7 second, fourth, and sixth sentences.

8 (d) CONFORMING AMENDMENT.—The last sentence

9 of section 9(d)(1) of the Act is amended by striking ‘‘sub10 section (b)(2)(C)’’ and inserting ‘‘subsection (b)(2)(B)’’.

11 (e) NUTRITIONAL INFORMATION.—Section 9(f) of the

12 Act is amended—

13 (1) by striking paragraph (1);

14 (2) by striking ‘‘(2)’’;

15 (3) by redesignating subparagraphs (A) through

16 (D) as paragraphs (1) through (4), respectively;

17 (4) by striking paragraph (1), as redesignated

18 by paragraph (3), and inserting the following:

19 ‘‘(1) NUTRITIONAL REQUIREMENTS.—Except as

20 provided in paragraph (2), not later than the first

21 day of the 1996–1997 school year, schools that are

22 participating in the school lunch or school breakfast

23 program shall serve lunches and breakfasts under

24 the program that—
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1 ‘‘(A) are consistent with the goals of the

2 most recent Dietary Guidelines for Americans

3 published under section 301 of the National

4 Nutrition Monitoring and Related Research Act

5 of 1990 (7 U.S.C. 5341); and

6 ‘‘(B) provide, on the average over each

7 week, at least—

‘‘(i) with respect to school lunches, 1 8 ⁄3

9 of the daily recommended dietary allow10 ance established by the Food and Nutrition

11 Board of the National Research Council of

12 the National Academy of Sciences; and

13 ‘‘(ii) with respect to school breakfasts,

1 14 ⁄4 of the daily recommended dietary allow15 ance established by the Food and Nutrition

16 Board of the National Research Council of

17 the National Academy of Sciences.’’;

18 (5) in paragraph (3), as redesignated by para19 graph (3)—

20 (A) by redesignating clauses (i) and (ii) as

21 subparagraphs (A) and (B), respectively; and

22 (B) in subparagraph (A), as so redesig23 nated, by redesignating subclauses (I) and (II)

24 as clauses (i) and (ii), respectively; and
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1 (6) in paragraph (4), as redesignated by para2 graph (3)—

3 (A) by redesignating clauses (i) and (ii) as

4 subparagraphs (A) and (B), respectively;

5 (B) in subparagraph (A) (as redesignated

6 by subparagraph (A)), by redesignating sub7 clauses (I) and (II) as clauses (i) and (ii), re8 spectively; and

9 (C) in subparagraph (A)(ii) (as redesig10 nated by subparagraph (B)), by striking ‘‘sub11 paragraph (C)’’ and inserting ‘‘paragraph (3)’’.

12 (f) USE OF RESOURCES.—Section 9 of the Act is

13 amended by striking subsection (h).

14 SEC. 3403. FREE AND REDUCED PRICE POLICY STATEMENT.

15 Section 9(b)(2) of the National School Lunch Act (42

16 U.S.C. 1758(b)(2)), as amended by section 3402(b)(1), is

17 further amended by adding at the end the following:

18 ‘‘(C) FREE AND REDUCED PRICE POLICY

19 STATEMENT.—After the initial submission, a

20 school shall not be required to submit a free

21 and reduced price policy statement to a State

22 educational agency under this Act unless there

23 is a substantive change in the free and reduced

24 price policy of the school. A routine change in

25 the policy of a school, such as an annual adjust-
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1 ment of the income eligibility guidelines for free

2 and reduced price meals, shall not be sufficient

3 cause for requiring the school to submit a policy

4 statement.’’.

5 SEC. 3404. SPECIAL ASSISTANCE.

6 (a) EXTENSION OF PAYMENT PERIOD.—Section

7 11(a)(1)(D)(i) of the National School Lunch Act (42

8 U.S.C. 1759a(a)(1)(D)(i)) is amended by striking ‘‘, on

9 the date of enactment of this subparagraph,’’.

10 (b) APPLICABILITY OF OTHER PROVISIONS.—Section

11 11 of the Act is amended—

12 (1) by striking subsection (d);

13 (2) in subsection (e)(2)—

14 (A) by striking ‘‘The’’ and inserting ‘‘On

15 request of the Secretary, the’’; and

16 (B) by striking ‘‘each month’’; and

17 (3) by redesignating subsections (e) and (f), as

18 so amended, as subsections (d) and (e), respectively.

19 SEC. 3405. MISCELLANEOUS PROVISIONS AND DEFINI20 TIONS.

21 (a) ACCOUNTS AND RECORDS.—Section 12(a) of the

22 National School Lunch Act (42 U.S.C. 1760(a)) is amend23 ed by striking ‘‘at all times be available’’ and inserting

24 ‘‘be available at any reasonable time’’.
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1 (b) RESTRICTION ON REQUIREMENTS.—Section

2 12(c) of the Act is amended by striking ‘‘neither the Sec3 retary nor the State shall’’ and inserting ‘‘the Secretary

4 shall not’’.

5 (c) DEFINITIONS.—Section 12(d) of the Act, as

6 amended by section 3401(b), is further amended—

7 (1) in paragraph (1), by striking ‘‘the Trust

8 Territory of the Pacific Islands’’ and inserting ‘‘the

9 Commonwealth of the Northern Mariana Islands’’;

10 (2) by striking paragraphs (3) and (4); and

11 (3) by redesignating paragraphs (1), (2), and

12 (5) through (9) as paragraphs (6), (7), (3), (4), (2),

13 (5), and (1), respectively, and rearranging the para14 graphs so as to appear in numerical order.

15 (d) ADJUSTMENTS TO NATIONAL AVERAGE PAY16 MENT RATES.—Section 12(f) of the Act is amended by

17 striking ‘‘the Trust Territory of the Pacific Islands,’’.

18 (e) EXPEDITED RULEMAKING.—Section 12(k) of the

19 Act is amended—

20 (1) by striking paragraphs (1), (2), and (5);

21 and

22 (2) by redesignating paragraphs (3) and (4) as

23 paragraphs (1) and (2), respectively.

24 (f) WAIVER.—Section 12(l) of the Act is amended—

25 (1) in paragraph (2)(A)—
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1 (A) in clause (iii), by adding ‘‘and’’ at the

2 end;

3 (B) in clause (iv), by striking the semi4 colon at the end and inserting a period; and

5 (C) by striking clauses (v) through (vii);

6 (2) in paragraph (3)—

7 (A) by striking ‘‘(A)’’; and

8 (B) by striking subparagraphs (B) through

9 (D);

10 (3) in paragraph (4)—

11 (A) in the matter preceding subparagraph

12 (A), by striking ‘‘of any requirement relating’’

13 and inserting ‘‘that increases Federal costs or

14 that relates’’;

15 (B) by striking subparagraph (D);

16 (C) by redesignating subparagraphs (E)

17 through (N) as subparagraphs (D) through

18 (M), respectively; and

19 (D) in subparagraph (L), as redesignated

20 by subparagraph (C), by striking ‘‘and’’ at the

21 end and inserting ‘‘or’’; and

22 (4) in paragraph (6)—

23 (A) by striking ‘‘(A)(i)’’ and all that fol24 lows through ‘‘(B)’’; and
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1 (B) by redesignating clauses (i) through

2 (iv) as subparagraphs (A) through (D), respec3 tively.

4 (g) FOOD AND NUTRITION PROJECTS.—Section 12

5 of the Act is amended by striking subsection (m).

6 SEC. 3406. SUMMER FOOD SERVICE PROGRAM FOR CHIL7 DREN.

8 (a) ESTABLISHMENT OF PROGRAM.—Section 13(a)

9 of the National School Lunch Act (42 U.S.C. 1761(a))

10 is amended—

11 (1) in paragraph (1)—

12 (A) in the first sentence, by striking ‘‘initi13 ate, maintain, and expand’’ and inserting ‘‘initi14 ate and maintain’’; and

15 (B) in subparagraph (E) of the second

16 sentence, by striking ‘‘the Trust Territory of

17 the Pacific Islands,’’; and

18 (2) in paragraph (7)(A), by striking ‘‘Except as

19 provided in subparagraph (C), private’’ and inserting

20 ‘‘Private’’.

21 (b) SERVICE INSTITUTIONS.—Section 13(b) of the

22 Act is amended by striking ‘‘(b)(1)’’ and all that follows

23 through the end of paragraph (1) and inserting the follow24 ing:

25 ‘‘(b) SERVICE INSTITUTIONS.—
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1 ‘‘(1) PAYMENTS.—

2 ‘‘(A) IN GENERAL.—Except as otherwise

3 provided in this paragraph, payments to service

4 institutions shall equal the full cost of food

5 service operations (which cost shall include the

6 costs of obtaining, preparing, and serving food,

7 but shall not include administrative costs).

8 ‘‘(B) MAXIMUM AMOUNTS.—Subject to

9 subparagraph (C), payments to any institution

10 under subparagraph (A) shall not exceed—

11 ‘‘(i) $1.82 for each lunch and supper

12 served;

13 ‘‘(ii) $1.13 for each breakfast served;

14 and

15 ‘‘(iii) 46 cents for each meal supple16 ment served.

17 ‘‘(C) ADJUSTMENTS.—Amounts specified

18 in subparagraph (B) shall be adjusted on Janu19 ary 1, 1997, and each January 1 thereafter, to

20 the nearest lower cent increment in accordance

21 with the changes for the 12-month period end22 ing the preceding November 30 in the series for

23 food away from home of the Consumer Price

24 Index for All Urban Consumers published by

25 the Bureau of Labor Statistics of the Depart-
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1 ment of Labor. Each adjustment shall be based

2 on the unrounded adjustment for the prior 12-

3 month period.’’.

4 (c) ADMINISTRATION OF SERVICE INSTITUTIONS.—

5 Section 13(b)(2) of the Act is amended—

6 (1) in the first sentence, by striking ‘‘four

7 meals’’ and inserting ‘‘3 meals, or 2 meals and 1

8 supplement,’’; and

9 (2) by striking the second sentence.

10 (d) REIMBURSEMENTS.—Section 13(c)(2) of the Act

11 is amended—

12 (1) by striking subparagraph (A);

13 (2) in subparagraph (B)—

14 (A) in the first sentence—

15 (i) by striking ‘‘, and such higher edu16 cation institutions,’’; and

17 (ii) by striking ‘‘without application’’

18 and inserting ‘‘upon showing residence in

19 areas in which poor economic conditions

20 exist or on the basis of income eligibility

21 statements for children enrolled in the pro22 gram’’; and

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

24 ‘‘The higher education institutions referred to

25 in the preceding sentence shall be eligible to
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1 participate in the program under this para2 graph without application.’’;

3 (3) in subparagraph (C)(ii), by striking ‘‘severe

4 need’’; and

5 (4) by redesignating subparagraphs (B)

6 through (E), as so amended, as subparagraphs (A)

7 through (D), respectively.

8 (e) ADVANCE PROGRAM PAYMENTS.—Section

9 13(e)(1) of the Act is amended—

10 (1) by striking ‘‘institution: Provided, That (A)

11 the’’ and inserting ‘‘institution. The’’;

12 (2) by inserting ‘‘(excluding a school)’’ after

13 ‘‘any service institution’’; and

14 (3) by striking ‘‘responsibilities, and (B) no’’

15 and inserting ‘‘responsibilities. No’’.

16 (f) FOOD REQUIREMENTS.—Section 13(f) of the Act

17 is amended—

18 (1) by redesignating the first through seventh

19 sentences as paragraphs (1) through (7), respec20 tively;

21 (2) by striking paragraph (3), as redesignated

22 by paragraph (1);

23 (3) in paragraph (4), as redesignated by para24 graph (1), by striking ‘‘the first sentence’’ and in25 serting ‘‘paragraph (1)’’;
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1 (4) in paragraph (6), as redesignated by para2 graph (1), by striking ‘‘that bacteria levels’’ and all

3 that follows through the period at the end and in4 serting ‘‘conformance with standards set by local

5 health authorities.’’; and

6 (5) by redesignating paragraphs (4) through

7 (7), as redesignated by paragraph (1), as para8 graphs (3) through (6), respectively.

9 (g) PERMITTING OFFER VERSUS SERVE.—Section

10 13(f) of the Act, as amended by subsection (f), is further

11 amended by adding at the end the following:

12 ‘‘(7) OFFER VERSUS SERVE.—A school food au13 thority participating as a service institution may

14 permit a child attending a site on school premises

15 operated directly by the authority to refuse not more

16 than 1 item of a meal that the child does not intend

17 to consume. A refusal of an offered food item shall

18 not affect the amount of payments made under this

19 section to a school for the meal.’’.

20 (h) FOOD SERVICE MANAGEMENT COMPANIES.—

21 Section 13(l) of the Act is amended—

22 (1) by striking paragraph (4);

23 (2) in paragraph (5), by striking the first sen24 tence; and
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1 (3) by redesignating paragraph (5), as so

2 amended, as paragraph (4).

3 (i) RECORDS.—The second sentence of section 13(m)

4 of the Act is amended by striking ‘‘at all times be avail5 able’’ and inserting ‘‘be available at any reasonable time’’.

6 (j) REMOVING MANDATORY NOTICE TO INSTITU7 TIONS.—Section 13(n)(2) of the Act is amended by strik8 ing ‘‘, and its plans and schedule for informing service

9 institutions of the availability of the program’’.

10 (k) PLAN.—Section 13(n) of the Act is amended—

11 (1) in paragraph (2), by striking ‘‘, including

12 the State’s methods of assessing need’’;

13 (2) by striking paragraph (3);

14 (3) in paragraph (4), by striking ‘‘and sched15 ule’’; and

16 (4) by redesignating paragraphs (4) through

17 (7), as so amended, as paragraphs (3) through (6),

18 respectively.

19 (l) MONITORING AND TRAINING.—Section 13(q) of

20 the Act is amended—

21 (1) by striking paragraphs (2) and (4);

22 (2) in paragraph (3), by striking ‘‘paragraphs

23 (1) and (2) of this subsection’’ and inserting ‘‘para24 graph (1)’’; and
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1 (3) by redesignating paragraph (3), as so

2 amended, as paragraph (2).

3 (m) EXPIRED PROGRAM.—Section 13 of the Act is

4 amended—

5 (1) by striking subsection (p); and

6 (2) by redesignating subsections (q) and (r), as

7 so amended, as subsections (p) and (q), respectively.

8 (n) EFFECTIVE DATE.—The amendments made by

9 subsection (b) shall become effective on January 1, 1997.

10 SEC. 3407. COMMODITY DISTRIBUTION.

11 (a) CEREAL AND SHORTENING IN COMMODITY DO12 NATIONS.—Section 14(b) of the National School Lunch

13 Act (42 U.S.C. 1762a(b)) is amended—

14 (1) by striking paragraph (1); and

15 (2) by redesignating paragraphs (2) and (3) as

16 paragraphs (1) and (2), respectively.

17 (b) IMPACT STUDY AND PURCHASING PROCE18 DURES.—Section 14(d) of the Act is amended by striking

19 the second and third sentences.

20 (c) CASH COMPENSATION FOR PILOT PROJECT

21 SCHOOLS.—Section 14(g) of the Act is amended by strik22 ing paragraph (3).

23 (d) STATE ADVISORY COUNCIL.—Section 14 is

24 amended—

25 (1) by striking subsection (e); and
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1 (2) by redesignating subsections (f) and (g), as

2 so amended, as subsections (e) and (f), respectively.

3 SEC. 3408. CHILD CARE FOOD PROGRAM.

4 (a) ESTABLISHMENT OF PROGRAM.—Section 17 of

5 the National School Lunch Act (42 U.S.C. 1766) is

6 amended—

7 (1) in the section heading, by striking ‘‘AND

8 ADULT’’; and

9 (2) in the first sentence of subsection (a), by

10 striking ‘‘initiate, maintain, and expand’’ and insert11 ing ‘‘initiate and maintain’’.

12 (b) PAYMENTS TO SPONSOR EMPLOYEES.—Para13 graph (2) of the last sentence of section 17(a) of the Act

14 (42 U.S.C. 1766(a)) is amended—

15 (1) by striking ‘‘and’’ at the end of subpara16 graph (B);

17 (2) by striking the period at the end of sub18 paragraph (C) and inserting ‘‘; and’’; and

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

20 ‘‘(D) in the case of a family or group day

21 care home sponsoring organization that employs

22 more than 1 employee, the organization does

23 not base payments to an employee of the orga24 nization on the number of family or group day

25 care homes recruited.’’.
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1 (c) TECHNICAL ASSISTANCE.—The last sentence of

2 section 17(d)(1) of the Act is amended by striking ‘‘, and

3 shall provide technical assistance’’ and all that follows

4 through ‘‘its application’’.

5 (d) REIMBURSEMENT OF CHILD CARE INSTITU6 TIONS.—Section 17(f)(2)(B) of the Act (42 U.S.C.

7 1766(f)(2)(B)) is amended by striking ‘‘two meals and two

8 supplements or three meals and one supplement’’ and in9 serting ‘‘two meals and one supplement’’.

10 (e) IMPROVED TARGETING OF DAY CARE HOME RE11 IMBURSEMENTS.—

12 (1) RESTRUCTURED DAY CARE HOME REIM13 BURSEMENTS.—Section 17(f)(3) of the Act is

14 amended by striking ‘‘(3)(A) Institutions’’ and all

15 that follows through the end of subparagraph (A)

16 and inserting the following:

17 ‘‘(3) REIMBURSEMENT OF FAMILY OR GROUP

18 DAY CARE HOME SPONSORING ORGANIZATIONS.—

19 ‘‘(A) REIMBURSEMENT FACTOR.—

20 ‘‘(i) IN GENERAL.—An institution

21 that participates in the program under this

22 section as a family or group day care home

23 sponsoring organization shall be provided,

24 for payment to a home sponsored by the

25 organization, reimbursement factors in ac-
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1 cordance with this subparagraph for the

2 cost of obtaining and preparing food and

3 prescribed labor costs involved in providing

4 meals under this section.

5 ‘‘(ii) TIER I FAMILY OR GROUP DAY

6 CARE HOMES.—

7 ‘‘(I) DEFINITION.—In this para8 graph, the term ‘tier I family or group

9 day care home’ means—

10 ‘‘(aa) a family or group day

11 care home that is located in a ge12 ographic area, as defined by the

13 Secretary based on census data,

14 in which at least 50 percent of

15 the children residing in the area

16 are members of households whose

17 incomes meet the income eligi18 bility guidelines for free or re19 duced price meals under section

20 9;

21 ‘‘(bb) a family or group day

22 care home that is located in an

23 area served by a school enrolling

24 elementary students in which at

25 least 50 percent of the total num-
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1 ber of children enrolled are cer2 tified eligible to receive free or

3 reduced price school meals under

4 this Act or the Child Nutrition

5 Act of 1966 (42 U.S.C. 1771 et

6 seq.); or

7 ‘‘(cc) a family or group day

8 care home that is operated by a

9 provider whose household meets

10 the income eligibility guidelines

11 for free or reduced price meals

12 under section 9 and whose in13 come is verified by the sponsor14 ing organization of the home

15 under regulations established by

16 the Secretary.

17 ‘‘(II) REIMBURSEMENT.—Except

18 as provided in subclause (III), a tier

19 I family or group day care home shall

20 be provided reimbursement factors

21 under this clause without a require22 ment for documentation of the costs

23 described in clause (i), except that re24 imbursement shall not be provided

25 under this subclause for meals or sup-
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1 plements served to the children of a

2 person acting as a family or group

3 day care home provider unless the

4 children meet the income eligibility

5 guidelines for free or reduced price

6 meals under section 9.

7 ‘‘(III) FACTORS.—Except as pro8 vided in subclause (IV), the reim9 bursement factors applied to a home

10 referred to in subclause (II) shall be

11 the factors in effect on July 1, 1996.

12 ‘‘(IV) ADJUSTMENTS.—The re13 imbursement factors under this sub14 paragraph shall be adjusted on July

15 1, 1997, and each July 1 thereafter,

16 to reflect changes in the Consumer

17 Price Index for food at home for the

18 most recent 12-month period for

19 which the data are available. The re20 imbursement factors under this sub21 paragraph shall be rounded to the

22 nearest lower cent increment and

23 based on the unrounded adjustment in

24 effect on June 30 of the preceding

25 school year.
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1 ‘‘(iii) TIER II FAMILY OR GROUP DAY

2 CARE HOMES.—

3 ‘‘(I) IN GENERAL.—

4 ‘‘(aa) FACTORS.—Except as

5 provided in subclause (II), with

6 respect to meals or supplements

7 served under this clause by a

8 family or group day care home

9 that does not meet the criteria

10 set forth in clause (ii)(I), the re11 imbursement factors shall be 90

12 cents for lunches and suppers, 25

13 cents for breakfasts, and 10

14 cents for supplements.

15 ‘‘(bb) ADJUSTMENTS.—The

16 factors shall be adjusted on July

17 1, 1997, and each July 1 there18 after, to reflect changes in the

19 Consumer Price Index for food at

20 home for the most recent 12-

21 month period for which the data

22 are available. The reimbursement

23 factors under this item shall be

24 rounded down to the nearest

25 lower cent increment and based
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1 on the unrounded adjustment for

2 the preceding 12-month period.

3 ‘‘(cc) REIMBURSEMENT.—A

4 family or group day care home

5 shall be provided reimbursement

6 factors under this subclause with7 out a requirement for docu8 mentation of the costs described

9 in clause (i), except that reim10 bursement shall not be provided

11 under this subclause for meals or

12 supplements served to the chil13 dren of a person acting as a fam14 ily or group day care home pro15 vider unless the children meet the

16 income eligibility guidelines for

17 free or reduced price meals under

18 section 9.

19 ‘‘(II) OTHER FACTORS.—A fam20 ily or group day care home that does

21 not meet the criteria set forth in

22 clause (ii)(I) may elect to be provided

23 reimbursement factors determined in

24 accordance with the following require25 ments:
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1 ‘‘(aa) CHILDREN ELIGIBLE

2 FOR FREE OR REDUCED PRICE

3 MEALS.—In the case of meals or

4 supplements served under this

5 subsection to children who are

6 members of households whose in7 comes meet the income eligibility

8 guidelines for free or reduced

9 price meals under section 9, the

10 family or group day care home

11 shall be provided reimbursement

12 factors set by the Secretary in

13 accordance with clause (ii)(III).

14 ‘‘(bb) INELIGIBLE CHIL15 DREN.—In the case of meals or

16 supplements served under this

17 subsection to children who are

18 members of households whose in19 comes do not meet the income

20 eligibility guidelines, the family

21 or group day care home shall be

22 provided reimbursement factors

23 in accordance with subclause (I).

24 ‘‘(III) INFORMATION AND DE25 TERMINATIONS.—
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1 ‘‘(aa) IN GENERAL.—If a

2 family or group day care home

3 elects to claim the factors de4 scribed in subclause (II), the

5 family or group day care home

6 sponsoring organization serving

7 the home shall collect the nec8 essary income information, as de9 termined by the Secretary, from

10 any parent or other caretaker to

11 make the determinations speci12 fied in subclause (II) and shall

13 make the determinations in ac14 cordance with rules prescribed by

15 the Secretary.

16 ‘‘(bb) CATEGORICAL ELIGI17 BILITY.—In making a determina18 tion under item (aa), a family or

19 group day care home sponsoring

20 organization may consider a child

21 participating in or subsidized

22 under, or a child with a parent

23 participating in or subsidized

24 under, a federally or State sup25 ported child care or other benefit
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1 program with an income eligi2 bility limit that does not exceed

3 the eligibility standard for free or

4 reduced price meals under section

5 9 to be a child who is a member

6 of a household whose income

7 meets the income eligibility

8 guidelines under section 9.

9 ‘‘(cc) FACTORS FOR CHIL10 DREN ONLY.—A family or group

11 day care home may elect to re12 ceive the reimbursement factors

13 prescribed under clause (ii)(III)

14 solely for the children participat15 ing in a program referred to in

16 item (bb) if the home elects not

17 to have income statements col18 lected from parents or other care19 takers.

20 ‘‘(IV) SIMPLIFIED MEAL COUNT21 ING AND REPORTING PROCEDURES.—

22 The Secretary shall prescribe sim23 plified meal counting and reporting

24 procedures for use by a family or

25 group day care home that elects to
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1 claim the factors under subclause (II)

2 and by a family or group day care

3 home sponsoring organization that

4 sponsors the home. The procedures

5 the Secretary prescribes may include

6 1 or more of the following:

7 ‘‘(aa) Setting an annual per8 centage for each home of the

9 number of meals served that are

10 to be reimbursed in accordance

11 with the reimbursement factors

12 prescribed under clause (ii)(III)

13 and an annual percentage of the

14 number of meals served that are

15 to be reimbursed in accordance

16 with the reimbursement factors

17 prescribed under subclause (I),

18 based on the family income of

19 children enrolled in the home in a

20 specified month or other period.

21 ‘‘(bb) Placing a home into 1

22 of 2 or more reimbursement cat23 egories annually based on the

24 percentage of children in the

25 home whose households have in-
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1 comes that meet the income eligi2 bility guidelines under section 9,

3 with each such reimbursement

4 category carrying a set of reim5 bursement factors such as the

6 factors prescribed under clause

7 (ii)(III) or subclause (I) or fac8 tors established within the range

9 of factors prescribed under clause

10 (ii)(III) and subclause (I).

11 ‘‘(cc) Such other simplified

12 procedures as the Secretary may

13 prescribe.

14 ‘‘(V) MINIMUM VERIFICATION

15 REQUIREMENTS.—The Secretary may

16 establish any necessary minimum ver17 ification requirements.’’.

18 (2) GRANTS TO STATES TO PROVIDE ASSIST19 ANCE TO FAMILY OR GROUP DAY CARE HOMES.—

20 Section 17(f)(3) of the Act is amended by adding at

21 the end the following:

22 ‘‘(D) GRANTS TO STATES TO PROVIDE AS23 SISTANCE TO FAMILY OR GROUP DAY CARE

24 HOMES.—

25 ‘‘(i) IN GENERAL.—
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1 ‘‘(I) RESERVATION.—From

2 amounts made available to carry out

3 this section, the Secretary shall re4 serve $5,000,000 of the amount made

5 available for fiscal year 1997.

6 ‘‘(II) PURPOSE.—The Secretary

7 shall use the funds made available

8 under subclause (I) to provide grants

9 to States for the purpose of provid10 ing—

11 ‘‘(aa) assistance, including

12 grants, to family and day care

13 home sponsoring organizations

14 and other appropriate organiza15 tions, in securing and providing

16 training, materials, automated

17 data processing assistance, and

18 other assistance for the staff of

19 the sponsoring organizations; and

20 ‘‘(bb) training and other as21 sistance to family and group day

22 care homes in the implementation

23 of the amendment to subpara24 graph (A) made by section

25 3408(e)(1) of the Personal Re-
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1 sponsibility and Work Oppor2 tunity Act of 1996.

3 ‘‘(ii) ALLOCATION.—The Secretary

4 shall allocate from the funds reserved

5 under clause (i)(I)—

6 ‘‘(I) $30,000 in base funding to

7 each State; and

8 ‘‘(II) any remaining amount

9 among the States, based on the num10 ber of family day care homes partici11 pating in the program in a State dur12 ing fiscal year 1995 as a percentage

13 of the number of all family day care

14 homes participating in the program

15 during fiscal year 1995.

16 ‘‘(iii) RETENTION OF FUNDS.—Of the

17 amount of funds made available to a State

18 for fiscal year 1997 under clause (i), the

19 State may retain not to exceed 30 percent

20 of the amount to carry out this subpara21 graph.

22 ‘‘(iv) ADDITIONAL PAYMENTS.—Any

23 payments received under this subpara24 graph shall be in addition to payments
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1 that a State receives under subparagraph

2 (A).’’.

3 (3) PROVISION OF DATA.—Section 17(f)(3) of

4 the Act, as amended by paragraph (2), is further

5 amended by adding at the end the following:

6 ‘‘(E) PROVISION OF DATA TO FAMILY OR

7 GROUP DAY CARE HOME SPONSORING ORGANI8 ZATIONS.—

9 ‘‘(i) CENSUS DATA.—The Secretary

10 shall provide to each State agency admin11 istering a child care food program under

12 this section data from the most recent de13 cennial census survey or other appropriate

14 census survey for which the data are avail15 able showing which areas in the State meet

16 the requirements of subparagraph

17 (A)(ii)(I)(aa). The State agency shall pro18 vide the data to family or group day care

19 home sponsoring organizations located in

20 the State.

21 ‘‘(ii) SCHOOL DATA.—

22 ‘‘(I) IN GENERAL.—A State

23 agency administering the school lunch

24 program under this Act or the school

25 breakfast program under the Child
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1 Nutrition Act of 1966 (42 U.S.C.

2 1771 et seq.) shall provide to ap3 proved family or group day care home

4 sponsoring organizations a list of

5 schools serving elementary school chil6 dren in the State in which not less

than 1 7 ⁄2 of the children enrolled are

8 certified to receive free or reduced

9 price meals. The State agency shall

10 collect the data necessary to create

11 the list annually and provide the list

12 on a timely basis to any approved

13 family or group day care home spon14 soring organization that requests the

15 list.

16 ‘‘(II) USE OF DATA FROM PRE17 CEDING SCHOOL YEAR.—In determin18 ing for a fiscal year or other annual

19 period whether a home qualifies as a

20 tier I family or group day care home

21 under subparagraph (A)(ii)(I), the

22 State agency administering the pro23 gram under this section, and a family

24 or group day care home sponsoring

25 organization, shall use the most cur-
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1 rent available data at the time of the

2 determination.

3 ‘‘(iii) DURATION OF DETERMINA4 TION.—For purposes of this section, a de5 termination that a family or group day

6 care home is located in an area that quali7 fies the home as a tier I family or group

8 day care home (as the term is defined in

9 subparagraph (A)(ii)(I)), shall be in effect

10 for 3 years (unless the determination is

11 made on the basis of census data, in which

12 case the determination shall remain in ef13 fect until more recent census data are

14 available) unless the State agency deter15 mines that the area in which the home is

16 located no longer qualifies the home as a

17 tier I family or group day care home.’’.

18 (4) CONFORMING AMENDMENTS.—Section 17(c)

19 of the Act is amended by inserting ‘‘except as pro20 vided in subsection (f)(3),’’ after ‘‘For purposes of

21 this section,’’ each place it appears in paragraphs

22 (1), (2), and (3).

23 (f) REIMBURSEMENT.—Section 17(f) of the Act is

24 amended—

25 (1) in paragraph (3)—
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1 (A) in subparagraph (B), by striking the

2 third and fourth sentences; and

3 (B) in subparagraph (C)—

4 (i) by striking ‘‘(i)’’ and

5 (ii) by striking clause (ii); and

6 (2) in paragraph (4), by striking ‘‘shall’’ and

7 inserting ‘‘may’’ in the first sentence.

8 (g) NUTRITIONAL REQUIREMENTS.—Section

9 17(g)(1) of the Act is amended—

10 (1) in subparagraph (A), by striking the second

11 sentence; and

12 (2) in subparagraph (B), by striking the second

13 sentence.

14 (h) ELIMINATION OF STATE PAPERWORK AND OUT15 REACH BURDEN.—Section 17 of the Act is amended by

16 striking subsection (k) and inserting the following:

17 ‘‘(k) TRAINING AND TECHNICAL ASSISTANCE.—A

18 State participating in the program established under this

19 section shall provide sufficient training, technical assist20 ance, and monitoring to facilitate effective operation of the

21 program. The Secretary shall assist the State in develop22 ing plans to fulfill the requirements of this subsection.’’.

23 (i) RECORDS.—The second sentence of section 17(m)

24 of the Act is amended by striking ‘‘at all times’’ and in25 serting ‘‘at any reasonable time’’.
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1 (j) MODIFICATION OF ADULT CARE FOOD PRO2 GRAM.—Section 17(o) of the Act is amended—

3 (1) in the first sentence of paragraph (1)—

4 (A) by striking ‘‘adult day care centers’’

5 and inserting ‘‘day care centers for chronically

6 impaired disabled persons’’; and

7 (B) by striking ‘‘to persons 60 years of age

8 or older or’’; and

9 (2) in paragraph (2)—

10 (A) in subparagraph (A)—

11 (i) by striking ‘‘adult day care center’’

12 and inserting ‘‘day care center for chron13 ically impaired disabled persons’’; and

14 (ii) in clause (i)—

15 (I) by striking ‘‘adult’’;

16 (II) by striking ‘‘adults’’ and in17 serting ‘‘persons’’; and

18 (III) by striking ‘‘or persons 60

19 years of age or older’’; and

20 (B) in subparagraph (B), by striking

21 ‘‘adult day care services’’ and inserting ‘‘day

22 care services for chronically impaired disabled

23 persons’’.

24 (k) UNNEEDED PROVISION.—Section 17 of the Act

25 is amended by striking subsection (q).
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1 (l) CONFORMING AMENDMENTS.—

2 (1) Section 17B(f) of the Act (42 U.S.C.

3 1766b(f)) is amended—

4 (A) in the subsection heading, by striking

5 ‘‘AND ADULT’’; and

6 (B) in paragraph (1), by striking ‘‘and

7 adult’’.

8 (2) Section 18(e)(3)(B) of the Act (42 U.S.C.

9 1769(e)(3)(B)) is amended by striking ‘‘and adult’’.

10 (3) Section 25(b)(1)(C) of the Act (42 U.S.C.

11 1769f(b)(1)(C)) is amended by striking ‘‘and adult’’.

12 (4) Section 3(1) of the Healthy Meals for

13 Healthy Americans Act of 1994 (Public Law 103–

14 448) is amended by striking ‘‘and adult’’.

15 (m) EFFECTIVE DATE.—

16 (1) IN GENERAL.—Except as provided in para17 graph (2), the amendments made by this section

18 shall become effective on the date of enactment of

19 this Act.

20 (2) IMPROVED TARGETING OF DAY CARE HOME

21 REIMBURSEMENTS.—The amendments made by

22 paragraphs (1) and (4) of subsection (e) shall be23 come effective on July 1, 1997.

24 (3) REGULATIONS.—
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1 (A) INTERIM REGULATIONS.—Not later

2 than January 1, 1997, the Secretary shall issue

3 interim regulations to implement—

4 (i) the amendments made by para5 graphs (1), (3), and (4) of subsection (e);

6 and

7 (ii) section 17(f)(3)(C) of the National

8 School Lunch Act (42 U.S.C.

9 1766(f)(3)(C)).

10 (B) FINAL REGULATIONS.—Not later than

11 July 1, 1997, the Secretary shall issue final

12 regulations to implement the provisions of law

13 referred to in subparagraph (A).

14 (n) STUDY OF IMPACT OF AMENDMENTS ON PRO15 GRAM PARTICIPATION AND FAMILY DAY CARE LICENS16 ING.—

17 (1) IN GENERAL.—The Secretary of Agri18 culture, in conjunction with the Secretary of Health

19 and Human Services, shall study the impact of the

20 amendments made by this section on—

21 (A) the number of family day care homes

22 participating in the child care food program es23 tablished under section 17 of the National

24 School Lunch Act (42 U.S.C. 1766);
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1 (B) the number of day care home sponsor2 ing organizations participating in the program;

3 (C) the number of day care homes that are

4 licensed, certified, registered, or approved by

5 each State in accordance with regulations is6 sued by the Secretary;

7 (D) the rate of growth of the numbers re8 ferred to in subparagraphs (A) through (C);

9 (E) the nutritional adequacy and quality of

10 meals served in family day care homes that—

11 (i) received reimbursement under the

12 program prior to the amendments made by

13 this section but do not receive reimburse14 ment after the amendments made by this

15 section; or

16 (ii) received full reimbursement under

17 the program prior to the amendments

18 made by this section but do not receive full

19 reimbursement after the amendments

20 made by this section; and

21 (F) the proportion of low-income children

22 participating in the program prior to the

23 amendments made by this section and the pro24 portion of low-income children participating in
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1 the program after the amendments made by

2 this section.

3 (2) REQUIRED DATA.—Each State agency par4 ticipating in the child care food program under sec5 tion 17 of the National School Lunch Act (42

6 U.S.C. 1766) shall submit to the Secretary data

7 on—

8 (A) the number of family day care homes

9 participating in the program on June 30, 1997,

10 and June 30, 1998;

11 (B) the number of family day care homes

12 licensed, certified, registered, or approved for

13 service on June 30, 1997, and June 30, 1998;

14 and

15 (C) such other data as the Secretary may

16 require to carry out this subsection.

17 (3) SUBMISSION OF REPORT.—Not later than 2

18 years after the effective date of this section, the Sec19 retary shall submit the study required under this

20 subsection to the Committee on Economic and Edu21 cational Opportunities of the House of Representa22 tives and the Committee on Agriculture, Nutrition,

23 and Forestry of the Senate.
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1 SEC. 3409. PILOT PROJECTS.

2 (a) UNIVERSAL FREE PILOT.—Section 18(d) of the

3 National School Lunch Act (42 U.S.C. 1769(d)) is amend4 ed—

5 (1) by striking paragraph (3); and

6 (2) by redesignating paragraphs (4) and (5) as

7 paragraphs (3) and (4), respectively.

8 (b) DEMO PROJECT OUTSIDE SCHOOL HOURS.—Sec9 tion 18(e) of the Act is amended—

10 (1) in paragraph (1)—

11 (A) in subparagraph (A)—

12 (i) by striking ‘‘(A)’’; and

13 (ii) by striking ‘‘shall’’ and inserting

14 ‘‘may’’; and

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

16 (2) by striking paragraph (5) and inserting the

17 following:

18 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—

19 There are authorized to be appropriated to carry out

20 this subsection such sums as are necessary for each

21 of fiscal years 1997 and 1998.’’.

22 (c) ELIMINATING PROJECTS.—Section 18 of the Act

23 is amended—

24 (1) by striking subsections (a) and (g) through

25 (i); and
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1 (2) by redesignating subsections (b) through

2 (f), as so amended, as subsections (a) through (e),

3 respectively.

4 (d) CONFORMING AMENDMENT.—Section

5 17B(d)(1)(A) of the Act (42 U.S.C. 1766b(d)(1)(A)) is

6 amended by striking ‘‘18(c)’’ and inserting ‘‘18(b)’’.

7 SEC. 3410. REDUCTION OF PAPERWORK.

8 Section 19 of the National School Lunch Act (42

9 U.S.C. 1769a) is repealed.

10 SEC. 3411. INFORMATION ON INCOME ELIGIBILITY.

11 Section 23 of the National School Lunch Act (42

12 U.S.C. 1769d) is repealed.

13 SEC. 3412. NUTRITION GUIDANCE FOR CHILD NUTRITION

14 PROGRAMS.

15 Section 24 of the National School Lunch Act (42

16 U.S.C. 1769e) is repealed.

17 SEC. 3413. INFORMATION CLEARINGHOUSE.

18 Section 26 of the National School Lunch Act (42

19 U.S.C. 1769g) is repealed.

20 CHAPTER 2—CHILD NUTRITION ACT OF

21 1966

22 SEC. 3421. SPECIAL MILK PROGRAM.

23 Section 3(a)(3) of the Child Nutrition Act of 1966

24 (42 U.S.C. 1772(a)(3)) is amended by striking ‘‘the Trust
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1 Territory of the Pacific Islands’’ and inserting ‘‘the Com2 monwealth of the Northern Mariana Islands’’.

3 SEC. 3422. FREE AND REDUCED PRICE POLICY STATEMENT.

4 Section 4(b)(1) of the Child Nutrition Act of 1966

5 (42 U.S.C. 1773(b)(1)) is amended by adding at the end

6 the following:

7 ‘‘(E) FREE AND REDUCED PRICE POLICY

8 STATEMENT.—After the initial submission, a

9 school shall not be required to submit a free

10 and reduced price policy statement to a State

11 educational agency under this Act unless there

12 is a substantive change in the free and reduced

13 price policy of the school. A routine change in

14 the policy of a school, such as an annual adjust15 ment of the income eligibility guidelines for free

16 and reduced price meals, shall not be sufficient

17 cause for requiring the school to submit a policy

18 statement.’’.

19 SEC. 3423. SCHOOL BREAKFAST PROGRAM AUTHORIZA20 TION.

21 (a) TRAINING AND TECHNICAL ASSISTANCE IN FOOD

22 PREPARATION.—Section 4(e)(1) of the Child Nutrition

23 Act of 1966 (42 U.S.C. 1773(e)(1)) is amended—

24 (1) in subparagraph (A), by striking ‘‘(A)’’; and

25 (2) by striking subparagraph (B).
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1 (b) EXPANSION OF PROGRAM; STARTUP AND EXPAN2 SION COSTS.—

3 (1) IN GENERAL.—Section 4 of the Act is

4 amended by striking subsections (f) and (g).

5 (2) EFFECTIVE DATE.—The amendments made

6 by paragraph (1) shall become effective on October

7 1, 1996.

8 SEC. 3424. STATE ADMINISTRATIVE EXPENSES.

9 (a) USE OF FUNDS FOR COMMODITY DISTRIBUTION

10 ADMINISTRATION; STUDIES.—Section 7 of the Child Nu11 trition Act of 1966 (42 U.S.C. 1776) is amended—

12 (1) by striking subsections (e) and (h); and

13 (2) by redesignating subsections (f), (g), and (i)

14 as subsections (e), (f), and (g), respectively.

15 (b) APPROVAL OF CHANGES.—Section 7(e) of the

16 Act, as so redesignated, is amended—

17 (1) by striking ‘‘each year an annual plan’’ and

18 inserting ‘‘the initial fiscal year a plan’’; and

19 (2) by adding at the end the following: ‘‘After

20 submitting the initial plan, a State shall only be re21 quired to submit to the Secretary for approval a

22 substantive change in the plan.’’.

23 SEC. 3425. REGULATIONS.

24 Section 10(b) of the Child Nutrition Act of 1966 (42

25 U.S.C. 1779(b)) is amended—
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1 (1) in paragraph (1), by striking ‘‘(1)’’; and

2 (2) by striking paragraphs (2) through (4).

3 SEC. 3426. PROHIBITIONS.

4 Section 11(a) of the Child Nutrition Act of 1966 (42

5 U.S.C. 1780(a)) is amended by striking ‘‘neither the Sec6 retary nor the State shall’’ and inserting ‘‘the Secretary

7 shall not’’.

8 SEC. 3427. MISCELLANEOUS PROVISIONS AND DEFINI9 TIONS.

10 Section 15 of the Child Nutrition Act of 1966 (42

11 U.S.C. 1784) is amended—

12 (1) in paragraph (1), by striking ‘‘the Trust

13 Territory of the Pacific Islands’’ and inserting ‘‘the

14 Commonwealth of the Northern Mariana Islands’’;

15 and

16 (2) in the first sentence of paragraph (3)—

17 (A) in subparagraph (A), by inserting

18 ‘‘and’’ at the end; and

19 (B) by striking ‘‘, and (C)’’ and all that

20 follows through ‘‘Governor of Puerto Rico’’.

21 SEC. 3428. ACCOUNTS AND RECORDS.

22 The second sentence of section 16(a) of the Child Nu23 trition Act of 1966 (42 U.S.C. 1785(a)) is amended by

24 striking ‘‘at all times be available’’ and inserting ‘‘be avail25 able at any reasonable time’’.
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1 SEC. 3429. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM

2 FOR WOMEN, INFANTS, AND CHILDREN.

3 (a) DEFINITIONS.—Section 17(b) of the Child Nutri4 tion Act of 1966 (42 U.S.C. 1786(b)) is amended—

5 (1) in paragraph (15)(B)(iii), by inserting ‘‘of

6 not more than 365 days’’ after ‘‘accommodation’’;

7 and

8 (2) in paragraph (16)—

9 (A) in subparagraph (A), by adding ‘‘and’’

10 at the end; and

11 (B) in subparagraph (B), by striking ‘‘;

12 and’’ and inserting a period; and

13 (C) by striking subparagraph (C).

14 (b) SECRETARY’S PROMOTION OF WIC.—Section

15 17(c) of the Act is amended by striking paragraph (5).

16 (c) ELIGIBLE PARTICIPANTS.—Section 17(d) of the

17 Act is amended by striking paragraph (4).

18 (d) NUTRITION EDUCATION AND DRUG ABUSE EDU19 CATION.—Section 17(e) of the Act is amended—

20 (1) in the first sentence of paragraph (1), by

21 striking ‘‘shall ensure’’ and all that follows through

22 ‘‘is provided’’ and inserting ‘‘shall provide nutrition

23 education and may provide drug abuse education’’;

24 (2) in paragraph (2), by striking the third sen25 tence;

26 (3) in paragraph (4)—
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1 (A) in the matter preceding subparagraph

2 (A), by striking ‘‘shall’’;

3 (B) by striking subparagraph (A);

4 (C) by redesignating subparagraphs (B)

5 and (C) as subparagraphs (A) and (B), respec6 tively;

7 (D) in subparagraphs (A) and (B) (as re8 designated), by inserting ‘‘shall’’ before ‘‘pro9 vide’’ each place it appears;

10 (E) in subparagraph (A) (as redesignated),

11 by striking ‘‘and’’ at the end;

12 (F) in subparagraph (B) (as redesignated),

13 by striking the period and inserting ‘‘; and’’;

14 and

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

16 ‘‘(C) may provide a local agency with materials

17 describing other programs for which participants in

18 the program may be eligible.’’;

19 (4) in paragraph (5), by striking ‘‘The State’’

20 and all that follows through ‘‘local agency shall’’ and

21 inserting ‘‘Each local agency shall’’; and

22 (5) by striking paragraph (6).

23 (e) STATE PLAN.—Section 17(f) of the Act is amend24 ed—

25 (1) in paragraph (1)—
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1 (A) in subparagraph (A)—

2 (i) by striking ‘‘annually to the Sec3 retary, by a date specified by the Sec4 retary, a’’ and inserting ‘‘to the Secretary,

5 by a date specified by the Secretary, an

6 initial’’; and

7 (ii) by adding at the end the follow8 ing: ‘‘After submitting the initial plan, a

9 State shall only be required to submit to

10 the Secretary for approval a substantive

11 change in the plan.’’;

12 (B) in subparagraph (C)—

13 (i) by striking clause (iii) and insert14 ing the following:

15 ‘‘(iii) a plan to coordinate operations under the

16 program with other services or programs that may

17 benefit participants in, and applicants for, the pro18 gram;’’;

19 (ii) in clause (vi), by inserting after

20 ‘‘in the State’’ the following: ‘‘(including a

21 plan to improve access to the program for

22 participants and prospective applicants

23 who are employed, or who reside in rural

24 areas)’’;
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1 (iii) in clause (vii), by striking ‘‘to

2 provide program benefits’’ and all that fol3 lows through ‘‘emphasis on’’ and inserting

4 ‘‘for’’;

5 (iv) by striking clauses (ix), (x), and

6 (xii);

7 (v) in clause (xiii), by striking ‘‘may

8 require’’ and inserting ‘‘may reasonably re9 quire’’; and

10 (vi) by redesignating clauses (xi) and

11 (xiii), as so amended, as clauses (ix) and

12 (x), respectively;

13 (C) by striking subparagraph (D); and

14 (D) by redesignating subparagraph (E) as

15 subparagraph (D);

16 (2) by striking paragraphs (2), (6), (8), and

17 (22);

18 (3) in the second sentence of paragraph (5), by

19 striking ‘‘at all times be available’’ and inserting ‘‘be

20 available at any reasonable time’’;

21 (4) in paragraph (9)(B), by striking the second

22 sentence;

23 (5) in the first sentence of paragraph (11), by

24 striking ‘‘, including standards that will ensure suffi25 cient State agency staff’’;
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1 (6) in paragraph (12), by striking the third sen2 tence;

3 (7) in paragraph (14), by striking ‘‘shall’’ and

4 inserting ‘‘may’’;

5 (8) in paragraph (17), by striking ‘‘and to ac6 commodate’’ and all that follows through ‘‘facili7 ties’’;

8 (9) in paragraph (19), by striking ‘‘shall’’ and

9 inserting ‘‘may’’; and

10 (10) by redesignating paragraphs (3), (4), (5),

11 (7), (9) through (19), (20), (21), (23), and (24), as

12 so amended, as paragraphs (2), (3), (4), (5), (6)

13 through (16), (17), (18), (19), and (20), respec14 tively.

15 (f) INFORMATION.—Section 17(g) of the Act is

16 amended—

17 (1) in paragraph (5), by striking ‘‘the report re18 quired under subsection (d)(4)’’ and inserting ‘‘re19 ports on program participant characteristics’’; and

20 (2) by striking paragraph (6).

21 (g) PROCUREMENT OF INFANT FORMULA.—

22 (1) IN GENERAL.—Section 17(h) of the Act is

23 amended—

24 (A) in paragraph (4)(E), by striking ‘‘and,

25 on’’ and all that follows through ‘‘(d)(4)’’;
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1 (B) in paragraph (8)—

2 (i) by striking subparagraphs (A),

3 (C), and (M);

4 (ii) in subparagraph (G)—

5 (I) in clause (i), by striking ‘‘(i)’’;

6 and

7 (II) by striking clauses (ii)

8 through (ix);

9 (iii) in subparagraph (I), by striking

10 ‘‘Secretary—’’ and all that follows through

11 ‘‘(v) may’’ and inserting ‘‘Secretary may’’;

12 (iv) by redesignating subparagraphs

13 (B) and (D) through (L) as subparagraphs

14 (A) and (B) through (J), respectively;

15 (v) in subparagraph (A)(i), as so re16 designated, by striking ‘‘subparagraphs

17 (C), (D), and (E)(iii), in carrying out sub18 paragraph (A),’’ and inserting ‘‘subpara19 graphs (B) and (C)(iii),’’;

20 (vi) in subparagraph (B)(i), as so re21 designated, by striking ‘‘subparagraph

22 (B)’’ each place it appears and inserting

23 ‘‘subparagraph (A)’’; and

24 (vii) in subparagraph (C)(iii), as so

25 redesignated, by striking ‘‘subparagraph
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1 (B)’’ and inserting ‘‘subparagraph (A)’’;

2 and

3 (C) in paragraph (10)(B)—

4 (i) in clause (i), by striking the semi5 colon and inserting ‘‘; and’’;

6 (ii) in clause (ii), by striking ‘‘; and’’

7 and inserting a period; and

8 (iii) by striking clause (iii).

9 (2) APPLICATION.—The amendments made by

10 paragraph (1) shall not apply to a contract for the

11 procurement of infant formula under section

12 17(h)(8) of the Act that is in effect on the effective

13 date of this subsection.

14 (h) NATIONAL ADVISORY COUNCIL ON MATERNAL,

15 INFANT, AND FETAL NUTRITION.—Section 17(k)(3) of

16 the Act is amended by striking ‘‘Secretary shall designate’’

17 and inserting ‘‘Council shall elect’’.

18 (i) COMPLETED STUDY; COMMUNITY COLLEGE DEM19 ONSTRATION; GRANTS FOR INFORMATION AND DATA SYS20 TEM.—Section 17 of the Act is amended by striking sub21 sections (n), (o), and (p).

22 (j) DISQUALIFICATION OF VENDORS WHO ARE DIS23 QUALIFIED UNDER THE FOOD STAMP PROGRAM.—Sec24 tion 17 of the Act, as so amended, is further amended

25 by adding at the end the following:
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1 ‘‘(n) DISQUALIFICATION OF VENDORS WHO ARE

2 DISQUALIFIED UNDER THE FOOD STAMP PROGRAM.—

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

4 regulations providing criteria for the disqualification

5 under this section of an approved vendor that is dis6 qualified from accepting benefits under the food

7 stamp program established under the Food Stamp

8 Act of 1977 (7 U.S.C. 2011 et seq.).

9 ‘‘(2) TERMS.—A disqualification under para10 graph (1)—

11 ‘‘(A) shall be for the same period as the

12 disqualification from the program referred to in

13 paragraph (1);

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

15 disqualification from the program referred to in

16 paragraph (1); and

17 ‘‘(C) shall not be subject to judicial or ad18 ministrative review.’’.

19 SEC. 3430. CASH GRANTS FOR NUTRITION EDUCATION.

20 Section 18 of the Child Nutrition Act of 1966 (42

21 U.S.C. 1787) is repealed.

22 SEC. 3431. NUTRITION EDUCATION AND TRAINING.

23 (a) FINDINGS.—Section 19 of the Child Nutrition

24 Act of 1966 (42 U.S.C. 1788) is amended—
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1 (1) in subsection (a), by striking ‘‘that—’’ and

2 all that follows through the period at the end and

3 inserting ‘‘that effective dissemination of scientif4 ically valid information to children participating or

5 eligible to participate in the school lunch and related

6 child nutrition programs should be encouraged.’’;

7 and

8 (2) in subsection (b), by striking ‘‘encourage’’

9 and all that follows through ‘‘establishing’’ and in10 serting ‘‘establish’’.

11 (b) USE OF FUNDS.—Section 19(f) of the Act is

12 amended—

13 (1) in paragraph (1)—

14 (A) by striking subparagraph (B); and

15 (B) in subparagraph (A)—

16 (i) by striking ‘‘(A)’’;

17 (ii) by striking clauses (ix) through

18 (xix);

19 (iii) by redesignating clauses (i)

20 through (viii) and (xx) as subparagraphs

21 (A) through (H) and (I), respectively;

22 (iv) in subparagraph (I), as so redes23 ignated, by striking the period at the end

24 and inserting ‘‘; and’’; and

25 (v) by adding at the end the following:
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1 ‘‘(J) other appropriate related activities, as de2 termined by the State.’’;

3 (2) by striking paragraphs (2) and (4); and

4 (3) by redesignating paragraph (3) as para5 graph (2).

6 (c) ACCOUNTS, RECORDS, AND REPORTS.—The sec7 ond sentence of section 19(g)(1) of the Act is amended

8 by striking ‘‘at all times be available’’ and inserting ‘‘be

9 available at any reasonable time’’.

10 (d) STATE COORDINATORS FOR NUTRITION; STATE

11 PLAN.—Section 19(h) of the Act is amended—

12 (1) in the second sentence of paragraph (1)—

13 (A) by striking ‘‘as provided in paragraph

14 (2) of this subsection’’; and

15 (B) by striking ‘‘as provided in paragraph

16 (3) of this subsection’’;

17 (2) in paragraph (2), by striking the second

18 and third sentences; and

19 (3) by striking paragraph (3).

20 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

21 19(i) of the Act is amended—

22 (1) in the first sentence of paragraph (2)(A), by

23 striking ‘‘and each succeeding fiscal year’’;

24 (2) by redesignating paragraphs (3) and (4) as

25 paragraphs (4) and (5), respectively; and
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1 (3) by inserting after paragraph (2) the follow2 ing:

3 ‘‘(3) FISCAL YEARS 1997 THROUGH 2002.—

4 ‘‘(A) IN GENERAL.—There are authorized

5 to be appropriated to carry out this section

6 $10,000,000 for each of fiscal years 1997

7 through 2002.

8 ‘‘(B) GRANTS.—

9 ‘‘(i) IN GENERAL.—Grants to each

10 State from the amounts made available

11 under subparagraph (A) shall be based on

12 a rate of 50 cents for each child enrolled

13 in schools or institutions within the State,

14 except that no State shall receive an

15 amount less than $75,000 per fiscal year.

16 ‘‘(ii) INSUFFICIENT FUNDS.—If the

17 amount made available for any fiscal year

18 is insufficient to pay the amount to which

19 each State is entitled under clause (i), the

20 amount of each grant shall be ratably re21 duced.’’.

22 (f) ASSESSMENT.—Section 19 of the Act is amended

23 by striking subsection (j).

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

25 subsection (e) shall become effective on October 1, 1996.
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1 CHAPTER 3—MISCELLANEOUS

2 PROVISIONS

3 SEC. 3441. COORDINATION OF SCHOOL LUNCH, SCHOOL

4 BREAKFAST, AND SUMMER FOOD SERVICE

5 PROGRAMS.

6 (a) COORDINATION.—

7 (1) IN GENERAL.—The Secretary of Agriculture

8 shall develop proposed changes to the regulations

9 under the school lunch program under the National

10 School Lunch Act, the summer food service program

11 under section 13 of that Act, and the school break12 fast program under section 4 of the Child Nutrition

13 Act of 1966, for the purpose of simplifying and co14 ordinating those programs into a comprehensive

15 meal program.

16 (2) CONSULTATION.—In developing proposed

17 changes to the regulations under paragraph (1), the

18 Secretary of Agriculture shall consult with local,

19 State, and regional administrators of the programs

20 described in such paragraph.

21 (b) REPORT.—Not later than November 1, 1997, the

22 Secretary of Agriculture shall submit to the Committee on

23 Agriculture, Nutrition, and Forestry of the Senate and the

24 Committee on Economic and Educational Opportunities of
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1 the House of Representatives a report containing the pro2 posed changes developed under subsection (a).

3 Subtitle E—Related Provisions

4 Sec. 3501. REQUIREMENT THAT DATA RELATING TO THE IN5 CIDENCE OF POVERTY IN THE UNITED

6 STATES BE PUBLISHED AT LEAST EVERY 2

7 YEARS.

8 (a) IN GENERAL.—The Secretary shall, to the extent

9 feasible, produce and publish for each State, county, and

10 local unit of general purpose government for which data

11 have been compiled in the then most recent census of pop12 ulation under section 141(a) of title 13, United States

13 Code, and for each school district, data relating to the in14 cidence of poverty. Such data may be produced by means

15 of sampling, estimation, or any other method that the Sec16 retary determines will produce current, comprehensive,

17 and reliable data.

18 (b) CONTENT; FREQUENCY.—Data under this sec19 tion—

20 (1) shall include—

21 (A) for each school district, the number of

22 children age 5 to 17, inclusive, in families below

23 the poverty level; and
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1 (B) for each State and county referred to

2 in subsection (a), the number of individuals age

3 65 or older below the poverty level; and

4 (2) shall be published—

5 (A) for each State, county, and local unit

6 of general purpose government referred to in

7 subsection (a), in 1997 and at least every sec8 ond year thereafter; and

9 (B) for each school district, in 1999 and at

10 least every second year thereafter.

11 (c) AUTHORITY TO AGGREGATE.—

12 (1) IN GENERAL.—If reliable data could not

13 otherwise be produced, the Secretary may, for pur14 poses of subsection (b)(1)(A), aggregate school dis15 tricts, but only to the extent necessary to achieve re16 liability.

17 (2) INFORMATION RELATING TO USE OF AU18 THORITY.—Any data produced under this subsection

19 shall be appropriately identified and shall be accom20 panied by a detailed explanation as to how and why

21 aggregation was used (including the measures taken

22 to minimize any such aggregation).

23 (d) REPORT TO BE SUBMITTED WHENEVER DATA

24 IS NOT TIMELY PUBLISHED.—If the Secretary is unable

25 to produce and publish the data required under this sec-
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1 tion for any State, county, local unit of general purpose

2 government, or school district in any year specified in sub3 section (b)(2), a report shall be submitted by the Secretary

4 to the President of the Senate and the Speaker of the

5 House of Representatives, not later than 90 days before

6 the start of the following year, enumerating each govern7 ment or school district excluded and giving the reasons

8 for the exclusion.

9 (e) CRITERIA RELATING TO POVERTY.—In carrying

10 out this section, the Secretary shall use the same criteria

11 relating to poverty as were used in the then most recent

12 census of population under section 141(a) of title 13,

13 United States Code (subject to such periodic adjustments

14 as may be necessary to compensate for inflation and other

15 similar factors).

16 (f) CONSULTATION.—The Secretary shall consult

17 with the Secretary of Education in carrying out the re18 quirements of this section relating to school districts.

19 (g) DEFINITION.—For the purpose of this section,

20 the term ‘‘Secretary’’ means the Secretary of Health and

21 Human Services.

22 (h) AUTHORIZATION OF APPROPRIATIONS.—There

23 are authorized to be appropriated to carry out this section

24 $1,500,000 for each of fiscal years 1997 through 2000.
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1 SEC. 3502. SENSE OF THE CONGRESS.

2 It is the sense of the Congress that this title, and

3 the amendments made by this title, should not result in

4 an increase in the number of children who are hungry,

5 homeless, poor, or medically uninsured.

6 SEC. 3503. LEGISLATIVE ACCOUNTABILITY.

7 In the event that this title, or the amendments made

8 by this title, results in an increase in the number of chil9 dren in the United States who are hungry, homeless, poor,

10 or medically uninsured by the end of the fiscal year 1997,

11 the Congress—

12 (1) shall revisit the provisions of this title, or

13 the amendments made by this title, which caused

14 such increase; and

15 (2) shall, as soon as practicable thereafter, pass

16 legislation that stops the continuation of such in17 crease.

18 TITLE IV—COMMITTEE ON WAYS

19 AND MEANS: WELFARE REFORM

20 SEC. 4001. SHORT TITLE.

21 This title may be cited as the ‘‘Personal Responsibil22 ity and Work Opportunity Act of 1996’’.

23 SEC. 4002. TABLE OF CONTENTS.

Sec. 4001. Short title.

Sec. 4002. Table of contents.

Subtitle A—Block Grants for Temporary Assistance for Needy Families
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Sec. 4101. Findings.

Sec. 4102. Reference to Social Security Act.

Sec. 4103. Block grants to States.

Sec. 4104. Services provided by charitable, religious, or private organizations.

Sec. 4105. Census data on grandparents as primary caregivers for their grandchildren.

Sec. 4106. Report on data processing.

Sec. 4107. Study on alternative outcomes measures.

Sec. 4108. Conforming amendments to the Social Security Act.

Sec. 4109. Conforming amendments to the Food Stamp Act of 1977 and related provisions.

Sec. 4110. Conforming amendments to other laws.

Sec. 4111. Development of prototype of counterfeit-resistant social security

card required.

Sec. 4112. Disclosure of receipt of Federal funds.

Sec. 4113. Modifications to the job opportunities for certain low-income individuals program.

Sec. 4114. Secretarial submission of legislative proposal for technical and conforming amendments.

Sec. 4115. Effective date; transition rule.

Subtitle B—Supplemental Security Income

Sec. 4200. Reference to Social Security Act.

CHAPTER 1—ELIGIBILITY RESTRICTIONS

Sec. 4201. Denial of SSI benefits for 10 years to individuals found to have

fraudulently misrepresented residence in order to obtain benefits simultaneously in 2 or more States.

Sec. 4202. Denial of SSI benefits for fugitive felons and probation and parole

violators.

Sec. 4203. Treatment of prisoners.

Sec. 4204. Effective date of application for benefits.

CHAPTER 2—BENEFITS FOR DISABLED CHILDREN

Sec. 4211. Definition and eligibility rules.

Sec. 4212. Eligibility redeterminations and continuing disability reviews.

Sec. 4213. Additional accountability requirements.

Sec. 4214. Reduction in cash benefits payable to institutionalized individuals

whose medical costs are covered by private insurance.

Sec. 4215. Regulations.

CHAPTER 3—ADDITIONAL ENFORCEMENT PROVISIONS

Sec. 4221. Installment payment of large past-due supplemental security income

benefits.

Sec. 4222. Recovery of supplemental security income overpayments from social

security benefits.

Sec. 4223. Regulations.

CHAPTER 4—STATE SUPPLEMENTATION PROGRAMS

Sec. 4225. Repeal of maintenance of effort requirements applicable to optional

State programs for supplementation of SSI benefits.
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CHAPTER 5—STUDIES REGARDING SUPPLEMENTAL SECURITY INCOME

PROGRAM

Sec. 4231. Annual report on the supplemental security income program.

Sec. 4232. Study of disability determination process.

Sec. 4233. Study by General Accounting Office.

CHAPTER 6—NATIONAL COMMISSION ON THE FUTURE OF DISABILITY

Sec. 4241. Establishment.

Sec. 4242. Duties of the commission.

Sec. 4243. Membership.

Sec. 4244. Staff and support services.

Sec. 4245. Powers of commission.

Sec. 4246. Reports.

Sec. 4247. Termination.

Sec. 4248. Authorization of appropriations.

Subtitle C—Child Support

Sec. 4300. Reference to Social Security Act.

CHAPTER 1—ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS

Sec. 4301. State obligation to provide child support enforcement services.

Sec. 4302. Distribution of child support collections.

Sec. 4303. Privacy safeguards.

Sec. 4304. Rights to notification of hearings.

CHAPTER 2—LOCATE AND CASE TRACKING

Sec. 4311. State case registry.

Sec. 4312. Collection and disbursement of support payments.

Sec. 4313. State directory of new hires.

Sec. 4314. Amendments concerning income withholding.

Sec. 4315. Locator information from interstate networks.

Sec. 4316. Expansion of the Federal Parent Locator Service.

Sec. 4317. Collection and use of social security numbers for use in child support enforcement.

CHAPTER 3—STREAMLINING AND UNIFORMITY OF PROCEDURES

Sec. 4321. Adoption of uniform State laws.

Sec. 4322. Improvements to full faith and credit for child support orders.

Sec. 4323. Administrative enforcement in interstate cases.

Sec. 4324. Use of forms in interstate enforcement.

Sec. 4325. State laws providing expedited procedures.

CHAPTER 4—PATERNITY ESTABLISHMENT

Sec. 4331. State laws concerning paternity establishment.

Sec. 4332. Outreach for voluntary paternity establishment.

Sec. 4333. Cooperation by applicants for and recipients of part A assistance.

CHAPTER 5—PROGRAM ADMINISTRATION AND FUNDING

Sec. 4341. Performance-based incentives and penalties.

Sec. 4342. Federal and State reviews and audits.

Sec. 4343. Required reporting procedures.
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Sec. 4344. Automated data processing requirements.

Sec. 4345. Technical assistance.

Sec. 4346. Reports and data collection by the Secretary.

CHAPTER 6—ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS

Sec. 4351. Simplified process for review and adjustment of child support orders.

Sec. 4352. Furnishing consumer reports for certain purposes relating to child

support.

Sec. 4353. Nonliability for financial institutions providing financial records to

State child support enforcement agencies in child support

cases.

CHAPTER 7—ENFORCEMENT OF SUPPORT ORDERS

Sec. 4361. Internal Revenue Service collection of arrearages.

Sec. 4362. Authority to collect support from Federal employees.

Sec. 4363. Enforcement of child support obligations of members of the Armed

Forces.

Sec. 4364. Voiding of fraudulent transfers.

Sec. 4365. Work requirement for persons owing past-due child support.

Sec. 4366. Definition of support order.

Sec. 4367. Reporting arrearages to credit bureaus.

Sec. 4368. Liens.

Sec. 4369. State law authorizing suspension of licenses.

Sec. 4370. Denial of passports for nonpayment of child support.

Sec. 4371. International support enforcement.

Sec. 4372. Financial institution data matches.

Sec. 4373. Enforcement of orders against paternal or maternal grandparents in

cases of minor parents.

Sec. 4374. Nondischargeability in bankruptcy of certain debts for the support

of a child.

CHAPTER 8—MEDICAL SUPPORT

Sec. 4376. Correction to ERISA definition of medical child support order.

Sec. 4377. Enforcement of orders for health care coverage.

CHAPTER 9—ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NONRESIDENTIAL PARENTS

Sec. 4381. Grants to States for access and visitation programs.

CHAPTER 10—EFFECTIVE DATES AND CONFORMING AMENDMENTS

Sec. 4391. Effective dates and conforming amendments.

Subtitle D—Restricting Welfare and Public Benefits for Aliens

Sec. 4400. Statements of national policy concerning welfare and immigration.

CHAPTER 1—ELIGIBILITY FOR FEDERAL BENEFITS

Sec. 4401. Aliens who are not qualified aliens ineligible for Federal public benefits.

Sec. 4402. Limited eligibility of qualified aliens for certain Federal programs.
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Sec. 4403. Five-year limited eligibility of qualified aliens for Federal meanstested public benefit.

Sec. 4404. Notification and information reporting.

CHAPTER 2—ELIGIBILITY FOR STATE AND LOCAL PUBLIC BENEFITS

PROGRAMS

Sec. 4411. Aliens who are not qualified aliens or nonimmigrants ineligible for

State and local public benefits.

Sec. 4412. State authority to limit eligibility of qualified aliens for State public

benefits.

CHAPTER 3—ATTRIBUTION OF INCOME AND AFFIDAVITS OF SUPPORT

Sec. 4421. Federal attribution of sponsor’s income and resources to alien.

Sec. 4422. Authority for States to provide for attribution of sponsors income

and resources to the alien with respect to State programs.

Sec. 4423. Requirements for sponsor’s affidavit of support.

Sec. 4424. Cosignature of alien student loans.

CHAPTER 4—GENERAL PROVISIONS

Sec. 4431. Definitions.

Sec. 4432. Verification of eligibility for Federal public benefits.

Sec. 4433. Statutory construction.

Sec. 4434. Communication between State and local government agencies and

the Immigration and Naturalization Service.

Sec. 4435. Qualifying quarters.

CHAPTER 5—CONFORMING AMENDMENTS RELATING TO ASSISTED HOUSING

Sec. 4441. Conforming amendments relating to assisted housing.

CHAPTER 6—EARNED INCOME CREDIT DENIED TO UNAUTHORIZED

EMPLOYEES

Sec. 4451. Earned income credit denied to individuals not authorized to be employed in the United States.

Subtitle E—Reform of Public Housing

Sec. 4601. Fraud under means-tested welfare and public assistance programs.

Subtitle F—Child Protection Block Grant Programs and Foster Care,

Adoption Assistance, and Independent Living Programs

CHAPTER 1—CHILD PROTECTION BLOCK GRANT PROGRAM AND FOSTER

CARE, ADOPTION ASSISTANCE, AND INDEPENDENT LIVING PROGRAMS

SUBCHAPTER A—BLOCK GRANTS TO STATES FOR THE PROTECTION OF

CHILDREN

Sec. 4701. Establishment of program.

Sec. 4702. Conforming amendments.

SUBCHAPTER B—FOSTER CARE, ADOPTION ASSISTANCE, AND INDEPENDENT

LIVING PROGRAMS

Sec. 4711. Conforming amendments to part E of title IV.
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SUBCHAPTER C—MISCELLANEOUS

Sec. 4721. Secretarial submission of legislative proposal for technical and conforming amendments.

Sec. 4722. Sense of the Congress regarding timely adoption of children.

Sec. 4723. Effective date; transition rules.

CHAPTER 2—CHILD AND FAMILY SERVICES BLOCK GRANT

Sec. 4751. Child and family services block grant.

Sec. 4752. Reauthorizations.

Sec. 4753. Repeals.

Subtitle G—Child Care

Sec. 4801. Short title and references.

Sec. 4802. Goals.

Sec. 4803. Authorization of appropriations and entitlement authority.

Sec. 4804. Lead agency.

Sec. 4805. Application and plan.

Sec. 4806. Limitation on State allotments.

Sec. 4807. Activities to improve the quality of child care.

Sec. 4808. Repeal of early childhood development and before- and after-school

care requirement.

Sec. 4809. Administration and enforcement.

Sec. 4810. Payments.

Sec. 4811. Annual report and audits.

Sec. 4812. Report by the Secretary.

Sec. 4813. Allotments.

Sec. 4814. Definitions.

Sec. 4815. Repeals.

Sec. 4816. Effective date.

Subtitle H—Miscellaneous

Sec. 4901. Appropriation by State legislatures.

Sec. 4902. Sanctioning for testing positive for controlled substances.

Sec. 4903. Reduction in block grants to States for social services.

Sec. 4904. Rules relating to denial of earned income credit on basis of disqualified income.

Sec. 4905. Modification of adjusted gross income definition for earned income

credit.

Sec. 4906. Modification of earned income credit amount and phaseout.

1 Subtitle A—Block Grants for Tem2 porary Assistance for Needy

3 Families

4 SEC. 4101. FINDINGS.

5 The Congress makes the following findings:
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1 (1) Marriage is the foundation of a successful

2 society.

3 (2) Marriage is an essential institution of a suc4 cessful society which promotes the interests of chil5 dren.

6 (3) Promotion of responsible fatherhood and

7 motherhood is integral to successful child rearing

8 and the well-being of children.

9 (4) In 1992, only 54 percent of single-parent

10 families with children had a child support order es11 tablished and, of that 54 percent, only about one12 half received the full amount due. Of the cases en13 forced through the public child support enforcement

14 system, only 18 percent of the caseload has a collec15 tion.

16 (5) The number of individuals receiving aid to

17 families with dependent children (in this section re18 ferred to as ‘‘AFDC’’) has more than tripled since

19 1965. More than two-thirds of these recipients are

20 children. Eighty-nine percent of children receiving

21 AFDC benefits now live in homes in which no father

22 is present.

23 (A)(i) The average monthly number of

24 children receiving AFDC benefits—

25 (I) was 3,300,000 in 1965;
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1 (II) was 6,200,000 in 1970;

2 (III) was 7,400,000 in 1980; and

3 (IV) was 9,300,000 in 1992.

4 (ii) While the number of children receiving

5 AFDC benefits increased nearly threefold be6 tween 1965 and 1992, the total number of chil7 dren in the United States aged 0 to 18 has de8 clined by 5.5 percent.

9 (B) The Department of Health and

10 Human Services has estimated that 12,000,000

11 children will receive AFDC benefits within 10

12 years.

13 (C) The increase in the number of children

14 receiving public assistance is closely related to

15 the increase in births to unmarried women. Be16 tween 1970 and 1991, the percentage of live

17 births to unmarried women increased nearly

18 threefold, from 10.7 percent to 29.5 percent.

19 (6) The increase of out-of-wedlock pregnancies

20 and births is well documented as follows:

21 (A) It is estimated that the rate of non22 marital teen pregnancy rose 23 percent from 54

23 pregnancies per 1,000 unmarried teenagers in

24 1976 to 66.7 pregnancies in 1991. The overall

25 rate of nonmarital pregnancy rose 14 percent
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1 from 90.8 pregnancies per 1,000 unmarried

2 women in 1980 to 103 in both 1991 and 1992.

3 In contrast, the overall pregnancy rate for mar4 ried couples decreased 7.3 percent between

5 1980 and 1991, from 126.9 pregnancies per

6 1,000 married women in 1980 to 117.6 preg7 nancies in 1991.

8 (B) The total of all out-of-wedlock births

9 between 1970 and 1991 has risen from 10.7

10 percent to 29.5 percent and if the current trend

11 continues, 50 percent of all births by the year

12 2015 will be out-of-wedlock.

13 (7) The negative consequences of an out-of-wed14 lock birth on the mother, the child, the family, and

15 society are well documented as follows:

16 (A) Young women 17 and under who give

17 birth outside of marriage are more likely to go

18 on public assistance and to spend more years

19 on welfare once enrolled. These combined ef20 fects of ‘‘younger and longer’’ increase total

21 AFDC costs per household by 25 percent to 30

22 percent for 17-year-olds.

23 (B) Children born out-of-wedlock have a

24 substantially higher risk of being born at a very

25 low or moderately low birth weight.
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1 (C) Children born out-of-wedlock are more

2 likely to experience low verbal cognitive attain3 ment, as well as more child abuse, and neglect.

4 (D) Children born out-of-wedlock were

5 more likely to have lower cognitive scores, lower

6 educational aspirations, and a greater likelihood

7 of becoming teenage parents themselves.

8 (E) Being born out-of-wedlock significantly

9 reduces the chances of the child growing up to

10 have an intact marriage.

11 (F) Children born out-of-wedlock are 3

12 times more likely to be on welfare when they

13 grow up.

14 (8) Currently 35 percent of children in single15 parent homes were born out-of-wedlock, nearly the

16 same percentage as that of children in single-parent

17 homes whose parents are divorced (37 percent).

18 While many parents find themselves, through divorce

19 or tragic circumstances beyond their control, facing

20 the difficult task of raising children alone, neverthe21 less, the negative consequences of raising children in

22 single-parent homes are well documented as follows:

23 (A) Only 9 percent of married-couple fami24 lies with children under 18 years of age have

25 income below the national poverty level. In con-
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1 trast, 46 percent of female-headed households

2 with children under 18 years of age are below

3 the national poverty level.

4 (B) Among single-parent families, nearly

1 5 ⁄2 of the mothers who never married received

AFDC while only 1 6 ⁄5 of divorced mothers re7 ceived AFDC.

8 (C) Children born into families receiving

9 welfare assistance are 3 times more likely to be

10 on welfare when they reach adulthood than chil11 dren not born into families receiving welfare.

12 (D) Mothers under 20 years of age are at

13 the greatest risk of bearing low-birth-weight ba14 bies.

15 (E) The younger the single parent mother,

16 the less likely she is to finish high school.

17 (F) Young women who have children be18 fore finishing high school are more likely to re19 ceive welfare assistance for a longer period of

20 time.

21 (G) Between 1985 and 1990, the public

22 cost of births to teenage mothers under the aid

23 to families with dependent children program,

24 the food stamp program, and the medicaid pro25 gram has been estimated at $120,000,000,000.
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1 (H) The absence of a father in the life of

2 a child has a negative effect on school perform3 ance and peer adjustment.

4 (I) Children of teenage single parents have

5 lower cognitive scores, lower educational aspira6 tions, and a greater likelihood of becoming teen7 age parents themselves.

8 (J) Children of single-parent homes are 3

9 times more likely to fail and repeat a year in

10 grade school than are children from intact 2-

11 parent families.

12 (K) Children from single-parent homes are

13 almost 4 times more likely to be expelled or sus14 pended from school.

15 (L) Neighborhoods with larger percentages

16 of youth aged 12 through 20 and areas with

17 higher percentages of single-parent households

18 have higher rates of violent crime.

19 (M) Of those youth held for criminal of20 fenses within the State juvenile justice system,

21 only 29.8 percent lived primarily in a home with

22 both parents. In contrast to these incarcerated

23 youth, 73.9 percent of the 62,800,000 children

24 in the Nation’s resident population were living

25 with both parents.
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1 (9) Therefore, in light of this demonstration of

2 the crisis in our Nation, it is the sense of the Con3 gress that prevention of out-of-wedlock pregnancy

4 and reduction in out-of-wedlock birth are very im5 portant Government interests and the policy con6 tained in part A of title IV of the Social Security

7 Act (as amended by section 4103(a) of this Act) is

8 intended to address the crisis.

9 SEC. 4102. REFERENCE TO SOCIAL SECURITY ACT.

10 Except as otherwise specifically provided, wherever in

11 this subtitle an amendment is expressed in terms of an

12 amendment to or repeal of a section or other provision,

13 the reference shall be considered to be made to that sec14 tion or other provision of the Social Security Act.

15 SEC. 4103. BLOCK GRANTS TO STATES.

16 (a) IN GENERAL.—Part A of title IV (42 U.S.C. 601

17 et seq.) is amended—

18 (1) by striking all that precedes section 418 (as

19 added by section 4803(b)(2) of this Act) and insert20 ing the following:
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1 ‘‘PART A—BLOCK GRANTS TO STATES FOR

2 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

3 ‘‘SEC. 401. PURPOSE.

4 ‘‘(a) IN GENERAL.—The purpose of this part is to

5 increase the flexibility of States in operating a program

6 designed to—

7 ‘‘(1) provide assistance to needy families so that

8 children may be cared for in their own homes or in

9 the homes of relatives;

10 ‘‘(2) end the dependence of needy parents on

11 government benefits by promoting job preparation,

12 work, and marriage;

13 ‘‘(3) prevent and reduce the incidence of out-of14 wedlock pregnancies and establish annual numerical

15 goals for preventing and reducing the incidence of

16 these pregnancies; and

17 ‘‘(4) encourage the formation and maintenance

18 of two-parent families.

19 ‘‘(b) NO INDIVIDUAL ENTITLEMENT.—This part

20 shall not be interpreted to entitle any individual or family

21 to assistance under any State program funded under this

22 part.

23 ‘‘SEC. 402. ELIGIBLE STATES; STATE PLAN.

24 ‘‘(a) IN GENERAL.—As used in this part, the term

25 ‘eligible State’ means, with respect to a fiscal year, a State

26 that, during the 2-year period immediately preceding the
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1 fiscal year, has submitted to the Secretary a plan that the

2 Secretary has found includes the following:

3 ‘‘(1) OUTLINE OF FAMILY ASSISTANCE PRO4 GRAM.—

5 ‘‘(A) GENERAL PROVISIONS.—A written

6 document that outlines how the State intends to

7 do the following:

8 ‘‘(i) Conduct a program, designed to

9 serve all political subdivisions in the State

10 (not necessarily in a uniform manner),

11 that provides assistance to needy families

12 with (or expecting) children and provides

13 parents with job preparation, work, and

14 support services to enable them to leave

15 the program and become self-sufficient.

16 ‘‘(ii) Require a parent or caretaker re17 ceiving assistance under the program to

18 engage in work (as defined by the State)

19 once the State determines the parent or

20 caretaker is ready to engage in work, or

21 once the parent or caretaker has received

22 assistance under the program for 24

23 months (whether or not consecutive),

24 whichever is earlier.
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1 ‘‘(iii) Ensure that parents and care2 takers receiving assistance under the pro3 gram engage in work activities in accord4 ance with section 407.

5 ‘‘(iv) Take such reasonable steps as

6 the State deems necessary to restrict the

7 use and disclosure of information about in8 dividuals and families receiving assistance

9 under the program attributable to funds

10 provided by the Federal Government.

11 ‘‘(v) Establish goals and take action

12 (including provision of education and coun13 seling (including abstinence-based pro14 grams) and pre-pregnancy health services)

15 to prevent and reduce the incidence of out16 of-wedlock pregnancies, with special em17 phasis on teenage pregnancies, and estab18 lish numerical goals for reducing the ille19 gitimacy ratio of the State (as defined in

20 section 403(a)(2)(B)) for calendar years

21 1996 through 2005.

22 ‘‘(B) SPECIAL PROVISIONS.—

23 ‘‘(i) The document shall indicate

24 whether the State intends to treat families

25 moving into the State from another State
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1 differently than other families under the

2 program, and if so, how the State intends

3 to treat such families under the program.

4 ‘‘(ii) The document shall indicate

5 whether the State intends to provide as6 sistance under the program to individuals

7 who are not citizens of the United States,

8 and if so, shall include an overview of such

9 assistance.

10 ‘‘(iii) The document shall set forth ob11 jective criteria for the delivery of benefits

12 and the determination of eligibility and for

13 fair and equitable treatment, including an

14 explanation of how the State will provide

15 opportunities for recipients who have been

16 adversely affected to be heard in a State

17 administrative or appeal process.

18 ‘‘(2) CERTIFICATION THAT THE STATE WILL

19 OPERATE A CHILD SUPPORT ENFORCEMENT PRO20 GRAM.—A certification by the chief executive officer

21 of the State that, during the fiscal year, the State

22 will operate a child support enforcement program

23 under the State plan approved under part D.

24 ‘‘(3) CERTIFICATION THAT THE STATE WILL

25 OPERATE A CHILD PROTECTION PROGRAM.—A cer-
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1 tification by the chief executive officer of the State

2 that, during the fiscal year, the State will operate a

3 child protection program under the State plan ap4 proved under part B.

5 ‘‘(4) CERTIFICATION OF THE ADMINISTRATION

6 OF THE PROGRAM.—A certification by the chief ex7 ecutive officer of the State specifying which State

8 agency or agencies will administer and supervise the

9 program referred to in paragraph (1) for the fiscal

10 year, which shall include assurances that local gov11 ernments and private sector organizations—

12 ‘‘(A) have been consulted regarding the

13 plan and design of welfare services in the State

14 so that services are provided in a manner ap15 propriate to local populations; and

16 ‘‘(B) have had at least 45 days to submit

17 comments on the plan and the design of such

18 services.

19 ‘‘(5) CERTIFICATION THAT THE STATE WILL

20 PROVIDE INDIANS WITH EQUITABLE ACCESS TO AS21 SISTANCE.—A certification by the chief executive of22 ficer of the State that, during the fiscal year, the

23 State will provide each Indian who is a member of

24 an Indian tribe in the State that does not have a

25 tribal family assistance plan approved under section
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1 412 with equitable access to assistance under the

2 State program funded under this part attributable

3 to funds provided by the Federal Government.

4 ‘‘(b) PUBLIC AVAILABILITY OF STATE PLAN SUM5 MARY.—The State shall make available to the public a

6 summary of any plan submitted by the State under this

7 section.

8 ‘‘SEC. 403. GRANTS TO STATES.

9 ‘‘(a) GRANTS.—

10 ‘‘(1) FAMILY ASSISTANCE GRANT.—

11 ‘‘(A) IN GENERAL.—Each eligible State

12 shall be entitled to receive from the Secretary,

13 for each of fiscal years 1996, 1997, 1998,

14 1999, 2000, and 2001 a grant in an amount

15 equal to the State family assistance grant.

16 ‘‘(B) STATE FAMILY ASSISTANCE GRANT

17 DEFINED.—As used in this part, the term

18 ‘State family assistance grant’ means the great19 est of—

‘‘(i) 1 20 ⁄3 of the total amount required

21 to be paid to the State under former sec22 tion 403 (as in effect on September 30,

23 1995) for fiscal years 1992, 1993, and

24 1994 (other than with respect to amounts

25 expended by the State for child care under
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1 subsection (g) or (i) of former section 402

2 (as so in effect));

3 ‘‘(ii)(I) the total amount required to

4 be paid to the State under former section

5 403 for fiscal year 1994 (other than with

6 respect to amounts expended by the State

7 for child care under subsection (g) or (i) of

8 former section 402 (as so in effect)); plus

9 ‘‘(II) an amount equal to 85 percent

10 of the amount (if any) by which the total

11 amount required to be paid to the State

12 under former section 403(a)(5) for emer13 gency assistance for fiscal year 1995 ex14 ceeds the total amount required to be paid

15 to the State under former section

16 403(a)(5) for fiscal year 1994, if, during

17 fiscal year 1994 or 1995, the Secretary ap18 proved under former section 402 an

19 amendment to the former State plan to

20 allow the provision of emergency assistance

21 in the context of family preservation; or

‘‘(iii) 4 22 ⁄3 of the total amount required

23 to be paid to the State under former sec24 tion 403 (as in effect on September 30,

25 1995) for the 1st 3 quarters of fiscal year
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1 1995 (other than with respect to amounts

2 expended by the State under the State

3 plan approved under part F (as so in ef4 fect) or for child care under subsection (g)

5 or (i) of former section 402 (as so in ef6 fect)), plus the total amount required to be

7 paid to the State for fiscal year 1995

8 under former section 403(l) (as so in ef9 fect).

10 ‘‘(C) TOTAL AMOUNT REQUIRED TO BE

11 PAID TO THE STATE UNDER FORMER SECTION

12 403 DEFINED.—As used in this part, the term

13 ‘total amount required to be paid to the State

14 under former section 403’ means, with respect

15 to a fiscal year—

16 ‘‘(i) in the case of a State to which

17 section 1108 does not apply, the sum of—

18 ‘‘(I) the Federal share of mainte19 nance assistance expenditures for the

20 fiscal year, before reduction pursuant

21 to subparagraph (B) or (C) of section

22 403(b)(2) (as in effect on September

23 30, 1995), as reported by the State on

24 ACF Form 231;
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1 ‘‘(II) the Federal share of admin2 istrative expenditures (including ad3 ministrative expenditures for the de4 velopment of management information

5 systems) for the fiscal year, as re6 ported by the State on ACF Form

7 231;

8 ‘‘(III) the Federal share of emer9 gency assistance expenditures for the

10 fiscal year, as reported by the State

11 on ACF Form 231;

12 ‘‘(IV) the Federal share of ex13 penditures for the fiscal year with re14 spect to child care pursuant to sub15 sections (g) and (i) of former section

16 402 (as in effect on September 30,

17 1995), as reported by the State on

18 ACF Form 231; and

19 ‘‘(V) the aggregate amount re20 quired to be paid to the State for the

21 fiscal year with respect to the State

22 program operated under part F (as in

23 effect on September 30, 1995), as de24 termined by the Secretary, including

25 additional obligations or reductions in
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1 obligations made after the close of the

2 fiscal year; and

3 ‘‘(ii) in the case of a State to which

4 section 1108 applies, the lesser of—

5 ‘‘(I) the sum described in clause

6 (i); or

7 ‘‘(II) the total amount certified

8 by the Secretary under former section

9 403 (as in effect during the fiscal

10 year) with respect to the territory.

11 ‘‘(D) INFORMATION TO BE USED IN DE12 TERMINING AMOUNTS.—

13 ‘‘(i) FOR FISCAL YEARS 1992 AND

14 1993.—

15 ‘‘(I) In determining the amounts

16 described in subclauses (I) through

17 (IV) of subparagraph (C)(i) for any

18 State for each of fiscal years 1992

19 and 1993, the Secretary shall use in20 formation available as of April 28,

21 1995.

22 ‘‘(II) In determining the amount

23 described in subparagraph (C)(i)(V)

24 for any State for each of fiscal years

25 1992 and 1993, the Secretary shall
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1 use information available as of Janu2 ary 6, 1995.

3 ‘‘(ii) FOR FISCAL YEAR 1994.—In de4 termining the amounts described in sub5 paragraph (C)(i) for any State for fiscal

6 year 1994, the Secretary shall use informa7 tion available as of April 28, 1995.

8 ‘‘(iii) FOR FISCAL YEAR 1995.—

9 ‘‘(I) In determining the amount

10 described in subparagraph (B)(ii)(II)

11 for any State for fiscal year 1995, the

12 Secretary shall use the information

13 which was reported by the States and

14 estimates made by the States with re15 spect to emergency assistance expend16 itures and was available as of August

17 11, 1995.

18 ‘‘(II) In determining the amounts

19 described in subclauses (I) through

20 (III) of subparagraph (C)(i) for any

21 State for fiscal year 1995, the Sec22 retary shall use information available

23 as of October 2, 1995.

24 ‘‘(III) In determining the amount

25 described in subparagraph (C)(i)(IV)
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1 for any State for fiscal year 1995, the

2 Secretary shall use information avail3 able as of February 28, 1996.

4 ‘‘(IV) In determining the amount

5 described in subparagraph (C)(i)(V)

6 for any State for fiscal year 1995, the

7 Secretary shall use information avail8 able as of October 5, 1995.

9 ‘‘(E) APPROPRIATION.—Out of any money

10 in the Treasury of the United States not other11 wise appropriated, there are appropriated for

12 fiscal years 1996, 1997, 1998, 1999, 2000, and

13 2001 such sums as are necessary for grants

14 under this paragraph.

15 ‘‘(2) GRANT TO REWARD STATES THAT REDUCE

16 OUT-OF-WEDLOCK BIRTHS.—

17 ‘‘(A) IN GENERAL.—Each eligible State

18 shall be entitled to receive from the Secretary

19 for fiscal year 1998 or any succeeding fiscal

20 year, a grant in an amount equal to the State

21 family assistance grant multiplied by—

22 ‘‘(i) 5 percent if—

23 ‘‘(I) the illegitimacy ratio of the

24 State for the fiscal year is at least 1

25 percentage point lower than the ille-
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1 gitimacy ratio of the State for fiscal

2 year 1995; and

3 ‘‘(II) the rate of induced preg4 nancy terminations in the State for

5 the fiscal year is less than the rate of

6 induced pregnancy terminations in the

7 State for fiscal year 1995; or

8 ‘‘(ii) 10 percent if—

9 ‘‘(I) the illegitimacy ratio of the

10 State for the fiscal year is at least 2

11 percentage points lower than the ille12 gitimacy ratio of the State for fiscal

13 year 1995; and

14 ‘‘(II) the rate of induced preg15 nancy terminations in the State for

16 the fiscal year is less than the rate of

17 induced pregnancy terminations in the

18 State for fiscal year 1995.

19 ‘‘(B) ILLEGITIMACY RATIO.—As used in

20 this paragraph, the term ‘illegitimacy ratio’

21 means, with respect to a State and a fiscal

22 year—

23 ‘‘(i) the number of out-of-wedlock

24 births that occurred in the State during
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1 the most recent fiscal year for which such

2 information is available; divided by

3 ‘‘(ii) the number of births that oc4 curred in the State during the most recent

5 fiscal year for which such information is

6 available.

7 ‘‘(C) DISREGARD OF CHANGES IN DATA

8 DUE TO CHANGED REPORTING METHODS.—For

9 purposes of subparagraph (A), the Secretary

10 shall disregard—

11 ‘‘(i) any difference between the illegit12 imacy ratio of a State for a fiscal year and

13 the illegitimacy ratio of the State for fiscal

14 year 1995 which is attributable to a

15 change in State methods of reporting data

16 used to calculate the illegitimacy ratio; and

17 ‘‘(ii) any difference between the rate

18 of induced pregnancy terminations in a

19 State for a fiscal year and such rate for

20 fiscal year 1995 which is attributable to a

21 change in State methods of reporting data

22 used to calculate such rate.

23 ‘‘(D) APPROPRIATION.—Out of any money

24 in the Treasury of the United States not other25 wise appropriated, there are appropriated for
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1 fiscal year 1998 and for each succeeding fiscal

2 year such sums as are necessary for grants

3 under this paragraph.

4 ‘‘(3) SUPPLEMENTAL GRANT FOR POPULATION

5 INCREASES IN CERTAIN STATES.—

6 ‘‘(A) IN GENERAL.—Each qualifying State

7 shall, subject to subparagraph (F), be entitled

8 to receive from the Secretary—

9 ‘‘(i) for fiscal year 1997 a grant in an

10 amount equal to 2.5 percent of the total

11 amount required to be paid to the State

12 under former section 403 (as in effect dur13 ing fiscal year 1994) for fiscal year 1994;

14 and

15 ‘‘(ii) for each of fiscal years 1998,

16 1999, and 2000, a grant in an amount

17 equal to the sum of—

18 ‘‘(I) the amount (if any) required

19 to be paid to the State under this

20 paragraph for the immediately preced21 ing fiscal year; and

22 ‘‘(II) 2.5 percent of the sum of—

23 ‘‘(aa) the total amount re24 quired to be paid to the State

25 under former section 403 (as in
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1 effect during fiscal year 1994)

2 for fiscal year 1994; and

3 ‘‘(bb) the amount (if any)

4 required to be paid to the State

5 under this paragraph for the fis6 cal year preceding the fiscal year

7 for which the grant is to be

8 made.

9 ‘‘(B) PRESERVATION OF GRANT WITHOUT

10 INCREASES FOR STATES FAILING TO REMAIN

11 QUALIFYING STATES.—Each State that is not a

12 qualifying State for a fiscal year specified in

13 subparagraph (A)(ii) but was a qualifying State

14 for a prior fiscal year shall, subject to subpara15 graph (F), be entitled to receive from the Sec16 retary for the specified fiscal year, a grant in

17 an amount equal to the amount required to be

18 paid to the State under this paragraph for the

19 most recent fiscal year for which the State was

20 a qualifying State.

21 ‘‘(C) QUALIFYING STATE.—

22 ‘‘(i) IN GENERAL.—For purposes of

23 this paragraph, a State is a qualifying

24 State for a fiscal year if—
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1 ‘‘(I) the level of welfare spending

2 per poor person by the State for the

3 immediately preceding fiscal year is

4 less than the national average level of

5 State welfare spending per poor per6 son for such preceding fiscal year; and

7 ‘‘(II) the population growth rate

8 of the State (as determined by the

9 Bureau of the Census) for the most

10 recent fiscal year for which informa11 tion is available exceeds the average

12 population growth rate for all States

13 (as so determined) for such most re14 cent fiscal year.

15 ‘‘(ii) STATE MUST QUALIFY IN FISCAL

16 YEAR 1997.—Notwithstanding clause (i), a

17 State shall not be a qualifying State for

18 any fiscal year after 1997 by reason of

19 clause (i) if the State is not a qualifying

20 State for fiscal year 1997 by reason of

21 clause (i).

22 ‘‘(iii) CERTAIN STATES DEEMED

23 QUALIFYING STATES.—For purposes of

24 this paragraph, a State is deemed to be a
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1 qualifying State for fiscal years 1997,

2 1998, 1999, and 2000 if—

3 ‘‘(I) the level of welfare spending

4 per poor person by the State for fiscal

5 year 1996 is less than 35 percent of

6 the national average level of State

7 welfare spending per poor person for

8 fiscal year 1996; or

9 ‘‘(II) the population of the State

10 increased by more than 10 percent

11 from April 1, 1990 to July 1, 1994,

12 according to the population estimates

13 in publication CB94–204 of the Bu14 reau of the Census.

15 ‘‘(D) DEFINITIONS.—As used in this para16 graph:

17 ‘‘(i) LEVEL OF WELFARE SPENDING

18 PER POOR PERSON.—The term ‘level of

19 State welfare spending per poor person’

20 means, with respect to a State and a fiscal

21 year—

22 ‘‘(I) the sum of—

23 ‘‘(aa) the total amount re24 quired to be paid to the State

25 under former section 403 (as in
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1 effect during fiscal year 1994)

2 for fiscal year 1994; and

3 ‘‘(bb) the amount (if any)

4 paid to the State under this

5 paragraph for the immediately

6 preceding fiscal year; divided by

7 ‘‘(II) the number of individuals,

8 according to the 1990 decennial cen9 sus, who were residents of the State

10 and whose income was below the pov11 erty line.

12 ‘‘(ii) NATIONAL AVERAGE LEVEL OF

13 STATE WELFARE SPENDING PER POOR

14 PERSON.—The term ‘national average level

15 of State welfare spending per poor person’

16 means, with respect to a fiscal year, an

17 amount equal to—

18 ‘‘(I) the total amount required to

19 be paid to the States under former

20 section 403 (as in effect during fiscal

21 year 1994) for fiscal year 1994; di22 vided by

23 ‘‘(II) the number of individuals,

24 according to the 1990 decennial cen25 sus, who were residents of any State
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1 and whose income was below the pov2 erty line.

3 ‘‘(iii) STATE.—The term ‘State’

4 means each of the 50 States of the United

5 States and the District of Columbia.

6 ‘‘(E) APPROPRIATION.—Out of any money

7 in the Treasury of the United States not other8 wise appropriated, there are appropriated for

9 fiscal years 1997, 1998, 1999, and 2000 such

10 sums as are necessary for grants under this

11 paragraph, in a total amount not to exceed

12 $800,000,000.

13 ‘‘(F) GRANTS REDUCED PRO RATA IF IN14 SUFFICIENT APPROPRIATIONS.—If the amount

15 appropriated pursuant to this paragraph for a

16 fiscal year is less than the total amount of pay17 ments otherwise required to be made under this

18 paragraph for the fiscal year, then the amount

19 otherwise payable to any State for the fiscal

20 year under this paragraph shall be reduced by

21 a percentage equal to the amount so appro22 priated divided by such total amount.

23 ‘‘(G) BUDGET SCORING.—Notwithstanding

24 section 257(b)(2) of the Balanced Budget and

25 Emergency Deficit Control Act of 1985, the
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1 baseline shall assume that no grant shall be

2 made under this paragraph after fiscal year

3 2000.

4 ‘‘(4) BONUS TO REWARD HIGH PERFORMANCE

5 STATES.—

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

7 make a grant pursuant to this paragraph to

8 each State for each bonus year for which the

9 State is a high performing State.

10 ‘‘(B) AMOUNT OF GRANT.—

11 ‘‘(i) IN GENERAL.—Subject to clause

12 (ii) of this subparagraph, the Secretary

13 shall determine the amount of the grant

14 payable under this paragraph to a high

15 performing State for a bonus year, which

16 shall be based on the score assigned to the

17 State under subparagraph (D)(i) for the

18 fiscal year that immediately precedes the

19 bonus year.

20 ‘‘(ii) LIMITATION.—The amount pay21 able to a State under this paragraph for a

22 bonus year shall not exceed 5 percent of

23 the State family assistance grant.

24 ‘‘(C) FORMULA FOR MEASURING STATE

25 PERFORMANCE.—Not later than 1 year after
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1 the date of the enactment of the Personal Re2 sponsibility and Work Opportunity Act of 1996,

3 the Secretary, in consultation with the National

4 Governors’ Association and the American Pub5 lic Welfare Association, shall develop a formula

6 for measuring State performance in operating

7 the State program funded under this part so as

8 to achieve the goals set forth in section 401(a).

9 ‘‘(D) SCORING OF STATE PERFORMANCE;

10 SETTING OF PERFORMANCE THRESHOLDS.—

11 For each bonus year, the Secretary shall—

12 ‘‘(i) use the formula developed under

13 subparagraph (C) to assign a score to each

14 eligible State for the fiscal year that imme15 diately precedes the bonus year; and

16 ‘‘(ii) prescribe a performance thresh17 old in such a manner so as to ensure

18 that—

19 ‘‘(I) the average annual total

20 amount of grants to be made under

21 this paragraph for each bonus year

22 equals $200,000,000; and

23 ‘‘(II) the total amount of grants

24 to be made under this paragraph for
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1 all bonus years equals

2 $1,000,000,000.

3 ‘‘(E) DEFINITIONS.—As used in this para4 graph:

5 ‘‘(i) BONUS YEAR.—The term ‘bonus

6 year’ means fiscal years 1999, 2000, 2001,

7 2002, and 2003.

8 ‘‘(ii) HIGH PERFORMING STATE.—The

9 term ‘high performing State’ means, with

10 respect a bonus year, an eligible State

11 whose score assigned pursuant to subpara12 graph (D)(i) for the fiscal year imme13 diately preceding the bonus year equals or

14 exceeds the performance threshold pre15 scribed under subparagraph (D)(ii) for

16 such preceding fiscal year.

17 ‘‘(F) APPROPRIATION.—Out of any money

18 in the Treasury of the United States not other19 wise appropriated, there are appropriated for

20 fiscal years 1999 through 2003 $1,000,000,000

21 for grants under this paragraph.

22 ‘‘(b) CONTINGENCY FUND.—

23 ‘‘(1) ESTABLISHMENT.—There is hereby estab24 lished in the Treasury of the United States a fund

25 which shall be known as the ‘Contingency Fund for
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1 State Welfare Programs’ (in this section referred to

2 as the ‘Fund’).

3 ‘‘(2) DEPOSITS INTO FUND.—Out of any money

4 in the Treasury of the United States not otherwise

5 appropriated, there are appropriated for fiscal years

6 1997, 1998, 1999, 2000, and 2001 such sums as are

7 necessary for payment to the Fund in a total

8 amount not to exceed $2,000,000,000.

9 ‘‘(3) GRANTS.—

10 ‘‘(A) PROVISIONAL PAYMENTS.—If an eli11 gible State submits to the Secretary a request

12 for funds under this paragraph during an eligi13 ble month, the Secretary shall, subject to this

14 paragraph, pay to the State, from amounts ap15 propriated pursuant to paragraph (2), an

16 amount equal to the amount of funds so re17 quested.

18 ‘‘(B) PAYMENT PRIORITY.—The Secretary

19 shall make payments under subparagraph (A)

20 in the order in which the Secretary receives re21 quests for such payments.

22 ‘‘(C) LIMITATIONS.—

23 ‘‘(i) MONTHLY PAYMENT TO A

24 STATE.—The total amount paid to a single

25 State under subparagraph (A) during a
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month shall not exceed 1 1 ⁄12 of 20 percent

2 of the State family assistance grant.

3 ‘‘(ii) PAYMENTS TO ALL STATES.—

4 The total amount paid to all States under

5 subparagraph (A) during fiscal years 1997

6 through 2001 shall not exceed the total

7 amount appropriated pursuant to para8 graph (2).

9 ‘‘(4) ANNUAL RECONCILIATION.—Notwithstand10 ing paragraph (3), at the end of each fiscal year,

11 each State shall remit to the Secretary an amount

12 equal to the amount (if any) by which the total

13 amount paid to the State under paragraph (3) dur14 ing the fiscal year exceeds—

15 ‘‘(A) the Federal medical assistance per16 centage for the State for the fiscal year (as de17 fined in section 1905(b), as in effect on Sep18 tember 30, 1995) of the amount (if any) by

19 which the expenditures under the State pro20 gram funded under this part for the fiscal year

21 exceed historic State expenditures (as defined in

22 section 409(a)(7)(B)(iii)); multiplied by

‘‘(B) 1 23 ⁄12 times the number of months dur24 ing the fiscal year for which the Secretary
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1 makes a payment to the State under this sub2 section.

3 ‘‘(5) ELIGIBLE MONTH.—As used in paragraph

4 (3)(A), the term ‘eligible month’ means, with respect

5 to a State, a month in the 2-month period that be6 gins with any month for which the State is a needy

7 State.

8 ‘‘(6) NEEDY STATE.—For purposes of para9 graph (5), a State is a needy State for a month if—

10 ‘‘(A) the average rate of—

11 ‘‘(i) total unemployment in such State

12 (seasonally adjusted) for the period con13 sisting of the most recent 3 months for

14 which data for all States are published

15 equals or exceeds 6.5 percent; and

16 ‘‘(ii) total unemployment in such

17 State (seasonally adjusted) for the 3-

18 month period equals or exceeds 110 per19 cent of such average rate for either (or

20 both) of the corresponding 3-month periods

21 ending in the 2 preceding calendar years;

22 or

23 ‘‘(B) as determined by the Secretary of

24 Agriculture (in the discretion of the Secretary

25 of Agriculture), the monthly average number of
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1 individuals (as of the last day of each month)

2 participating in the food stamp program in the

3 State in the then most recently concluded 3-

4 month period for which data are available ex5 ceeds by not less than 10 percent the lesser

6 of—

7 ‘‘(i) the monthly average number of

8 individuals (as of the last day of each

9 month) in the State that would have par10 ticipated in the food stamp program in the

11 corresponding 3-month period in fiscal

12 year 1994 if the amendments made by

13 subtitles D and J of the Personal Respon14 sibility and Work Opportunity Act of 1996

15 had been in effect throughout fiscal year

16 1994; or

17 ‘‘(ii) the monthly average number of

18 individuals (as of the last day of each

19 month) in the State that would have par20 ticipated in the food stamp program in the

21 corresponding 3-month period in fiscal

22 year 1995 if the amendments made by

23 subtitles D and J of the Personal Respon24 sibility and Work Opportunity Act of 1996
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1 had been in effect throughout fiscal year

2 1995.

3 ‘‘(7) OTHER TERMS DEFINED.—As used in this

4 subsection:

5 ‘‘(A) STATE.—The term ‘State’ means

6 each of the 50 States of the United States and

7 the District of Columbia.

8 ‘‘(B) SECRETARY.—The term ‘Secretary’

9 means the Secretary of the Treasury.

10 ‘‘(8) ANNUAL REPORTS.—The Secretary shall

11 annually report to the Congress on the status of the

12 Fund.

13 ‘‘(9) BUDGET SCORING.—Notwithstanding sec14 tion 257(b)(2) of the Balanced Budget and Emer15 gency Deficit Control Act of 1985, the baseline shall

16 assume that no grant shall be made under this sub17 section after fiscal year 2001.

18 ‘‘SEC. 404. USE OF GRANTS.

19 ‘‘(a) GENERAL RULES.—Subject to this part, a State

20 to which a grant is made under section 403 may use the

21 grant—

22 ‘‘(1) in any manner that is reasonably cal23 culated to accomplish the purpose of this part, in24 cluding to provide low income households with as-
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1 sistance in meeting home heating and cooling costs;

2 or

3 ‘‘(2) in any manner that the State was author4 ized to use amounts received under part A or F, as

5 such parts were in effect on September 30, 1995.

6 ‘‘(b) LIMITATION ON USE OF GRANT FOR ADMINIS7 TRATIVE PURPOSES.—

8 ‘‘(1) LIMITATION.—A State to which a grant is

9 made under section 403 shall not expend more than

10 15 percent of the grant for administrative purposes.

11 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

12 apply to the use of a grant for information tech13 nology and computerization needed for tracking or

14 monitoring required by or under this part.

15 ‘‘(c) AUTHORITY TO TREAT INTERSTATE IMMI16 GRANTS UNDER RULES OF FORMER STATE.—A State op17 erating a program funded under this part may apply to

18 a family the rules (including benefit amounts) of the pro19 gram funded under this part of another State if the family

20 has moved to the State from the other State and has re21 sided in the State for less than 12 months.

22 ‘‘(d) AUTHORITY TO USE PORTION OF GRANT FOR

23 OTHER PURPOSES.—

24 ‘‘(1) IN GENERAL.—A State may use not more

25 than 30 percent of the amount of the grant made to
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1 the State under section 403 for a fiscal year to carry

2 out a State program pursuant to any or all of the

3 following provisions of law:

4 ‘‘(A) Part B or E of this title.

5 ‘‘(B) Title XX of this Act.

6 ‘‘(C) The Child Care and Development

7 Block Grant Act of 1990.

8 ‘‘(2) APPLICABLE RULES.—Any amount paid to

9 the State under this part that is used to carry out

10 a State program pursuant to a provision of law spec11 ified or described in paragraph (1) shall not be sub12 ject to the requirements of this part, but shall be

13 subject to the requirements that apply to Federal

14 funds provided directly under the provision of law to

15 carry out the program.

16 ‘‘(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS

17 FOR ASSISTANCE.—A State may reserve amounts paid to

18 the State under this part for any fiscal year for the pur19 pose of providing, without fiscal year limitation, assistance

20 under the State program funded under this part.

21 ‘‘(f) AUTHORITY TO OPERATE EMPLOYMENT PLACE22 MENT PROGRAM.—A State to which a grant is made under

23 section 403 may use the grant to make payments (or pro24 vide job placement vouchers) to State-approved public and

25 private job placement agencies that provide employment
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1 placement services to individuals who receive assistance

2 under the State program funded under this part.

3 ‘‘(g) IMPLEMENTATION OF ELECTRONIC BENEFIT

4 TRANSFER SYSTEM.—A State to which a grant is made

5 under section 403 is encouraged to implement an elec6 tronic benefit transfer system for providing assistance

7 under the State program funded under this part, and may

8 use the grant for such purpose.

9 ‘‘SEC. 405. ADMINISTRATIVE PROVISIONS.

10 ‘‘(a) QUARTERLY.—The Secretary shall pay each

11 grant payable to a State under section 403 in quarterly

12 installments.

13 ‘‘(b) NOTIFICATION.—Not later than 3 months before

14 the payment of any such quarterly installment to a State,

15 the Secretary shall notify the State of the amount of any

16 reduction determined under section 412(a)(1)(B) with re17 spect to the State.

18 ‘‘(c) COMPUTATION AND CERTIFICATION OF PAY19 MENTS TO STATES.—

20 ‘‘(1) COMPUTATION.—The Secretary shall esti21 mate the amount to be paid to each eligible State for

22 each quarter under this part, such estimate to be

23 based on a report filed by the State containing an

24 estimate by the State of the total sum to be ex25 pended by the State in the quarter under the State
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1 program funded under this part and such other in2 formation as the Secretary may find necessary.

3 ‘‘(2) CERTIFICATION.—The Secretary of Health

4 and Human Services shall certify to the Secretary of

5 the Treasury the amount estimated under paragraph

6 (1) with respect to a State, reduced or increased to

7 the extent of any overpayment or underpayment

8 which the Secretary of Health and Human Services

9 determines was made under this part to the State

10 for any prior quarter and with respect to which ad11 justment has not been made under this paragraph.

12 ‘‘(d) PAYMENT METHOD.—Upon receipt of a certifi13 cation under subsection (c)(2) with respect to a State, the

14 Secretary of the Treasury shall, through the Fiscal Service

15 of the Department of the Treasury and before audit or

16 settlement by the General Accounting Office, pay to the

17 State, at the time or times fixed by the Secretary of

18 Health and Human Services, the amount so certified.

19 ‘‘(e) COLLECTION OF STATE OVERPAYMENTS TO

20 FAMILIES FROM FEDERAL TAX REFUNDS.—

21 ‘‘(1) IN GENERAL.—Upon receiving notice from

22 the Secretary of Health and Human Services that a

23 State agency administering a program funded under

24 this part has notified the Secretary that a named

25 individual has been overpaid under the State pro-
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1 gram funded under this part, the Secretary of the

2 Treasury shall determine whether any amounts as

3 refunds of Federal taxes paid are payable to such

4 individual, regardless of whether the individual filed

5 a tax return as a married or unmarried individual.

6 If the Secretary of the Treasury finds that any such

7 amount is so payable, the Secretary shall withhold

8 from such refunds an amount equal to the overpay9 ment sought to be collected by the State and pay

10 such amount to the State agency.

11 ‘‘(2) REGULATIONS.—The Secretary of the

12 Treasury shall issue regulations, after review by the

13 Secretary of Health and Human services, that pro14 vide—

15 ‘‘(A) that a State may only submit under

16 paragraph (1) requests for collection of over17 payments with respect to individuals—

18 ‘‘(i) who are no longer receiving as19 sistance under the State program funded

20 under this part;

21 ‘‘(ii) with respect to whom the State

22 has already taken appropriate action under

23 State law against the income or resources

24 of the individuals or families involved to
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1 collect the past-due legally enforceable

2 debt; and

3 ‘‘(iii) to whom the State agency has

4 given notice of its intent to request with5 holding by the Secretary of the Treasury

6 from the income tax refunds of such indi7 viduals;

8 ‘‘(B) that the Secretary of the Treasury

9 will give a timely and appropriate notice to any

10 other person filing a joint return with the indi11 vidual whose refund is subject to withholding

12 under paragraph (1); and

13 ‘‘(C) the procedures that the State and the

14 Secretary of the Treasury will follow in carrying

15 out this subsection which, to the maximum ex16 tent feasible and consistent with the provisions

17 of this subsection, will be the same as those is18 sued pursuant to section 464(b) applicable to

19 collection of past-due child support.

20 ‘‘SEC. 406. FEDERAL LOANS FOR STATE WELFARE PRO21 GRAMS.

22 ‘‘(a) LOAN AUTHORITY.—

23 ‘‘(1) IN GENERAL.—The Secretary shall make

24 loans to any loan-eligible State, for a period to ma25 turity of not more than 3 years.
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1 ‘‘(2) LOAN-ELIGIBLE STATE.—As used in para2 graph (1), the term ‘loan-eligible State’ means a

3 State against which a penalty has not been imposed

4 under section 409(a)(1).

5 ‘‘(b) RATE OF INTEREST.—The Secretary shall

6 charge and collect interest on any loan made under this

7 section at a rate equal to the current average market yield

8 on outstanding marketable obligations of the United

9 States with remaining periods to maturity comparable to

10 the period to maturity of the loan.

11 ‘‘(c) USE OF LOAN.—A State shall use a loan made

12 to the State under this section only for any purpose for

13 which grant amounts received by the State under section

14 403(a) may be used, including—

15 ‘‘(1) welfare anti-fraud activities; and

16 ‘‘(2) the provision of assistance under the State

17 program to Indian families that have moved from

18 the service area of an Indian tribe with a tribal fam19 ily assistance plan approved under section 412.

20 ‘‘(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO

21 A STATE.—The cumulative dollar amount of all loans

22 made to a State under this section during fiscal years

23 1997 through 2001 shall not exceed 10 percent of the

24 State family assistance grant.
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1 ‘‘(e) LIMITATION ON TOTAL AMOUNT OF OUTSTAND2 ING LOANS.—The total dollar amount of loans outstand3 ing under this section may not exceed $1,700,000,000.

4 ‘‘(f) APPROPRIATION.—Out of any money in the

5 Treasury of the United States not otherwise appropriated,

6 there are appropriated such sums as may be necessary for

7 the cost of loans under this section.

8 ‘‘SEC. 407. MANDATORY WORK REQUIREMENTS.

9 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.—

10 ‘‘(1) ALL FAMILIES.—A State to which a grant

11 is made under section 403 for a fiscal year shall

12 achieve the minimum participation rate specified in

13 the following table for the fiscal year with respect to

14 all families receiving assistance under the State pro15 gram funded under this part:

The minimum

participation

‘‘If the fiscal year is: rate is:

1996 ................................................................... 15

1997 ................................................................... 20

1998 ................................................................... 25

1999 ................................................................... 30

2000 ................................................................... 35

2001 ................................................................... 40

2002 or thereafter ............................................. 50.

16 ‘‘(2) 2-PARENT FAMILIES.—A State to which a

17 grant is made under section 403 for a fiscal year

18 shall achieve the minimum participation rate speci19 fied in the following table for the fiscal year with re20 spect to 2-parent families receiving assistance under

21 the State program funded under this part:
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The minimum

participation

‘‘If the fiscal year is: rate is:

1996 ................................................................... 50

1997 ................................................................... 75

1998 ................................................................... 75

1999 or thereafter ............................................. 90.

1 ‘‘(b) CALCULATION OF PARTICIPATION RATES.—

2 ‘‘(1) ALL FAMILIES.—

3 ‘‘(A) AVERAGE MONTHLY RATE.—For pur4 poses of subsection (a)(1), the participation

5 rate for all families of a State for a fiscal year

6 is the average of the participation rates for all

7 families of the State for each month in the fis8 cal year.

9 ‘‘(B) MONTHLY PARTICIPATION RATES.—

10 The participation rate of a State for all families

11 of the State for a month, expressed as a per12 centage, is—

13 ‘‘(i) the number of families receiving

14 assistance under the State program funded

15 under this part that include an adult who

16 is engaged in work for the month; divided

17 by

18 ‘‘(ii) the amount by which—

19 ‘‘(I) the number of families re20 ceiving such assistance during the

21 month that include an adult receiving

22 such assistance; exceeds
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1 ‘‘(II) the number of families re2 ceiving such assistance that are sub3 ject in such month to a penalty de4 scribed in subsection (e)(1) but have

5 not been subject to such penalty for

6 more than 3 months within the pre7 ceding 12-month period (whether or

8 not consecutive).

9 ‘‘(2) 2-PARENT FAMILIES.—

10 ‘‘(A) AVERAGE MONTHLY RATE.—For pur11 poses of subsection (a)(2), the participation

12 rate for 2-parent families of a State for a fiscal

13 year is the average of the participation rates for

14 2-parent families of the State for each month in

15 the fiscal year.

16 ‘‘(B) MONTHLY PARTICIPATION RATES.—

17 The participation rate of a State for 2-parent

18 families of the State for a month shall be cal19 culated by use of the formula set forth in para20 graph (1)(B), except that in the formula the

21 term ‘number of 2-parent families’ shall be sub22 stituted for the term ‘number of families’ each

23 place such latter term appears.
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1 ‘‘(3) PRO RATA REDUCTION OF PARTICIPATION

2 RATE DUE TO CASELOAD REDUCTIONS NOT RE3 QUIRED BY FEDERAL LAW.—

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

5 prescribe regulations for reducing the minimum

6 participation rate otherwise required by this

7 section for a fiscal year by the number of per8 centage points equal to the number of percent9 age points (if any) by which—

10 ‘‘(i) the average monthly number of

11 families receiving assistance during the fis12 cal year under the State program funded

13 under this part is less than, and

14 ‘‘(ii) the average monthly number of

15 families that received aid under the State

16 plan approved under part A (as in effect

17 on September 30, 1995) during fiscal year

18 1995.

19 The minimum participation rate shall not be re20 duced to the extent that the Secretary deter21 mines that the reduction in the number of fami22 lies receiving such assistance is required by

23 Federal law.

24 ‘‘(B) ELIGIBILITY CHANGES NOT COUNT25 ED.—The regulations described in subpara-
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1 graph (A) shall not take into account families

2 that are diverted from a State program funded

3 under this part as a result of differences in eli4 gibility criteria under a State program funded

5 under this part and eligibility criteria under the

6 State program operated under the State plan

7 approved under part A (as such plan and such

8 part were in effect on September 30, 1995).

9 Such regulations shall place the burden on the

10 Secretary to prove that such families were di11 verted as a direct result of differences in such

12 eligibility criteria.

13 ‘‘(4) STATE OPTION TO INCLUDE INDIVIDUALS

14 RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY

15 ASSISTANCE PLAN.—For purposes of paragraphs

16 (1)(B) and (2)(B), a State may, at its option, in17 clude families receiving assistance under a tribal

18 family assistance plan approved under section 412.

19 ‘‘(5) STATE OPTION FOR PARTICIPATION RE20 QUIREMENT EXEMPTIONS.—For any fiscal year, a

21 State may, at its option, not require an individual

22 who is a single custodial parent caring for a child

23 who has not attained 12 months of age to engage in

24 work and may disregard such an individual in deter25 mining the participation rates under subsection (a).
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1 ‘‘(c) ENGAGED IN WORK.—

2 ‘‘(1) ALL FAMILIES.—For purposes of sub3 section (b)(1)(B)(i), a recipient is engaged in work

4 for a month in a fiscal year if the recipient is par5 ticipating in work activities for at least the minimum

6 average number of hours per week specified in the

7 following table during the month, not fewer than 20

8 hours per week of which are attributable to an activ9 ity described in paragraph (1), (2), (3), (4), (5), (6),

10 (7), or (8) of subsection (d):

The minimum

‘‘If the month is average number of

in fiscal year: hours per week is:

1996 ............................................................... 20

1997 ............................................................... 20

1998 ............................................................... 20

1999 or thereafter ......................................... 25.

11 ‘‘(2) 2-PARENT FAMILIES.—For purposes of

12 subsection (b)(2)(B)(i), an adult is engaged in work

13 for a month in a fiscal year if the adult is making

14 progress in work activities for at least 35 hours per

15 week during the month, not fewer than 30 hours per

16 week of which are attributable to an activity de17 scribed in paragraph (1), (2), (3), (4), (5), (6), (7),

18 or (8) of subsection (d).

19 ‘‘(3) LIMITATION ON NUMBER OF WEEKS FOR

20 WHICH JOB SEARCH COUNTS AS WORK.—Notwith21 standing paragraphs (1) and (2), an individual shall

22 not be considered to be engaged in work by virtue
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1 of participation in an activity described in subsection

2 (d)(6), after the individual has participated in such

3 an activity for 12 weeks in a fiscal year. An individ4 ual shall be considered to be participating in such an

5 activity for a week if the individual participates in

6 such an activity at any time during the week.

7 ‘‘(4) LIMITATION ON VOCATIONAL EDUCATION

8 ACTIVITIES COUNTED AS WORK.—For purposes of

9 determining monthly participation rates under para10 graphs (1)(B)(i) and (2)(B)(i) of subsection (b), not

11 more than 20 percent of adults in all families and

12 in 2-parent families determined to be engaged in

13 work in the State for a month may meet the work

14 activity requirement through participation in voca15 tional educational training.

16 ‘‘(5) SINGLE PARENT WITH CHILD UNDER AGE

17 6 DEEMED TO BE MEETING WORK PARTICIPATION

18 REQUIREMENTS IF PARENT IS ENGAGED IN WORK

19 FOR 20 HOURS PER WEEK.—For purposes of deter20 mining monthly participation rates under subsection

21 (b)(1)(B)(i), a recipient in a 1-parent family who is

22 the parent of a child who has not attained 6 years

23 of age is deemed to be engaged in work for a month

24 if the recipient is engaged in work for an average of

25 at least 20 hours per week during the month.
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1 ‘‘(6) TEEN HEAD OF HOUSEHOLD WHO MAIN2 TAINS SATISFACTORY SCHOOL ATTENDANCE

3 DEEMED TO BE MEETING WORK PARTICIPATION RE4 QUIREMENTS.—For purposes of determining month5 ly participation rates under subsection (b)(1)(B)(i),

6 a recipient who is a single head of household and

7 has not attained 20 years of age is deemed to be en8 gaged in work for a month in a fiscal year if the re9 cipient—

10 ‘‘(A) maintains satisfactory attendance at

11 secondary school or the equivalent during the

12 month; or

13 ‘‘(B) participates in education directly re14 lated to employment for at least the minimum

15 average number of hours per week specified in

16 the table set forth in paragraph (1).

17 ‘‘(d) WORK ACTIVITIES DEFINED.—As used in this

18 section, the term ‘work activities’ means—

19 ‘‘(1) unsubsidized employment;

20 ‘‘(2) subsidized private sector employment;

21 ‘‘(3) subsidized public sector employment;

22 ‘‘(4) work experience (including work associated

23 with the refurbishing of publicly assisted housing) if

24 sufficient private sector employment is not available;

25 ‘‘(5) on-the-job training;
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1 ‘‘(6) job search and job readiness assistance;

2 ‘‘(7) community service programs;

3 ‘‘(8) vocational educational training (not to ex4 ceed 12 months with respect to any individual);

5 ‘‘(9) job skills training directly related to em6 ployment;

7 ‘‘(10) education directly related to employment,

8 in the case of a recipient who has not attained 20

9 years of age, and has not received a high school di10 ploma or a certificate of high school equivalency; and

11 ‘‘(11) satisfactory attendance at secondary

12 school, in the case of a recipient who—

13 ‘‘(A) has not completed secondary school;

14 and

15 ‘‘(B) is a dependent child, or a head of

16 household who has not attained 20 years of age.

17 ‘‘(e) PENALTIES AGAINST INDIVIDUALS.—

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), if an adult in a family receiving assist20 ance under the State program funded under this

21 part refuses to engage in work required in accord22 ance with this section, the State shall—

23 ‘‘(A) reduce the amount of assistance oth24 erwise payable to the family pro rata (or more,

25 at the option of the State) with respect to any
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1 period during a month in which the adult so re2 fuses; or

3 ‘‘(B) terminate such assistance,

4 subject to such good cause and other exceptions as

5 the State may establish.

6 ‘‘(2) EXCEPTION.—Notwithstanding paragraph

7 (1), a State may not reduce or terminate assistance

8 under the State program funded under this part

9 based on a refusal of an adult to work if the adult

10 is a single custodial parent caring for a child who

11 has not attained 6 years of age, and the adult proves

12 that the adult has a demonstrated inability (as de13 termined by the State) to obtain needed child care,

14 for 1 or more of the following reasons:

15 ‘‘(A) Unavailability of appropriate child

16 care within a reasonable distance from the indi17 vidual’s home or work site.

18 ‘‘(B) Unavailability or unsuitability of in19 formal child care by a relative or under other

20 arrangements.

21 ‘‘(C) Unavailability of appropriate and af22 fordable formal child care arrangements.

23 ‘‘(f) NONDISPLACEMENT IN WORK ACTIVITIES.—

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

25 an adult in a family receiving assistance under a
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1 State program funded under this part attributable to

2 funds provided by the Federal Government may fill

3 a vacant employment position in order to engage in

4 a work activity described in subsection (d).

5 ‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No

6 adult in a work activity described in subsection (d)

7 which is funded, in whole or in part, by funds pro8 vided by the Federal Government shall be employed

9 or assigned—

10 ‘‘(A) when any other individual is on layoff

11 from the same or any substantially equivalent

12 job; or

13 ‘‘(B) if the employer has terminated the

14 employment of any regular employee or other15 wise caused an involuntary reduction of its

16 workforce in order to fill the vacancy so created

17 with an adult described in paragraph (1).

18 ‘‘(3) NO PREEMPTION.—Nothing in this sub19 section shall preempt or supersede any provision of

20 State or local law that provides greater protection

21 for employees from displacement.

22 ‘‘(g) SENSE OF THE CONGRESS.—It is the sense of

23 the Congress that in complying with this section, each

24 State that operates a program funded under this part is

25 encouraged to assign the highest priority to requiring
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1 adults in 2-parent families and adults in single-parent

2 families that include older preschool or school-age children

3 to be engaged in work activities.

4 ‘‘(h) SENSE OF THE CONGRESS THAT STATES

5 SHOULD IMPOSE CERTAIN REQUIREMENTS ON NON6 CUSTODIAL, NONSUPPORTING MINOR PARENTS.—It is the

7 sense of the Congress that the States should require non8 custodial, nonsupporting parents who have not attained 18

9 years of age to fulfill community work obligations and at10 tend appropriate parenting or money management classes

11 after school.

12 ‘‘SEC. 408. PROHIBITIONS; REQUIREMENTS.

13 ‘‘(a) IN GENERAL.—

14 ‘‘(1) NO ASSISTANCE FOR FAMILIES WITHOUT A

15 MINOR CHILD.—A State to which a grant is made

16 under section 403 shall not use any part of the

17 grant to provide assistance to a family, unless the

18 family includes—

19 ‘‘(A) a minor child who resides with a cus20 todial parent or other adult caretaker relative of

21 the child; or

22 ‘‘(B) a pregnant individual.

23 ‘‘(2) NO ADDITIONAL CASH ASSISTANCE FOR

24 CHILDREN BORN TO FAMILIES RECEIVING ASSIST25 ANCE.—
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1 ‘‘(A) GENERAL RULE.—A State to which a

2 grant is made under section 403 shall not use

3 any part of the grant to provide cash benefits

4 for a minor child who is born to—

5 ‘‘(i) a recipient of assistance under

6 the program operated under this part; or

7 ‘‘(ii) a person who received such as8 sistance at any time during the 10-month

9 period ending with the birth of the child.

10 ‘‘(B) EXCEPTION FOR CHILDREN BORN

11 INTO FAMILIES WITH NO OTHER CHILDREN.—

12 Subparagraph (A) shall not apply to a minor

13 child who is born into a family that does not in14 clude any other children.

15 ‘‘(C) EXCEPTION FOR VOUCHERS.—Sub16 paragraph (A) shall not apply to vouchers

17 which are provided in lieu of cash benefits and

18 which may be used only to pay for particular

19 goods and services specified by the State as

20 suitable for the care of the child involved.

21 ‘‘(D) EXCEPTION FOR RAPE OR INCEST.—

22 Subparagraph (A) shall not apply with respect

23 to a child who is born as a result of rape or in24 cest.
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1 ‘‘(E) STATE ELECTION TO OPT OUT.—Sub2 paragraph (A) shall not apply to a State if

3 State law specifically exempts the State pro4 gram funded under this part from the applica5 tion of subparagraph (A).

6 ‘‘(F) SUBSTITUTION OF FAMILY CAPS IN

7 EFFECT UNDER WAIVERS.—Subparagraph (A)

8 shall not apply to a State—

9 ‘‘(i) if, as of the date of the enactment

10 of this part, there is in effect a waiver ap11 proved by the Secretary under section

12 1115 which permits the State to deny aid

13 under the State plan approved under part

14 A of this title (as in effect without regard

15 to the amendments made by subtitle A of

16 the Personal Responsibility and Work Op17 portunity Act of 1996) to a family by rea18 son of the birth of a child to a family

19 member otherwise eligible for such aid; and

20 ‘‘(ii) for so long as the State contin21 ues to implement such policy under the

22 State program funded under this part,

23 under rules prescribed by the State.

24 ‘‘(3) REDUCTION OR ELIMINATION OF ASSIST25 ANCE FOR NONCOOPERATION IN ESTABLISHING PA-
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1 TERNITY OR OBTAINING CHILD SUPPORT.—If the

2 agency responsible for administering the State plan

3 approved under part D determines that an individual

4 is not cooperating with the State in establishing pa5 ternity or in establishing, modifying, or enforcing a

6 support order with respect to a child of the individ7 ual, and the individual does not qualify for any good

8 cause or other exception established by the State

9 pursuant to section 454(29), then the State—

10 ‘‘(A) shall deduct from the assistance that

11 would otherwise be provided to the family of the

12 individual under the State program funded

13 under this part the share of such assistance at14 tributable to the individual; and

15 ‘‘(B) may deny the family any assistance

16 under the State program.

17 ‘‘(4) NO ASSISTANCE FOR FAMILIES NOT AS18 SIGNING CERTAIN SUPPORT RIGHTS TO THE

19 STATE.—

20 ‘‘(A) IN GENERAL.—A State to which a

21 grant is made under section 403 shall require,

22 as a condition of providing assistance to a fam23 ily under the State program funded under this

24 part, that a member of the family assign to the

25 State any rights the family member may have
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1 (on behalf of the family member or of any other

2 person for whom the family member has applied

3 for or is receiving such assistance) to support

4 from any other person, not exceeding the total

5 amount of assistance so provided to the family,

6 which accrue (or have accrued) before the date

7 the family leaves the program, which assign8 ment, on and after the date the family leaves

9 the program, shall not apply with respect to any

10 support (other than support collected pursuant

11 to section 464) which accrued before the family

12 received such assistance and which the State

13 has not collected by—

14 ‘‘(i) September 30, 2000, if the as15 signment is executed on or after October 1,

16 1997, and before October 1, 2000; or

17 ‘‘(ii) the date the family leaves the

18 program, if the assignment is executed on

19 or after October 1, 2000.

20 ‘‘(B) LIMITATION.—A State to which a

21 grant is made under section 403 shall not re22 quire, as a condition of providing assistance to

23 any family under the State program funded

24 under this part, that a member of the family

25 assign to the State any rights to support de-
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1 scribed in subparagraph (A) which accrue after

2 the date the family leaves the program.

3 ‘‘(5) NO ASSISTANCE FOR TEENAGE PARENTS

4 WHO DO NOT ATTEND HIGH SCHOOL OR OTHER

5 EQUIVALENT TRAINING PROGRAM.—A State to

6 which a grant is made under section 403 shall not

7 use any part of the grant to provide assistance to an

8 individual who has not attained 18 years of age, is

9 not married, has a minor child at least 12 weeks of

10 age in his or her care, and has not successfully com11 pleted a high-school education (or its equivalent), if

12 the individual does not participate in—

13 ‘‘(A) educational activities directed toward

14 the attainment of a high school diploma or its

15 equivalent; or

16 ‘‘(B) an alternative educational or training

17 program that has been approved by the State.

18 ‘‘(6) NO ASSISTANCE FOR TEENAGE PARENTS

19 NOT LIVING IN ADULT-SUPERVISED SETTINGS.—

20 ‘‘(A) IN GENERAL.—

21 ‘‘(i) REQUIREMENT.—Except as pro22 vided in subparagraph (B), a State to

23 which a grant is made under section 403

24 shall not use any part of the grant to pro25 vide assistance to an individual described
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1 in clause (ii) of this subparagraph if the

2 individual and the minor child referred to

3 in clause (ii)(II) do not reside in a place of

4 residence maintained by a parent, legal

5 guardian, or other adult relative of the in6 dividual as such parent’s, guardian’s, or

7 adult relative’s own home.

8 ‘‘(ii) INDIVIDUAL DESCRIBED.— For

9 purposes of clause (i), an individual de10 scribed in this clause is an individual

11 who—

12 ‘‘(I) has not attained 18 years of

13 age; and

14 ‘‘(II) is not married, and has a

15 minor child in his or her care.

16 ‘‘(B) EXCEPTION.—

17 ‘‘(i) PROVISION OF, OR ASSISTANCE IN

18 LOCATING, ADULT-SUPERVISED LIVING AR19 RANGEMENT.—In the case of an individual

20 who is described in clause (ii), the State

21 agency referred to in section 402(a)(4)

22 shall provide, or assist the individual in lo23 cating, a second chance home, maternity

24 home, or other appropriate adult-super25 vised supportive living arrangement, taking
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1 into consideration the needs and concerns

2 of the individual, unless the State agency

3 determines that the individual’s current

4 living arrangement is appropriate, and

5 thereafter shall require that the individual

6 and the minor child referred to in subpara7 graph (A)(ii)(II) reside in such living ar8 rangement as a condition of the continued

9 receipt of assistance under the State pro10 gram funded under this part attributable

11 to funds provided by the Federal Govern12 ment (or in an alternative appropriate ar13 rangement, should circumstances change

14 and the current arrangement cease to be

15 appropriate).

16 ‘‘(ii) INDIVIDUAL DESCRIBED.—For

17 purposes of clause (i), an individual is de18 scribed in this clause if the individual is

19 described in subparagraph (A)(ii), and—

20 ‘‘(I) the individual has no parent,

21 legal guardian or other appropriate

22 adult relative described in subclause

23 (II) of his or her own who is living or

24 whose whereabouts are known;
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1 ‘‘(II) no living parent, legal

2 guardian, or other appropriate adult

3 relative, who would otherwise meet

4 applicable State criteria to act as the

5 individual’s legal guardian, of such in6 dividual allows the individual to live in

7 the home of such parent, guardian, or

8 relative;

9 ‘‘(III) the State agency deter10 mines that—

11 ‘‘(aa) the individual or the

12 minor child referred to in sub13 paragraph (A)(ii)(II) is being or

14 has been subjected to serious

15 physical or emotional harm, sex16 ual abuse, or exploitation in the

17 residence of the individual’s own

18 parent or legal guardian; or

19 ‘‘(bb) substantial evidence

20 exists of an act or failure to act

21 that presents an imminent or se22 rious harm if the individual and

23 the minor child lived in the same

24 residence with the individual’s

25 own parent or legal guardian; or
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1 ‘‘(IV) the State agency otherwise

2 determines that it is in the best inter3 est of the minor child to waive the re4 quirement of subparagraph (A) with

5 respect to the individual or the minor

6 child.

7 ‘‘(iii) SECOND-CHANCE HOME.—For

8 purposes of this subparagraph, the term

9 ‘second-chance home’ means an entity that

10 provides individuals described in clause (ii)

11 with a supportive and supervised living ar12 rangement in which such individuals are

13 required to learn parenting skills, including

14 child development, family budgeting, health

15 and nutrition, and other skills to promote

16 their long-term economic independence and

17 the well-being of their children.

18 ‘‘(7) NO MEDICAL SERVICES.—

19 ‘‘(A) IN GENERAL.—Except as provided in

20 subparagraph (B), a State to which a grant is

21 made under section 403 shall not use any part

22 of the grant to provide medical services.

23 ‘‘(B) EXCEPTION FOR FAMILY PLANNING

24 SERVICES.—As used in subparagraph (A), the
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1 term ‘medical services’ does not include family

2 planning services.

3 ‘‘(8) NO ASSISTANCE FOR MORE THAN 5

4 YEARS.—

5 ‘‘(A) IN GENERAL.—Except as provided in

6 subparagraphs (B) and (C), a State to which a

7 grant is made under section 403 shall not use

8 any part of the grant to provide assistance to

9 a family that includes an adult who has re10 ceived assistance under any State program

11 funded under this part attributable to funds

12 provided by the Federal Government, for 60

13 months (whether or not consecutive) after the

14 date the State program funded under this part

15 commences.

16 ‘‘(B) MINOR CHILD EXCEPTION.—In deter17 mining the number of months for which an in18 dividual who is a parent or pregnant has re19 ceived assistance under the State program

20 funded under this part, the State shall dis21 regard any month for which such assistance

22 was provided with respect to the individual and

23 during which the individual was—

24 ‘‘(i) a minor child; and
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1 ‘‘(ii) not the head of a household or

2 married to the head of a household.

3 ‘‘(C) HARDSHIP EXCEPTION.—

4 ‘‘(i) IN GENERAL.—The State may ex5 empt a family from the application of sub6 paragraph (A) by reason of hardship or if

7 the family includes an individual who has

8 been battered or subjected to extreme cru9 elty.

10 ‘‘(ii) LIMITATION.—The number of

11 families with respect to which an exemp12 tion made by a State under clause (i) is in

13 effect for a fiscal year shall not exceed 20

14 percent of the average monthly number of

15 families to which assistance is provided

16 under the State program funded under this

17 part.

18 ‘‘(iii) BATTERED OR SUBJECT TO EX19 TREME CRUELTY DEFINED.—For purposes

20 of clause (i), an individual has been bat21 tered or subjected to extreme cruelty if the

22 individual has been subjected to—

23 ‘‘(I) physical acts that resulted

24 in, or threatened to result in, physical

25 injury to the individual;
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1 ‘‘(II) sexual abuse;

2 ‘‘(III) sexual activity involving a

3 dependent child;

4 ‘‘(IV) being forced as the care5 taker relative of a dependent child to

6 engage in nonconsensual sexual acts

7 or activities;

8 ‘‘(V) threats of, or attempts at,

9 physical or sexual abuse;

10 ‘‘(VI) mental abuse; or

11 ‘‘(VII) neglect or deprivation of

12 medical care.

13 ‘‘(D) RULE OF INTERPRETATION.—Sub14 paragraph (A) shall not be interpreted to re15 quire any State to provide assistance to any in16 dividual for any period of time under the State

17 program funded under this part.

18 ‘‘(9) DENIAL OF ASSISTANCE FOR 10 YEARS TO

19 A PERSON FOUND TO HAVE FRAUDULENTLY MIS20 REPRESENTED RESIDENCE IN ORDER TO OBTAIN AS21 SISTANCE IN 2 OR MORE STATES.—A State to which

22 a grant is made under section 403 shall not use any

23 part of the grant to provide cash assistance to an in24 dividual during the 10-year period that begins on

25 the date the individual is convicted in Federal or
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1 State court of having made a fraudulent statement

2 or representation with respect to the place of resi3 dence of the individual in order to receive assistance

4 simultaneously from 2 or more States under pro5 grams that are funded under this title, title XV or

6 XIX, or the Food Stamp Act of 1977, or benefits in

7 2 or more States under the supplemental security in8 come program under title XVI. The preceding sen9 tence shall not apply with respect to a conviction of

10 an individual, for any month beginning after the

11 President of the United States grants a pardon with

12 respect to the conduct which was the subject of the

13 conviction.

14 ‘‘(10) DENIAL OF ASSISTANCE FOR FUGITIVE

15 FELONS AND PROBATION AND PAROLE VIOLA16 TORS.—

17 ‘‘(A) IN GENERAL.—A State to which a

18 grant is made under section 403 shall not use

19 any part of the grant to provide assistance to

20 any individual who is—

21 ‘‘(i) fleeing to avoid prosecution, or

22 custody or confinement after conviction,

23 under the laws of the place from which the

24 individual flees, for a crime, or an attempt

25 to commit a crime, which is a felony under
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1 the laws of the place from which the indi2 vidual flees, or which, in the case of the

3 State of New Jersey, is a high mis4 demeanor under the laws of such State; or

5 ‘‘(ii) violating a condition of probation

6 or parole imposed under Federal or State

7 law.

8 The preceding sentence shall not apply with re9 spect to conduct of an individual, for any month

10 beginning after the President of the United

11 States grants a pardon with respect to the con12 duct.

13 ‘‘(B) EXCHANGE OF INFORMATION WITH

14 LAW ENFORCEMENT AGENCIES.—If a State to

15 which a grant is made under section 403 estab16 lishes safeguards against the use or disclosure

17 of information about applicants or recipients of

18 assistance under the State program funded

19 under this part, the safeguards shall not pre20 vent the State agency administering the pro21 gram from furnishing a Federal, State, or local

22 law enforcement officer, upon the request of the

23 officer, with the current address of any recipi24 ent if the officer furnishes the agency with the
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1 name of the recipient and notifies the agency

2 that—

3 ‘‘(i) the recipient—

4 ‘‘(I) is described in subparagraph

5 (A); or

6 ‘‘(II) has information that is nec7 essary for the officer to conduct the

8 official duties of the officer; and

9 ‘‘(ii) the location or apprehension of

10 the recipient is within such official duties.

11 ‘‘(11) DENIAL OF ASSISTANCE FOR MINOR

12 CHILDREN WHO ARE ABSENT FROM THE HOME FOR

13 A SIGNIFICANT PERIOD.—

14 ‘‘(A) IN GENERAL.—A State to which a

15 grant is made under section 403 shall not use

16 any part of the grant to provide assistance for

17 a minor child who has been, or is expected by

18 a parent (or other caretaker relative) of the

19 child to be, absent from the home for a period

20 of 45 consecutive days or, at the option of the

21 State, such period of not less than 30 and not

22 more than 180 consecutive days as the State

23 may provide for in the State plan submitted

24 pursuant to section 402.
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1 ‘‘(B) STATE AUTHORITY TO ESTABLISH

2 GOOD CAUSE EXCEPTIONS.—The State may es3 tablish such good cause exceptions to subpara4 graph (A) as the State considers appropriate if

5 such exceptions are provided for in the State

6 plan submitted pursuant to section 402.

7 ‘‘(C) DENIAL OF ASSISTANCE FOR REL8 ATIVE WHO FAILS TO NOTIFY STATE AGENCY

9 OF ABSENCE OF CHILD.—A State to which a

10 grant is made under section 403 shall not use

11 any part of the grant to provide assistance for

12 an individual who is a parent (or other care13 taker relative) of a minor child and who fails to

14 notify the agency administering the State pro15 gram funded under this part of the absence of

16 the minor child from the home for the period

17 specified in or provided for pursuant to sub18 paragraph (A), by the end of the 5-day period

19 that begins with the date that it becomes clear

20 to the parent (or relative) that the minor child

21 will be absent for such period so specified or

22 provided for.

23 ‘‘(12) INCOME SECURITY PAYMENTS NOT TO BE

24 DISREGARDED IN DETERMINING THE AMOUNT OF

25 ASSISTANCE TO BE PROVIDED TO A FAMILY.—If a
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1 State to which a grant is made under section 403

2 uses any part of the grant to provide assistance for

3 any individual who is receiving benefits, or on behalf

4 of whom benefits are paid, under a State plan for

5 old-age assistance approved under section 2, under

6 section 202, 205(j)(1), 223, or 228, under a State

7 program funded under part E that provides cash

8 payments for foster care, or under the supplemental

9 security income program under title XVI, then the

10 State may disregard the payment in determining the

11 amount of assistance to be provided under the State

12 program funded under this part, from funds pro13 vided by the Federal Government, to the family of

14 which the individual is a member.

15 ‘‘(13) MEDICAL ASSISTANCE REQUIRED TO BE

16 PROVIDED FOR 1 YEAR FOR FAMILIES BECOMING IN17 ELIGIBLE FOR ASSISTANCE UNDER THIS PART DUE

18 TO INCREASED EARNINGS FROM EMPLOYMENT OR

19 COLLECTION OF CHILD SUPPORT.—A State to which

20 a grant is made under section 403 shall take such

21 action as may be necessary to ensure that, if any

22 family becomes ineligible to receive assistance under

23 the State program funded under this part as a re24 sult of increased earnings from employment or as a

25 result of the collection or increased collection of child
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1 or spousal support, or a combination thereof, having

2 received such assistance in at least 3 of the 6

3 months immediately preceding the month in which

4 such ineligibility begins, the family shall be eligible

5 for medical assistance under the State’s plan ap6 proved under title XIX (or, if applicable, title XV)

7 during the immediately succeeding 12-month period

8 for so long as family income (as defined by the

9 State), excluding any refund of Federal income taxes

10 made by reason of section 32 of the Internal Reve11 nue Code of 1986 (relating to earned income tax

12 credit) and any payment made by an employer under

13 section 3507 of such Code (relating to advance pay14 ment of earned income credit), is less than the pov15 erty line, and that the family will be appropriately

16 notified of such eligibility.

17 ‘‘(14) MEDICAL ASSISTANCE REQUIRED TO BE

18 PROVIDED FOR ALL RECIPIENTS OF ASSISTANCE

19 UNDER THIS PART.—A State to which a grant is

20 made under section 403 shall take such action as

21 may be necessary to ensure that each recipient of as22 sistance under the State program funded under this

23 part is eligible for medical assistance under the

24 State’s plan approved under title XIX (or, if applica25 ble, title XV) to the extent that the health care costs
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1 of the recipient are not covered by other health in2 surance.

3 ‘‘(b) ALIENS.—For special rules relating to the treat4 ment of aliens, see section 4402 of the Personal Respon5 sibility and Work Opportunity Act of 1996.

6 ‘‘SEC. 409. PENALTIES.

7 ‘‘(a) IN GENERAL.—Subject to this section:

8 ‘‘(1) USE OF GRANT IN VIOLATION OF THIS

9 PART.—

10 ‘‘(A) GENERAL PENALTY.—If an audit

11 conducted under chapter 75 of title 31, United

12 States Code, finds that an amount paid to a

13 State under section 403 for a fiscal year has

14 been used in violation of this part, the Sec15 retary shall reduce the grant payable to the

16 State under section 403(a)(1) for the imme17 diately succeeding fiscal year quarter by the

18 amount so used.

19 ‘‘(B) ENHANCED PENALTY FOR INTEN20 TIONAL VIOLATIONS.—If the State does not

21 prove to the satisfaction of the Secretary that

22 the State did not intend to use the amount in

23 violation of this part, the Secretary shall fur24 ther reduce the grant payable to the State

25 under section 403(a)(1) for the immediately
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1 succeeding fiscal year quarter by an amount

2 equal to 5 percent of the State family assist3 ance grant.

4 ‘‘(2) FAILURE TO SUBMIT REQUIRED RE5 PORT.—

6 ‘‘(A) IN GENERAL.—If the Secretary deter7 mines that a State has not, within 1 month

8 after the end of a fiscal quarter, submitted the

9 report required by section 411(a) for the quar10 ter, the Secretary shall reduce the grant pay11 able to the State under section 403(a)(1) for

12 the immediately succeeding fiscal year by an

13 amount equal to 4 percent of the State family

14 assistance grant.

15 ‘‘(B) RESCISSION OF PENALTY.—The Sec16 retary shall rescind a penalty imposed on a

17 State under subparagraph (A) with respect to a

18 report if the State submits the report before the

19 end of the fiscal quarter that immediately suc20 ceeds the fiscal quarter for which the report

21 was required.

22 ‘‘(3) FAILURE TO SATISFY MINIMUM PARTICIPA23 TION RATES.—

24 ‘‘(A) IN GENERAL.—If the Secretary deter25 mines that a State to which a grant is made
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1 under section 403 for a fiscal year has failed to

2 comply with section 407(a) for the fiscal year,

3 the Secretary shall reduce the grant payable to

4 the State under section 403(a)(1) for the imme5 diately succeeding fiscal year by an amount

6 equal to not more than 5 percent of the State

7 family assistance grant.

8 ‘‘(B) PENALTY BASED ON SEVERITY OF

9 FAILURE.—The Secretary shall impose reduc10 tions under subparagraph (A) based on the de11 gree of noncompliance.

12 ‘‘(4) FAILURE TO PARTICIPATE IN THE INCOME

13 AND ELIGIBILITY VERIFICATION SYSTEM.—If the

14 Secretary determines that a State program funded

15 under this part is not participating during a fiscal

16 year in the income and eligibility verification system

17 required by section 1137, the Secretary shall reduce

18 the grant payable to the State under section

19 403(a)(1) for the immediately succeeding fiscal year

20 by an amount equal to not more than 2 percent of

21 the State family assistance grant.

22 ‘‘(5) FAILURE TO COMPLY WITH PATERNITY ES23 TABLISHMENT AND CHILD SUPPORT ENFORCEMENT

24 REQUIREMENTS UNDER PART D.—Notwithstanding

25 any other provision of this Act, if the Secretary de-
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1 termines that the State agency that administers a

2 program funded under this part does not enforce the

3 penalties requested by the agency administering part

4 D against recipients of assistance under the State

5 program who fail to cooperate in establishing pater6 nity or in establishing, modifying, or enforcing a

7 child support order in accordance with such part and

8 who do not qualify for any good cause or other ex9 ception established by the State under section

10 454(29), the Secretary shall reduce the grant pay11 able to the State under section 403(a)(1) for the im12 mediately succeeding fiscal year (without regard to

13 this section) by not more than 5 percent.

14 ‘‘(6) FAILURE TO TIMELY REPAY A FEDERAL

15 LOAN FUND FOR STATE WELFARE PROGRAMS.—If

16 the Secretary determines that a State has failed to

17 repay any amount borrowed from the Federal Loan

18 Fund for State Welfare Programs established under

19 section 406 within the period of maturity applicable

20 to the loan, plus any interest owed on the loan, the

21 Secretary shall reduce the grant payable to the State

22 under section 403(a)(1) for the immediately succeed23 ing fiscal year quarter (without regard to this sec24 tion) by the outstanding loan amount, plus the inter25 est owed on the outstanding amount. The Secretary
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1 shall not forgive any outstanding loan amount or in2 terest owed on the outstanding amount.

3 ‘‘(7) FAILURE OF ANY STATE TO MAINTAIN

4 CERTAIN LEVEL OF HISTORIC EFFORT.—

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

6 reduce the grant payable to the State under

7 section 403(a)(1) for fiscal year 1998, 1999,

8 2000, 2001, or 2002 by the amount (if any) by

9 which qualified State expenditures for the then

10 immediately preceding fiscal year are less than

11 the applicable percentage of historic State ex12 penditures with respect to such preceding fiscal

13 year.

14 ‘‘(B) DEFINITIONS.—As used in this para15 graph:

16 ‘‘(i) QUALIFIED STATE EXPENDI17 TURES.—

18 ‘‘(I) IN GENERAL.—The term

19 ‘qualified State expenditures’ means,

20 with respect to a State and a fiscal

21 year, the total expenditures by the

22 State during the fiscal year, under all

23 State programs, for any of the follow24 ing with respect to eligible families:

25 ‘‘(aa) Cash assistance.
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1 ‘‘(bb) Child care assistance.

2 ‘‘(cc) Educational activities

3 designed to increase self-suffi4 ciency, job training, and work,

5 excluding any expenditure for

6 public education in the State ex7 cept expenditures which involve

8 the provision of services or assist9 ance to a member of an eligible

10 family which is not generally

11 available to persons who are not

12 members of an eligible family.

13 ‘‘(dd) Administrative costs

14 in connection with the matters

15 described in items (aa), (bb),

16 (cc), and (ee), but only to the ex17 tent that such costs do not ex18 ceed 15 percent of the total

19 amount of qualified State ex20 penditures for the fiscal year.

21 ‘‘(ee) Any other use of funds

22 allowable under section

23 404(a)(1).

24 ‘‘(II) EXCLUSION OF TRANSFERS

25 FROM OTHER STATE AND LOCAL PRO-
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1 GRAMS.—Such term does not include

2 expenditures under any State or local

3 program during a fiscal year, except

4 to the extent that—

5 ‘‘(aa) the expenditures ex6 ceed the amount expended under

7 the State or local program in the

8 fiscal year most recently ending

9 before the date of the enactment

10 of this part; or

11 ‘‘(bb) the State is entitled to

12 a payment under former section

13 403 (as in effect immediately be14 fore such date of enactment) with

15 respect to the expenditures.

16 ‘‘(III) ELIGIBLE FAMILIES.—As

17 used in subclause (I), the term ‘eligi18 ble families’ means families eligible

19 for assistance under the State pro20 gram funded under this part, and

21 families that would be eligible for such

22 assistance but for the application of

23 section 408(a)(8) of this Act or sec24 tion 4402 of the Personal Responsibil-
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1 ity and Work Opportunity Act of

2 1996.

3 ‘‘(ii) APPLICABLE PERCENTAGE.—The

4 term ‘applicable percentage’ means for fis5 cal years 1997 through 2001, 75 percent

6 reduced (if appropriate) in accordance with

7 subparagraph (C)(ii).

8 ‘‘(iii) HISTORIC STATE EXPENDI9 TURES.—The term ‘historic State expendi10 tures’ means, with respect to a State, the

11 lesser of—

12 ‘‘(I) the expenditures by the

13 State under parts A and F (as in ef14 fect during fiscal year 1994) for fiscal

15 year 1994; or

16 ‘‘(II) the amount which bears the

17 same ratio to the amount described in

18 subclause (I) as—

19 ‘‘(aa) the State family as20 sistance grant, plus the total

21 amount required to be paid to

22 the State under former section

23 403 for fiscal year 1994 with re24 spect to amounts expended by

25 the State for child care under
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1 subsection (g) or (i) of section

2 402 (as in effect during fiscal

3 year 1994); bears to

4 ‘‘(bb) the total amount re5 quired to be paid to the State

6 under former section 403 (as in

7 effect during fiscal year 1994)

8 for fiscal year 1994.

9 Such term does not include any expendi10 tures under the State plan approved under

11 part A (as so in effect) on behalf of indi12 viduals covered by a tribal family assist13 ance plan approved under section 412, as

14 determined by the Secretary.

15 ‘‘(iv) EXPENDITURES BY THE

16 STATE.—The term ‘expenditures by the

17 State’ does not include—

18 ‘‘(I) any expenditures from

19 amounts made available by the Fed20 eral Government;

21 ‘‘(II) State funds expended for

22 the medicaid program under title XV

23 or XIX; or

24 ‘‘(III) any State funds which are

25 used to match Federal funds or are
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1 expended as a condition of receiving

2 Federal funds under Federal pro3 grams other than under this part.

4 ‘‘(C) APPLICABLE PERCENTAGE REDUCED

5 FOR HIGH PERFORMANCE STATES.—

6 ‘‘(i) DETERMINATION OF HIGH PER7 FORMANCE STATES.—The Secretary shall

8 use the formula developed under section

9 403(a)(4)(C) to assign a score to each eli10 gible State that represents the perform11 ance of the State program funded under

12 this part for each fiscal year, and shall

13 prescribe a performance threshold which

14 the Secretary shall use to determine

15 whether to reduce the applicable percent16 age with respect to any eligible State for a

17 fiscal year.

18 ‘‘(ii) REDUCTION PROPORTIONAL TO

19 PERFORMANCE.—The Secretary shall re20 duce the applicable percentage for a fiscal

21 year with respect to each eligible State by

22 an amount which is directly proportional to

23 the amount (if any) by which the score as24 signed to the State under clause (i) for the

25 immediately preceding fiscal year exceeds
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1 the performance threshold prescribed

2 under clause (i) for such preceding fiscal

3 year, subject to clause (iii).

4 ‘‘(iii) LIMITATION ON REDUCTION.—

5 The applicable percentage for a fiscal year

6 with respect to a State may not be reduced

7 by more than 8 percentage points under

8 this subparagraph.

9 ‘‘(8) SUBSTANTIAL NONCOMPLIANCE OF STATE

10 CHILD SUPPORT ENFORCEMENT PROGRAM WITH RE11 QUIREMENTS OF PART D.—

12 ‘‘(A) IN GENERAL.—If a State program

13 operated under part D is found as a result of

14 a review conducted under section 452(a)(4) not

15 to have complied substantially with the require16 ments of such part for any quarter, and the

17 Secretary determines that the program is not

18 complying substantially with such requirements

19 at the time the finding is made, the Secretary

20 shall reduce the grant payable to the State

21 under section 403(a)(1) for the quarter and

22 each subsequent quarter that ends before the

23 1st quarter throughout which the program is

24 found to be in substantial compliance with such

25 requirements by—
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1 ‘‘(i) not less than 1 nor more than 2

2 percent;

3 ‘‘(ii) not less than 2 nor more than 3

4 percent, if the finding is the second con5 secutive such finding made as a result of

6 such a review; or

7 ‘‘(iii) not less than 3 nor more than 5

8 percent, if the finding is the third or a

9 subsequent consecutive such finding made

10 as a result of such a review.

11 ‘‘(B) DISREGARD OF NONCOMPLIANCE

12 WHICH IS OF A TECHNICAL NATURE.—For pur13 poses of subparagraph (A) and section

14 452(a)(4), a State which is not in full compli15 ance with the requirements of this part shall be

16 determined to be in substantial compliance with

17 such requirements only if the Secretary deter18 mines that any noncompliance with such re19 quirements is of a technical nature which does

20 not adversely affect the performance of the

21 State’s program operated under part D.

22 ‘‘(9) FAILURE OF STATE RECEIVING AMOUNTS

23 FROM CONTINGENCY FUND TO MAINTAIN 100 PER24 CENT OF HISTORIC EFFORT.—If, at the end of any

25 fiscal year during which amounts from the Contin-
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1 gency Fund for State Welfare Programs have been

2 paid to a State, the Secretary finds that the expendi3 tures under the State program funded under this

4 part for the fiscal year are less than 100 percent of

5 historic State expenditures (as defined in paragraph

6 (8)(B)(iii) of this subsection), the Secretary shall re7 duce the grant payable to the State under section

8 403(a)(1) for the immediately succeeding fiscal year

9 by the total of the amounts so paid to the State.

10 ‘‘(10) FAILURE TO EXPEND ADDITIONAL STATE

11 FUNDS TO REPLACE GRANT REDUCTIONS.—If the

12 grant payable to a State under section 403(a)(1) for

13 a fiscal year is reduced by reason of this subsection,

14 the State shall, during the immediately succeeding

15 fiscal year, expend under the State program funded

16 under this part an amount equal to the total amount

17 of such reductions.

18 ‘‘(11) FAILURE TO PROVIDE MEDICAL ASSIST19 ANCE TO FAMILIES BECOMING INELIGIBLE FOR AS20 SISTANCE UNDER THIS PART DUE TO INCREASED

21 EARNINGS FROM EMPLOYMENT OR COLLECTION OF

22 CHILD SUPPORT.—

23 ‘‘(A) IN GENERAL.—If the Secretary deter24 mines that a State program funded under this

25 part is not in compliance with section
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1 408(a)(13) for a quarter, the Secretary shall re2 duce the grant payable to the State under sec3 tion 403(a)(1) for the immediately succeeding

4 fiscal year by an amount equal to not more

5 than 5 percent of the State family assistance

6 grant.

7 ‘‘(B) PENALTY BASED ON SEVERITY OF

8 FAILURE.—The Secretary shall impose reduc9 tions under subparagraph (A) based on the de10 gree of noncompliance.

11 ‘‘(b) REASONABLE CAUSE EXCEPTION.—

12 ‘‘(1) IN GENERAL.—The Secretary may not im13 pose a penalty on a State under subsection (a) with

14 respect to a requirement if the Secretary determines

15 that the State has reasonable cause for failing to

16 comply with the requirement.

17 ‘‘(2) EXCEPTION.—Paragraph (1) of this sub18 section shall not apply to any penalty under para19 graph (7), (8), or (11) of subsection (a).

20 ‘‘(c) CORRECTIVE COMPLIANCE PLAN.—

21 ‘‘(1) IN GENERAL.—

22 ‘‘(A) NOTIFICATION OF VIOLATION.—Be23 fore imposing a penalty against a State under

24 subsection (a) with respect to a violation of this

25 part, the Secretary shall notify the State of the
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1 violation and allow the State the opportunity to

2 enter into a corrective compliance plan in ac3 cordance with this subsection which outlines

4 how the State will correct the violation and how

5 the State will insure continuing compliance with

6 this part.

7 ‘‘(B) 60-DAY PERIOD TO PROPOSE A COR8 RECTIVE COMPLIANCE PLAN.—During the 60-

9 day period that begins on the date the State re10 ceives a notice provided under subparagraph

11 (A) with respect to a violation, the State may

12 submit to the Federal Government a corrective

13 compliance plan to correct the violation.

14 ‘‘(C) CONSULTATION ABOUT MODIFICA15 TIONS.—During the 60-day period that begins

16 with the date the Secretary receives a corrective

17 compliance plan submitted by a State in accord18 ance with subparagraph (B), the Secretary may

19 consult with the State on modifications to the

20 plan.

21 ‘‘(D) ACCEPTANCE OF PLAN.— A correc22 tive compliance plan submitted by a State in ac23 cordance with subparagraph (B) is deemed to

24 be accepted by the Secretary if the Secretary

25 does not accept or reject the plan during 60-day
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1 period that begins on the date the plan is sub2 mitted.

3 ‘‘(2) EFFECT OF CORRECTING VIOLATION.—

4 The Secretary may not impose any penalty under

5 subsection (a) with respect to any violation covered

6 by a State corrective compliance plan accepted by

7 the Secretary if the State corrects the violation pur8 suant to the plan.

9 ‘‘(3) EFFECT OF FAILING TO CORRECT VIOLA10 TION.—The Secretary shall assess some or all of a

11 penalty imposed on a State under subsection (a)

12 with respect to a violation if the State does not, in

13 a timely manner, correct the violation pursuant to a

14 State corrective compliance plan accepted by the

15 Secretary.

16 ‘‘(4) INAPPLICABILITY TO FAILURE TO TIMELY

17 REPAY A FEDERAL LOAN FUND FOR A STATE WEL18 FARE PROGRAM.—This subsection shall not apply to

19 the imposition of a penalty against a State under

20 subsection (a)(6).

21 ‘‘(d) LIMITATION ON AMOUNT OF PENALTY.—

22 ‘‘(1) IN GENERAL.—In imposing the penalties

23 described in subsection (a), the Secretary shall not

24 reduce any quarterly payment to a State by more

25 than 25 percent.
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1 ‘‘(2) CARRYFORWARD OF UNRECOVERED PEN2 ALTIES.—To the extent that paragraph (1) of this

3 subsection prevents the Secretary from recovering

4 during a fiscal year the full amount of penalties im5 posed on a State under subsection (a) of this section

6 for a prior fiscal year, the Secretary shall apply any

7 remaining amount of such penalties to the grant

8 payable to the State under section 403(a)(1) for the

9 immediately succeeding fiscal year.

10 ‘‘SEC. 410. APPEAL OF ADVERSE DECISION.

11 ‘‘(a) IN GENERAL.—Within 5 days after the date the

12 Secretary takes any adverse action under this part with

13 respect to a State, the Secretary shall notify the chief ex14 ecutive officer of the State of the adverse action, including

15 any action with respect to the State plan submitted under

16 section 402 or the imposition of a penalty under section

17 409.

18 ‘‘(b) ADMINISTRATIVE REVIEW.—

19 ‘‘(1) IN GENERAL.—Within 60 days after the

20 date a State receives notice under subsection (a) of

21 an adverse action, the State may appeal the action,

22 in whole or in part, to the Departmental Appeals

23 Board established in the Department of Health and

24 Human Services (in this section referred to as the

25 ‘Board’) by filing an appeal with the Board.
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1 ‘‘(2) PROCEDURAL RULES.—The Board shall

2 consider an appeal filed by a State under paragraph

3 (1) on the basis of such documentation as the State

4 may submit and as the Board may require to sup5 port the final decision of the Board. In deciding

6 whether to uphold an adverse action or any portion

7 of such an action, the Board shall conduct a thor8 ough review of the issues and take into account all

9 relevant evidence. The Board shall make a final de10 termination with respect to an appeal filed under

11 paragraph (1) not less than 60 days after the date

12 the appeal is filed.

13 ‘‘(c) JUDICIAL REVIEW OF ADVERSE DECISION.—

14 ‘‘(1) IN GENERAL.—Within 90 days after the

15 date of a final decision by the Board under this sec16 tion with respect to an adverse action taken against

17 a State, the State may obtain judicial review of the

18 final decision (and the findings incorporated into the

19 final decision) by filing an action in—

20 ‘‘(A) the district court of the United States

21 for the judicial district in which the principal or

22 headquarters office of the State agency is lo23 cated; or

24 ‘‘(B) the United States District Court for

25 the District of Columbia.
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1 ‘‘(2) PROCEDURAL RULES.—The district court

2 in which an action is filed under paragraph (1) shall

3 review the final decision of the Board on the record

4 established in the administrative proceeding, in ac5 cordance with the standards of review prescribed by

6 subparagraphs (A) through (E) of section 706(2) of

7 title 5, United States Code. The review shall be on

8 the basis of the documents and supporting data sub9 mitted to the Board.

10 ‘‘SEC. 411. DATA COLLECTION AND REPORTING.

11 ‘‘(a) QUARTERLY REPORTS BY STATES.—

12 ‘‘(1) GENERAL REPORTING REQUIREMENT.—

13 ‘‘(A) CONTENTS OF REPORT.—Each eligi14 ble State shall collect on a monthly basis, and

15 report to the Secretary on a quarterly basis, the

16 following disaggregated case record information

17 on the families receiving assistance under the

18 State program funded under this part:

19 ‘‘(i) The county of residence of the

20 family.

21 ‘‘(ii) Whether a child receiving such

22 assistance or an adult in the family is dis23 abled.

24 ‘‘(iii) The ages of the members of

25 such families.
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1 ‘‘(iv) The number of individuals in the

2 family, and the relation of each family

3 member to the youngest child in the fam4 ily.

5 ‘‘(v) The employment status and earn6 ings of the employed adult in the family.

7 ‘‘(vi) The marital status of the adults

8 in the family, including whether such

9 adults have never married, are widowed, or

10 are divorced.

11 ‘‘(vii) The race and educational status

12 of each adult in the family.

13 ‘‘(viii) The race and educational sta14 tus of each child in the family.

15 ‘‘(ix) Whether the family received sub16 sidized housing, medical assistance under

17 the State plan under title XV or the State

18 plan approved under title XIX, food

19 stamps, or subsidized child care, and if the

20 latter 2, the amount received.

21 ‘‘(x) The number of months that the

22 family has received each type of assistance

23 under the program.
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1 ‘‘(xi) If the adults participated in, and

2 the number of hours per week of participa3 tion in, the following activities:

4 ‘‘(I) Education.

5 ‘‘(II) Subsidized private sector

6 employment.

7 ‘‘(III) Unsubsidized employment.

8 ‘‘(IV) Public sector employment,

9 work experience, or community serv10 ice.

11 ‘‘(V) Job search.

12 ‘‘(VI) Job skills training or on13 the-job training.

14 ‘‘(VII) Vocational education.

15 ‘‘(xii) Information necessary to cal16 culate participation rates under section

17 407.

18 ‘‘(xiii) The type and amount of assist19 ance received under the program, including

20 the amount of and reason for any reduc21 tion of assistance (including sanctions).

22 ‘‘(xiv) Any amount of unearned in23 come received by any member of the fam24 ily.
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1 ‘‘(xv) The citizenship of the members

2 of the family.

3 ‘‘(xvi) From a sample of closed cases,

4 whether the family left the program, and if

5 so, whether the family left due to—

6 ‘‘(I) employment;

7 ‘‘(II) marriage;

8 ‘‘(III) the prohibition set forth in

9 section 408(a)(8);

10 ‘‘(IV) sanction; or

11 ‘‘(V) State policy.

12 ‘‘(B) USE OF ESTIMATES.—

13 ‘‘(i) AUTHORITY.—A State may com14 ply with subparagraph (A) by submitting

15 an estimate which is obtained through the

16 use of scientifically acceptable sampling

17 methods approved by the Secretary.

18 ‘‘(ii) SAMPLING AND OTHER METH19 ODS.—The Secretary shall provide the

20 States with such case sampling plans and

21 data collection procedures as the Secretary

22 deems necessary to produce statistically

23 valid estimates of the performance of State

24 programs funded under this part. The Sec25 retary may develop and implement proce-
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1 dures for verifying the quality of data sub2 mitted by the States.

3 ‘‘(2) REPORT ON USE OF FEDERAL FUNDS TO

4 COVER ADMINISTRATIVE COSTS AND OVERHEAD.—

5 The report required by paragraph (1) for a fiscal

6 quarter shall include a statement of the percentage

7 of the funds paid to the State under this part for

8 the quarter that are used to cover administrative

9 costs or overhead.

10 ‘‘(3) REPORT ON STATE EXPENDITURES ON

11 PROGRAMS FOR NEEDY FAMILIES.—The report re12 quired by paragraph (1) for a fiscal quarter shall in13 clude a statement of the total amount expended by

14 the State during the quarter on programs for needy

15 families.

16 ‘‘(4) REPORT ON NONCUSTODIAL PARENTS PAR17 TICIPATING IN WORK ACTIVITIES.—The report re18 quired by paragraph (1) for a fiscal quarter shall in19 clude the number of noncustodial parents in the

20 State who participated in work activities (as defined

21 in section 407(d)) during the quarter.

22 ‘‘(5) REPORT ON TRANSITIONAL SERVICES.—

23 The report required by paragraph (1) for a fiscal

24 quarter shall include the total amount expended by

25 the State during the quarter to provide transitional
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1 services to a family that has ceased to receive assist2 ance under this part because of employment, along

3 with a description of such services.

4 ‘‘(6) REGULATIONS.—The Secretary shall pre5 scribe such regulations as may be necessary to de6 fine the data elements with respect to which reports

7 are required by this subsection.

8 ‘‘(b) ANNUAL REPORTS TO THE CONGRESS BY THE

9 SECRETARY.—Not later than 6 months after the end of

10 fiscal year 1997, and each fiscal year thereafter, the Sec11 retary shall transmit to the Congress a report describ12 ing—

13 ‘‘(1) whether the States are meeting—

14 ‘‘(A) the participation rates described in

15 section 407(a); and

16 ‘‘(B) the objectives of—

17 ‘‘(i) increasing employment and earn18 ings of needy families, and child support

19 collections; and

20 ‘‘(ii) decreasing out-of-wedlock preg21 nancies and child poverty;

22 ‘‘(2) the demographic and financial characteris23 tics of families applying for assistance, families re24 ceiving assistance, and families that become ineli25 gible to receive assistance;
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1 ‘‘(3) the characteristics of each State program

2 funded under this part; and

3 ‘‘(4) the trends in employment and earnings of

4 needy families with minor children living at home.

5 ‘‘SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY IN6 DIAN TRIBES.

7 ‘‘(a) GRANTS FOR INDIAN TRIBES.—

8 ‘‘(1) TRIBAL FAMILY ASSISTANCE GRANT.—

9 ‘‘(A) IN GENERAL.—For each of fiscal

10 years 1997, 1998, 1999, and 2000, the Sec11 retary shall pay to each Indian tribe that has

12 an approved tribal family assistance plan a trib13 al family assistance grant for the fiscal year in

14 an amount equal to the amount determined

15 under subparagraph (B), and shall reduce the

16 grant payable under section 403(a)(1) to any

17 State in which lies the service area or areas of

18 the Indian tribe by that portion of the amount

19 so determined that is attributable to expendi20 tures by the State.

21 ‘‘(B) AMOUNT DETERMINED.—

22 ‘‘(i) IN GENERAL.—The amount de23 termined under this subparagraph is an

24 amount equal to the total amount of the

25 Federal payments to a State or States
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1 under section 403 (as in effect during such

2 fiscal year) for fiscal year 1994 attrib3 utable to expenditures (other than child

4 care expenditures) by the State or States

5 under parts A and F (as so in effect) for

6 fiscal year 1994 for Indian families resid7 ing in the service area or areas identified

8 by the Indian tribe pursuant to subsection

9 (b)(1)(C) of this section.

10 ‘‘(ii) USE OF STATE SUBMITTED

11 DATA.—

12 ‘‘(I) IN GENERAL.—The Sec13 retary shall use State submitted data

14 to make each determination under

15 clause (i).

16 ‘‘(II) DISAGREEMENT WITH DE17 TERMINATION.—If an Indian tribe or

18 tribal organization disagrees with

19 State submitted data described under

20 subclause (I), the Indian tribe or trib21 al organization may submit to the

22 Secretary such additional information

23 as may be relevant to making the de24 termination under clause (i) and the

25 Secretary may consider such informa-
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1 tion before making such determina2 tion.

3 ‘‘(2) GRANTS FOR INDIAN TRIBES THAT RE4 CEIVED JOBS FUNDS.—

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

6 pay to each eligible Indian tribe for each of fis7 cal years 1996, 1997, 1998, 1999, 2000, and

8 2001 a grant in an amount equal to the amount

9 received by the Indian tribe in fiscal year 1994

10 under section 482(i) (as in effect during fiscal

11 year 1994).

12 ‘‘(B) ELIGIBLE INDIAN TRIBE.—For pur13 poses of subparagraph (A), the term ‘eligible

14 Indian tribe’ means an Indian tribe or Alaska

15 Native organization that conducted a job oppor16 tunities and basic skills training program in fis17 cal year 1995 under section 482(i) (as in effect

18 during fiscal year 1995).

19 ‘‘(C) USE OF GRANT.—Each Indian tribe

20 to which a grant is made under this paragraph

21 shall use the grant for the purpose of operating

22 a program to make work activities available to

23 members of the Indian tribe.

24 ‘‘(D) APPROPRIATION.—Out of any money

25 in the Treasury of the United States not other-
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1 wise appropriated, there are appropriated

2 $7,638,474 for each fiscal year specified in sub3 paragraph (A) for grants under subparagraph

4 (A).

5 ‘‘(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.—

6 ‘‘(1) IN GENERAL.—Any Indian tribe that de7 sires to receive a tribal family assistance grant shall

8 submit to the Secretary a 3-year tribal family assist9 ance plan that—

10 ‘‘(A) outlines the Indian tribe’s approach

11 to providing welfare-related services for the 3-

12 year period, consistent with this section;

13 ‘‘(B) specifies whether the welfare-related

14 services provided under the plan will be pro15 vided by the Indian tribe or through agree16 ments, contracts, or compacts with intertribal

17 consortia, States, or other entities;

18 ‘‘(C) identifies the population and service

19 area or areas to be served by such plan;

20 ‘‘(D) provides that a family receiving as21 sistance under the plan may not receive duplica22 tive assistance from other State or tribal pro23 grams funded under this part;

24 ‘‘(E) identifies the employment opportuni25 ties in or near the service area or areas of the
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•HR 3734 RH

1 Indian tribe and the manner in which the In2 dian tribe will cooperate and participate in en3 hancing such opportunities for recipients of as4 sistance under the plan consistent with any ap5 plicable State standards; and

6 ‘‘(F) applies the fiscal accountability provi7 sions of section 5(f)(1) of the Indian Self-De8 termination and Education Assistance Act (25

9 U.S.C. 450c(f)(1)), relating to the submission

10 of a single-agency audit report required by

11 chapter 75 of title 31, United States Code.

12 ‘‘(2) APPROVAL.—The Secretary shall approve

13 each tribal family assistance plan submitted in ac14 cordance with paragraph (1).

15 ‘‘(3) CONSORTIUM OF TRIBES.—Nothing in this

16 section shall preclude the development and submis17 sion of a single tribal family assistance plan by the

18 participating Indian tribes of an intertribal consor19 tium.

20 ‘‘(c) MINIMUM WORK PARTICIPATION REQUIRE21 MENTS AND TIME LIMITS.—The Secretary, with the par22 ticipation of Indian tribes, shall establish for each Indian

23 tribe receiving a grant under this section minimum work

24 participation requirements, appropriate time limits for re-
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1 ceipt of welfare-related services under the grant, and pen2 alties against individuals—

3 ‘‘(1) consistent with the purposes of this sec4 tion;

5 ‘‘(2) consistent with the economic conditions

6 and resources available to each tribe; and

7 ‘‘(3) similar to comparable provisions in section

8 407(d).

9 ‘‘(d) EMERGENCY ASSISTANCE.—Nothing in this sec10 tion shall preclude an Indian tribe from seeking emergency

11 assistance from any Federal loan program or emergency

12 fund.

13 ‘‘(e) ACCOUNTABILITY.—Nothing in this section shall

14 be construed to limit the ability of the Secretary to main15 tain program funding accountability consistent with—

16 ‘‘(1) generally accepted accounting principles;

17 and

18 ‘‘(2) the requirements of the Indian Self-Deter19 mination and Education Assistance Act (25 U.S.C.

20 450 et seq.).

21 ‘‘(f) PENALTIES.—

22 ‘‘(1) Subsections (a)(1), (a)(6), and (b) of sec23 tion 409, shall apply to an Indian tribe with an ap24 proved tribal assistance plan in the same manner as

25 such subsections apply to a State.
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1 ‘‘(2) Section 409(a)(3) shall apply to an Indian

2 tribe with an approved tribal assistance plan by sub3 stituting ‘meet minimum work participation require4 ments established under section 412(c)’ for ‘comply

5 with section 407(a)’.

6 ‘‘(g) DATA COLLECTION AND REPORTING.—Section

7 411 shall apply to an Indian tribe with an approved tribal

8 family assistance plan.

9 ‘‘(h) SPECIAL RULE FOR INDIAN TRIBES IN ALAS10 KA.—

11 ‘‘(1) IN GENERAL.—Notwithstanding any other

12 provision of this section, and except as provided in

13 paragraph (2), an Indian tribe in the State of Alas14 ka that receives a tribal family assistance grant

15 under this section shall use the grant to operate a

16 program in accordance with requirements com17 parable to the requirements applicable to the pro18 gram of the State of Alaska funded under this part.

19 Comparability of programs shall be established on

20 the basis of program criteria developed by the Sec21 retary in consultation with the State of Alaska and

22 such Indian tribes.

23 ‘‘(2) WAIVER.—An Indian tribe described in

24 paragraph (1) may apply to the appropriate State
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1 authority to receive a waiver of the requirement of

2 paragraph (1).

3 ‘‘SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUD4 IES.

5 ‘‘(a) RESEARCH.—The Secretary shall conduct re6 search on the benefits, effects, and costs of operating dif7 ferent State programs funded under this part, including

8 time limits relating to eligibility for assistance. The re9 search shall include studies on the effects of different pro10 grams and the operation of such programs on welfare de11 pendency, illegitimacy, teen pregnancy, employment rates,

12 child well-being, and any other area the Secretary deems

13 appropriate. The Secretary shall also conduct research on

14 the costs and benefits of State activities under section

15 409.

16 ‘‘(b) DEVELOPMENT AND EVALUATION OF INNOVA17 TIVE APPROACHES TO REDUCING WELFARE DEPEND18 ENCY AND INCREASING CHILD WELL-BEING.—

19 ‘‘(1) IN GENERAL.—The Secretary may assist

20 States in developing, and shall evaluate, innovative

21 approaches for reducing welfare dependency and in22 creasing the well-being of minor children living at

23 home with respect to recipients of assistance under

24 programs funded under this part. The Secretary

25 may provide funds for training and technical assist-
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1 ance to carry out the approaches developed pursuant

2 to this paragraph.

3 ‘‘(2) EVALUATIONS.—In performing the evalua4 tions under paragraph (1), the Secretary shall, to

5 the maximum extent feasible, use random assign6 ment as an evaluation methodology.

7 ‘‘(c) DISSEMINATION OF INFORMATION.—The Sec8 retary shall develop innovative methods of disseminating

9 information on any research, evaluations, and studies con10 ducted under this section, including the facilitation of the

11 sharing of information and best practices among States

12 and localities through the use of computers and other

13 technologies.

14 ‘‘(d) ANNUAL RANKING OF STATES AND REVIEW OF

15 MOST AND LEAST SUCCESSFUL WORK PROGRAMS.—

16 ‘‘(1) ANNUAL RANKING OF STATES.—The Sec17 retary shall rank annually the States to which

18 grants are paid under section 403 in the order of

19 their success in placing recipients of assistance

20 under the State program funded under this part into

21 long-term private sector jobs, reducing the overall

22 welfare caseload, and, when a practicable method for

23 calculating this information becomes available, di24 verting individuals from formally applying to the

25 State program and receiving assistance. In ranking
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1 States under this subsection, the Secretary shall

2 take into account the average number of minor chil3 dren living at home in families in the State that

4 have incomes below the poverty line and the amount

5 of funding provided each State for such families.

6 ‘‘(2) ANNUAL REVIEW OF MOST AND LEAST

7 SUCCESSFUL WORK PROGRAMS.—The Secretary shall

8 review the programs of the 3 States most recently

9 ranked highest under paragraph (1) and the 3

10 States most recently ranked lowest under paragraph

11 (1) that provide parents with work experience, as12 sistance in finding employment, and other work

13 preparation activities and support services to enable

14 the families of such parents to leave the program

15 and become self-sufficient.

16 ‘‘(e) ANNUAL RANKING OF STATES AND REVIEW OF

17 ISSUES RELATING TO OUT-OF-WEDLOCK BIRTHS.—

18 ‘‘(1) ANNUAL RANKING OF STATES.—

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

20 annually rank States to which grants are made

21 under section 403 based on the following rank22 ing factors:

23 ‘‘(i) ABSOLUTE OUT-OF-WEDLOCK RA24 TIOS.—The ratio represented by—
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1 ‘‘(I) the total number of out-of2 wedlock births in families receiving as3 sistance under the State program

4 under this part in the State for the

5 most recent fiscal year for which in6 formation is available; over

7 ‘‘(II) the total number of births

8 in families receiving assistance under

9 the State program under this part in

10 the State for such year.

11 ‘‘(ii) NET CHANGES IN THE OUT-OF12 WEDLOCK RATIO.—The difference between

13 the ratio described in subparagraph (A)(i)

14 with respect to a State for the most recent

15 fiscal year for which such information is

16 available and the ratio with respect to the

17 State for the immediately preceding year.

18 ‘‘(2) ANNUAL REVIEW.—The Secretary shall re19 view the programs of the 5 States most recently

20 ranked highest under paragraph (1) and the 5

21 States most recently ranked the lowest under para22 graph (1).

23 ‘‘(f) STATE-INITIATED EVALUATIONS.—A State shall

24 be eligible to receive funding to evaluate the State pro25 gram funded under this part if—
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1 ‘‘(1) the State submits a proposal to the Sec2 retary for the evaluation;

3 ‘‘(2) the Secretary determines that the design

4 and approach of the evaluation is rigorous and is

5 likely to yield information that is credible and will

6 be useful to other States, and

7 ‘‘(3) unless otherwise waived by the Secretary,

8 the State contributes to the cost of the evaluation,

9 from non-Federal sources, an amount equal to at

10 least 10 percent of the cost of the evaluation.

11 ‘‘(g) REPORT ON CIRCUMSTANCES OF CERTAIN

12 CHILDREN AND FAMILIES.—

13 ‘‘(1) IN GENERAL.—Beginning 3 years after the

14 date of the enactment of this Act, the Secretary of

15 Health and Human Services shall prepare and sub16 mit to the Committees on Ways and Means and on

17 Economic and Educational Opportunities of the

18 House of Representatives and to the Committees on

19 Finance and on Labor and Resources of the Senate

20 annual reports that examine in detail the matters

21 described in paragraph (2) with respect to each of

22 the following groups for the period after such enact23 ment:

24 ‘‘(A) Individuals who were children in fam25 ilies that have become ineligible for assistance
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1 under a State program funded under this part

2 by reason of having reached a time limit on the

3 provision of such assistance.

4 ‘‘(B) Families that include a child who is

5 ineligible for assistance under a State program

6 funded under this part by reason of section

7 408(a)(2).

8 ‘‘(C) Children born after such date of en9 actment to parents who, at the time of such

10 birth, had not attained 20 years of age.

11 ‘‘(D) Individuals who, after such date of

12 enactment, became parents before attaining 20

13 years of age.

14 ‘‘(2) MATTERS DESCRIBED.—The matters de15 scribed in this paragraph are the following:

16 ‘‘(A) The percentage of each group that

17 has dropped out of secondary school (or the

18 equivalent), and the percentage of each group

19 at each level of educational attainment.

20 ‘‘(B) The percentage of each group that is

21 employed.

22 ‘‘(C) The percentage of each group that

23 has been convicted of a crime or has been adju24 dicated as a delinquent.
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1 ‘‘(D) The rate at which the members of

2 each group are born, or have children, out-of3 wedlock, and the percentage of each group that

4 is married.

5 ‘‘(E) The percentage of each group that

6 continues to participate in State programs

7 funded under this part.

8 ‘‘(F) The percentage of each group that

9 has health insurance provided by a private en10 tity (broken down by whether the insurance is

11 provided through an employer or otherwise), the

12 percentage that has health insurance provided

13 by an agency of government, and the percent14 age that does not have health insurance.

15 ‘‘(G) The average income of the families of

16 the members of each group.

17 ‘‘(H) Such other matters as the Secretary

18 deems appropriate.

19 ‘‘(h) FUNDING OF STUDIES AND DEMONSTRA20 TIONS.—

21 ‘‘(1) IN GENERAL.—Out of any money in the

22 Treasury of the United States not otherwise appro23 priated, there are appropriated $15,000,000 for each

24 fiscal year specified in section 403(a)(1) for the pur25 pose of paying—
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1 ‘‘(A) the cost of conducting the research

2 described in subsection (a);

3 ‘‘(B) the cost of developing and evaluating

4 innovative approaches for reducing welfare de5 pendency and increasing the well-being of minor

6 children under subsection (b);

7 ‘‘(C) the Federal share of any State-initi8 ated study approved under subsection (f); and

9 ‘‘(D) an amount determined by the Sec10 retary to be necessary to operate and evaluate

11 demonstration projects, relating to this part,

12 that are in effect or approved under section

13 1115 as of September 30, 1995, and are contin14 ued after such date.

15 ‘‘(2) ALLOCATION.—Of the amount appro16 priated under paragraph (1) for a fiscal year—

17 ‘‘(A) 50 percent shall be allocated for the

18 purposes described in subparagraphs (A) and

19 (B) of paragraph (1), and

20 ‘‘(B) 50 percent shall be allocated for the

21 purposes described in subparagraphs (C) and

22 (D) of paragraph (1).

23 ‘‘(3) DEMONSTRATIONS OF INNOVATIVE STRAT24 EGIES.—The Secretary may implement and evaluate
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1 demonstrations of innovative and promising strate2 gies which—

3 ‘‘(A) provide one-time capital funds to es4 tablish, expand, or replicate programs;

5 ‘‘(B) test performance-based grant-to-loan

6 financing in which programs meeting perform7 ance targets receive grants while programs not

8 meeting such targets repay funding on a pro9 rated basis; and

10 ‘‘(C) test strategies in multiple States and

11 types of communities.

12 ‘‘SEC. 414. STUDY BY THE CENSUS BUREAU.

13 ‘‘(a) IN GENERAL.—The Bureau of the Census shall

14 expand the Survey of Income and Program Participation

15 as necessary to obtain such information as will enable in16 terested persons to evaluate the impact of the amendments

17 made by subtitle A of the Personal Responsibility and

18 Work Opportunity Act of 1996 on a random national sam19 ple of recipients of assistance under State programs fund20 ed under this part and (as appropriate) other low income

21 families, and in doing so, shall pay particular attention

22 to the issues of out-of-wedlock birth, welfare dependency,

23 the beginning and end of welfare spells, and the causes

24 of repeat welfare spells.
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1 ‘‘(b) APPROPRIATION.—Out of any money in the

2 Treasury of the United States not otherwise appropriated,

3 there are appropriated $10,000,000 for each of fiscal

4 years 1996, 1997, 1998, 1999, 2000, 2001, and 2002 for

5 payment to the Bureau of the Census to carry out sub6 section (a).

7 ‘‘SEC. 415. WAIVERS.

8 ‘‘(a) CONTINUATION OF WAIVERS.—

9 ‘‘(1) WAIVERS IN EFFECT ON DATE OF ENACT10 MENT OF WELFARE REFORM.—Except as provided

11 in paragraph (3), if any waiver granted to a State

12 under section 1115 or otherwise which relates to the

13 provision of assistance under a State plan under this

14 part (as in effect on September 30, 1995) is in ef15 fect as of the date of the enactment of the Personal

16 Responsibility and Work Opportunity Act of 1996,

17 the amendments made by such Act (other than by

18 section 4103(d) of such Act) shall not apply with re19 spect to the State before the expiration (determined

20 without regard to any extensions) of the waiver to

21 the extent such amendments are inconsistent with

22 the waiver.

23 ‘‘(2) WAIVERS GRANTED SUBSEQUENTLY.—Ex24 cept as provided in paragraph (3), if any waiver

25 granted to a State under section 1115 or otherwise
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1 which relates to the provision of assistance under a

2 State plan under this part (as in effect on Septem3 ber 30, 1995) is submitted to the Secretary before

4 the date of the enactment of the Personal Respon5 sibility and Work Opportunity Act of 1996 and ap6 proved by the Secretary on or before July 1, 1997,

7 and the State demonstrates to the satisfaction of the

8 Secretary that the waiver will not result in Federal

9 expenditures under title IV of this Act (as in effect

10 without regard to the amendments made by the Per11 sonal Responsibility and Work Opportunity Act of

12 1996) that are greater than would occur in the ab13 sence of the waiver, the amendments made by the

14 Personal Responsibility and Work Opportunity Act

15 of 1996 (other than by section 4103(d) of such Act)

16 shall not apply with respect to the State before the

17 expiration (determined without regard to any exten18 sions) of the waiver to the extent the amendments

19 made by the Personal Responsibility and Work Op20 portunity Act of 1996 are inconsistent with the

21 waiver.

22 ‘‘(3) FINANCING LIMITATION.—Notwithstand23 ing any other provision of law, beginning with fiscal

24 year 1996, a State operating under a waiver de25 scribed in paragraph (1) shall be entitled to payment
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1 under section 403 for the fiscal year, in lieu of any

2 other payment provided for in the waiver.

3 ‘‘(b) STATE OPTION TO TERMINATE WAIVER.—

4 ‘‘(1) IN GENERAL.—A State may terminate a

5 waiver described in subsection (a) before the expira6 tion of the waiver.

7 ‘‘(2) REPORT.—A State which terminates a

8 waiver under paragraph (1) shall submit a report to

9 the Secretary summarizing the waiver and any avail10 able information concerning the result or effect of

11 the waiver.

12 ‘‘(3) HOLD HARMLESS PROVISION.—

13 ‘‘(A) IN GENERAL.—Notwithstanding any

14 other provision of law, a State that, not later

15 than the date described in subparagraph (B),

16 submits a written request to terminate a waiver

17 described in subsection (a) shall be held harm18 less for accrued cost neutrality liabilities in19 curred under the waiver.

20 ‘‘(B) DATE DESCRIBED.—The date de21 scribed in this subparagraph is 90 days follow22 ing the adjournment of the first regular session

23 of the State legislature that begins after the

24 date of the enactment of the Personal Respon25 sibility and Work Opportunity Act of 1996.
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1 ‘‘(c) SECRETARIAL ENCOURAGEMENT OF CURRENT

2 WAIVERS.—The Secretary shall encourage any State oper3 ating a waiver described in subsection (a) to continue the

4 waiver and to evaluate, using random sampling and other

5 characteristics of accepted scientific evaluations, the result

6 or effect of the waiver.

7 ‘‘(d) CONTINUATION OF INDIVIDUAL WAIVERS.—A

8 State may elect to continue 1 or more individual waivers

9 described in subsection (a).

10 ‘‘SEC. 416. ASSISTANT SECRETARY FOR FAMILY SUPPORT.

11 ‘‘The programs under this part and part D shall be

12 administered by an Assistant Secretary for Family Sup13 port within the Department of Health and Human Serv14 ices, who shall be appointed by the President, by and with

15 the advice and consent of the Senate, and who shall be

16 in addition to any other Assistant Secretary of Health and

17 Human Services provided for by law.

18 ‘‘SEC. 417. LIMITATION ON FEDERAL AUTHORITY.

19 ‘‘No officer or employee of the Federal Government

20 may regulate the conduct of States under this part or en21 force any provision of this part, except to the extent ex22 pressly provided in this part.’’; and

23 (2) by inserting after such section 418 the fol24 lowing:
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1 ‘‘SEC. 419. DEFINITIONS.

2 ‘‘As used in this part:

3 ‘‘(1) ADULT.—The term ‘adult’ means an indi4 vidual who is not a minor child.

5 ‘‘(2) MINOR CHILD.—The term ‘minor child’

6 means an individual who—

7 ‘‘(A) has not attained 18 years of age; or

8 ‘‘(B) has not attained 19 years of age and

9 is a full-time student in a secondary school (or

10 in the equivalent level of vocational or technical

11 training).

12 ‘‘(3) FISCAL YEAR.—The term ‘fiscal year’

13 means any 12-month period ending on September 30

14 of a calendar year.

15 ‘‘(4) INDIAN, INDIAN TRIBE, AND TRIBAL ORGA16 NIZATION.—

17 ‘‘(A) IN GENERAL.—Except as provided in

18 subparagraph (B), the terms ‘Indian’, ‘Indian

19 tribe’, and ‘tribal organization’ have the mean20 ing given such terms by section 4 of the Indian

21 Self-Determination and Education Assistance

22 Act (25 U.S.C. 450b).

23 ‘‘(B) SPECIAL RULE FOR INDIAN TRIBES

24 IN ALASKA.—The term ‘Indian tribe’ means,

25 with respect to the State of Alaska, only the

26 Metlakatla Indian Community of the Annette
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1 Islands Reserve and the following Alaska Native

2 regional nonprofit corporations:

3 ‘‘(i) Arctic Slope Native Association.

4 ‘‘(ii) Kawerak, Inc.

5 ‘‘(iii) Maniilaq Association.

6 ‘‘(iv) Association of Village Council

7 Presidents.

8 ‘‘(v) Tanana Chiefs Conference.

9 ‘‘(vi) Cook Inlet Tribal Council.

10 ‘‘(vii) Bristol Bay Native Association.

11 ‘‘(viii) Aleutian and Pribilof Island

12 Association.

13 ‘‘(ix) Chugachmuit.

14 ‘‘(x) Tlingit Haida Central Council.

15 ‘‘(xi) Kodiak Area Native Association.

16 ‘‘(xii) Copper River Native Associa17 tion.

18 ‘‘(5) STATE.—Except as otherwise specifically

19 provided, the term ‘State’ means the 50 States of

20 the United States, the District of Columbia, the

21 Commonwealth of Puerto Rico, the United States

22 Virgin Islands, Guam, and American Samoa.’’.

23 (b) GRANTS TO OUTLYING AREAS.—Section 1108

24 (42 U.S.C. 1308) is amended—
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1 (1) by redesignating subsection (c) as sub2 section (g);

3 (2) by striking all that precedes subsection (c)

4 and inserting the following:

5 ‘‘SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE

6 VIRGIN ISLANDS, GUAM, AND AMERICAN

7 SAMOA; LIMITATION ON TOTAL PAYMENTS.

8 ‘‘(a) LIMITATION ON TOTAL PAYMENTS TO EACH

9 TERRITORY.—Notwithstanding any other provision of this

10 Act, the total amount certified by the Secretary of Health

11 and Human Services under titles I, X, XIV, and XVI,

12 under parts A, B, and E of title IV, and under subsection

13 (b) of this section, for payment to any territory for a fiscal

14 year shall not exceed the ceiling amount for the territory

15 for the fiscal year.

16 ‘‘(b) ENTITLEMENT TO MATCHING GRANT.—

17 ‘‘(1) IN GENERAL.—Each territory shall be en18 titled to receive from the Secretary for each fiscal

19 year a grant in an amount equal to 75 percent of

20 the amount (if any) by which—

21 ‘‘(A) the total expenditures of the territory

22 during the fiscal year under the territory pro23 grams funded under parts A, B, and E of title

24 IV; exceeds

25 ‘‘(B) the sum of—
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1 ‘‘(i) the total amount required to be

2 paid to the territory (other than with re3 spect to child care) under former section

4 403 (as in effect on September 30, 1995)

5 for fiscal year 1995, which shall be deter6 mined by applying subparagraphs (C) and

7 (D) of section 403(a)(1) to the territory;

8 ‘‘(ii) the total amount required to be

9 paid to the territory under former section

10 434 (as so in effect) for fiscal year 1995;

11 and

12 ‘‘(iii) the total amount expended by

13 the territory during fiscal year 1995 pur14 suant to parts A, B, and F of title IV (as

15 so in effect), other than for child care.

16 ‘‘(2) USE OF GRANT.—Any territory to which a

17 grant is made under paragraph (1) may expend the

18 amount under any program operated or funded

19 under any provision of law specified in subsection

20 (a).

21 ‘‘(c) DEFINITIONS.—As used in this section:

22 ‘‘(1) TERRITORY.—The term ‘territory’ means

23 Puerto Rico, the Virgin Islands, Guam, and Amer24 ican Samoa.
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1 ‘‘(2) CEILING AMOUNT.—The term ‘ceiling

2 amount’ means, with respect to a territory and a fis3 cal year, the mandatory ceiling amount with respect

4 to the territory plus the discretionary ceiling amount

5 with respect to the territory, reduced for the fiscal

6 year in accordance with subsection (f).

7 ‘‘(3) MANDATORY CEILING AMOUNT.—The term

8 ‘mandatory ceiling amount’ means—

9 ‘‘(A) $105,538,000 with respect to for

10 Puerto Rico;

11 ‘‘(B) $4,902,000 with respect to Guam;

12 ‘‘(C) $3,742,000 with respect to the Virgin

13 Islands; and

14 ‘‘(D) $1,122,000 with respect to American

15 Samoa.

16 ‘‘(4) DISCRETIONARY CEILING AMOUNT.—The

17 term ‘discretionary ceiling amount’ means, with re18 spect to a territory and a fiscal year, the total

19 amount appropriated pursuant to subsection (d)(3)

20 for the fiscal year for payment to the territory.

21 ‘‘(5) TOTAL AMOUNT EXPENDED BY THE TER22 RITORY.—The term ‘total amount expended by the

23 territory’—
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1 ‘‘(A) does not include expenditures during

2 the fiscal year from amounts made available by

3 the Federal Government; and

4 ‘‘(B) when used with respect to fiscal year

5 1995, also does not include—

6 ‘‘(i) expenditures during fiscal year

7 1995 under subsection (g) or (i) of section

8 402 (as in effect on September 30, 1995);

9 or

10 ‘‘(ii) any expenditures during fiscal

11 year 1995 for which the territory (but for

12 section 1108, as in effect on September 30,

13 1995) would have received reimbursement

14 from the Federal Government.

15 ‘‘(d) DISCRETIONARY GRANTS.—

16 ‘‘(1) IN GENERAL.—The Secretary shall make a

17 grant to each territory for any fiscal year in the

18 amount appropriated pursuant to paragraph (3) for

19 the fiscal year for payment to the territory.

20 ‘‘(2) USE OF GRANT.—Any territory to which a

21 grant is made under paragraph (1) may expend the

22 amount under any program operated or funded

23 under any provision of law specified in subsection

24 (a).
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1 ‘‘(3) LIMITATION ON AUTHORIZATION OF AP2 PROPRIATIONS.—For grants under paragraph (1),

3 there are authorized to be appropriated to the Sec4 retary for each fiscal year—

5 ‘‘(A) $7,951,000 for payment to Puerto

6 Rico;

7 ‘‘(B) $345,000 for payment to Guam;

8 ‘‘(C) $275,000 for payment to the Virgin

9 Islands; and

10 ‘‘(D) $190,000 for payment to American

11 Samoa.

12 ‘‘(e) AUTHORITY TO TRANSFER FUNDS AMONG PRO13 GRAMS.—Notwithstanding any other provision of this Act,

14 any territory to which an amount is paid under any provi15 sion of law specified in subsection (a) may use part or

16 all of the amount to carry out any program operated by

17 the territory, or funded, under any other such provision

18 of law.

19 ‘‘(f) MAINTENANCE OF EFFORT.—The ceiling

20 amount with respect to a territory shall be reduced for

21 a fiscal year by an amount equal to the amount (if any)

22 by which—

23 ‘‘(1) the total amount expended by the territory

24 under all programs of the territory operated pursu25 ant to the provisions of law specified in subsection
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1 (a) (as such provisions were in effect for fiscal year

2 1995) for fiscal year 1995; exceeds

3 ‘‘(2) the total amount expended by the territory

4 under all programs of the territory that are funded

5 under the provisions of law specified in subsection

6 (a) for the fiscal year that immediately precedes the

7 fiscal year referred to in the matter preceding para8 graph (1).’’; and

9 (3) by striking subsections (d) and (e).

10 (c) REPEAL OF PROVISIONS REQUIRING REDUCTION

11 OF MEDICAID PAYMENTS TO STATES THAT REDUCE

12 WELFARE PAYMENT LEVELS.—

13 (1) Section 1903(i) (42 U.S.C. 1396b(i)) is

14 amended by striking paragraph (9).

15 (2) Section 1902 (42 U.S.C. 1396a) is amended

16 by striking subsection (c).

17 (d) ELIMINATION OF CHILD CARE PROGRAMS

18 UNDER THE SOCIAL SECURITY ACT.—

19 (1) AFDC AND TRANSITIONAL CHILD CARE

20 PROGRAMS.—Section 402 (42 U.S.C. 602) is amend21 ed by striking subsection (g).

22 (2) AT-RISK CHILD CARE PROGRAM.—

23 (A) AUTHORIZATION.—Section 402 (42

24 U.S.C. 602) is amended by striking subsection

25 (i).
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1 (B) FUNDING PROVISIONS.—Section 403

2 (42 U.S.C. 603) is amended by striking sub3 section (n).

4 SEC. 4104. SERVICES PROVIDED BY CHARITABLE, RELI5 GIOUS, OR PRIVATE ORGANIZATIONS.

6 (a) IN GENERAL.—

7 (1) STATE OPTIONS.—A State may—

8 (A) administer and provide services under

9 the programs described in subparagraphs (A)

10 and (B)(i) of paragraph (2) through contracts

11 with charitable, religious, or private organiza12 tions; and

13 (B) provide beneficiaries of assistance

14 under the programs described in subparagraphs

15 (A) and (B)(ii) of paragraph (2) with certifi16 cates, vouchers, or other forms of disbursement

17 which are redeemable with such organizations.

18 (2) PROGRAMS DESCRIBED.—The programs de19 scribed in this paragraph are the following pro20 grams:

21 (A) A State program funded under part A

22 of title IV of the Social Security Act (as amend23 ed by section 4103(a) of this Act).
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1 (B) Any other program established or

2 modified under subtitle A, B, or F of this title,

3 that—

4 (i) permits contracts with organiza5 tions; or

6 (ii) permits certificates, vouchers, or

7 other forms of disbursement to be provided

8 to beneficiaries, as a means of providing

9 assistance.

10 (b) RELIGIOUS ORGANIZATIONS.—The purpose of

11 this section is to allow States to contract with religious

12 organizations, or to allow religious organizations to accept

13 certificates, vouchers, or other forms of disbursement

14 under any program described in subsection (a)(2), on the

15 same basis as any other nongovernmental provider without

16 impairing the religious character of such organizations,

17 and without diminishing the religious freedom of bene18 ficiaries of assistance funded under such program.

19 (c) NONDISCRIMINATION AGAINST RELIGIOUS ORGA20 NIZATIONS.—In the event a State exercises its authority

21 under subsection (a), religious organizations are eligible,

22 on the same basis as any other private organization, as

23 contractors to provide assistance, or to accept certificates,

24 vouchers, or other forms of disbursement, under any pro25 gram described in subsection (a)(2) so long as the pro-
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1 grams are implemented consistent with the Establishment

2 Clause of the United States Constitution. Except as pro3 vided in subsection (k), neither the Federal Government

4 nor a State receiving funds under such programs shall dis5 criminate against an organization which is or applies to

6 be a contractor to provide assistance, or which accepts cer7 tificates, vouchers, or other forms of disbursement, on the

8 basis that the organization has a religious character.

9 (d) RELIGIOUS CHARACTER AND FREEDOM.—

10 (1) RELIGIOUS ORGANIZATIONS.—A religious

11 organization with a contract described in subsection

12 (a)(1)(A), or which accepts certificates, vouchers, or

13 other forms of disbursement under subsection

14 (a)(1)(B), shall retain its independence from Fed15 eral, State, and local governments, including such

16 organization’s control over the definition, develop17 ment, practice, and expression of its religious beliefs.

18 (2) ADDITIONAL SAFEGUARDS.—Neither the

19 Federal Government nor a State shall require a reli20 gious organization to—

21 (A) alter its form of internal governance;

22 or

23 (B) remove religious art, icons, scripture,

24 or other symbols;
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1 in order to be eligible to contract to provide assist2 ance, or to accept certificates, vouchers, or other

3 forms of disbursement, funded under a program de4 scribed in subsection (a)(2).

5 (e) RIGHTS OF BENEFICIARIES OF ASSISTANCE.—

6 (1) IN GENERAL.—If an individual described in

7 paragraph (2) has an objection to the religious char8 acter of the organization or institution from which

9 the individual receives, or would receive, assistance

10 funded under any program described in subsection

11 (a)(2), the State in which the individual resides shall

12 provide such individual (if otherwise eligible for such

13 assistance) within a reasonable period of time after

14 the date of such objection with assistance from an

15 alternative provider that is accessible to the individ16 ual and the value of which is not less than the value

17 of the assistance which the individual would have re18 ceived from such organization.

19 (2) INDIVIDUAL DESCRIBED.—An individual de20 scribed in this paragraph is an individual who re21 ceives, applies for, or requests to apply for, assist22 ance under a program described in subsection (a)(2).

23 (f) EMPLOYMENT PRACTICES.—A religious organiza24 tion’s exemption provided under section 702 of the Civil

25 Rights Act of 1964 (42 U.S.C. 2000e–1a) regarding em-
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1 ployment practices shall not be affected by its participa2 tion in, or receipt of funds from, programs described in

3 subsection (a)(2).

4 (g) NONDISCRIMINATION AGAINST BENE5 FICIARIES.—Except as otherwise provided in law, a reli6 gious organization shall not discriminate against an indi7 vidual in regard to rendering assistance funded under any

8 program described in subsection (a)(2) on the basis of reli9 gion, a religious belief, or refusal to actively participate

10 in a religious practice.

11 (h) FISCAL ACCOUNTABILITY.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), any religious organization contracting to

14 provide assistance funded under any program de15 scribed in subsection (a)(2) shall be subject to the

16 same regulations as other contractors to account in

17 accord with generally accepted auditing principles

18 for the use of such funds provided under such pro19 grams.

20 (2) LIMITED AUDIT.—If such organization seg21 regates Federal funds provided under such programs

22 into separate accounts, then only the financial as23 sistance provided with such funds shall be subject to

24 audit.
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1 (i) COMPLIANCE.—Any party which seeks to enforce

2 its rights under this section may assert a civil action for

3 injunctive relief exclusively in an appropriate State court

4 against the entity or agency that allegedly commits such

5 violation.

6 (j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN

7 PURPOSES.—No funds provided directly to institutions or

8 organizations to provide services and administer programs

9 under subsection (a)(1)(A) shall be expended for sectarian

10 worship, instruction, or proselytization.

11 (k) PREEMPTION.—Nothing in this section shall be

12 construed to preempt any provision of a State constitution

13 or State statute that prohibits or restricts the expenditure

14 of State funds in or by religious organizations.

15 SEC. 4105. CENSUS DATA ON GRANDPARENTS AS PRIMARY

16 CAREGIVERS FOR THEIR GRANDCHILDREN.

17 (a) IN GENERAL.—Not later than 90 days after the

18 date of the enactment of this Act, the Secretary of Com19 merce, in carrying out section 141 of title 13, United

20 States Code, shall expand the data collection efforts of the

21 Bureau of the Census (in this section referred to as the

22 ‘‘Bureau’’) to enable the Bureau to collect statistically sig23 nificant data, in connection with its decennial census and

24 its mid-decade census, concerning the growing trend of
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1 grandparents who are the primary caregivers for their

2 grandchildren.

3 (b) EXPANDED CENSUS QUESTION.—In carrying out

4 subsection (a), the Secretary of Commerce shall expand

5 the Bureau’s census question that details households

6 which include both grandparents and their grandchildren.

7 The expanded question shall be formulated to distinguish

8 between the following households:

9 (1) A household in which a grandparent tempo10 rarily provides a home for a grandchild for a period

11 of weeks or months during periods of parental dis12 tress.

13 (2) A household in which a grandparent pro14 vides a home for a grandchild and serves as the pri15 mary caregiver for the grandchild.

16 SEC. 4106. REPORT ON DATA PROCESSING.

17 (a) IN GENERAL.—Within 6 months after the date

18 of the enactment of this Act, the Secretary of Health and

19 Human Services shall prepare and submit to the Congress

20 a report on—

21 (1) the status of the automated data processing

22 systems operated by the States to assist manage23 ment in the administration of State programs under

24 part A of title IV of the Social Security Act (wheth25 er in effect before or after October 1, 1995); and
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1 (2) what would be required to establish a sys2 tem capable of—

3 (A) tracking participants in public pro4 grams over time; and

5 (B) checking case records of the States to

6 determine whether individuals are participating

7 in public programs of 2 or more States.

8 (b) PREFERRED CONTENTS.—The report required by

9 subsection (a) should include—

10 (1) a plan for building on the automated data

11 processing systems of the States to establish a sys12 tem with the capabilities described in subsection

13 (a)(2); and

14 (2) an estimate of the amount of time required

15 to establish such a system and of the cost of estab16 lishing such a system.

17 SEC. 4107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

18 (a) STUDY.—The Secretary shall, in cooperation with

19 the States, study and analyze outcomes measures for eval20 uating the success of the States in moving individuals out

21 of the welfare system through employment as an alter22 native to the minimum participation rates described in

23 section 407 of the Social Security Act. The study shall

24 include a determination as to whether such alternative

25 outcomes measures should be applied on a national or a
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1 State-by-State basis and a preliminary assessment of the

2 effects of section 409(a)(7)(C) of such Act.

3 (b) REPORT.—Not later than September 30, 1998,

4 the Secretary shall submit to the Committee on Finance

5 of the Senate and the Committee on Ways and Means of

6 the House of Representatives a report containing the find7 ings of the study required by subsection (a).

8 SEC. 4108. CONFORMING AMENDMENTS TO THE SOCIAL SE9 CURITY ACT.

10 (a) AMENDMENTS TO TITLE II.—

11 (1) Section 205(c)(2)(C)(vi) (42 U.S.C.

12 405(c)(2)(C)(vi)), as so redesignated by section

13 321(a)(9)(B) of the Social Security Independence

14 and Program Improvements Act of 1994, is amend15 ed—

16 (A) by inserting ‘‘an agency administering

17 a program funded under part A of title IV or’’

18 before ‘‘an agency operating’’; and

19 (B) by striking ‘‘A or D of title IV of this

20 Act’’ and inserting ‘‘D of such title’’.

21 (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is

22 amended by inserting ‘‘under a State program fund23 ed under’’ before ‘‘part A of title IV’’.

24 (b) AMENDMENTS TO PART D OF TITLE IV.—
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1 (1) Section 451 (42 U.S.C. 651) is amended by

2 striking ‘‘aid’’ and inserting ‘‘assistance under a

3 State program funded’’.

4 (2) Section 452(a)(10)(C) (42 U.S.C.

5 652(a)(10)(C)) is amended—

6 (A) by striking ‘‘aid to families with de7 pendent children’’ and inserting ‘‘assistance

8 under a State program funded under part A’’;

9 (B) by striking ‘‘such aid’’ and inserting

10 ‘‘such assistance’’; and

11 (C) by striking ‘‘under section 402(a)(26)

12 or’’ and inserting ‘‘pursuant to section

13 408(a)(4) or under section’’.

14 (3) Section 452(a)(10)(F) (42 U.S.C.

15 652(a)(10)(F)) is amended—

16 (A) by striking ‘‘aid under a State plan ap17 proved’’ and inserting ‘‘assistance under a State

18 program funded’’; and

19 (B) by striking ‘‘in accordance with the

20 standards referred to in section

21 402(a)(26)(B)(ii)’’ and inserting ‘‘by the

22 State’’.

23 (4) Section 452(b) (42 U.S.C. 652(b)) is

24 amended in the first sentence by striking ‘‘aid under

25 the State plan approved under part A’’ and inserting
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1 ‘‘assistance under the State program funded under

2 part A’’.

3 (5) Section 452(d)(3)(B)(i) (42 U.S.C.

4 652(d)(3)(B)(i)) is amended by striking ‘‘1115(c)’’

5 and inserting ‘‘1115(b)’’.

6 (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C.

7 652(g)(2)(A)(ii)(I)) is amended by striking ‘‘aid is

8 being paid under the State’s plan approved under

9 part A or E’’ and inserting ‘‘assistance is being pro10 vided under the State program funded under part

11 A’’.

12 (7) Section 452(g)(2)(A) (42 U.S.C.

13 652(g)(2)(A)) is amended in the matter following

14 clause (iii) by striking ‘‘aid was being paid under the

15 State’s plan approved under part A or E’’ and in16 serting ‘‘assistance was being provided under the

17 State program funded under part A’’.

18 (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

19 amended in the matter following subparagraph

20 (B)—

21 (A) by striking ‘‘who is a dependent child’’

22 and inserting ‘‘with respect to whom assistance

23 is being provided under the State program

24 funded under part A’’;
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1 (B) by inserting ‘‘by the State’’ after

2 ‘‘found’’; and

3 (C) by striking ‘‘to have good cause for re4 fusing to cooperate under section 402(a)(26)’’

5 and inserting ‘‘to qualify for a good cause or

6 other exception to cooperation pursuant to sec7 tion 454(29)’’.

8 (9) Section 452(h) (42 U.S.C. 652(h)) is

9 amended by striking ‘‘under section 402(a)(26)’’ and

10 inserting ‘‘pursuant to section 408(a)(4)’’.

11 (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is

12 amended by striking ‘‘aid under part A of this title’’

13 and inserting ‘‘assistance under a State program

14 funded under part A’’.

15 (11) Section 454(5)(A) (42 U.S.C. 654(5)(A)))

16 is amended—

17 (A) by striking ‘‘under section 402(a)(26)’’

18 and inserting ‘‘pursuant to section 408(a)(4)’’;

19 and

20 (B) by striking ‘‘; except that this para21 graph shall not apply to such payments for any

22 month following the first month in which the

23 amount collected is sufficient to make such

24 family ineligible for assistance under the State
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1 plan approved under part A;’’ and inserting a

2 comma.

3 (12) Section 454(6)(D) (42 U.S.C. 654(6)(D))

4 is amended by striking ‘‘aid under a State plan ap5 proved’’ and inserting ‘‘assistance under a State pro6 gram funded’’.

7 (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is

8 amended by striking ‘‘under section 402(a)(26)’’.

9 (14) Section 466(a)(3)(B) (42 U.S.C.

10 666(a)(3)(B)) is amended by striking ‘‘402(a)(26)’’

11 and inserting ‘‘408(a)(3)’’.

12 (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is

13 amended by striking ‘‘aid’’ and inserting ‘‘assistance

14 under a State program funded’’.

15 (16) Section 469(a) (42 U.S.C. 669(a)) is

16 amended—

17 (A) by striking ‘‘aid under plans approved’’

18 and inserting ‘‘assistance under State programs

19 funded’’; and

20 (B) by striking ‘‘such aid’’ and inserting

21 ‘‘such assistance’’.

22 (c) REPEAL OF PART F OF TITLE IV.—Part F of

23 title IV (42 U.S.C. 681–687) is repealed.

24 (d) AMENDMENT TO TITLE X.—Section 1002(a)(7)

25 (42 U.S.C. 1202(a)(7)) is amended by striking ‘‘aid to
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1 families with dependent children under the State plan ap2 proved under section 402 of this Act’’ and inserting ‘‘as3 sistance under a State program funded under part A of

4 title IV’’.

5 (e) AMENDMENTS TO TITLE XI.—

6 (1) Section 1109 (42 U.S.C. 1309) is amended

7 by striking ‘‘or part A of title IV,’’.

8 (2) Section 1115 (42 U.S.C. 1315) is amend9 ed—

10 (A) in subsection (a)(2)—

11 (i) by inserting ‘‘(A)’’ after ‘‘(2)’’;

12 (ii) by striking ‘‘403,’’;

13 (iii) by striking the period at the end

14 and inserting ‘‘, and’’; and

15 (iv) by adding at the end the following

16 new subparagraph:

17 ‘‘(B) costs of such project which would not oth18 erwise be a permissible use of funds under part A

19 of title IV and which are not included as part of the

20 costs of projects under section 1110, shall to the ex21 tent and for the period prescribed by the Secretary,

22 be regarded as a permissible use of funds under

23 such part.’’; and
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1 (B) in subsection (c)(3), by striking ‘‘the

2 program of aid to families with dependent chil3 dren’’ and inserting ‘‘part A of such title’’.

4 (3) Section 1116 (42 U.S.C. 1316) is amend5 ed—

6 (A) in each of subsections (a)(1), (b), and

7 (d), by striking ‘‘or part A of title IV,’’; and

8 (B) in subsection (a)(3), by striking

9 ‘‘404,’’.

10 (4) Section 1118 (42 U.S.C. 1318) is amend11 ed—

12 (A) by striking ‘‘403(a),’’;

13 (B) by striking ‘‘and part A of title IV,’’;

14 and

15 (C) by striking ‘‘, and shall, in the case of

16 American Samoa, mean 75 per centum with re17 spect to part A of title IV’’.

18 (5) Section 1119 (42 U.S.C. 1319) is amend19 ed—

20 (A) by striking ‘‘or part A of title IV’’; and

21 (B) by striking ‘‘403(a),’’.

22 (6) Section 1133(a) (42 U.S.C. 1320b–3(a)) is

23 amended by striking ‘‘or part A of title IV,’’.

24 (7) Section 1136 (42 U.S.C. 1320b–6) is re25 pealed.
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1 (8) Section 1137 (42 U.S.C. 1320b–7) is

2 amended—

3 (A) in subsection (b), by striking para4 graph (1) and inserting the following:

5 ‘‘(1) any State program funded under part A of

6 title IV of this Act;’’; and

7 (B) in subsection (d)(1)(B)—

8 (i) by striking ‘‘In this subsection—’’

9 and all that follows through ‘‘(ii) in’’ and

10 inserting ‘‘In this subsection, in’’;

11 (ii) by redesignating subclauses (I),

12 (II), and (III) as clauses (i), (ii), and (iii);

13 and

14 (iii) by moving such redesignated ma15 terial 2 ems to the left.

16 (f) AMENDMENT TO TITLE XIV.—Section

17 1402(a)(7) (42 U.S.C. 1352(a)(7)) is amended by striking

18 ‘‘aid to families with dependent children under the State

19 plan approved under section 402 of this Act’’ and insert20 ing ‘‘assistance under a State program funded under part

21 A of title IV’’.

22 (g) AMENDMENT TO TITLE XVI AS IN EFFECT WITH

23 RESPECT TO THE TERRITORIES.—Section 1602(a)(11),

24 as in effect without regard to the amendment made by

25 section 301 of the Social Security Amendments of 1972
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1 (42 U.S.C. 1382 note), is amended by striking ‘‘aid under

2 the State plan approved’’ and inserting ‘‘assistance under

3 a State program funded’’.

4 (h) AMENDMENT TO TITLE XVI AS IN EFFECT WITH

5 RESPECT TO THE STATES.—Section 1611(c)(5)(A) (42

6 U.S.C. 1382(c)(5)(A)) is amended to read as follows: ‘‘(A)

7 a State program funded under part A of title IV,’’.

8 (i) AMENDMENT TO TITLE XIX.—Section 1902(j)

9 (42 U.S.C. 1396a(j)) is amended by striking ‘‘1108(c)’’

10 and inserting ‘‘1108(g)’’.

11 SEC. 4109. CONFORMING AMENDMENTS TO THE FOOD

12 STAMP ACT OF 1977 AND RELATED PROVI13 SIONS.

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

15 U.S.C. 2014) is amended—

16 (1) in the second sentence of subsection (a), by

17 striking ‘‘plan approved’’ and all that follows

18 through ‘‘title IV of the Social Security Act’’ and in19 serting ‘‘program funded under part A of title IV of

20 the Social Security Act (42 U.S.C. 601 et seq.)’’;

21 (2) in subsection (d)—

22 (A) in paragraph (5), by striking ‘‘assist23 ance to families with dependent children’’ and

24 inserting ‘‘assistance under a State program

25 funded’’; and
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1 (B) by striking paragraph (13) and redes2 ignating paragraphs (14), (15), and (16) as

3 paragraphs (13), (14), and (15), respectively;

4 (3) in subsection (j), by striking ‘‘plan approved

5 under part A of title IV of such Act (42 U.S.C. 601

6 et seq.)’’ and inserting ‘‘program funded under part

7 A of title IV of the Act (42 U.S.C. 601 et seq.)’’;

8 and

9 (4) by striking subsection (m).

10 (b) Section 6 of such Act (7 U.S.C. 2015) is amend11 ed—

12 (1) in subsection (c)(5), by striking ‘‘the State

13 plan approved’’ and inserting ‘‘the State program

14 funded’’; and

15 (2) in subsection (e)(6), by striking ‘‘aid to

16 families with dependent children’’ and inserting

17 ‘‘benefits under a State program funded’’.

18 (c) Section 16(g)(4) of such Act (7 U.S.C.

19 2025(g)(4)) is amended by striking ‘‘State plans under the

20 Aid to Families with Dependent Children Program under’’

21 and inserting ‘‘State programs funded under part A of’’.

22 (d) Section 17 of such Act (7 U.S.C. 2026) is amend23 ed—

24 (1) in the first sentence of subsection (b)(1)(A),

25 by striking ‘‘to aid to families with dependent chil-
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1 dren under part A of title IV of the Social Security

2 Act’’ and inserting ‘‘or are receiving assistance

3 under a State program funded under part A of title

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

5 seq.)’’; and

6 (2) in subsection (b)(3), by adding at the end

7 the following new subparagraph:

8 ‘‘(I) The Secretary may not grant a waiver under this

9 paragraph on or after October 1, 1995. Any reference in

10 this paragraph to a provision of title IV of the Social Secu11 rity Act shall be deemed to be a reference to such provision

12 as in effect on September 30, 1995.’’;

13 (e) Section 20 of such Act (7 U.S.C. 2029) is amend14 ed—

15 (1) in subsection (a)(2)(B) by striking ‘‘operat16 ing—’’ and all that follows through ‘‘(ii) any other’’

17 and inserting ‘‘operating any’’; and

18 (2) in subsection (b)—

19 (A) in paragraph (1)—

20 (i) by striking ‘‘(b)(1) A household’’

21 and inserting ‘‘(b) A household’’; and

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

23 ‘‘training program’’ and inserting ‘‘activ24 ity’’;

25 (B) by striking paragraph (2); and
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1 (C) by redesignating subparagraphs (A)

2 through (F) as paragraphs (1) through (6), re3 spectively.

4 (f) Section 5(h)(1) of the Agriculture and Consumer

5 Protection Act of 1973 (Public Law 93–186; 7 U.S.C.

6 612c note) is amended by striking ‘‘the program for aid

7 to families with dependent children’’ and inserting ‘‘the

8 State program funded’’.

9 (g) Section 9 of the National School Lunch Act (42

10 U.S.C. 1758) is amended—

11 (1) in subsection (b)—

12 (A) in paragraph (2)(C)(ii)(II)—

13 (i) by striking ‘‘program for aid to

14 families with dependent children’’ and in15 serting ‘‘State program funded’’; and

16 (ii) by inserting before the period at

17 the end the following: ‘‘that the Secretary

18 determines complies with standards estab19 lished by the Secretary that ensure that

20 the standards under the State program are

21 comparable to or more restrictive than

22 those in effect on June 1, 1995’’; and

23 (B) in paragraph (6)—

24 (i) in subparagraph (A)(ii)—
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1 (I) by striking ‘‘an AFDC assist2 ance unit (under the aid to families

3 with dependent children program au4 thorized’’ and inserting ‘‘a family

5 (under the State program funded’’;

6 and

7 (II) by striking ‘‘, in a State’’

8 and all that follows through

9 ‘‘9902(2)))’’ and inserting ‘‘that the

10 Secretary determines complies with

11 standards established by the Secretary

12 that ensure that the standards under

13 the State program are comparable to

14 or more restrictive than those in effect

15 on June 1, 1995’’; and

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

17 ‘‘aid to families with dependent children’’

18 and inserting ‘‘assistance under the State

19 program funded under part A of title IV of

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

21 seq.) that the Secretary determines com22 plies with standards established by the

23 Secretary that ensure that the standards

24 under the State program are comparable
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1 to or more restrictive than those in effect

2 on June 1, 1995’’; and

3 (2) in subsection (d)(2)(C)—

4 (A) by striking ‘‘program for aid to fami5 lies with dependent children’’ and inserting

6 ‘‘State program funded’’; and

7 (B) by inserting before the period at the

8 end the following: ‘‘that the Secretary deter9 mines complies with standards established by

10 the Secretary that ensure that the standards

11 under the State program are comparable to or

12 more restrictive than those in effect on June 1,

13 1995’’.

14 (h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition

15 Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amend16 ed—

17 (1) by striking ‘‘program for aid to families

18 with dependent children established’’ and inserting

19 ‘‘State program funded’’; and

20 (2) by inserting before the semicolon the follow21 ing: ‘‘that the Secretary determines complies with

22 standards established by the Secretary that ensure

23 that the standards under the State program are

24 comparable to or more restrictive than those in ef25 fect on June 1, 1995’’.
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1 SEC. 4110. CONFORMING AMENDMENTS TO OTHER LAWS.

2 (a) Subsection (b) of section 508 of the Unemploy3 ment Compensation Amendments of 1976 (42 U.S.C.

4 603a; Public Law 94–566; 90 Stat. 2689) is amended to

5 read as follows:

6 ‘‘(b) PROVISION FOR REIMBURSEMENT OF EX7 PENSES.—For purposes of section 455 of the Social Secu8 rity Act, expenses incurred to reimburse State employment

9 offices for furnishing information requested of such of10 fices—

11 ‘‘(1) pursuant to the third sentence of section

12 3(a) of the Act entitled ‘An Act to provide for the

13 establishment of a national employment system and

14 for cooperation with the States in the promotion of

15 such system, and for other purposes’, approved June

16 6, 1933 (29 U.S.C. 49b(a)), or

17 ‘‘(2) by a State or local agency charged with

18 the duty of carrying a State plan for child support

19 approved under part D of title IV of the Social Se20 curity Act,

21 shall be considered to constitute expenses incurred in the

22 administration of such State plan.’’.

23 (b) Section 9121 of the Omnibus Budget Reconcili24 ation Act of 1987 (42 U.S.C. 602 note) is repealed.

25 (c) Section 9122 of the Omnibus Budget Reconcili26 ation Act of 1987 (42 U.S.C. 602 note) is repealed.
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1 (d) Section 221 of the Housing and Urban-Rural Re2 covery Act of 1983 (42 U.S.C. 602 note), relating to treat3 ment under AFDC of certain rental payments for federally

4 assisted housing, is repealed.

5 (e) Section 159 of the Tax Equity and Fiscal Respon6 sibility Act of 1982 (42 U.S.C. 602 note) is repealed.

7 (f) Section 202(d) of the Social Security Amendments

8 of 1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed.

9 (g) Section 903 of the Stewart B. McKinney Home10 less Assistance Amendments Act of 1988 (42 U.S.C.

11 11381 note), relating to demonstration projects to reduce

12 number of AFDC families in welfare hotels, is amended—

13 (1) in subsection (a), by striking ‘‘aid to fami14 lies with dependent children under a State plan ap15 proved’’ and inserting ‘‘assistance under a State pro16 gram funded’’; and

17 (2) in subsection (c), by striking ‘‘aid to fami18 lies with dependent children in the State under a

19 State plan approved’’ and inserting ‘‘assistance in

20 the State under a State program funded’’.

21 (h) The Higher Education Act of 1965 (20 U.S.C.

22 1001 et seq.) is amended—

23 (1) in section 404C(c)(3) (20 U.S.C. 1070a–

24 23(c)(3)), by striking ‘‘(Aid to Families with De25 pendent Children)’’; and
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1 (2) in section 480(b)(2) (20 U.S.C.

2 1087vv(b)(2)), by striking ‘‘aid to families with de3 pendent children under a State plan approved’’ and

4 inserting ‘‘assistance under a State program fund5 ed’’.

6 (i) The Carl D. Perkins Vocational and Applied Tech7 nology Education Act (20 U.S.C. 2301 et seq.) is amend8 ed—

9 (1) in section 231(d)(3)(A)(ii) (20 U.S.C.

10 2341(d)(3)(A)(ii)), by striking ‘‘The program for aid

11 to dependent children’’ and inserting ‘‘The State

12 program funded’’;

13 (2) in section 232(b)(2)(B) (20 U.S.C.

14 2341a(b)(2)(B)), by striking ‘‘the program for aid to

15 families with dependent children’’ and inserting ‘‘the

16 State program funded’’; and

17 (3) in section 521(14)(B)(iii) (20 U.S.C.

18 2471(14)(B)(iii)), by striking ‘‘the program for aid

19 to families with dependent children’’ and inserting

20 ‘‘the State program funded’’.

21 (j) The Elementary and Secondary Education Act of

22 1965 (20 U.S.C. 2701 et seq.) is amended—

23 (1) in section 1113(a)(5) (20 U.S.C.

24 6313(a)(5)), by striking ‘‘Aid to Families with De25 pendent Children program’’ and inserting ‘‘State
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1 program funded under part A of title IV of the So2 cial Security Act’’;

3 (2) in section 1124(c)(5) (20 U.S.C.

4 6333(c)(5)), by striking ‘‘the program of aid to fam5 ilies with dependent children under a State plan ap6 proved under’’ and inserting ‘‘a State program fund7 ed under part A of’’; and

8 (3) in section 5203(b)(2) (20 U.S.C.

9 7233(b)(2))—

10 (A) in subparagraph (A)(xi), by striking

11 ‘‘Aid to Families with Dependent Children ben12 efits’’ and inserting ‘‘assistance under a State

13 program funded under part A of title IV of the

14 Social Security Act’’; and

15 (B) in subparagraph (B)(viii), by striking

16 ‘‘Aid to Families with Dependent Children’’ and

17 inserting ‘‘assistance under the State program

18 funded under part A of title IV of the Social

19 Security Act’’.

20 (k) The 4th proviso of chapter VII of title I of Public

21 Law 99–88 (25 U.S.C. 13d–1) is amended to read as fol22 lows: ‘‘Provided further, That general assistance payments

23 made by the Bureau of Indian Affairs shall be made—
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1 ‘‘(1) after April 29, 1985, and before October

2 1, 1995, on the basis of Aid to Families with De3 pendent Children (AFDC) standards of need; and

4 ‘‘(2) on and after October 1, 1995, on the basis

5 of standards of need established under the State

6 program funded under part A of title IV of the So7 cial Security Act,

8 except that where a State ratably reduces its AFDC or

9 State program payments, the Bureau shall reduce general

10 assistance payments in such State by the same percentage

11 as the State has reduced the AFDC or State program pay12 ment.’’.

13 (l) The Internal Revenue Code of 1986 (26 U.S.C.

14 1 et seq.) is amended—

15 (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by

16 striking all that follows ‘‘agency as’’ and inserting

17 ‘‘being eligible for financial assistance under part A

18 of title IV of the Social Security Act and as having

19 continually received such financial assistance during

20 the 90-day period which immediately precedes the

21 date on which such individual is hired by the em22 ployer.’’;

23 (2) in section 3304(a)(16) (26 U.S.C.

24 3304(a)(16)), by striking ‘‘eligibility for aid or serv25 ices,’’ and all that follows through ‘‘children ap-
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1 proved’’ and inserting ‘‘eligibility for assistance, or

2 the amount of such assistance, under a State pro3 gram funded’’;

4 (3) in section 6103(l)(7)(D)(i) (26 U.S.C.

5 6103(l)(7)(D)(i)), by striking ‘‘aid to families with

6 dependent children provided under a State plan ap7 proved’’ and inserting ‘‘a State program funded’’;

8 (4) in section 6103(l)(10) (26 U.S.C.

9 6103(l)(10))—

10 (A) by striking ‘‘(c) or (d)’’ each place it

11 appears and inserting ‘‘(c), (d), or (e)’’; and

12 (B) by adding at the end of subparagraph

13 (B) the following new sentence: ‘‘Any return in14 formation disclosed with respect to section

15 6402(e) shall only be disclosed to officers and

16 employees of the State agency requesting such

17 information.’’;

18 (5) in section 6103(p)(4) (26 U.S.C.

19 6103(p)(4)), in the matter preceding subparagraph

20 (A)—

21 (A) by striking ‘‘(5), (10)’’ and inserting

22 ‘‘(5)’’; and

23 (B) by striking ‘‘(9), or (12)’’ and insert24 ing ‘‘(9), (10), or (12)’’;
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1 (6) in section 6334(a)(11)(A) (26 U.S.C.

2 6334(a)(11)(A)), by striking ‘‘(relating to aid to

3 families with dependent children)’’;

4 (7) in section 6402 (26 U.S.C. 6402)—

5 (A) in subsection (a), by striking ‘‘(c) and

6 (d)’’ and inserting ‘‘(c), (d), and (e)’’;

7 (B) by redesignating subsections (e)

8 through (i) as subsections (f) through (j), re9 spectively; and

10 (C) by inserting after subsection (d) the

11 following:

12 ‘‘(e) COLLECTION OF OVERPAYMENTS UNDER TITLE

13 IV–A OF THE SOCIAL SECURITY ACT.—The amount of

14 any 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 405(e) 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).’’; and

21 (8) in section 7523(b)(3)(C) (26 U.S.C.

22 7523(b)(3)(C)), by striking ‘‘aid to families with de23 pendent children’’ and inserting ‘‘assistance under a

24 State program funded under part A of title IV of the

25 Social Security Act’’.
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1 (m) Section 3(b) of the Wagner-Peyser Act (29

2 U.S.C. 49b(b)) is amended by striking ‘‘State plan ap3 proved under part A of title IV’’ and inserting ‘‘State pro4 gram funded under part A of title IV’’.

5 (n) The Job Training Partnership Act (29 U.S.C.

6 1501 et seq.) is amended—

7 (1) in section 4(29)(A)(i) (29 U.S.C.

8 1503(29)(A)(i)), by striking ‘‘(42 U.S.C. 601 et

9 seq.)’’;

10 (2) in section 106(b)(6)(C) (29 U.S.C.

11 1516(b)(6)(C)), by striking ‘‘State aid to families

12 with dependent children records,’’ and inserting

13 ‘‘records collected under the State program funded

14 under part A of title IV of the Social Security Act,’’;

15 (3) in section 121(b)(2) (29 U.S.C.

16 1531(b)(2))—

17 (A) by striking ‘‘the JOBS program’’ and

18 inserting ‘‘the work activities required under

19 title IV of the Social Security Act’’; and

20 (B) by striking the second sentence;

21 (4) in section 123(c) (29 U.S.C. 1533(c))—

22 (A) in paragraph (1)(E), by repealing

23 clause (vi); and

24 (B) in paragraph (2)(D), by repealing

25 clause (v);
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1 (5) in section 203(b)(3) (29 U.S.C.

2 1603(b)(3)), by striking ‘‘, including recipients

3 under the JOBS program’’;

4 (6) in subparagraphs (A) and (B) of section

5 204(a)(1) (29 U.S.C. 1604(a)(1) (A) and (B)), by

6 striking ‘‘(such as the JOBS program)’’ each place

7 it appears;

8 (7) in section 205(a) (29 U.S.C. 1605(a)), by

9 striking paragraph (4) and inserting the following:

10 ‘‘(4) the portions of title IV of the Social Secu11 rity Act relating to work activities;’’;

12 (8) in section 253 (29 U.S.C. 1632)—

13 (A) in subsection (b)(2), by repealing sub14 paragraph (C); and

15 (B) in paragraphs (1)(B) and (2)(B) of

16 subsection (c), by striking ‘‘the JOBS program

17 or’’ each place it appears;

18 (9) in section 264 (29 U.S.C. 1644)—

19 (A) in subparagraphs (A) and (B) of sub20 section (b)(1), by striking ‘‘(such as the JOBS

21 program)’’ each place it appears; and

22 (B) in subparagraphs (A) and (B) of sub23 section (d)(3), by striking ‘‘and the JOBS pro24 gram’’ each place it appears;
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1 (10) in section 265(b) (29 U.S.C. 1645(b)), by

2 striking paragraph (6) and inserting the following:

3 ‘‘(6) the portion of title IV of the Social Secu4 rity Act relating to work activities;’’;

5 (11) in the second sentence of section 429(e)

6 (29 U.S.C. 1699(e)), by striking ‘‘and shall be in an

7 amount that does not exceed the maximum amount

8 that may be provided by the State pursuant to sec9 tion 402(g)(1)(C) of the Social Security Act (42

10 U.S.C. 602(g)(1)(C))’’;

11 (12) in section 454(c) (29 U.S.C. 1734(c)), by

12 striking ‘‘JOBS and’’;

13 (13) in section 455(b) (29 U.S.C. 1735(b)), by

14 striking ‘‘the JOBS program,’’;

15 (14) in section 501(1) (29 U.S.C. 1791(1)), by

16 striking ‘‘aid to families with dependent children

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

18 (42 U.S.C. 601 et seq.)’’ and inserting ‘‘assistance

19 under the State program funded under part A of

20 title IV of the Social Security Act’’;

21 (15) in section 506(1)(A) (29 U.S.C.

22 1791e(1)(A)), by striking ‘‘aid to families with de23 pendent children’’ and inserting ‘‘assistance under

24 the State program funded’’;
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1 (16) in section 508(a)(2)(A) (29 U.S.C.

2 1791g(a)(2)(A)), by striking ‘‘aid to families with

3 dependent children’’ and inserting ‘‘assistance under

4 the State program funded’’; and

5 (17) in section 701(b)(2)(A) (29 U.S.C.

6 1792(b)(2)(A))—

7 (A) in clause (v), by striking the semicolon

8 and inserting ‘‘; and’’; and

9 (B) by striking clause (vi).

10 (o) Section 3803(c)(2)(C)(iv) of title 31, United

11 States Code, is amended to read as follows:

12 ‘‘(iv) assistance under a State program funded

13 under part A of title IV of the Social Security Act;’’.

14 (p) Section 2605(b)(2)(A)(i) of the Low-Income

15 Home Energy Assistance Act of 1981 (42 U.S.C.

16 8624(b)(2)(A)(i)) is amended to read as follows:

17 ‘‘(i) assistance under the State pro18 gram funded under part A of title IV of

19 the Social Security Act;’’.

20 (q) Section 303(f)(2) of the Family Support Act of

21 1988 (42 U.S.C. 602 note) is amended—

22 (1) by striking ‘‘(A)’’; and

23 (2) by striking subparagraphs (B) and (C).

24 (r) The Balanced Budget and Emergency Deficit

25 Control Act of 1985 (2 U.S.C. 900 et seq.) is amended—
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1 (1) in the first section 255(h) (2 U.S.C.

2 905(h)), by striking ‘‘Aid to families with dependent

3 children (75–0412–0–1–609);’’ and inserting ‘‘Block

4 grants to States for temporary assistance for needy

5 families;’’; and

6 (2) in section 256 (2 U.S.C. 906)—

7 (A) by striking subsection (k); and

8 (B) by redesignating subsection (l) as sub9 section (k).

10 (s) The Immigration and Nationality Act (8 U.S.C.

11 1101 et seq.) is amended—

12 (1) in section 210(f) (8 U.S.C. 1160(f)), by

13 striking ‘‘aid under a State plan approved under’’

14 each place it appears and inserting ‘‘assistance

15 under a State program funded under’’;

16 (2) in section 245A(h) (8 U.S.C. 1255a(h))—

17 (A) in paragraph (1)(A)(i), by striking

18 ‘‘program of aid to families with dependent chil19 dren’’ and inserting ‘‘State program of assist20 ance’’; and

21 (B) in paragraph (2)(B), by striking ‘‘aid

22 to families with dependent children’’ and insert23 ing ‘‘assistance under a State program funded

24 under part A of title IV of the Social Security

25 Act’’; and
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1 (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)),

2 by striking ‘‘State plan approved’’ and inserting

3 ‘‘State program funded’’.

4 (t) Section 640(a)(4)(B)(i) of the Head Start Act (42

5 U.S.C. 9835(a)(4)(B)(i)) is amended by striking ‘‘pro6 gram of aid to families with dependent children under a

7 State plan approved’’ and inserting ‘‘State program of as8 sistance funded’’.

9 (u) Section 9 of the Act of April 19, 1950 (64 Stat.

10 47, chapter 92; 25 U.S.C. 639) is repealed.

11 (v) Subparagraph (E) of section 213(d)(6) of the

12 School-To-Work Opportunities Act of 1994 (20 U.S.C.

13 6143(d)(6)) is amended to read as follows:

14 ‘‘(E) part A of title IV of the Social Secu15 rity Act (42 U.S.C. 601 et seq.) relating to

16 work activities;’’.

17 (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United

18 States Code, is amended by striking ‘‘section 464 or 1137

19 of the Social Security Act’’ and inserting ‘‘section 404(e),

20 464, or 1137 of the Social Security Act’’.

21 SEC. 4111. DEVELOPMENT OF PROTOTYPE OF COUNTER22 FEIT-RESISTANT SOCIAL SECURITY CARD RE23 QUIRED.

24 (a) DEVELOPMENT.—
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1 (1) IN GENERAL.—The Commissioner of Social

2 Security (in this section referred to as the ‘‘Commis3 sioner’’) shall, in accordance with this section, de4 velop a prototype of a counterfeit-resistant social se5 curity card. Such prototype card shall—

6 (A) be made of a durable, tamper-resistant

7 material such as plastic or polyester,

8 (B) employ technologies that provide secu9 rity features, such as magnetic stripes,

10 holograms, and integrated circuits, and

11 (C) be developed so as to provide individ12 uals with reliable proof of citizenship or legal

13 resident alien status.

14 (2) ASSISTANCE BY ATTORNEY GENERAL.—The

15 Attorney General of the United States shall provide

16 such information and assistance as the Commis17 sioner deems necessary to enable the Commissioner

18 to comply with this section.

19 (b) STUDY AND REPORT.—

20 (1) IN GENERAL.—The Commissioner shall con21 duct a study and issue a report to Congress which

22 examines different methods of improving the social

23 security card application process.

24 (2) ELEMENTS OF STUDY.—The study shall in25 clude an evaluation of the cost and work load impli-
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1 cations of issuing a counterfeit-resistant social secu2 rity card for all individuals over a 3-, 5-, and 10-

3 year period. The study shall also evaluate the fea4 sibility and cost implications of imposing a user fee

5 for replacement cards and cards issued to individ6 uals who apply for such a card prior to the sched7 uled 3-, 5-, and 10-year phase-in options.

8 (3) DISTRIBUTION OF REPORT.—The Commis9 sioner shall submit copies of the report described in

10 this subsection along with a facsimile of the proto11 type card as described in subsection (a) to the Com12 mittees on Ways and Means and Judiciary of the

13 House of Representatives and the Committees on Fi14 nance and Judiciary of the Senate within 1 year

15 after the date of the enactment of this Act.

16 SEC. 4112. DISCLOSURE OF RECEIPT OF FEDERAL FUNDS.

17 (a) IN GENERAL.—Whenever an organization that

18 accepts Federal funds under this title or the amendments

19 made by this title (other than funds provided under title

20 IV, XVI, or XX of the Social Security Act) makes any

21 communication that in any way intends to promote public

22 support or opposition to any policy of a Federal, State,

23 or local government through any broadcasting station,

24 newspaper, magazine, outdoor advertising facility, direct

25 mailing, or any other type of general public advertising,
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1 such communication shall state the following: ‘‘This was

2 prepared and paid for by an organization that accepts tax3 payer dollars.’’.

4 (b) FAILURE TO COMPLY.—If an organization makes

5 any communication described in subsection (a) and fails

6 to provide the statement required by that subsection, such

7 organization shall be ineligible to receive Federal funds

8 under this title or the amendments made by this title.

9 (c) DEFINITION.—For purposes of this section, the

10 term ‘‘organization’’ means an organization described in

11 section 501(c) of the Internal Revenue Code of 1986.

12 (d) EFFECTIVE DATES.—This section shall take ef13 fect—

14 (1) with respect to printed communications 1

15 year after the date of enactment of this Act; and

16 (2) with respect to any other communication on

17 the date of enactment of this Act.

18 SEC. 4113. MODIFICATIONS TO THE JOB OPPORTUNITIES

19 FOR CERTAIN LOW-INCOME INDIVIDUALS

20 PROGRAM.

21 Section 505 of the Family Support Act of 1988 (42

22 U.S.C. 1315 note) is amended—

23 (1) in the heading, by striking ‘‘DEMONSTRA24 TION’’;
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1 (2) by striking ‘‘demonstration’’ each place such

2 term appears;

3 (3) in subsection (a), by striking ‘‘in each of

4 fiscal years’’ and all that follows through ‘‘10’’ and

5 inserting ‘‘shall enter into agreements with’’;

6 (4) in subsection (b)(3), by striking ‘‘aid to

7 families with dependent children under part A of

8 title IV of the Social Security Act’’ and inserting

9 ‘‘assistance under the program funded part A of title

10 IV of the Social Security Act of the State in which

11 the individual resides’’;

12 (5) in subsection (c)—

13 (A) in paragraph (1)(C), by striking ‘‘aid

14 to families with dependent children under title

15 IV of the Social Security Act’’ and inserting

16 ‘‘assistance under a State program funded part

17 A of title IV of the Social Security Act’’;

18 (B) in paragraph (2), by striking ‘‘aid to

19 families with dependent children under title IV

20 of such Act’’ and inserting ‘‘assistance under a

21 State program funded part A of title IV of the

22 Social Security Act’’;

23 (6) in subsection (d), by striking ‘‘job opportu24 nities and basic skills training program (as provided

25 for under title IV of the Social Security Act)’’ and
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1 inserting ‘‘the State program funded under part A

2 of title IV of the Social Security Act’’; and

3 (7) by striking subsections (e) through (g) and

4 inserting the following:

5 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the

6 purpose of conducting projects under this section, there

7 is authorized to be appropriated an amount not to exceed

8 $25,000,000 for any fiscal year.’’.

9 SEC. 4114. SECRETARIAL SUBMISSION OF LEGISLATIVE

10 PROPOSAL FOR TECHNICAL AND CONFORM11 ING AMENDMENTS.

12 Not later than 90 days after the date of the enact13 ment of this Act, the Secretary of Health and Human

14 Services and the Commissioner of Social Security, in con15 sultation, as appropriate, with the heads of other Federal

16 agencies, shall submit to the appropriate committees of

17 Congress a legislative proposal proposing such technical

18 and conforming amendments as are necessary to bring the

19 law into conformity with the policy embodied in this sub20 title.

21 SEC. 4115. EFFECTIVE DATE; TRANSITION RULE.

22 (a) EFFECTIVE DATES.—

23 (1) IN GENERAL.—Except as otherwise pro24 vided in this subtitle, this subtitle and the amend-
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1 ments made by this subtitle shall take effect on July

2 1, 1997.

3 (2) DELAYED EFFECTIVE DATE FOR CERTAIN

4 PROVISIONS.—Notwithstanding any other provision

5 of this section, paragraphs (2), (3), (4), (5), (8), and

6 (10) of section 409(a) and section 411(a) of the So7 cial Security Act (as added by the amendments

8 made by section 4103(a) of this Act) shall not take

9 effect with respect to a State until, and shall apply

10 only with respect to conduct that occurs on or after,

11 the later of—

12 (A) July 1, 1997; or

13 (B) the date that is 6 months after the

14 date the Secretary of Health and Human Serv15 ices receives from the State a plan described in

16 section 402(a) of the Social Security Act (as

17 added by such amendment).

18 (3) ELIMINATION OF CHILD CARE PROGRAMS.—

19 The amendments made by section 4103(d) shall take

20 effect on October 1, 1996.

21 (4) DEFINITIONS APPLICABLE TO NEW CHILD

22 CARE ENTITLEMENT.—Sections 403(a)(1)(C),

23 403(a)(1)(D), and 419(4) of the Social Security Act,

24 as added by the amendments made by section
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1 4103(a) of this Act, shall take effect on October 1,

2 1996.

3 (b) TRANSITION RULES.—Effective on the date of

4 the enactment of this Act:

5 (1) STATE OPTION TO ACCELERATE EFFECTIVE

6 DATE.—

7 (A) IN GENERAL.—If the Secretary of

8 Health and Human Services receives from a

9 State a plan described in section 402(a) of the

10 Social Security Act (as added by the amend11 ment made by section 4103(a)(1) of this Act),

12 then—

13 (i) on and after the date of such re14 ceipt—

15 (I) except as provided in clause

16 (ii), this subtitle and the amendments

17 made by this subtitle (other than by

18 section 4103(d) of this Act) shall

19 apply with respect to the State; and

20 (II) the State shall be considered

21 an eligible State for purposes of part

22 A of title IV of the Social Security

23 Act (as in effect pursuant to the

24 amendments made by such section

25 4103(a)); and
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1 (ii) during the period that begins on

2 the date of such receipt and ends on June

3 30, 1997, there shall remain in effect with

4 respect to the State—

5 (I) section 403(h) of the Social

6 Security Act (as in effect on Septem7 ber 30, 1995); and

8 (II) all State reporting require9 ments under parts A and F of title IV

10 of the Social Security Act (as in effect

11 on September 30, 1995), modified by

12 the Secretary as appropriate, taking

13 into account the State program under

14 part A of title IV of the Social Secu15 rity Act (as in effect pursuant to the

16 amendments made by such section

17 4103(a)).

18 (B) LIMITATIONS ON FEDERAL OBLIGA19 TIONS.—

20 (i) UNDER AFDC PROGRAM.—The

21 total obligations of the Federal Govern22 ment to a State under part A of title IV

23 of the Social Security Act (as in effect on

24 September 30, 1995) with respect to ex25 penditures in fiscal year 1997 shall not ex-
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1 ceed an amount equal to the State family

2 assistance grant.

3 (ii) UNDER TEMPORARY FAMILY AS4 SISTANCE PROGRAM.—Notwithstanding

5 section 403(a)(1) of the Social Security

6 Act (as in effect pursuant to the amend7 ments made by section 4103(a) of this

8 Act), the total obligations of the Federal

9 Government to a State under such section

10 403(a)(1)—

11 (I) for fiscal year 1996, shall be

12 an amount equal to—

13 (aa) the State family assist14 ance grant; multiplied by

(bb) 1 15 ⁄366 of the number of

16 days during the period that be17 gins on the date the Secretary of

18 Health and Human Services first

19 receives from the State a plan

20 described in section 402(a) of the

21 Social Security Act (as added by

22 the amendment made by section

23 4103(a)(1) of this Act) and ends

24 on September 30, 1996; and
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1 (II) for fiscal year 1997, shall be

2 an amount equal to the lesser of—

3 (aa) the amount (if any) by

4 which the State family assistance

5 grant exceeds the total obliga6 tions of the Federal Government

7 to the State under part A of title

8 IV of the Social Security Act (as

9 in effect on September 30, 1995)

10 with respect to expenditures in

11 fiscal year 1997; or

12 (bb) the State family assistance grant, multiplied by 1 13 ⁄365 of

14 the number of days during the

15 period that begins on October 1,

16 1996, or the date the Secretary

17 of Health and Human Services

18 first receives from the State a

19 plan described in section 402(a)

20 of the Social Security Act (as

21 added by the amendment made

22 by section 4103(a)(1) of this

23 Act), whichever is later, and ends

24 on September 30, 1997.
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1 (iii) CHILD CARE OBLIGATIONS EX2 CLUDED IN DETERMINING FEDERAL AFDC

3 OBLIGATIONS.—As used in this subpara4 graph, the term ‘‘obligations of the Federal

5 Government to the State under part A of

6 title IV of the Social Security Act’’ does

7 not include any obligation of the Federal

8 Government with respect to child care ex9 penditures by the State.

10 (C) SUBMISSION OF STATE PLAN FOR FIS11 CAL YEAR 1996 OR 1997 DEEMED ACCEPTANCE

12 OF GRANT LIMITATIONS AND FORMULA AND

13 TERMINATION OF AFDC ENTITLEMENT.—The

14 submission of a plan by a State pursuant to

15 subparagraph (A) is deemed to constitute—

16 (i) the State’s acceptance of the grant

17 reductions under subparagraph (B) (in18 cluding the formula for computing the

19 amount of the reduction); and

20 (ii) the termination of any entitlement

21 of any individual or family to benefits or

22 services under the State AFDC program.

23 (D) DEFINITIONS.—As used in this para24 graph:
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1 (i) STATE AFDC PROGRAM.—The term

2 ‘‘State AFDC program’’ means the State

3 program under parts A and F of title IV

4 of the Social Security Act (as in effect on

5 September 30, 1995).

6 (ii) STATE.—The term ‘‘State’’ means

7 the 50 States and the District of Colum8 bia.

9 (iii) STATE FAMILY ASSISTANCE

10 GRANT.—The term ‘‘State family assist11 ance grant’’ means the State family assist12 ance grant (as defined in section

13 403(a)(1)(B) of the Social Security Act, as

14 added by the amendment made by section

15 4103(a)(1) of this Act).

16 (2) CLAIMS, ACTIONS, AND PROCEEDINGS.—

17 The amendments made by this subtitle shall not

18 apply with respect to—

19 (A) powers, duties, functions, rights,

20 claims, penalties, or obligations applicable to

21 aid, assistance, or services provided before the

22 effective date of this subtitle under the provi23 sions amended; and

24 (B) administrative actions and proceedings

25 commenced before such date, or authorized be-
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1 fore such date to be commenced, under such

2 provisions.

3 (3) CLOSING OUT ACCOUNT FOR THOSE PRO4 GRAMS TERMINATED OR SUBSTANTIALLY MODIFIED

5 BY THIS SUBTITLE.—In closing out accounts, Fed6 eral and State officials may use scientifically accept7 able statistical sampling techniques. Claims made

8 with respect to State expenditures under a State

9 plan approved under part A of title IV of the Social

10 Security Act (as in effect on September 30, 1995)

11 with respect to assistance or services provided on or

12 before September 30, 1995, shall be treated as

13 claims with respect to expenditures during fiscal

14 year 1995 for purposes of reimbursement even if

15 payment was made by a State on or after October

16 1, 1995. Each State shall complete the filing of all

17 claims under the State plan (as so in effect) within

18 2 years after the date of the enactment of this Act.

19 The head of each Federal department shall—

20 (A) use the single audit procedure to re21 view and resolve any claims in connection with

22 the close out of programs under such State

23 plans; and

24 (B) reimburse States for any payments

25 made for assistance or services provided during
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1 a prior fiscal year from funds for fiscal year

2 1995, rather than from funds authorized by

3 this subtitle.

4 (4) CONTINUANCE IN OFFICE OF ASSISTANT

5 SECRETARY FOR FAMILY SUPPORT.—The individual

6 who, on the day before the effective date of this sub7 title, is serving as Assistant Secretary for Family

8 Support within the Department of Health and

9 Human Services shall, until a successor is appointed

10 to such position—

11 (A) continue to serve in such position; and

12 (B) except as otherwise provided by law—

13 (i) continue to perform the functions

14 of the Assistant Secretary for Family Sup15 port under section 417 of the Social Secu16 rity Act (as in effect before such effective

17 date); and

18 (ii) have the powers and duties of the

19 Assistant Secretary for Family Support

20 under section 416 of the Social Security

21 Act (as in effect pursuant to the amend22 ment made by section 4103(a)(1) of this

23 Act).

24 (c) TERMINATION OF ENTITLEMENT UNDER AFDC

25 PROGRAM.—Effective October 1, 1996, no individual or
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1 family shall be entitled to any benefits or services under

2 any State plan approved under part A or F of title IV

3 of the Social Security Act (as in effect on September 30,

4 1995).

5 Subtitle B—Supplemental Security

6 Income

7 SEC. 4200. REFERENCE TO SOCIAL SECURITY ACT.

8 Except as otherwise specifically provided, wherever in

9 this subtitle an amendment is expressed in terms of an

10 amendment to or repeal of a section or other provision,

11 the reference shall be considered to be made to that sec12 tion or other provision of the Social Security Act.

13 CHAPTER 1—ELIGIBILITY RESTRICTIONS

14 SEC. 4201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDI15 VIDUALS FOUND TO HAVE FRAUDULENTLY

16 MISREPRESENTED RESIDENCE IN ORDER TO

17 OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR

18 MORE STATES.

19 (a) IN GENERAL.—Section 1611(e) (42 U.S.C.

20 1382(e)), as amended by section 105(b)(4) of the Contract

21 with America Advancement Act of 1996, is amended by

22 redesignating paragraph (5) as paragraph (3) and by add23 ing at the end the following new paragraph:

24 ‘‘(4)(A) No person shall be considered an eligible in25 dividual or eligible spouse for purposes of this title during
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1 the 10-year period that begins on the date the person is

2 convicted in Federal or State court of having made a

3 fraudulent statement or representation with respect to the

4 place of residence of the person in order to receive assist5 ance simultaneously from 2 or more States under pro6 grams that are funded under title IV, title XV, title XIX,

7 or the Food Stamp Act of 1977, or benefits in 2 or more

8 States under the supplemental security income program

9 under this title.

10 ‘‘(B) As soon as practicable after the conviction of

11 a person in a Federal or State court as described in sub12 paragraph (A), an official of such court shall notify the

13 Commissioner of such conviction.’’.

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

15 this section shall take effect on the date of the enactment

16 of this Act.

17 SEC. 4202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS

18 AND PROBATION AND PAROLE VIOLATORS.

19 (a) IN GENERAL.—Section 1611(e) (42 U.S.C.

20 1382(e)), as amended by section 4201(a) of this Act, is

21 amended by adding at the end the following new para22 graph:

23 ‘‘(5) No person shall be considered an eligible individ24 ual or eligible spouse for purposes of this title with respect

25 to any month if during such month the person is—
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1 ‘‘(A) fleeing to avoid prosecution, or custody or

2 confinement after conviction, under the laws of the

3 place from which the person flees, for a crime, or an

4 attempt to commit a crime, which is a felony under

5 the laws of the place from which the person flees, or

6 which, in the case of the State of New Jersey, is a

7 high misdemeanor under the laws of such State; or

8 ‘‘(B) violating a condition of probation or pa9 role imposed under Federal or State law.’’.

10 (b) EXCHANGE OF INFORMATION.—Section 1611(e)

11 (42 U.S.C. 1382(e)), as amended by section 4201(a) of

12 this Act and subsection (a) of this section, is amended by

13 adding at the end the following new paragraph:

14 ‘‘(6) Notwithstanding any other provision of law

15 (other than section 6103 of the Internal Revenue Code

16 of 1986), the Commissioner shall furnish any Federal,

17 State, or local law enforcement officer, upon the written

18 request of the officer, with the current address, Social Se19 curity number, and photograph (if applicable) of any re20 cipient of benefits under this title, if the officer furnishes

21 the Commissioner with the name of the recipient, and

22 other identifying information as reasonably required by

23 the Commissioner to establish the unique identity of the

24 recipient, and notifies the Commissioner that—

25 ‘‘(A) the recipient—
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1 ‘‘(i) is described in subparagraph (A) or

2 (B) of paragraph (5); or

3 ‘‘(ii) has information that is necessary for

4 the officer to conduct the officer’s official du5 ties; and

6 ‘‘(B) the location or apprehension of the recipi7 ent is within the officer’s official duties.’’.

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

9 this section shall take effect on the date of the enactment

10 of this Act.

11 SEC. 4203. TREATMENT OF PRISONERS.

12 (a) IMPLEMENTATION OF PROHIBITION AGAINST

13 PAYMENT OF BENEFITS TO PRISONERS.—

14 (1) IN GENERAL.—Section 1611(e)(1) (42

15 U.S.C. 1382(e)(1)) is amended by adding at the end

16 the following new subparagraph:

17 ‘‘(I)(i) The Commissioner shall enter into a contract,

18 with any interested State or local institution referred to

19 in subparagraph (A), under which—

20 ‘‘(I) the institution shall provide to the Com21 missioner, on a monthly basis, the names, social se22 curity account numbers, dates of birth, and such

23 other identifying information concerning the inmates

24 of the institution as the Commissioner may require

25 for the purpose of carrying out paragraph (1); and
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1 ‘‘(II) the Commissioner shall pay to any such

2 institution, with respect to each inmate of the insti3 tution who is eligible for a benefit under this title for

4 the month preceding the first month throughout

5 which such inmate is in such institution and be6 comes ineligible for such benefit (or becomes eligible

7 only for a benefit payable at a reduced rate) as a re8 sult of the application of this paragraph, an amount

9 not to exceed $400 if the institution furnishes the

10 information described in subclause (I) to the Com11 missioner within 30 days after such individual be12 comes an inmate of such institution, or an amount

13 not to exceed $200 if the institution furnishes such

14 information after 30 days after such date but within

15 90 days after such date.

16 ‘‘(ii) The provisions of section 552a of title 5, United

17 States Code, shall not apply to any contract entered into

18 under clause (i) or to information exchanged pursuant to

19 such contract.’’.

20 (2) CONFORMING OASDI AMENDMENTS.—Sec21 tion 202(x)(3) (42 U.S.C. 402(x)(3)) is amended—

22 (A) by inserting ‘‘(A)’’ after ‘‘(3)’’; and

23 (B) by adding at the end the following new

24 subparagraph:
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1 ‘‘(B)(i) The Commissioner shall enter into a contract,

2 with any interested State or local institution described in

3 clause (i) or (ii) of paragraph (1)(A) the primary purpose

4 of which is to confine individuals as described in para5 graph (1)(A), under which—

6 ‘‘(I) the institution shall provide to the Com7 missioner, on a monthly basis, the names, social se8 curity account numbers, dates of birth, and such

9 other identifying information concerning the individ10 uals confined in the institution as the Commissioner

11 may require for the purpose of carrying out para12 graph (1); and

13 ‘‘(II) the Commissioner shall pay to any such

14 institution, with respect to each individual who is en15 titled to a benefit under this title for the month pre16 ceding the first month throughout which such indi17 vidual is confined in such institution as described in

18 paragraph (1)(A), an amount not to exceed $400 if

19 the institution furnishes the information described in

20 subclause (I) to the Commissioner within 30 days

21 after the date such individual’s confinement in such

22 institution begins, or an amount not to exceed $200

23 if the institution furnishes such information after 30

24 days after such date but within 90 days after such

25 date.
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1 ‘‘(ii) The provisions of section 552a of title 5, United

2 States Code, shall not apply to any contract entered into

3 under clause (i) or to information exchanged pursuant to

4 such contract.’’.

5 (b) DENIAL OF SSI BENEFITS FOR 10 YEARS TO A

6 PERSON FOUND TO HAVE FRAUDULENTLY OBTAINED

7 SSI BENEFITS WHILE IN PRISON.—

8 (1) IN GENERAL.—Section 1611(e)(1) (42

9 U.S.C. 1382(e)(1)), as amended by subsection (a)(1)

10 of this section, is amended by adding at the end the

11 following new subparagraph:

12 ‘‘(J) In any case in which the Commissioner of Social

13 Security finds that a person has made a fraudulent state14 ment or representation in order to obtain or to continue

15 to receive benefits under this title while being an inmate

16 in a penal institution, such person shall not be considered

17 an eligible individual or eligible spouse for any month end18 ing during the 10-year period beginning on the date on

19 which such person ceases being such an inmate.’’.

20 (2) EFFECTIVE DATE.—The amendment made

21 by this subsection shall apply with respect to state22 ments or representations made on or after the date

23 of the enactment of this Act.
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1 (c) ELIMINATION OF OASDI REQUIREMENT THAT

2 CONFINEMENT STEM FROM CRIME PUNISHABLE BY IM3 PRISONMENT FOR MORE THAN 1 YEAR.—

4 (1) IN GENERAL.—Section 202(x)(1)(A) (42

5 U.S.C. 402(x)(1)(A)) is amended—

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

7 striking ‘‘during’’ and inserting ‘‘throughout’’;

8 (B) in clause (i), by striking ‘‘pursuant’’

9 and all that follows through ‘‘imposed)’’; and

10 (C) in clause (ii)(I), by striking ‘‘an of11 fense punishable by imprisonment for more

12 than 1 year’’ and inserting ‘‘a criminal of13 fense’’.

14 (2) EFFECTIVE DATE.—The amendments made

15 by this subsection shall be effective with respect to

16 benefits payable for months beginning more than

17 180 days after the date of the enactment of this Act.

18 (d) STUDY OF OTHER POTENTIAL IMPROVEMENTS IN

19 THE COLLECTION OF INFORMATION RESPECTING PUBLIC

20 INMATES.—

21 (1) STUDY.—The Commissioner of Social Secu22 rity shall conduct a study of the desirability, feasibil23 ity, and cost of—

24 (A) establishing a system under which

25 Federal, State, and local courts would furnish
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1 to the Commissioner such information respect2 ing court orders by which individuals are con3 fined in jails, prisons, or other public penal,

4 correctional, or medical facilities as the Com5 missioner may require for the purpose of carry6 ing out sections 202(x) and 1611(e)(1) of the

7 Social Security Act; and

8 (B) requiring that State and local jails,

9 prisons, and other institutions that enter into

10 contracts with the Commissioner under section

11 202(x)(3)(B) or 1611(e)(1)(I) of the Social Se12 curity Act furnish the information required by

13 such contracts to the Commissioner by means

14 of an electronic or other sophisticated data ex15 change system.

16 (2) REPORT.—Not later than 1 year after the

17 date of the enactment of this Act, the Commissioner

18 of Social Security shall submit a report on the re19 sults of the study conducted pursuant to this sub20 section to the Committee on Finance of the Senate

21 and the Committee on Ways and Means of the

22 House of Representatives.
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1 SEC. 4204. EFFECTIVE DATE OF APPLICATION FOR BENE2 FITS.

3 (a) IN GENERAL.—Subparagraphs (A) and (B) of

4 section 1611(c)(7) (42 U.S.C. 1382(c)(7)) are amended

5 to read as follows:

6 ‘‘(A) the first day of the month following the

7 date such application is filed, or

8 ‘‘(B) the first day of the month following the

9 date such individual becomes eligible for such bene10 fits with respect to such application.’’.

11 (b) SPECIAL RULE RELATING TO EMERGENCY AD12 VANCE PAYMENTS.—Section 1631(a)(4)(A) (42 U.S.C.

13 1383(a)(4)(A)) is amended—

14 (1) by inserting ‘‘for the month following the

15 date the application is filed’’ after ‘‘is presumptively

16 eligible for such benefits’’; and

17 (2) by inserting ‘‘, which shall be repaid

18 through proportionate reductions in such benefits

19 over a period of not more than 6 months’’ before the

20 semicolon.

21 (c) CONFORMING AMENDMENTS.—

22 (1) Section 1614(b) (42 U.S.C. 1382c(b)) is

23 amended by striking ‘‘at the time the application or

24 request is filed’’ and inserting ‘‘on the first day of

25 the month following the date the application or re26 quest is filed’’.
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1 (2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3))

2 is amended by inserting ‘‘following the month’’ after

3 ‘‘beginning with the month’’.

4 (d) EFFECTIVE DATE.—

5 (1) IN GENERAL.—The amendments made by

6 this section shall apply to applications for benefits

7 under title XVI of the Social Security Act filed on

8 or after the date of the enactment of this Act, with9 out regard to whether regulations have been issued

10 to implement such amendments.

11 (2) BENEFITS UNDER TITLE XVI.—For pur12 poses of this subsection, the term ‘‘benefits under

13 title XVI of the Social Security Act’’ includes sup14 plementary payments pursuant to an agreement for

15 Federal administration under section 1616(a) of the

16 Social Security Act, and payments pursuant to an

17 agreement entered into under section 212(b) of Pub18 lic Law 93–66.

19 CHAPTER 2—BENEFITS FOR DISABLED

20 CHILDREN

21 SEC. 4211. DEFINITION AND ELIGIBILITY RULES.

22 (a) DEFINITION OF CHILDHOOD DISABILITY.—Sec23 tion 1614(a)(3) (42 U.S.C. 1382c(a)(3)), as amended by

24 section 105(b)(1) of the Contract with America Advance25 ment Act of 1996, is amended—
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1 (1) in subparagraph (A), by striking ‘‘An indi2 vidual’’ and inserting ‘‘Except as provided in sub3 paragraph (C), an individual’’;

4 (2) in subparagraph (A), by striking ‘‘(or, in

5 the case of an individual under the age of 18, if he

6 suffers from any medically determinable physical or

7 mental impairment of comparable severity)’’;

8 (3) by redesignating subparagraphs (C) through

9 (I) as subparagraphs (D) through (J), respectively;

10 (4) by inserting after subparagraph (B) the fol11 lowing new subparagraph:

12 ‘‘(C)(i) An individual under the age of 18 shall be

13 considered disabled for the purposes of this title if that

14 individual has a medically determinable physical or mental

15 impairment, which results in marked and severe functional

16 limitations, and which can be expected to result in death

17 or which has lasted or can be expected to last for a contin18 uous period of not less than 12 months.

19 ‘‘(ii) The Commissioner shall ensure that the com20 bined effects of all physical or mental impairments of an

21 individual are taken into account in determining whether

22 an individual is disabled in accordance with clause (i).

23 ‘‘(iii) The Commissioner shall ensure that the regula24 tions prescribed under this subparagraph provide for the
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1 evaluation of children who cannot be tested because of

2 their young age.

3 ‘‘(iv) Notwithstanding the preceding provisions of

4 this subparagraph, no individual under the age of 18 who

5 engages in substantial gainful activity (determined in ac6 cordance with regulations prescribed pursuant to subpara7 graph (E)) may be considered to be disabled.’’; and

8 (5) in subparagraph (F), as redesignated by

9 paragraph (3), by striking ‘‘(D)’’ and inserting

10 ‘‘(E)’’.

11 (b) CHANGES TO CHILDHOOD SSI REGULATIONS.—

12 (1) MODIFICATION TO MEDICAL CRITERIA FOR

13 EVALUATION OF MENTAL AND EMOTIONAL DIS14 ORDERS.—The Commissioner of Social Security

15 shall modify sections 112.00C.2. and

16 112.02B.2.c.(2) of appendix 1 to subpart P of part

17 404 of title 20, Code of Federal Regulations, to

18 eliminate references to maladaptive behavior in the

19 domain of personal/behavorial function.

20 (2) DISCONTINUANCE OF INDIVIDUALIZED

21 FUNCTIONAL ASSESSMENT.—The Commissioner of

22 Social Security shall discontinue the individualized

23 functional assessment for children set forth in sec24 tions 416.924d and 416.924e of title 20, Code of

25 Federal Regulations.
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1 (c) MEDICAL IMPROVEMENT REVIEW STANDARD AS

2 IT APPLIES TO INDIVIDUALS UNDER THE AGE OF 18.—

3 Section 1614(a)(4) (42 U.S.C. 1382(a)(4)) is amended—

4 (1) by redesignating subclauses (I) and (II) of

5 clauses (i) and (ii) of subparagraph (B) as items

6 (aa) and (bb), respectively;

7 (2) by redesignating clauses (i) and (ii) of sub8 paragraphs (A) and (B) as subclauses (I) and (II),

9 respectively;

10 (3) by redesignating subparagraphs (A) through

11 (C) as clauses (i) through (iii), respectively;

12 (4) by inserting before clause (i) (as redesig13 nated by paragraph (3)) the following new subpara14 graph:

15 ‘‘(A) in the case of an individual who is age 18

16 or older—’’;

17 (5) by inserting after and below subparagraph

18 (A)(iii) (as so redesignated) the following new sub19 paragraph:

20 ‘‘(B) in the case of an individual who is under

21 the age of 18—

22 ‘‘(i) substantial evidence which dem23 onstrates that there has been medical improve24 ment in the individual’s impairment or com25 bination of impairments, and that such impair-
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1 ment or combination of impairments no longer

2 results in marked and severe functional limita3 tions; or

4 ‘‘(ii) substantial evidence which dem5 onstrates that, as determined on the basis of

6 new or improved diagnostic techniques or eval7 uations, the individual’s impairment or com8 bination of impairments, is not as disabling as

9 it was considered to be at the time of the most

10 recent prior decision that the individual was

11 under a disability or continued to be under a

12 disability, and such impairment or combination

13 of impairments does not result in marked and

14 severe functional limitations; or’’;

15 (6) by redesignating subparagraph (D) as sub16 paragraph (C) and by inserting in such subpara17 graph ‘‘in the case of any individual,’’ before ‘‘sub18 stantial evidence’’; and

19 (7) in the first sentence following subparagraph

20 (C) (as redesignated by paragraph (6)), by—

21 (A) inserting ‘‘(i)’’ before ‘‘to restore’’; and

22 (B) inserting ‘‘, or (ii) in the case of an in23 dividual under the age of 18, to eliminate or

24 improve the individual’s impairment or com25 bination of impairments so that it no longer re-
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1 sults in marked and severe functional limita2 tions’’ immediately before the period.

3 (d) EFFECTIVE DATE, ETC.—

4 (1) EFFECTIVE DATE.—The provisions of, and

5 amendments made by, this section shall apply to ap6 plications for benefits under title XVI of the Social

7 Security Act pending on, or filed on or after, the

8 date of the enactment of this Act, without regard to

9 whether regulations have been issued to implement

10 such provisions and amendments.

11 (2) APPLICATION TO CURRENT RECIPIENTS.—

12 (A) ELIGIBILITY REDETERMINATIONS.—

13 During the period beginning on the date of the

14 enactment of this Act and ending on the date

15 which is 1 year after such date of enactment,

16 the Commissioner of Social Security shall rede17 termine the eligibility of any individual under

18 age 18 who is eligible for supplemental security

19 income benefits by reason of disability under

20 title XVI of the Social Security Act as of the

21 date of the enactment of this Act and whose eli22 gibility for such benefits may terminate by rea23 son of the provisions of, or amendments made

24 by, this section. With respect to any redeter25 mination under this subparagraph—
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1 (i) section 1614(a)(4) of the Social

2 Security Act (42 U.S.C. 1382c(a)(4)) shall

3 not apply;

4 (ii) the Commissioner of Social Secu5 rity shall apply the eligibility criteria for

6 new applicants for benefits under title XVI

7 of such Act;

8 (iii) the Commissioner shall give such

9 redetermination priority over all continuing

10 eligibility reviews and other reviews under

11 such title; and

12 (iv) such redetermination shall be

13 counted as a review or redetermination

14 otherwise required to be made under sec15 tion 208 of the Social Security Independ16 ence and Program Improvements Act of

17 1994 or any other provision of title XVI of

18 the Social Security Act.

19 (B) GRANDFATHER PROVISION.—The pro20 visions of, and amendments made by, this sec21 tion, and the redetermination under subpara22 graph (A), shall only apply with respect to the

23 benefits of an individual described in subpara24 graph (A) for months beginning on or after the
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1 date of the redetermination with respect to such

2 individual.

3 (C) NOTICE.—Not later than January 1,

4 1997, the Commissioner of Social Security shall

5 notify an individual described in subparagraph

6 (A) of the provisions of this paragraph.

7 (3) REPORT.—The Commissioner of Social Se8 curity shall report to the Congress regarding the

9 progress made in implementing the provisions of,

10 and amendments made by, this section on child dis11 ability evaluations not later than 180 days after the

12 date of the enactment of this Act.

13 (4) REGULATIONS.—Notwithstanding any other

14 provision of law, the Commissioner of Social Secu15 rity shall submit for review to the committees of ju16 risdiction in the Congress any final regulation per17 taining to the eligibility of individuals under age 18

18 for benefits under title XVI of the Social Security

19 Act at least 45 days before the effective date of such

20 regulation. The submission under this paragraph

21 shall include supporting documentation providing a

22 cost analysis, workload impact, and projections as to

23 how the regulation will effect the future number of

24 recipients under such title.

25 (5) APPROPRIATIONS.—
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1 (A) IN GENERAL.—Out of any money in

2 the Treasury not otherwise appropriated, there

3 are authorized to be appropriated and are here4 by appropriated, to remain available without

5 fiscal year limitation, $200,000,000 for fiscal

6 year 1997, $75,000,000 for fiscal year 1998,

7 and $25,000,000 for fiscal year 1999, for the

8 Commissioner of Social Security to utilize only

9 for continuing disability reviews and redeter10 minations under title XVI of the Social Security

11 Act, with reviews and redeterminations for indi12 viduals affected by the provisions of subsection

13 (b) given highest priority.

14 (B) ADDITIONAL FUNDS.—Amounts appro15 priated under subparagraph (A) shall be in ad16 dition to any funds otherwise appropriated for

17 continuing disability reviews and redetermina18 tions under title XVI of the Social Security Act.

19 (6) BENEFITS UNDER TITLE XVI.—For pur20 poses of this subsection, the term ‘‘benefits under

21 title XVI of the Social Security Act’’ includes sup22 plementary payments pursuant to an agreement for

23 Federal administration under section 1616(a) of the

24 Social Security Act, and payments pursuant to an
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1 agreement entered into under section 212(b) of Pub2 lic Law 93–66.

3 SEC. 4212. ELIGIBILITY REDETERMINATIONS AND CON4 TINUING DISABILITY REVIEWS.

5 (a) CONTINUING DISABILITY REVIEWS RELATING TO

6 CERTAIN CHILDREN.—Section 1614(a)(3)(H) (42 U.S.C.

7 1382c(a)(3)(H)), as redesignated by section 4211(a)(3) of

8 this Act, is amended—

9 (1) by inserting ‘‘(i)’’ after ‘‘(H)’’; and

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

11 clause:

12 ‘‘(ii)(I) Not less frequently than once every 3 years,

13 the Commissioner shall review in accordance with para14 graph (4) the continued eligibility for benefits under this

15 title of each individual who has not attained 18 years of

16 age and is eligible for such benefits by reason of an im17 pairment (or combination of impairments) which is likely

18 to improve (or, at the option of the Commissioner, which

19 is unlikely to improve).

20 ‘‘(II) A representative payee of a recipient whose case

21 is reviewed under this clause shall present, at the time

22 of review, evidence demonstrating that the recipient is,

23 and has been, receiving treatment, to the extent consid24 ered medically necessary and available, of the condition

25 which was the basis for providing benefits under this title.
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1 ‘‘(III) If the representative payee refuses to comply

2 without good cause with the requirements of subclause

3 (II), the Commissioner of Social Security shall, if the

4 Commissioner determines it is in the best interest of the

5 individual, promptly suspend payment of benefits to the

6 representative payee, and provide for payment of benefits

7 to an alternative representative payee of the individual or,

8 if the interest of the individual under this title would be

9 served thereby, to the individual.

10 ‘‘(IV) Subclause (II) shall not apply to the represent11 ative payee of any individual with respect to whom the

12 Commissioner determines such application would be inap13 propriate or unnecessary. In making such determination,

14 the Commissioner shall take into consideration the nature

15 of the individual’s impairment (or combination of impair16 ments). Section 1631(c) shall not apply to a finding by

17 the Commissioner that the requirements of subclause (II)

18 should not apply to an individual’s representative payee.’’.

19 (b) DISABILITY ELIGIBILITY REDETERMINATIONS

20 REQUIRED FOR SSI RECIPIENTS WHO ATTAIN 18 YEARS

21 OF AGE.—

22 (1) IN GENERAL.—Section 1614(a)(3)(H) (42

23 U.S.C. 1382c(a)(3)(H)), as amended by subsection

24 (a) of this section, is amended by adding at the end

25 the following new clause:
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1 ‘‘(iii) If an individual is eligible for benefits under this

2 title by reason of disability for the month preceding the

3 month in which the individual attains the age of 18 years,

4 the Commissioner shall redetermine such eligibility—

5 ‘‘(I) during the 1-year period beginning on the

6 individual’s 18th birthday; and

7 ‘‘(II) by applying the criteria used in determin8 ing the initial eligibility for applicants who are age

9 18 or older.

10 With respect to a redetermination under this clause, para11 graph (4) shall not apply and such redetermination shall

12 be considered a substitute for a review or redetermination

13 otherwise required under any other provision of this sub14 paragraph during that 1-year period.’’.

15 (2) CONFORMING REPEAL.—Section 207 of the

16 Social Security Independence and Program Improve17 ments Act of 1994 (42 U.S.C. 1382 note; 108 Stat.

18 1516) is hereby repealed.

19 (c) CONTINUING DISABILITY REVIEW REQUIRED FOR

20 LOW BIRTH WEIGHT BABIES.—Section 1614(a)(3)(H)

21 (42 U.S.C. 1382c(a)(3)(H)), as amended by subsections

22 (a) and (b) of this section, is amended by adding at the

23 end the following new clause:

24 ‘‘(iv)(I) Not later than 12 months after the birth of

25 an individual, the Commissioner shall review in accordance
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1 with paragraph (4) the continuing eligibility for benefits

2 under this title by reason of disability of such individual

3 whose low birth weight is a contributing factor material

4 to the Commissioner’s determination that the individual

5 is disabled.

6 ‘‘(II) A review under subclause (I) shall be considered

7 a substitute for a review otherwise required under any

8 other provision of this subparagraph during that 12-

9 month period.

10 ‘‘(III) A representative payee of a recipient whose

11 case is reviewed under this clause shall present, at the

12 time of review, evidence demonstrating that the recipient

13 is, and has been, receiving treatment, to the extent consid14 ered medically necessary and available, of the condition

15 which was the basis for providing benefits under this title.

16 ‘‘(IV) If the representative payee refuses to comply

17 without good cause with the requirements of subclause

18 (III), the Commissioner of Social Security shall, if the

19 Commissioner determines it is in the best interest of the

20 individual, promptly suspend payment of benefits to the

21 representative payee, and provide for payment of benefits

22 to an alternative representative payee of the individual or,

23 if the interest of the individual under this title would be

24 served thereby, to the individual.
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1 ‘‘(V) Subclause (III) shall not apply to the represent2 ative payee of any individual with respect to whom the

3 Commissioner determines such application would be inap4 propriate or unnecessary. In making such determination,

5 the Commissioner shall take into consideration the nature

6 of the individual’s impairment (or combination of impair7 ments). Section 1631(c) shall not apply to a finding by

8 the Commissioner that the requirements of subclause (III)

9 should not apply to an individual’s representative payee.’’.

10 (d) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to benefits for months beginning

12 on or after the date of the enactment of this Act, without

13 regard to whether regulations have been issued to imple14 ment such amendments.

15 SEC. 4213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

16 (a) DISPOSAL OF RESOURCES FOR LESS THAN FAIR

17 MARKET VALUE.—

18 (1) IN GENERAL.—Section 1613(c) (42 U.S.C.

19 1382b(c)) is amended to read as follows:

20 ‘‘Disposal of Resources for Less Than Fair Market Value

21 ‘‘(c)(1)(A)(i) If an individual who has not attained

22 18 years of age (or any person acting on such individual’s

23 behalf) disposes of resources of the individual for less than

24 fair market value on or after the look-back date specified

25 in clause (ii)(I), the individual is ineligible for benefits
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1 under this title for months during the period beginning

2 on the date specified in clause (iii) and equal to the num3 ber of months specified in clause (iv).

4 ‘‘(ii)(I) The look-back date specified in this subclause

5 is a date that is 36 months before the date specified in

6 subclause (II).

7 ‘‘(II) The date specified in this subclause is the date

8 on which the individual applies for benefits under this title

9 or, if later, the date on which the disposal of the individ10 ual’s resources for less than fair market value occurs.

11 ‘‘(iii) The date specified in this clause is the first day

12 of the first month that follows the month in which the

13 individual’s resources were disposed of for less than fair

14 market value and that does not occur in any other period

15 of ineligibility under this paragraph.

16 ‘‘(iv) The number of months of ineligibility under this

17 clause for an individual shall be equal to—

18 ‘‘(I) the total, cumulative uncompensated value

19 of all the individual’s resources so disposed of on or

20 after the look-back date specified in clause (ii)(I), di21 vided by

22 ‘‘(II) the amount of the maximum monthly ben23 efit payable under section 1611(b) to an eligible in24 dividual for the month in which the date specified in

25 clause (ii)(II) occurs.
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1 ‘‘(B) An individual shall not be ineligible for benefits

2 under this title by reason of subparagraph (A) if the Com3 missioner determines that—

4 ‘‘(i) the individual intended to dispose of the re5 sources at fair market value;

6 ‘‘(ii) the resources were transferred exclusively

7 for a purpose other than to qualify for benefits

8 under this title;

9 ‘‘(iii) all resources transferred for less than fair

10 market value have been returned to the individual;

11 or

12 ‘‘(iv) the denial of eligibility would work an

13 undue hardship on the individual (as determined on

14 the basis of criteria established by the Commissioner

15 in regulations).

16 ‘‘(C) For purposes of this paragraph, in the case of

17 a resource held by an individual in common with another

18 person or persons in a joint tenancy, tenancy in common,

19 or similar arrangement, the resource (or the affected por20 tion of such resource) shall be considered to be disposed

21 of by such individual when any action is taken, either by

22 such individual or by any other person, that reduces or

23 eliminates such individual’s ownership or control of such

24 resource.
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1 ‘‘(D)(i) Notwithstanding subparagraph (A), this sub2 section shall not apply to a transfer of a resource to a

3 trust if the portion of the trust attributable to such re4 source is considered a resource available to the individual

5 pursuant to subsection (e)(3) (or would be so considered,

6 but for the application of subsection (e)(4)).

7 ‘‘(ii) In the case of a trust established by an individ8 ual (within the meaning of subsection (e)(2)(A)), if from

9 such portion of the trust (if any) that is considered a re10 source available to the individual pursuant to subsection

11 (e)(3) (or would be so considered but for the application

12 of subsection (e)(2)) or the residue of such portion upon

13 the termination of the trust—

14 ‘‘(I) there is made a payment other than to or

15 for the benefit of the individual, or

16 ‘‘(II) no payment could under any circumstance

17 be made to the individual,

18 then the payment described in subclause (I) or the fore19 closure of payment described in subclause (II) shall be

20 considered a disposal of resources by the individual subject

21 to this subsection, as of the date of such payment or fore22 closure, respectively.

23 ‘‘(2)(A) At the time an individual (and the individ24 ual’s eligible spouse, if any) applies for benefits under this

25 title, and at the time the eligibility of an individual (and
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1 such spouse, if any) for such benefits is redetermined, the

2 Commissioner of Social Security shall—

3 ‘‘(i) inform such individual of the provisions of

4 paragraph (1) providing for a period of ineligibility

5 for benefits under this title for individuals who make

6 certain dispositions of resources for less than fair

7 market value, and inform such individual that infor8 mation obtained pursuant to clause (ii) will be made

9 available to the State agency administering a State

10 plan approved under title XV or XIX (as provided

11 in subparagraph (B)); and

12 ‘‘(ii) obtain from such individual information

13 which may be used in determining whether or not a

14 period of ineligibility for such benefits would be re15 quired by reason of paragraph (1).

16 ‘‘(B) The Commissioner of Social Security shall make

17 the information obtained under subparagraph (A)(ii)

18 available, on request, to any State agency administering

19 a State plan approved under title XV or XIX.

20 ‘‘(3) For purposes of this subsection—

21 ‘‘(A) the term ‘trust’ includes any legal instru22 ment or device that is similar to a trust; and

23 ‘‘(B) the term ‘benefits under this title’ includes

24 supplementary payments pursuant to an agreement

25 for Federal administration under section 1616(a),
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1 and payments pursuant to an agreement entered

2 into under section 212(b) of Public Law 93–66.’’.

3 (2) EFFECTIVE DATE.—The amendment made

4 by this subsection shall be effective with respect to

5 transfers that occur at least 90 days after the date

6 of the enactment of this Act.

7 (b) TREATMENT OF ASSETS HELD IN TRUST.—

8 (1) TREATMENT AS RESOURCE.—Section 1613

9 (42 U.S.C. 1382) is amended by adding at the end

10 the following new subsection:

11 ‘‘Trusts

12 ‘‘(e)(1) In determining the resources of an individual

13 who has not attained 18 years of age, the provisions of

14 paragraph (3) shall apply to a trust established by such

15 individual.

16 ‘‘(2)(A) For purposes of this subsection, an individual

17 shall be considered to have established a trust if any assets

18 of the individual were transferred to the trust.

19 ‘‘(B) In the case of an irrevocable trust to which the

20 assets of an individual and the assets of any other person

21 or persons were transferred, the provisions of this sub22 section shall apply to the portion of the trust attributable

23 to the assets of the individual.

24 ‘‘(C) This subsection shall apply without regard to—
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1 ‘‘(i) the purposes for which the trust is estab2 lished;

3 ‘‘(ii) whether the trustees have or exercise any

4 discretion under the trust;

5 ‘‘(iii) any restrictions on when or whether dis6 tributions may be made from the trust; or

7 ‘‘(iv) any restrictions on the use of distributions

8 from the trust.

9 ‘‘(3)(A) In the case of a revocable trust, the corpus

10 of the trust shall be considered a resource available to the

11 individual.

12 ‘‘(B) In the case of an irrevocable trust, if there are

13 any circumstances under which payment from the trust

14 could be made to or for the benefit of the individual, the

15 portion of the corpus from which payment to or for the

16 benefit of the individual could be made shall be considered

17 a resource available to the individual.

18 ‘‘(4) The Commissioner may waive the application of

19 this subsection with respect to any individual if the Com20 missioner determines, on the basis of criteria prescribed

21 in regulations, that such application would work an undue

22 hardship on such individual.

23 ‘‘(5) For purposes of this subsection—

24 ‘‘(A) the term ‘trust’ includes any legal instru25 ment or device that is similar to a trust;
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1 ‘‘(B) the term ‘corpus’ means all property and

2 other interests held by the trust, including accumu3 lated earnings and any other addition to such trust

4 after its establishment (except that such term does

5 not include any such earnings or addition in the

6 month in which such earnings or addition is credited

7 or otherwise transferred to the trust);

8 ‘‘(C) the term ‘asset’ includes any income or re9 source of the individual, including—

10 ‘‘(i) any income otherwise excluded by sec11 tion 1612(b);

12 ‘‘(ii) any resource otherwise excluded by

13 this section; and

14 ‘‘(iii) any other payment or property that

15 the individual is entitled to but does not receive

16 or have access to because of action by—

17 ‘‘(I) such individual;

18 ‘‘(II) a person or entity (including a

19 court) with legal authority to act in place

20 of, or on behalf of, such individual; or

21 ‘‘(III) a person or entity (including a

22 court) acting at the direction of, or upon

23 the request of, such individual; and

24 ‘‘(D) the term ‘benefits under this title’ in25 cludes supplementary payments pursuant to an
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1 agreement for Federal administration under section

2 1616(a), and payments pursuant to an agreement

3 entered into under section 212(b) of Public Law 93–

4 66.’’.

5 (2) TREATMENT AS INCOME.—Section

6 1612(a)(2) (42 U.S.C. 1382a(a)(2)) is amended—

7 (A) by striking ‘‘and’’ at the end of sub8 paragraph (E);

9 (B) by striking the period at the end of

10 subparagraph (F) and inserting ‘‘; and’’; and

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

12 subparagraph:

13 ‘‘(G) any earnings of, and additions to, the

14 corpus of a trust (as defined in section 1613(f))

15 established by an individual (within the mean16 ing of section 1613(e)(2)(A)) and of which such

17 individual is a beneficiary (other than a trust to

18 which section 1613(e)(4) applies), except that

19 in the case of an irrevocable trust, there shall

20 exist circumstances under which payment from

21 such earnings or additions could be made to, or

22 for the benefit of, such individual.’’.

23 (3) EFFECTIVE DATE.—The amendments made

24 by this subsection shall take effect on the date which

25 is 90 days after the date of the enactment of this
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1 Act, and shall apply to trusts established on or after

2 such date.

3 (c) REQUIREMENT TO ESTABLISH ACCOUNT.—

4 (1) IN GENERAL.—Section 1631(a)(2) (42

5 U.S.C. 1383(a)(2)) is amended—

6 (A) by redesignating subparagraphs (F)

7 and (G) as subparagraphs (G) and (H), respec8 tively; and

9 (B) by inserting after subparagraph (E)

10 the following new subparagraph:

11 ‘‘(F)(i)(I) Each representative payee of an eligible in12 dividual under the age of 18 who is eligible for the pay13 ment of benefits described in subclause (II) shall establish

14 on behalf of such individual an account in a financial insti15 tution into which such benefits shall be paid, and shall

16 thereafter maintain such account for use in accordance

17 with clause (ii).

18 ‘‘(II) Benefits described in this subclause are past19 due monthly benefits under this title (which, for purposes

20 of this subclause, include State supplementary payments

21 made by the Commissioner pursuant to an agreement

22 under section 1616 or section 212(b) of Public Law 93–

23 66) in an amount (after any withholding by the Commis24 sioner for reimbursement to a State for interim assistance

25 under subsection (g)) that exceeds the product of—
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1 ‘‘(aa) 6, and

2 ‘‘(bb) the maximum monthly benefit payable

3 under this title to an eligible individual.

4 ‘‘(ii)(I) A representative payee shall use funds in the

5 account established under clause (i) to pay for allowable

6 expenses described in subclause (II).

7 ‘‘(II) An allowable expense described in this subclause

8 is an expense for—

9 ‘‘(aa) education or job skills training;

10 ‘‘(bb) personal needs assistance;

11 ‘‘(cc) special equipment;

12 ‘‘(dd) housing modification;

13 ‘‘(ee) medical treatment;

14 ‘‘(ff) therapy or rehabilitation; or

15 ‘‘(gg) any other item or service that the Com16 missioner determines to be appropriate;

17 provided that such expense benefits such individual and,

18 in the case of an expense described in item (bb), (cc), (dd),

19 (ff), or (gg), is related to the impairment (or combination

20 of impairments) of such individual.

21 ‘‘(III) The use of funds from an account established

22 under clause (i) in any manner not authorized by this

23 clause—

24 ‘‘(aa) by a representative payee shall be consid25 ered a misapplication of benefits for all purposes of
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1 this paragraph, and any representative payee who

2 knowingly misapplies benefits from such an account

3 shall be liable to the Commissioner in an amount

4 equal to the total amount of such benefits; and

5 ‘‘(bb) by an eligible individual who is his or her

6 own payee shall be considered a misapplication of

7 benefits for all purposes of this paragraph and the

8 total amount of such benefits so used shall be con9 sidered to be the uncompensated value of a disposed

10 resource and shall be subject to the provisions of

11 section 1613(c).

12 ‘‘(IV) This clause shall continue to apply to funds in

13 the account after the child has reached age 18, regardless

14 of whether benefits are paid directly to the beneficiary or

15 through a representative payee.

16 ‘‘(iii) The representative payee may deposit into the

17 account established pursuant to clause (i)—

18 ‘‘(I) past-due benefits payable to the eligible in19 dividual in an amount less than that specified in

20 clause (i)(II), and

21 ‘‘(II) any other funds representing an under22 payment under this title to such individual, provided

23 that the amount of such underpayment is equal to

24 or exceeds the maximum monthly benefit payable

25 under this title to an eligible individual.
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1 ‘‘(iv) The Commissioner of Social Security shall es2 tablish a system for accountability monitoring whereby

3 such representative payee shall report, at such time and

4 in such manner as the Commissioner shall require, on ac5 tivity respecting funds in the account established pursuant

6 to clause (i).’’.

7 (2) EXCLUSION FROM RESOURCES.—Section

8 1613(a) (42 U.S.C. 1382b(a)) is amended—

9 (A) by striking ‘‘and’’ at the end of para10 graph (10);

11 (B) by striking the period at the end of

12 paragraph (11) and inserting ‘‘; and’’; and

13 (C) by inserting after paragraph (11) the

14 following new paragraph:

15 ‘‘(12) any account, including accrued interest or

16 other earnings thereon, established and maintained

17 in accordance with section 1631(a)(2)(F).’’.

18 (3) EXCLUSION FROM INCOME.—Section

19 1612(b) (42 U.S.C. 1382a(b)) is amended—

20 (A) by striking ‘‘and’’ at the end of para21 graph (19);

22 (B) by striking the period at the end of

23 paragraph (20) and inserting ‘‘; and’’; and

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

25 paragraph:
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1 ‘‘(21) the interest or other earnings on any ac2 count established and maintained in accordance with

3 section 1631(a)(2)(F).’’.

4 (4) EFFECTIVE DATE.—The amendments made

5 by this subsection shall apply to payments made

6 after the date of the enactment of this Act.

7 SEC. 4214. REDUCTION IN CASH BENEFITS PAYABLE TO IN8 STITUTIONALIZED INDIVIDUALS WHOSE MED9 ICAL COSTS ARE COVERED BY PRIVATE IN10 SURANCE.

11 (a) IN GENERAL.—Section 1611(e)(1)(B) (42 U.S.C.

12 1382(e)(1)(B)) is amended—

13 (1) by striking ‘‘title XIX, or’’ and inserting

14 ‘‘title XV or XIX,’’; and

15 (2) by inserting ‘‘or, in the case of an eligible

16 individual under the age of 18, receiving payments

17 (with respect to such individual) under any health

18 insurance policy issued by a private provider of such

19 insurance’’ after ‘‘section 1614(f)(2)(B),’’.

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

21 this section shall apply to benefits for months beginning

22 90 or more days after the date of the enactment of this

23 Act, without regard to whether regulations have been is24 sued to implement such amendments.
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1 SEC. 4215. REGULATIONS.

2 Within 3 months after the date of the enactment of

3 this Act, the Commissioner of Social Security shall pre4 scribe such regulations as may be necessary to implement

5 the amendments made by this chapter.

6 CHAPTER 3—ADDITIONAL ENFORCEMENT

7 PROVISIONS

8 SEC. 4221. INSTALLMENT PAYMENT OF LARGE PAST-DUE

9 SUPPLEMENTAL SECURITY INCOME BENE10 FITS.

11 (a) IN GENERAL.—Section 1631(a) (42 U.S.C. 1383)

12 is amended by adding at the end the following new para13 graph:

14 ‘‘(10)(A) If an individual is eligible for past-due

15 monthly benefits under this title in an amount that (after

16 any withholding for reimbursement to a State for interim

17 assistance under subsection (g)) equals or exceeds the

18 product of—

19 ‘‘(i) 12, and

20 ‘‘(ii) the maximum monthly benefit payable

21 under this title to an eligible individual (or, if appro22 priate, to an eligible individual and eligible spouse),

23 then the payment of such past-due benefits (after any such

24 reimbursement to a State) shall be made in installments

25 as provided in subparagraph (B).
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1 ‘‘(B)(i) The payment of past-due benefits subject to

2 this subparagraph shall be made in not to exceed 3 install3 ments that are made at 6-month intervals.

4 ‘‘(ii) Except as provided in clause (iii), the amount

5 of each of the first and second installments may not exceed

6 an amount equal to the product of clauses (i) and (ii) of

7 subparagraph (A).

8 ‘‘(iii) In the case of an individual who has—

9 ‘‘(I) outstanding debt attributable to—

10 ‘‘(aa) food,

11 ‘‘(bb) clothing,

12 ‘‘(cc) shelter, or

13 ‘‘(dd) medically necessary services, supplies

14 or equipment, or medicine; or

15 ‘‘(II) current expenses or expenses anticipated

16 in the near term attributable to—

17 ‘‘(aa) medically necessary services, supplies

18 or equipment, or medicine, or

19 ‘‘(bb) the purchase of a home, and

20 such debt or expenses are not subject to reimbursement

21 by a public assistance program, the Secretary under title

22 XVIII, a State plan approved under title XV or XIX, or

23 any private entity legally liable to provide payment pursu24 ant to an insurance policy, pre-paid plan, or other ar25 rangement, the limitation specified in clause (ii) may be
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1 exceeded by an amount equal to the total of such debt

2 and expenses.

3 ‘‘(C) This paragraph shall not apply to any individual

4 who, at the time of the Commissioner’s determination that

5 such individual is eligible for the payment of past-due

6 monthly benefits under this title—

7 ‘‘(i) is afflicted with a medically determinable

8 impairment that is expected to result in death within

9 12 months; or

10 ‘‘(ii) is ineligible for benefits under this title

11 and the Commissioner determines that such individ12 ual is likely to remain ineligible for the next 12

13 months.

14 ‘‘(D) For purposes of this paragraph, the term ‘bene15 fits under this title’ includes supplementary payments pur16 suant to an agreement for Federal administration under

17 section 1616(a), and payments pursuant to an agreement

18 entered into under section 212(b) of Public Law 93–66.’’.

19 (b) CONFORMING AMENDMENT.—Section 1631(a)(1)

20 (42 U.S.C. 1383(a)(1)) is amended by inserting ‘‘(subject

21 to paragraph (10))’’ immediately before ‘‘in such install22 ments’’.

23 (c) EFFECTIVE DATE.—

24 (1) IN GENERAL.—The amendments made by

25 this section are effective with respect to past-due
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1 benefits payable under title XVI of the Social Secu2 rity Act after the third month following the month

3 in which this Act is enacted.

4 (2) BENEFITS PAYABLE UNDER TITLE XVI.—

5 For purposes of this subsection, the term ‘‘benefits

6 payable under title XVI of the Social Security Act’’

7 includes supplementary payments pursuant to an

8 agreement for Federal administration under section

9 1616(a) of the Social Security Act, and payments

10 pursuant to an agreement entered into under section

11 212(b) of Public Law 93–66.

12 SEC. 4222. RECOVERY OF SUPPLEMENTAL SECURITY IN13 COME OVERPAYMENTS FROM SOCIAL SECU14 RITY BENEFITS.

15 (a) IN GENERAL.—Part A of title XI is amended by

16 adding at the end the following new section:

17 ‘‘RECOVERY OF SSI OVERPAYMENTS FROM SOCIAL

18 SECURITY BENEFITS

19 ‘‘SEC. 1146. (a) IN GENERAL.—Whenever the Com20 missioner of Social Security determines that more than

21 the correct amount of any payment has been made to any

22 person under the supplemental security income program

23 authorized by title XVI, and the Commissioner is unable

24 to make proper adjustment or recovery of the amount so

25 incorrectly paid as provided in section 1631(b), the Com26 missioner (notwithstanding section 207) may recover the
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1 amount incorrectly paid by decreasing any amount which

2 is payable under the Federal Old-Age and Survivors Insur3 ance program or the Federal Disability Insurance pro4 gram authorized by title II to that person or that person’s

5 estate.

6 ‘‘(b) NO EFFECT ON SSI BENEFIT ELIGIBILITY OR

7 AMOUNT.—Notwithstanding subsections (a) and (b) of

8 section 1611, in any case in which the Commissioner takes

9 action in accordance with subsection (a) to recover an

10 overpayment from any person, neither that person, nor

11 any individual whose eligibility or benefit amount is deter12 mined by considering any part of that person’s income,

13 shall, as a result of such action—

14 ‘‘(1) become eligible under the program of sup15 plemental security income benefits under title XVI,

16 or

17 ‘‘(2) if such person or individual is already so

18 eligible, become eligible for increased benefits there19 under.

20 ‘‘(c) PROGRAM UNDER TITLE XVI.—For purposes of

21 this section, the term ‘supplemental security income pro22 gram authorized by title XVI’ includes supplementary pay23 ments pursuant to an agreement for Federal administra24 tion under section 1616(a), and payments pursuant to an
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1 agreement entered into under section 212(b) of Public

2 Law 93–66.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Section 204 (42 U.S.C. 404) is amended by

5 adding at the end the following new subsection:

6 ‘‘(g) For payments which are adjusted or withheld

7 to recover an overpayment of supplemental security in8 come benefits paid under title XVI (including State sup9 plementary payments which were paid under an agreement

10 pursuant to section 1616(a) or section 212(b) of Public

11 Law 93–66), see section 1146.’’.

12 (2) Section 1631(b) is amended by adding at

13 the end the following new paragraph:

14 ‘‘(5) For the recovery of overpayments of benefits

15 under this title from benefits payable under title II, see

16 section 1146.’’.

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

18 this section shall take effect on the date of the enactment

19 of this Act and shall apply to overpayments outstanding

20 on or after such date.

21 SEC. 4223. REGULATIONS.

22 Within 3 months after the date of the enactment of

23 this Act, the Commissioner of Social Security shall pre24 scribe such regulations as may be necessary to implement

25 the amendments made by this chapter.
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1 CHAPTER 4—STATE SUPPLEMENTATION

2 PROGRAMS

3 SEC. 4225. REPEAL OF MAINTENANCE OF EFFORT RE4 QUIREMENTS APPLICABLE TO OPTIONAL

5 STATE PROGRAMS FOR SUPPLEMENTATION

6 OF SSI BENEFITS.

7 Section 1618 (42 U.S.C. 1382g) is hereby repealed.

8 CHAPTER 5—STUDIES REGARDING SUP9 PLEMENTAL SECURITY INCOME PRO10 GRAM

11 SEC. 4231. ANNUAL REPORT ON THE SUPPLEMENTAL SECU12 RITY INCOME PROGRAM.

13 Title XVI (42 U.S.C. 1381 et seq.), as amended by

14 section 4201(c) of this Act, is amended by adding at the

15 end the following new section:

16 ‘‘ANNUAL REPORT ON PROGRAM

17 ‘‘SEC. 1637. (a) Not later than May 30 of each year,

18 the Commissioner of Social Security shall prepare and de19 liver a report annually to the President and the Congress

20 regarding the program under this title, including—

21 ‘‘(1) a comprehensive description of the pro22 gram;

23 ‘‘(2) historical and current data on allowances

24 and denials, including number of applications and

25 allowance rates for initial determinations, reconsid26 eration determinations, administrative law judge
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1 hearings, appeals council reviews, and Federal court

2 decisions;

3 ‘‘(3) historical and current data on characteris4 tics of recipients and program costs, by recipient

5 group (aged, blind, disabled adults, and disabled

6 children);

7 ‘‘(4) projections of future number of recipients

8 and program costs, through at least 25 years;

9 ‘‘(5) number of redeterminations and continu10 ing disability reviews, and the outcomes of such re11 determinations and reviews;

12 ‘‘(6) data on the utilization of work incentives;

13 ‘‘(7) detailed information on administrative and

14 other program operation costs;

15 ‘‘(8) summaries of relevant research undertaken

16 by the Social Security Administration, or by other

17 researchers;

18 ‘‘(9) State supplementation program operations;

19 ‘‘(10) a historical summary of statutory

20 changes to this title; and

21 ‘‘(11) such other information as the Commis22 sioner deems useful.

23 ‘‘(b) Each member of the Social Security Advisory

24 Board shall be permitted to provide an individual report,

25 or a joint report if agreed, of views of the program under
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1 this title, to be included in the annual report required

2 under this section.’’.

3 SEC. 4232. STUDY OF DISABILITY DETERMINATION PROC4 ESS.

5 (a) IN GENERAL.—Not later than 90 days after the

6 date of the enactment of this Act, and from funds other7 wise appropriated, the Commissioner of Social Security

8 shall make arrangements with the National Academy of

9 Sciences, or other independent entity, to conduct a study

10 of the disability determination process under titles II and

11 XVI of the Social Security Act. This study shall be under12 taken in consultation with professionals representing ap13 propriate disciplines.

14 (b) STUDY COMPONENTS.—The study described in

15 subsection (a) shall include—

16 (1) an initial phase examining the appropriate17 ness of, and making recommendations regarding—

18 (A) the definitions of disability in effect on

19 the date of the enactment of this Act and the

20 advantages and disadvantages of alternative

21 definitions; and

22 (B) the operation of the disability deter23 mination process, including the appropriate

24 method of performing comprehensive assess-
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1 ments of individuals under age 18 with physical

2 and mental impairments;

3 (2) a second phase, which may be concurrent

4 with the initial phase, examining the validity, reli5 ability, and consistency with current scientific knowl6 edge of the standards and individual listings in the

7 Listing of Impairments set forth in appendix 1 of

8 subpart P of part 404 of title 20, Code of Federal

9 Regulations, and of related evaluation procedures as

10 promulgated by the Commissioner of Social Security;

11 and

12 (3) such other issues as the applicable entity

13 considers appropriate.

14 (c) REPORTS AND REGULATIONS.—

15 (1) REPORTS.—The Commissioner of Social Se16 curity shall request the applicable entity, to submit

17 an interim report and a final report of the findings

18 and recommendations resulting from the study de19 scribed in this section to the President and the Con20 gress not later than 18 months and 24 months, re21 spectively, from the date of the contract for such

22 study, and such additional reports as the Commis23 sioner deems appropriate after consultation with the

24 applicable entity.
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1 (2) REGULATIONS.—The Commissioner of So2 cial Security shall review both the interim and final

3 reports, and shall issue regulations implementing

4 any necessary changes following each report.

5 SEC. 4233. STUDY BY GENERAL ACCOUNTING OFFICE.

6 Not later than January 1, 1999, the Comptroller

7 General of the United States shall study and report on—

8 (1) the impact of the amendments made by,

9 and the provisions of, this subtitle on the supple10 mental security income program under title XVI of

11 the Social Security Act; and

12 (2) extra expenses incurred by families of chil13 dren receiving benefits under such title that are not

14 covered by other Federal, State, or local programs.

15 CHAPTER 6—NATIONAL COMMISSION ON

16 THE FUTURE OF DISABILITY

17 SEC. 4241. ESTABLISHMENT.

18 There is established a commission to be known as the

19 National Commission on the Future of Disability (referred

20 to in this chapter as the ‘‘Commission’’).

21 SEC. 4242. DUTIES OF THE COMMISSION.

22 (a) IN GENERAL.—The Commission shall develop

23 and carry out a comprehensive study of all matters related

24 to the nature, purpose, and adequacy of all Federal pro25 grams serving individuals with disabilities. In particular,
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1 the Commission shall study the disability insurance pro2 gram under title II of the Social Security Act and the sup3 plemental security income disability program under title

4 XVI of such Act.

5 (b) MATTERS STUDIED.—The Commission shall pre6 pare an inventory of Federal programs serving individuals

7 with disabilities, and shall examine—

8 (1) trends and projections regarding the size

9 and characteristics of the population of individuals

10 with disabilities, and the implications of such analy11 ses for program planning;

12 (2) the feasibility and design of performance

13 standards for the Nation’s disability programs;

14 (3) the adequacy of Federal efforts in rehabili15 tation research and training, and opportunities to

16 improve the lives of individuals with disabilities

17 through all manners of scientific and engineering re18 search; and

19 (4) the adequacy of policy research available to

20 the Federal Government, and what actions might be

21 undertaken to improve the quality and scope of such

22 research.

23 (c) RECOMMENDATIONS.—The Commission shall

24 submit to the appropriate committees of the Congress and
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1 to the President recommendations and, as appropriate,

2 proposals for legislation, regarding—

3 (1) which (if any) Federal disability programs

4 should be eliminated or augmented;

5 (2) what new Federal disability programs (if

6 any) should be established;

7 (3) the suitability of the organization and loca8 tion of disability programs within the Federal Gov9 ernment;

10 (4) other actions the Federal Government

11 should take to prevent disabilities and disadvantages

12 associated with disabilities; and

13 (5) such other matters as the Commission con14 siders appropriate.

15 SEC. 4243. MEMBERSHIP.

16 (a) NUMBER AND APPOINTMENT.—

17 (1) IN GENERAL.—The Commission shall be

18 composed of 15 members, of whom—

19 (A) five shall be appointed by the Presi20 dent, of whom not more than 3 shall be of the

21 same major political party;

22 (B) three shall be appointed by the Major23 ity Leader of the Senate;

24 (C) two shall be appointed by the Minority

25 Leader of the Senate;
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1 (D) three shall be appointed by the Speak2 er of the House of Representatives; and

3 (E) two shall be appointed by the Minority

4 Leader of the House of Representatives.

5 (2) REPRESENTATION.—The Commission mem6 bers shall be chosen based on their education, train7 ing, or experience. In appointing individuals as

8 members of the Commission, the President and the

9 Majority and Minority Leaders of the Senate and

10 the Speaker and Minority Leader of the House of

11 Representatives shall seek to ensure that the mem12 bership of the Commission reflects the general inter13 ests of the business and taxpaying community and

14 the diversity of individuals with disabilities in the

15 United States.

16 (b) COMPTROLLER GENERAL.—The Comptroller

17 General of the United States shall advise the Commission

18 on the methodology and approach of the study of the Com19 mission.

20 (c) TERM OF APPOINTMENT.—The members shall

21 serve on the Commission for the life of the Commission.

22 (d) MEETINGS.—The Commission shall locate its

23 headquarters in the District of Columbia, and shall meet

24 at the call of the Chairperson, but not less than 4 times

25 each year during the life of the Commission.
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1 (e) QUORUM.—Ten members of the Commission shall

2 constitute a quorum, but a lesser number may hold hear3 ings.

4 (f) CHAIRPERSON AND VICE CHAIRPERSON.—Not

5 later than 15 days after the members of the Commission

6 are appointed, such members shall designate a Chair7 person and Vice Chairperson from among the members of

8 the Commission.

9 (g) CONTINUATION OF MEMBERSHIP.—If a member

10 of the Commission becomes an officer or employee of any

11 government after appointment to the Commission, the in12 dividual may continue as a member until a successor mem13 ber is appointed.

14 (h) VACANCIES.—A vacancy on the Commission shall

15 be filled in the manner in which the original appointment

16 was made not later than 30 days after the Commission

17 is given notice of the vacancy.

18 (i) COMPENSATION.—Members of the Commission

19 shall receive no additional pay, allowances, or benefits by

20 reason of their service on the Commission.

21 (j) TRAVEL EXPENSES.—Each member of the Com22 mission shall receive travel expenses, including per diem

23 in lieu of subsistence, in accordance with sections 5702

24 and 5703 of title 5, United States Code.
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1 SEC. 4244. STAFF AND SUPPORT SERVICES.

2 (a) DIRECTOR.—

3 (1) APPOINTMENT.—Upon consultation with

4 the members of the Commission, the Chairperson

5 shall appoint a Director of the Commission.

6 (2) COMPENSATION.—The Director shall be

7 paid the rate of basic pay for level V of the Execu8 tive Schedule.

9 (b) STAFF.—With the approval of the Commission,

10 the Director may appoint such personnel as the Director

11 considers appropriate.

12 (c) APPLICABILITY OF CIVIL SERVICE LAWS.—The

13 staff of the Commission shall be appointed without regard

14 to the provisions of title 5, United States Code, governing

15 appointments in the competitive service, and shall be paid

16 without regard to the provisions of chapter 51 and sub17 chapter III of chapter 53 of such title relating to classi18 fication and General Schedule pay rates.

19 (d) EXPERTS AND CONSULTANTS.—With the ap20 proval of the Commission, the Director may procure tem21 porary and intermittent services under section 3109(b) of

22 title 5, United States Code.

23 (e) STAFF OF FEDERAL AGENCIES.—Upon the re24 quest of the Commission, the head of any Federal agency

25 may detail, on a reimbursable basis, any of the personnel
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1 of such agency to the Commission to assist in carrying

2 out the duties of the Commission under this chapter.

3 (f) OTHER RESOURCES.—The Commission shall have

4 reasonable access to materials, resources, statistical data,

5 and other information from the Library of Congress and

6 agencies and elected representatives of the executive and

7 legislative branches of the Federal Government. The

8 Chairperson of the Commission shall make requests for

9 such access in writing when necessary.

10 (g) PHYSICAL FACILITIES.—The Administrator of

11 the General Services Administration shall locate suitable

12 office space for the operation of the Commission. The fa13 cilities shall serve as the headquarters of the Commission

14 and shall include all necessary equipment and incidentals

15 required for proper functioning of the Commission.

16 SEC. 4245. POWERS OF COMMISSION.

17 (a) HEARINGS.—The Commission may conduct pub18 lic hearings or forums at the discretion of the Commission,

19 at any time and place the Commission is able to secure

20 facilities and witnesses, for the purpose of carrying out

21 the duties of the Commission under this chapter.

22 (b) DELEGATION OF AUTHORITY.—Any member or

23 agent of the Commission may, if authorized by the Com24 mission, take any action the Commission is authorized to

25 take by this section.
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1 (c) INFORMATION.—The Commission may secure di2 rectly from any Federal agency information necessary to

3 enable the Commission to carry out its duties under this

4 chapter. Upon request of the Chairperson or Vice Chair5 person of the Commission, the head of a Federal agency

6 shall furnish the information to the Commission to the ex7 tent permitted by law.

8 (d) GIFTS, BEQUESTS, AND DEVISES.—The Commis9 sion may accept, use, and dispose of gifts, bequests, or

10 devises of services or property, both real and personal, for

11 the purpose of aiding or facilitating the work of the Com12 mission. Gifts, bequests, or devises of money and proceeds

13 from sales of other property received as gifts, bequests,

14 or devises shall be deposited in the Treasury and shall be

15 available for disbursement upon order of the Commission.

16 (e) MAILS.—The Commission may use the United

17 States mails in the same manner and under the same con18 ditions as other Federal agencies.

19 SEC. 4246. REPORTS.

20 (a) INTERIM REPORT.—Not later than 1 year prior

21 to the date on which the Commission terminates pursuant

22 to section 4247, the Commission shall submit an interim

23 report to the President and to the Congress. The interim

24 report shall contain a detailed statement of the findings

25 and conclusions of the Commission, together with the
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1 Commission’s recommendations for legislative and admin2 istrative action, based on the activities of the Commission.

3 (b) FINAL REPORT.—Not later than the date on

4 which the Commission terminates, the Commission shall

5 submit to the Congress and to the President a final report

6 containing—

7 (1) a detailed statement of final findings, con8 clusions, and recommendations; and

9 (2) an assessment of the extent to which rec10 ommendations of the Commission included in the in11 terim report under subsection (a) have been imple12 mented.

13 (c) PRINTING AND PUBLIC DISTRIBUTION.—Upon

14 receipt of each report of the Commission under this sec15 tion, the President shall—

16 (1) order the report to be printed; and

17 (2) make the report available to the public upon

18 request.

19 SEC. 4247. TERMINATION.

20 The Commission shall terminate on the date that is

21 2 years after the date on which the members of the Com22 mission have met and designated a Chairperson and Vice

23 Chairperson.
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1 SEC. 4248. AUTHORIZATION OF APPROPRIATIONS.

2 There are authorized to be appropriated such sums

3 as are necessary to carry out the purposes of the Commis4 sion.

5 Subtitle C—Child Support

6 SEC. 4300. REFERENCE TO SOCIAL SECURITY ACT.

7 Except as otherwise specifically provided, wherever in

8 this subtitle an amendment is expressed in terms of an

9 amendment to or repeal of a section or other provision,

10 the reference shall be considered to be made to that sec11 tion or other provision of the Social Security Act.

12 CHAPTER 1—ELIGIBILITY FOR SERVICES;

13 DISTRIBUTION OF PAYMENTS

14 SEC. 4301. STATE OBLIGATION TO PROVIDE CHILD SUP15 PORT ENFORCEMENT SERVICES.

16 (a) STATE PLAN REQUIREMENTS.—Section 454 (42

17 U.S.C. 654) is amended—

18 (1) by striking paragraph (4) and inserting the

19 following new paragraph:

20 ‘‘(4) provide that the State will—

21 ‘‘(A) provide services relating to the estab22 lishment of paternity or the establishment,

23 modification, or enforcement of child support

24 obligations, as appropriate, under the plan with

25 respect to—
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1 ‘‘(i) each child for whom (I) assist2 ance is provided under the State program

3 funded under part A of this title, (II) ben4 efits or services for foster care mainte5 nance are provided under the State pro6 gram funded under part E of this title,

7 (III) medical assistance is provided under

8 the State plan under title XV, or (IV)

9 medical assistance is provided under the

10 State plan approved under title XIX, un11 less, in accordance with paragraph (29),

12 good cause or other exceptions exist;

13 ‘‘(ii) any other child, if an individual

14 applies for such services with respect to

15 the child; and

16 ‘‘(B) enforce any support obligation estab17 lished with respect to—

18 ‘‘(i) a child with respect to whom the

19 State provides services under the plan; or

20 ‘‘(ii) the custodial parent of such a

21 child;’’; and

22 (2) in paragraph (6)—

23 (A) by striking ‘‘provide that’’ and insert24 ing ‘‘provide that—’’;
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1 (B) by striking subparagraph (A) and in2 serting the following new subparagraph:

3 ‘‘(A) services under the plan shall be made

4 available to residents of other States on the

5 same terms as to residents of the State submit6 ting the plan;’’;

7 (C) in subparagraph (B), by inserting ‘‘on

8 individuals not receiving assistance under any

9 State program funded under part A’’ after

10 ‘‘such services shall be imposed’’;

11 (D) in each of subparagraphs (B), (C),

12 (D), and (E)—

13 (i) by indenting the subparagraph in

14 the same manner as, and aligning the left

15 margin of the subparagraph with the left

16 margin of, the matter inserted by subpara17 graph (B) of this paragraph; and

18 (ii) by striking the final comma and

19 inserting a semicolon; and

20 (E) in subparagraph (E), by indenting

21 each of clauses (i) and (ii) 2 additional ems.

22 (b) CONTINUATION OF SERVICES FOR FAMILIES

23 CEASING TO RECEIVE ASSISTANCE UNDER THE STATE

24 PROGRAM FUNDED UNDER PART A.—Section 454 (42

25 U.S.C. 654) is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (23);

3 (2) by striking the period at the end of para4 graph (24) and inserting ‘‘; and’’; and

5 (3) by adding after paragraph (24) the follow6 ing new paragraph:

7 ‘‘(25) provide that if a family with respect to

8 which services are provided under the plan ceases to

9 receive assistance under the State program funded

10 under part A, the State shall provide appropriate no11 tice to the family and continue to provide such serv12 ices, subject to the same conditions and on the same

13 basis as in the case of other individuals to whom

14 services are furnished under the plan, except that an

15 application or other request to continue services

16 shall not be required of such a family and paragraph

17 (6)(B) shall not apply to the family.’’.

18 (c) CONFORMING AMENDMENTS.—

19 (1) Section 452(b) (42 U.S.C. 652(b)) is

20 amended by striking ‘‘454(6)’’ and inserting

21 ‘‘454(4)’’.

22 (2) Section 452(g)(2)(A) (42 U.S.C.

23 652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each

24 place it appears and inserting ‘‘454(4)(A)(ii)’’.
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1 (3) Section 466(a)(3)(B) (42 U.S.C.

2 666(a)(3)(B)) is amended by striking ‘‘in the case of

3 overdue support which a State has agreed to collect

4 under section 454(6)’’ and inserting ‘‘in any other

5 case’’.

6 (4) Section 466(e) (42 U.S.C. 666(e)) is

7 amended by striking ‘‘paragraph (4) or (6) of sec8 tion 454’’ and inserting ‘‘section 454(4)’’.

9 SEC. 4302. DISTRIBUTION OF CHILD SUPPORT COLLEC10 TIONS.

11 (a) IN GENERAL.—Section 457 (42 U.S.C. 657) is

12 amended to read as follows:

13 ‘‘SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

14 ‘‘(a) IN GENERAL.—Subject to subsection (e), an

15 amount collected on behalf of a family as support by a

16 State pursuant to a plan approved under this part shall

17 be distributed as follows:

18 ‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the

19 case of a family receiving assistance from the State,

20 the State shall—

21 ‘‘(A) pay to the Federal Government the

22 Federal share of the amount so collected; and

23 ‘‘(B) retain, or distribute to the family, the

24 State share of the amount so collected.
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1 ‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS2 SISTANCE.—In the case of a family that formerly re3 ceived assistance from the State:

4 ‘‘(A) CURRENT SUPPORT PAYMENTS.—To

5 the extent that the amount so collected does not

6 exceed the amount required to be paid to the

7 family for the month in which collected, the

8 State shall distribute the amount so collected to

9 the family.

10 ‘‘(B) PAYMENTS OF ARREARAGES.—To the

11 extent that the amount so collected exceeds the

12 amount required to be paid to the family for

13 the month in which collected, the State shall

14 distribute the amount so collected as follows:

15 ‘‘(i) DISTRIBUTION OF ARREARAGES

16 THAT ACCRUED AFTER THE FAMILY

17 CEASED TO RECEIVE ASSISTANCE.—

18 ‘‘(I) PRE-OCTOBER 1997.—Except

19 as provided in subclause (II), the pro20 visions of this section (other than sub21 section (b)(1)) as in effect and applied

22 on the day before the date of the en23 actment of section 4302 of the Per24 sonal Responsibility and Work Oppor25 tunity Act of 1996 shall apply with
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1 respect to the distribution of support

2 arrearages that—

3 ‘‘(aa) accrued after the fam4 ily ceased to receive assistance,

5 and

6 ‘‘(bb) are collected before

7 October 1, 1997.

8 ‘‘(II) POST-SEPTEMBER 1997.—

9 With respect to the amount so col10 lected on or after October 1, 1997 (or

11 before such date, at the option of the

12 State)—

13 ‘‘(aa) IN GENERAL.—The

14 State shall first distribute the

15 amount so collected (other than

16 any amount described in clause

17 (iv)) to the family to the extent

18 necessary to satisfy any support

19 arrearages with respect to the

20 family that accrued after the

21 family ceased to receive assist22 ance from the State.

23 ‘‘(bb) REIMBURSEMENT OF

24 GOVERNMENTS FOR ASSISTANCE

25 PROVIDED TO THE FAMILY.—
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1 After the application of division

2 (aa) and clause (ii)(II)(aa) with

3 respect to the amount so col4 lected, the State shall retain the

5 State share of the amount so col6 lected, and pay to the Federal

7 Government the Federal share

8 (as defined in subsection (c)(2))

9 of the amount so collected, but

10 only to the extent necessary to

11 reimburse amounts paid to the

12 family as assistance by the State.

13 ‘‘(cc) DISTRIBUTION OF THE

14 REMAINDER TO THE FAMILY.—

15 To the extent that neither divi16 sion (aa) nor division (bb) applies

17 to the amount so collected, the

18 State shall distribute the amount

19 to the family.

20 ‘‘(ii) DISTRIBUTION OF ARREARAGES

21 THAT ACCRUED BEFORE THE FAMILY RE22 CEIVED ASSISTANCE.—

23 ‘‘(I) PRE-OCTOBER 2000.—Except

24 as provided in subclause (II), the pro25 visions of this section (other than sub-
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1 section (b)(1)) as in effect and applied

2 on the day before the date of the en3 actment of section 4302 of the Per4 sonal Responsibility and Work Oppor5 tunity Act of 1996 shall apply with

6 respect to the distribution of support

7 arrearages that—

8 ‘‘(aa) accrued before the

9 family received assistance, and

10 ‘‘(bb) are collected before

11 October 1, 2000.

12 ‘‘(II) POST-SEPTEMBER 2000.—

13 Unless, based on the report required

14 by paragraph (4), the Congress deter15 mines otherwise, with respect to the

16 amount so collected on or after Octo17 ber 1, 2000 (or before such date, at

18 the option of the State)—

19 ‘‘(aa) IN GENERAL.—The

20 State shall first distribute the

21 amount so collected (other than

22 any amount described in clause

23 (iv)) to the family to the extent

24 necessary to satisfy any support

25 arrearages with respect to the
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1 family that accrued before the

2 family received assistance from

3 the State.

4 ‘‘(bb) REIMBURSEMENT OF

5 GOVERNMENTS FOR ASSISTANCE

6 PROVIDED TO THE FAMILY.—

7 After the application of clause

8 (i)(II)(aa) and division (aa) with

9 respect to the amount so col10 lected, the State shall retain the

11 State share of the amount so col12 lected, and pay to the Federal

13 Government the Federal share

14 (as defined in subsection (c)(2))

15 of the amount so collected, but

16 only to the extent necessary to

17 reimburse amounts paid to the

18 family as assistance by the State.

19 ‘‘(cc) DISTRIBUTION OF THE

20 REMAINDER TO THE FAMILY.—

21 To the extent that neither divi22 sion (aa) nor division (bb) applies

23 to the amount so collected, the

24 State shall distribute the amount

25 to the family.
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1 ‘‘(iii) DISTRIBUTION OF ARREARAGES

2 THAT ACCRUED WHILE THE FAMILY RE3 CEIVED ASSISTANCE.—In the case of a

4 family described in this subparagraph, the

5 provisions of paragraph (1) shall apply

6 with respect to the distribution of support

7 arrearages that accrued while the family

8 received assistance.

9 ‘‘(iv) AMOUNTS COLLECTED PURSU10 ANT TO SECTION 464.—Notwithstanding

11 any other provision of this section, any

12 amount of support collected pursuant to

13 section 464 shall be retained by the State

14 to the extent past-due support has been as15 signed to the State as a condition of re16 ceiving assistance from the State, up to the

17 amount necessary to reimburse the State

18 for amounts paid to the family as assist19 ance by the State. The State shall pay to

20 the Federal Government the Federal share

21 of the amounts so retained. To the extent

22 the amount collected pursuant to section

23 464 exceeds the amount so retained, the

24 State shall distribute the excess to the

25 family.
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1 ‘‘(v) ORDERING RULES FOR DISTRIBU2 TIONS.—For purposes of this subpara3 graph, unless an earlier effective date is re4 quired by this section, effective October 1,

5 2000, the State shall treat any support ar6 rearages collected, except for amounts col7 lected pursuant to section 464, as accruing

8 in the following order:

9 ‘‘(I) To the period after the fam10 ily ceased to receive assistance.

11 ‘‘(II) To the period before the

12 family received assistance.

13 ‘‘(III) To the period while the

14 family was receiving assistance.

15 ‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST16 ANCE.—In the case of any other family, the State

17 shall distribute the amount so collected to the fam18 ily.

19 ‘‘(4) STUDY AND REPORT.—Not later than Oc20 tober 1, 1998, the Secretary shall report to the Con21 gress the Secretary’s findings with respect to—

22 ‘‘(A) whether the distribution of post-as23 sistance arrearages to families has been effec24 tive in moving people off of welfare and keeping

25 them off of welfare;
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1 ‘‘(B) whether early implementation of a

2 pre-assistance arrearage program by some

3 States has been effective in moving people off

4 of welfare and keeping them off of welfare;

5 ‘‘(C) what the overall impact has been of

6 the amendments made by the Personal Respon7 sibility and Work Opportunity Act of 1996 with

8 respect to child support enforcement in moving

9 people off of welfare and keeping them off of

10 welfare; and

11 ‘‘(D) based on the information and data

12 the Secretary has obtained, what changes, if

13 any, should be made in the policies related to

14 the distribution of child support arrearages.

15 ‘‘(b) CONTINUATION OF ASSIGNMENTS.—Any rights

16 to support obligations, which were assigned to a State as

17 a condition of receiving assistance from the State under

18 part A and which were in effect on the day before the

19 date of the enactment of the Personal Responsibility and

20 Work Opportunity Act of 1996, shall remain assigned

21 after such date.

22 ‘‘(c) DEFINITIONS.—As used in subsection (a):

23 ‘‘(1) ASSISTANCE.—The term ‘assistance from

24 the State’ means—
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1 ‘‘(A) assistance under the State program

2 funded under part A or under the State plan

3 approved under part A of this title (as in effect

4 on the day before the date of the enactment of

5 the Personal Responsibility and Work Oppor6 tunity Act of 1996); and

7 ‘‘(B) foster care maintenance payments

8 under the State plan approved under part E of

9 this title.

10 ‘‘(2) FEDERAL SHARE.—The term ‘Federal

11 share’ means that portion of the amount collected

12 resulting from the application of the Federal medical

13 assistance percentage in effect for the fiscal year in

14 which the amount is collected.

15 ‘‘(3) FEDERAL MEDICAL ASSISTANCE PERCENT16 AGE.—The term ‘Federal medical assistance per17 centage’ means—

18 ‘‘(A) the Federal medical assistance per19 centage (as defined in section 1118), in the case

20 of Puerto Rico, the Virgin Islands, Guam, and

21 American Samoa; or

22 ‘‘(B) the Federal medical assistance per23 centage (as defined in section 1905(b), as in ef24 fect on September 30, 1996) in the case of any

25 other State.
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1 ‘‘(4) STATE SHARE.—The term ‘State share’

2 means 100 percent minus the Federal share.

3 ‘‘(d) HOLD HARMLESS PROVISION.—If the amounts

4 collected which could be retained by the State in the fiscal

5 year (to the extent necessary to reimburse the State for

6 amounts paid to families as assistance by the State) are

7 less than the State share of the amounts collected in fiscal

8 year 1995 (determined in accordance with section 457 as

9 in effect on the day before the date of the enactment of

10 the Personal Responsibility and Work Opportunity Act of

11 1996), the State share for the fiscal year shall be an

12 amount equal to the State share in fiscal year 1995.

13 ‘‘(e) GAP PAYMENTS NOT SUBJECT TO DISTRIBU14 TION UNDER THIS SECTION.—At State option, this sec15 tion shall not apply to any amount collected on behalf of

16 a family as support by the State (and paid to the family

17 in addition to the amount of assistance otherwise payable

18 to the family) pursuant to a plan approved under this part

19 if such amount would have been paid to the family by the

20 State under section 402(a)(28), as in effect and applied

21 on the day before the date of the enactment of section

22 4302 of the Personal Responsibility and Work Oppor23 tunity Act of 1996. For purposes of subsection (d), the

24 State share of such amount paid to the family shall be

25 considered amounts which could be retained by the State
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1 if such payments were reported by the State as part of

2 the State share of amounts collected in fiscal year 1995.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is

5 amended by striking ‘‘section 457(b)(4) or (d)(3)’’

6 and inserting ‘‘section 457’’.

7 (2) Section 454 (42 U.S.C. 654) is amended—

8 (A) in paragraph (11)—

9 (i) by striking ‘‘(11)’’ and inserting

10 ‘‘(11)(A)’’; and

11 (ii) by inserting after the semicolon

12 ‘‘and’’; and

13 (B) by redesignating paragraph (12) as

14 subparagraph (B) of paragraph (11).

15 (c) EFFECTIVE DATES.—

16 (1) IN GENERAL.—Except as provided in para17 graph (2), the amendments made by this section

18 shall be effective on October 1, 1996, or earlier at

19 the State’s option.

20 (2) CONFORMING AMENDMENTS.—The amend21 ments made by subsection (b)(2) shall become effec22 tive on the date of the enactment of this Act.
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1 SEC. 4303. PRIVACY SAFEGUARDS.

2 (a) STATE PLAN REQUIREMENT.—Section 454 (42

3 U.S.C. 654), as amended by section 4301(b) of this Act,

4 is amended—

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

6 (24);

7 (2) by striking the period at the end of para8 graph (25) and inserting ‘‘; and’’; and

9 (3) by adding after paragraph (25) the follow10 ing new paragraph:

11 ‘‘(26) will have in effect safeguards, applicable

12 to all confidential information handled by the State

13 agency, that are designed to protect the privacy

14 rights of the parties, including—

15 ‘‘(A) safeguards against unauthorized use

16 or disclosure of information relating to proceed17 ings or actions to establish paternity, or to es18 tablish or enforce support;

19 ‘‘(B) prohibitions against the release of in20 formation on the whereabouts of 1 party to an21 other party against whom a protective order

22 with respect to the former party has been en23 tered; and

24 ‘‘(C) prohibitions against the release of in25 formation on the whereabouts of 1 party to an26 other party if the State has reason to believe
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1 that the release of the information may result

2 in physical or emotional harm to the former

3 party.’’.

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

5 subsection (a) shall become effective on October 1, 1997.

6 SEC. 4304. RIGHTS TO NOTIFICATION OF HEARINGS.

7 (a) IN GENERAL.—Section 454 (42 U.S.C. 654), as

8 amended by section 4302(b)(2) of this Act, is amended

9 by inserting after paragraph (11) the following new para10 graph:

11 ‘‘(12) provide for the establishment of proce12 dures to require the State to provide individuals who

13 are applying for or receiving services under the State

14 plan, or who are parties to cases in which services

15 are being provided under the State plan—

16 ‘‘(A) with notice of all proceedings in

17 which support obligations might be established

18 or modified; and

19 ‘‘(B) with a copy of any order establishing

20 or modifying a child support obligation, or (in

21 the case of a petition for modification) a notice

22 of determination that there should be no change

23 in the amount of the child support award, with24 in 14 days after issuance of such order or de25 termination;’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall become effective on October 1, 1997.

3 CHAPTER 2—LOCATE AND CASE

4 TRACKING

5 SEC. 4311. STATE CASE REGISTRY.

6 Section 454A, as added by section 4344(a)(2) of this

7 Act, is amended by adding at the end the following new

8 subsections:

9 ‘‘(e) STATE CASE REGISTRY.—

10 ‘‘(1) CONTENTS.—The automated system re11 quired by this section shall include a registry (which

12 shall be known as the ‘State case registry’) that con13 tains records with respect to—

14 ‘‘(A) each case in which services are being

15 provided by the State agency under the State

16 plan approved under this part; and

17 ‘‘(B) each support order established or

18 modified in the State on or after October 1,

19 1998.

20 ‘‘(2) LINKING OF LOCAL REGISTRIES.—The

21 State case registry may be established by linking

22 local case registries of support orders through an

23 automated information network, subject to this sec24 tion.
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1 ‘‘(3) USE OF STANDARDIZED DATA ELE2 MENTS.—Such records shall use standardized data

3 elements for both parents (such as names, social se4 curity numbers and other uniform identification

5 numbers, dates of birth, and case identification

6 numbers), and contain such other information (such

7 as on case status) as the Secretary may require.

8 ‘‘(4) PAYMENT RECORDS.—Each case record in

9 the State case registry with respect to which services

10 are being provided under the State plan approved

11 under this part and with respect to which a support

12 order has been established shall include a record

13 of—

14 ‘‘(A) the amount of monthly (or other peri15 odic) support owed under the order, and other

16 amounts (including arrearages, interest or late

17 payment penalties, and fees) due or overdue

18 under the order;

19 ‘‘(B) any amount described in subpara20 graph (A) that has been collected;

21 ‘‘(C) the distribution of such collected

22 amounts;

23 ‘‘(D) the birth date of any child for whom

24 the order requires the provision of support; and
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1 ‘‘(E) the amount of any lien imposed with

2 respect to the order pursuant to section

3 466(a)(4).

4 ‘‘(5) UPDATING AND MONITORING.—The State

5 agency operating the automated system required by

6 this section shall promptly establish and update,

7 maintain, and regularly monitor, case records in the

8 State case registry with respect to which services are

9 being provided under the State plan approved under

10 this part, on the basis of—

11 ‘‘(A) information on administrative actions

12 and administrative and judicial proceedings and

13 orders relating to paternity and support;

14 ‘‘(B) information obtained from compari15 son with Federal, State, or local sources of in16 formation;

17 ‘‘(C) information on support collections

18 and distributions; and

19 ‘‘(D) any other relevant information.

20 ‘‘(f) INFORMATION COMPARISONS AND OTHER DIS21 CLOSURES OF INFORMATION.—The State shall use the

22 automated system required by this section to extract infor23 mation from (at such times, and in such standardized for24 mat or formats, as may be required by the Secretary), to

25 share and compare information with, and to receive infor-
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1 mation from, other data bases and information compari2 son services, in order to obtain (or provide) information

3 necessary to enable the State agency (or the Secretary or

4 other State or Federal agencies) to carry out this part,

5 subject to section 6103 of the Internal Revenue Code of

6 1986. Such information comparison activities shall include

7 the following:

8 ‘‘(1) FEDERAL CASE REGISTRY OF CHILD SUP9 PORT ORDERS.—Furnishing to the Federal Case

10 Registry of Child Support Orders established under

11 section 453(h) (and update as necessary, with infor12 mation including notice of expiration of orders) the

13 minimum amount of information on child support

14 cases recorded in the State case registry that is nec15 essary to operate the registry (as specified by the

16 Secretary in regulations).

17 ‘‘(2) FEDERAL PARENT LOCATOR SERVICE.—

18 Exchanging information with the Federal Parent

19 Locator Service for the purposes specified in section

20 453.

21 ‘‘(3) TEMPORARY FAMILY ASSISTANCE AND

22 MEDICAID AGENCIES.—Exchanging information with

23 State agencies (of the State and of other States) ad24 ministering programs funded under part A, pro25 grams operated under a State plan under title XV
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1 or a State plan approved under title XIX, and other

2 programs designated by the Secretary, as necessary

3 to perform State agency responsibilities under this

4 part and under such programs.

5 ‘‘(4) INTRASTATE AND INTERSTATE INFORMA6 TION COMPARISONS.—Exchanging information with

7 other agencies of the State, agencies of other States,

8 and interstate information networks, as necessary

9 and appropriate to carry out (or assist other States

10 to carry out) the purposes of this part.’’.

11 SEC. 4312. COLLECTION AND DISBURSEMENT OF SUPPORT

12 PAYMENTS.

13 (a) STATE PLAN REQUIREMENT.—Section 454 (42

14 U.S.C. 654), as amended by sections 4301(b) and 4303(a)

15 of this Act, is amended—

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

17 (25);

18 (2) by striking the period at the end of para19 graph (26) and inserting ‘‘; and’’; and

20 (3) by adding after paragraph (26) the follow21 ing new paragraph:

22 ‘‘(27) provide that, on and after October 1,

23 1998, the State agency will—

24 ‘‘(A) operate a State disbursement unit in

25 accordance with section 454B; and
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1 ‘‘(B) have sufficient State staff (consisting

2 of State employees) and (at State option) con3 tractors reporting directly to the State agency

4 to—

5 ‘‘(i) monitor and enforce support col6 lections through the unit in cases being en7 forced by the State pursuant to section

8 454(4) (including carrying out the auto9 mated data processing responsibilities de10 scribed in section 454A(g)); and

11 ‘‘(ii) take the actions described in sec12 tion 466(c)(1) in appropriate cases.’’.

13 (b) ESTABLISHMENT OF STATE DISBURSEMENT

14 UNIT.—Part D of title IV (42 U.S.C. 651–669), as

15 amended by section 4344(a)(2) of this Act, is amended

16 by inserting after section 454A the following new section:

17 ‘‘SEC. 454B. COLLECTION AND DISBURSEMENT OF SUP18 PORT PAYMENTS.

19 ‘‘(a) STATE DISBURSEMENT UNIT.—

20 ‘‘(1) IN GENERAL.—In order for a State to

21 meet the requirements of this section, the State

22 agency must establish and operate a unit (which

23 shall be known as the ‘State disbursement unit’) for

24 the collection and disbursement of payments under

25 support orders—
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1 ‘‘(A) in all cases being enforced by the

2 State pursuant to section 454(4); and

3 ‘‘(B) in all cases not being enforced by the

4 State under this part in which the support

5 order is initially issued in the State on or after

6 January 1, 1994, and in which the income of

7 the noncustodial parent are subject to withhold8 ing pursuant to section 466(a)(8)(B).

9 ‘‘(2) OPERATION.—The State disbursement

10 unit shall be operated—

11 ‘‘(A) directly by the State agency (or 2 or

12 more State agencies under a regional coopera13 tive agreement), or (to the extent appropriate)

14 by a contractor responsible directly to the State

15 agency; and

16 ‘‘(B) except in cases described in para17 graph (1)(B), in coordination with the auto18 mated system established by the State pursuant

19 to section 454A.

20 ‘‘(3) LINKING OF LOCAL DISBURSEMENT

21 UNITS.—The State disbursement unit may be estab22 lished by linking local disbursement units through

23 an automated information network, subject to this

24 section, if the Secretary agrees that the system will

25 not cost more nor take more time to establish or op-
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1 erate than a centralized system. In addition, employ2 ers shall be given 1 location to which income with3 holding is sent.

4 ‘‘(b) REQUIRED PROCEDURES.—The State disburse5 ment unit shall use automated procedures, electronic proc6 esses, and computer-driven technology to the maximum

7 extent feasible, efficient, and economical, for the collection

8 and disbursement of support payments, including proce9 dures—

10 ‘‘(1) for receipt of payments from parents, em11 ployers, and other States, and for disbursements to

12 custodial parents and other obligees, the State agen13 cy, and the agencies of other States;

14 ‘‘(2) for accurate identification of payments;

15 ‘‘(3) to ensure prompt disbursement of the cus16 todial parent’s share of any payment; and

17 ‘‘(4) to furnish to any parent, upon request,

18 timely information on the current status of support

19 payments under an order requiring payments to be

20 made by or to the parent.

21 ‘‘(c) TIMING OF DISBURSEMENTS.—

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), the State disbursement unit shall distrib24 ute all amounts payable under section 457(a) within

25 2 business days after receipt from the employer or
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1 other source of periodic income, if sufficient infor2 mation identifying the payee is provided.

3 ‘‘(2) PERMISSIVE RETENTION OF ARREAR4 AGES.—The State disbursement unit may delay the

5 distribution of collections toward arrearages until

6 the resolution of any timely appeal with respect to

7 such arrearages.

8 ‘‘(d) BUSINESS DAY DEFINED.—As used in this sec9 tion, the term ‘business day’ means a day on which State

10 offices are open for regular business.’’.

11 (c) USE OF AUTOMATED SYSTEM.—Section 454A, as

12 added by section 4344(a)(2) and as amended by section

13 4311 of this Act, is amended by adding at the end the

14 following new subsection:

15 ‘‘(g) COLLECTION AND DISTRIBUTION OF SUPPORT

16 PAYMENTS.—

17 ‘‘(1) IN GENERAL.—The State shall use the

18 automated system required by this section, to the

19 maximum extent feasible, to assist and facilitate the

20 collection and disbursement of support payments

21 through the State disbursement unit operated under

22 section 454B, through the performance of functions,

23 including, at a minimum—
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1 ‘‘(A) transmission of orders and notices to

2 employers (and other debtors) for the withhold3 ing of income—

4 ‘‘(i) within 2 business days after re5 ceipt of notice of, and the income source

6 subject to, such withholding from a court,

7 another State, an employer, the Federal

8 Parent Locator Service, or another source

9 recognized by the State; and

10 ‘‘(ii) using uniform formats prescribed

11 by the Secretary;

12 ‘‘(B) ongoing monitoring to promptly iden13 tify failures to make timely payment of support;

14 and

15 ‘‘(C) automatic use of enforcement proce16 dures (including procedures authorized pursu17 ant to section 466(c)) if payments are not time18 ly made.

19 ‘‘(2) BUSINESS DAY DEFINED.—As used in

20 paragraph (1), the term ‘business day’ means a day

21 on which State offices are open for regular busi22 ness.’’.

23 (d) EFFECTIVE DATES.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall become effective on October 1, 1998.

4 (2) LIMITED EXCEPTION TO UNIT HANDLING

5 PAYMENTS.—Notwithstanding section 454B(b)(1) of

6 the Social Security Act, as added by this section,

7 any State which, as of the date of the enactment of

8 this Act, processes the receipt of child support pay9 ments through local courts may, at the option of the

10 State, continue to process through September 30,

11 1999, such payments through such courts as proc12 essed such payments on or before such date of en13 actment.

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

15 Congress that, in determining whether to comply with sec16 tion 454B of the Social Security Act by establishing a sin17 gle, centralized unit for the collection and disbursement

18 of support payments or by linking together through auto19 mation local units for the collection and disbursement of

20 support payments, a State should choose the method of

21 compliance which best meets the needs of parents, employ22 ers, and children.
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1 SEC. 4313. STATE DIRECTORY OF NEW HIRES.

2 (a) STATE PLAN REQUIREMENT.—Section 454 (42

3 U.S.C. 654), as amended by sections 4301(b), 4303(a)

4 and 4312(a) of this Act, is amended—

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

6 (26);

7 (2) by striking the period at the end of para8 graph (27) and inserting ‘‘; and’’; and

9 (3) by adding after paragraph (27) the follow10 ing new paragraph:

11 ‘‘(28) provide that, on and after October 1,

12 1997, the State will operate a State Directory of

13 New Hires in accordance with section 453A.’’.

14 (b) STATE DIRECTORY OF NEW HIRES.—Part D of

15 title IV (42 U.S.C. 651–669) is amended by inserting

16 after section 453 the following new section:

17 ‘‘SEC. 453A. STATE DIRECTORY OF NEW HIRES.

18 ‘‘(a) ESTABLISHMENT.—

19 ‘‘(1) IN GENERAL.—

20 ‘‘(A) REQUIREMENT FOR STATES THAT

21 HAVE NO DIRECTORY.—Except as provided in

22 subparagraph (B), not later than October 1,

23 1997, each State shall establish an automated

24 directory (to be known as the ‘State Directory

25 of New Hires’) which shall contain information
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1 supplied in accordance with subsection (b) by

2 employers on each newly hired employee.

3 ‘‘(B) STATES WITH NEW HIRE REPORTING

4 IN EXISTENCE.—A State which has a new hire

5 reporting law in existence on the date of the en6 actment of this section may continue to operate

7 under the State law, but the State must meet

8 the requirements of subsection (g)(2) not later

9 than October 1, 1997, and the requirements of

10 this section (other than subsection (g)(2)) not

11 later than October 1, 1998.

12 ‘‘(2) DEFINITIONS.—As used in this section:

13 ‘‘(A) EMPLOYEE.—The term ‘employee’—

14 ‘‘(i) means an individual who is an

15 employee within the meaning of chapter 24

16 of the Internal Revenue Code of 1986; and

17 ‘‘(ii) does not include an employee of

18 a Federal or State agency performing in19 telligence or counterintelligence functions,

20 if the head of such agency has determined

21 that reporting pursuant to paragraph (1)

22 with respect to the employee could endan23 ger the safety of the employee or com24 promise an ongoing investigation or intel25 ligence mission.
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1 ‘‘(B) EMPLOYER.—

2 ‘‘(i) IN GENERAL.—The term ‘em3 ployer’ has the meaning given such term in

4 section 3401(d) of the Internal Revenue

5 Code of 1986 and includes any govern6 mental entity and any labor organization.

7 ‘‘(ii) LABOR ORGANIZATION.—The

8 term ‘labor organization’ shall have the

9 meaning given such term in section 2(5) of

10 the National Labor Relations Act, and in11 cludes any entity (also known as a ‘hiring

12 hall’) which is used by the organization

13 and an employer to carry out requirements

14 described in section 8(f)(3) of such Act of

15 an agreement between the organization

16 and the employer.

17 ‘‘(b) EMPLOYER INFORMATION.—

18 ‘‘(1) REPORTING REQUIREMENT.—

19 ‘‘(A) IN GENERAL.—Except as provided in

20 subparagraphs (B) and (C), each employer shall

21 furnish to the Directory of New Hires of the

22 State in which a newly hired employee works, a

23 report that contains the name, address, and so24 cial security number of the employee, and the

25 name and address of, and identifying number
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1 assigned under section 6109 of the Internal

2 Revenue Code of 1986 to, the employer.

3 ‘‘(B) MULTISTATE EMPLOYERS.—An em4 ployer that has employees who are employed in

5 2 or more States and that transmits reports

6 magnetically or electronically may comply with

7 subparagraph (A) by designating 1 State in

8 which such employer has employees to which

9 the employer will transmit the report described

10 in subparagraph (A), and transmitting such re11 port to such State. Any employer that transmits

12 reports pursuant to this subparagraph shall no13 tify the Secretary in writing as to which State

14 such employer designates for the purpose of

15 sending reports.

16 ‘‘(C) FEDERAL GOVERNMENT EMPLOY17 ERS.—Any department, agency, or instrumen18 tality of the United States shall comply with

19 subparagraph (A) by transmitting the report

20 described in subparagraph (A) to the National

21 Directory of New Hires established pursuant to

22 section 453.

23 ‘‘(2) TIMING OF REPORT.—Each State may

24 provide the time within which the report required by
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1 paragraph (1) shall be made with respect to an em2 ployee, but such report shall be made—

3 ‘‘(A) not later than 20 days after the date

4 the employer hires the employee; or

5 ‘‘(B) in the case of an employer transmit6 ting reports magnetically or electronically, by 2

7 monthly transmissions (if necessary) not less

8 than 12 days nor more than 16 days apart.

9 ‘‘(c) REPORTING FORMAT AND METHOD.—Each re10 port required by subsection (b) shall be made on a

11 W–4 form or, at the option of the employer, an equivalent

12 form, and may be transmitted by 1st class mail, magneti13 cally, or electronically.

14 ‘‘(d) CIVIL MONEY PENALTIES ON NONCOMPLYING

15 EMPLOYERS.—The State shall have the option to set a

16 State civil money penalty which shall be less than—

17 ‘‘(1) $25; or

18 ‘‘(2) $500 if, under State law, the failure is the

19 result of a conspiracy between the employer and the

20 employee to not supply the required report or to

21 supply a false or incomplete report.

22 ‘‘(e) ENTRY OF EMPLOYER INFORMATION.—Infor23 mation shall be entered into the data base maintained by

24 the State Directory of New Hires within 5 business days

25 of receipt from an employer pursuant to subsection (b).
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1 ‘‘(f) INFORMATION COMPARISONS.—

2 ‘‘(1) IN GENERAL.—Not later than May 1,

3 1998, an agency designated by the State shall, di4 rectly or by contract, conduct automated compari5 sons of the social security numbers reported by em6 ployers pursuant to subsection (b) and the social se7 curity numbers appearing in the records of the State

8 case registry for cases being enforced under the

9 State plan.

10 ‘‘(2) NOTICE OF MATCH.—When an information

11 comparison conducted under paragraph (1) reveals a

12 match with respect to the social security number of

13 an individual required to provide support under a

14 support order, the State Directory of New Hires

15 shall provide the agency administering the State

16 plan approved under this part of the appropriate

17 State with the name, address, and social security

18 number of the employee to whom the social security

19 number is assigned, and the name and address of,

20 and identifying number assigned under section 6109

21 of the Internal Revenue Code of 1986 to, the em22 ployer.

23 ‘‘(g) TRANSMISSION OF INFORMATION.—

24 ‘‘(1) TRANSMISSION OF WAGE WITHHOLDING

25 NOTICES TO EMPLOYERS.—Within 2 business days
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1 after the date information regarding a newly hired

2 employee is entered into the State Directory of New

3 Hires, the State agency enforcing the employee’s

4 child support obligation shall transmit a notice to

5 the employer of the employee directing the employer

6 to withhold from the income of the employee an

7 amount equal to the monthly (or other periodic)

8 child support obligation (including any past due sup9 port obligation) of the employee, unless the employ10 ee’s income is not subject to withholding pursuant to

11 section 466(b)(3).

12 ‘‘(2) TRANSMISSIONS TO THE NATIONAL DIREC13 TORY OF NEW HIRES.—

14 ‘‘(A) NEW HIRE INFORMATION.—Within 3

15 business days after the date information re16 garding a newly hired employee is entered into

17 the State Directory of New Hires, the State Di18 rectory of New Hires shall furnish the informa19 tion to the National Directory of New Hires.

20 ‘‘(B) WAGE AND UNEMPLOYMENT COM21 PENSATION INFORMATION.—The State Direc22 tory of New Hires shall, on a quarterly basis,

23 furnish to the National Directory of New Hires

24 extracts of the reports required under section

25 303(a)(6) to be made to the Secretary of Labor
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1 concerning the wages and unemployment com2 pensation paid to individuals, by such dates, in

3 such format, and containing such information

4 as the Secretary of Health and Human Services

5 shall specify in regulations.

6 ‘‘(3) BUSINESS DAY DEFINED.—As used in this

7 subsection, the term ‘business day’ means a day on

8 which State offices are open for regular business.

9 ‘‘(h) OTHER USES OF NEW HIRE INFORMATION.—

10 ‘‘(1) LOCATION OF CHILD SUPPORT OBLI11 GORS.—The agency administering the State plan ap12 proved under this part shall use information received

13 pursuant to subsection (f)(2) to locate individuals

14 for purposes of establishing paternity and establish15 ing, modifying, and enforcing child support obliga16 tions, and may disclose such information to any

17 agent of the agency that is under contract with the

18 agency to carry out such purposes.

19 ‘‘(2) VERIFICATION OF ELIGIBILITY FOR CER20 TAIN PROGRAMS.—A State agency responsible for

21 administering a program specified in section 1137(b)

22 shall have access to information reported by employ23 ers pursuant to subsection (b) of this section for

24 purposes of verifying eligibility for the program.
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1 ‘‘(3) ADMINISTRATION OF EMPLOYMENT SECU2 RITY AND WORKERS’ COMPENSATION.—State agen3 cies operating employment security and workers’

4 compensation programs shall have access to informa5 tion reported by employers pursuant to subsection

6 (b) for the purposes of administering such pro7 grams.’’.

8 (c) QUARTERLY WAGE REPORTING.—Section

9 1137(a)(3) (42 U.S.C. 1320b–7(a)(3)) is amended—

10 (1) by inserting ‘‘(including State and local gov11 ernmental entities and labor organizations (as de12 fined in section 453A(a)(2)(B)(iii))’’ after ‘‘employ13 ers’’; and

14 (2) by inserting ‘‘, and except that no report

15 shall be filed with respect to an employee of a State

16 or local agency performing intelligence or counter17 intelligence functions, if the head of such agency has

18 determined that filing such a report could endanger

19 the safety of the employee or compromise an ongo20 ing investigation or intelligence mission’’ after

21 ‘‘paragraph (2)’’.

22 (d) DISCLOSURE TO CERTAIN AGENTS.—Section

23 303(e) (42 U.S.C. 503(e)) is amended by adding at the

24 end the following:
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1 ‘‘(5) A State or local child support enforcement agen2 cy may disclose to any agent of the agency that is under

3 contract with the agency to carry out the purposes de4 scribed in paragraph (1)(B) wage information that is dis5 closed to an officer or employee of the agency under para6 graph (1)(A). Any agent of a State or local child support

7 agency that receives wage information under this para8 graph shall comply with the safeguards established pursu9 ant to paragraph (1)(B).’’.

10 SEC. 4314. AMENDMENTS CONCERNING INCOME WITH11 HOLDING.

12 (a) MANDATORY INCOME WITHHOLDING.—

13 (1) IN GENERAL.—Section 466(a)(1) (42

14 U.S.C. 666(a)(1)) is amended to read as follows:

15 ‘‘(1)(A) Procedures described in subsection (b)

16 for the withholding from income of amounts payable

17 as support in cases subject to enforcement under the

18 State plan.

19 ‘‘(B) Procedures under which the income of a

20 person with a support obligation imposed by a sup21 port order issued (or modified) in the State before

22 October 1, 1996, if not otherwise subject to with23 holding under subsection (b), shall become subject to

24 withholding as provided in subsection (b) if arrear-
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1 ages occur, without the need for a judicial or admin2 istrative hearing.’’.

3 (2) CONFORMING AMENDMENTS.—

4 (A) Section 466(b) (42 U.S.C. 666(b)) is

5 amended in the matter preceding paragraph

6 (1), by striking ‘‘subsection (a)(1)’’ and insert7 ing ‘‘subsection (a)(1)(A)’’.

8 (B) Section 466(b)(4) (42 U.S.C.

9 666(b)(4)) is amended to read as follows:

10 ‘‘(4)(A) Such withholding must be carried out

11 in full compliance with all procedural due process re12 quirements of the State, and the State must send

13 notice to each noncustodial parent to whom para14 graph (1) applies—

15 ‘‘(i) that the withholding has commenced;

16 and

17 ‘‘(ii) of the procedures to follow if the non18 custodial parent desires to contest such with19 holding on the grounds that the withholding or

20 the amount withheld is improper due to a mis21 take of fact.

22 ‘‘(B) The notice under subparagraph (A) of this

23 paragraph shall include the information provided to

24 the employer under paragraph (6)(A).’’.
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1 (C) Section 466(b)(5) (42 U.S.C.

2 666(b)(5)) is amended by striking all that fol3 lows ‘‘administered by’’ and inserting ‘‘the

4 State through the State disbursement unit es5 tablished pursuant to section 454B, in accord6 ance with the requirements of section 454B.’’.

7 (D) Section 466(b)(6)(A) (42 U.S.C.

8 666(b)(6)(A)) is amended—

9 (i) in clause (i), by striking ‘‘to the

10 appropriate agency’’ and all that follows

11 and inserting ‘‘to the State disbursement

12 unit within 5 business days after the date

13 the amount would (but for this subsection)

14 have been paid or credited to the employee,

15 for distribution in accordance with this

16 part. The employer shall withhold funds as

17 directed in the notice. For terms and con18 ditions for withholding income that are not

19 specified in a notice issued by another

20 State, the employer shall apply the law of

21 the State in which the obligor works. An

22 employer who complies with an income

23 withholding notice that is regular on its

24 face shall not be subject to civil liability to
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1 any individual or agency for conduct in

2 compliance with the notice.’’.

3 (ii) in clause (ii), by inserting ‘‘be in

4 a standard format prescribed by the Sec5 retary, and’’ after ‘‘shall’’; and

6 (iii) by adding at the end the follow7 ing new clause:

8 ‘‘(iii) As used in this subparagraph, the term

9 ‘business day’ means a day on which State offices

10 are open for regular business.’’.

11 (E) Section 466(b)(6)(D) (42 U.S.C.

12 666(b)(6)(D)) is amended by striking ‘‘any em13 ployer’’ and all that follows and inserting ‘‘any

14 employer who—

15 ‘‘(i) discharges from employment, refuses

16 to employ, or takes disciplinary action against

17 any noncustodial parent subject to income with18 holding required by this subsection because of

19 the existence of such withholding and the obli20 gations or additional obligations which it im21 poses upon the employer; or

22 ‘‘(ii) fails to withhold support from income

23 or to pay such amounts to the State disburse24 ment unit in accordance with this subsection.’’.
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1 (F) Section 466(b) (42 U.S.C. 666(b)) is

2 amended by adding at the end the following

3 new paragraph:

4 ‘‘(11) Procedures under which the agency ad5 ministering the State plan approved under this part

6 may execute a withholding order without advance

7 notice to the obligor, including issuing the withhold8 ing order through electronic means.’’.

9 (b) DEFINITION OF INCOME.—

10 (1) IN GENERAL.—Section 466(b)(8) (42

11 U.S.C. 666(b)(8)) is amended to read as follows:

12 ‘‘(8) For purposes of subsection (a) and this

13 subsection, the term ‘income’ means any periodic

14 form of payment due to an individual, regarless of

15 source, including wages, salaries, commissions, bo16 nuses, worker’s compensation, disability, payments

17 pursuant to a pension or retirement program, and

18 interest.’’.

19 (2) CONFORMING AMENDMENTS.—

20 (A) Subsections (a)(8)(A), (a)(8)(B)(i),

21 (b)(3)(A), (b)(3)(B), (b)(6)(A)(i), and

22 (b)(6)(C), and (b)(7) of section 466 (42 U.S.C.

23 666(a)(8)(A), (a)(8)(B)(i), (b)(3)(A), (b)(3)(B),

24 (b)(6)(A)(i), and (b)(6)(C), and (b)(7)) are
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1 each amended by striking ‘‘wages’’ each place

2 such term appears and inserting ‘‘income’’.

3 (B) Section 466(b)(1) (42 U.S.C.

4 666(b)(1)) is amended by striking ‘‘wages (as

5 defined by the State for purposes of this sec6 tion)’’ and inserting ‘‘income’’.

7 (c) CONFORMING AMENDMENT.—Section 466(c) (42

8 U.S.C. 666(c)) is repealed.

9 SEC. 4315. LOCATOR INFORMATION FROM INTERSTATE

10 NETWORKS.

11 Section 466(a) (42 U.S.C. 666(a)) is amended by in12 serting after paragraph (11) the following new paragraph:

13 ‘‘(12) LOCATOR INFORMATION FROM INTER14 STATE NETWORKS.—Procedures to ensure that all

15 Federal and State agencies conducting activities

16 under this part have access to any system used by

17 the State to locate an individual for purposes relat18 ing to motor vehicles or law enforcement.’’.

19 SEC. 4316. EXPANSION OF THE FEDERAL PARENT LOCATOR

20 SERVICE.

21 (a) EXPANDED AUTHORITY TO LOCATE INDIVID22 UALS AND ASSETS.—Section 453 (42 U.S.C. 653) is

23 amended—

24 (1) in subsection (a), by striking all that follows

25 ‘‘subsection (c))’’ and inserting ‘‘, for the purpose of
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1 establishing parentage, establishing, setting the

2 amount of, modifying, or enforcing child support ob3 ligations, or enforcing child custody or visitation or4 ders—

5 ‘‘(1) information on, or facilitating the discov6 ery of, the location of any individual—

7 ‘‘(A) who is under an obligation to pay

8 child support or provide child custody or visita9 tion rights;

10 ‘‘(B) against whom such an obligation is

11 sought;

12 ‘‘(C) to whom such an obligation is owed,

13 including the individual’s social security number (or

14 numbers), most recent address, and the name, ad15 dress, and employer identification number of the in16 dividual’s employer;

17 ‘‘(2) information on the individual’s wages (or

18 other income) from, and benefits of, employment (in19 cluding rights to or enrollment in group health care

20 coverage); and

21 ‘‘(3) information on the type, status, location,

22 and amount of any assets of, or debts owed by or

23 to, any such individual.’’; and

24 (2) in subsection (b)—
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1 (A) in the matter preceding paragraph (1),

2 by striking ‘‘social security’’ and all that follows

3 through ‘‘absent parent’’ and inserting ‘‘infor4 mation described in subsection (a)’’; and

5 (B) in the flush paragraph at the end, by

6 adding the following: ‘‘No information shall be

7 disclosed to any person if the State has notified

8 the Secretary that the State has reasonable evi9 dence of domestic violence or child abuse and

10 the disclosure of such information could be

11 harmful to the custodial parent or the child of

12 such parent. Information received or transmit13 ted pursuant to this section shall be subject to

14 the safeguard provisions contained in section

15 454(26).’’.

16 (b) AUTHORIZED PERSON FOR INFORMATION RE17 GARDING VISITATION RIGHTS.—Section 453(c) (42

18 U.S.C. 653(c)) is amended—

19 (1) in paragraph (1), by striking ‘‘support’’ and

20 inserting ‘‘support or to seek to enforce orders pro21 viding child custody or visitation rights’’; and

22 (2) in paragraph (2), by striking ‘‘, or any

23 agent of such court; and’’ and inserting ‘‘or to issue

24 an order against a resident parent for child custody

25 or visitation rights, or any agent of such court;’’.
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1 (c) REIMBURSEMENT FOR INFORMATION FROM FED2 ERAL AGENCIES.—Section 453(e)(2) (42 U.S.C.

3 653(e)(2)) is amended in the 4th sentence by inserting

4 ‘‘in an amount which the Secretary determines to be rea5 sonable payment for the information exchange (which

6 amount shall not include payment for the costs of obtain7 ing, compiling, or maintaining the information)’’ before

8 the period.

9 (d) REIMBURSEMENT FOR REPORTS BY STATE

10 AGENCIES.—Section 453 (42 U.S.C. 653) is amended by

11 adding at the end the following new subsection:

12 ‘‘(g) REIMBURSEMENT FOR REPORTS BY STATE

13 AGENCIES.—The Secretary may reimburse Federal and

14 State agencies for the costs incurred by such entities in

15 furnishing information requested by the Secretary under

16 this section in an amount which the Secretary determines

17 to be reasonable payment for the information exchange

18 (which amount shall not include payment for the costs of

19 obtaining, compiling, or maintaining the information).’’.

20 (e) CONFORMING AMENDMENTS.—

21 (1) Sections 452(a)(9), 453(a), 453(b), 463(a),

22 463(e), and 463(f) (42 U.S.C. 652(a)(9), 653(a),

23 653(b), 663(a), 663(e), and 663(f)) are each amend24 ed by inserting ‘‘Federal’’ before ‘‘Parent’’ each

25 place such term appears.
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1 (2) Section 453 (42 U.S.C. 653) is amended in

2 the heading by adding ‘‘FEDERAL’’ before ‘‘PAR3 ENT’’.

4 (f) NEW COMPONENTS.—Section 453 (42 U.S.C.

5 653), as amended by subsection (d) of this section, is

6 amended by adding at the end the following new sub7 sections:

8 ‘‘(h) FEDERAL CASE REGISTRY OF CHILD SUPPORT

9 ORDERS.—

10 ‘‘(1) IN GENERAL.—Not later than October 1,

11 1998, in order to assist States in administering pro12 grams under State plans approved under this part

13 and programs funded under part A, and for the

14 other purposes specified in this section, the Sec15 retary shall establish and maintain in the Federal

16 Parent Locator Service an automated registry

17 (which shall be known as the ‘Federal Case Registry

18 of Child Support Orders’), which shall contain ab19 stracts of support orders and other information de20 scribed in paragraph (2) with respect to each case

21 in each State case registry maintained pursuant to

22 section 454A(e), as furnished (and regularly up23 dated), pursuant to section 454A(f), by State agen24 cies administering programs under this part.
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1 ‘‘(2) CASE INFORMATION.—The information re2 ferred to in paragraph (1) with respect to a case

3 shall be such information as the Secretary may

4 specify in regulations (including the names, social

5 security numbers or other uniform identification

6 numbers, and State case identification numbers) to

7 identify the individuals who owe or are owed support

8 (or with respect to or on behalf of whom support ob9 ligations are sought to be established), and the State

10 or States which have the case.

11 ‘‘(i) NATIONAL DIRECTORY OF NEW HIRES.—

12 ‘‘(1) IN GENERAL.—In order to assist States in

13 administering programs under State plans approved

14 under this part and programs funded under part A,

15 and for the other purposes specified in this section,

16 the Secretary shall, not later than October 1, 1997,

17 establish and maintain in the Federal Parent Loca18 tor Service an automated directory to be known as

19 the National Directory of New Hires, which shall

20 contain the information supplied pursuant to section

21 453A(g)(2).

22 ‘‘(2) ENTRY OF DATA.—Information shall be

23 entered into the data base maintained by the Na24 tional Directory of New Hires within 2 business

25 days of receipt pursuant to section 453A(g)(2).
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1 ‘‘(3) ADMINISTRATION OF FEDERAL TAX

2 LAWS.—The Secretary of the Treasury shall have

3 access to the information in the National Directory

4 of New Hires for purposes of administering section

5 32 of the Internal Revenue Code of 1986, or the ad6 vance payment of the earned income tax credit

7 under section 3507 of such Code, and verifying a

8 claim with respect to employment in a tax return.

9 ‘‘(4) LIST OF MULTISTATE EMPLOYERS.—The

10 Secretary shall maintain within the National Direc11 tory of New Hires a list of multistate employers that

12 report information regarding newly hired employees

13 pursuant to section 453A(b)(1)(B), and the State

14 which each such employer has designated to receive

15 such information.

16 ‘‘(j) INFORMATION COMPARISONS AND OTHER DIS17 CLOSURES.—

18 ‘‘(1) VERIFICATION BY SOCIAL SECURITY AD19 MINISTRATION.—

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

21 transmit information on individuals and em22 ployers maintained under this section to the So23 cial Security Administration to the extent nec24 essary for verification in accordance with sub25 paragraph (B).
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1 ‘‘(B) VERIFICATION BY SSA.—The Social

2 Security Administration shall verify the accu3 racy of, correct, or supply to the extent pos4 sible, and report to the Secretary, the following

5 information supplied by the Secretary pursuant

6 to subparagraph (A):

7 ‘‘(i) The name, social security num8 ber, and birth date of each such individual.

9 ‘‘(ii) The employer identification num10 ber of each such employer.

11 ‘‘(2) INFORMATION COMPARISONS.—For the

12 purpose of locating individuals in a paternity estab13 lishment case or a case involving the establishment,

14 modification, or enforcement of a support order, the

15 Secretary shall—

16 ‘‘(A) compare information in the National

17 Directory of New Hires against information in

18 the support case abstracts in the Federal Case

19 Registry of Child Support Orders not less often

20 than every 2 business days; and

21 ‘‘(B) within 2 business days after such a

22 comparison reveals a match with respect to an

23 individual, report the information to the State

24 agency responsible for the case.
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1 ‘‘(3) INFORMATION COMPARISONS AND DISCLO2 SURES OF INFORMATION IN ALL REGISTRIES FOR

3 TITLE IV PROGRAM PURPOSES.—To the extent and

4 with the frequency that the Secretary determines to

5 be effective in assisting States to carry out their re6 sponsibilities under programs operated under this

7 part and programs funded under part A, the Sec8 retary shall—

9 ‘‘(A) compare the information in each com10 ponent of the Federal Parent Locator Service

11 maintained under this section against the infor12 mation in each other such component (other

13 than the comparison required by paragraph

14 (2)), and report instances in which such a com15 parison reveals a match with respect to an indi16 vidual to State agencies operating such pro17 grams; and

18 ‘‘(B) disclose information in such registries

19 to such State agencies.

20 ‘‘(4) PROVISION OF NEW HIRE INFORMATION

21 TO THE SOCIAL SECURITY ADMINISTRATION.—The

22 National Directory of New Hires shall provide the

23 Commissioner of Social Security with all information

24 in the National Directory, which shall be used to de25 termine the accuracy of payments under the supple-
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1 mental security income program under title XVI and

2 in connection with benefits under title II.

3 ‘‘(5) RESEARCH.—The Secretary may provide

4 access to information reported by employers pursu5 ant to section 453A(b) for research purposes found

6 by the Secretary to be likely to contribute to achiev7 ing the purposes of part A or this part, but without

8 personal identifiers.

9 ‘‘(k) FEES.—

10 ‘‘(1) FOR SSA VERIFICATION.—The Secretary

11 shall reimburse the Commissioner of Social Security,

12 at a rate negotiated between the Secretary and the

13 Commissioner, for the costs incurred by the Com14 missioner in performing the verification services de15 scribed in subsection (j).

16 ‘‘(2) FOR INFORMATION FROM STATE DIREC17 TORIES OF NEW HIRES.—The Secretary shall reim18 burse costs incurred by State directories of new

19 hires in furnishing information as required by sub20 section (j)(3), at rates which the Secretary deter21 mines to be reasonable (which rates shall not include

22 payment for the costs of obtaining, compiling, or

23 maintaining such information).

24 ‘‘(3) FOR INFORMATION FURNISHED TO STATE

25 AND FEDERAL AGENCIES.—A State or Federal agen-
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1 cy that receives information from the Secretary pur2 suant to this section shall reimburse the Secretary

3 for costs incurred by the Secretary in furnishing the

4 information, at rates which the Secretary determines

5 to be reasonable (which rates shall include payment

6 for the costs of obtaining, verifying, maintaining,

7 and comparing the information).

8 ‘‘(l) RESTRICTION ON DISCLOSURE AND USE.—In9 formation in the Federal Parent Locator Service, and in10 formation resulting from comparisons using such informa11 tion, shall not be used or disclosed except as expressly pro12 vided in this section, subject to section 6103 of the Inter13 nal Revenue Code of 1986.

14 ‘‘(m) INFORMATION INTEGRITY AND SECURITY.—

15 The Secretary shall establish and implement safeguards

16 with respect to the entities established under this section

17 designed to—

18 ‘‘(1) ensure the accuracy and completeness of

19 information in the Federal Parent Locator Service;

20 and

21 ‘‘(2) restrict access to confidential information

22 in the Federal Parent Locator Service to authorized

23 persons, and restrict use of such information to au24 thorized purposes.
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1 ‘‘(n) FEDERAL GOVERNMENT REPORTING.—Each

2 department, agency, and instrumentality of the United

3 States shall on a quarterly basis report to the Federal

4 Parent Locator Service the name and social security num5 ber of each employee and the wages paid to the employee

6 during the previous quarter, except that such a report

7 shall not be filed with respect to an employee of a depart8 ment, agency, or instrumentality performing intelligence

9 or counterintelligence functions, if the head of such de10 partment, agency, or instrumentality has determined that

11 filing such a report could endanger the safety of the em12 ployee or compromise an ongoing investigation or intel13 ligence mission.’’.

14 (g) CONFORMING AMENDMENTS.—

15 (1) TO PART D OF TITLE IV OF THE SOCIAL SE16 CURITY ACT.—

17 (A) Section 454(8)(B) (42 U.S.C.

18 654(8)(B)) is amended to read as follows:

19 ‘‘(B) the Federal Parent Locator Service

20 established under section 453;’’.

21 (B) Section 454(13) (42 U.S.C. 654(13))

22 is amended by inserting ‘‘and provide that in23 formation requests by parents who are residents

24 of other States be treated with the same prior25 ity as requests by parents who are residents of
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1 the State submitting the plan’’ before the semi2 colon.

3 (2) TO FEDERAL UNEMPLOYMENT TAX ACT.—

4 Section 3304(a)(16) of the Internal Revenue Code of

5 1986 is amended—

6 (A) by striking ‘‘Secretary of Health, Edu7 cation, and Welfare’’ each place such term ap8 pears and inserting ‘‘Secretary of Health and

9 Human 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 compensation in22 formation contained in the records of such agency

23 shall be furnished to the Secretary of Health and

24 Human Services (in accordance with regulations pro25 mulgated by such Secretary) as necessary for the
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1 purposes of the National Directory of New Hires es2 tablished under section 453(i) of the Social Security

3 Act, and’’.

4 (3) TO STATE GRANT PROGRAM UNDER TITLE

5 III OF THE SOCIAL SECURITY ACT.—Subsection (h)

6 of section 303 (42 U.S.C. 503) is amended to read

7 as follows:

8 ‘‘(h)(1) The State agency charged with the adminis9 tration of the State law shall, on a reimbursable basis—

10 ‘‘(A) disclose quarterly, to the Secretary of

11 Health and Human Services, wage and claim infor12 mation, as required pursuant to section 453(i)(1),

13 contained in the records of such agency;

14 ‘‘(B) ensure that information provided pursuant

15 to subparagraph (A) meets such standards relating

16 to correctness and verification as the Secretary of

17 Health and Human Services, with the concurrence

18 of the Secretary of Labor, may find necessary; and

19 ‘‘(C) establish such safeguards as the Secretary

20 of Labor determines are necessary to insure that in21 formation disclosed under subparagraph (A) is used

22 only for purposes of section 453(i)(1) in carrying out

23 the child support enforcement program under title

24 IV.
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1 ‘‘(2) Whenever the Secretary of Labor, after reason2 able notice and opportunity for hearing to the State agen3 cy charged with the administration of the State law, finds

4 that there is a failure to comply substantially with the re5 quirements of paragraph (1), the Secretary of Labor shall

6 notify such State agency that further payments will not

7 be made to the State until the Secretary of Labor is satis8 fied that there is no longer any such failure. Until the

9 Secretary of Labor is so satisfied, the Secretary shall

10 make no future certification to the Secretary of the Treas11 ury with respect to the State.

12 ‘‘(3) For purposes of this subsection—

13 ‘‘(A) the term ‘wage information’ means infor14 mation regarding wages paid to an individual, the

15 social security account number of such individual,

16 and the name, address, State, and the Federal em17 ployer identification number of the employer paying

18 such wages to such individual; and

19 ‘‘(B) the term ‘claim information’ means infor20 mation regarding whether an individual is receiving,

21 has received, or has made application for, unemploy22 ment compensation, the amount of any such com23 pensation being received (or to be received by such

24 individual), and the individual’s current (or most re25 cent) home address.’’.
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1 (4) DISCLOSURE OF CERTAIN INFORMATION TO

2 AGENTS OF CHILD SUPPORT ENFORCEMENT AGEN3 CIES.—

4 (A) IN GENERAL.—Paragraph (6) of sec5 tion 6103(l) of the Internal Revenue Code of

6 1986 (relating to disclosure of return informa7 tion to Federal, State, and local child support

8 enforcement agencies) is amended by redesig9 nating subparagraph (B) as subparagraph (C)

10 and by inserting after subparagraph (A) the fol11 lowing new subparagraph:

12 ‘‘(B) DISCLOSURE TO CERTAIN AGENTS.—

13 The following information disclosed to any child

14 support enforcement agency under subpara15 graph (A) with respect to any individual with

16 respect to whom child support obligations are

17 sought to be established or enforced may be dis18 closed by such agency to any agent of such

19 agency which is under contract with such agen20 cy to carry out the purposes described in sub21 paragraph (C):

22 ‘‘(i) The address and social security

23 account number (or numbers) of such indi24 vidual.
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1 ‘‘(ii) The amount of any reduction

2 under section 6402(c) (relating to offset of

3 past-due support against overpayments) in

4 any overpayment otherwise payable to such

5 individual.’’

6 (B) CONFORMING AMENDMENTS.—

7 (i) Paragraph (3) of section 6103(a)

8 of such Code is amended by striking

9 ‘‘(l)(12)’’ and inserting ‘‘paragraph (6) or

10 (12) of subsection (l)’’.

11 (ii) Subparagraph (C) of section

12 6103(l)(6) of such Code, as redesignated

13 by subsection (a), is amended to read as

14 follows:

15 ‘‘(C) RESTRICTION ON DISCLOSURE.—In16 formation may be disclosed under this para17 graph only for purposes of, and to the extent

18 necessary in, establishing and collecting child

19 support obligations from, and locating, individ20 uals owing such obligations.’’

21 (iii) The material following subpara22 graph (F) of section 6103(p)(4) of such

23 Code is amended by striking ‘‘subsection

24 (l)(12)(B)’’ and inserting ‘‘paragraph

25 (6)(A) or (12)(B) of subsection (l)’’.
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1 (h) REQUIREMENT FOR COOPERATION.—The Sec2 retary of Labor and the Secretary of Health and Human

3 Services shall work jointly to develop cost-effective and ef4 ficient methods of accessing the information in the various

5 State directories of new hires and the National Directory

6 of New Hires as established pursuant to the amendments

7 made by this chapter. In developing these methods the

8 Secretaries shall take into account the impact, including

9 costs, on the States, and shall also consider the need to

10 insure the proper and authorized use of wage record infor11 mation.

12 SEC. 4317. COLLECTION AND USE OF SOCIAL SECURITY

13 NUMBERS FOR USE IN CHILD SUPPORT EN14 FORCEMENT.

15 (a) STATE LAW REQUIREMENT.—Section 466(a) (42

16 U.S.C. 666(a)), as amended by section 4315 of this Act,

17 is amended by inserting after paragraph (12) the following

18 new paragraph:

19 ‘‘(13) RECORDING OF SOCIAL SECURITY NUM20 BERS IN CERTAIN FAMILY MATTERS.—Procedures

21 requiring that the social security number of—

22 ‘‘(A) any applicant for a professional li23 cense, commercial driver’s license, occupational

24 license, or marriage license be recorded on the

25 application;
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1 ‘‘(B) any individual who is subject to a di2 vorce decree, support order, or paternity deter3 mination or acknowledgment be placed in the

4 records relating to the matter; and

5 ‘‘(C) any individual who has died be placed

6 in the records relating to the death and be re7 corded on the death certificate.

8 For purposes of subparagraph (A), if a State allows

9 the use of a number other than the social security

10 number, the State shall so advise any applicants.’’.

11 (b) CONFORMING AMENDMENTS.—Section

12 205(c)(2)(C) (42 U.S.C. 405(c)(2)(C)), as amended by

13 section 321(a)(9) of the Social Security Independence and

14 Program Improvements Act of 1994, is amended—

15 (1) in clause (i), by striking ‘‘may require’’ and

16 inserting ‘‘shall require’’;

17 (2) in clause (ii), by inserting after the 1st sen18 tence the following: ‘‘In the administration of any

19 law involving the issuance of a marriage certificate

20 or license, each State shall require each party named

21 in the certificate or license to furnish to the State

22 (or political subdivision thereof), or any State agen23 cy having administrative responsibility for the law

24 involved, the social security number of the party.’’;
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1 (3) in clause (ii), by inserting ‘‘or marriage cer2 tificate’’ after ‘‘Such numbers shall not be recorded

3 on the birth certificate’’.

4 (4) in clause (vi), by striking ‘‘may’’ and insert5 ing ‘‘shall’’; and

6 (5) by adding at the end the following new

7 clauses:

8 ‘‘(x) An agency of a State (or a political subdivision

9 thereof) charged with the administration of any law con10 cerning the issuance or renewal of a license, certificate,

11 permit, or other authorization to engage in a profession,

12 an occupation, or a commercial activity shall require all

13 applicants for issuance or renewal of the license, certifi14 cate, permit, or other authorization to provide the appli15 cant’s social security number to the agency for the purpose

16 of administering such laws, and for the purpose of re17 sponding to requests for information from an agency oper18 ating pursuant to part D of title IV.

19 ‘‘(xi) All divorce decrees, support orders, and pater20 nity determinations issued, and all paternity acknowledg21 ments made, in each State shall include the social security

22 number of each party to the decree, order, determination,

23 or acknowledgment in the records relating to the matter,

24 for the purpose of responding to requests for information

25 from an agency operating pursuant to part D of title IV.’’.
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1 CHAPTER 3—STREAMLINING AND

2 UNIFORMITY OF PROCEDURES

3 SEC. 4321. ADOPTION OF UNIFORM STATE LAWS.

4 Section 466 (42 U.S.C. 666) is amended by adding

5 at the end the following new subsection:

6 ‘‘(f) UNIFORM INTERSTATE FAMILY SUPPORT

7 ACT.—

8 ‘‘(1) ENACTMENT AND USE.—In order to sat9 isfy section 454(20)(A), on and after January 1,

10 1998, each State must have in effect the Uniform

11 Interstate Family Support Act, as approved by the

12 American Bar Association on February 9, 1993, to13 gether with any amendments officially adopted be14 fore January 1, 1998 by the National Conference of

15 Commissioners on Uniform State Laws.

16 ‘‘(2) EMPLOYERS TO FOLLOW PROCEDURAL

17 RULES OF STATE WHERE EMPLOYEE WORKS.—The

18 State law enacted pursuant to paragraph (1) shall

19 provide that an employer that receives an income

20 withholding order or notice pursuant to section 501

21 of the Uniform Interstate Family Support Act follow

22 the procedural rules that apply with respect to such

23 order or notice under the laws of the State in which

24 the obligor works.’’.
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1 SEC. 4322. IMPROVEMENTS TO FULL FAITH AND CREDIT

2 FOR CHILD SUPPORT ORDERS.

3 Section 1738B of title 28, United States Code, is

4 amended—

5 (1) in subsection (a)(2), by striking ‘‘subsection

6 (e)’’ and inserting ‘‘subsections (e), (f), and (i)’’;

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

8 undesignated paragraph the following:

9 ‘‘ ‘child’s home State’ means the State in which a

10 child lived with a parent or a person acting as parent for

11 at least 6 consecutive months immediately preceding the

12 time of filing of a petition or comparable pleading for sup13 port and, if a child is less than 6 months old, the State

14 in which the child lived from birth with any of them. A

15 period of temporary absence of any of them is counted

16 as part of the 6-month period.’’;

17 (3) in subsection (c), by inserting ‘‘by a court

18 of a State’’ before ‘‘is made’’;

19 (4) in subsection (c)(1), by inserting ‘‘and sub20 sections (e), (f), and (g)’’ after ‘‘located’’;

21 (5) in subsection (d)—

22 (A) by inserting ‘‘individual’’ before ‘‘con23 testant’’; and

24 (B) by striking ‘‘subsection (e)’’ and in25 serting ‘‘subsections (e) and (f)’’;
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1 (6) in subsection (e), by striking ‘‘make a modi2 fication of a child support order with respect to a

3 child that is made’’ and inserting ‘‘modify a child

4 support order issued’’;

5 (7) in subsection (e)(1), by inserting ‘‘pursuant

6 to subsection (i)’’ before the semicolon;

7 (8) in subsection (e)(2)—

8 (A) by inserting ‘‘individual’’ before ‘‘con9 testant’’ each place such term appears; and

10 (B) by striking ‘‘to that court’s making the

11 modification and assuming’’ and inserting ‘‘with

12 the State of continuing, exclusive jurisdiction

13 for a court of another State to modify the order

14 and assume’’;

15 (9) by redesignating subsections (f) and (g) as

16 subsections (g) and (h), respectively;

17 (10) by inserting after subsection (e) the follow18 ing new subsection:

19 ‘‘(f) RECOGNITION OF CHILD SUPPORT ORDERS.—

20 If 1 or more child support orders have been issued with

21 regard to an obligor and a child, a court shall apply the

22 following rules in determining which order to recognize for

23 purposes of continuing, exclusive jurisdiction and enforce24 ment:
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1 ‘‘(1) If only 1 court has issued a child support

2 order, the order of that court must be recognized.

3 ‘‘(2) If 2 or more courts have issued child sup4 port orders for the same obligor and child, and only

5 1 of the courts would have continuing, exclusive ju6 risdiction under this section, the order of that court

7 must be recognized.

8 ‘‘(3) If 2 or more courts have issued child sup9 port orders for the same obligor and child, and more

10 than 1 of the courts would have continuing, exclusive

11 jurisdiction under this section, an order issued by a

12 court in the current home State of the child must

13 be recognized, but if an order has not been issued

14 in the current home State of the child, the order

15 most recently issued must be recognized.

16 ‘‘(4) If 2 or more courts have issued child sup17 port orders for the same obligor and child, and none

18 of the courts would have continuing, exclusive juris19 diction under this section, a court may issue a child

20 support order, which must be recognized.

21 ‘‘(5) The court that has issued an order recog22 nized under this subsection is the court having con23 tinuing, exclusive jurisdiction.’’;

24 (11) in subsection (g) (as so redesignated)—
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1 (A) by striking ‘‘PRIOR’’ and inserting

2 ‘‘MODIFIED’’; and

3 (B) by striking ‘‘subsection (e)’’ and in4 serting ‘‘subsections (e) and (f)’’;

5 (12) in subsection (h) (as so redesignated)—

6 (A) in paragraph (2), by inserting ‘‘includ7 ing the duration of current payments and other

8 obligations of support’’ before the comma; and

9 (B) in paragraph (3), by inserting ‘‘arrears

10 under’’ after ‘‘enforce’’; and

11 (13) by adding at the end the following new

12 subsection:

13 ‘‘(i) REGISTRATION FOR MODIFICATION.—If there is

14 no individual contestant or child residing in the issuing

15 State, the party or support enforcement agency seeking

16 to modify, or to modify and enforce, a child support order

17 issued in another State shall register that order in a State

18 with jurisdiction over the nonmovant for the purpose of

19 modification.’’.

20 SEC. 4323. ADMINISTRATIVE ENFORCEMENT IN INTER21 STATE CASES.

22 Section 466(a) (42 U.S.C. 666(a)), as amended by

23 sections 4315 and 4317(a) of this Act, is amended by in24 serting after paragraph (13) the following new paragraph:
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1 ‘‘(14) ADMINISTRATIVE ENFORCEMENT IN

2 INTERSTATE CASES.—Procedures under which—

3 ‘‘(A)(i) the State shall respond within 5

4 business days to a request made by another

5 State to enforce a support order; and

6 ‘‘(ii) the term ‘business day’ means a day

7 on which State offices are open for regular

8 business;

9 ‘‘(B) the State may, by electronic or other

10 means, transmit to another State a request for

11 assistance in a case involving the enforcement

12 of a support order, which request—

13 ‘‘(i) shall include such information as

14 will enable the State to which the request

15 is transmitted to compare the information

16 about the case to the information in the

17 data bases of the State; and

18 ‘‘(ii) shall constitute a certification by

19 the requesting State—

20 ‘‘(I) of the amount of support

21 under the order the payment of which

22 is in arrears; and

23 ‘‘(II) that the requesting State

24 has complied with all procedural due
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1 process requirements applicable to the

2 case;

3 ‘‘(C) if the State provides assistance to an4 other State pursuant to this paragraph with re5 spect to a case, neither State shall consider the

6 case to be transferred to the caseload of such

7 other State; and

8 ‘‘(D) the State shall maintain records of—

9 ‘‘(i) the number of such requests for

10 assistance received by the State;

11 ‘‘(ii) the number of cases for which

12 the State collected support in response to

13 such a request; and

14 ‘‘(iii) the amount of such collected

15 support.’’.

16 SEC. 4324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

17 (a) PROMULGATION.—Section 452(a) (42 U.S.C.

18 652(a)) is amended—

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

20 (9);

21 (2) by striking the period at the end of para22 graph (10) and inserting ‘‘; and’’; and

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

24 paragraph:
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1 ‘‘(11) not later than October 1, 1996, after con2 sulting with the State directors of programs under

3 this part, promulgate forms to be used by States in

4 interstate cases for—

5 ‘‘(A) collection of child support through in6 come withholding;

7 ‘‘(B) imposition of liens; and

8 ‘‘(C) administrative subpoenas.’’.

9 (b) USE BY STATES.—Section 454(9) (42 U.S.C.

10 654(9)) is amended—

11 (1) by striking ‘‘and’’ at the end of subpara12 graph (C);

13 (2) by inserting ‘‘and’’ at the end of subpara14 graph (D); and

15 (3) by adding at the end the following new sub16 paragraph:

17 ‘‘(E) not later than March 1, 1997, in

18 using the forms promulgated pursuant to sec19 tion 452(a)(11) for income withholding, imposi20 tion of liens, and issuance of administrative

21 subpoenas in interstate child support cases;’’.
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1 SEC. 4325. STATE LAWS PROVIDING EXPEDITED PROCE2 DURES.

3 (a) STATE LAW REQUIREMENTS.—Section 466 (42

4 U.S.C. 666), as amended by section 4314 of this Act, is

5 amended—

6 (1) in subsection (a)(2), by striking the first

7 sentence and inserting the following: ‘‘Expedited ad8 ministrative and judicial procedures (including the

9 procedures specified in subsection (c)) for establish10 ing paternity and for establishing, modifying, and

11 enforcing support obligations.’’; and

12 (2) by inserting after subsection (b) the follow13 ing new subsection:

14 ‘‘(c) EXPEDITED PROCEDURES.—The procedures

15 specified in this subsection are the following:

16 ‘‘(1) ADMINISTRATIVE ACTION BY STATE AGEN17 CY.—Procedures which give the State agency the au18 thority to take the following actions relating to es19 tablishment of paternity or to establishment, modi20 fication, or enforcement of support orders, without

21 the necessity of obtaining an order from any other

22 judicial or administrative tribunal, and to recognize

23 and enforce the authority of State agencies of other

24 States to take the following actions:
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1 ‘‘(A) GENETIC TESTING.—To order genetic

2 testing for the purpose of paternity establish3 ment as provided in section 466(a)(5).

4 ‘‘(B) FINANCIAL OR OTHER INFORMA5 TION.—To subpoena any financial or other in6 formation needed to establish, modify, or en7 force a support order, and to impose penalties

8 for failure to respond to such a subpoena.

9 ‘‘(C) RESPONSE TO STATE AGENCY RE10 QUEST.—To require all entities in the State (in11 cluding for-profit, nonprofit, and governmental

12 employers) to provide promptly, in response to

13 a request by the State agency of that or any

14 other State administering a program under this

15 part, information on the employment, com16 pensation, and benefits of any individual em17 ployed by such entity as an employee or con18 tractor, and to sanction failure to respond to

19 any such request.

20 ‘‘(D) ACCESS TO INFORMATION CON21 TAINED IN CERTAIN RECORDS.—To obtain ac22 cess, subject to safeguards on privacy and infor23 mation security, and subject to the nonliability

24 of entities that afford such access under this

25 subparagraph, to information contained in the
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1 following records (including automated access,

2 in the case of records maintained in automated

3 data bases):

4 ‘‘(i) Records of other State and local

5 government agencies, including—

6 ‘‘(I) vital statistics (including

7 records of marriage, birth, and di8 vorce);

9 ‘‘(II) State and local tax and rev10 enue records (including information

11 on residence address, employer, in12 come and assets);

13 ‘‘(III) records concerning real

14 and titled personal property;

15 ‘‘(IV) records of occupational and

16 professional licenses, and records con17 cerning the ownership and control of

18 corporations, partnerships, and other

19 business entities;

20 ‘‘(V) employment security

21 records;

22 ‘‘(VI) records of agencies admin23 istering public assistance programs;

24 ‘‘(VII) records of the motor vehi25 cle department; and
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1 ‘‘(VIII) corrections records.

2 ‘‘(ii) Certain records held by private

3 entities with respect to individuals who owe

4 or are owed support (or against or with re5 spect to whom a support obligation is

6 sought), consisting of—

7 ‘‘(I) the names and addresses of

8 such individuals and the names and

9 addresses of the employers of such in10 dividuals, as appearing in customer

11 records of public utilities and cable

12 television companies, pursuant to an

13 administrative subpoena authorized by

14 subparagraph (B); and

15 ‘‘(II) information (including in16 formation on assets and liabilities) on

17 such individuals held by financial in18 stitutions.

19 ‘‘(E) CHANGE IN PAYEE.—In cases in

20 which support is subject to an assignment in

21 order to comply with a requirement imposed

22 pursuant to part A or section 1912, or to a re23 quirement to pay through the State disburse24 ment unit established pursuant to section

25 454B, upon providing notice to obligor and obli-
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1 gee, to direct the obligor or other payor to

2 change the payee to the appropriate government

3 entity.

4 ‘‘(F) INCOME WITHHOLDING.—To order

5 income withholding in accordance with sub6 sections (a)(1)(A) and (b) of section 466.

7 ‘‘(G) SECURING ASSETS.—In cases in

8 which there is a support arrearage, to secure

9 assets to satisfy the arrearage by—

10 ‘‘(i) intercepting or seizing periodic or

11 lump-sum payments from—

12 ‘‘(I) a State or local agency, in13 cluding unemployment compensation,

14 workers’ compensation, and other ben15 efits; and

16 ‘‘(II) judgments, settlements, and

17 lotteries;

18 ‘‘(ii) attaching and seizing assets of

19 the obligor held in financial institutions;

20 ‘‘(iii) attaching public and private re21 tirement funds; and

22 ‘‘(iv) imposing liens in accordance

23 with subsection (a)(4) and, in appropriate

24 cases, to force sale of property and dis25 tribution of proceeds.
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1 ‘‘(H) INCREASE MONTHLY PAYMENTS.—

2 For the purpose of securing overdue support, to

3 increase the amount of monthly support pay4 ments to include amounts for arrearages, sub5 ject to such conditions or limitations as the

6 State may provide.

7 Such procedures shall be subject to due process safe8 guards, including (as appropriate) requirements for

9 notice, opportunity to contest the action, and oppor10 tunity for an appeal on the record to an independent

11 administrative or judicial tribunal.

12 ‘‘(2) SUBSTANTIVE AND PROCEDURAL RULES.—

13 The expedited procedures required under subsection

14 (a)(2) shall include the following rules and author15 ity, applicable with respect to all proceedings to es16 tablish paternity or to establish, modify, or enforce

17 support orders:

18 ‘‘(A) LOCATOR INFORMATION; PRESUMP19 TIONS CONCERNING NOTICE.—Procedures

20 under which—

21 ‘‘(i) each party to any paternity or

22 child support proceeding is required (sub23 ject to privacy safeguards) to file with the

24 tribunal and the State case registry upon

25 entry of an order, and to update as appro-
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1 priate, information on location and identity

2 of the party, including social security num3 ber, residential and mailing addresses, tele4 phone number, driver’s license number,

5 and name, address, and telephone number

6 of employer; and

7 ‘‘(ii) in any subsequent child support

8 enforcement action between the parties,

9 upon sufficient showing that diligent effort

10 has been made to ascertain the location of

11 such a party, the tribunal may deem State

12 due process requirements for notice and

13 service of process to be met with respect to

14 the party, upon delivery of written notice

15 to the most recent residential or employer

16 address filed with the tribunal pursuant to

17 clause (i).

18 ‘‘(B) STATEWIDE JURISDICTION.—Proce19 dures under which—

20 ‘‘(i) the State agency and any admin21 istrative or judicial tribunal with authority

22 to hear child support and paternity cases

23 exerts statewide jurisdiction over the par24 ties; and
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1 ‘‘(ii) in a State in which orders are is2 sued by courts or administrative tribunals,

3 a case may be transferred between local ju4 risdictions in the State without need for

5 any additional filing by the petitioner, or

6 service of process upon the respondent, to

7 retain jurisdiction over the parties.

8 ‘‘(3) COORDINATION WITH ERISA.—Notwith9 standing subsection (d) of section 514 of the Em10 ployee Retirement Income Security Act of 1974 (re11 lating to effect on other laws), nothing in this sub12 section shall be construed to alter, amend, modify,

13 invalidate, impair, or supersede subsections (a), (b),

14 and (c) of such section 514 as it applies with respect

15 to any procedure referred to in paragraph (1) and

16 any expedited procedure referred to in paragraph

17 (2), except to the extent that such procedure would

18 be consistent with the requirements of section

19 206(d)(3) of such Act (relating to qualified domestic

20 relations orders) or the requirements of section

21 609(a) of such Act (relating to qualified medical

22 child support orders) if the reference in such section

23 206(d)(3) to a domestic relations order and the ref24 erence in such section 609(a) to a medical child sup25 port order were a reference to a support order re-
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1 ferred to in paragraphs (1) and (2) relating to the

2 same matters, respectively.’’.

3 (b) AUTOMATION OF STATE AGENCY FUNCTIONS.—

4 Section 454A, as added by section 4344(a)(2) and as

5 amended by sections 4311 and 4312(c) of this Act, is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(h) EXPEDITED ADMINISTRATIVE PROCEDURES.—

9 The automated system required by this section shall be

10 used, to the maximum extent feasible, to implement the

11 expedited administrative procedures required by section

12 466(c).’’.

13 CHAPTER 4—PATERNITY ESTABLISHMENT

14 SEC. 4331. STATE LAWS CONCERNING PATERNITY ESTAB15 LISHMENT.

16 (a) STATE LAWS REQUIRED.—Section 466(a)(5) (42

17 U.S.C. 666(a)(5)) is amended to read as follows:

18 ‘‘(5) PROCEDURES CONCERNING PATERNITY ES19 TABLISHMENT.—

20 ‘‘(A) ESTABLISHMENT PROCESS AVAIL21 ABLE FROM BIRTH UNTIL AGE 18.—

22 ‘‘(i) Procedures which permit the es23 tablishment of the paternity of a child at

24 any time before the child attains 18 years

25 of age.
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1 ‘‘(ii) As of August 16, 1984, clause (i)

2 shall also apply to a child for whom pater3 nity has not been established or for whom

4 a paternity action was brought but dis5 missed because a statute of limitations of

6 less than 18 years was then in effect in the

7 State.

8 ‘‘(B) PROCEDURES CONCERNING GENETIC

9 TESTING.—

10 ‘‘(i) GENETIC TESTING REQUIRED IN

11 CERTAIN CONTESTED CASES.—Procedures

12 under which the State is required, in a

13 contested paternity case (unless otherwise

14 barred by State law) to require the child

15 and all other parties (other than individ16 uals found under section 454(29) to have

17 good cause and other exceptions for refus18 ing to cooperate) to submit to genetic tests

19 upon the request of any such party, if the

20 request is supported by a sworn statement

21 by the party—

22 ‘‘(I) alleging paternity, and set23 ting forth facts establishing a reason24 able possibility of the requisite sexual

25 contact between the parties; or
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1 ‘‘(II) denying paternity, and set2 ting forth facts establishing a reason3 able possibility of the nonexistence of

4 sexual contact between the parties.

5 ‘‘(ii) OTHER REQUIREMENTS.—Proce6 dures which require the State agency, in

7 any case in which the agency orders ge8 netic testing—

9 ‘‘(I) to pay costs of such tests,

10 subject to recoupment (if the State so

11 elects) from the alleged father if pa12 ternity is established; and

13 ‘‘(II) to obtain additional testing

14 in any case if an original test result is

15 contested, upon request and advance

16 payment by the contestant.

17 ‘‘(C) VOLUNTARY PATERNITY ACKNOWL18 EDGMENT.—

19 ‘‘(i) SIMPLE CIVIL PROCESS.—Proce20 dures for a simple civil process for volun21 tarily acknowledging paternity under which

22 the State must provide that, before a

23 mother and a putative father can sign an

24 acknowledgment of paternity, the mother

25 and the putative father must be given no-
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1 tice, orally and in writing, of the alter2 natives to, the legal consequences of, and

3 the rights (including, if 1 parent is a

4 minor, any rights afforded due to minority

5 status) and responsibilities that arise from,

6 signing the acknowledgment.

7 ‘‘(ii) HOSPITAL-BASED PROGRAM.—

8 Such procedures must include a hospital9 based program for the voluntary acknowl10 edgment of paternity focusing on the pe11 riod immediately before or after the birth

12 of a child, unless good cause and other ex13 ceptions exist which—

14 ‘‘(I) shall be defined, taking into

15 account the best interests of the child,

16 and

17 ‘‘(II) shall be applied in each

18 case,

19 by, at the option of the State, the State

20 agency administering the State program

21 under part A, this part, title XV, or title

22 XIX.

23 ‘‘(iii) PATERNITY ESTABLISHMENT

24 SERVICES.—
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1 ‘‘(I) STATE-OFFERED SERV2 ICES.—Such procedures must require

3 the State agency responsible for main4 taining birth records to offer vol5 untary paternity establishment serv6 ices.

7 ‘‘(II) REGULATIONS.—

8 ‘‘(aa) SERVICES OFFERED

9 BY HOSPITALS AND BIRTH

10 RECORD AGENCIES.—The Sec11 retary shall prescribe regulations

12 governing voluntary paternity es13 tablishment services offered by

14 hospitals and birth record agen15 cies.

16 ‘‘(bb) SERVICES OFFERED

17 BY OTHER ENTITIES.—The Sec18 retary shall prescribe regulations

19 specifying the types of other enti20 ties that may offer voluntary pa21 ternity establishment services,

22 and governing the provision of

23 such services, which shall include

24 a requirement that such an entity

25 must use the same notice provi-
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1 sions used by, use the same ma2 terials used by, provide the per3 sonnel providing such services

4 with the same training provided

5 by, and evaluate the provision of

6 such services in the same manner

7 as the provision of such services

8 is evaluated by, voluntary pater9 nity establishment programs of

10 hospitals and birth record agen11 cies.

12 ‘‘(iv) USE OF PATERNITY ACKNOWL13 EDGMENT AFFIDAVIT.—Such procedures

14 must require the State to develop and use

15 an affidavit for the voluntary acknowledg16 ment of paternity which includes the mini17 mum requirements of the affidavit speci18 fied by the Secretary under section

19 452(a)(7) for the voluntary acknowledg20 ment of paternity, and to give full faith

21 and credit to such an affidavit signed in

22 any other State according to its proce23 dures.

24 ‘‘(D) STATUS OF SIGNED PATERNITY AC25 KNOWLEDGMENT.—
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1 ‘‘(i) INCLUSION IN BIRTH RECORDS.—

2 Procedures under which the name of the

3 father shall be included on the record of

4 birth of the child of unmarried parents

5 only if—

6 ‘‘(I) the father and mother have

7 signed a voluntary acknowledgment of

8 paternity; or

9 ‘‘(II) a court or an administrative

10 agency of competent jurisdiction has

11 issued an adjudication of paternity.

12 Nothing in this clause shall preclude a

13 State agency from obtaining an admission

14 of paternity from the father for submission

15 in a judicial or administrative proceeding,

16 or prohibit the issuance of an order in a

17 judicial or administrative proceeding which

18 bases a legal finding of paternity on an ad19 mission of paternity by the father and any

20 other additional showing required by State

21 law.

22 ‘‘(ii) LEGAL FINDING OF PATER23 NITY.—Procedures under which a signed

24 voluntary acknowledgment of paternity is

25 considered a legal finding of paternity,
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1 subject to the right of any signatory to re2 scind the acknowledgment within the ear3 lier of—

4 ‘‘(I) 60 days; or

5 ‘‘(II) the date of an administra6 tive or judicial proceeding relating to

7 the child (including a proceeding to

8 establish a support order) in which

9 the signatory is a party.

10 ‘‘(iii) CONTEST.—Procedures under

11 which, after the 60-day period referred to

12 in clause (ii), a signed voluntary acknowl13 edgment of paternity may be challenged in

14 court only on the basis of fraud, duress, or

15 material mistake of fact, with the burden

16 of proof upon the challenger, and under

17 which the legal responsibilities (including

18 child support obligations) of any signatory

19 arising from the acknowledgment may not

20 be suspended during the challenge, except

21 for good cause shown.

22 ‘‘(E) BAR ON ACKNOWLEDGMENT RATIFI23 CATION PROCEEDINGS.—Procedures under

24 which judicial or administrative proceedings are
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1 not required or permitted to ratify an unchal2 lenged acknowledgment of paternity.

3 ‘‘(F) ADMISSIBILITY OF GENETIC TESTING

4 RESULTS.—Procedures—

5 ‘‘(i) requiring the admission into evi6 dence, for purposes of establishing pater7 nity, of the results of any genetic test that

8 is—

9 ‘‘(I) of a type generally acknowl10 edged as reliable by accreditation bod11 ies designated by the Secretary; and

12 ‘‘(II) performed by a laboratory

13 approved by such an accreditation

14 body;

15 ‘‘(ii) requiring an objection to genetic

16 testing results to be made in writing not

17 later than a specified number of days be18 fore any hearing at which the results may

19 be introduced into evidence (or, at State

20 option, not later than a specified number

21 of days after receipt of the results); and

22 ‘‘(iii) making the test results admissi23 ble as evidence of paternity without the

24 need for foundation testimony or other
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1 proof of authenticity or accuracy, unless

2 objection is made.

3 ‘‘(G) PRESUMPTION OF PATERNITY IN

4 CERTAIN CASES.—Procedures which create a re5 buttable or, at the option of the State, conclu6 sive presumption of paternity upon genetic test7 ing results indicating a threshold probability

8 that the alleged father is the father of the child.

9 ‘‘(H) DEFAULT ORDERS.—Procedures re10 quiring a default order to be entered in a pater11 nity case upon a showing of service of process

12 on the defendant and any additional showing

13 required by State law.

14 ‘‘(I) NO RIGHT TO JURY TRIAL.—Proce15 dures providing that the parties to an action to

16 establish paternity are not entitled to a trial by

17 jury.

18 ‘‘(J) TEMPORARY SUPPORT ORDER BASED

19 ON PROBABLE PATERNITY IN CONTESTED

20 CASES.—Procedures which require that a tem21 porary order be issued, upon motion by a party,

22 requiring the provision of child support pending

23 an administrative or judicial determination of

24 parentage, if there is clear and convincing evi-
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1 dence of paternity (on the basis of genetic tests

2 or other evidence).

3 ‘‘(K) PROOF OF CERTAIN SUPPORT AND

4 PATERNITY ESTABLISHMENT COSTS.—Proce5 dures under which bills for pregnancy, child6 birth, and genetic testing are admissible as evi7 dence without requiring third-party foundation

8 testimony, and shall constitute prima facie evi9 dence of amounts incurred for such services or

10 for testing on behalf of the child.

11 ‘‘(L) STANDING OF PUTATIVE FATHERS.—

12 Procedures ensuring that the putative father

13 has a reasonable opportunity to initiate a pater14 nity action.

15 ‘‘(M) FILING OF ACKNOWLEDGMENTS AND

16 ADJUDICATIONS IN STATE REGISTRY OF BIRTH

17 RECORDS.—Procedures under which voluntary

18 acknowledgments and adjudications of paternity

19 by judicial or administrative processes are filed

20 with the State registry of birth records for com21 parison with information in the State case reg22 istry.’’.

23 (b) NATIONAL PATERNITY ACKNOWLEDGMENT AFFI24 DAVIT.—Section 452(a)(7) (42 U.S.C. 652(a)(7)) is

25 amended by inserting ‘‘, and specify the minimum require-
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1 ments of an affidavit to be used for the voluntary acknowl2 edgment of paternity which shall include the social secu3 rity number of each parent and, after consultation with

4 the States, other common elements as determined by such

5 designee’’ before the semicolon.

6 (c) CONFORMING AMENDMENT.—Section 468 (42

7 U.S.C. 668) is amended by striking ‘‘a simple civil process

8 for voluntarily acknowledging paternity and’’.

9 SEC. 4332. OUTREACH FOR VOLUNTARY PATERNITY ESTAB10 LISHMENT.

11 Section 454(23) (42 U.S.C. 654(23)) is amended by

12 inserting ‘‘and will publicize the availability and encourage

13 the use of procedures for voluntary establishment of pater14 nity and child support by means the State deems appro15 priate’’ before the semicolon.

16 SEC. 4333. COOPERATION BY APPLICANTS FOR AND RECIPI17 ENTS OF PART A ASSISTANCE.

18 Section 454 (42 U.S.C. 654), as amended by sections

19 4301(b), 4303(a), 4312(a), and 4313(a) of this Act, is

20 amended—

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

22 (27);

23 (2) by striking the period at the end of para24 graph (28) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (28) the fol2 lowing new paragraph:

3 ‘‘(29) provide that the State agency responsible

4 for administering the State plan—

5 ‘‘(A) shall make the determination (and re6 determination at appropriate intervals) as to

7 whether an individual who has applied for or is

8 receiving assistance under the State program

9 funded under part A, the State program under

10 title XV, or the State program under title XIX

11 is cooperating in good faith with the State in

12 establishing the paternity of, or in establishing,

13 modifying, or enforcing a support order for, any

14 child of the individual by providing the State

15 agency with the name of, and such other infor16 mation as the State agency may require with

17 respect to, the noncustodial parent of the child,

18 subject to good cause and other exceptions

19 which—

20 ‘‘(i) shall be defined, taking into ac21 count the best interests of the child, and

22 ‘‘(ii) shall be applied in each case,

23 by, at the option of the State, the State agency

24 administering the State program under part A,

25 this part, title XV, or title XIX;
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1 ‘‘(B) shall require the individual to supply

2 additional necessary information and appear at

3 interviews, hearings, and legal proceedings;

4 ‘‘(C) shall require the individual and the

5 child to submit to genetic tests pursuant to ju6 dicial or administrative order;

7 ‘‘(D) may request that the individual sign

8 a voluntary acknowledgment of paternity, after

9 notice of the rights and consequences of such

10 an acknowledgment, but may not require the in11 dividual to sign an acknowledgment or other12 wise relinquish the right to genetic tests as a

13 condition of cooperation and eligibility for as14 sistance under the State program funded under

15 part A, the State program under title XV, or

16 the State program under title XIX; and

17 ‘‘(E) shall promptly notify the individual

18 and the State agency administering the State

19 program funded under part A, the State agency

20 administering the State program under title

21 XV, and the State agency administering the

22 State program under title XIX, of each such

23 determination, and if noncooperation is deter24 mined, the basis therefore.’’.
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1 CHAPTER 5—PROGRAM ADMINISTRATION

2 AND FUNDING

3 SEC. 4341. PERFORMANCE-BASED INCENTIVES AND PEN4 ALTIES.

5 (a) DEVELOPMENT OF NEW SYSTEM.—The Sec6 retary of Health and Human Services, in consultation with

7 State directors of programs under part D of title IV of

8 the Social Security Act, shall develop a new incentive sys9 tem to replace, in a revenue neutral manner, the system

10 under section 458 of such Act. The new system shall pro11 vide additional payments to any State based on such

12 State’s performance under such a program. Not later than

13 November 1, 1996, the Secretary shall report on the new

14 system to the Committee on Ways and Means of the

15 House of Representatives and the Committee on Finance

16 of the Senate.

17 (b) CONFORMING AMENDMENTS TO PRESENT SYS18 TEM.—Section 458 (42 U.S.C. 658) is amended—

19 (1) in subsection (a), by striking ‘‘aid to fami20 lies with dependent children under a State plan ap21 proved under part A of this title’’ and inserting ‘‘as22 sistance under a program funded under part A’’;

23 (2) in subsection (b)(1)(A), by striking ‘‘section

24 402(a)(26)’’ and inserting ‘‘section 408(a)(4)’’;

25 (3) in subsections (b) and (c)—
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1 (A) by striking ‘‘AFDC collections’’ each

2 place it appears and inserting ‘‘title IV–A col3 lections’’, and

4 (B) by striking ‘‘non-AFDC collections’’

5 each place it appears and inserting ‘‘non-title

6 IV–A collections’’; and

7 (4) in subsection (c), by striking ‘‘combined

8 AFDC/non-AFDC administrative costs’’ both places

9 it appears and inserting ‘‘combined title IV–A/non10 title IV–A administrative costs’’.

11 (c) CALCULATION OF PATERNITY ESTABLISHMENT

12 PERCENTAGE.—

13 (1) Section 452(g)(1)(A) (42 U.S.C.

14 652(g)(1)(A)) is amended by striking ‘‘75’’ and in15 serting ‘‘90’’.

16 (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is

17 amended—

18 (A) by redesignating subparagraphs (B)

19 through (E) as subparagraphs (C) through (F),

20 respectively, and by inserting after subpara21 graph (A) the following new subparagraph:

22 ‘‘(B) for a State with a paternity establishment

23 percentage of not less than 75 percent but less than

24 90 percent for such fiscal year, the paternity estab-
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1 lishment percentage of the State for the immediately

2 preceding fiscal year plus 2 percentage points;’’; and

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

4 flush sentence:

5 ‘‘In determining compliance under this section, a State

6 may use as its paternity establishment percentage either

7 the State’s IV–D paternity establishment percentage (as

8 defined in paragraph (2)(A)) or the State’s statewide pa9 ternity establishment percentage (as defined in paragraph

10 (2)(B)).’’.

11 (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

12 amended—

13 (A) in subparagraph (A)—

14 (i) in the matter preceding clause

15 (i)—

16 (I) by striking ‘‘paternity estab17 lishment percentage’’ and inserting

18 ‘‘IV–D paternity establishment per19 centage’’; and

20 (II) by striking ‘‘(or all States, as

21 the case may be)’’; and

22 (ii) by striking ‘‘and’’ at the end; and

23 (B) by redesignating subparagraph (B) as

24 subparagraph (C) and by inserting after sub25 paragraph (A) the following new subparagraph:
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1 ‘‘(B) the term ‘statewide paternity establish2 ment percentage’ means, with respect to a State for

3 a fiscal year, the ratio (expressed as a percentage)

4 that the total number of minor children—

5 ‘‘(i) who have been born out of wedlock,

6 and

7 ‘‘(ii) the paternity of whom has been estab8 lished or acknowledged during the fiscal year,

9 bears to the total number of children born out of

10 wedlock during the preceding fiscal year; and’’.

11 (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is

12 amended—

13 (A) by striking subparagraph (A) and re14 designating subparagraphs (B) and (C) as sub15 paragraphs (A) and (B), respectively; and

16 (B) in subparagraph (A) (as so redesig17 nated), by striking ‘‘the percentage of children

18 born out-of-wedlock in a State’’ and inserting

19 ‘‘the percentage of children in a State who are

20 born out of wedlock or for whom support has

21 not been established’’.

22 (d) EFFECTIVE DATES.—

23 (1) INCENTIVE ADJUSTMENTS.—

24 (A) IN GENERAL.—The system developed

25 under subsection (a) and the amendments made
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1 by subsection (b) shall become effective on Oc2 tober 1, 1998, except to the extent provided in

3 subparagraph (B).

4 (B) APPLICATION OF SECTION 458.—Sec5 tion 458 of the Social Security Act, as in effect

6 on the day before the date of the enactment of

7 this section, shall be effective for purposes of

8 incentive payments to States for fiscal years be9 fore fiscal year 1999.

10 (2) PENALTY REDUCTIONS.—The amendments

11 made by subsection (c) shall become effective with

12 respect to calendar quarters beginning on or after

13 the date of the enactment of this Act.

14 SEC. 4342. FEDERAL AND STATE REVIEWS AND AUDITS.

15 (a) STATE AGENCY ACTIVITIES.—Section 454 (42

16 U.S.C. 654) is amended—

17 (1) in paragraph (14), by striking ‘‘(14)’’ and

18 inserting ‘‘(14)(A)’’;

19 (2) by redesignating paragraph (15) as sub20 paragraph (B) of paragraph (14); and

21 (3) by inserting after paragraph (14) the fol22 lowing new paragraph:

23 ‘‘(15) provide for—

24 ‘‘(A) a process for annual reviews of and

25 reports to the Secretary on the State program
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1 operated under the State plan approved under

2 this part, including such information as may be

3 necessary to measure State compliance with

4 Federal requirements for expedited procedures,

5 using such standards and procedures as are re6 quired by the Secretary, under which the State

7 agency will determine the extent to which the

8 program is operated in compliance with this

9 part; and

10 ‘‘(B) a process of extracting from the auto11 mated data processing system required by para12 graph (16) and transmitting to the Secretary

13 data and calculations concerning the levels of

14 accomplishment (and rates of improvement)

15 with respect to applicable performance indica16 tors (including paternity establishment percent17 ages) to the extent necessary for purposes of

18 sections 452(g) and 458;’’.

19 (b) FEDERAL ACTIVITIES.—Section 452(a)(4) (42

20 U.S.C. 652(a)(4)) is amended to read as follows:

21 ‘‘(4)(A) review data and calculations transmit22 ted by State agencies pursuant to section

23 454(15)(B) on State program accomplishments with

24 respect to performance indicators for purposes of

25 subsection (g) of this section and section 458;
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1 ‘‘(B) review annual reports submitted pursuant

2 to section 454(15)(A) and, as appropriate, provide

3 to the State comments, recommendations for addi4 tional or alternative corrective actions, and technical

5 assistance; and

6 ‘‘(C) conduct audits, in accordance with the

7 Government auditing standards of the Comptroller

8 General of the United States—

9 ‘‘(i) at least once every 3 years (or more

10 frequently, in the case of a State which fails to

11 meet the requirements of this part concerning

12 performance standards and reliability of pro13 gram data) to assess the completeness, reliabil14 ity, and security of the data and the accuracy

15 of the reporting systems used in calculating

16 performance indicators under subsection (g) of

17 this section and section 458;

18 ‘‘(ii) of the adequacy of financial manage19 ment of the State program operated under the

20 State plan approved under this part, including

21 assessments of—

22 ‘‘(I) whether Federal and other funds

23 made available to carry out the State pro24 gram are being appropriately expended,
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1 and are properly and fully accounted for;

2 and

3 ‘‘(II) whether collections and disburse4 ments of support payments are carried out

5 correctly and are fully accounted for; and

6 ‘‘(iii) for such other purposes as the Sec7 retary may find necessary;’’.

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

9 this section shall be effective with respect to calendar

10 quarters beginning 12 months or more after the date of

11 the enactment of this Act.

12 SEC. 4343. REQUIRED REPORTING PROCEDURES.

13 (a) ESTABLISHMENT.—Section 452(a)(5) (42 U.S.C.

14 652(a)(5)) is amended by inserting ‘‘, and establish proce15 dures to be followed by States for collecting and reporting

16 information required to be provided under this part, and

17 establish uniform definitions (including those necessary to

18 enable the measurement of State compliance with the re19 quirements of this part relating to expedited processes) to

20 be applied in following such procedures’’ before the semi21 colon.

22 (b) STATE PLAN REQUIREMENT.—Section 454 (42

23 U.S.C. 654), as amended by sections 4301(b), 4303(a),

24 4312(a), 4313(a), and 4333 of this Act, is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (28);

3 (2) by striking the period at the end of para4 graph (29) and inserting ‘‘; and’’; and

5 (3) by adding after paragraph (29) the follow6 ing new paragraph:

7 ‘‘(30) provide that the State shall use the defi8 nitions established under section 452(a)(5) in col9 lecting and reporting information as required under

10 this part.’’.

11 SEC. 4344. AUTOMATED DATA PROCESSING REQUIRE12 MENTS.

13 (a) REVISED REQUIREMENTS.—

14 (1) IN GENERAL.—Section 454(16) (42 U.S.C.

15 654(16)) is amended—

16 (A) by striking ‘‘, at the option of the

17 State,’’;

18 (B) by inserting ‘‘and operation by the

19 State agency’’ after ‘‘for the establishment’’;

20 (C) by inserting ‘‘meeting the requirements

21 of section 454A’’ after ‘‘information retrieval

22 system’’;

23 (D) by striking ‘‘in the State and localities

24 thereof, so as (A)’’ and inserting ‘‘so as’’;

25 (E) by striking ‘‘(i)’’; and
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1 (F) by striking ‘‘(including’’ and all that

2 follows and inserting a semicolon.

3 (2) AUTOMATED DATA PROCESSING.—Part D of

4 title IV (42 U.S.C. 651–669) is amended by insert5 ing after section 454 the following new section:

6 ‘‘SEC. 454A. AUTOMATED DATA PROCESSING.

7 ‘‘(a) IN GENERAL.—In order for a State to meet the

8 requirements of this section, the State agency administer9 ing the State program under this part shall have in oper10 ation a single statewide automated data processing and

11 information retrieval system which has the capability to

12 perform the tasks specified in this section with the fre13 quency and in the manner required by or under this part.

14 ‘‘(b) PROGRAM MANAGEMENT.—The automated sys15 tem required by this section shall perform such functions

16 as the Secretary may specify relating to management of

17 the State program under this part, including—

18 ‘‘(1) controlling and accounting for use of Fed19 eral, State, and local funds in carrying out the pro20 gram; and

21 ‘‘(2) maintaining the data necessary to meet

22 Federal reporting requirements under this part on a

23 timely basis.

24 ‘‘(c) CALCULATION OF PERFORMANCE INDICA25 TORS.—In order to enable the Secretary to determine the
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1 incentive payments and penalty adjustments required by

2 sections 452(g) and 458, the State agency shall—

3 ‘‘(1) use the automated system—

4 ‘‘(A) to maintain the requisite data on

5 State performance with respect to paternity es6 tablishment and child support enforcement in

7 the State; and

8 ‘‘(B) to calculate the paternity establish9 ment percentage for the State for each fiscal

10 year; and

11 ‘‘(2) have in place systems controls to ensure

12 the completeness and reliability of, and ready access

13 to, the data described in paragraph (1)(A), and the

14 accuracy of the calculations described in paragraph

15 (1)(B).

16 ‘‘(d) INFORMATION INTEGRITY AND SECURITY.—The

17 State agency shall have in effect safeguards on the integ18 rity, accuracy, and completeness of, access to, and use of

19 data in the automated system required by this section,

20 which shall include the following (in addition to such other

21 safeguards as the Secretary may specify in regulations):

22 ‘‘(1) POLICIES RESTRICTING ACCESS.—Written

23 policies concerning access to data by State agency

24 personnel, and sharing of data with other persons,

25 which—
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1 ‘‘(A) permit access to and use of data only

2 to the extent necessary to carry out the State

3 program under this part; and

4 ‘‘(B) specify the data which may be used

5 for particular program purposes, and the per6 sonnel permitted access to such data.

7 ‘‘(2) SYSTEMS CONTROLS.—Systems controls

8 (such as passwords or blocking of fields) to ensure

9 strict adherence to the policies described in para10 graph (1).

11 ‘‘(3) MONITORING OF ACCESS.—Routine mon12 itoring of access to and use of the automated sys13 tem, through methods such as audit trails and feed14 back mechanisms, to guard against and promptly

15 identify unauthorized access or use.

16 ‘‘(4) TRAINING AND INFORMATION.—Proce17 dures to ensure that all personnel (including State

18 and local agency staff and contractors) who may

19 have access to or be required to use confidential pro20 gram data are informed of applicable requirements

21 and penalties (including those in section 6103 of the

22 Internal Revenue Code of 1986), and are adequately

23 trained in security procedures.

24 ‘‘(5) PENALTIES.—Administrative penalties (up

25 to and including dismissal from employment) for un-
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1 authorized access to, or disclosure or use of, con2 fidential data.’’.

3 (3) REGULATIONS.—The Secretary of Health

4 and Human Services shall prescribe final regulations

5 for implementation of section 454A of the Social Se6 curity Act not later than 2 years after the date of

7 the enactment of this Act.

8 (4) IMPLEMENTATION TIMETABLE.—Section

9 454(24) (42 U.S.C. 654(24)), as amended by section

10 4303(a)(1) of this Act, is amended to read as fol11 lows:

12 ‘‘(24) provide that the State will have in effect

13 an automated data processing and information re14 trieval system—

15 ‘‘(A) by October 1, 1997, which meets all

16 requirements of this part which were enacted on

17 or before the date of enactment of the Family

18 Support Act of 1988, and

19 ‘‘(B) by October 1, 1999, which meets all

20 requirements of this part enacted on or before

21 the date of the enactment of the Personal Re22 sponsibility and Work Opportunity Act of 1996,

23 except that such deadline shall be extended by

24 1 day for each day (if any) by which the Sec25 retary fails to meet the deadline imposed by
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1 section 4344(a)(3) of the Personal Responsibil2 ity and Work Opportunity Act of 1996;’’.

3 (b) SPECIAL FEDERAL MATCHING RATE FOR DE4 VELOPMENT COSTS OF AUTOMATED SYSTEMS.—

5 (1) IN GENERAL.—Section 455(a) (42 U.S.C.

6 655(a)) is amended—

7 (A) in paragraph (1)(B)—

8 (i) by striking ‘‘90 percent’’ and in9 serting ‘‘the percent specified in paragraph

10 (3)’’;

11 (ii) by striking ‘‘so much of’’; and

12 (iii) by striking ‘‘which the Secretary’’

13 and all that follows and inserting ‘‘, and’’;

14 and

15 (B) by adding at the end the following new

16 paragraph:

17 ‘‘(3)(A) The Secretary shall pay to each State, for

18 each quarter in fiscal years 1996 and 1997, 90 percent

19 of so much of the State expenditures described in para20 graph (1)(B) as the Secretary finds are for a system meet21 ing the requirements specified in section 454(16) (as in

22 effect on September 30, 1995) but limited to the amount

23 approved for States in the advance planning documents

24 of such States submitted on or before September 30,

25 1995.
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1 ‘‘(B)(i) The Secretary shall pay to each State, for

2 each quarter in fiscal years 1996 through 2001, the per3 centage specified in clause (ii) of so much of the State

4 expenditures described in paragraph (1)(B) as the Sec5 retary finds are for a system meeting the requirements

6 of sections 454(16) and 454A.

7 ‘‘(ii) The percentage specified in this clause is 80 per8 cent.’’.

9 (2) TEMPORARY LIMITATION ON PAYMENTS

10 UNDER SPECIAL FEDERAL MATCHING RATE.—

11 (A) IN GENERAL.—The Secretary of

12 Health and Human Services may not pay more

13 than $400,000,000 in the aggregate under sec14 tion 455(a)(3)(B) of the Social Security Act for

15 fiscal years 1996 through 2001.

16 (B) ALLOCATION OF LIMITATION AMONG

17 STATES.—The total amount payable to a State

18 under section 455(a)(3)(B) of such Act for fis19 cal years 1996 through 2001 shall not exceed

20 the limitation determined for the State by the

21 Secretary of Health and Human Services in

22 regulations.

23 (C) ALLOCATION FORMULA.—The regula24 tions referred to in subparagraph (B) shall pre25 scribe a formula for allocating the amount spec-
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1 ified in subparagraph (A) among States with

2 plans approved under part D of title IV of the

3 Social Security Act, which shall take into ac4 count—

5 (i) the relative size of State caseloads

6 under such part; and

7 (ii) the level of automation needed to

8 meet the automated data processing re9 quirements of such part.

10 (c) CONFORMING AMENDMENT.—Section 123(c) of

11 the Family Support Act of 1988 (102 Stat. 2352; Public

12 Law 100–485) is repealed.

13 SEC. 4345. TECHNICAL ASSISTANCE.

14 (a) FOR TRAINING OF FEDERAL AND STATE STAFF,

15 RESEARCH AND DEMONSTRATION PROGRAMS, AND SPE16 CIAL PROJECTS OF REGIONAL OR NATIONAL SIGNIFI17 CANCE.—Section 452 (42 U.S.C. 652) is amended by add18 ing at the end the following new subsection:

19 ‘‘(j) Out of any money in the Treasury of the United

20 States not otherwise appropriated, there is hereby appro21 priated to the Secretary for each fiscal year an amount

22 equal to 1 percent of the total amount paid to the Federal

23 Government pursuant to section 457(a) during the imme24 diately preceding fiscal year (as determined on the basis

25 of the most recent reliable data available to the Secretary
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1 as of the end of the 3rd calendar quarter following the

2 end of such preceding fiscal year), to cover costs incurred

3 by the Secretary for—

4 ‘‘(1) information dissemination and technical

5 assistance to States, training of State and Federal

6 staff, staffing studies, and related activities needed

7 to improve programs under this part (including tech8 nical assistance concerning State automated systems

9 required by this part); and

10 ‘‘(2) research, demonstration, and special

11 projects of regional or national significance relating

12 to the operation of State programs under this part.

13 The amount appropriated under this subsection shall re14 main available until expended.’’.

15 (b) OPERATION OF FEDERAL PARENT LOCATOR

16 SERVICE.—Section 453 (42 U.S.C. 653), as amended by

17 section 4316 of this Act, is amended by adding at the end

18 the following new subsection:

19 ‘‘(o) RECOVERY OF COSTS.—Out of any money in the

20 Treasury of the United States not otherwise appropriated,

21 there is hereby appropriated to the Secretary for each fis22 cal year an amount equal to 2 percent of the total amount

23 paid to the Federal Government pursuant to section

24 457(a) during the immediately preceding fiscal year (as

25 determined on the basis of the most recent reliable data
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1 available to the Secretary as of the end of the 3rd calendar

2 quarter following the end of such preceding fiscal year),

3 to cover costs incurred by the Secretary for operation of

4 the Federal Parent Locator Service under this section, to

5 the extent such costs are not recovered through user

6 fees.’’.

7 SEC. 4346. REPORTS AND DATA COLLECTION BY THE SEC8 RETARY.

9 (a) ANNUAL REPORT TO CONGRESS.—

10 (1) Section 452(a)(10)(A) (42 U.S.C.

11 652(a)(10)(A)) is amended—

12 (A) by striking ‘‘this part;’’ and inserting

13 ‘‘this part, including—’’; and

14 (B) by adding at the end the following new

15 clauses:

16 ‘‘(i) the total amount of child support

17 payments collected as a result of services

18 furnished during the fiscal year to individ19 uals receiving services under this part;

20 ‘‘(ii) the cost to the States and to the

21 Federal Government of so furnishing the

22 services; and

23 ‘‘(iii) the number of cases involving

24 families—
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1 ‘‘(I) who became ineligible for as2 sistance under State programs funded

3 under part A during a month in the

4 fiscal year; and

5 ‘‘(II) with respect to whom a

6 child support payment was received in

7 the month;’’.

8 (2) Section 452(a)(10)(C) (42 U.S.C.

9 652(a)(10)(C)) is amended—

10 (A) in the matter preceding clause (i)—

11 (i) by striking ‘‘with the data required

12 under each clause being separately stated

13 for cases’’ and inserting ‘‘separately stated

14 for cases’’;

15 (ii) by striking ‘‘cases where the child

16 was formerly receiving’’ and inserting ‘‘or

17 formerly received’’;

18 (iii) by inserting ‘‘or 1912’’ after

19 ‘‘471(a)(17)’’; and

20 (iv) by inserting ‘‘for’’ before ‘‘all

21 other’’;

22 (B) in each of clauses (i) and (ii), by strik23 ing ‘‘, and the total amount of such obliga24 tions’’;
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1 (C) in clause (iii), by striking ‘‘described

2 in’’ and all that follows and inserting ‘‘in which

3 support was collected during the fiscal year;’’;

4 (D) by striking clause (iv); and

5 (E) by redesignating clause (v) as clause

6 (vii), and inserting after clause (iii) the follow7 ing new clauses:

8 ‘‘(iv) the total amount of support col9 lected during such fiscal year and distrib10 uted as current support;

11 ‘‘(v) the total amount of support col12 lected during such fiscal year and distrib13 uted as arrearages;

14 ‘‘(vi) the total amount of support due

15 and unpaid for all fiscal years; and’’.

16 (3) Section 452(a)(10)(G) (42 U.S.C.

17 652(a)(10)(G)) is amended by striking ‘‘on the use

18 of Federal courts and’’.

19 (4) Section 452(a)(10) (42 U.S.C. 652(a)(10))

20 is amended—

21 (A) in subparagraph (H), by striking

22 ‘‘and’’;

23 (B) in subparagraph (I), by striking the

24 period and inserting ‘‘; and’’; and
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1 (C) by inserting after subparagraph (I) the

2 following new subparagraph:

3 ‘‘(J) compliance, by State, with the stand4 ards established pursuant to subsections (h)

5 and (i);’’.

6 (5) Section 452(a)(10) (42 U.S.C. 652(a)(10))

7 is amended by striking ‘‘The information contained

8 in any such report under subpargraph (A)’’ and all

9 that follows through ‘‘the State plan approved under

10 part A.’’.

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

12 subsection (a) shall be effective with respect to fiscal year

13 1997 and succeeding fiscal years.

14 CHAPTER 6—ESTABLISHMENT AND

15 MODIFICATION OF SUPPORT ORDERS

16 SEC. 4351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUST17 MENT OF CHILD SUPPORT ORDERS.

18 Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amend19 ed to read as follows:

20 ‘‘(10) REVIEW AND ADJUSTMENT OF SUPPORT

21 ORDERS UPON REQUEST.—Procedures under which

22 the State shall review and adjust each support order

23 being enforced under this part if there is an assign24 ment under part A or upon the request of either

25 parent, and may review and adjust any other sup-
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1 port order being enforced under this part. Such pro2 cedures shall provide the following:

3 ‘‘(A) IN GENERAL.—

4 ‘‘(i) 3-YEAR CYCLE.—Except as pro5 vided in subparagraphs (B) and (C), the

6 State shall review and, as appropriate, ad7 just the support order every 3 years, tak8 ing into account the best interests of the

9 child involved.

10 ‘‘(ii) METHODS OF ADJUSTMENT.—

11 The State may elect to review and, if ap12 propriate, adjust an order pursuant to

13 clause (i) by—

14 ‘‘(I) reviewing and, if appro15 priate, adjusting the order in accord16 ance with the guidelines established

17 pursuant to section 467(a) if the

18 amount of the child support award

19 under the order differs from the

20 amount that would be awarded in ac21 cordance with the guidelines; or

22 ‘‘(II) applying a cost-of-living ad23 justment to the order in accordance

24 with a formula developed by the State

25 and permit either party to contest the
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1 adjustment, within 30 days after the

2 date of the notice of the adjustment,

3 by making a request for review and, if

4 appropriate, adjustment of the order

5 in accordance with the child support

6 guidelines established pursuant to sec7 tion 467(a).

8 ‘‘(iii) NO PROOF OF CHANGE IN CIR9 CUMSTANCES NECESSARY.—Any adjust10 ment under this subparagraph (A) shall be

11 made without a requirement for proof or

12 showing of a change in circumstances.

13 ‘‘(B) AUTOMATED METHOD.—The State

14 may use automated methods (including auto15 mated comparisons with wage or State income

16 tax data) to identify orders eligible for review,

17 conduct the review, identify orders eligible for

18 adjustment, and apply the appropriate adjust19 ment to the orders eligible for adjustment

20 under the threshold established by the State.

21 ‘‘(C) REQUEST UPON SUBSTANTIAL

22 CHANGE IN CIRCUMSTANCES.—The State shall,

23 at the request of either parent subject to such

24 an order or of any State child support enforce25 ment agency, review and, if appropriate, adjust
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1 the order in accordance with the guidelines es2 tablished pursuant to section 467(a) based

3 upon a substantial change in the circumstances

4 of either parent.

5 ‘‘(D) NOTICE OF RIGHT TO REVIEW.—The

6 State shall provide notice not less than once

7 every 3 years to the parents subject to such an

8 order informing them of their right to request

9 the State to review and, if appropriate, adjust

10 the order pursuant to this paragraph. The no11 tice may be included in the order.’’.

12 SEC. 4352. FURNISHING CONSUMER REPORTS FOR CER13 TAIN PURPOSES RELATING TO CHILD SUP14 PORT.

15 Section 604 of the Fair Credit Reporting Act (15

16 U.S.C. 1681b) is amended by adding at the end the follow17 ing new paragraphs:

18 ‘‘(4) In response to a request by the head of a State

19 or local child support enforcement agency (or a State or

20 local government official authorized by the head of such

21 an agency), if the person making the request certifies to

22 the consumer reporting agency that—

23 ‘‘(A) the consumer report is needed for the pur24 pose of establishing an individual’s capacity to make
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1 child support payments or determining the appro2 priate level of such payments;

3 ‘‘(B) the paternity of the consumer for the child

4 to which the obligation relates has been established

5 or acknowledged by the consumer in accordance with

6 State laws under which the obligation arises (if re7 quired by those laws);

8 ‘‘(C) the person has provided at least 10 days’

9 prior notice to the consumer whose report is re10 quested, by certified or registered mail to the last

11 known address of the consumer, that the report will

12 be requested; and

13 ‘‘(D) the consumer report will be kept confiden14 tial, will be used solely for a purpose described in

15 subparagraph (A), and will not be used in connec16 tion with any other civil, administrative, or criminal

17 proceeding, or for any other purpose.

18 ‘‘(5) To an agency administering a State plan under

19 section 454 of the Social Security Act (42 U.S.C. 654)

20 for use to set an initial or modified child support award.’’.
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1 SEC. 4353. NONLIABILITY FOR FINANCIAL INSTITUTIONS

2 PROVIDING FINANCIAL RECORDS TO STATE

3 CHILD SUPPORT ENFORCEMENT AGENCIES

4 IN CHILD SUPPORT CASES.

5 Part D of title IV (42 U.S.C. 651–669) is amended

6 by adding at the end the following:

7 ‘‘SEC. 469A. NONLIABILITY FOR FINANCIAL INSTITUTIONS

8 PROVIDING FINANCIAL RECORDS TO STATE

9 CHILD SUPPORT ENFORCEMENT AGENCIES

10 IN CHILD SUPPORT CASES.

11 ‘‘(a) IN GENERAL.—Notwithstanding any other pro12 vision of Federal or State law, a financial institution shall

13 not be liable under any Federal or State law to any person

14 for disclosing any financial record of an individual to a

15 State child support enforcement agency attempting to es16 tablish, modify, or enforce a child support obligation of

17 such individual.

18 ‘‘(b) PROHIBITION OF DISCLOSURE OF FINANCIAL

19 RECORD OBTAINED BY STATE CHILD SUPPORT EN20 FORCEMENT AGENCY.—A State child support enforcement

21 agency which obtains a financial record of an individual

22 from a financial institution pursuant to subsection (a)

23 may disclose such financial record only for the purpose

24 of, and to the extent necessary in, establishing, modifying,

25 or enforcing a child support obligation of such individual.
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1 ‘‘(c) CIVIL DAMAGES FOR UNAUTHORIZED DISCLO2 SURE.—

3 ‘‘(1) DISCLOSURE BY STATE OFFICER OR EM4 PLOYEE.—If any person knowingly, or by reason of

5 negligence, discloses a financial record of an individ6 ual in violation of subsection (b), such individual

7 may bring a civil action for damages against such

8 person in a district court of the United States.

9 ‘‘(2) NO LIABILITY FOR GOOD FAITH BUT ER10 RONEOUS INTERPRETATION.—No liability shall arise

11 under this subsection with respect to any disclosure

12 which results from a good faith, but erroneous, in13 terpretation of subsection (b).

14 ‘‘(3) DAMAGES.—In any action brought under

15 paragraph (1), upon a finding of liability on the part

16 of the defendant, the defendant shall be liable to the

17 plaintiff in an amount equal to the sum of—

18 ‘‘(A) the greater of—

19 ‘‘(i) $1,000 for each act of unauthor20 ized disclosure of a financial record with

21 respect to which such defendant is found

22 liable; or

23 ‘‘(ii) the sum of—
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1 ‘‘(I) the actual damages sus2 tained by the plaintiff as a result of

3 such unauthorized disclosure; plus

4 ‘‘(II) in the case of a willful dis5 closure or a disclosure which is the re6 sult of gross negligence, punitive dam7 ages; plus

8 ‘‘(B) the costs (including attorney’s fees)

9 of the action.

10 ‘‘(d) DEFINITIONS.—For purposes of this section—

11 ‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi12 nancial institution’ means—

13 ‘‘(A) a depository institution, as defined in

14 section 3(c) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1813(c));

16 ‘‘(B) an institution-affiliated party, as de17 fined in section 3(u) of such Act (12 U.S.C.

18 1813(u));

19 ‘‘(C) any Federal credit union or State

20 credit union, as defined in section 101 of the

21 Federal Credit Union Act (12 U.S.C. 1752), in22 cluding an institution-affiliated party of such a

23 credit union, as defined in section 206(r) of

24 such Act (12 U.S.C. 1786(r)); and
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1 ‘‘(D) any benefit association, insurance

2 company, safe deposit company, money-market

3 mutual fund, or similar entity authorized to do

4 business in the State.

5 ‘‘(2) FINANCIAL RECORD.—The term ‘financial

6 record’ has the meaning given such term in section

7 1101 of the Right to Financial Privacy Act of 1978

8 (12 U.S.C. 3401).’’.

9 CHAPTER 7—ENFORCEMENT OF SUPPORT

10 ORDERS

11 SEC. 4361. INTERNAL REVENUE SERVICE COLLECTION OF

12 ARREARAGES.

13 (a) COLLECTION OF FEES.—Section 6305(a) of the

14 Internal Revenue Code of 1986 (relating to collection of

15 certain liability) is amended—

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

17 (3);

18 (2) by striking the period at the end of para19 graph (4) and inserting ‘‘, and’’;

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

21 paragraph:

22 ‘‘(5) no additional fee may be assessed for ad23 justments to an amount previously certified pursu24 ant to such section 452(b) with respect to the same

25 obligor.’’; and
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1 (4) by striking ‘‘Secretary of Health, Edu2 cation, and Welfare’’ each place it appears and in3 serting ‘‘Secretary of Health and Human Services’’.

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

5 this section shall become effective October 1, 1997.

6 SEC. 4362. AUTHORITY TO COLLECT SUPPORT FROM FED7 ERAL EMPLOYEES.

8 (a) CONSOLIDATION AND STREAMLINING OF AU9 THORITIES.—Section 459 (42 U.S.C. 659) is amended to

10 read as follows:

11 ‘‘SEC. 459. CONSENT BY THE UNITED STATES TO INCOME

12 WITHHOLDING, GARNISHMENT, AND SIMILAR

13 PROCEEDINGS FOR ENFORCEMENT OF CHILD

14 SUPPORT AND ALIMONY OBLIGATIONS.

15 ‘‘(a) CONSENT TO SUPPORT ENFORCEMENT.—Not16 withstanding any other provision of law (including section

17 207 of this Act and section 5301 of title 38, United States

18 Code), effective January 1, 1975, moneys (the entitlement

19 to which is based upon remuneration for employment) due

20 from, or payable by, the United States or the District of

21 Columbia (including any agency, subdivision, or instru22 mentality thereof) to any individual, including members

23 of the Armed Forces of the United States, shall be subject,

24 in like manner and to the same extent as if the United

25 States or the District of Columbia were a private person,
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1 to withholding in accordance with State law enacted pur2 suant to subsections (a)(1) and (b) of section 466 and reg3 ulations of the Secretary under such subsections, and to

4 any other legal process brought, by a State agency admin5 istering a program under a State plan approved under this

6 part or by an individual obligee, to enforce the legal obliga7 tion of the individual to provide child support or alimony.

8 ‘‘(b) CONSENT TO REQUIREMENTS APPLICABLE TO

9 PRIVATE PERSON.—With respect to notice to withhold in10 come pursuant to subsection (a)(1) or (b) of section 466,

11 or any other order or process to enforce support obliga12 tions against an individual (if the order or process con13 tains or is accompanied by sufficient data to permit

14 prompt identification of the individual and the moneys in15 volved), each governmental entity specified in subsection

16 (a) shall be subject to the same requirements as would

17 apply if the entity were a private person, except as other18 wise provided in this section.

19 ‘‘(c) DESIGNATION OF AGENT; RESPONSE TO NOTICE

20 OR PROCESS—

21 ‘‘(1) DESIGNATION OF AGENT.—The head of

22 each agency subject to this section shall—

23 ‘‘(A) designate an agent or agents to re24 ceive orders and accept service of process in
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1 matters relating to child support or alimony;

2 and

3 ‘‘(B) annually publish in the Federal Reg4 ister the designation of the agent or agents,

5 identified by title or position, mailing address,

6 and telephone number.

7 ‘‘(2) RESPONSE TO NOTICE OR PROCESS.—If an

8 agent designated pursuant to paragraph (1) of this

9 subsection receives notice pursuant to State proce10 dures in effect pursuant to subsection (a)(1) or (b)

11 of section 466, or is effectively served with any

12 order, process, or interrogatory, with respect to an

13 individual’s child support or alimony payment obli14 gations, the agent shall—

15 ‘‘(A) as soon as possible (but not later

16 than 15 days) thereafter, send written notice of

17 the notice or service (together with a copy of

18 the notice or service) to the individual at the

19 duty station or last-known home address of the

20 individual;

21 ‘‘(B) within 30 days (or such longer period

22 as may be prescribed by applicable State law)

23 after receipt of a notice pursuant to such State

24 procedures, comply with all applicable provi25 sions of section 466; and
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1 ‘‘(C) within 30 days (or such longer period

2 as may be prescribed by applicable State law)

3 after effective service of any other such order,

4 process, or interrogatory, respond to the order,

5 process, or interrogatory.

6 ‘‘(d) PRIORITY OF CLAIMS.—If a governmental entity

7 specified in subsection (a) receives notice or is served with

8 process, as provided in this section, concerning amounts

9 owed by an individual to more than 1 person—

10 ‘‘(1) support collection under section 466(b)

11 must be given priority over any other process, as

12 provided in section 466(b)(7);

13 ‘‘(2) allocation of moneys due or payable to an

14 individual among claimants under section 466(b)

15 shall be governed by section 466(b) and the regula16 tions prescribed under such section; and

17 ‘‘(3) such moneys as remain after compliance

18 with paragraphs (1) and (2) shall be available to

19 satisfy any other such processes on a first-come,

20 first-served basis, with any such process being satis21 fied out of such moneys as remain after the satisfac22 tion of all such processes which have been previously

23 served.

24 ‘‘(e) NO REQUIREMENT TO VARY PAY CYCLES.—A

25 governmental entity that is affected by legal process
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1 served for the enforcement of an individual’s child support

2 or alimony payment obligations shall not be required to

3 vary its normal pay and disbursement cycle in order to

4 comply with the legal process.

5 ‘‘(f) RELIEF FROM LIABILITY.—

6 ‘‘(1) Neither the United States, nor the govern7 ment of the District of Columbia, nor any disbursing

8 officer shall be liable with respect to any payment

9 made from moneys due or payable from the United

10 States to any individual pursuant to legal process

11 regular on its face, if the payment is made in ac12 cordance with this section and the regulations issued

13 to carry out this section.

14 ‘‘(2) No Federal employee whose duties include

15 taking actions necessary to comply with the require16 ments of subsection (a) with regard to any individ17 ual shall be subject under any law to any discipli18 nary action or civil or criminal liability or penalty

19 for, or on account of, any disclosure of information

20 made by the employee in connection with the carry21 ing out of such actions.

22 ‘‘(g) REGULATIONS.—Authority to promulgate regu23 lations for the implementation of this section shall, insofar

24 as this section applies to moneys due from (or payable

25 by)—
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1 ‘‘(1) the United States (other than the legisla2 tive or judicial branches of the Federal Government)

3 or the government of the District of Columbia, be

4 vested in the President (or the designee of the Presi5 dent);

6 ‘‘(2) the legislative branch of the Federal Gov7 ernment, be vested jointly in the President pro tem8 pore of the Senate and the Speaker of the House of

9 Representatives (or their designees), and

10 ‘‘(3) the judicial branch of the Federal Govern11 ment, be vested in the Chief Justice of the United

12 States (or the designee of the Chief Justice).

13 ‘‘(h) MONEYS SUBJECT TO PROCESS.—

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

15 moneys paid or payable to an individual which are

16 considered to be based upon remuneration for em17 ployment, for purposes of this section—

18 ‘‘(A) consist of—

19 ‘‘(i) compensation paid or payable for

20 personal services of the individual, whether

21 the compensation is denominated as wages,

22 salary, commission, bonus, pay, allowances,

23 or otherwise (including severance pay, sick

24 pay, and incentive pay);
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1 ‘‘(ii) periodic benefits (including a

2 periodic benefit as defined in section

3 228(h)(3)) or other payments—

4 ‘‘(I) under the insurance system

5 established by title II;

6 ‘‘(II) under any other system or

7 fund established by the United States

8 which provides for the payment of

9 pensions, retirement or retired pay,

10 annuities, dependents’ or survivors’

11 benefits, or similar amounts payable

12 on account of personal services per13 formed by the individual or any other

14 individual;

15 ‘‘(III) as compensation for death

16 under any Federal program;

17 ‘‘(IV) under any Federal pro18 gram established to provide ‘black

19 lung’ benefits; or

20 ‘‘(V) by the Secretary of Veter21 ans Affairs as compensation for a

22 service-connected disability paid by

23 the Secretary to a former member of

24 the Armed Forces who is in receipt of

25 retired or retainer pay if the former
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1 member has waived a portion of the

2 retired or retainer pay in order to re3 ceive such compensation; and

4 ‘‘(iii) worker’s compensation benefits

5 paid under Federal or State law but

6 ‘‘(B) do not include any payment—

7 ‘‘(i) by way of reimbursement or oth8 erwise, to defray expenses incurred by the

9 individual in carrying out duties associated

10 with the employment of the individual; or

11 ‘‘(ii) as allowances for members of the

12 uniformed services payable pursuant to

13 chapter 7 of title 37, United States Code,

14 as prescribed by the Secretaries concerned

15 (defined by section 101(5) of such title) as

16 necessary for the efficient performance of

17 duty.

18 ‘‘(2) CERTAIN AMOUNTS EXCLUDED.—In deter19 mining the amount of any moneys due from, or pay20 able by, the United States to any individual, there

21 shall be excluded amounts which—

22 ‘‘(A) are owed by the individual to the

23 United States;

24 ‘‘(B) are required by law to be, and are,

25 deducted from the remuneration or other pay-
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1 ment involved, including Federal employment

2 taxes, and fines and forfeitures ordered by

3 court-martial;

4 ‘‘(C) are properly withheld for Federal,

5 State, or local income tax purposes, if the with6 holding of the amounts is authorized or re7 quired by law and if amounts withheld are not

8 greater than would be the case if the individual

9 claimed all dependents to which he was entitled

10 (the withholding of additional amounts pursu11 ant to section 3402(i) of the Internal Revenue

12 Code of 1986 may be permitted only when the

13 individual presents evidence of a tax obligation

14 which supports the additional withholding);

15 ‘‘(D) are deducted as health insurance pre16 miums;

17 ‘‘(E) are deducted as normal retirement

18 contributions (not including amounts deducted

19 for supplementary coverage); or

20 ‘‘(F) are deducted as normal life insurance

21 premiums from salary or other remuneration

22 for employment (not including amounts de23 ducted for supplementary coverage).

24 ‘‘(i) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) UNITED STATES.—The term ‘United

2 States’ includes any department, agency, or instru3 mentality of the legislative, judicial, or executive

4 branch of the Federal Government, the United

5 States Postal Service, the Postal Rate Commission,

6 any Federal corporation created by an Act of Con7 gress that is wholly owned by the Federal Govern8 ment, and the governments of the territories and

9 possessions of the United States.

10 ‘‘(2) CHILD SUPPORT.—The term ‘child sup11 port’, when used in reference to the legal obligations

12 of an individual to provide such support, means

13 amounts required to be paid under a judgment, de14 cree, or order, whether temporary, final, or subject

15 to modification, issued by a court or an administra16 tive agency of competent jurisdiction, for the sup17 port and maintenance of a child, including a child

18 who has attained the age of majority under the law

19 of the issuing State, or a child and the parent with

20 whom the child is living, which provides for mone21 tary support, health care, arrearages or reimburse22 ment, and which may include other related costs and

23 fees, interest and penalties, income withholding, at24 torney’s fees, and other relief.

25 ‘‘(3) ALIMONY.—
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1 ‘‘(A) IN GENERAL.—The term ‘alimony’,

2 when used in reference to the legal obligations

3 of an individual to provide the same, means

4 periodic payments of funds for the support and

5 maintenance of the spouse (or former spouse)

6 of the individual, and (subject to and in accord7 ance with State law) includes separate mainte8 nance, alimony pendente lite, maintenance, and

9 spousal support, and includes attorney’s fees,

10 interest, and court costs when and to the extent

11 that the same are expressly made recoverable as

12 such pursuant to a decree, order, or judgment

13 issued in accordance with applicable State law

14 by a court of competent jurisdiction.

15 ‘‘(B) EXCEPTIONS.—Such term does not

16 include—

17 ‘‘(i) any child support; or

18 ‘‘(ii) any payment or transfer of prop19 erty or its value by an individual to the

20 spouse or a former spouse of the individual

21 in compliance with any community prop22 erty settlement, equitable distribution of

23 property, or other division of property be24 tween spouses or former spouses.
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1 ‘‘(4) PRIVATE PERSON.—The term ‘private per2 son’ means a person who does not have sovereign or

3 other special immunity or privilege which causes the

4 person not to be subject to legal process.

5 ‘‘(5) LEGAL PROCESS.—The term ‘legal proc6 ess’ means any writ, order, summons, or other simi7 lar process in the nature of garnishment—

8 ‘‘(A) which is issued by—

9 ‘‘(i) a court or an administrative

10 agency of competent jurisdiction in any

11 State, territory, or possession of the Unit12 ed States;

13 ‘‘(ii) a court or an administrative

14 agency of competent jurisdiction in any

15 foreign country with which the United

16 States has entered into an agreement

17 which requires the United States to honor

18 the process; or

19 ‘‘(iii) an authorized official pursuant

20 to an order of such a court or an adminis21 trative agency of competent jurisdiction or

22 pursuant to State or local law; and

23 ‘‘(B) which is directed to, and the purpose

24 of which is to compel, a governmental entity

25 which holds moneys which are otherwise pay-
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1 able to an individual to make a payment from

2 the moneys to another party in order to satisfy

3 a legal obligation of the individual to provide

4 child support or make alimony payments.’’.

5 (b) CONFORMING AMENDMENTS.—

6 (1) TO PART D OF TITLE IV.—Sections 461 and

7 462 (42 U.S.C. 661 and 662) are repealed.

8 (2) TO TITLE 5, UNITED STATES CODE.—Sec9 tion 5520a of title 5, United States Code, is amend10 ed, in subsections (h)(2) and (i), by striking ‘‘sec11 tions 459, 461, and 462 of the Social Security Act

12 (42 U.S.C. 659, 661, and 662)’’ and inserting ‘‘sec13 tion 459 of the Social Security Act (42 U.S.C.

14 659)’’.

15 (c) MILITARY RETIRED AND RETAINER PAY.—

16 (1) DEFINITION OF COURT.—Section

17 1408(a)(1) of title 10, United States Code, is

18 amended—

19 (A) by striking ‘‘and’’ at the end of sub20 paragraph (B);

21 (B) by striking the period at the end of

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

23 (C) by adding after subparagraph (C) the

24 following new subparagraph:
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1 ‘‘(D) any administrative or judicial tribu2 nal of a State competent to enter orders for

3 support or maintenance (including a State

4 agency administering a program under a State

5 plan approved under part D of title IV of the

6 Social Security Act), and, for purposes of this

7 subparagraph, the term ‘State’ includes the

8 District of Columbia, the Commonwealth of

9 Puerto Rico, the Virgin Islands, Guam, and

10 American Samoa.’’.

11 (2) DEFINITION OF COURT ORDER.—Section

12 1408(a)(2) of such title is amended—

13 (A) by inserting ‘‘or a support order, as

14 defined in section 453(p) of the Social Security

15 Act (42 U.S.C. 653(p)),’’ before ‘‘which—’’;

16 (B) in subparagraph (B)(i), by striking

17 ‘‘(as defined in section 462(b) of the Social Se18 curity Act (42 U.S.C. 662(b)))’’ and inserting

19 ‘‘(as defined in section 459(i)(2) of the Social

20 Security Act (42 U.S.C. 659(i)(2)))’’; and

21 (C) in subparagraph (B)(ii), by striking

22 ‘‘(as defined in section 462(c) of the Social Se23 curity Act (42 U.S.C. 662(c)))’’ and inserting

24 ‘‘(as defined in section 459(i)(3) of the Social

25 Security Act (42 U.S.C. 659(i)(3)))’’.
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1 (3) PUBLIC PAYEE.—Section 1408(d) of such

2 title is amended—

3 (A) in the heading, by inserting ‘‘(OR FOR

4 BENEFIT OF)’’ before ‘‘SPOUSE OR’’; and

5 (B) in paragraph (1), in the 1st sentence,

6 by inserting ‘‘(or for the benefit of such spouse

7 or former spouse to a State disbursement unit

8 established pursuant to section 454B of the So9 cial Security Act or other public payee des10 ignated by a State, in accordance with part D

11 of title IV of the Social Security Act, as di12 rected by court order, or as otherwise directed

13 in accordance with such part D)’’ before ‘‘in an

14 amount sufficient’’.

15 (4) RELATIONSHIP TO PART D OF TITLE IV.—

16 Section 1408 of such title is amended by adding at

17 the end the following new subsection:

18 ‘‘(j) RELATIONSHIP TO OTHER LAWS.—In any case

19 involving an order providing for payment of child support

20 (as defined in section 459(i)(2) of the Social Security Act)

21 by a member who has never been married to the other

22 parent of the child, the provisions of this section shall not

23 apply, and the case shall be subject to the provisions of

24 section 459 of such Act.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall become effective 6 months after the date

3 of the enactment of this Act.

4 SEC. 4363. ENFORCEMENT OF CHILD SUPPORT OBLIGA5 TIONS OF MEMBERS OF THE ARMED FORCES.

6 (a) AVAILABILITY OF LOCATOR INFORMATION.—

7 (1) MAINTENANCE OF ADDRESS INFORMA8 TION.—The Secretary of Defense shall establish a

9 centralized personnel locator service that includes

10 the address of each member of the Armed Forces

11 under the jurisdiction of the Secretary. Upon re12 quest of the Secretary of Transportation, addresses

13 for members of the Coast Guard shall be included in

14 the centralized personnel locator service.

15 (2) TYPE OF ADDRESS.—

16 (A) RESIDENTIAL ADDRESS.—Except as

17 provided in subparagraph (B), the address for

18 a member of the Armed Forces shown in the lo19 cator service shall be the residential address of

20 that member.

21 (B) DUTY ADDRESS.—The address for a

22 member of the Armed Forces shown in the loca23 tor service shall be the duty address of that

24 member in the case of a member—
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1 (i) who is permanently assigned over2 seas, to a vessel, or to a routinely

3 deployable unit; or

4 (ii) with respect to whom the Sec5 retary concerned makes a determination

6 that the member’s residential address

7 should not be disclosed due to national se8 curity or safety concerns.

9 (3) UPDATING OF LOCATOR INFORMATION.—

10 Within 30 days after a member listed in the locator

11 service establishes a new residential address (or a

12 new duty address, in the case of a member covered

13 by paragraph (2)(B)), the Secretary concerned shall

14 update the locator service to indicate the new ad15 dress of the member.

16 (4) AVAILABILITY OF INFORMATION.—The Sec17 retary of Defense shall make information regarding

18 the address of a member of the Armed Forces listed

19 in the locator service available, on request, to the

20 Federal Parent Locator Service established under

21 section 453 of the Social Security Act.

22 (b) FACILITATING GRANTING OF LEAVE FOR AT23 TENDANCE AT HEARINGS.—

24 (1) REGULATIONS.—The Secretary of each

25 military department, and the Secretary of Transpor-
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1 tation with respect to the Coast Guard when it is

2 not operating as a service in the Navy, shall pre3 scribe regulations to facilitate the granting of leave

4 to a member of the Armed Forces under the juris5 diction of that Secretary in a case in which—

6 (A) the leave is needed for the member to

7 attend a hearing described in paragraph (2);

8 (B) the member is not serving in or with

9 a unit deployed in a contingency operation (as

10 defined in section 101 of title 10, United States

11 Code); and

12 (C) the exigencies of military service (as

13 determined by the Secretary concerned) do not

14 otherwise require that such leave not be grant15 ed.

16 (2) COVERED HEARINGS.—Paragraph (1) ap17 plies to a hearing that is conducted by a court or

18 pursuant to an administrative process established

19 under State law, in connection with a civil action—

20 (A) to determine whether a member of the

21 Armed Forces is a natural parent of a child; or

22 (B) to determine an obligation of a mem23 ber of the Armed Forces to provide child sup24 port.
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1 (3) DEFINITIONS.—For purposes of this sub2 section—

3 (A) The term ‘‘court’’ has the meaning

4 given that term in section 1408(a) of title 10,

5 United States Code.

6 (B) The term ‘‘child support’’ has the

7 meaning given such term in section 459(i) of

8 the Social Security Act (42 U.S.C. 659(i)).

9 (c) PAYMENT OF MILITARY RETIRED PAY IN COM10 PLIANCE WITH CHILD SUPPORT ORDERS.—

11 (1) DATE OF CERTIFICATION OF COURT

12 ORDER.—Section 1408 of title 10, United States

13 Code, as amended by section 4362(c)(4) of this Act,

14 is amended—

15 (A) by redesignating subsections (i) and (j)

16 as subsections (j) and (k), respectively; and

17 (B) by inserting after subsection (h) the

18 following new subsection:

19 ‘‘(i) CERTIFICATION DATE.—It is not necessary that

20 the date of a certification of the authenticity or complete21 ness of a copy of a court order for child support received

22 by the Secretary concerned for the purposes of this section

23 be recent in relation to the date of receipt by the Sec24 retary.’’.
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1 (2) PAYMENTS CONSISTENT WITH ASSIGN2 MENTS OF RIGHTS TO STATES.—Section 1408(d)(1)

3 of such title is amended by inserting after the 1st

4 sentence the following new sentence: ‘‘In the case of

5 a spouse or former spouse who, pursuant to section

6 408(a)(4) of the Social Security Act (42 U.S.C.

7 608(a)(4)), assigns to a State the rights of the

8 spouse or former spouse to receive support, the Sec9 retary concerned may make the child support pay10 ments referred to in the preceding sentence to that

11 State in amounts consistent with that assignment of

12 rights.’’.

13 (3) ARREARAGES OWED BY MEMBERS OF THE

14 UNIFORMED SERVICES.—Section 1408(d) of such

15 title is amended by adding at the end the following

16 new paragraph:

17 ‘‘(6) In the case of a court order for which effective

18 service is made on the Secretary concerned on or after

19 the date of the enactment of this paragraph and which

20 provides for payments from the disposable retired pay of

21 a member to satisfy the amount of child support set forth

22 in the order, the authority provided in paragraph (1) to

23 make payments from the disposable retired pay of a mem24 ber to satisfy the amount of child support set forth in a

25 court order shall apply to payment of any amount of child
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1 support arrearages set forth in that order as well as to

2 amounts of child support that currently become due.’’.

3 (4) PAYROLL DEDUCTIONS.—The Secretary of

4 Defense shall begin payroll deductions within 30

5 days after receiving notice of withholding, or for the

6 1st pay period that begins after such 30-day period.

7 SEC. 4364. VOIDING OF FRAUDULENT TRANSFERS.

8 Section 466 (42 U.S.C. 666), as amended by section

9 4321 of this Act, is amended by adding at the end the

10 following new subsection:

11 ‘‘(g) LAWS VOIDING FRAUDULENT TRANSFERS.—In

12 order to satisfy section 454(20)(A), each State must have

13 in effect—

14 ‘‘(1)(A) the Uniform Fraudulent Conveyance

15 Act of 1981;

16 ‘‘(B) the Uniform Fraudulent Transfer Act of

17 1984; or

18 ‘‘(C) another law, specifying indicia of fraud

19 which create a prima facie case that a debtor trans20 ferred income or property to avoid payment to a

21 child support creditor, which the Secretary finds af22 fords comparable rights to child support creditors;

23 and

24 ‘‘(2) procedures under which, in any case in

25 which the State knows of a transfer by a child sup-
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1 port debtor with respect to which such a prima facie

2 case is established, the State must—

3 ‘‘(A) seek to void such transfer; or

4 ‘‘(B) obtain a settlement in the best inter5 ests of the child support creditor.’’.

6 SEC. 4365. WORK REQUIREMENT FOR PERSONS OWING

7 PAST-DUE CHILD SUPPORT.

8 (a) IN GENERAL.—Section 466(a) (42 U.S.C.

9 666(a)), as amended by sections 4315, 4317(a), and 4323

10 of this Act, is amended by inserting after paragraph (14)

11 the following new paragraph:

12 ‘‘(15) PROCEDURES TO ENSURE THAT PERSONS

13 OWING PAST-DUE SUPPORT WORK OR HAVE A PLAN

14 FOR PAYMENT OF SUCH SUPPORT.—

15 ‘‘(A) IN GENERAL.—Procedures under

16 which the State has the authority, in any case

17 in which an individual owes past-due support

18 with respect to a child receiving assistance

19 under a State program funded under part A, to

20 issue an order or to request that a court or an

21 administrative process established pursuant to

22 State law issue an order that requires the indi23 vidual to—

24 ‘‘(i) pay such support in accordance

25 with a plan approved by the court, or, at
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1 the option of the State, a plan approved by

2 the State agency administering the State

3 program under this part; or

4 ‘‘(ii) if the individual is subject to

5 such a plan and is not incapacitated, par6 ticipate in such work activities (as defined

7 in section 407(d)) as the court, or, at the

8 option of the State, the State agency ad9 ministering the State program under this

10 part, deems appropriate.

11 ‘‘(B) PAST-DUE SUPPORT DEFINED.—For

12 purposes of subparagraph (A), the term ‘past13 due support’ means the amount of a delin14 quency, determined under a court order, or an

15 order of an administrative process established

16 under State law, for support and maintenance

17 of a child, or of a child and the parent with

18 whom the child is living.’’.

19 (b) CONFORMING AMENDMENT.—The flush para20 graph at the end of section 466(a) (42 U.S.C.666(a)) is

21 amended by striking ‘‘and (7)’’ and inserting ‘‘(7), and

22 (15)’’.
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1 SEC. 4366. DEFINITION OF SUPPORT ORDER.

2 Section 453 (42 U.S.C. 653) as amended by sections

3 4316 and 4345(b) of this Act, is amended by adding at

4 the end the following new subsection:

5 ‘‘(p) SUPPORT ORDER DEFINED.—As used in this

6 part, the term ‘support order’ means a judgment, decree,

7 or order, whether temporary, final, or subject to modifica8 tion, issued by a court or an administrative agency of com9 petent jurisdiction, for the support and maintenance of a

10 child, including a child who has attained the age of major11 ity under the law of the issuing State, or a child and the

12 parent with whom the child is living, which provides for

13 monetary support, health care, arrearages, or reimburse14 ment, and which may include related costs and fees, inter15 est and penalties, income withholding, attorneys’ fees, and

16 other relief.’’.

17 SEC. 4367. REPORTING ARREARAGES TO CREDIT BUREAUS.

18 Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended

19 to read as follows:

20 ‘‘(7) REPORTING ARREARAGES TO CREDIT BU21 REAUS.—

22 ‘‘(A) IN GENERAL.—Procedures (subject to

23 safeguards pursuant to subparagraph (B)) re24 quiring the State to report periodically to

25 consumer reporting agencies (as defined in sec26 tion 603(f) of the Fair Credit Reporting Act
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1 (15 U.S.C. 1681a(f)) the name of any non2 custodial parent who is delinquent in the pay3 ment of support, and the amount of overdue

4 support owed by such parent.

5 ‘‘(B) SAFEGUARDS.—Procedures ensuring

6 that, in carrying out subparagraph (A), infor7 mation with respect to a noncustodial parent is

8 reported—

9 ‘‘(i) only after such parent has been

10 afforded all due process required under

11 State law, including notice and a reason12 able opportunity to contest the accuracy of

13 such information; and

14 ‘‘(ii) only to an entity that has fur15 nished evidence satisfactory to the State

16 that the entity is a consumer reporting

17 agency (as so defined).’’.

18 SEC. 4368. LIENS.

19 Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended

20 to read as follows:

21 ‘‘(4) LIENS.—Procedures under which—

22 ‘‘(A) liens arise by operation of law against

23 real and personal property for amounts of over24 due support owed by a noncustodial parent who

25 resides or owns property in the State; and
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1 ‘‘(B) the State accords full faith and credit

2 to liens described in subparagraph (A) arising

3 in another State, when the State agency, party,

4 or other entity seeking to enforce such a lien

5 complies with the procedural rules relating to

6 recording or serving liens that arise within the

7 State, except that such rules may not require

8 judicial notice or hearing prior to the enforce9 ment of such a lien.’’.

10 SEC. 4369. STATE LAW AUTHORIZING SUSPENSION OF LI11 CENSES.

12 Section 466(a) (42 U.S.C. 666(a)), as amended by

13 sections 4315, 4317(a), 4323, and 4365 of this Act, is

14 amended by inserting after paragraph (15) the following:

15 ‘‘(16) AUTHORITY TO WITHHOLD OR SUSPEND

16 LICENSES.—Procedures under which the State has

17 (and uses in appropriate cases) authority to withhold

18 or suspend, or to restrict the use of driver’s licenses,

19 professional and occupational licenses, and rec20 reational licenses of individuals owing overdue sup21 port or failing, after receiving appropriate notice, to

22 comply with subpoenas or warrants relating to pa23 ternity or child support proceedings.’’.
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1 SEC. 4370. DENIAL OF PASSPORTS FOR NONPAYMENT OF

2 CHILD SUPPORT.

3 (a) HHS CERTIFICATION PROCEDURE.—

4 (1) SECRETARIAL RESPONSIBILITY.—Section

5 452 (42 U.S.C. 652), as amended by section 4345

6 of this Act, is amended by adding at the end the fol7 lowing new subsection:

8 ‘‘(k)(1) If the Secretary receives a certification by a

9 State agency in accordance with the requirements of sec10 tion 454(31) that an individual owes arrearages of child

11 support in an amount exceeding $5,000, the Secretary

12 shall transmit such certification to the Secretary of State

13 for action (with respect to denial, revocation, or limitation

14 of passports) pursuant to paragraph (2).

15 ‘‘(2) The Secretary of State shall, upon certification

16 by the Secretary transmitted under paragraph (1), refuse

17 to issue a passport to such individual, and may revoke,

18 restrict, or limit a passport issued previously to such indi19 vidual.

20 ‘‘(3) The Secretary and the Secretary of State shall

21 not be liable to an individual for any action with respect

22 to a certification by a State agency under this section.’’.

23 (2) STATE AGENCY RESPONSIBILITY.—Section

24 454 (42 U.S.C. 654), as amended by sections

25 4301(b), 4303(a), 4312(b), 4313(a), 4333, and

26 4343(b) of this Act, is amended—
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1 (A) by striking ‘‘and’’ at the end of para2 graph (29);

3 (B) by striking the period at the end of

4 paragraph (30) and inserting ‘‘; and’’; and

5 (C) by adding after paragraph (30) the fol6 lowing new paragraph:

7 ‘‘(31) provide that the State agency will have in

8 effect a procedure for certifying to the Secretary, for

9 purposes of the procedure under section 452(k), de10 terminations that individuals owe arrearages of child

11 support in an amount exceeding $5,000, under

12 which procedure—

13 ‘‘(A) each individual concerned is afforded

14 notice of such determination and the con15 sequences thereof, and an opportunity to con16 test the determination; and

17 ‘‘(B) the certification by the State agency

18 is furnished to the Secretary in such format,

19 and accompanied by such supporting docu20 mentation, as the Secretary may require.’’.

21 (b) EFFECTIVE DATE.—This section and the amend22 ments made by this section shall become effective October

23 1, 1997.
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1 SEC. 4371. INTERNATIONAL SUPPORT ENFORCEMENT.

2 (a) AUTHORITY FOR INTERNATIONAL AGREE3 MENTS.—Part D of title IV, as amended by section

4 4362(a) of this Act, is amended by adding after section

5 459 the following new section:

6 ‘‘SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT.

7 ‘‘(a) AUTHORITY FOR DECLARATIONS.—

8 ‘‘(1) DECLARATION.—The Secretary of State,

9 with the concurrence of the Secretary of Health and

10 Human Services, is authorized to declare any foreign

11 country (or a political subdivision thereof) to be a

12 foreign reciprocating country if the foreign country

13 has established, or undertakes to establish, proce14 dures for the establishment and enforcement of du15 ties of support owed to obligees who are residents of

16 the United States, and such procedures are substan17 tially in conformity with the standards prescribed

18 under subsection (b).

19 ‘‘(2) REVOCATION.—A declaration with respect

20 to a foreign country made pursuant to paragraph

21 (1) may be revoked if the Secretaries of State and

22 Health and Human Services determine that—

23 ‘‘(A) the procedures established by the for24 eign country regarding the establishment and

25 enforcement of duties of support have been so

26 changed, or the foreign country’s implementa-
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1 tion of such procedures is so unsatisfactory,

2 that such procedures do not meet the criteria

3 for such a declaration; or

4 ‘‘(B) continued operation of the declaration

5 is not consistent with the purposes of this part.

6 ‘‘(3) FORM OF DECLARATION.—A declaration

7 under paragraph (1) may be made in the form of an

8 international agreement, in connection with an inter9 national agreement or corresponding foreign declara10 tion, or on a unilateral basis.

11 ‘‘(b) STANDARDS FOR FOREIGN SUPPORT ENFORCE12 MENT PROCEDURES.—

13 ‘‘(1) MANDATORY ELEMENTS.—Support en14 forcement procedures of a foreign country which

15 may be the subject of a declaration pursuant to sub16 section (a)(1) shall include the following elements:

17 ‘‘(A) The foreign country (or political sub18 division thereof) has in effect procedures, avail19 able to residents of the United States—

20 ‘‘(i) for establishment of paternity,

21 and for establishment of orders of support

22 for children and custodial parents; and

23 ‘‘(ii) for enforcement of orders to pro24 vide support to children and custodial par25 ents, including procedures for collection
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1 and appropriate distribution of support

2 payments under such orders.

3 ‘‘(B) The procedures described in subpara4 graph (A), including legal and administrative

5 assistance, are provided to residents of the

6 United States at no cost.

7 ‘‘(C) An agency of the foreign country is

8 designated as a Central Authority responsible

9 for—

10 ‘‘(i) facilitating support enforcement

11 in cases involving residents of the foreign

12 country and residents of the United States;

13 and

14 ‘‘(ii) ensuring compliance with the

15 standards established pursuant to this sub16 section.

17 ‘‘(2) ADDITIONAL ELEMENTS.—The Secretary

18 of Health and Human Services and the Secretary of

19 State, in consultation with the States, may establish

20 such additional standards as may be considered nec21 essary to further the purposes of this section.

22 ‘‘(c) DESIGNATION OF UNITED STATES CENTRAL

23 AUTHORITY.—It shall be the responsibility of the Sec24 retary of Health and Human Services to facilitate support

25 enforcement in cases involving residents of the United
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1 States and residents of foreign countries that are the sub2 ject of a declaration under this section, by activities in3 cluding—

4 ‘‘(1) development of uniform forms and proce5 dures for use in such cases;

6 ‘‘(2) notification of foreign reciprocating coun7 tries of the State of residence of individuals sought

8 for support enforcement purposes, on the basis of in9 formation provided by the Federal Parent Locator

10 Service; and

11 ‘‘(3) such other oversight, assistance, and co12 ordination activities as the Secretary may find nec13 essary and appropriate.

14 ‘‘(d) EFFECT ON OTHER LAWS.—States may enter

15 into reciprocal arrangements for the establishment and en16 forcement of support obligations with foreign countries

17 that are not the subject of a declaration pursuant to sub18 section (a), to the extent consistent with Federal law.’’.

19 (b) STATE PLAN REQUIREMENT.—Section 454 (42

20 U.S.C. 654), as amended by sections 4301(b), 4303(a),

21 4312(b), 4313(a), 4333, 4343(b), and 4370(a)(2) of this

22 Act, is amended—

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

24 (30);
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1 (2) by striking the period at the end of para2 graph (31) and inserting ‘‘; and’’; and

3 (3) by adding after paragraph (31) the follow4 ing new paragraph:

5 ‘‘(32)(A) provide that any request for services

6 under this part by a foreign reciprocating country or

7 a foreign country with which the State has an ar8 rangement described in section 459A(d)(2) shall be

9 treated as a request by a State;

10 ‘‘(B) provide, at State option, notwithstanding

11 paragraph (4) or any other provision of this part,

12 for services under the plan for enforcement of a

13 spousal support order not described in paragraph

14 (4)(B) entered by such a country (or subdivision);

15 and

16 ‘‘(C) provide that no applications will be re17 quired from, and no costs will be assessed for such

18 services against, the foreign reciprocating country or

19 foreign obligee (but costs may at State option be as20 sessed against the obligor).’’.

21 SEC. 4372. FINANCIAL INSTITUTION DATA MATCHES.

22 Section 466(a) (42 U.S.C. 666(a)), as amended by

23 sections 4315, 4317(a), 4323, 4365, and 4369 of this Act,

24 is amended by inserting after paragraph (16) the following

25 new paragraph:
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1 ‘‘(17) FINANCIAL INSTITUTION DATA

2 MATCHES.—

3 ‘‘(A) IN GENERAL.—Procedures under

4 which the State agency shall enter into agree5 ments with financial institutions doing business

6 in the State—

7 ‘‘(i) to develop and operate, in coordi8 nation with such financial institutions, a

9 data match system, using automated data

10 exchanges to the maximum extent feasible,

11 in which each such financial institution is

12 required to provide for each calendar quar13 ter the name, record address, social secu14 rity number or other taxpayer identifica15 tion number, and other identifying infor16 mation for each noncustodial parent who

17 maintains an account at such institution

18 and who owes past-due support, as identi19 fied by the State by name and social secu20 rity number or other taxpayer identifica21 tion number; and

22 ‘‘(ii) in response to a notice of lien or

23 levy, encumber or surrender, as the case

24 may be, assets held by such institution on

25 behalf of any noncustodial parent who is
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1 subject to a child support lien pursuant to

2 paragraph (4).

3 ‘‘(B) REASONABLE FEES.—The State

4 agency may pay a reasonable fee to a financial

5 institution for conducting the data match pro6 vided for in subparagraph (A)(i), not to exceed

7 the actual costs incurred by such financial insti8 tution.

9 ‘‘(C) LIABILITY.—A financial institution

10 shall not be liable under any Federal or State

11 law to any person—

12 ‘‘(i) for any disclosure of information

13 to the State agency under subparagraph

14 (A)(i);

15 ‘‘(ii) for encumbering or surrendering

16 any assets held by such financial institu17 tion in response to a notice of lien or levy

18 issued by the State agency as provided for

19 in subparagraph (A)(ii); or

20 ‘‘(iii) for any other action taken in

21 good faith to comply with the requirements

22 of subparagraph (A).

23 ‘‘(D) DEFINITIONS.—For purposes of this

24 paragraph—
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1 ‘‘(i) FINANCIAL INSTITUTION.—The

2 term ‘financial institution’ has the mean3 ing given to such term by section

4 469A(d)(1).

5 ‘‘(ii) ACCOUNT.—The term ‘account’

6 means a demand deposit account, checking

7 or negotiable withdrawal order account,

8 savings account, time deposit account, or

9 money-market mutual fund account.’’.

10 SEC. 4373. ENFORCEMENT OF ORDERS AGAINST PATERNAL

11 OR MATERNAL GRANDPARENTS IN CASES OF

12 MINOR PARENTS.

13 Section 466(a) (42 U.S.C. 666(a)), as amended by

14 sections 4315, 4317(a), 4323, 4365, 4369, and 4372 of

15 this Act, is amended by inserting after paragraph (17) the

16 following new paragraph:

17 ‘‘(18) ENFORCEMENT OF ORDERS AGAINST PA18 TERNAL OR MATERNAL GRANDPARENTS.—Proce19 dures under which, at the State’s option, any child

20 support order enforced under this part with respect

21 to a child of minor parents, if the custodial parent

22 of such child is receiving assistance under the State

23 program under part A, shall be enforceable, jointly

24 and severally, against the parents of the noncusto25 dial parent of such child.’’.
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1 SEC. 4374. NONDISCHARGEABILITY IN BANKRUPTCY OF

2 CERTAIN DEBTS FOR THE SUPPORT OF A

3 CHILD.

4 (a) AMENDMENT TO TITLE 11 OF THE UNITED

5 STATES CODE.—Section 523(a) of title 11, United States

6 Code, is amended—

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

8 (16);

9 (2) by striking the period at the end of para10 graph (17) and inserting ‘‘; or’’;

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

12 ‘‘(18) owed under State law to a State or mu13 nicipality that is—

14 ‘‘(A) in the nature of support, and

15 ‘‘(B) enforceable under part D of title IV

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

17 seq.).’’; and

18 (4) in paragraph (5), by striking ‘‘section

19 402(a)(26)’’ and inserting ‘‘section 408(a)(4)’’.

20 (b) AMENDMENT TO THE SOCIAL SECURITY ACT.—

21 Section 456(b) (42 U.S.C. 656(b)) is amended to read as

22 follows:

23 ‘‘(b) NONDISCHARGEABILITY.—A debt (as defined in

24 section 101 of title 11 of the United States Code) owed

25 under State law to a State (as defined in such section)

26 or municipality (as defined in such section) that is in the
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1 nature of support and that is enforceable under this part

2 is not released by a discharge in bankruptcy under title

3 11 of the United States Code.’’.

4 (c) APPLICATION OF AMENDMENTS.—The amend5 ments made by this section shall apply only with respect

6 to cases commenced under title 11 of the United States

7 Code after the date of the enactment of this Act.

8 CHAPTER 8—MEDICAL SUPPORT

9 SEC. 4376. CORRECTION TO ERISA DEFINITION OF MEDI10 CAL CHILD SUPPORT ORDER.

11 (a) IN GENERAL.—Section 609(a)(2)(B) of the Em12 ployee Retirement Income Security Act of 1974 (29

13 U.S.C. 1169(a)(2)(B)) is amended—

14 (1) by striking ‘‘issued by a court of competent

15 jurisdiction’’;

16 (2) by striking the period at the end of clause

17 (ii) and inserting a comma; and

18 (3) by adding, after and below clause (ii), the

19 following:

20 ‘‘if such judgment, decree, or order (I) is issued

21 by a court of competent jurisdiction or (II) is

22 issued through an administrative process estab23 lished under State law and has the force and ef24 fect of law under applicable State law.’’.

25 (b) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—The amendments made by

2 this section shall take effect on the date of the en3 actment of this Act.

4 (2) PLAN AMENDMENTS NOT REQUIRED UNTIL

5 JANUARY 1, 1997.—Any amendment to a plan re6 quired to be made by an amendment made by this

7 section shall not be required to be made before the

8 1st plan year beginning on or after January 1,

9 1997, if—

10 (A) during the period after the date before

11 the date of the enactment of this Act and be12 fore such 1st plan year, the plan is operated in

13 accordance with the requirements of the amend14 ments made by this section; and

15 (B) such plan amendment applies retro16 actively to the period after the date before the

17 date of the enactment of this Act and before

18 such 1st plan year.

19 A plan shall not be treated as failing to be operated

20 in accordance with the provisions of the plan merely

21 because it operates in accordance with this para22 graph.
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1 SEC. 4377. ENFORCEMENT OF ORDERS FOR HEALTH CARE

2 COVERAGE.

3 Section 466(a) (42 U.S.C. 666(a)), as amended by

4 sections 4315, 4317(a), 4323, 4365, 4369, 4372, and

5 4373 of this Act, is amended by inserting after paragraph

6 (18) the following new paragraph:

7 ‘‘(19) HEALTH CARE COVERAGE.—Procedures

8 under which all child support orders enforced pursu9 ant to this part shall include a provision for the

10 health care coverage of the child, and in the case in

11 which a noncustodial parent provides such coverage

12 and changes employment, and the new employer pro13 vides health care coverage, the State agency shall

14 transfer notice of the provision to the employer,

15 which notice shall operate to enroll the child in the

16 noncustodial parent’s health plan, unless the non17 custodial parent contests the notice.’’.

18 CHAPTER 9—ENHANCING RESPONSIBIL19 ITY AND OPPORTUNITY FOR NON-RES20 IDENTIAL PARENTS

21 SEC. 4381. GRANTS TO STATES FOR ACCESS AND VISITA22 TION PROGRAMS.

23 Part D of title IV (42 U.S.C. 651–669), as amended

24 by section 4353 of this Act, is amended by adding at the

25 end the following new section:
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1 ‘‘SEC. 469B. GRANTS TO STATES FOR ACCESS AND VISITA2 TION PROGRAMS.

3 ‘‘(a) IN GENERAL.—The Administration for Children

4 and Families shall make grants under this section to en5 able States to establish and administer programs to sup6 port and facilitate noncustodial parents’ access to and visi7 tation of their children, by means of activities including

8 mediation (both voluntary and mandatory), counseling,

9 education, development of parenting plans, visitation en10 forcement (including monitoring, supervision and neutral

11 drop-off and pickup), and development of guidelines for

12 visitation and alternative custody arrangements.

13 ‘‘(b) AMOUNT OF GRANT.—The amount of the grant

14 to be made to a State under this section for a fiscal year

15 shall be an amount equal to the lesser of—

16 ‘‘(1) 90 percent of State expenditures during

17 the fiscal year for activities described in subsection

18 (a); or

19 ‘‘(2) the allotment of the State under sub20 section (c) for the fiscal year.

21 ‘‘(c) ALLOTMENTS TO STATES.—

22 ‘‘(1) IN GENERAL.—The allotment of a State

23 for a fiscal year is the amount that bears the same

24 ratio to $10,000,000 for grants under this section

25 for the fiscal year as the number of children in the
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1 State living with only 1 biological parent bears to

2 the total number of such children in all States.

3 ‘‘(2) MINIMUM ALLOTMENT.—The Administra4 tion for Children and Families shall adjust allot5 ments to States under paragraph (1) as necessary to

6 ensure that no State is allotted less than—

7 ‘‘(A) $50,000 for fiscal year 1997 or 1998;

8 or

9 ‘‘(B) $100,000 for any succeeding fiscal

10 year.

11 ‘‘(d) NO SUPPLANTATION OF STATE EXPENDITURES

12 FOR SIMILAR ACTIVITIES.—A State to which a grant is

13 made under this section may not use the grant to supplant

14 expenditures by the State for activities specified in sub15 section (a), but shall use the grant to supplement such

16 expenditures at a level at least equal to the level of such

17 expenditures for fiscal year 1995.

18 ‘‘(e) STATE ADMINISTRATION.—Each State to which

19 a grant is made under this section—

20 ‘‘(1) may administer State programs funded

21 with the grant, directly or through grants to or con22 tracts with courts, local public agencies, or nonprofit

23 private entities;

24 ‘‘(2) shall not be required to operate such pro25 grams on a statewide basis; and
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1 ‘‘(3) shall monitor, evaluate, and report on such

2 programs in accordance with regulations prescribed

3 by the Secretary.’’.

4 CHAPTER 10—EFFECTIVE DATES AND

5 CONFORMING AMENDMENTS

6 SEC. 4391. EFFECTIVE DATES AND CONFORMING AMEND7 MENTS.

8 (a) IN GENERAL.—Except as otherwise specifically

9 provided (but subject to subsections (b) and (c))—

10 (1) the provisions of this subtitle requiring the

11 enactment or amendment of State laws under sec12 tion 466 of the Social Security Act, or revision of

13 State plans under section 454 of such Act, shall be

14 effective with respect to periods beginning on and

15 after October 1, 1996; and

16 (2) all other provisions of this subtitle shall be17 come effective upon the date of the enactment of

18 this Act.

19 (b) GRACE PERIOD FOR STATE LAW CHANGES.—The

20 provisions of this subtitle shall become effective with re21 spect to a State on the later of—

22 (1) the date specified in this subtitle, or

23 (2) the effective date of laws enacted by the leg24 islature of such State implementing such provisions,
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1 but in no event later than the 1st day of the 1st calendar

2 quarter beginning after the close of the 1st regular session

3 of the State legislature that begins after the date of the

4 enactment of this Act. For purposes of the previous sen5 tence, in the case of a State that has a 2-year legislative

6 session, each year of such session shall be deemed to be

7 a separate regular session of the State legislature.

8 (c) GRACE PERIOD FOR STATE CONSTITUTIONAL

9 AMENDMENT.—A State shall not be found out of compli10 ance with any requirement enacted by this subtitle if the

11 State is unable to so comply without amending the State

12 constitution until the earlier of—

13 (1) 1 year after the effective date of the nec14 essary State constitutional amendment; or

15 (2) 5 years after the date of the enactment of

16 this Act.

17 (d) CONFORMING AMENDMENTS.—

18 (1) The following provisions are amended by

19 striking ‘‘absent’’ each place it appears and inserting

20 ‘‘noncustodial’’:

21 (A) Section 451 (42 U.S.C. 651).

22 (B) Subsections (a)(1), (a)(8), (a)(10)(E),

23 (a)(10)(F), (f), and (h) of section 452 (42

24 U.S.C. 652).

25 (C) Section 453(f) (42 U.S.C. 653(f)).
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1 (D) Paragraphs (8), (13), and (21)(A) of

2 section 454 (42 U.S.C. 654).

3 (E) Section 455(e)(1) (42 U.S.C.

4 655(e)(1)).

5 (F) Section 458(a) (42 U.S.C. 658(a)).

6 (G) Subsections (a), (b), and (c) of section

7 463 (42 U.S.C. 663).

8 (H) Subsections (a)(3)(A), (a)(3)(C),

9 (a)(6), and (a)(8)(B)(ii), the last sentence of

10 subsection (a), and subsections (b)(1),

11 (b)(3)(B), (b)(3)(B)(i), (b)(6)(A)(i), (b)(9), and

12 (e) of section 466 (42 U.S.C. 666).

13 (2) The following provisions are amended by

14 striking ‘‘an absent’’ each place it appears and in15 serting ‘‘a noncustodial’’:

16 (A) Paragraphs (2) and (3) of section

17 453(c) (42 U.S.C. 653(c)).

18 (B) Subparagraphs (B) and (C) of section

19 454(9) (42 U.S.C. 654(9)).

20 (C) Section 456(a)(3) (42 U.S.C.

21 656(a)(3)).

22 (D) Subsections (a)(3)(A), (a)(6),

23 (a)(8)(B)(i), (b)(3)(A), and (b)(3)(B) of section

24 466 (42 U.S.C. 666).
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1 (E) Paragraphs (2) and (4) of section

2 469(b) (42 U.S.C. 669(b)).

3 Subtitle D—Restricting Welfare

4 and Public Benefits for Aliens

5 SEC. 4400. STATEMENTS OF NATIONAL POLICY CONCERN6 ING WELFARE AND IMMIGRATION.

7 The Congress makes the following statements con8 cerning national policy with respect to welfare and immi9 gration:

10 (1) Self-sufficiency has been a basic principle of

11 United States immigration law since this country’s

12 earliest immigration statutes.

13 (2) It continues to be the immigration policy of

14 the United States that—

15 (A) aliens within the Nation’s borders not

16 depend on public resources to meet their needs,

17 but rather rely on their own capabilities and the

18 resources of their families, their sponsors, and

19 private organizations, and

20 (B) the availability of public benefits not

21 constitute an incentive for immigration to the

22 United States.

23 (3) Despite the principle of self-sufficiency,

24 aliens have been applying for and receiving public
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1 benefits from Federal, State, and local governments

2 at increasing rates.

3 (4) Current eligibility rules for public assistance

4 and unenforceable financial support agreements have

5 proved wholly incapable of assuring that individual

6 aliens not burden the public benefits system.

7 (5) It is a compelling government interest to

8 enact new rules for eligibility and sponsorship agree9 ments in order to assure that aliens be self-reliant

10 in accordance with national immigration policy.

11 (6) It is a compelling government interest to re12 move the incentive for illegal immigration provided

13 by the availability of public benefits.

14 (7) With respect to the State authority to make

15 determinations concerning the eligibility of qualified

16 aliens for public benefits in this subtitle, a State

17 that chooses to follow the Federal classification in

18 determining the eligibility of such aliens for public

19 assistance shall be considered to have chosen the

20 least restrictive means available for achieving the

21 compelling governmental interest of assuring that

22 aliens be self-reliant in accordance with national im23 migration policy.
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1 CHAPTER 1—ELIGIBILITY FOR FEDERAL

2 BENEFITS

3 SEC. 4401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELI4 GIBLE FOR FEDERAL PUBLIC BENEFITS.

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law and except as provided in subsection (b), an

7 alien who is not a qualified alien (as defined in section

8 4431) is not eligible for any Federal public benefit (as de9 fined in subsection (c)).

10 (b) EXCEPTIONS.—

11 (1) Subsection (a) shall not apply with respect

12 to the following Federal public benefits:

13 (A) Emergency medical services under title

14 XV or XIX of the Social Security Act.

15 (B) Short-term, noncash, in-kind emer16 gency disaster relief.

17 (C)(i) Public health assistance for immuni18 zations.

19 (ii) Public health assistance for testing and

20 treatment of a serious communicable disease if

21 the Secretary of Health and Human Services

22 determines that it is necessary to prevent the

23 spread of such disease.

24 (D) Programs, services, or assistance (such

25 as soup kitchens, crisis counseling and interven-
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1 tion, and short-term shelter) specified by the

2 Attorney General, in the Attorney General’s

3 sole and unreviewable discretion after consulta4 tion with appropriate Federal agencies and de5 partments, which (i) deliver in-kind services at

6 the community level, including through public

7 or private nonprofit agencies; (ii) do not condi8 tion the provision of assistance, the amount of

9 assistance provided, or the cost of assistance

10 provided on the individual recipient’s income or

11 resources; and (iii) are necessary for the protec12 tion of life or safety.

13 (E) Programs for housing or community

14 development assistance or financial assistance

15 administered by the Secretary of Housing and

16 Urban Development, any program under title V

17 of the Housing Act of 1949, or any assistance

18 under section 306C of the Consolidated Farm

19 and Rural Development Act, to the extent that

20 the alien is receiving such a benefit on the date

21 of the enactment of this Act.

22 (2) Subsection (a) shall not apply to any benefit

23 payable under title II of the Social Security Act to

24 an alien who is lawfully present in the United States

25 as determined by the Attorney General, to any bene-
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1 fit if nonpayment of such benefit would contravene

2 an international agreement described in section 233

3 of the Social Security Act, to any benefit if nonpay4 ment would be contrary to section 202(t) of the So5 cial Security Act, or to any benefit payable under

6 title II of the Social Security Act to which entitle7 ment is based on an application filed in or before the

8 month in which this Act becomes law.

9 (c) FEDERAL PUBLIC BENEFIT DEFINED.—

10 (1) Except as provided in paragraph (2), for

11 purposes of this subtitle the term ‘‘Federal public

12 benefit’’ means—

13 (A) any grant, contract, loan, professional

14 license, or commercial license provided by an

15 agency of the United States or by appropriated

16 funds of the United States; and

17 (B) any retirement, welfare, health, dis18 ability, public or assisted housing, postsecond19 ary education, food assistance, unemployment

20 benefit, or any other similar benefit for which

21 payments or assistance are provided to an indi22 vidual, household, or family eligibility unit by

23 an agency of the United States or by appro24 priated funds of the United States.

25 (2) Such term shall not apply—
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1 (A) to any contract, professional license, or

2 commercial license for a nonimmigrant whose

3 visa for entry is related to such employment in

4 the United States; or

5 (B) with respect to benefits for an alien

6 who as a work authorized nonimmigrant or as

7 an alien lawfully admitted for permanent resi8 dence under the Immigration and Nationality

9 Act qualified for such benefits and for whom

10 the United States under reciprocal treaty agree11 ments is required to pay benefits, as determined

12 by the Attorney General, after consultation with

13 the Secretary of State.

14 SEC. 4402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS

15 FOR CERTAIN FEDERAL PROGRAMS.

16 (a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL

17 PROGRAMS.—

18 (1) IN GENERAL.—Notwithstanding any other

19 provision of law and except as provided in paragraph

20 (2), an alien who is a qualified alien (as defined in

21 section 4431) is not eligible for any specified Fed22 eral program (as defined in paragraph (3)).

23 (2) EXCEPTIONS.—
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1 (A) TIME-LIMITED EXCEPTION FOR REFU2 GEES AND ASYLEES.—Paragraph (1) shall not

3 apply to an alien until 5 years after the date—

4 (i) an alien is admitted to the United

5 States as a refugee under section 207 of

6 the Immigration and Nationality Act;

7 (ii) an alien is granted asylum under

8 section 208 of such Act; or

9 (iii) an alien’s deportation is withheld

10 under section 243(h) of such Act.

11 (B) CERTAIN PERMANENT RESIDENT

12 ALIENS.—Paragraph (1) shall not apply to an

13 alien who—

14 (i) is lawfully admitted to the United

15 States for permanent residence under the

16 Immigration and Nationality Act; and

17 (ii)(I) has worked 40 qualifying quar18 ters of coverage as defined under title II of

19 the Social Security Act or can be credited

20 with such qualifying quarters as provided

21 under section 435, and (II) did not receive

22 any Federal means-tested public benefit

23 (as defined in section 4403(c)) during any

24 such quarter.
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1 (C) VETERAN AND ACTIVE DUTY EXCEP2 TION.—Paragraph (1) shall not apply to an

3 alien who is lawfully residing in any State and

4 is—

5 (i) a veteran (as defined in section

6 101 of title 38, United States Code) with

7 a discharge characterized as an honorable

8 discharge and not on account of alienage,

9 (ii) on active duty (other than active

10 duty for training) in the Armed Forces of

11 the United States, or

12 (iii) the spouse or unmarried depend13 ent child of an individual described in

14 clause (i) or (ii).

15 (D) TRANSITION FOR ALIENS CURRENTLY

16 RECEIVING BENEFITS.—

17 (i) SSI.—

18 (I) IN GENERAL.—With respect

19 to the specified Federal program de20 scribed in paragraph (3)(A), during

21 the period beginning on the date of

22 the enactment of this Act and ending

23 on the date which is 1 year after such

24 date of enactment, the Commissioner

25 of Social Security shall redetermine
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1 the eligibility of any individual who is

2 receiving benefits under such program

3 as of the date of the enactment of this

4 Act and whose eligibility for such ben5 efits may terminate by reason of the

6 provisions of this subsection.

7 (II) REDETERMINATION CRI8 TERIA.— With respect to any redeter9 mination under subclause (I), the

10 Commissioner of Social Security shall

11 apply the eligibility criteria for new

12 applicants for benefits under such

13 program.

14 (III) GRANDFATHER PROVI15 SION.—The provisions of this sub16 section and the redetermination under

17 subclause (I), shall only apply with re18 spect to the benefits of an individual

19 described in subclause (I) for months

20 beginning on or after the date of the

21 redetermination with respect to such

22 individual.

23 (IV) NOTICE.—Not later than

24 January 1, 1997, the Commissioner of

25 Social Security shall notify an individ-
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1 ual described in subclause (I) of the

2 provisions of this clause.

3 (ii) FOOD STAMPS.—

4 (I) IN GENERAL.—With respect

5 to the specified Federal program de6 scribed in paragraph (3)(B), during

7 the period beginning on the date of

8 enactment of this Act and ending on

9 the date which is 1 year after the date

10 of enactment, the State agency shall,

11 at the time of the recertification, re12 certify the eligibility of any individual

13 who is receiving benefits under such

14 program as of the date of enactment

15 of this Act and whose eligibility for

16 such benefits may terminate by reason

17 of the provisions of this subsection.

18 (II) RECERTIFICATION CRI19 TERIA.—With respect to any recertifi20 cation under subclause (I), the State

21 agency shall apply the eligibility cri22 teria for applicants for benefits under

23 such program.

24 (III) GRANDFATHER PROVI25 SION.—The provisions of this sub-
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1 section and the recertification under

2 subclause (I) shall only apply with re3 spect to the eligibility of an alien for

4 a program for months beginning on or

5 after the date of recertification, if on

6 the date of enactment of this Act the

7 alien is lawfully residing in any State

8 and is receiving benefits under such

9 program on such date of enactment.

10 (3) SPECIFIED FEDERAL PROGRAM DEFINED.—

11 For purposes of this subtitle, the term ‘‘specified

12 Federal program’’ means any of the following:

13 (A) SSI.—The supplemental security in14 come program under title XVI of the Social Se15 curity Act, including supplementary payments

16 pursuant to an agreement for Federal adminis17 tration under section 1616(a) of the Social Se18 curity Act and payments pursuant to an agree19 ment entered into under section 212(b) of Pub20 lic Law 93–66.

21 (B) FOOD STAMPS.—The food stamp pro22 gram as defined in section 3(h) of the Food

23 Stamp Act of 1977.

24 (b) LIMITED ELIGIBILITY FOR DESIGNATED FED25 ERAL PROGRAMS.—
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1 (1) IN GENERAL.—Notwithstanding any other

2 provision of law and except as provided in section

3 4403 and paragraph (2), a State is authorized to de4 termine the eligibility of an alien who is a qualified

5 alien (as defined in section 4431) for any designated

6 Federal program (as defined in paragraph (3)).

7 (2) EXCEPTIONS.—Qualified aliens under this

8 paragraph shall be eligible for any designated Fed9 eral program.

10 (A) TIME-LIMITED EXCEPTION FOR REFU11 GEES AND ASYLEES.—

12 (i) An alien who is admitted to the

13 United States as a refugee under section

14 207 of the Immigration and Nationality

15 Act until 5 years after the date of an

16 alien’s entry into the United States.

17 (ii) An alien who is granted asylum

18 under section 208 of such Act until 5 years

19 after the date of such grant of asylum.

20 (iii) An alien whose deportation is

21 being withheld under section 243(h) of

22 such Act until 5 years after such withhold23 ing.

24 (B) CERTAIN PERMANENT RESIDENT

25 ALIENS.—An alien who—
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1 (i) is lawfully admitted to the United

2 States for permanent residence under the

3 Immigration and Nationality Act; and

4 (ii)(I) has worked 40 qualifying quar5 ters of coverage as defined under title II of

6 the Social Security Act or can be credited

7 with such qualifying quarters as provided

8 under section 4435, and (II) did not re9 ceive any Federal means-tested public ben10 efit (as defined in section 4403(c)) during

11 any such quarter.

12 (C) VETERAN AND ACTIVE DUTY EXCEP13 TION.—An alien who is lawfully residing in any

14 State and is—

15 (i) a veteran (as defined in section

16 101 of title 38, United States Code) with

17 a discharge characterized as an honorable

18 discharge and not on account of alienage,

19 (ii) on active duty (other than active

20 duty for training) in the Armed Forces of

21 the United States, or

22 (iii) the spouse or unmarried depend23 ent child of an individual described in

24 clause (i) or (ii).
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1 (D) TRANSITION FOR THOSE CURRENTLY

2 RECEIVING BENEFITS.—An alien who on the

3 date of the enactment of this Act is lawfully re4 siding in any State and is receiving benefits

5 under such program on the date of the enact6 ment of this Act shall continue to be eligible to

7 receive such benefits until January 1, 1997.

8 (3) DESIGNATED FEDERAL PROGRAM DE9 FINED.—For purposes of this subtitle, the term

10 ‘‘designated Federal program’’ means any of the fol11 lowing:

12 (A) TEMPORARY ASSISTANCE FOR NEEDY

13 FAMILIES.—The program of block grants to

14 States for temporary assistance for needy fami15 lies under part A of title IV of the Social Secu16 rity Act.

17 (B) SOCIAL SERVICES BLOCK GRANT.—

18 The program of block grants to States for so19 cial services under title XX of the Social Secu20 rity Act.

21 (C) MEDICAID.—The program of medical

22 assistance under title XV and XIX of the Social

23 Security Act.
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1 SEC. 4403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED

2 ALIENS FOR FEDERAL MEANS-TESTED PUB3 LIC BENEFIT.

4 (a) IN GENERAL.—Notwithstanding any other provi5 sion of law and except as provided in subsection (b), an

6 alien who is a qualified alien (as defined in section 4431)

7 and who enters the United States on or after the date

8 of the enactment of this Act is not eligible for any Federal

9 means-tested public benefit (as defined in subsection (c))

10 for a period of five years beginning on the date of the

11 alien’s entry into the United States with a status within

12 the meaning of the term ‘‘qualified alien’’.

13 (b) EXCEPTIONS.—The limitation under subsection

14 (a) shall not apply to the following aliens:

15 (1) EXCEPTION FOR REFUGEES AND

16 ASYLEES.—

17 (A) An alien who is admitted to the United

18 States as a refugee under section 207 of the

19 Immigration and Nationality Act.

20 (B) An alien who is granted asylum under

21 section 208 of such Act.

22 (C) An alien whose deportation is being

23 withheld under section 243(h) of such Act.

24 (2) VETERAN AND ACTIVE DUTY EXCEPTION.—

25 An alien who is lawfully residing in any State and

26 is—
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1 (A) a veteran (as defined in section 101 of

2 title 38, United States Code) with a discharge

3 characterized as an honorable discharge and not

4 on account of alienage,

5 (B) on active duty (other than active duty

6 for training) in the Armed Forces of the United

7 States, or

8 (C) the spouse or unmarried dependent

9 child of an individual described in subparagraph

10 (A) or (B).

11 (c) FEDERAL MEANS-TESTED PUBLIC BENEFIT DE12 FINED.—

13 (1) Except as provided in paragraph (2), for

14 purposes of this subtitle, the term ‘‘Federal means15 tested public benefit’’ means a public benefit (includ16 ing cash, medical, housing, and food assistance and

17 social services) of the Federal Government in which

18 the eligibility of an individual, household, or family

19 eligibility unit for benefits, or the amount of such

20 benefits, or both are determined on the basis of in21 come, resources, or financial need of the individual,

22 household, or unit.

23 (2) Such term does not include the following:

24 (A) Emergency medical services under title

25 XV or XIX of the Social Security Act.
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1 (B) Short-term, noncash, in-kind emer2 gency disaster relief.

3 (C) Assistance or benefits under the Na4 tional School Lunch Act.

5 (D) Assistance or benefits under the Child

6 Nutrition Act of 1966.

7 (E)(i) Public health assistance for immuni8 zations.

9 (ii) Public health assistance for testing and

10 treatment of a serious communicable disease if

11 the Secretary of Health and Human Services

12 determines that it is necessary to prevent the

13 spread of such disease.

14 (F) Payments for foster care and adoption

15 assistance under parts B and E of title IV of

16 the Social Security Act for a child who would,

17 in the absence of subsection (a), be eligible to

18 have such payments made on the child’s behalf

19 under such part, but only if the foster or adop20 tive parent or parents of such child are not de21 scribed under subsection (a).

22 (G) Programs, services, or assistance (such

23 as soup kitchens, crisis counseling and interven24 tion, and short-term shelter) specified by the

25 Attorney General, in the Attorney General’s
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1 sole and unreviewable discretion after consulta2 tion with appropriate Federal agencies and de3 partments, which (i) deliver in-kind services at

4 the community level, including through public

5 or private nonprofit agencies; (ii) do not condi6 tion the provision of assistance, the amount of

7 assistance provided, or the cost of assistance

8 provided on the individual recipient’s income or

9 resources; and (iii) are necessary for the protec10 tion of life or safety.

11 (H) Programs of student assistance under

12 titles IV, V, IX, and X of the Higher Education

13 Act of 1965.

14 (I) Means-tested programs under the Ele15 mentary and Secondary Education Act of 1965.

16 SEC. 4404. NOTIFICATION AND INFORMATION REPORTING.

17 (a) NOTIFICATION.—Each Federal agency that ad18 ministers a program to which section 4401, 4402, or 4403

19 applies shall, directly or through the States, post informa20 tion and provide general notification to the public and to

21 program recipients of the changes regarding eligibility for

22 any such program pursuant to this chapter.

23 (b) INFORMATION REPORTING UNDER TITLE IV OF

24 THE SOCIAL SECURITY ACT.—Part A of title IV of the

25 Social Security Act, as amended by section 4103(a) of this
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1 Act, is amended by inserting the following new section

2 after section 411:

3 ‘‘SEC. 411A. STATE REQUIRED TO PROVIDE CERTAIN INFOR4 MATION.

5 ‘‘Each State to which a grant is made under section

6 403 shall, at least 4 times annually and upon request of

7 the Immigration and Naturalization Service, furnish the

8 Immigration and Naturalization Service with the name

9 and address of, and other identifying information on, any

10 individual who the State knows is unlawfully in the United

11 States.’’.

12 (c) SSI.—Section 1631(e) of such Act (42 U.S.C.

13 1383(e)) is amended—

14 (1) by redesignating the paragraphs (6) and (7)

15 inserted by sections 206(d)(2) and 206(f)(1) of the

16 Social Security Independence and Programs Im17 provement Act of 1994 (Public Law 103–296; 108

18 Stat. 1514, 1515) as paragraphs (7) and (8), re19 spectively; and

20 (2) by adding at the end the following new

21 paragraph:

22 ‘‘(9) Notwithstanding any other provision of law, the

23 Commissioner shall, at least 4 times annually and upon

24 request of the Immigration and Naturalization Service

25 (hereafter in this paragraph referred to as the ‘Service’),
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1 furnish the Service with the name and address of, and

2 other identifying information on, any individual who the

3 Commissioner knows is unlawfully in the United States,

4 and shall ensure that each agreement entered into under

5 section 1616(a) with a State provides that the State shall

6 furnish such information at such times with respect to any

7 individual who the State knows is unlawfully in the United

8 States.’’.

9 (d) INFORMATION REPORTING FOR HOUSING PRO10 GRAMS.—Title I of the United States Housing Act of 1937

11 (42 U.S.C. 1437 et seq.) is amended by adding at the end

12 the following new section:

13 ‘‘SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCE14 MENT AND OTHER AGENCIES.

15 ‘‘Notwithstanding any other provision of law, the Sec16 retary shall, at least 4 times annually and upon request

17 of the Immigration and Naturalization Service (hereafter

18 in this section referred to as the ‘Service’), furnish the

19 Service with the name and address of, and other identify20 ing information on, any individual who the Secretary

21 knows is unlawfully in the United States, and shall ensure

22 that each contract for assistance entered into under sec23 tion 6 or 8 of this Act with a public housing agency pro24 vides that the public housing agency shall furnish such

25 information at such times with respect to any individual
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1 who the public housing agency knows is unlawfully in the

2 United States.’’.

3 CHAPTER 2—ELIGIBILITY FOR STATE AND

4 LOCAL PUBLIC BENEFITS PROGRAMS

5 SEC. 4411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR

6 NONIMMIGRANTS INELIGIBLE FOR STATE

7 AND LOCAL PUBLIC BENEFITS.

8 (a) IN GENERAL.—Notwithstanding any other provi9 sion of law and except as provided in subsections (b) and

10 (d), an alien who is not—

11 (1) a qualified alien (as defined in section

12 4431),

13 (2) a nonimmigrant under the Immigration and

14 Nationality Act, or

15 (3) an alien who is paroled into the United

16 States under section 212(d)(5) of such Act for less

17 than one year,

18 is not eligible for any State or local public benefit (as de19 fined in subsection (c)).

20 (b) EXCEPTIONS.—Subsection (a) shall not apply

21 with respect to the following State or local public benefits:

22 (1) Emergency medical services under title XV

23 or XIX of the Social Security Act.

24 (2) Short-term, non-cash, in-kind emergency

25 disaster relief.
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1 (3)(A) Public health assistance for immuniza2 tions.

3 (B) Public health assistance for testing and

4 treatment of a serious communicable disease if the

5 Secretary of Health and Human Services determines

6 that it is necessary to prevent the spread of such

7 disease.

8 (4) Programs, services, or assistance (such as

9 soup kitchens, crisis counseling and intervention,

10 and short-term shelter) specified by the Attorney

11 General, in the Attorney General’s sole and

12 unreviewable discretion after consultation with ap13 propriate Federal agencies and departments, which

14 (A) deliver in-kind services at the community level,

15 including through public or private nonprofit agen16 cies; (B) do not condition the provision of assistance,

17 the amount of assistance provided, or the cost of as18 sistance provided on the individual recipient’s in19 come or resources; and (C) are necessary for the

20 protection of life or safety.

21 (c) STATE OR LOCAL PUBLIC BENEFIT DEFINED.—

22 (1) Except as provided in paragraph (2), for

23 purposes of this chapter the term ‘‘State or local

24 public benefit’’ means—
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1 (A) any grant, contract, loan, professional

2 license, or commercial license provided by an

3 agency of a State or local government or by ap4 propriated funds of a State or local govern5 ment; and

6 (B) any retirement, welfare, health, dis7 ability, public or assisted housing, postsecond8 ary education, food assistance, unemployment

9 benefit, or any other similar benefit for which

10 payments or assistance are provided to an indi11 vidual, household, or family eligibility unit by

12 an agency of a State or local government or by

13 appropriated funds of a State or local govern14 ment.

15 (2) Such term shall not apply—

16 (A) to any contract, professional license, or

17 commercial license for a nonimmigrant whose

18 visa for entry is related to such employment in

19 the United States; or

20 (B) with respect to benefits for an alien

21 who as a work authorized nonimmigrant or as

22 an alien lawfully admitted for permanent resi23 dence under the Immigration and Nationality

24 Act qualified for such benefits and for whom

25 the United States under reciprocal treaty agree-
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1 ments is required to pay benefits, as determined

2 by the Secretary of State, after consultation

3 with the Attorney General.

4 (d) STATE AUTHORITY TO PROVIDE FOR ELIGI5 BILITY OF ILLEGAL ALIENS FOR STATE AND LOCAL PUB6 LIC BENEFITS.—A State may provide that an alien who

7 is not lawfully present in the United States is eligible for

8 any State or local public benefit for which such alien would

9 otherwise be ineligible under subsection (a) only through

10 the enactment of a State law after the date of the enact11 ment of this Act which affirmatively provides for such eli12 gibility.

13 SEC. 4412. STATE AUTHORITY TO LIMIT ELIGIBILITY OF

14 QUALIFIED ALIENS FOR STATE PUBLIC BENE15 FITS.

16 (a) IN GENERAL.—Notwithstanding any other provi17 sion of law and except as provided in subsection (b), a

18 State is authorized to determine the eligibility for any

19 State public benefits (as defined in subsection (c) of an

20 alien who is a qualified alien (as defined in section 4431),

21 a nonimmigrant under the Immigration and Nationality

22 Act, or an alien who is paroled into the United States

23 under section 212(d)(5) of such Act for less than one year.

24 (b) EXCEPTIONS.—Qualified aliens under this sub25 section shall be eligible for any State public benefits.
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1 (1) TIME-LIMITED EXCEPTION FOR REFUGEES

2 AND ASYLEES.—

3 (A) An alien who is admitted to the United

4 States as a refugee under section 207 of the

5 Immigration and Nationality Act until 5 years

6 after the date of an alien’s entry into the Unit7 ed States.

8 (B) An alien who is granted asylum under

9 section 208 of such Act until 5 years after the

10 date of such grant of asylum.

11 (C) An alien whose deportation is being

12 withheld under section 243(h) of such Act until

13 5 years after such withholding.

14 (2) CERTAIN PERMANENT RESIDENT ALIENS.—

15 An alien who—

16 (A) is lawfully admitted to the United

17 States for permanent residence under the Im18 migration and Nationality Act; and

19 (B)(i) has worked 40 qualifying quarters

20 of coverage as defined under title II of the So21 cial Security Act or can be credited with such

22 qualifying quarters as provided under section

23 4435, and (ii) did not receive any Federal

24 means-tested public benefit (as defined in sec25 tion 4403(c)) during any such quarter.
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1 (3) VETERAN AND ACTIVE DUTY EXCEPTION.—

2 An alien who is lawfully residing in any State and

3 is—

4 (A) a veteran (as defined in section 101 of

5 title 38, United States Code) with a discharge

6 characterized as an honorable discharge and not

7 on account of alienage,

8 (B) on active duty (other than active duty

9 for training) in the Armed Forces of the United

10 States, or

11 (C) the spouse or unmarried dependent

12 child of an individual described in subparagraph

13 (A) or (B).

14 (4) TRANSITION FOR THOSE CURRENTLY RE15 CEIVING BENEFITS.—An alien who on the date of

16 the enactment of this Act is lawfully residing in any

17 State and is receiving benefits on the date of the en18 actment of this Act shall continue to be eligible to

19 receive such benefits until January 1, 1997.

20 (c) STATE PUBLIC BENEFITS DEFINED.—The term

21 ‘‘State public benefits’’ means any means-tested public

22 benefit of a State or political subdivision of a State under

23 which the State or political subdivision specifies the stand24 ards for eligibility, and does not include any Federal public

25 benefit.
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1 CHAPTER 3—ATTRIBUTION OF INCOME

2 AND AFFIDAVITS OF SUPPORT

3 SEC. 4421. FEDERAL ATTRIBUTION OF SPONSOR’S INCOME

4 AND RESOURCES TO ALIEN.

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law, in determining the eligibility and the amount

7 of benefits of an alien for any Federal means-tested public

8 benefits program (as defined in section 4403(c)), the in9 come and resources of the alien shall be deemed to include

10 the following:

11 (1) The income and resources of any person

12 who executed an affidavit of support pursuant to

13 section 213A of the Immigration and Nationality

14 Act (as added by section 4423) on behalf of such

15 alien.

16 (2) The income and resources of the spouse (if

17 any) of the person.

18 (b) APPLICATION.—Subsection (a) shall apply with

19 respect to an alien until such time as the alien—

20 (1) achieves United States citizenship through

21 naturalization pursuant to chapter 2 of title III of

22 the Immigration and Nationality Act; or

23 (2)(A) has worked 40 qualifying quarters of

24 coverage as defined under title II of the Social Secu25 rity Act or can be credited with such qualifying
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1 quarters as provided under section 4435, and (B)

2 did not receive any Federal means-tested public ben3 efit (as defined in section 4403(c)) during any such

4 quarter.

5 (c) REVIEW OF INCOME AND RESOURCES OF ALIEN

6 UPON REAPPLICATION.—Whenever an alien is required to

7 reapply for benefits under any Federal means-tested pub8 lic benefits program, the applicable agency shall review the

9 income and resources attributed to the alien under sub10 section (a).

11 (d) APPLICATION.—

12 (1) If on the date of the enactment of this Act,

13 a Federal means-tested public benefits program at14 tributes a sponsor’s income and resources to an alien

15 in determining the alien’s eligibility and the amount

16 of benefits for an alien, this section shall apply to

17 any such determination beginning on the day after

18 the date of the enactment of this Act.

19 (2) If on the date of the enactment of this Act,

20 a Federal means-tested public benefits program does

21 not attribute a sponsor’s income and resources to an

22 alien in determining the alien’s eligibility and the

23 amount of benefits for an alien, this section shall

24 apply to any such determination beginning 180 days

25 after the date of the enactment of this Act.
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1 SEC. 4422. AUTHORITY FOR STATES TO PROVIDE FOR AT2 TRIBUTION OF SPONSORS INCOME AND RE3 SOURCES TO THE ALIEN WITH RESPECT TO

4 STATE PROGRAMS.

5 (a) OPTIONAL APPLICATION TO STATE PROGRAMS.—

6 Except as provided in subsection (b), in determining the

7 eligibility and the amount of benefits of an alien for any

8 State public benefits (as defined in section 4412(c)), the

9 State or political subdivision that offers the benefits is au10 thorized to provide that the income and resources of the

11 alien shall be deemed to include—

12 (1) the income and resources of any individual

13 who executed an affidavit of support pursuant to

14 section 213A of the Immigration and Nationality

15 Act (as added by section 4423) on behalf of such

16 alien, and

17 (2) the income and resources of the spouse (if

18 any) of the individual.

19 (b) EXCEPTIONS.—Subsection (a) shall not apply

20 with respect to the following State public benefits:

21 (1) Emergency medical services.

22 (2) Short-term, non-cash, in-kind emergency

23 disaster relief.

24 (3) Programs comparable to assistance or bene25 fits under the National School Lunch Act.
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1 (4) Programs comparable to assistance or bene2 fits under the Child Nutrition Act of 1966.

3 (5)(A) Public health assistance for immuniza4 tions.

5 (B) Public health assistance for testing and

6 treatment of a serious communicable disease if the

7 appropriate chief State health official determines

8 that it is necessary to prevent the spread of such

9 disease.

10 (6) Payments for foster care and adoption as11 sistance.

12 (7) Programs, services, or assistance (such as

13 soup kitchens, crisis counseling and intervention,

14 and short-term shelter) specified by the Attorney

15 General of a State, after consultation with appro16 priate agencies and departments, which (A) deliver

17 in-kind services at the community level, including

18 through public or private nonprofit agencies; (B) do

19 not condition the provision of assistance, the amount

20 of assistance provided, or the cost of assistance pro21 vided on the individual recipient’s income or re22 sources; and (C) are necessary for the protection of

23 life or safety.
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1 SEC. 4423. REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF

2 SUPPORT.

3 (a) IN GENERAL.—Title II of the Immigration and

4 Nationality Act is amended by inserting after section 213

5 the following new section:

6 ‘‘REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF SUPPORT

7 ‘‘SEC. 213A. (a) ENFORCEABILITY.—(1) No affidavit

8 of support may be accepted by the Attorney General or

9 by any consular officer to establish that an alien is not

10 excludable as a public charge under section 212(a)(4) un11 less such affidavit is executed as a contract—

12 ‘‘(A) which is legally enforceable against the

13 sponsor by the sponsored alien, the Federal Govern14 ment, and by any State (or any political subdivision

15 of such State) which provides any means-tested pub16 lic benefits program, but not later than 10 years

17 after the alien last receives any such benefit;

18 ‘‘(B) in which the sponsor agrees to financially

19 support the alien, so that the alien will not become

20 a public charge; and

21 ‘‘(C) in which the sponsor agrees to submit to

22 the jurisdiction of any Federal or State court for the

23 purpose of actions brought under subsection (e)(2).

24 ‘‘(2) A contract under paragraph (1) shall be enforce25 able with respect to benefits provided to the alien until
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1 such time as the alien achieves United States citizenship

2 through naturalization pursuant to chapter 2 of title III.

3 ‘‘(b) FORMS.—Not later than 90 days after the date

4 of enactment of this section, the Attorney General, in con5 sultation with the Secretary of State and the Secretary

6 of Health and Human Services, shall formulate an affida7 vit of support consistent with the provisions of this sec8 tion.

9 ‘‘(c) REMEDIES.—Remedies available to enforce an

10 affidavit of support under this section include any or all

11 of the remedies described in section 3201, 3203, 3204,

12 or 3205 of title 28, United States Code, as well as an

13 order for specific performance and payment of legal fees

14 and other costs of collection, and include corresponding

15 remedies available under State law. A Federal agency may

16 seek to collect amounts owed under this section in accord17 ance with the provisions of subchapter II of chapter 37

18 of title 31, United States Code.

19 ‘‘(d) NOTIFICATION OF CHANGE OF ADDRESS.—

20 ‘‘(1) IN GENERAL.—The sponsor shall notify

21 the Attorney General and the State in which the

22 sponsored alien is currently resident within 30 days

23 of any change of address of the sponsor during the

24 period specified in subsection (a)(2).
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1 ‘‘(2) PENALTY.—Any person subject to the re2 quirement of paragraph (1) who fails to satisfy such

3 requirement shall be subject to a civil penalty of—

4 ‘‘(A) not less than $250 or more than

5 $2,000, or

6 ‘‘(B) if such failure occurs with knowledge

7 that the alien has received any means-tested

8 public benefit, not less than $2,000 or more

9 than $5,000.

10 ‘‘(e) REIMBURSEMENT OF GOVERNMENT EX11 PENSES.—(1)(A) Upon notification that a sponsored alien

12 has received any benefit under any means-tested public

13 benefits program, the appropriate Federal, State, or local

14 official shall request reimbursement by the sponsor in the

15 amount of such assistance.

16 ‘‘(B) The Attorney General, in consultation with the

17 Secretary of Health and Human Services, shall prescribe

18 such regulations as may be necessary to carry out sub19 paragraph (A).

20 ‘‘(2) If within 45 days after requesting reimburse21 ment, the appropriate Federal, State, or local agency has

22 not received a response from the sponsor indicating a will23 ingness to commence payments, an action may be brought

24 against the sponsor pursuant to the affidavit of support.
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1 ‘‘(3) If the sponsor fails to abide by the repayment

2 terms established by such agency, the agency may, within

3 60 days of such failure, bring an action against the spon4 sor pursuant to the affidavit of support.

5 ‘‘(4) No cause of action may be brought under this

6 subsection later than 10 years after the alien last received

7 any benefit under any means-tested public benefits pro8 gram.

9 ‘‘(5) If, pursuant to the terms of this subsection, a

10 Federal, State, or local agency requests reimbursement

11 from the sponsor in the amount of assistance provided,

12 or brings an action against the sponsor pursuant to the

13 affidavit of support, the appropriate agency may appoint

14 or hire an individual or other person to act on behalf of

15 such agency acting under the authority of law for purposes

16 of collecting any moneys owed. Nothing in this subsection

17 shall preclude any appropriate Federal, State, or local

18 agency from directly requesting reimbursement from a

19 sponsor for the amount of assistance provided, or from

20 bringing an action against a sponsor pursuant to an affi21 davit of support.

22 ‘‘(f) DEFINITIONS.—For the purposes of this sec23 tion—

24 ‘‘(1) SPONSOR.—The term ‘sponsor’ means an

25 individual who—
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1 ‘‘(A) is a citizen or national of the United

2 States or an alien who is lawfully admitted to

3 the United States for permanent residence;

4 ‘‘(B) is 18 years of age or over;

5 ‘‘(C) is domiciled in any of the 50 States

6 or the District of Columbia; and

7 ‘‘(D) is the person petitioning for the ad8 mission of the alien under section 204.

9 ‘‘(2) MEANS-TESTED PUBLIC BENEFITS PRO10 GRAM.—The term ‘means-tested public benefits pro11 gram’ means a program of public benefits (including

12 cash, medical, housing, and food assistance and so13 cial services) of the Federal Government or of a

14 State or political subdivision of a State in which the

15 eligibility of an individual, household, or family eligi16 bility unit for benefits under the program, or the

17 amount of such benefits, or both are determined on

18 the basis of income, resources, or financial need of

19 the individual, household, or unit.’’.

20 (b) CLERICAL AMENDMENT.—The table of contents

21 of such Act is amended by inserting after the item relating

22 to section 213 the following:

‘‘Sec. 213A. Requirements for sponsor’s affidavit of support.’’.

23 (c) EFFECTIVE DATE.—Subsection (a) of section

24 213A of the Immigration and Nationality Act, as inserted

25 by subsection (a) of this section, shall apply to affidavits
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1 of support executed on or after a date specified by the

2 Attorney General, which date shall be not earlier than 60

3 days (and not later than 90 days) after the date the Attor4 ney General formulates the form for such affidavits under

5 subsection (b) of such section.

6 (d) BENEFITS NOT SUBJECT TO REIMBURSE7 MENT.—Requirements for reimbursement by a sponsor for

8 benefits provided to a sponsored alien pursuant to an affi9 davit of support under section 213A of the Immigration

10 and Nationality Act shall not apply with respect to the

11 following:

12 (1) Emergency medical services under title XV

13 or XIX of the Social Security Act.

14 (2) Short-term, noncash, in-kind emergency dis15 aster relief.

16 (3) Assistance or benefits under the National

17 School Lunch Act.

18 (4) Assistance or benefits under the Child Nu19 trition Act of 1966.

20 (5)(A) Public health assistance for immuniza21 tions.

22 (B) Public health assistance for testing and

23 treatment of a serious communicable disease if the

24 Secretary of Health and Human Services determines
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1 that it is necessary to prevent the spread of such

2 disease.

3 (6) Payments for foster care and adoption as4 sistance under part B of title IV of the Social Secu5 rity Act for a child, but only if the foster or adoptive

6 parent or parents of such child are not otherwise in7 eligible pursuant to section 4403 of this Act.

8 (7) Programs, services, or assistance (such as

9 soup kitchens, crisis counseling and intervention,

10 and short-term shelter) specified by the Attorney

11 General, in the Attorney General’s sole and

12 unreviewable discretion after consultation with ap13 propriate Federal agencies and departments, which

14 (A) deliver in-kind services at the community level,

15 including through public or private nonprofit agen16 cies; (B) do not condition the provision of assistance,

17 the amount of assistance provided, or the cost of as18 sistance provided on the individual recipient’s in19 come or resources; and (C) are necessary for the

20 protection of life or safety.

21 (8) Programs of student assistance under titles

22 IV, V, IX, and X of the Higher Education Act of

23 1965.
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1 SEC. 4424. COSIGNATURE OF ALIEN STUDENT LOANS.

2 Section 484(b) of the Higher Education Act of 1965

3 (20 U.S.C. 1091(b)) is amended by adding at the end the

4 following new paragraph:

5 ‘‘(6) Notwithstanding sections 427(a)(2)(A),

6 428B(a), 428C(b)(4)(A), and 464(c)(1)(E), or any other

7 provision of this title, a student who is an alien lawfully

8 admitted for permanent residence under the Immigration

9 and Nationality Act shall not be eligible for a loan under

10 this title unless the loan is endorsed and cosigned by the

11 alien’s sponsor under section 213A of the Immigration

12 and Nationality Act or by another creditworthy individual

13 who is a United States citizen.’’.

14 CHAPTER 4—GENERAL PROVISIONS

15 SEC. 4431. DEFINITIONS.

16 (a) IN GENERAL.—Except as otherwise provided in

17 this subtitle, the terms used in this subtitle have the same

18 meaning given such terms in section 101(a) of the Immi19 gration and Nationality Act.

20 (b) QUALIFIED ALIEN.—For purposes of this sub21 title, the term ‘‘qualified alien’’ means an alien who, at

22 the time the alien applies for, receives, or attempts to re23 ceive a Federal public benefit, is—

24 (1) an alien who is lawfully admitted for perma25 nent residence under the Immigration and National26 ity Act,
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1 (2) an alien who is granted asylum under sec2 tion 208 of such Act,

3 (3) a refugee who is admitted to the United

4 States under section 207 of such Act,

5 (4) an alien who is paroled into the United

6 States under section 212(d)(5) of such Act for a pe7 riod of at least 1 year,

8 (5) an alien whose deportation is being withheld

9 under section 243(h) of such Act, or

10 (6) an alien who is granted conditional entry

11 pursuant to section 203(a)(7) of such Act as in ef12 fect prior to April 1, 1980.

13 SEC. 4432. VERIFICATION OF ELIGIBILITY FOR FEDERAL

14 PUBLIC BENEFITS.

15 (a) IN GENERAL.—Not later than 18 months after

16 the date of the enactment of this Act, the Attorney Gen17 eral of the United States, after consultation with the Sec18 retary of Health and Human Services, shall promulgate

19 regulations requiring verification that a person applying

20 for a Federal public benefit (as defined in section

21 4401(c)), to which the limitation under section 4401 ap22 plies, is a qualified alien and is eligible to receive such

23 benefit. Such regulations shall, to the extent feasible, re24 quire that information requested and exchanged be similar
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1 in form and manner to information requested and ex2 changed under section 1137 of the Social Security Act.

3 (b) STATE COMPLIANCE.—Not later than 24 months

4 after the date the regulations described in subsection (a)

5 are adopted, a State that administers a program that pro6 vides a Federal public benefit shall have in effect a ver7 ification system that complies with the regulations.

8 (c) AUTHORIZATION OF APPROPRIATIONS.—There

9 are authorized to be appropriated such sums as may be

10 necessary to carry out the purpose of this section.

11 SEC. 4433. STATUTORY CONSTRUCTION.

12 (a) LIMITATION.—

13 (1) Nothing in this subtitle may be construed

14 as an entitlement or a determination of an individ15 ual’s eligibility or fulfillment of the requisite require16 ments for any Federal, State, or local governmental

17 program, assistance, or benefits. For purposes of

18 this subtitle, eligibility relates only to the general

19 issue of eligibility or ineligibility on the basis of

20 alienage.

21 (2) Nothing in this subtitle may be construed

22 as addressing alien eligibility for a basic public edu23 cation as determined by the Supreme Court of the

24 United States under Plyler v. Doe (457 U.S.

25 202)(1982).
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1 (b) NOT APPLICABLE TO FOREIGN ASSISTANCE.—

2 This subtitle does not apply to any Federal, State, or local

3 governmental program, assistance, or benefits provided to

4 an alien under any program of foreign assistance as deter5 mined by the Secretary of State in consultation with the

6 Attorney General.

7 (c) SEVERABILITY.—If any provision of this subtitle

8 or the application of such provision to any person or cir9 cumstance is held to be unconstitutional, the remainder

10 of this subtitle and the application of the provisions of

11 such to any person or circumstance shall not be affected

12 thereby.

13 SEC. 4434. COMMUNICATION BETWEEN STATE AND LOCAL

14 GOVERNMENT AGENCIES AND THE IMMIGRA15 TION AND NATURALIZATION SERVICE.

16 Notwithstanding any other provision of Federal,

17 State, or local law, no State or local government entity

18 may be prohibited, or in any way restricted, from sending

19 to or receiving from the Immigration and Naturalization

20 Service information regarding the immigration status,

21 lawful or unlawful, of an alien in the United States.

22 SEC. 4435. QUALIFYING QUARTERS.

23 For purposes of this subtitle, in determining the

24 number of qualifying quarters of coverage under title II

25 of the Social Security Act an alien shall be credited with—
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1 (1) all of the qualifying quarters of coverage as

2 defined under title II of the Social Security Act

3 worked by a parent of such alien while the alien was

4 under age 18 if the parent did not receive any Fed5 eral means-tested public benefit (as defined in sec6 tion 4403(c)) during any such quarter, and

7 (2) all of the qualifying quarters worked by a

8 spouse of such alien during their marriage if the

9 spouse did not receive any Federal means-tested

10 public benefit (as defined in section 4403(c)) during

11 any such quarter and the alien remains married to

12 such spouse or such spouse is deceased.

13 CHAPTER 5—CONFORMING AMENDMENTS

14 RELATING TO ASSISTED HOUSING

15 SEC. 4441. CONFORMING AMENDMENTS RELATING TO AS16 SISTED HOUSING.

17 (a) LIMITATIONS ON ASSISTANCE.—Section 214 of

18 the Housing and Community Development Act of 1980

19 (42 U.S.C. 1436a) is amended—

20 (1) by striking ‘‘Secretary of Housing and

21 Urban Development’’ each place it appears and in22 serting ‘‘applicable Secretary’’;

23 (2) in subsection (b), by inserting after ‘‘Na24 tional Housing Act,’’ the following: ‘‘the direct loan

25 program under section 502 of the Housing Act of
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1 1949 or section 502(c)(5)(D), 504, 521(a)(2)(A), or

2 542 of such Act, subtitle A of title III of the Cran3 ston-Gonzalez National Affordable Housing Act,’’;

4 (3) in paragraphs (2) through (6) of subsection

5 (d), by striking ‘‘Secretary’’ each place it appears

6 and inserting ‘‘applicable Secretary’’;

7 (4) in subsection (d), in the matter following

8 paragraph (6), by striking ‘‘the term ‘Secretary’’’

9 and inserting ‘‘the term ‘applicable Secretary’’’; and

10 (5) by adding at the end the following new sub11 section:

12 ‘‘(h) For purposes of this section, the term ‘applicable

13 Secretary’ means—

14 ‘‘(1) the Secretary of Housing and Urban De15 velopment, with respect to financial assistance ad16 ministered by such Secretary and financial assist17 ance under subtitle A of title III of the Cranston18 Gonzalez National Affordable Housing Act; and

19 ‘‘(2) the Secretary of Agriculture, with respect

20 to financial assistance administered by such Sec21 retary.’’.

22 (b) CONFORMING AMENDMENTS.—Section 501(h) of

23 the Housing Act of 1949 (42 U.S.C. 1471(h)) is amend24 ed—

25 (1) by striking ‘‘(1)’’;
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1 (2) by striking ‘‘by the Secretary of Housing

2 and Urban Development’’; and

3 (3) by striking paragraph (2).

4 CHAPTER 6—EARNED INCOME CREDIT

5 DENIED TO UNAUTHORIZED EMPLOYEES

6 SEC. 4451. EARNED INCOME CREDIT DENIED TO INDIVID7 UALS NOT AUTHORIZED TO BE EMPLOYED IN

8 THE UNITED STATES.

9 (a) IN GENERAL.—Section 32(c)(1) of the Internal

10 Revenue Code of 1986 (relating to individuals eligible to

11 claim the earned income credit) is amended by adding at

12 the end the following new subparagraph:

13 ‘‘(F) IDENTIFICATION NUMBER REQUIRE14 MENT.—The term ‘eligible individual’ does not

15 include any individual who does not include on

16 the return of tax for the taxable year—

17 ‘‘(i) such individual’s taxpayer identi18 fication number, and

19 ‘‘(ii) if the individual is married (with20 in the meaning of section 7703), the tax21 payer identification number of such indi22 vidual’s spouse.’’.

23 (b) SPECIAL IDENTIFICATION NUMBER.—Section 32

24 of such Code is amended by adding at the end the follow25 ing new subsection:
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1 ‘‘(l) IDENTIFICATION NUMBERS.—Solely for pur2 poses of subsections (c)(1)(F) and (c)(3)(D), a taxpayer

3 identification number means a social security number is4 sued to an individual by the Social Security Administra5 tion (other than a social security number issued pursuant

6 to clause (II) (or that portion of clause (III) that relates

7 to clause (II)) of section 205(c)(2)(B)(i) of the Social Se8 curity Act).’’.

9 (c) EXTENSION OF PROCEDURES APPLICABLE TO

10 MATHEMATICAL OR CLERICAL ERRORS.—Section

11 6213(g)(2) of such Code (relating to the definition of

12 mathematical or clerical errors) is amended by striking

13 ‘‘and’ at the end of subparagraph (D), by striking the pe14 riod at the end of subparagraph (E) and inserting a

15 comma, and by inserting after subparagraph (E) the fol16 lowing new subparagraphs:

17 ‘‘(F) an omission of a correct taxpayer

18 identification number required under section 32

19 (relating to the earned income tax credit) to be

20 included on a return, and

21 ‘‘(G) an entry on a return claiming the

22 credit under section 32 with respect to net

23 earnings from self-employment described in sec24 tion 32(c)(2)(A) to the extent the tax imposed
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1 by section 1401 (relating to self-employment

2 tax) on such net earnings has not been paid.’’

3 (d) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to taxable years beginning after

5 December 31, 1995.

6 Subtitle E—Reform of Public

7 Housing

8 SEC. 4601. FRAUD UNDER MEANS-TESTED WELFARE AND

9 PUBLIC ASSISTANCE PROGRAMS.

10 (a) IN GENERAL.—If an individual’s benefits under

11 a Federal, State, or local law relating to a means-tested

12 welfare or a public assistance program are reduced be13 cause of an act of fraud by the individual under the law

14 or program, the individual may not, for the duration of

15 the reduction, receive an increased benefit under any other

16 means-tested welfare or public assistance program for

17 which Federal funds are appropriated as a result of a de18 crease in the income of the individual (determined under

19 the applicable program) attributable to such reduction.

20 (b) WELFARE OR PUBLIC ASSISTANCE PROGRAMS

21 FOR WHICH FEDERAL FUNDS ARE APPROPRIATED.—For

22 purposes of subsection (a), the term ‘‘means-tested welfare

23 or public assistance program for which Federal funds are

24 appropriated’’ includes the food stamp program under the

25 Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), any
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1 program of public or assisted housing under title I of the

2 United States Housing Act of 1937 (42 U.S.C. 1437 et

3 seq.), and State programs funded under part A of title

4 IV of the Social Security Act (42 U.S.C. 601 et seq.).

5 Subtitle F—Child Protection Block

6 Grant Programs and Foster

7 Care, Adoption Assistance, and

8 Independent Living Programs

9 CHAPTER 1—CHILD PROTECTION BLOCK

10 GRANT PROGRAM AND FOSTER CARE,

11 ADOPTION ASSISTANCE, AND INDE12 PENDENT LIVING PROGRAMS

13 Subchapter A—Block Grants to States for the

14 Protection of Children

15 SEC. 4701. ESTABLISHMENT OF PROGRAM.

16 Title IV of the Social Security Act (42 U.S.C. 601

17 et seq.) is amended by striking part B and inserting the

18 following:

19 ‘‘PART B—BLOCK GRANTS TO STATES FOR THE

20 PROTECTION OF CHILDREN

21 ‘‘SEC. 421. PURPOSE.

22 ‘‘The purpose of this part is to enable eligible States

23 to carry out a child protection program to—

24 ‘‘(1) identify and assist families at risk of abus25 ing or neglecting their children;
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1 ‘‘(2) operate a system for receiving reports of

2 abuse or neglect of children;

3 ‘‘(3) improve the intake, assessment, screening,

4 and investigation of reports of abuse and neglect;

5 ‘‘(4) enhance the general child protective sys6 tem by improving risk and safety assessment tools

7 and protocols;

8 ‘‘(5) improve legal preparation and representa9 tion, including procedures for appealing and re10 sponding to appeals of substantiated reports of

11 abuse and neglect;

12 ‘‘(6) provide support, treatment, and family

13 preservation services to families which are, or are at

14 risk of, abusing or neglecting their children;

15 ‘‘(7) support children who must be removed

16 from or who cannot live with their families;

17 ‘‘(8) make timely decisions about permanent liv18 ing arrangements for children who must be removed

19 from or who cannot live with their families;

20 ‘‘(9) provide for continuing evaluation and im21 provement of child protection laws, regulations, and

22 services;

23 ‘‘(10) develop and facilitate training protocols

24 for individuals mandated to report child abuse or ne25 glect; and
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1 ‘‘(11) develop and enhance the capacity of com2 munity-based programs to integrate shared leader3 ship strategies between parents and professionals to

4 prevent and treat child abuse and neglect at the

5 neighborhood level.

6 ‘‘SEC. 422. ELIGIBLE STATES.

7 ‘‘(a) IN GENERAL.—As used in this part, the term

8 ‘eligible State’ means a State that has submitted to the

9 Secretary, not later than October 1, 1996, and every 3

10 years thereafter, a plan which has been signed by the chief

11 executive officer of the State and that includes the follow12 ing:

13 ‘‘(1) OUTLINE OF CHILD PROTECTION PRO14 GRAM.—A written document that outlines the activi15 ties the State intends to conduct to achieve the pur16 pose of this part, including the procedures to be

17 used for—

18 ‘‘(A) receiving and assessing reports of

19 child abuse or neglect;

20 ‘‘(B) investigating such reports;

21 ‘‘(C) with respect to families in which

22 abuse or neglect has been confirmed, providing

23 services or referral for services for families and

24 children where the State makes a determination
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1 that the child may safely remain with the fam2 ily;

3 ‘‘(D) protecting children by removing them

4 from dangerous settings and ensuring their

5 placement in a safe environment;

6 ‘‘(E) providing training for individuals

7 mandated to report suspected cases of child

8 abuse or neglect;

9 ‘‘(F) protecting children in foster care;

10 ‘‘(G) promoting timely adoptions;

11 ‘‘(H) protecting the rights of families,

12 using adult relatives as the preferred placement

13 for children separated from their parents where

14 such relatives meet the relevant State child pro15 tection standards; and

16 ‘‘(I) providing services to individuals, fami17 lies, or communities, either directly or through

18 referral, that are aimed at preventing the occur19 rence of child abuse and neglect.

20 ‘‘(2) CERTIFICATION OF STATE LAW REQUIRING

21 THE REPORTING OF CHILD ABUSE AND NEGLECT.—

22 A certification that the State has in effect laws that

23 require public officials and other professionals to re24 port, in good faith, actual or suspected instances of

25 child abuse or neglect.
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1 ‘‘(3) CERTIFICATION OF PROCEDURES FOR

2 SCREENING, SAFETY ASSESSMENT, AND PROMPT IN3 VESTIGATION.—A certification that the State has in

4 effect procedures for receiving and responding to re5 ports of child abuse or neglect, including the reports

6 described in paragraph (2), and for the immediate

7 screening, safety assessment, and prompt investiga8 tion of such reports.

9 ‘‘(4) CERTIFICATION OF STATE PROCEDURES

10 FOR REMOVAL AND PLACEMENT OF ABUSED OR NE11 GLECTED CHILDREN.—A certification that the State

12 has in effect procedures for the removal from fami13 lies and placement of abused or neglected children

14 and of any other child in the same household who

15 may also be in danger of abuse or neglect.

16 ‘‘(5) CERTIFICATION OF PROVISIONS FOR IMMU17 NITY FROM PROSECUTION.—A certification that the

18 State has in effect laws requiring immunity from

19 prosecution under State and local laws and regula20 tions for individuals making good faith reports of

21 suspected or known instances of child abuse or ne22 glect.

23 ‘‘(6) CERTIFICATION OF PROVISIONS AND PRO24 CEDURES RELATING TO APPEALS.—A certification

25 that not later than 2 years after the date of the en-
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1 actment of this part, the State shall have laws and

2 procedures in effect affording individuals an oppor3 tunity to appeal an official finding of abuse or ne4 glect.

5 ‘‘(7) CERTIFICATION OF STATE PROCEDURES

6 FOR DEVELOPING AND REVIEWING WRITTEN PLANS

7 FOR PERMANENT PLACEMENT OF REMOVED CHIL8 DREN.—A certification that the State has in effect

9 procedures for ensuring that a written plan is pre10 pared for children who have been removed from their

11 families. Such plan shall specify the goals for achiev12 ing a permanent placement for the child in a timely

13 fashion, for ensuring that the written plan is re14 viewed every 6 months (until such placement is

15 achieved), and for ensuring that information about

16 such children is collected regularly and recorded in

17 case records, and include a description of such pro18 cedures.

19 ‘‘(8) CERTIFICATION OF STATE PROGRAM TO

20 PROVIDE INDEPENDENT LIVING SERVICES.—A cer21 tification that the State has in effect a program to

22 provide independent living services, for assistance in

23 making the transition to self-sufficient adulthood, to

24 individuals in the child protection program of the

25 State who are 16, but who are not 20 (or, at the op-
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1 tion of the State, 22), years of age, and who do not

2 have a family to which to be returned.

3 ‘‘(9) CERTIFICATION OF STATE PROCEDURES

4 TO RESPOND TO REPORTING OF MEDICAL NEGLECT

5 OF DISABLED INFANTS.—

6 ‘‘(A) IN GENERAL.—A certification that

7 the State has in place for the purpose of re8 sponding to the reporting of medical neglect of

9 infants (including instances of withholding of

10 medically indicated treatment from disabled in11 fants with life-threatening conditions), proce12 dures or programs, or both (within the State

13 child protective services system), to provide

14 for—

15 ‘‘(i) coordination and consultation

16 with individuals designated by and within

17 appropriate health-care facilities;

18 ‘‘(ii) prompt notification by individ19 uals designated by and within appropriate

20 health-care facilities of cases of suspected

21 medical neglect (including instances of

22 withholding of medically indicated treat23 ment from disabled infants with life-threat24 ening conditions); and
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1 ‘‘(iii) authority, under State law, for

2 the State child protective service to pursue

3 any legal remedies, including the authority

4 to initiate legal proceedings in a court of

5 competent jurisdiction, as may be nec6 essary to prevent the withholding of medi7 cally indicated treatment from disabled in8 fants with life-threatening conditions.

9 ‘‘(B) WITHHOLDING OF MEDICALLY INDI10 CATED TREATMENT.—As used in subparagraph

11 (A), the term ‘withholding of medically indi12 cated treatment’ means the failure to respond

13 to the infant’s life-threatening conditions by

14 providing treatment (including appropriate nu15 trition, hydration, and medication) which, in the

16 treating physician’s or physicians’ reasonable

17 medical judgment, will be most likely to be ef18 fective in ameliorating or correcting all such

19 conditions, except that such term does not in20 clude the failure to provide treatment (other

21 than appropriate nutrition, hydration, or medi22 cation) to an infant when, in the treating physi23 cian’s or physicians’ reasonable medical judg24 ment—
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1 ‘‘(i) the infant is chronically and irre2 versibly comatose;

3 ‘‘(ii) the provision of such treatment

4 would—

5 ‘‘(I) merely prolong dying;

6 ‘‘(II) not be effective in amelio7 rating or correcting all of the infant’s

8 life-threatening conditions; or

9 ‘‘(III) otherwise be futile in

10 terms of the survival of the infant; or

11 ‘‘(iii) the provision of such treatment

12 would be virtually futile in terms of the

13 survival of the infant and the treatment it14 self under such circumstances would be in15 humane.

16 ‘‘(10) IDENTIFICATION OF CHILD PROTECTION

17 GOALS.—The quantitative goals of the State child

18 protection program.

19 ‘‘(11) CERTIFICATION OF CHILD PROTECTION

20 STANDARDS.—With respect to fiscal years beginning

21 on or after April 1, 1996, a certification that the

22 State—

23 ‘‘(A) has completed an inventory of all

24 children who, before the inventory, had been in
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1 foster care under the responsibility of the State

2 for 6 months or more, which determined—

3 ‘‘(i) the appropriateness of, and neces4 sity for, the foster care placement;

5 ‘‘(ii) whether the child could or should

6 be returned to the parents of the child or

7 should be freed for adoption or other per8 manent placement; and

9 ‘‘(iii) the services necessary to facili10 tate the return of the child or the place11 ment of the child for adoption or legal

12 guardianship;

13 ‘‘(B) is operating, to the satisfaction of the

14 Secretary—

15 ‘‘(i) a statewide information system

16 from which can be readily determined the

17 status, demographic characteristics, loca18 tion, and goals for the placement of every

19 child who is (or, within the immediately

20 preceding 12 months, has been) in foster

21 care;

22 ‘‘(ii) a case review system for each

23 child receiving foster care under the super24 vision of the State;
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1 ‘‘(iii) a service program designed to

2 help children—

3 ‘‘(I) where appropriate, return to

4 families from which they have been

5 removed; or

6 ‘‘(II) be placed for adoption, with

7 a legal guardian, or if adoption or

8 legal guardianship is determined not

9 to be appropriate for a child, in some

10 other planned, permanent living ar11 rangement; and

12 ‘‘(iv) a preplacement preventive serv13 ices program designed to help children at

14 risk for foster care placement remain with

15 their families; and

16 ‘‘(C)(i) has reviewed (or not later than Oc17 tober 1, 1997, will review) State policies and

18 administrative and judicial procedures in effect

19 for children abandoned at or shortly after birth

20 (including policies and procedures providing for

21 legal representation of such children); and

22 ‘‘(ii) is implementing (or not later than Oc23 tober 1, 1997, will implement) such policies and

24 procedures as the State determines, on the

25 basis of the review described in clause (i), to be
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1 necessary to enable permanent decisions to be

2 made expeditiously with respect to the place3 ment of such children.

4 ‘‘(12) CERTIFICATION OF REASONABLE EF5 FORTS BEFORE PLACEMENT OF CHILDREN IN FOS6 TER CARE.—A certification that the State in each

7 case will—

8 ‘‘(A) make reasonable efforts prior to the

9 placement of a child in foster care, to prevent

10 or eliminate the need for removal of the child

11 from the child’s home, and to make it possible

12 for the child to return home; and

13 ‘‘(B) with respect to families in which

14 abuse or neglect has been confirmed, provide

15 services or referral for services for families and

16 children where the State makes a determination

17 that the child may safely remain with the fam18 ily.

19 ‘‘(13) CERTIFICATION OF COOPERATIVE EF20 FORTS.—A certification by the State, where appro21 priate, that all steps will be taken, including cooper22 ative efforts with the State agencies administering

23 the plans approved under parts A and D, to secure

24 an assignment to the State of any rights to support
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1 on behalf of each child receiving foster care mainte2 nance payments under part E.

3 ‘‘(14) CERTIFICATION OF CONFIDENTIALITY

4 AND REQUIREMENTS FOR INFORMATION DISCLO5 SURE.—

6 ‘‘(A) IN GENERAL.—A certification that

7 the State has in effect and operational—

8 ‘‘(i) requirements ensuring that re9 ports and records made and maintained

10 pursuant to the purposes of this part shall

11 only be made available to—

12 ‘‘(I) individuals who are the sub13 ject of the report;

14 ‘‘(II) Federal, State, or local gov15 ernment entities, or any agent of such

16 entities, having a need for such infor17 mation in order to carry out their re18 sponsibilities under law to protect

19 children from abuse and neglect;

20 ‘‘(III) child abuse citizen review

21 panels;

22 ‘‘(IV) child fatality review panels;

23 ‘‘(V) a grand jury or court, upon

24 a finding that information in the

25 record is necessary for the determina-
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1 tion of an issue before the court or

2 grand jury; and

3 ‘‘(VI) other entities or classes of

4 individuals statutorily authorized by

5 the State to receive such information

6 pursuant to a legitimate State pur7 pose; and

8 ‘‘(ii) provisions that allow for public

9 disclosure of the findings or information

10 about cases of child abuse or neglect that

11 have resulted in a child fatality or near fa12 tality.

13 ‘‘(B) LIMITATION.—Disclosures made pur14 suant to clause (i) or (ii) shall not include the

15 identifying information concerning the individ16 ual initiating a report or complaint alleging sus17 pected instances of child abuse or neglect.

18 ‘‘(C) DEFINITION.—For purposes of this

19 paragraph, the term ‘near fatality’ means an

20 act that, as certified by a physician, places the

21 child in serious or critical condition.

22 ‘‘(b) DETERMINATIONS.—The Secretary shall deter23 mine whether a plan submitted pursuant to subsection (a)

24 contains the material required by subsection (a), other

25 than the material described in paragraph (9) of such sub-
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1 section. The Secretary may not require a State to include

2 in such a plan any material not described in subsection

3 (a).

4 ‘‘SEC. 423. GRANTS TO STATES FOR CHILD PROTECTION.

5 ‘‘(a) FUNDING OF BLOCK GRANTS.—

6 ‘‘(1) ENTITLEMENT COMPONENT.—

7 ‘‘(A) ELIGIBLE STATES.—Each eligible

8 State shall be entitled to receive from the Sec9 retary for each fiscal year specified in sub10 section (b)(1) a grant in an amount equal to

11 the State share of 99 percent of the child pro12 tection amount for the fiscal year.

13 ‘‘(B) INDIAN TRIBES AND TRIBAL ORGANI14 ZATIONS.—The Secretary shall reserve for pay15 ments to Indian tribes (as defined in section

16 658P(7) of the Child Care and Development

17 Block Grant Act of 1990) and tribal organiza18 tions (as defined in section 658P(14) of such

19 Act) for each fiscal year specified in subsection

20 (b)(1) an amount equal to 1 percent of the

21 child protection amount for the fiscal year.

22 ‘‘(2) AUTHORIZATION COMPONENT.—

23 ‘‘(A) IN GENERAL.—

24 ‘‘(i) ELIGIBLE STATES.—For each eli25 gible State for each fiscal year specified in
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1 subsection (b)(1), the Secretary shall sup2 plement the grant under paragraph (1)(A)

3 of this subsection by an amount equal to

4 the State share of 99.64 percent of the

5 amount (if any) appropriated pursuant to

6 subparagraph (B) of this paragraph for

7 the fiscal year.

8 ‘‘(ii) INDIAN TRIBES AND TRIBAL OR9 GANIZATIONS.—The Secretary shall sup10 plement the amount reserved for payments

11 pursuant to paragraph (1)(B) of this sub12 section for each fiscal year specified in

13 subsection (b)(1), by an amount equal to

14 0.36 percent of the amount (if any) appro15 priated pursuant to subparagraph (B) of

16 this paragraph for the fiscal year.

17 ‘‘(B) LIMITATION ON AUTHORIZATION OF

18 APPROPRIATIONS.—For grants under subpara19 graph (A), there are authorized to be appro20 priated to the Secretary an amount not to ex21 ceed $325,000,000 for each fiscal year specified

22 in subsection (b)(1).

23 ‘‘(b) DEFINITIONS.—As used in this section:

24 ‘‘(1) CHILD PROTECTION AMOUNT.—The term

25 ‘child protection amount’ means—
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1 ‘‘(A) $240,000,000 for fiscal year 1997;

2 ‘‘(B) $255,000,000 for fiscal year 1998;

3 ‘‘(C) $262,000,000 for fiscal year 1999;

4 ‘‘(D) $270,000,000 for fiscal year 2000;

5 ‘‘(E) $278,000,000 for fiscal year 2001;

6 and

7 ‘‘(F) $286,000,000 for fiscal year 2002;

8 ‘‘(2) STATE SHARE.—

9 ‘‘(A) IN GENERAL.—The term ‘State

10 share’ means the qualified child protection ex11 penses of the State divided by the sum of the

12 qualified child protection expenses of all of the

13 States.

14 ‘‘(B) QUALIFIED CHILD PROTECTION EX15 PENSES.—The term ‘qualified child protection

16 expenses’ means, with respect to a State the

17 greater of—

18 ‘‘(i) the total amount of one-third of

19 the Federal grant amounts to the State

20 under the provisions of law specified in

21 clauses (i) and (ii) of subparagraph (C) for

22 fiscal years 1992, 1993, and 1994; or

23 ‘‘(ii) the total amount of the Federal

24 grant amounts to the State under the pro25 visions of law specified in clauses (i) and
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1 (ii) of subparagraph (C) for fiscal year

2 1994.

3 ‘‘(C) PROVISIONS OF LAW.—The provisions

4 of law specified in this subparagraph are the

5 following (as in effect with respect to each of

6 the fiscal years referred to in subparagraph

7 (B)):

8 ‘‘(i) Section 423 of this Act.

9 ‘‘(ii) Section 434 of this Act.

10 ‘‘(D) DETERMINATION OF INFORMA11 TION.—In determining amounts for fiscal years

12 1992, 1993, and 1994 under clauses (i) and (ii)

13 of subparagraph (B), the Secretary shall use in14 formation listed as actual amounts in the Jus15 tification for Estimates for Appropriation Com16 mittees of the Administration for Children and

17 Families for fiscal years 1994, 1995, and 1996,

18 respectively.

19 ‘‘(c) USE OF GRANT.—

20 ‘‘(1) IN GENERAL.—A State to which a grant

21 is made under this section may use the grant in any

22 manner that the State deems appropriate to accom23 plish the purpose of this part.

24 ‘‘(2) TIMING OF EXPENDITURES.—A State to

25 which a grant is made under this section for a fiscal
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1 year shall expend the total amount of the grant not

2 later than the end of the immediately succeeding fis3 cal year.

4 ‘‘(3) RULE OF INTERPRETATION.—This part

5 shall not be interpreted to prohibit short- and long6 term foster care facilities operated for profit from

7 receiving funds provided under this part or part E.

8 ‘‘(d) TIMING OF PAYMENTS.—The Secretary shall

9 pay each eligible State the amount of the grant payable

10 to the State under this section in quarterly installments.

11 ‘‘(e) PENALTIES.—

12 ‘‘(1) FOR USE OF GRANT IN VIOLATION OF

13 THIS PART.—If an audit conducted pursuant to

14 chapter 75 of title 31, United States Code, finds

15 that an amount paid to a State under this section

16 for a fiscal year has been used in violation of this

17 part, then the Secretary shall reduce the amount of

18 the grant that would (in the absence of this para19 graph) be payable to the State under this section for

20 the immediately succeeding fiscal year by the

21 amount so used, plus 5 percent of the grant paid

22 under this section to the State for such fiscal year.

23 ‘‘(2) FOR FAILURE TO MAINTAIN EFFORT.—

24 ‘‘(A) IN GENERAL.—If an audit conducted

25 pursuant to chapter 75 of title 31, United
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1 States Code, finds that the amount expended by

2 a State (other than from amounts provided by

3 the Federal Government) during the fiscal years

4 specified in subparagraph (B), to carry out the

5 State program funded under this part is less

6 than the applicable percentage specified in such

7 subparagraph of the total amount expended by

8 the State (other than from amounts provided by

9 the Federal Government) during fiscal year

10 1994 under part B of this title (as in effect on

11 the day before the date of the enactment of this

12 part), then the Secretary shall reduce the

13 amount of the grant that would (in the absence

14 of this paragraph) be payable to the State

15 under this section for the immediately succeed16 ing fiscal year by the amount of the difference,

17 plus 5 percent of the grant paid under this sec18 tion to the State for such fiscal year.

19 ‘‘(B) SPECIFICATION OF FISCAL YEARS

20 AND APPLICABLE PERCENTAGES.—The fiscal

21 years and applicable percentages specified in

22 this subparagraph are as follows:

23 ‘‘(i) For fiscal years 1997 and 1998,

24 100 percent.
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1 ‘‘(ii) For fiscal years 1999 through

2 2002, 75 percent.

3 ‘‘(3) FOR FAILURE TO SUBMIT REQUIRED RE4 PORT.—

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

6 reduce by 3 percent the amount of the grant

7 that would (in the absence of this paragraph)

8 be payable to a State under this section for a

9 fiscal year if the Secretary determines that the

10 State has not submitted the report required by

11 section 424 for the immediately preceding fiscal

12 year, within 6 months after the end of the im13 mediately preceding fiscal year.

14 ‘‘(B) RESCISSION OF PENALTY.—The Sec15 retary shall rescind a penalty imposed on a

16 State under subparagraph (A) with respect to a

17 report for a fiscal year if the State submits the

18 report before the end of the immediately suc19 ceeding fiscal year.

20 ‘‘(4) STATE FUNDS TO REPLACE REDUCTIONS

21 IN GRANT.—A State which has a penalty imposed

22 against it under this subsection for a fiscal year

23 shall expend additional State funds in an amount

24 equal to the amount of the penalty for the purpose
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1 of carrying out the State program under this part

2 during the immediately succeeding fiscal year.

3 ‘‘(5) REASONABLE CAUSE EXCEPTION.—Except

4 in the case of the penalty described in paragraph

5 (2), the Secretary may not impose a penalty on a

6 State under this subsection with respect to a re7 quirement if the Secretary determines that the State

8 has reasonable cause for failing to comply with the

9 requirement.

10 ‘‘(6) CORRECTIVE COMPLIANCE PLAN.—

11 ‘‘(A) IN GENERAL.—

12 ‘‘(i) NOTIFICATION OF VIOLATION.—

13 Before imposing a penalty against a State

14 under this subsection with respect to a vio15 lation of this part, the Secretary shall no16 tify the State of the violation and allow the

17 State the opportunity to enter into a cor18 rective compliance plan in accordance with

19 this paragraph which outlines how the

20 State will correct the violation and how the

21 State will insure continuing compliance

22 with this part.

23 ‘‘(ii) 60-DAY PERIOD TO PROPOSE A

24 CORRECTIVE COMPLIANCE PLAN.—During

25 the 60-day period that begins on the date
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1 the State receives a notice provided under

2 clause (i) with respect to a violation, the

3 State may submit to the Federal Govern4 ment a corrective compliance plan to cor5 rect the violation.

6 ‘‘(iii) CONSULTATION ABOUT MODI7 FICATIONS.—During the 60-day period

8 that begins with the date the Secretary re9 ceives a corrective compliance plan submit10 ted by a State in accordance with clause

11 (ii), the Secretary may consult with the

12 State on modifications to the plan.

13 ‘‘(iv) ACCEPTANCE OF PLAN.—A cor14 rective compliance plan submitted by a

15 State in accordance with clause (ii) is

16 deemed to be accepted by the Secretary if

17 the Secretary does not accept or reject the

18 plan during the 60-day period that begins

19 on the date the plan is submitted.

20 ‘‘(B) EFFECT OF CORRECTING VIOLA21 TION.—The Secretary may not impose any pen22 alty under this subsection with respect to any

23 violation covered by a State corrective compli24 ance plan accepted by the Secretary if the State

25 corrects the violation pursuant to the plan.
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1 ‘‘(C) EFFECT OF FAILING TO CORRECT

2 VIOLATION.—The Secretary shall assess some

3 or all of a penalty imposed on a State under

4 this subsection with respect to a violation if the

5 State does not, in a timely manner, correct the

6 violation pursuant to a State corrective compli7 ance plan accepted by the Secretary.

8 ‘‘(7) LIMITATION ON AMOUNT OF PENALTY.—

9 ‘‘(A) IN GENERAL.—In imposing the pen10 alties described in this subsection, the Secretary

11 shall not reduce any quarterly payment to a

12 State by more than 25 percent.

13 ‘‘(B) CARRYFORWARD OF UNRECOVERED

14 PENALTIES.—To the extent that subparagraph

15 (A) prevents the Secretary from recovering dur16 ing a fiscal year the full amount of all penalties

17 imposed on a State under this subsection for a

18 prior fiscal year, the Secretary shall apply any

19 remaining amount of such penalties to the

20 grant payable to the State under subsection (a)

21 for the immediately succeeding fiscal year.

22 ‘‘(f) TREATMENT OF TERRITORIES.—

23 ‘‘(1) IN GENERAL.—A territory, as defined in

24 section 1108(b)(1), shall carry out a child protection
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1 program in accordance with the provisions of this

2 part.

3 ‘‘(2) PAYMENTS.—Subject to the mandatory

4 ceiling amounts specified in section 1108, each terri5 tory, as so defined, shall be entitled to receive from

6 the Secretary for any fiscal year an amount equal to

7 the total obligations to the territory under section

8 434 (as in effect on the day before the date of the

9 enactment of this part) for fiscal year 1995.

10 ‘‘(g) LIMITATION ON FEDERAL AUTHORITY.—Except

11 as expressly provided in this Act, the Secretary may not

12 regulate the conduct of States under this part or enforce

13 any provision of this part.

14 ‘‘SEC. 424. DATA COLLECTION AND REPORTING.

15 ‘‘(a) NATIONAL CHILD ABUSE AND NEGLECT DATA

16 SYSTEM.—The Secretary shall establish a national data

17 collection and analysis program—

18 ‘‘(1) which, to the extent practicable, coordi19 nates existing State child abuse and neglect reports

20 and which shall include—

21 ‘‘(A) standardized data on substantiated,

22 as well as false, unfounded, or unsubstantiated

23 reports; and

24 ‘‘(B) information on the number of deaths

25 due to child abuse and neglect; and
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1 ‘‘(2) which shall collect, compile, analyze, and

2 make available State child abuse and neglect report3 ing information which, to the extent practical, is uni4 versal and case-specific and integrated with other

5 case-based foster care and adoption data collected by

6 the Secretary.

7 ‘‘(b) ADOPTION AND FOSTER CARE AND ANALYSIS

8 AND REPORTING SYSTEMS.—The Secretary shall imple9 ment a system for the collection of data relating to adop10 tion and foster care in the United States. Such data collec11 tion system shall—

12 ‘‘(1) avoid unnecessary diversion of resources

13 from agencies responsible for adoption and foster

14 care;

15 ‘‘(2) assure that any data that is collected is re16 liable and consistent over time and among jurisdic17 tions through the use of uniform definitions and

18 methodologies;

19 ‘‘(3) provide comprehensive national informa20 tion with respect to—

21 ‘‘(A) the demographic characteristics of

22 adoptive and foster children and their biological

23 and adoptive or foster parents;

24 ‘‘(B) the status of the foster care popu25 lation (including the number of children in fos-
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1 ter care, length of placement, type of place2 ment, availability for adoption, and goals for

3 ending or continuing foster care);

4 ‘‘(C) the number and characteristics of—

5 ‘‘(i) children placed in or removed

6 from foster care;

7 ‘‘(ii) children adopted or with respect

8 to whom adoptions have been terminated;

9 and

10 ‘‘(iii) children placed in foster care

11 outside the State which has placement and

12 care responsibility; and

13 ‘‘(D) the extent and nature of assistance

14 provided by Federal, State, and local adoption

15 and foster care programs and the characteris16 tics of the children with respect to whom such

17 assistance is provided; and

18 ‘‘(4) utilize appropriate requirements and incen19 tives to ensure that the system functions reliably

20 throughout the United States.

21 ‘‘(c) ADDITIONAL INFORMATION.—The Secretary

22 may require the provision of additional information under

23 the data collection system established under subsection (b)

24 if the addition of such information is agreed to by a major25 ity of the States.
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1 ‘‘(d) ANNUAL REPORT BY THE SECRETARY.—Not

2 later than 6 months after the end of each fiscal year, the

3 Secretary shall prepare a report based on information pro4 vided by the States for the fiscal year pursuant to this

5 section, and shall make the report and such information

6 available to the Congress and the public.

7 ‘‘SEC. 425. FUNDING FOR STUDIES OF CHILD WELFARE.

8 ‘‘(a) NATIONAL RANDOM SAMPLE STUDY OF CHILD

9 WELFARE.—There are authorized to be appropriated and

10 there are appropriated to the Secretary for each of fiscal

11 years 1996 through 2002—

12 ‘‘(1) $6,000,000 to conduct a national study

13 based on random samples of children who are at risk

14 of child abuse or neglect, or are determined by

15 States to have been abused or neglected under sec16 tion 208 of the Child and Family Services Block

17 Grant Act of 1996; and

18 ‘‘(2) $10,000,000 for such other research as

19 may be necessary under such section.

20 ‘‘(b) ASSESSMENT OF STATE COURTS IMPROVEMENT

21 OF HANDLING OF PROCEEDINGS RELATING TO FOSTER

22 CARE AND ADOPTION.—There are authorized to be appro23 priated and there are appropriated to the Secretary for

24 each of fiscal years 1996 through 1998 $10,000,000 for

25 the purpose of carrying out section 13712 of the Omnibus
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1 Budget Reconciliation Act of 1993 (42 U.S.C. 670 note).

2 All funds appropriated under this subsection shall be ex3 pended not later than September 30, 1999.

4 ‘‘SEC. 426. DEFINITIONS.

5 ‘‘For purposes of this part and part E, the following

6 definitions shall apply:

7 ‘‘(1) ADMINISTRATIVE REVIEW.—The term ‘ad8 ministrative review’ means a review open to the par9 ticipation of the parents of the child, conducted by

10 a panel of appropriate persons at least one of whom

11 is not responsible for the case management of, or

12 the delivery of services to, either the child or the

13 parents who are the subject of the review.

14 ‘‘(2) ADOPTION ASSISTANCE AGREEMENT.—The

15 term ‘adoption assistance agreement’ means a writ16 ten agreement, binding on the parties to the agree17 ment, between the State, other relevant agencies,

18 and the prospective adoptive parents of a minor

19 child which at a minimum—

20 ‘‘(A) specifies the nature and amount of

21 any payments, services, and assistance to be

22 provided under such agreement; and

23 ‘‘(B) stipulates that the agreement shall

24 remain in effect regardless of the State of
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1 which the adoptive parents are residents at any

2 given time.

3 The agreement shall contain provisions for the pro4 tection (under an interstate compact approved by

5 the Secretary or otherwise) of the interests of the

6 child in cases where the adoptive parents and child

7 move to another State while the agreement is effec8 tive.

9 ‘‘(3) CASE PLAN.—The term ‘case plan’ means

10 a written document which includes at least the fol11 lowing:

12 ‘‘(A) A description of the type of home or

13 institution in which a child is to be placed, in14 cluding a discussion of the appropriateness of

15 the placement and how the agency which is re16 sponsible for the child plans to carry out the

17 voluntary placement agreement entered into or

18 judicial determination made with respect to the

19 child in accordance with section 472(a)(1).

20 ‘‘(B) A plan for assuring that the child re21 ceives proper care and that services are pro22 vided to the parents, child, and foster parents

23 in order to improve the conditions in the par24 ents’ home, facilitate return of the child to his

25 or her own home or the permanent placement
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1 of the child, and address the needs of the child

2 while in foster care, including a discussion of

3 the appropriateness of the services that have

4 been provided to the child under the plan.

5 ‘‘(C) To the extent available and acces6 sible, the health and education records of the

7 child, including—

8 ‘‘(i) the names and addresses of the

9 child’s health and educational providers;

10 ‘‘(ii) the child’s grade level perform11 ance;

12 ‘‘(iii) the child’s school record;

13 ‘‘(iv) assurances that the child’s place14 ment in foster care takes into account

15 proximity to the school in which the child

16 is enrolled at the time of placement;

17 ‘‘(v) a record of the child’s immuniza18 tions;

19 ‘‘(vi) the child’s known medical prob20 lems;

21 ‘‘(vii) the child’s medications; and

22 ‘‘(viii) any other relevant health and

23 education information concerning the child

24 determined to be appropriate by the State.
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1 Where appropriate, for a child age 16 or over,

2 the case plan must also include a written de3 scription of the programs and services which

4 will help such child prepare for the transition

5 from foster care to independent living.

6 ‘‘(4) CASE REVIEW SYSTEM.—The term ‘case

7 review system’ means a procedure for assuring

8 that—

9 ‘‘(A) each child has a case plan designed to

10 achieve placement in the least restrictive (most

11 family-like) and most appropriate setting avail12 able and in close proximity to the parents’

13 home, consistent with the best interests and

14 special needs of the child, which—

15 ‘‘(i) if the child has been placed in a

16 foster family home or child-care institution

17 a substantial distance from the home of

18 the parents of the child, or in a State dif19 ferent from the State in which such home

20 is located, sets forth the reasons why such

21 placement is in the best interests of the

22 child; and

23 ‘‘(ii) if the child has been placed in

24 foster care outside the State in which the

25 home of the parents of the child is located,
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1 requires that, periodically, but not less fre2 quently than every 12 months, a case3 worker on the staff of the State in which

4 the home of the parents of the child is lo5 cated, or of the State in which the child

6 has been placed, visit such child in such

7 home or institution and submit a report on

8 such visit to the State in which the home

9 of the parents of the child is located;

10 ‘‘(B) the status of each child is reviewed

11 periodically but no less frequently than once

12 every 6 months by either a court or by adminis13 trative review (as defined in paragraph (1)) in

14 order to determine the continuing necessity for

15 and appropriateness of the placement, the ex16 tent of compliance with the case plan, and the

17 extent of progress which has been made toward

18 alleviating or mitigating the causes necessitat19 ing placement in foster care, and to project a

20 likely date by which the child may be returned

21 to the home or placed for adoption or legal

22 guardianship;

23 ‘‘(C) with respect to each such child, pro24 cedural safeguards will be applied, among other

25 things, to assure each child in foster care under
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1 the supervision of the State of a dispositional

2 hearing to be held, in a family or juvenile court

3 or another court (including a tribal court) of

4 competent jurisdiction, or by an administrative

5 body appointed or approved by the court, no

6 later than 18 months after the original place7 ment (and not less frequently than every 12

8 months thereafter during the continuation of

9 foster care), which hearing shall determine the

10 future status of the child (including whether the

11 child should be returned to the parent, should

12 be continued in foster care for a specified pe13 riod, should be placed for adoption, or should

14 (because of the child’s special needs or cir15 cumstances) be continued in foster care on a

16 permanent or long-term basis) and, in the case

17 of a child described in subparagraph (A)(ii),

18 whether the out-of-State placement continues to

19 be appropriate and in the best interests of the

20 child, and, in the case of a child who has at21 tained age 16, the services needed to assist the

22 child to make the transition from foster care

23 to independent living; and procedural safe24 guards shall also be applied with respect to pa25 rental rights pertaining to the removal of the
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1 child from the home of his parents, to a change

2 in the child’s placement, and to any determina3 tion affecting visitation privileges of parents;

4 and

5 ‘‘(D) a child’s health and education record

6 (as described in paragraph (3)(C)) is reviewed

7 and updated, and supplied to the foster parent

8 or foster care provider with whom the child is

9 placed, at the time of each placement of the

10 child in foster care.

11 ‘‘(5) CHILD-CARE INSTITUTION.—The term

12 ‘child-care institution’ means a private child-care in13 stitution, or a public child-care institution which ac14 commodates no more than 25 children, which is li15 censed by the State in which it is situated or has

16 been approved, by the agency of such State respon17 sible for licensing or approval of institutions of this

18 type, as meeting the standards established for such

19 licensing, but the term shall not include detention

20 facilities, forestry camps, training schools, or any

21 other facility operated primarily for the detention of

22 children who are determined to be delinquent.

23 ‘‘(6) FOSTER CARE MAINTENANCE PAY24 MENTS.—
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1 ‘‘(A) IN GENERAL.—The term ‘foster care

2 maintenance payments’ means payments to

3 cover the cost of (and the cost of providing)

4 food, clothing, shelter, daily supervision, school

5 supplies, a child’s personal incidentals, liability

6 insurance with respect to a child, and reason7 able travel to the child’s home for visitation. In

8 the case of institutional care, such term shall

9 include the reasonable costs of administration

10 and operation of such institution as are nec11 essarily required to provide the items described

12 in the preceding sentence.

13 ‘‘(B) SPECIAL RULE.—In cases where—

14 ‘‘(i) a child placed in a foster family

15 home or child-care institution is the parent

16 of a son or daughter who is in the same

17 home or institution; and

18 ‘‘(ii) payments described in subpara19 graph (A) are being made under this part

20 with respect to such child,

21 the foster care maintenance payments made

22 with respect to such child as otherwise deter23 mined under subparagraph (A) shall also in24 clude such amounts as may be necessary to

25 cover the cost of the items described in that
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1 subparagraph with respect to such son or

2 daughter.

3 ‘‘(7) FOSTER FAMILY HOME.—The term ‘foster

4 family home’ means a foster family home for chil5 dren which is licensed by the State in which it is sit6 uated or has been approved, by the agency of such

7 State having responsibility for licensing homes of

8 this type, as meeting the standards established for

9 such licensing.

10 ‘‘(8) PARENTS.—The term ‘parents’ means bio11 logical or adoptive parents or legal guardians, as de12 termined by applicable State law.

13 ‘‘(9) STATE.—The term ‘State’ means the 50

14 States and the District of Columbia.

15 ‘‘(10) VOLUNTARY PLACEMENT.—The term

16 ‘voluntary placement’ means an out-of-home place17 ment of a minor, by or with participation of the

18 State, after the parents or guardians of the minor

19 have requested the assistance of the State and

20 signed a voluntary placement agreement.

21 ‘‘(11) VOLUNTARY PLACEMENT AGREEMENT.—

22 The term ‘voluntary placement agreement’ means a

23 written agreement, binding on the parties to the

24 agreement, between the State, any other agency act25 ing on its behalf, and the parents or guardians of a
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1 minor child which specifies, at a minimum, the legal

2 status of the child and the rights and obligations of

3 the parents or guardians, the child, and the agency

4 while the child is in placement.’’.

5 SEC. 4702. CONFORMING AMENDMENTS.

6 (a) AMENDMENTS TO PART D OF TITLE IV OF THE

7 SOCIAL SECURITY ACT.—

8 (1) Section 452(a)(10)(C) of the Social Security

9 Act (42 U.S.C. 652(a)(10)(C)), as amended by sec10 tion 4108(b)(2) of this Act, is amended by striking

11 ‘‘or under section 471(a)(17),’’.

12 (2) Section 452(g)(2)(A) of such Act (42

13 U.S.C. 652(g)(2)(A)), as amended by paragraphs

14 (6) and (7) of section 4108(b) of this Act, is amend15 ed by inserting ‘‘or benefits or services for foster

16 care maintenance were being provided under the

17 State program funded under part E’’ after ‘‘part A’’

18 each place it appears.

19 (3) Section 466(a)(3)(B) of such Act (42

20 U.S.C. 666(a)(3)(B)), as amended by section

21 4108(b)(14) of this Act, is amended by striking ‘‘or

22 471(a)(17)’’.

23 (b) AMENDMENT TO SECTION 9442 OF THE OMNI24 BUS BUDGET RECONCILIATION ACT OF 1986.—Section

25 9442(4) of the Omnibus Budget Reconciliation Act of
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1 1986 (42 U.S.C. 679a(4)) is amended by inserting ‘‘(as

2 in effect before October 1, 1995)’’ after ‘‘Act’’.

3 (c) REDESIGNATION AND AMENDMENTS OF SECTION

4 1123.—

5 (1) REDESIGNATION.—The Social Security Act

6 is amended by redesignating section 1123, the sec7 ond place it appears (42 U.S.C. 1320a–1a), as sec8 tion 1123A.

9 (2) AMENDMENTS.—Section 1123A of such

10 Act, as so redesignated, is amended in subsection

11 (a)—

12 (A) by striking ‘‘The Secretary’’ and in13 serting ‘‘Notwithstanding section 423(g), the

14 Secretary’’; and

15 (B) in paragraph (2), by inserting ‘‘under

16 this section’’ after ‘‘promulgated’’.

17 Subchapter B—Foster Care, Adoption Assist18 ance, and Independent Living Programs

19 SEC. 4711. CONFORMING AMENDMENTS TO PART E OF

20 TITLE IV.

21 (a) PURPOSE; APPROPRIATION.—Section 470 of the

22 Social Security Act (42 U.S.C 670) is amended—

23 (1) by amending the heading to read as follows:
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1 ‘‘SEC. 470. PURPOSE; APPROPRIATION.’’; and

2 (2) in the second sentence, by striking ‘‘this

3 part’’ and inserting ‘‘section 422’’.

4 (b) STATE PLAN FOR FOSTER CARE AND ADOPTION

5 ASSISTANCE.—Section 471 of such Act (42 U.S.C. 671)

6 is amended to read as follows:

7 ‘‘SEC. 471. ELIGIBLE STATES.

8 ‘‘In order for a State to be eligible for payments

9 under this part, the State shall have submitted to the Sec10 retary a plan which satisfies the requirements of section

11 422.’’.

12 (c) FOSTER CARE MAINTENANCE PAYMENTS PRO13 GRAM.—Section 472 of such Act (42 U.S.C. 672) is

14 amended to read as follows:

15 ‘‘SEC. 472. REQUIREMENTS FOR FOSTER CARE MAINTE16 NANCE PAYMENTS.

17 ‘‘(a) IN GENERAL.—Each State operating a program

18 under this part shall make foster care maintenance pay19 ments, as defined in section 426(6) with respect to a child

20 who would meet the requirements of section 406(a) (as

21 in effect on the day before the date of the enactment of

22 the Personal Responsibility and Work Opportunity Act of

23 1996) or of section 407 (as so in effect) but for the re24 moval of the child from the home of a relative (specified

25 in section 406(a) (as so in effect)), if—
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1 ‘‘(1) the removal from the home occurred pur2 suant to a voluntary placement agreement entered

3 into by the child’s parent or legal guardian, or was

4 the result of a judicial determination to the effect

5 that continuation therein would be contrary to the

6 welfare of such child and that reasonable efforts of

7 the type described in section 422(a)(12) have been

8 made;

9 ‘‘(2) such child’s placement and care are the re10 sponsibility of—

11 ‘‘(A) the State; or

12 ‘‘(B) any other public agency with which

13 the State has made an agreement for the ad14 ministration of the State program under this

15 part which is still in effect;

16 ‘‘(3) such child has been placed in a foster fam17 ily home or child-care institution as a result of the

18 voluntary placement agreement or judicial deter19 mination referred to in paragraph (1); and

20 ‘‘(4) such child—

21 ‘‘(A) would have been eligible to receive aid

22 under the eligibility standards under the State

23 plan approved under section 402 (as in effect

24 on the day before the date of the enactment of

25 this part and adjusted for inflation, in accord-
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1 ance with regulations issued by the Secretary)

2 in or for the month in which such agreement

3 was entered into or court proceedings leading to

4 the removal of such child from the home were

5 initiated; or

6 ‘‘(B) would have received such aid in or for

7 such month if application had been made there8 for, or the child had been living with a relative

9 specified in section 406(a) (as so in effect)

10 within 6 months prior to the month in which

11 such agreement was entered into or such pro12 ceedings were initiated, and would have received

13 such aid in or for such month if in such month

14 such child had been living with such a relative

15 and application therefor had been made.

16 ‘‘(b) LIMITATION ON FOSTER CARE PAYMENTS.—

17 Foster care maintenance payments may be made under

18 this part only on behalf of a child described in subsection

19 (a) of this section who is—

20 ‘‘(1) in the foster family home of an individual,

21 whether the payments therefore are made to such in22 dividual or to a public or private child placement or

23 child-care agency; or

24 ‘‘(2) in a child-care institution, whether the

25 payments therefore are made to such institution or
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1 to a public or private child-placement or child-care

2 agency, which payments shall be limited so as to in3 clude in such payments only those items which are

4 included in the term ‘foster care maintenance pay5 ments’ (as defined in section 426(6)).

6 ‘‘(c) VOLUNTARY PLACEMENTS.—

7 ‘‘(1) SATISFACTION OF CHILD PROTECTION

8 STANDARDS.—Notwithstanding any other provision

9 of this section, Federal payments may be made

10 under this part with respect to amounts expended by

11 any State as foster care maintenance payments

12 under this part, in the case of children removed

13 from their homes pursuant to voluntary placement

14 agreements as described in subsection (a), only if (at

15 the time such amounts were expended) the State has

16 fulfilled all of the requirements of section

17 422(a)(11).

18 ‘‘(2) REMOVAL IN EXCESS OF 180 DAYS.—No

19 Federal payment may be made under this part with

20 respect to amounts expended by any State as foster

21 care maintenance payments, in the case of any child

22 who was removed from such child’s home pursuant

23 to a voluntary placement agreement as described in

24 subsection (a) and has remained in voluntary place25 ment for a period in excess of 180 days, unless there
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1 has been a judicial determination by a court of com2 petent jurisdiction (within the first 180 days of such

3 placement) that such placement is in the best inter4 ests of the child.

5 ‘‘(3) DEEMED REVOCATION OF AGREEMENTS.—

6 In any case where—

7 ‘‘(A) the placement of a minor child in fos8 ter care occurred pursuant to a voluntary place9 ment agreement entered into by the parents or

10 guardians of such child as provided in sub11 section (a); and

12 ‘‘(B) such parents or guardians request (in

13 such manner and form as the Secretary may

14 prescribe) that the child be returned to their

15 home or to the home of a relative,

16 the voluntary placement agreement shall be deemed

17 to be revoked unless the State opposes such request

18 and obtains a judicial determination, by a court of

19 competent jurisdiction, that the return of the child

20 to such home would be contrary to the child’s best

21 interests.

22 ‘‘(d) ELIGIBILITY FOR MEDICAL ASSISTANCE.—For

23 purposes of title XIX (or, if applicable, title XV) and title

24 XX, any child with respect to whom foster care mainte25 nance payments are made under this section is deemed
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1 to be a recipient of cash assistance under part A of this

2 title. For the purposes of the preceding sentence, a child

3 whose costs in a foster family home or child-care institu4 tion are covered by the foster care maintenance payments

5 being made with respect to his or her minor parent, as

6 provided in section 426(6)(B), shall be considered a child

7 with respect to whom foster care maintenance payments

8 are made under this section.’’.

9 (d) ADOPTION ASSISTANCE PROGRAM.—Section 473

10 of such Act (42 U.S.C. 673) is amended to read as follows:

11 ‘‘SEC. 473. REQUIREMENTS FOR ADOPTION ASSISTANCE

12 PAYMENTS.

13 ‘‘(a) IN GENERAL.—A State operating a program

14 under this part shall enter into adoption assistance agree15 ments with the adoptive parents of children with special

16 needs.

17 ‘‘(b) PAYMENTS UNDER AGREEMENTS.—

18 ‘‘(1) IN GENERAL.—Under any adoption assist19 ance agreement entered into by a State with parents

20 who adopt a child with special needs, the State—

21 ‘‘(A) shall make payments of nonrecurring

22 adoption expenses incurred by or on behalf of

23 such parents in connection with the adoption of

24 such child, directly through the State agency or

25 through another public or nonprofit private
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1 agency, in amounts determined under sub2 section (e), and

3 ‘‘(B) in any case where the child meets the

4 requirements of subsection (d), may make adop5 tion assistance payments to such parents, di6 rectly through the State agency or through an7 other public or nonprofit private agency, in

8 amounts so determined.

9 ‘‘(2) DEFINITION OF NONRECURRING ADOPTION

10 EXPENSES.—

11 ‘‘(A) IN GENERAL.—For purposes of para12 graph (1)(A), the term ‘nonrecurring adoption

13 expenses’ means reasonable and necessary

14 adoption fees, court costs, attorney fees, and

15 other expenses which are directly related to the

16 legal adoption of a child with special needs and

17 which are not incurred in violation of State or

18 Federal law.

19 ‘‘(B) TREATMENT AS AN ADMINISTRATIVE

20 EXPENSE.—A State’s payment of nonrecurring

21 adoption expenses under an adoption assistance

22 agreement shall be treated as an expenditure

23 made for the proper and efficient administra24 tion of the State plan for purposes of section

25 474(a)(3)(E).
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1 ‘‘(c) ELIGIBILITY FOR MEDICAL ASSISTANCE.—For

2 purposes of title XIX (or, if applicable, title XV) and title

3 XX, any child—

4 ‘‘(1)(A) who is a child described in subsection

5 (b), and

6 ‘‘(B) with respect to whom an adoption assist7 ance agreement is in effect under this section

8 (whether or not adoption assistance payments are

9 provided under the agreement or are being made

10 under this section), including any such child who has

11 been placed for adoption in accordance with applica12 ble State and local law (whether or not an interlocu13 tory or other judicial decree of adoption has been

14 issued), or

15 ‘‘(2) with respect to whom foster care mainte16 nance payments are being made under section 472,

17 is deemed to be a recipient of cash assistance under part

18 A of this title in the State where such child resides. For

19 purposes of the preceding sentence, a child whose costs

20 in a foster family home or child-care institution are cov21 ered by the foster care maintenance payments being made

22 with respect to his or her minor parent, as provided in

23 section 426(6)(B), shall be considered a child with respect

24 to whom foster care maintenance payments are being

25 made under section 472.
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1 ‘‘(d) CHILDREN WITH SPECIAL NEEDS.—For pur2 poses of subsection (b)(1)(B), a child meets the require3 ments of this subsection if such child—

4 ‘‘(1)(A) at the time adoption proceedings were

5 initiated, met the requirements of section 406(a) (as

6 in effect on the day before the date of the enactment

7 of the Personal Responsibility and Work Oppor8 tunity Act of 1996) or section 407 (as so in effect)

9 or would have met such requirements except for

10 such child’s removal from the home of a relative

11 (specified in section 406(a) (as so in effect)), either

12 pursuant to a voluntary placement agreement with

13 respect to which Federal payments are provided

14 under section 474 (or 403 (as so in effect)) or as

15 a result of a judicial determination to the effect that

16 continuation therein would be contrary to the wel17 fare of such child;

18 ‘‘(B) meets all of the requirements of title XVI

19 with respect to eligibility for supplemental security

20 income benefits; or

21 ‘‘(C) is a child whose costs in a foster family

22 home or child-care institution are covered by the fos23 ter care maintenance payments being made with re24 spect to his or her minor parent;
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1 ‘‘(2)(A) would have received aid under the eligi2 bility standards under the State plan approved

3 under section 402 (as in effect on the day before the

4 date of the enactment of this part, adjusted for in5 flation, in accordance with regulations issued by the

6 Secretary) in or for the month in which such agree7 ment was entered into or court proceedings leading

8 to the removal of such child from the home were ini9 tiated;

10 ‘‘(B) would have received such aid in or for

11 such month if application had been made therefor,

12 or had been living with a relative specified in section

13 406(a) (as so in effect) within 6 months prior to the

14 month in which such agreement was entered into or

15 such proceedings were initiated, and would have re16 ceived such aid in or for such month if in such

17 month such child had been living with such a rel18 ative and application therefor had been made; or

19 ‘‘(C) is a child described in subparagraph (A)

20 or (B); and

21 ‘‘(3) has been determined by the State, pursu22 ant to subsection (h) of this section, to be a child

23 with special needs.

24 ‘‘(e) DETERMINATION OF PAYMENTS.—The amount

25 of the payments to be made in any case under subsection
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1 (b) shall be determined through agreement between the

2 adoptive parents and the State or a public or nonprofit

3 private agency administering the program under this part,

4 which shall take into consideration the circumstances of

5 the adopting parents and the needs of the child being

6 adopted, and may be readjusted periodically, with the con7 currence of the adopting parents (which may be specified

8 in the adoption assistance agreement), depending upon

9 changes in such circumstances. However, in no case may

10 the amount of the adoption assistance payment exceed the

11 foster care maintenance payment which would have been

12 paid during the period if the child with respect to whom

13 the adoption assistance payment is made had been in a

14 foster family home.

15 ‘‘(f) PAYMENT EXCEPTION.—Notwithstanding sub16 section (e), no payment may be made to parents with re17 spect to any child who has attained the age of 18 (or,

18 where the State determines that the child has a mental

19 or physical disability which warrants the continuation of

20 assistance, the age of 21), and no payment may be made

21 to parents with respect to any child if the State determines

22 that the parents are no longer legally responsible for the

23 support of the child or if the State determines that the

24 child is no longer receiving any support from such parents.

25 Parents who have been receiving adoption assistance pay-
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1 ments under this part shall keep the State or public or

2 nonprofit private agency administering the program under

3 this part informed of circumstances which would, pursu4 ant to this section, make them ineligible for such assist5 ance payments, or eligible for assistance payments in a

6 different amount.

7 ‘‘(g) PREADOPTION PAYMENTS.—For purposes of

8 this part, individuals with whom a child who has been de9 termined by the State, pursuant to subsection (h), to be

10 a child with special needs is placed for adoption in accord11 ance with applicable State and local law shall be eligible

12 for adoption assistance payments during the period of the

13 placement, on the same terms and subject to the same

14 conditions as if such individuals had adopted such child.

15 ‘‘(h) DETERMINATION OF CHILD WITH SPECIAL

16 NEEDS.—For purposes of this section, a child shall not

17 be considered a child with special needs unless—

18 ‘‘(1) the State has determined that the child

19 cannot or should not be returned to the home of the

20 child’s parents; and

21 ‘‘(2) the State had first determined—

22 ‘‘(A) that there exists with respect to the

23 child a specific factor or condition such as the

24 child’s ethnic background, age, or membership

25 in a minority or sibling group, or the presence
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1 of factors such as medical conditions or phys2 ical, mental, or emotional handicaps because of

3 which it is reasonable to conclude that such

4 child cannot be placed with adoptive parents

5 without providing adoption assistance under

6 this part or medical assistance under title XV

7 or XIX; and

8 ‘‘(B) that, except where it would be

9 against the best interests of the child because

10 of such factors as the existence of significant

11 emotional ties with prospective adoptive parents

12 while in the care of such parents as a foster

13 child, a reasonable, but unsuccessful, effort has

14 been made to place the child with appropriate

15 adoptive parents without providing adoption as16 sistance under this section or medical assistance

17 under title XV or XIX.’’.

18 (e) PAYMENTS TO STATES; ALLOTMENTS TO

19 STATES.—Section 474 of such Act (42 U.S.C. 674) is

20 amended to read as follows:

21 ‘‘SEC. 474. PAYMENTS TO STATES; ALLOTMENTS TO STATES.

22 ‘‘(a) FOSTER CARE, ADOPTION ASSISTANCE, AND

23 INDEPENDENT LIVING PROGRAMS PAYMENTS.—Each eli24 gible State, as determined under section 471, shall be enti-
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1 tled to receive from the Secretary for each quarter of each

2 fiscal year a payment equal to the sum of—

3 ‘‘(1) an amount equal to the Federal medical

4 assistance percentage (as defined in section 1905(b)

5 of this Act as in effect on the day before the date

6 of the enactment of the Personal Responsibility and

7 Work Opportunity Act of 1996) of the total amount

8 expended during such quarter as foster care mainte9 nance payments under the child protection program

10 under this part for children in foster family homes

11 or child-care institutions; plus

12 ‘‘(2) an amount equal to the Federal medical

13 assistance percentage (as defined in section 1905(b)

14 of this Act (as so in effect)) of the total amount ex15 pended during such quarter as adoption assistance

16 payments under the child protection program under

17 this part pursuant to adoption assistance agree18 ments; plus

19 ‘‘(3) an amount equal to the sum of the follow20 ing proportions of the total amounts expended dur21 ing such quarter as found necessary by the Sec22 retary for the provision of child placement services

23 and for the proper and efficient administration of

24 the State foster care and adoption assistance pro25 gram—
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1 ‘‘(A) 75 percent of so much of such ex2 penditures as are for the training (including

3 both short and long-term training at edu4 cational institutions through grants to such in5 stitutions or by direct financial assistance to

6 students enrolled in such institutions) of per7 sonnel employed or preparing for employment

8 by the State agency or by the local agency ad9 ministering the plan in the political subdivision;

10 ‘‘(B) 75 percent of so much of such ex11 penditures (including travel and per diem ex12 penses) as are for the short-term training of

13 current or prospective foster or adoptive par14 ents and the members of the staff of State-li15 censed or State-approved child care institutions

16 providing care to foster and adopted children

17 receiving assistance under this part, in ways

18 that increase the ability of such current or pro19 spective parents, staff members, and institu20 tions to provide support and assistance to foster

21 and adopted children, whether incurred directly

22 by the State or by contract;

23 ‘‘(C) 50 percent (or, if the quarter is in

24 fiscal year 1997, 75 percent) of so much of

25 such expenditures as are for the planning, de-
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1 sign, development, or installation of statewide

2 mechanized data collection and information re3 trieval systems (including 50 percent (or, if the

4 quarter is in fiscal year 1997, 75 percent) of

5 the full amount of expenditures for hardware

6 components for such systems) but only to the

7 extent that such systems—

8 ‘‘(i) meet the requirements imposed

9 by regulations;

10 ‘‘(ii) to the extent practicable, are ca11 pable of interfacing with the State data

12 collection system that collects information

13 relating to child abuse and neglect;

14 ‘‘(iii) to the extent practicable, have

15 the capability of interfacing with, and re16 trieving information from, the State data

17 collection system that collects information

18 relating to the eligibility of individuals

19 under part A (for the purposes of facilitat20 ing verification of eligibility of foster chil21 dren); and

22 ‘‘(iv) are determined by the Secretary

23 to be likely to provide more efficient, eco24 nomical, and effective administration of
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1 the programs carried out under a State

2 plan approved under this part;

3 ‘‘(D) 50 percent of so much of such ex4 penditures as are for the operation of the state5 wide mechanized data collection and informa6 tion retrieval systems referred to in subpara7 graph (C); and

8 ‘‘(E) one-half of the remainder of such ex9 penditures; plus

10 ‘‘(4) an amount equal to the sum of—

11 ‘‘(A) so much of the amounts expended by

12 such State to carry out a program under sec13 tion 476, as do not exceed the basic amount for

14 such State determined under subsection (e)(1)

15 of such section; and

16 ‘‘(B) the lesser of—

17 ‘‘(i) one-half of any additional

18 amounts expended by such State for such

19 programs; or

20 ‘‘(ii) the maximum additional amount

21 for such State under subsection (e)(1) of

22 such section.

23 ‘‘(b) AUTOMATED DATA COLLECTION EXPENDI24 TURES.—The Secretary shall treat as necessary for the

25 proper and efficient administration of the State plan all
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1 expenditures of a State necessary in order for the State

2 to plan, design, develop, install, and operate data collec3 tion and information retrieval systems, without regard to

4 whether the systems may be used with respect to foster

5 or adoptive children other than those on behalf of whom

6 foster care maintenance payments or adoption assistance

7 payments may be made under this part.

8 ‘‘(c) ESTIMATES BY THE SECRETARY.—

9 ‘‘(1) IN GENERAL.—The Secretary shall, prior

10 to the beginning of each quarter, estimate the

11 amount which a State will be entitled to receive

12 under subsection (a) for such quarter, such esti13 mates to be based on—

14 ‘‘(A) a report filed by the State containing

15 its estimate of the total sum to be expended in

16 such quarter in accordance with subsection (a),

17 and stating the amount appropriated or made

18 available by the State and its political subdivi19 sions for such expenditures in such quarter, and

20 if such amount is less than the State’s propor21 tionate share of the total sum of such estimated

22 expenditures, the source or sources from which

23 the difference is expected to be derived;
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1 ‘‘(B) records showing the number of chil2 dren in the State receiving assistance under

3 this part; and

4 ‘‘(C) such other information as the Sec5 retary may find necessary.

6 ‘‘(2) PAYMENTS.—The Secretary shall pay to

7 the States the amounts so estimated under para8 graph (1), reduced or increased to the extent of any

9 overpayment or underpayment which the Secretary

10 determines was made under this subsection to such

11 State for any prior quarter and with respect to

12 which adjustment has not already been made under

13 this subsection.

14 ‘‘(3) PRO RATA SHARE.— The pro rata share to

15 which the United States is equitably entitled, as de16 termined by the Secretary, of the net amount recov17 ered during any quarter by the State or any political

18 subdivision thereof with respect to foster care and

19 adoption assistance furnished under this part shall

20 be considered an overpayment to be adjusted under

21 this subsection.

22 ‘‘(d) ALLOWANCE OR DISALLOWANCE OF CLAIM.—

23 ‘‘(1) IN GENERAL.—Within 60 days after re24 ceipt of a State claim for expenditures pursuant to
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1 subsection (b)(1), the Secretary shall allow, disallow,

2 or defer such claim.

3 ‘‘(2) NOTICE.—Within 15 days after a decision

4 to defer a State claim, the Secretary shall notify the

5 State of the reasons for the deferral and of the addi6 tional information necessary to determine the allow7 ability of the claim.

8 ‘‘(3) DECISION.—Within 90 days after receiving

9 such necessary information (in readily reviewable

10 form), the Secretary shall—

11 ‘‘(A) disallow the claim, if able to complete

12 the review and determine that the claim is not

13 allowable; or

14 ‘‘(B) in any other case, allow the claim,

15 subject to disallowance (as necessary)—

16 ‘‘(i) upon completion of the review, if

17 it is determined that the claim is not allow18 able; or

19 ‘‘(ii) on the basis of findings of an

20 audit or financial management review.’’.

21 (f) DEFINITIONS.—Section 475 of such Act (42

22 U.S.C. 675) is amended to read as follows:

23 ‘‘SEC. 475. DEFINITIONS.

24 For definitions of terms used in this part, see section

25 426.’’.
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1 (g) TECHNICAL ASSISTANCE; DATA COLLECTION

2 AND EVALUATION.—Part E of title IV of such Act is

3 amended by striking section 476.

4 (h) INDEPENDENT LIVING INITIATIVES.—Part E of

5 title IV of such Act (42 U.S.C. 670 et seq.), as amended

6 by subsection (g) of this section, is amended—

7 (1) by redesignating section 477 as section 476;

8 and

9 (2) by amending section 476, as so redesig10 nated, to read as follows:

11 ‘‘SEC. 476. REQUIREMENTS FOR INDEPENDENT LIVING

12 PROGRAMS.

13 ‘‘(a) PAYMENTS FOR INDEPENDENT LIVING PRO14 GRAMS.—

15 ‘‘(1) IN GENERAL.—Payments shall be made in

16 accordance with this section for the purpose of as17 sisting States and localities in establishing and car18 rying out programs designed to assist children de19 scribed in paragraph (2) who have attained age 16

20 in making the transition from foster care to inde21 pendent living. Any State which provides for the es22 tablishment and carrying out of one or more such

23 programs in accordance with this section for a fiscal

24 year shall be entitled to receive payments under this
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1 section for such fiscal year, in an amount deter2 mined under subsection (e).

3 ‘‘(2) PROGRAM REQUIREMENTS.—A program

4 established and carried out under paragraph (1)—

5 ‘‘(A) shall be designed to assist children

6 with respect to whom foster care maintenance

7 payments are being made by the State under

8 this part;

9 ‘‘(B) may at the option of the State also

10 include any or all other children in foster care

11 under the responsibility of the State; and

12 ‘‘(C) may at the option of the State also

13 include any child who has not attained age 21

14 to whom foster care maintenance payments

15 were previously made by a State under this part

16 and whose payments were discontinued on or

17 after the date such child attained age 16, and

18 any child who previously was in foster care de19 scribed in subparagraph (B) and for whom such

20 care was discontinued on or after the date such

21 child attained age 16; and a written transitional

22 independent living plan of the type described in

23 subsection (d)(6) shall be developed for such

24 child as a part of such program.
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1 ‘‘(b) USE OF FUNDS.—Payment under this section

2 shall be made to the State, and shall be used for the pur3 pose of conducting and providing in accordance with this

4 section (directly or under contracts with local govern5 mental entities or private nonprofit organizations) the ac6 tivities and services required to carry out the program or

7 programs involved.

8 ‘‘(c) SUBMISSION OF PROGRAM DESCRIPTION AND

9 ASSURANCES.—In order for a State to receive payments

10 under this section for any fiscal year, the State, prior to

11 February 1 of such fiscal year, must submit to the Sec12 retary, in such manner and form as the Secretary may

13 prescribe, a description of the program together with satis14 factory assurances that the program will be operated in

15 an effective and efficient manner and will otherwise meet

16 the requirements of this section.

17 ‘‘(d) PROGRAM OBJECTIVES.—In carrying out the

18 purpose described in subsection (a), it shall be the objec19 tive of each program established under this section to help

20 the individuals participating in such program to prepare

21 to live independently upon leaving foster care. Such pro22 grams may include (subject to the availability of funds)

23 programs to—
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1 ‘‘(1) enable participants to seek a high school

2 diploma or its equivalent or to take part in appro3 priate vocational training;

4 ‘‘(2) provide training in daily living skills, budg5 eting, locating and maintaining housing, and career

6 planning;

7 ‘‘(3) provide for individual and group counsel8 ing;

9 ‘‘(4) integrate and coordinate services otherwise

10 available to participants;

11 ‘‘(5) provide for the establishment of outreach

12 programs designed to attract individuals who are eli13 gible to participate in the program;

14 ‘‘(6) provide each participant a written transi15 tional independent living plan which shall be based

16 on an assessment of his needs, and which shall be

17 incorporated into his case plan, as defined in section

18 426(3); and

19 ‘‘(7) provide participants with other services

20 and assistance designed to improve their transition

21 to independent living.

22 ‘‘(e) DETERMINATION OF PAYMENTS.—

23 ‘‘(1) BASIC AMOUNT.—

24 ‘‘(A) IN GENERAL.—The basic amount to

25 which a State shall be entitled under section
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1 474(a)(4) for a fiscal year shall be an amount

2 which bears the same ratio to the basic ceiling

3 for such fiscal year as such State’s average

4 number of children receiving foster care mainte5 nance payments under part E in fiscal year

6 1984 bore to the total of the average number

7 of children receiving such payments under such

8 part for all States for fiscal year 1984.

9 ‘‘(B) MAXIMUM ADDITIONAL AMOUNT.—

10 The maximum additional amount to which a

11 State shall be entitled under section 474(a)(4)

12 for a fiscal year shall be an amount which bears

13 the same ratio to the additional ceiling for such

14 fiscal year as the basic amount of such State

15 bears to $45,000,000.

16 ‘‘(C) DEFINITIONS.—For purposes of this

17 section:

18 ‘‘(i) BASIC CEILING.—The term ‘basic

19 ceiling’ means, for any fiscal year,

20 $45,000,000.

21 ‘‘(ii) ADDITIONAL CEILING.—The

22 term ‘additional ceiling’ means, for any fis23 cal year, $25,000,000.

24 ‘‘(2) REALLOCATION OF FUNDS.—If any State

25 does not apply for funds under this section for any
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1 fiscal year within the time provided in subsection

2 (c), the funds to which such State would have been

3 entitled for such fiscal year shall be reallocated to

4 one or more other States on the basis of their rel5 ative need for additional payments under this section

6 (as determined by the Secretary).

7 ‘‘(3) SUPPLEMENT TO OTHER FUNDS.—Any

8 amounts payable to States under this section shall

9 be in addition to amounts payable to States under

10 paragraphs (1), (2), and (3) of section 474(a), and

11 shall supplement and not replace any other funds

12 which may be available for the same general pur13 poses in the localities involved.

14 ‘‘(f) LIMITATION ON USE OF FUNDS.—Payments

15 made to a State under this section for any fiscal year—

16 ‘‘(1) shall be used only for the specific purposes

17 described in this section;

18 ‘‘(2) may not be used for the provision of room

19 or board;

20 ‘‘(3) may be made on an estimated basis in ad21 vance of the determination of the exact amount, with

22 appropriate subsequent adjustments to take account

23 of any error in the estimates; and

24 ‘‘(4) shall be expended by such State in such

25 fiscal year or in the succeeding fiscal year.
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1 ‘‘(g) REPORTING REQUIREMENTS.—Not later than

2 the first January 1 following the end of each fiscal year,

3 each State shall submit to the Secretary a report on the

4 programs carried out during such fiscal year with the

5 amounts received under this section. Such report shall be

6 in such form and contain such information as may be nec7 essary to provide an accurate description of such activities,

8 to provide a complete record of the purposes for which

9 the funds were spent, and to indicate the extent to which

10 the expenditure of such funds succeeded in accomplishing

11 the purpose described in subsection (a).

12 ‘‘(h) ASSISTANCE NOT CONSIDERED INCOME OR RE13 SOURCES.—Notwithstanding any other provision of this

14 title, payments made and services provided to participants

15 in a program under this section, as a direct consequence

16 of their participation in such program, shall not be consid17 ered as income or resources for purposes of determining

18 eligibility (or the eligibility of any other persons) for as19 sistance under the State’s plan approved under this part

20 or part A, or for purposes of determining the level of such

21 assistance.’’.

22 (i) COLLECTION OF DATA RELATING TO ADOPTION

23 AND FOSTER CARE.—Part E of title IV of such Act (42

24 U.S.C. 670 et seq.) is amended—
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1 (1) by redesignating section 479 as section 477;

2 and

3 (2) by amending section 477, as so redesig4 nated, to read as follows:

5 ‘‘SEC. 477. COLLECTION OF DATA RELATING TO ADOPTION

6 AND FOSTER CARE.

7 ‘‘For requirements with respect to the collection of

8 data relating to adoption and foster care, see section

9 424.’’.

10 Subchapter C—Miscellaneous

11 SEC. 4721. SECRETARIAL SUBMISSION OF LEGISLATIVE

12 PROPOSAL FOR TECHNICAL AND CONFORM13 ING AMENDMENTS.

14 Not later than 90 days after the date of the enact15 ment of this chapter, the Secretary of Health and Human

16 Services, in consultation, as appropriate, with the heads

17 of other Federal agencies, shall submit to the appropriate

18 committees of Congress a legislative proposal providing for

19 such technical and conforming amendments in the law as

20 are required by the provisions of this chapter.

21 SEC. 4722. SENSE OF THE CONGRESS REGARDING TIMELY

22 ADOPTION OF CHILDREN.

23 It is the sense of the Congress that—
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1 (1) too many children who wish to be adopted

2 are spending inordinate amounts of time in foster

3 care;

4 (2) there is an urgent need for States to in5 crease the number of waiting children being adopted

6 in a timely and lawful manner;

7 (3) studies have shown that States spend an ex8 cess of $15,000 each year on each special needs

9 child in foster care, and would save significant

10 amounts of money if they offered incentives to fami11 lies to adopt special needs children;

12 (4) States should allocate sufficient funds under

13 this subtitle for adoption assistance and medical as14 sistance to encourage more families to adopt chil15 dren who otherwise would languish in the foster care

16 system for a period that many experts consider det17 rimental to their development;

18 (5) States should offer incentives for families

19 that adopt special needs children to make adoption

20 more affordable for middle-class families;

21 (6) when it is necessary for a State to remove

22 a child from the home of the child’s biological par23 ents, the State should strive—
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1 (A) to provide the child with a single foster

2 care placement and a single coordinated case

3 team; and

4 (B) to conclude an adoption of the child,

5 when adoption is the goal of the child and the

6 State, within one year of the child’s placement

7 in foster care; and

8 (7) States should participate in local, regional,

9 or national programs to enable maximum visibility of

10 waiting children to potential parents. Such programs

11 should include a nationwide, interactive computer

12 network to disseminate information on children eligi13 ble for adoption to help match them with families

14 around the country.

15 SEC. 4723. EFFECTIVE DATE; TRANSITION RULES.

16 (a) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), this chapter and the amendments made

19 by this chapter shall be effective on and after Octo20 ber 1, 1996.

21 (2) EXCEPTION.—Section 425 of the Social Se22 curity Act, as added by section 4701 of this Act,

23 shall take effect on the date of the enactment of this

24 chapter.
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1 (3) TEMPORARY REDESIGNATION OF SECTION

2 425.—During the period beginning on the date of the

3 enactment of this chapter and ending on October 1,

4 1996, section 425 of the Social Security Act, as

5 added by section 4701 of this Act, is redesignated

6 as section 425A.

7 (b) TRANSITION RULES.—

8 (1) CLAIMS, ACTIONS, AND PROCEEDINGS.—

9 The amendments made by this chapter shall not

10 apply with respect to—

11 (A) powers, duties, functions, rights,

12 claims, penalties, or obligations applicable to

13 aid, assistance, services provided before the ef14 fective date of this chapter under the provisions

15 amended; and

16 (B) administrative actions and proceedings

17 commenced before such date, or authorized be18 fore such date to be commenced, under such

19 provisions.

20 (2) CLOSING OUT ACCOUNT FOR THOSE PRO21 GRAMS TERMINATED OR SUBSTANTIALLY MODIFIED

22 BY THIS CHAPTER.—In closing out accounts, Fed23 eral and State officials may use scientifically accept24 able statistical sampling techniques. Claims made

25 under programs which are repealed or substantially
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1 amended in this chapter and which involve State ex2 penditures in cases where assistance or services were

3 provided during a prior fiscal year, shall be treated

4 as expenditures during fiscal year 1995 for purposes

5 of reimbursement even if payment was made by a

6 State on or after October 1, 1995. States shall com7 plete the filing of all claims no later than September

8 30, 1997. Federal department heads shall—

9 (A) use the single audit procedure to re10 view and resolve any claims in connection with

11 the closeout of programs; and

12 (B) reimburse States for any payments

13 made for assistance or services provided during

14 a prior fiscal year from funds for fiscal year

15 1995, rather than the funds authorized by this

16 chapter.

17 CHAPTER 2—CHILD AND FAMILY

18 SERVICES BLOCK GRANT

19 SEC. 4751. CHILD AND FAMILY SERVICES BLOCK GRANT.

20 The Child Abuse Prevention and Treatment Act (42

21 U.S.C. 5101 et seq.) is amended to read as follows:

22 ‘‘SECTION 1. SHORT TITLE.

23 ‘‘This Act may be cited as the ‘Child and Family

24 Services Block Grant Act of 1996’.
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1 ‘‘SEC. 2. FINDINGS.

2 ‘‘The Congress finds the following:

3 ‘‘(1) Each year, close to 1,000,000 American

4 children are victims of abuse and neglect.

5 ‘‘(2) Many of these children and their families

6 fail to receive adequate protection or treatment.

7 ‘‘(3) The problem of child abuse and neglect re8 quires a comprehensive approach that—

9 ‘‘(A) integrates the work of social service,

10 legal, health, mental health, education, and sub11 stance abuse agencies and organizations;

12 ‘‘(B) strengthens coordination among all

13 levels of government, and with private agencies,

14 civic, religious, and professional organizations,

15 and individual volunteers;

16 ‘‘(C) emphasizes the need for abuse and

17 neglect prevention, assessment, investigation,

18 and treatment at the neighborhood level;

19 ‘‘(D) ensures properly trained and support

20 staff with specialized knowledge, to carry out

21 their child protection duties; and

22 ‘‘(E) is sensitive to ethnic and cultural di23 versity.

24 ‘‘(4) The child protection system should be

25 comprehensive, child-centered, family-focused, and

26 community-based, should incorporate all appropriate
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1 measures to prevent the occurrence or recurrence of

2 child abuse and neglect, and should promote physical

3 and psychological recovery and social reintegration

4 in an environment that fosters the health, safety,

5 self-respect, and dignity of the child.

6 ‘‘(5) The Federal Government should provide

7 leadership and assist communities in their child and

8 family protection efforts by—

9 ‘‘(A) generating and sharing knowledge

10 relevant to child and family protection, includ11 ing the development of models for service deliv12 ery;

13 ‘‘(B) strengthening the capacity of States

14 to assist communities;

15 ‘‘(C) helping communities to carry out

16 their child and family protection plans by pro17 moting the competence of professional, para18 professional, and volunteer resources; and

19 ‘‘(D) providing leadership to end the abuse

20 and neglect of the Nation’s children and youth.

21 ‘‘SEC. 3. PURPOSES.

22 ‘‘The purposes of this Act are the following:

23 ‘‘(1) To assist each State in improving the child

24 protective service systems of such State by—
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1 ‘‘(A) improving risk and safety assessment

2 tools and protocols;

3 ‘‘(B) developing, strengthening, and facili4 tating training opportunities for individuals who

5 are mandated to report child abuse or neglect

6 or otherwise overseeing, investigating, prosecut7 ing, or providing services to children and fami8 lies who are at risk of abusing or neglecting

9 their children; and

10 ‘‘(C) developing, implementing, or operat11 ing information, education, training, or other

12 programs designed to assist and provide serv13 ices for families of disabled infants with life14 threatening conditions.

15 ‘‘(2) To support State efforts to develop, oper16 ate, expand and enhance a network of community17 based, prevention-focused, family resource and sup18 port programs that are culturally competent and

19 that coordinate resources among existing education,

20 vocational rehabilitation, disability, respite, health,

21 mental health, job readiness, self-sufficiency, child

22 and family development, community action, Head

23 Start, child care, child abuse and neglect prevention,

24 juvenile justice, domestic violence prevention and
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1 intervention, housing, and other human service orga2 nizations within the State.

3 ‘‘(3) To facilitate the elimination of barriers to

4 adoption and to provide permanent and loving home

5 environments for children who would benefit from

6 adoption, particularly children with special needs, in7 cluding disabled infants with life-threatening condi8 tions, by—

9 ‘‘(A) promoting model adoption legislation

10 and procedures in the States and territories of

11 the United States in order to eliminate jurisdic12 tional and legal obstacles to adoption;

13 ‘‘(B) providing a mechanism for the De14 partment of Health and Human Services to—

15 ‘‘(i) promote quality standards for

16 adoption services, preplacement, post17 placement, and post-legal adoption counsel18 ing, and standards to protect the rights of

19 children in need of adoption;

20 ‘‘(ii) maintain a national adoption in21 formation exchange system to bring to22 gether children who would benefit from

23 adoption and qualified prospective adoptive

24 parents who are seeking such children, and

25 conduct national recruitment efforts in
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1 order to reach prospective parents for chil2 dren awaiting adoption; and

3 ‘‘(iii) demonstrate expeditious ways to

4 free children for adoption for whom it has

5 been determined that adoption is the ap6 propriate plan; and

7 ‘‘(C) facilitating the identification and re8 cruitment of foster and adoptive families that

9 can meet children’s needs.

10 ‘‘(4) To respond to the needs of children, in

11 particular those who are drug exposed or afflicted

12 with Acquired Immune Deficiency Syndrome

13 (AIDS), by supporting activities aimed at preventing

14 the abandonment of children, providing support to

15 children and their families, and facilitating the re16 cruitment and training of health and social service

17 personnel.

18 ‘‘(5) To carry out any other activities as the

19 Secretary determines are consistent with this Act.

20 ‘‘SEC. 4. DEFINITIONS.

21 ‘‘As used in this Act:

22 ‘‘(1) CHILD.—The term ‘child’ means a person

23 who has not attained the lesser of—

24 ‘‘(A) the age of 18; or
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1 ‘‘(B) except in the case of sexual abuse,

2 the age specified by the child protection law of

3 the State in which the child resides.

4 ‘‘(2) CHILD ABUSE AND NEGLECT.—The term

5 ‘child abuse and neglect’ means, at a minimum, any

6 recent act or failure to act on the part of a parent

7 or caretaker, which results in death, serious physical

8 or emotional harm, sexual abuse or exploitation, or

9 an act or failure to act which presents an imminent

10 risk of serious harm.

11 ‘‘(3) FAMILY RESOURCE AND SUPPORT PRO12 GRAMS.—The term ‘family resource and support

13 program’ means a community-based, prevention-fo14 cused entity that—

15 ‘‘(A) provides, through direct service, the

16 core services required under this Act, includ17 ing—

18 ‘‘(i) parent education, support and

19 leadership services, together with services

20 characterized by relationships between par21 ents and professionals that are based on

22 equality and respect, and designed to assist

23 parents in acquiring parenting skills, learn24 ing about child development, and respond-
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1 ing appropriately to the behavior of their

2 children;

3 ‘‘(ii) services to facilitate the ability of

4 parents to serve as resources to one an5 other (such as through mutual support and

6 parent self-help groups);

7 ‘‘(iii) early developmental screening of

8 children to assess any needs of children,

9 and to identify types of support that may

10 be provided;

11 ‘‘(iv) outreach services provided

12 through voluntary home visits and other

13 methods to assist parents in becoming

14 aware of and able to participate in family

15 resources and support program activities;

16 ‘‘(v) community and social services to

17 assist families in obtaining community re18 sources; and

19 ‘‘(vi) followup services;

20 ‘‘(B) provides, or arranges for the provi21 sion of, other core services through contracts or

22 agreements with other local agencies; and

23 ‘‘(C) provides access to optional services,

24 directly or by contract, purchase of service, or

25 interagency agreement, including—
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1 ‘‘(i) child care, early childhood devel2 opment and early intervention services;

3 ‘‘(ii) self-sufficiency and life manage4 ment skills training;

5 ‘‘(iii) education services, such as scho6 lastic tutoring, literacy training, and Gen7 eral Educational Degree services;

8 ‘‘(iv) job readiness skills;

9 ‘‘(v) child abuse and neglect preven10 tion activities;

11 ‘‘(vi) services that families with chil12 dren with disabilities or special needs may

13 require;

14 ‘‘(vii) community and social service re15 ferral;

16 ‘‘(viii) peer counseling;

17 ‘‘(ix) referral for substance abuse

18 counseling and treatment; and

19 ‘‘(x) help line services.

20 ‘‘(4) INDIAN TRIBE AND TRIBAL ORGANIZA21 TION.—The terms ‘Indian tribe’ and ‘tribal organi22 zation’ shall have the same meanings given such

23 terms in subsections (e) and (l), respectively, of sec24 tion 4 of the Indian Self-Determination and Edu25 cation Assistance Act (25 U.S.C. 450b (e) and (l)).
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1 ‘‘(5) RESPITE SERVICES.—The term ‘respite

2 services’ means short-term care services provided in

3 the temporary absence of the regular caregiver (par4 ent, other relative, foster parent, adoptive parent, or

5 guardian) to children who—

6 ‘‘(A) are in danger of abuse or neglect;

7 ‘‘(B) have experienced abuse or neglect; or

8 ‘‘(C) have disabilities, chronic, or terminal

9 illnesses.

10 Such services shall be provided within or outside the

11 home of the child, be short-term care (ranging from

12 a few hours to a few weeks of time, per year), and

13 be intended to enable the family to stay together and

14 to keep the child living in the home and community

15 of the child.

16 ‘‘(6) SECRETARY.—The term ‘Secretary’ means

17 the Secretary of Health and Human Services.

18 ‘‘(7) SEXUAL ABUSE.—The term ‘sexual abuse’

19 includes—

20 ‘‘(A) the employment, use, persuasion, in21 ducement, enticement, or coercion of any child

22 to engage in, or assist any other person to en23 gage in, any sexually explicit conduct or simula24 tion of such conduct for the purpose of produc25 ing a visual depiction of such conduct; or
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1 ‘‘(B) the rape, molestation, prostitution, or

2 other form of sexual exploitation of children, or

3 incest with children.

4 ‘‘(8) STATE.—The term ‘State’ means each of

5 the several States, the District of Columbia, the

6 Commonwealth of Puerto Rico, the Virgin Islands,

7 Guam, American Samoa, the Commonwealth of the

8 Northern Mariana Islands, and the Trust Territory

9 of the Pacific Islands.

10 ‘‘(9) WITHHOLDING OF MEDICALLY INDICATED

11 TREATMENT.—The term ‘withholding of medically

12 indicated treatment’ means the failure to respond to

13 the infant’s life-threatening conditions by providing

14 treatment (including appropriate nutrition, hydra15 tion, and medication) which, in the treating physi16 cian’s or physicians’ reasonable medical judgment,

17 will be most likely to be effective in ameliorating or

18 correcting all such conditions, except that the term

19 does not include the failure to provide treatment

20 (other than appropriate nutrition, hydration, or

21 medication) to an infant when, in the treating physi22 cian’s or physicians’ reasonable medical judgment—

23 ‘‘(A) the infant is chronically and irrevers24 ibly comatose;
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1 ‘‘(B) the provision of such treatment

2 would—

3 ‘‘(i) merely prolong dying;

4 ‘‘(ii) not be effective in ameliorating

5 or correcting all of the infant’s life-threat6 ening conditions; or

7 ‘‘(iii) otherwise be futile in terms of

8 the survival of the infant; or

9 ‘‘(C) the provision of such treatment would

10 be virtually futile in terms of the survival of the

11 infant and the treatment itself under such cir12 cumstances would be inhumane.

13 ‘‘TITLE I—GENERAL BLOCK

14 GRANT

15 ‘‘SEC. 101. CHILD AND FAMILY SERVICES BLOCK GRANTS.

16 ‘‘(a) ELIGIBILITY.—The Secretary shall award

17 grants to eligible States that file a State plan that is ap18 proved under section 102 and that otherwise meet the eli19 gibility requirements for grants under this title.

20 ‘‘(b) AMOUNT OF GRANT.—The amount of a grant

21 made to each State under subsection (a) for a fiscal year

22 shall be based on the population of children under the age

23 of 18 residing in each State that applies for a grant under

24 this section.
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1 ‘‘(c) USE OF AMOUNTS.—Amounts received by a

2 State under a grant awarded under subsection (a) shall

3 be used to carry out the purposes described in section 3.

4 ‘‘SEC. 102. ELIGIBLE STATES.

5 ‘‘(a) IN GENERAL.—As used in this title, the term

6 ‘eligible State’ means a State that has submitted to the

7 Secretary, not later than October 1, 1996, and every 3

8 years thereafter, a plan which has been signed by the chief

9 executive officer of the State and that includes the follow10 ing:

11 ‘‘(1) OUTLINE OF CHILD PROTECTION PRO12 GRAM.—A written document that outlines the activi13 ties the State intends to conduct to achieve the pur14 pose of this title, including the procedures to be used

15 for—

16 ‘‘(A) receiving and assessing reports of

17 child abuse or neglect;

18 ‘‘(B) investigating such reports;

19 ‘‘(C) with respect to families in which

20 abuse or neglect has been confirmed, providing

21 services or referral for services for families and

22 children where the State makes a determination

23 that the child may safely remain with the fam24 ily;
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1 ‘‘(D) protecting children by removing them

2 from dangerous settings and ensuring their

3 placement in a safe environment;

4 ‘‘(E) providing training for individuals

5 mandated to report suspected cases of child

6 abuse or neglect;

7 ‘‘(F) protecting children in foster care;

8 ‘‘(G) promoting timely adoptions;

9 ‘‘(H) protecting the rights of families,

10 using adult relatives as the preferred placement

11 for children separated from their parents where

12 such relatives meet the relevant State child pro13 tection standards; and

14 ‘‘(I) providing services to individuals, fami15 lies, or communities, either directly or through

16 referral, that are aimed at preventing the occur17 rence of child abuse and neglect.

18 ‘‘(2) CERTIFICATION OF STATE LAW REQUIRING

19 THE REPORTING OF CHILD ABUSE AND NEGLECT.—

20 A certification that the State has in effect laws that

21 require public officials and other professionals to re22 port, in good faith, actual or suspected instances of

23 child abuse or neglect.

24 ‘‘(3) CERTIFICATION OF PROCEDURES FOR

25 SCREENING, SAFETY ASSESSMENT, AND PROMPT IN-
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1 VESTIGATION.—A certification that the State has in

2 effect procedures for receiving and responding to re3 ports of child abuse or neglect, including the reports

4 described in paragraph (2), and for the immediate

5 screening, safety assessment, and prompt investiga6 tion of such reports.

7 ‘‘(4) CERTIFICATION OF STATE PROCEDURES

8 FOR REMOVAL AND PLACEMENT OF ABUSED OR NE9 GLECTED CHILDREN.—A certification that the State

10 has in effect procedures for the removal from fami11 lies and placement of abused or neglected children

12 and of any other child in the same household who

13 may also be in danger of abuse or neglect.

14 ‘‘(5) CERTIFICATION OF PROVISIONS FOR IMMU15 NITY FROM PROSECUTION.—A certification that the

16 State has in effect laws requiring immunity from

17 prosecution under State and local laws and regula18 tions for individuals making good faith reports of

19 suspected or known instances of child abuse or ne20 glect.

21 ‘‘(6) CERTIFICATION OF PROVISIONS AND PRO22 CEDURES RELATING TO APPEALS.—A certification

23 that not later than 2 years after the date of the en24 actment of this Act, the State shall have laws and

25 procedures in effect affording individuals an oppor-
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1 tunity to appeal an official finding of abuse or ne2 glect.

3 ‘‘(7) CERTIFICATION OF STATE PROCEDURES

4 FOR DEVELOPING AND REVIEWING WRITTEN PLANS

5 FOR PERMANENT PLACEMENT OF REMOVED CHIL6 DREN.—A certification that the State has in effect

7 procedures for ensuring that a written plan is pre8 pared for children who have been removed from their

9 families. Such plan shall specify the goals for achiev10 ing a permanent placement for the child in a timely

11 fashion, for ensuring that the written plan is re12 viewed every 6 months (until such placement is

13 achieved), and for ensuring that information about

14 such children is collected regularly and recorded in

15 case records, and include a description of such pro16 cedures.

17 ‘‘(8) CERTIFICATION OF STATE PROGRAM TO

18 PROVIDE INDEPENDENT LIVING SERVICES.—A cer19 tification that the State has in effect a program to

20 provide independent living services, for assistance in

21 making the transition to self-sufficient adulthood, to

22 individuals in the child protection program of the

23 State who are 16, but who are not 20 (or, at the

24 option of the State, 22), years of age, and who do

25 not have a family to which to be returned.
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1 ‘‘(9) CERTIFICATION OF STATE PROCEDURES

2 TO RESPOND TO REPORTING OF MEDICAL NEGLECT

3 OF DISABLED INFANTS.—

4 ‘‘(A) IN GENERAL.—A certification that

5 the State has in place for the purpose of re6 sponding to the reporting of medical neglect of

7 infants (including instances of withholding of

8 medically indicated treatment from disabled in9 fants with life-threatening conditions), proce10 dures or programs, or both (within the State

11 child protective services system), to provide

12 for—

13 ‘‘(i) coordination and consultation

14 with individuals designated by and within

15 appropriate health-care facilities;

16 ‘‘(ii) prompt notification by individ17 uals designated by and within appropriate

18 health-care facilities of cases of suspected

19 medical neglect (including instances of

20 withholding of medically indicated treat21 ment from disabled infants with life-threat22 ening conditions); and

23 ‘‘(iii) authority, under State law, for

24 the State child protective service to pursue

25 any legal remedies, including the authority
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1 to initiate legal proceedings in a court of

2 competent jurisdiction, as may be nec3 essary to prevent the withholding of medi4 cally indicated treatment from disabled in5 fants with life-threatening conditions.

6 ‘‘(B) WITHHOLDING OF MEDICALLY INDI7 CATED TREATMENT.—As used in subparagraph

8 (A), the term ‘withholding of medically indi9 cated treatment’ means the failure to respond

10 to the infant’s life-threatening conditions by

11 providing treatment (including appropriate nu12 trition, hydration, and medication) which, in the

13 treating physician’s or physicians’ reasonable

14 medical judgment, will be most likely to be ef15 fective in ameliorating or correcting all such

16 conditions, except that such term does not in17 clude the failure to provide treatment (other

18 than appropriate nutrition, hydration, or medi19 cation) to an infant when, in the treating physi20 cian’s or physicians’ reasonable medical judg21 ment—

22 ‘‘(i) the infant is chronically and irre23 versibly comatose;

24 ‘‘(ii) the provision of such treatment

25 would—
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1 ‘‘(I) merely prolong dying;

2 ‘‘(II) not be effective in amelio3 rating or correcting all of the infant’s

4 life-threatening conditions; or

5 ‘‘(III) otherwise be futile in

6 terms of the survival of the infant; or

7 ‘‘(iii) the provision of such treatment

8 would be virtually futile in terms of the

9 survival of the infant and the treatment it10 self under such circumstances would be in11 humane.

12 ‘‘(10) IDENTIFICATION OF CHILD PROTECTION

13 GOALS.—The quantitative goals of the State child

14 protection program.

15 ‘‘(11) CERTIFICATION OF CHILD PROTECTION

16 STANDARDS.—With respect to fiscal years beginning

17 on or after April 1, 1996, a certification that the

18 State—

19 ‘‘(A) has completed an inventory of all

20 children who, before the inventory, had been in

21 foster care under the responsibility of the State

22 for 6 months or more, which determined—

23 ‘‘(i) the appropriateness of, and neces24 sity for, the foster care placement;
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1 ‘‘(ii) whether the child could or should

2 be returned to the parents of the child or

3 should be freed for adoption or other per4 manent placement; and

5 ‘‘(iii) the services necessary to facili6 tate the return of the child or the place7 ment of the child for adoption or legal

8 guardianship;

9 ‘‘(B) is operating, to the satisfaction of the

10 Secretary—

11 ‘‘(i) a statewide information system

12 from which can be readily determined the

13 status, demographic characteristics, loca14 tion, and goals for the placement of every

15 child who is (or, within the immediately

16 preceding 12 months, has been) in foster

17 care;

18 ‘‘(ii) a case review system for each

19 child receiving foster care under the super20 vision of the State;

21 ‘‘(iii) a service program designed to

22 help children—

23 ‘‘(I) where appropriate, return to

24 families from which they have been

25 removed; or
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1 ‘‘(II) be placed for adoption, with

2 a legal guardian, or if adoption or

3 legal guardianship is determined not

4 to be appropriate for a child, in some

5 other planned, permanent living ar6 rangement; and

7 ‘‘(iv) a preplacement preventive serv8 ices program designed to help children at

9 risk for foster care placement remain with

10 their families; and

11 ‘‘(C)(i) has reviewed (or not later than Oc12 tober 1, 1997, will review) State policies and

13 administrative and judicial procedures in effect

14 for children abandoned at or shortly after birth

15 (including policies and procedures providing for

16 legal representation of such children); and

17 ‘‘(ii) is implementing (or not later than Oc18 tober 1, 1997, will implement) such policies and

19 procedures as the State determines, on the

20 basis of the review described in clause (i), to be

21 necessary to enable permanent decisions to be

22 made expeditiously with respect to the place23 ment of such children.

24 ‘‘(12) CERTIFICATION OF REASONABLE EF25 FORTS BEFORE PLACEMENT OF CHILDREN IN FOS-
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1 TER CARE.—A certification that the State in each

2 case will—

3 ‘‘(A) make reasonable efforts prior to the

4 placement of a child in foster care, to prevent

5 or eliminate the need for removal of the child

6 from the child’s home, and to make it possible

7 for the child to return home; and

8 ‘‘(B) with respect to families in which

9 abuse or neglect has been confirmed, provide

10 services or referral for services for families and

11 children where the State makes a determination

12 that the child may safely remain with the fam13 ily.

14 ‘‘(13) CERTIFICATION OF CONFIDENTIALITY

15 AND REQUIREMENTS FOR INFORMATION DISCLO16 SURE.—

17 ‘‘(A) IN GENERAL.—A certification that

18 the State has in effect and operational—

19 ‘‘(i) requirements ensuring that re20 ports and records made and maintained

21 pursuant to the purposes of this part shall

22 only be made available to—

23 ‘‘(I) individuals who are the sub24 ject of the report;
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1 ‘‘(II) Federal, State, or local gov2 ernment entities, or any agent of such

3 entities, having a need for such infor4 mation in order to carry out their re5 sponsibilities under law to protect

6 children from abuse and neglect;

7 ‘‘(III) child abuse citizen review

8 panels;

9 ‘‘(IV) child fatality review panels;

10 ‘‘(V) a grand jury or court, upon

11 a finding that information in the

12 record is necessary for the determina13 tion of an issue before the court or

14 grand jury; and

15 ‘‘(VI) other entities or classes of

16 individuals statutorily authorized by

17 the State to receive such information

18 pursuant to a legitimate State pur19 pose; and

20 ‘‘(ii) provisions that allow for public

21 disclosure of the findings or information

22 about cases of child abuse or neglect that

23 have resulted in a child fatality or near fa24 tality.
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1 ‘‘(B) LIMITATION.—Disclosures made pur2 suant to clause (i) or (ii) shall not include the

3 identifying information concerning the individ4 ual initiating a report or complaint alleging sus5 pected instances of child abuse or neglect.

6 ‘‘(C) DEFINITION.—For purposes of this

7 paragraph, the term ‘near fatality’ means an

8 act that, as certified by a physician, places the

9 child in serious or critical condition.

10 ‘‘(b) DETERMINATIONS.—The Secretary shall deter11 mine whether a plan submitted pursuant to subsection (a)

12 contains the material required by subsection (a), other

13 than the material described in paragraph (9) of such sub14 section. The Secretary may not require a State to include

15 in such a plan any material not described in subsection

16 (a).

17 ‘‘SEC. 103. DATA COLLECTION AND REPORTING.

18 ‘‘(a) NATIONAL CHILD ABUSE AND NEGLECT DATA

19 SYSTEM.—The Secretary shall establish a national data

20 collection and analysis program—

21 ‘‘(1) which, to the extent practicable, coordi22 nates existing State child abuse and neglect reports

23 and which shall include—
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1 ‘‘(A) standardized data on substantiated,

2 as well as false, unfounded, or unsubstantiated

3 reports; and

4 ‘‘(B) information on the number of deaths

5 due to child abuse and neglect; and

6 ‘‘(2) which shall collect, compile, analyze, and

7 make available State child abuse and neglect report8 ing information which, to the extent practical, is uni9 versal and case-specific and integrated with other

10 case-based foster care and adoption data collected by

11 the Secretary.

12 ‘‘(b) ADOPTION AND FOSTER CARE AND ANALYSIS

13 AND REPORTING SYSTEMS.—The Secretary shall imple14 ment a system for the collection of data relating to adop15 tion and foster care in the United States. Such data collec16 tion system shall—

17 ‘‘(1) avoid unnecessary diversion of resources

18 from agencies responsible for adoption and foster

19 care;

20 ‘‘(2) assure that any data that is collected is re21 liable and consistent over time and among jurisdic22 tions through the use of uniform definitions and

23 methodologies;

24 ‘‘(3) provide comprehensive national informa25 tion with respect to—
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1 ‘‘(A) the demographic characteristics of

2 adoptive and foster children and their biological

3 and adoptive or foster parents;

4 ‘‘(B) the status of the foster care popu5 lation (including the number of children in fos6 ter care, length of placement, type of place7 ment, availability for adoption, and goals for

8 ending or continuing foster care);

9 ‘‘(C) the number and characteristics of—

10 ‘‘(i) children placed in or removed

11 from foster care;

12 ‘‘(ii) children adopted or with respect

13 to whom adoptions have been terminated;

14 and

15 ‘‘(iii) children placed in foster care

16 outside the State which has placement and

17 care responsibility; and

18 ‘‘(D) the extent and nature of assistance

19 provided by Federal, State, and local adoption

20 and foster care programs and the characteris21 tics of the children with respect to whom such

22 assistance is provided; and

23 ‘‘(4) utilize appropriate requirements and incen24 tives to ensure that the system functions reliably

25 throughout the United States.
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1 ‘‘(c) ADDITIONAL INFORMATION.—The Secretary

2 may require the provision of additional information under

3 the data collection system established under subsection (b)

4 if the addition of such information is agreed to by a major5 ity of the States.

6 ‘‘(d) ANNUAL REPORT BY THE SECRETARY.—Within

7 6 months after the end of each fiscal year, the Secretary

8 shall prepare a report based on information provided by

9 the States for the fiscal year pursuant to this section, and

10 shall make the report and such information available to

11 the Congress and the public.

12 ‘‘TITLE II—RESEARCH, DEM13 ONSTRATIONS, TRAINING,

14 AND TECHNICAL ASSISTANCE

15 ‘‘SEC. 201. RESEARCH GRANTS.

16 ‘‘(a) IN GENERAL.—The Secretary, in consultation

17 with appropriate Federal officials and recognized experts

18 in the field, shall award grants or contracts for the con19 duct of research in accordance with subsection (b).

20 ‘‘(b) RESEARCH.—Research projects to be conducted

21 using amounts received under this section—

22 ‘‘(1) shall be designed to provide information to

23 better protect children from abuse or neglect and to

24 improve the well-being of abused or neglected chil-
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1 dren, with at least a portion of any such research

2 conducted under a project being field initiated;

3 ‘‘(2) shall at a minimum, focus on—

4 ‘‘(A) the nature and scope of child abuse

5 and neglect;

6 ‘‘(B) the causes, prevention, assessment,

7 identification, treatment, cultural and socio8 economic distinctions, and the consequences of

9 child abuse and neglect;

10 ‘‘(C) appropriate, effective and culturally

11 sensitive investigative, administrative, and judi12 cial procedures with respect to cases of child

13 abuse; and

14 ‘‘(D) the national incidence of child abuse

15 and neglect, including—

16 ‘‘(i) the extent to which incidents of

17 child abuse are increasing or decreasing in

18 number and severity;

19 ‘‘(ii) the incidence of substantiated

20 and unsubstantiated reported child abuse

21 cases;

22 ‘‘(iii) the number of substantiated

23 cases that result in a judicial finding of

24 child abuse or neglect or related criminal

25 court convictions;
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1 ‘‘(iv) the extent to which the number

2 of unsubstantiated, unfounded and false

3 reported cases of child abuse or neglect

4 have contributed to the inability of a State

5 to respond effectively to serious cases of

6 child abuse or neglect;

7 ‘‘(v) the extent to which the lack of

8 adequate resources and the lack of ade9 quate training of reporters have contrib10 uted to the inability of a State to respond

11 effectively to serious cases of child abuse

12 and neglect;

13 ‘‘(vi) the number of unsubstantiated,

14 false, or unfounded reports that have re15 sulted in a child being placed in substitute

16 care, and the duration of such placement;

17 ‘‘(vii) the extent to which unsubstan18 tiated reports return as more serious cases

19 of child abuse or neglect;

20 ‘‘(viii) the incidence and prevalence of

21 physical, sexual, and emotional abuse and

22 physical and emotional neglect in sub23 stitute care;

24 ‘‘(ix) the incidence and outcomes of

25 abuse allegations reported within the con-
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1 text of divorce, custody, or other family

2 court proceedings, and the interaction be3 tween this venue and the child protective

4 services system; and

5 ‘‘(x) the cases of children reunited

6 with their families or receiving family pres7 ervation services that result in subsequent

8 substantiated reports of child abuse and

9 neglect, including the death of the child;

10 and

11 ‘‘(3) may include the appointment of an advi12 sory board to—

13 ‘‘(A) provide recommendations on coordi14 nating Federal, State, and local child abuse and

15 neglect activities at the State level with similar

16 activities at the State and local level pertaining

17 to family violence prevention;

18 ‘‘(B) consider specific modifications needed

19 in State laws and programs to reduce the num20 ber of unfounded or unsubstantiated reports of

21 child abuse or neglect while enhancing the abil22 ity to identify and substantiate legitimate cases

23 of abuse or neglect which place a child in dan24 ger; and
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1 ‘‘(C) provide recommendations for modi2 fications needed to facilitate coordinated na3 tional and Statewide data collection with re4 spect to child protection and child welfare.

5 ‘‘SEC. 202. NATIONAL CLEARINGHOUSE FOR INFORMATION

6 RELATING TO CHILD ABUSE.

7 ‘‘(a) ESTABLISHMENT.—The Secretary shall,

8 through the Department of Health and Human Services,

9 or by one or more contracts of not less than 3 years dura10 tion provided through a competition, establish a national

11 clearinghouse for information relating to child abuse.

12 ‘‘(b) FUNCTIONS.—The Secretary shall, through the

13 clearinghouse established by subsection (a)—

14 ‘‘(1) maintain, coordinate, and disseminate in15 formation on all programs, including private pro16 grams, that show promise of success with respect to

17 the prevention, assessment, identification, and treat18 ment of child abuse and neglect;

19 ‘‘(2) maintain and disseminate information re20 lating to—

21 ‘‘(A) the incidence of cases of child abuse

22 and neglect in the United States;

23 ‘‘(B) the incidence of such cases in popu24 lations determined by the Secretary under sec25 tion 105(a)(1) of the Child Abuse Prevention,
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1 Adoption, and Family Services Act of 1988 (as

2 such section was in effect on the day before the

3 date of enactment of this Act); and

4 ‘‘(C) the incidence of any such cases relat5 ed to alcohol or drug abuse;

6 ‘‘(3) disseminate information related to data

7 collected and reported by States pursuant to section

8 103;

9 ‘‘(4) compile, analyze, and publish a summary

10 of the research conducted under section 201; and

11 ‘‘(5) solicit public comment on the components

12 of such clearinghouse.

13 ‘‘SEC. 203. GRANTS FOR DEMONSTRATION PROJECTS.

14 ‘‘(a) AWARDING OF GENERAL GRANTS.—The Sec15 retary may make grants to, and enter into contracts with,

16 public and nonprofit private agencies or organizations (or

17 combinations of such agencies or organizations) for the

18 purpose of developing, implementing, and operating time

19 limited, demonstration programs and projects for the fol20 lowing purposes:

21 ‘‘(1) INNOVATIVE PROGRAMS AND PROJECTS.—

22 The Secretary may award grants to public agencies

23 that demonstrate innovation in responding to reports

24 of child abuse and neglect including programs of col25 laborative partnerships between the State child pro-
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1 tective service agency, community social service

2 agencies and family support programs, schools,

3 churches and synagogues, and other community

4 agencies to allow for the establishment of a triage

5 system that—

6 ‘‘(A) accepts, screens and assesses reports

7 received to determine which such reports re8 quire an intensive intervention and which re9 quire voluntary referral to another agency, pro10 gram or project;

11 ‘‘(B) provides, either directly or through

12 referral, a variety of community-linked services

13 to assist families in preventing child abuse and

14 neglect; and

15 ‘‘(C) provides further investigation and in16 tensive intervention where the child’s safety is

17 in jeopardy.

18 ‘‘(2) KINSHIP CARE PROGRAMS AND

19 PROJECTS.—The Secretary may award grants to

20 public entities to assist such entities in developing or

21 implementing procedures using adult relatives as the

22 preferred placement for children removed from their

23 home, where such relatives are determined to be ca24 pable of providing a safe nurturing environment for

25 the child and where, to the maximum extent prac-
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1 ticable, such relatives comply with relevant State

2 child protection standards.

3 ‘‘(3) ADOPTION OPPORTUNITIES.—The Sec4 retary may award grants to public entities to assist

5 such entities in developing or implementing pro6 grams to expand opportunities for the adoption of

7 children with special needs.

8 ‘‘(4) FAMILY RESOURCE CENTERS.—The Sec9 retary may award grants to public or nonprofit pri10 vate entities to provide for the establishment of fam11 ily resource programs and support services that—

12 ‘‘(A) develop, expand, and enhance state13 wide networks of community-based, prevention14 focused centers, programs, or services that pro15 vide comprehensive support for families;

16 ‘‘(B) promote the development of parental

17 competencies and capacities in order to increase

18 family stability;

19 ‘‘(C) support the additional needs of fami20 lies with children with disabilities;

21 ‘‘(D) foster the development of a contin22 uum of preventive services for children and

23 families through State and community-based

24 collaborations and partnerships (both public

25 and private); and
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1 ‘‘(E) maximize funding for the financing,

2 planning, community mobilization, collabora3 tion, assessment, information and referral,

4 startup, training and technical assistance, infor5 mation management, reporting, and evaluation

6 costs for establishing, operating, or expanding a

7 statewide network of community-based, preven8 tion-focused family resource and support serv9 ices.

10 ‘‘(5) OTHER INNOVATIVE PROGRAMS.—The

11 Secretary may award grants to public or private

12 nonprofit organizations to assist such entities in de13 veloping or implementing innovative programs and

14 projects that show promise of preventing and treat15 ing cases of child abuse and neglect (such as Par16 ents Anonymous).

17 ‘‘(b) GRANTS FOR ABANDONED INFANT PRO18 GRAMS.—The Secretary may award grants to public and

19 nonprofit private entities to assist such entities in develop20 ing or implementing procedures—

21 ‘‘(1) to prevent the abandonment of infants and

22 young children, including the provision of services to

23 members of the natural family for any condition that

24 increases the probability of abandonment of an in25 fant or young child;
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1 ‘‘(2) to identify and address the needs of aban2 doned infants and young children;

3 ‘‘(3) to assist abandoned infants and young

4 children to reside with their natural families or in

5 foster care, as appropriate;

6 ‘‘(4) to recruit, train, and retain foster families

7 for abandoned infants and young children;

8 ‘‘(5) to carry out residential care programs for

9 abandoned infants and young children who are un10 able to reside with their families or to be placed in

11 foster care;

12 ‘‘(6) to carry out programs of respite care for

13 families and foster families of infants and young

14 children; and

15 ‘‘(7) to recruit and train health and social serv16 ices personnel to work with families, foster care fam17 ilies, and residential care programs for abandoned

18 infants and young children.

19 ‘‘(c) EVALUATION.—In making grants for demonstra20 tion projects under this section, the Secretary shall require

21 all such projects to be evaluated for their effectiveness.

22 Funding for such evaluations shall be provided either as

23 a stated percentage of a demonstration grant or as a sepa24 rate grant entered into by the Secretary for the purpose
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1 of evaluating a particular demonstration project or group

2 of projects.

3 ‘‘SEC. 204. TECHNICAL ASSISTANCE.

4 ‘‘(a) CHILD ABUSE AND NEGLECT.—

5 ‘‘(1) IN GENERAL.—The Secretary shall provide

6 technical assistance under this title to States to as7 sist such States in planning, improving, developing,

8 and carrying out programs and activities relating to

9 the prevention, assessment identification, and treat10 ment of child abuse and neglect.

11 ‘‘(2) EVALUATION.—Technical assistance pro12 vided under paragraph (1) may include an evalua13 tion or identification of—

14 ‘‘(A) various methods and procedures for

15 the investigation, assessment, and prosecution

16 of child physical and sexual abuse cases;

17 ‘‘(B) ways to mitigate psychological trau18 ma to the child victim; and

19 ‘‘(C) effective programs carried out by the

20 States under this Act.

21 ‘‘(b) ADOPTION OPPORTUNITIES.—The Secretary

22 shall provide, directly or by grant to or contract with pub23 lic or private nonprofit agencies or organizations—

24 ‘‘(1) technical assistance and resource and re25 ferral information to assist State or local govern-
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1 ments with termination of parental rights issues, in

2 recruiting and retaining adoptive families, in the

3 successful placement of children with special needs,

4 and in the provision of pre- and post-placement serv5 ices, including post-legal adoption services; and

6 ‘‘(2) other assistance to help State and local

7 governments replicate successful adoption-related

8 projects from other areas in the United States.

9 ‘‘SEC. 205. TRAINING RESOURCES.

10 ‘‘(a) TRAINING PROGRAMS.—The Secretary may

11 award grants to public or private nonprofit organiza12 tions—

13 ‘‘(1) for the training of professional and para14 professional personnel in the fields of medicine, law,

15 education, law enforcement, social work, and other

16 relevant fields who are engaged in, or intend to work

17 in, the field of prevention, identification, and treat18 ment of child abuse and neglect, including the links

19 between domestic violence and child abuse;

20 ‘‘(2) to provide culturally specific instruction in

21 methods of protecting children from child abuse and

22 neglect to children and to persons responsible for the

23 welfare of children, including parents of and persons

24 who work with children with disabilities; and
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1 ‘‘(3) to improve the recruitment, selection, and

2 training of volunteers serving in private and public

3 nonprofit children, youth and family service organi4 zations in order to prevent child abuse and neglect

5 through collaborative analysis of current recruit6 ment, selection, and training programs and develop7 ment of model programs for dissemination and rep8 lication nationally.

9 ‘‘(b) DISSEMINATION OF INFORMATION.—The Sec10 retary may provide for and disseminate information relat11 ing to various training resources available at the State and

12 local level to—

13 ‘‘(1) individuals who are engaged, or who intend

14 to engage, in the prevention, identification, assess15 ment, and treatment of child abuse and neglect; and

16 ‘‘(2) appropriate State and local officials, in17 cluding prosecutors, to assist in training law en18 forcement, legal, judicial, medical, mental health,

19 education, and child welfare personnel in appropriate

20 methods of interacting during investigative, adminis21 trative, and judicial proceedings with children who

22 have been subjected to abuse.
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1 ‘‘SEC. 206. APPLICATIONS AND AMOUNTS OF GRANTS.

2 ‘‘(a) REQUIREMENT OF APPLICATION.—The Sec3 retary may not make a grant to a State or other entity

4 under this title unless—

5 ‘‘(1) an application for the grant is submitted

6 to the Secretary;

7 ‘‘(2) with respect to carrying out the purpose

8 for which the grant is to be made, the application

9 provides assurances of compliance satisfactory to the

10 Secretary; and

11 ‘‘(3) the application otherwise is in such form,

12 is made in such manner, and contains such agree13 ments, assurances, and information as the Secretary

14 determines to be necessary to carry out this title.

15 ‘‘(b) AMOUNT OF GRANT.—The Secretary shall de16 termine the amount of a grant to be awarded under this

17 title.

18 ‘‘SEC. 207. PEER REVIEW FOR GRANTS.

19 ‘‘(a) ESTABLISHMENT OF PEER REVIEW PROCESS.—

20 ‘‘(1) IN GENERAL.—The Secretary shall, in con21 sultation with experts in the field and other Federal

22 agencies, establish a formal, rigorous, and meritori23 ous peer review process for purposes of evaluating

24 and reviewing applications for grants under this title

25 and determining the relative merits of the projects

26 for which such assistance is requested. The purpose
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1 of this process is to enhance the quality and useful2 ness of research in the field of child abuse and ne3 glect.

4 ‘‘(2) REQUIREMENTS FOR MEMBERS.—In estab5 lishing the process required by paragraph (1), the

6 Secretary shall appoint to the peer review panels

7 only members who are experts in the field of child

8 abuse and neglect or related disciplines, with appro9 priate expertise in the application to be reviewed,

10 and who are not individuals who are officers or em11 ployees of the Administration for Children and Fam12 ilies. The panels shall meet as often as is necessary

13 to facilitate the expeditious review of applications for

14 grants and contracts under this title, but may not

15 meet less than once a year. The Secretary shall en16 sure that the peer review panel utilizes scientifically

17 valid review criteria and scoring guidelines for re18 view committees.

19 ‘‘(b) REVIEW OF APPLICATIONS FOR ASSISTANCE.—

20 Each peer review panel established under subsection

21 (a)(1) that reviews any application for a grant shall—

22 ‘‘(1) determine and evaluate the merit of each

23 project described in such application;

24 ‘‘(2) rank such application with respect to all

25 other applications it reviews in the same priority
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1 area for the fiscal year involved, according to the rel2 ative merit of all of the projects that are described

3 in such application and for which financial assist4 ance is requested; and

5 ‘‘(3) make recommendations to the Secretary

6 concerning whether the application for the project

7 shall be approved.

8 The Secretary shall award grants under this title on the

9 basis of competitive review.

10 ‘‘(c) NOTICE OF APPROVAL.—

11 ‘‘(1) IN GENERAL.—The Secretary shall provide

12 grants under this title from among the projects

13 which the peer review panels established under sub14 section (a)(1) have determined to have merit.

15 ‘‘(2) REQUIREMENT OF EXPLANATION.—In the

16 instance in which the Secretary approves an applica17 tion for a program under this title without having

18 approved all applications ranked above such applica19 tion, the Secretary shall append to the approved ap20 plication a detailed explanation of the reasons relied

21 on for approving the application and for failing to

22 approve each pending application that is superior in

23 merit.
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1 ‘‘SEC. 208. NATIONAL RANDOM SAMPLE STUDY OF CHILD

2 WELFARE.

3 ‘‘(a) IN GENERAL.—The Secretary shall conduct a

4 national study based on random samples of children who

5 are at risk of child abuse or neglect, or are determined

6 by States to have been abused or neglected, and such other

7 research as may be necessary.

8 ‘‘(b) REQUIREMENTS.—The study required by sub9 section (a) shall—

10 ‘‘(1) have a longitudinal component; and

11 ‘‘(2) yield data reliable at the State level for as

12 many States as the Secretary determines is feasible.

13 ‘‘(c) PREFERRED CONTENTS.—In conducting the

14 study required by subsection (a), the Secretary should—

15 ‘‘(1) collect data on the child protection pro16 grams of different small States (or different groups

17 of such States) in different years to yield an occa18 sional picture of the child protection programs of

19 such States;

20 ‘‘(2) carefully consider selecting the sample

21 from cases of confirmed abuse or neglect; and

22 ‘‘(3) follow each case for several years while ob23 taining information on, among other things—

24 ‘‘(A) the type of abuse or neglect involved;

25 ‘‘(B) the frequency of contact with State

26 or local agencies;
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1 ‘‘(C) whether the child involved has been

2 separated from the family, and, if so, under

3 what circumstances;

4 ‘‘(D) the number, type, and characteristics

5 of out-of-home placements of the child; and

6 ‘‘(E) the average duration of each place7 ment.

8 ‘‘(d) REPORTS.—

9 ‘‘(1) IN GENERAL.—From time to time, the

10 Secretary shall prepare reports summarizing the re11 sults of the study required by subsection (a).

12 ‘‘(2) AVAILABILITY.—The Secretary shall make

13 available to the public any report prepared under

14 paragraph (1), in writing or in the form of an elec15 tronic data tape.

16 ‘‘(3) AUTHORITY TO CHARGE FEE.—The Sec17 retary may charge and collect a fee for the furnish18 ing of reports under paragraph (2).

19 ‘‘(4) FUNDING.—The Secretary shall carry out

20 this section using amounts made available under sec21 tion 425 of the Social Security Act.
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1 ‘‘TITLE III—GENERAL

2 PROVISIONS

3 ‘‘SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

4 ‘‘(a) TITLE I.—There are authorized to be appro5 priated to carry out title I, $230,000,000 for fiscal year

6 1996, and such sums as may be necessary for each of the

7 fiscal years 1997 through 2002.

8 ‘‘(b) TITLE II.—

9 ‘‘(1) IN GENERAL.—Of the amount appro10 priated under subsection (a) for a fiscal year, the

11 Secretary shall make available 12 percent of such

12 amount to carry out title II (except for sections 203

13 and 208).

14 ‘‘(2) GRANTS FOR DEMONSTRATION

15 PROJECTS.—Of the amount made available under

16 paragraph (1) for a fiscal year, the Secretary shall

17 make available not less than 40 percent of such

18 amount to carry out section 203.

19 ‘‘(c) INDIAN TRIBES.—Of the amount appropriated

20 under subsection (a) for a fiscal year, the Secretary shall

21 make available 1 percent of such amount to provide grants

22 and contracts to Indian tribes and Tribal Organizations.

23 ‘‘(d) AVAILABILITY OF APPROPRIATIONS.—Amounts

24 appropriated under subsection (a) shall remain available

25 until expended.
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1 ‘‘SEC. 302. GRANTS TO STATES FOR PROGRAMS RELATING

2 TO THE INVESTIGATION AND PROSECUTION

3 OF CHILD ABUSE AND NEGLECT CASES.

4 ‘‘(a) GRANTS TO STATES.—The Secretary, in con5 sultation with the Attorney General, is authorized to make

6 grants to the States for the purpose of assisting States

7 in developing, establishing, and operating programs de8 signed to improve—

9 ‘‘(1) the handling of child abuse and neglect

10 cases, particularly cases of child sexual abuse and

11 exploitation, in a manner which limits additional

12 trauma to the child victim;

13 ‘‘(2) the handling of cases of suspected child

14 abuse or neglect related fatalities; and

15 ‘‘(3) the investigation and prosecution of cases

16 of child abuse and neglect, particularly child sexual

17 abuse and exploitation.

18 ‘‘(b) ELIGIBILITY REQUIREMENTS.—In order for a

19 State to qualify for assistance under this section, such

20 State shall—

21 ‘‘(1) be an eligible State under section 102;

22 ‘‘(2) establish a task force as provided in sub23 section (c);

24 ‘‘(3) fulfill the requirements of subsection (d);

25 ‘‘(4) submit annually an application to the Sec26 retary at such time and containing such information
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1 and assurances as the Secretary considers necessary,

2 including an assurance that the State will—

3 ‘‘(A) make such reports to the Secretary as

4 may reasonably be required; and

5 ‘‘(B) maintain and provide access to

6 records relating to activities under subsection

7 (a); and

8 ‘‘(5) submit annually to the Secretary a report

9 on the manner in which assistance received under

10 this program was expended throughout the State,

11 with particular attention focused on the areas de12 scribed in paragraphs (1) through (3) of subsection

13 (a).

14 ‘‘(c) STATE TASK FORCES.—

15 ‘‘(1) GENERAL RULE.—Except as provided in

16 paragraph (2), a State requesting assistance under

17 this section shall establish or designate, and main18 tain, a State multidisciplinary task force on chil19 dren’s justice (hereafter in this section referred to as

20 ‘State task force’) composed of professionals with

21 knowledge and experience relating to the criminal

22 justice system and issues of child physical abuse,

23 child neglect, child sexual abuse and exploitation,

24 and child maltreatment related fatalities. The State

25 task force shall include—
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1 ‘‘(A) individuals representing the law en2 forcement community;

3 ‘‘(B) judges and attorneys involved in both

4 civil and criminal court proceedings related to

5 child abuse and neglect (including individuals

6 involved with the defense as well as the prosecu7 tion of such cases);

8 ‘‘(C) child advocates, including both attor9 neys for children and, where such programs are

10 in operation, court appointed special advocates;

11 ‘‘(D) health and mental health profes12 sionals;

13 ‘‘(E) individuals representing child protec14 tive service agencies;

15 ‘‘(F) individuals experienced in working

16 with children with disabilities;

17 ‘‘(G) parents; and

18 ‘‘(H) representatives of parents’ groups.

19 ‘‘(2) EXISTING TASK FORCE.—As determined

20 by the Secretary, a State commission or task force

21 established after January 1, 1983, with substantially

22 comparable membership and functions, may be con23 sidered the State task force for purposes of this sub24 section.
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1 ‘‘(d) STATE TASK FORCE STUDY.—Before a State

2 receives assistance under this section, and at 3-year inter3 vals thereafter, the State task force shall comprehen4 sively—

5 ‘‘(1) review and evaluate State investigative, ad6 ministrative and both civil and criminal judicial han7 dling of cases of child abuse and neglect, particularly

8 child sexual abuse and exploitation, as well as cases

9 involving suspected child maltreatment related fatali10 ties and cases involving a potential combination of

11 jurisdictions, such as interstate, Federal-State, and

12 State-Tribal; and

13 ‘‘(2) make policy and training recommendations

14 in each of the categories described in subsection (e).

15 The task force may make such other comments and rec16 ommendations as are considered relevant and useful.

17 ‘‘(e) ADOPTION OF STATE TASK FORCE REC18 OMMENDATIONS.—

19 ‘‘(1) GENERAL RULE.—Subject to the provi20 sions of paragraph (2), before a State receives as21 sistance under this section, a State shall adopt rec22 ommendations of the State task force in each of the

23 following categories—

24 ‘‘(A) investigative, administrative, and ju25 dicial handling of cases of child abuse and ne-
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1 glect, particularly child sexual abuse and exploi2 tation, as well as cases involving suspected child

3 maltreatment related fatalities and cases involv4 ing a potential combination of jurisdictions,

5 such as interstate, Federal-State, and State6 Tribal, in a manner which reduces the addi7 tional trauma to the child victim and the vic8 tim’s family and which also ensures procedural

9 fairness to the accused;

10 ‘‘(B) experimental, model and demonstra11 tion programs for testing innovative approaches

12 and techniques which may improve the prompt

13 and successful resolution of civil and criminal

14 court proceedings or enhance the effectiveness

15 of judicial and administrative action in child

16 abuse and neglect cases, particularly child sex17 ual abuse and exploitation cases, including the

18 enhancement of performance of court-appointed

19 attorneys and guardians ad litem for children;

20 and

21 ‘‘(C) reform of State laws, ordinances, reg22 ulations, protocols and procedures to provide

23 comprehensive protection for children from

24 abuse, particularly child sexual abuse and ex-
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1 ploitation, while ensuring fairness to all affected

2 persons.

3 ‘‘(2) EXEMPTION.—As determined by the Sec4 retary, a State shall be considered to be in fulfill5 ment of the requirements of this subsection if—

6 ‘‘(A) the State adopts an alternative to the

7 recommendations of the State task force, which

8 carries out the purpose of this section, in each

9 of the categories under paragraph (1) for which

10 the State task force’s recommendations are not

11 adopted; or

12 ‘‘(B) the State is making substantial

13 progress toward adopting recommendations of

14 the State task force or a comparable alternative

15 to such recommendations.

16 ‘‘(f) FUNDS AVAILABLE.—For grants under this sec17 tion, the Secretary shall use the amount authorized by sec18 tion 1404A of the Victims of Crime Act of 1984.

19 ‘‘SEC. 303. TRANSITIONAL PROVISION.

20 ‘‘A State or other entity that has a grant, contract,

21 or cooperative agreement in effect, on the date of enact22 ment of this Act, under the Family Resource and Support

23 Program, the Community-Based Family Resource Pro24 gram, the Family Support Center Program, the Emer25 gency Child Abuse Prevention Grant Program, or the
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1 Temporary Child Care for Children with Disabilities and

2 Crisis Nurseries Programs shall continue to receive funds

3 under such grant, contract, or cooperative agreement, sub4 ject to the original terms under which such funds were

5 provided, through the end of the applicable grant, con6 tract, or agreement cycle.

7 ‘‘SEC. 304. RULE OF CONSTRUCTION.

8 ‘‘(a) IN GENERAL.—Nothing in this Act, or in part

9 B or E of title IV of the Social Security Act, shall be con10 strued—

11 ‘‘(1) as establishing a Federal requirement that

12 a parent or legal guardian provide a child any medi13 cal service or treatment against the religious beliefs

14 of the parent or legal guardian; and

15 ‘‘(2) to require that a State find, or to prohibit

16 a State from finding, abuse or neglect in cases in

17 which a parent or legal guardian relies solely or par18 tially upon spiritual means rather than medical

19 treatment, in accordance with the religious beliefs of

20 the parent or legal guardian.

21 ‘‘(b) STATE REQUIREMENT.—Notwithstanding sub22 section (a), a State shall have in place authority under

23 State law to permit the child protective service system of

24 the State to pursue any legal remedies, including the au25 thority to initiate legal proceedings in a court of competent
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1 jurisdiction, to provide medical care or treatment for a

2 child when such care or treatment is necessary to prevent

3 or remedy serious harm to the child, or to prevent the

4 withholding of medically indicated treatment from children

5 with life threatening conditions. Except with respect to the

6 withholding of medically indicated treatments from dis7 abled infants with life threatening conditions, case by case

8 determinations concerning the exercise of the authority of

9 this subsection shall be within the sole discretion of the

10 State.’’.

11 SEC. 4752. REAUTHORIZATIONS.

12 (a) MISSING CHILDREN’S ASSISTANCE ACT.—Section

13 408 of the Missing Children’s Assistance Act (42 U.S.C.

14 5777) is amended—

15 (1) by striking ‘‘To’’ and inserting ‘‘(a) IN

16 GENERAL.—To’’

17 (2) by striking ‘‘and 1996’’ and inserting

18 ‘‘1996, and 1997’’; and

19 (3) by adding at the end thereof the following

20 new subsection:

21 ‘‘(b) EVALUATION.—The Administrator shall use not

22 more than 5 percent of the amount appropriated for a fis23 cal year under subsection (a) to conduct an evaluation of

24 the effectiveness of the programs and activities established

25 and operated under this title.’’.
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1 (b) VICTIMS OF CHILD ABUSE ACT OF 1990.—Sec2 tion 214B of the Victims of Child Abuse Act of 1990 (42

3 U.S.C. 13004) is amended—

4 (1) in subsection (a)(2), by striking ‘‘and 1996’’

5 and inserting ‘‘1996, and 1997’’; and

6 (2) in subsection (b)(2), by striking ‘‘and

7 1996’’ and inserting ‘‘1996, and 1997’’.

8 SEC. 4753. REPEALS.

9 (a) IN GENERAL.—The following provisions of law

10 are repealed:

11 (1) Title II of the Child Abuse Prevention and

12 Treatment and Adoption Reform Act of 1978 (42

13 U.S.C. 5111 et seq.).

14 (2) The Abandoned Infants Assistance Act of

15 1988 (42 U.S.C. 670 note).

16 (3) The Temporary Child Care for Children

17 with Disabilities and Crisis Nurseries Act of 1986

18 (42 U.S.C. 5117 et seq.).

19 (4) Subtitle F of title VII of the Stewart B.

20 McKinney Homeless Assistance Act (42 U.S.C.

21 11481 et seq.).

22 (b) CONFORMING AMENDMENTS.—

23 (1) RECOMMENDED LEGISLATION.—After con24 sultation with the appropriate committees of the

25 Congress and the Director of the Office of Manage-
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1 ment and Budget, the Secretary of Health and

2 Human Services shall prepare and submit to the

3 Congress a legislative proposal in the form of an im4 plementing bill containing technical and conforming

5 amendments to reflect the repeals made by this sec6 tion.

7 (2) SUBMISSION TO CONGRESS.—Not later than

8 6 months after the date of enactment of this sub9 chapter, the Secretary of Health and Human Serv10 ices shall submit the implementing bill referred to

11 under paragraph (1).

12 Subtitle G—Child Care

13 SEC. 4801. SHORT TITLE AND REFERENCES.

14 (a) SHORT TITLE.—This subtitle may be cited as the

15 ‘‘Child Care and Development Block Grant Amendments

16 of 1996’’.

17 (b) REFERENCES.—Except as otherwise expressly

18 provided, whenever in this subtitle an amendment or re19 peal is expressed in terms of an amendment to, or repeal

20 of, a section or other provision, the reference shall be con21 sidered to be made to a section or other provision of the

22 Child Care and Development Block Grant Act of 1990 (42

23 U.S.C. 9858 et seq.).
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1 SEC. 4802. GOALS.

2 (a) GOALS.—Section 658A (42 U.S.C. 9801 note) is

3 amended—

4 (1) in the section heading by inserting ‘‘AND

5 GOALS’’ after ‘‘TITLE’’;

6 (2) by inserting ‘‘(a) SHORT TITLE.—’’ before

7 ‘‘This’’; and

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

9 ‘‘(b) GOALS.—The goals of this subchapter are—

10 ‘‘(1) to allow each State maximum flexibility in

11 developing child care programs and policies that best

12 suit the needs of children and parents within such

13 State;

14 ‘‘(2) to promote parental choice to empower

15 working parents to make their own decisions on the

16 child care that best suits their family’s needs;

17 ‘‘(3) to encourage States to provide consumer

18 education information to help parents make in19 formed choices about child care;

20 ‘‘(4) to assist States to provide child care to

21 parents trying to achieve independence from public

22 assistance; and

23 ‘‘(5) to assist States in implementing the

24 health, safety, licensing, and registration standards

25 established in State regulations.’’.
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1 SEC. 4803. AUTHORIZATION OF APPROPRIATIONS AND EN2 TITLEMENT AUTHORITY.

3 (a) IN GENERAL.—Section 658B (42 U.S.C. 9858)

4 is amended to read as follows:

5 ‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

6 ‘‘There is authorized to be appropriated to carry out

7 this subchapter $1,000,000,000 for each of the fiscal

8 years 1996 through 2002.’’.

9 (b) SOCIAL SECURITY ACT.—Part A of title IV of

10 the Social Security Act (42 U.S.C. 601 et seq.) is amended

11 by adding at the end the following:

12 ‘‘SEC. 418. FUNDING FOR CHILD CARE.

13 ‘‘(a) GENERAL CHILD CARE ENTITLEMENT.—

14 ‘‘(1) GENERAL ENTITLEMENT.—Subject to the

15 amount appropriated under paragraph (3), each

16 State shall, for the purpose of providing child care

17 assistance, be entitled to payments under a grant

18 under this subsection for a fiscal year in an amount

19 equal to—

20 ‘‘(A) the sum of the total amount required

21 to be paid to the State under former section

22 403 for fiscal year 1994 or 1995 (whichever is

23 greater) with respect to amounts expended for

24 child care under section—
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1 ‘‘(i) 402(g) of this Act (as such sec2 tion was in effect before October 1, 1995);

3 and

4 ‘‘(ii) 402(i) of this Act (as so in ef5 fect); or

6 ‘‘(B) the average of the total amounts re7 quired to be paid to the State for fiscal years

8 1992 through 1994 under the sections referred

9 to in subparagraph (A);

10 whichever is greater.

11 ‘‘(2) REMAINDER.—

12 ‘‘(A) GRANTS.—The Secretary shall use

13 any amounts appropriated for a fiscal year

14 under paragraph (3), and remaining after the

15 reservation described in paragraph (4) and

16 after grants are awarded under paragraph (1),

17 to make grants to States under this paragraph.

18 ‘‘(B) AMOUNT.—Subject to subparagraph

19 (C), the amount of a grant awarded to a State

20 for a fiscal year under this paragraph shall be

21 based on the formula used for determining the

22 amount of Federal payments to the State under

23 section 403(n) (as such section was in effect be24 fore October 1, 1995).
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1 ‘‘(C) MATCHING REQUIREMENT.—The Sec2 retary shall pay to each eligible State in a fiscal

3 year an amount, under a grant under subpara4 graph (A), equal to the Federal medical assist5 ance percentage for such State for fiscal year

6 1995 (as defined in section 1905(b)) of so

7 much of the expenditures by the State for child

8 care in such year as exceed the State set-aside

9 for such State under paragraph (1)(A) for such

10 year and the amount of State expenditures in

11 fiscal year 1994 that equal the non-Federal

12 share for the programs described in subpara13 graph (A) of paragraph (1).

14 ‘‘(D) REDISTRIBUTION.—

15 ‘‘(i) IN GENERAL.—With respect to

16 any fiscal year, if the Secretary determines

17 (in accordance with clause (ii)) that

18 amounts under any grant awarded to a

19 State under this paragraph for such fiscal

20 year will not be used by such State during

21 such fiscal year for carrying out the pur22 pose for which the grant is made, the Sec23 retary shall make such amounts available

24 in the subsequent fiscal year for carrying

25 out such purpose to 1 or more States
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1 which apply for such funds to the extent

2 the Secretary determines that such States

3 will be able to use such additional amounts

4 for carrying out such purpose. Such avail5 able amounts shall be redistributed to a

6 State pursuant to section 402(i) (as such

7 section was in effect before October 1,

8 1995) by substituting ‘the number of chil9 dren residing in all States applying for

10 such funds’ for ‘the number of children re11 siding in the United States in the second

12 preceding fiscal year’.

13 ‘‘(ii) TIME OF DETERMINATION AND

14 DISTRIBUTION.—The determination of the

15 Secretary under clause (i) for a fiscal year

16 shall be made not later than the end of the

17 first quarter of the subsequent fiscal year.

18 The redistribution of amounts under clause

19 (i) shall be made as close as practicable to

20 the date on which such determination is

21 made. Any amount made available to a

22 State from an appropriation for a fiscal

23 year in accordance with this subparagraph

24 shall, for purposes of this part, be re25 garded as part of such State’s payment (as
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1 determined under this subsection) for the

2 fiscal year in which the redistribution is

3 made.

4 ‘‘(3) APPROPRIATION.—There are authorized to

5 be appropriated, and there are appropriated, to

6 carry out this section—

7 ‘‘(A) $1,967,000,000 for fiscal year 1997;

8 ‘‘(B) $2,067,000,000 for fiscal year 1998;

9 ‘‘(C) $2,167,000,000 for fiscal year 1999;

10 ‘‘(D) $2,367,000,000 for fiscal year 2000;

11 ‘‘(E) $2,567,000,000 for fiscal year 2001;

12 and

13 ‘‘(F) $2,717,000,000 for fiscal year 2002.

14 ‘‘(4) INDIAN TRIBES.—The Secretary shall re15 serve not more than 1 percent of the aggregate

16 amount appropriated to carry out this section in

17 each fiscal year for payments to Indian tribes and

18 tribal organizations.

19 ‘‘(b) USE OF FUNDS.—

20 ‘‘(1) IN GENERAL.—Amounts received by a

21 State under this section shall only be used to provide

22 child care assistance. Amounts received by a State

23 under a grant under subsection (a)(1) shall be avail24 able for use by the State without fiscal year limita25 tion.
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1 ‘‘(2) USE FOR CERTAIN POPULATIONS.—A

2 State shall ensure that not less than 70 percent of

3 the total amount of funds received by the State in

4 a fiscal year under this section are used to provide

5 child care assistance to families who are receiving

6 assistance under a State program under this part,

7 families who are attempting through work activities

8 to transition off of such assistance program, and

9 families who are at risk of becoming dependent on

10 such assistance program.

11 ‘‘(c) APPLICATION OF CHILD CARE AND DEVELOP12 MENT BLOCK GRANT ACT of 1990.—Notwithstanding any

13 other provision of law, amounts provided to a State under

14 this section shall be transferred to the lead agency under

15 the Child Care and Development Block Grant Act of 1990,

16 integrated by the State into the programs established by

17 the State under such Act, and be subject to requirements

18 and limitations of such Act.

19 ‘‘(d) DEFINITION.—As used in this section, the term

20 ‘State’ means each of the 50 States or the District of Co21 lumbia.’’.

22 SEC. 4804. LEAD AGENCY.

23 Section 658D(b) (42 U.S.C. 9858b(b)) is amended—

24 (1) in paragraph (1)—
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1 (A) in subparagraph (A), by striking

2 ‘‘State’’ the first place that such appears and

3 inserting ‘‘governmental or nongovernmental’’;

4 and

5 (B) in subparagraph (C), by inserting

6 ‘‘with sufficient time and Statewide distribution

7 of the notice of such hearing,’’ after ‘‘hearing in

8 the State’’; and

9 (2) in paragraph (2), by striking the second

10 sentence.

11 SEC. 4805. APPLICATION AND PLAN.

12 Section 658E (42 U.S.C. 9858c) is amended—

13 (1) in subsection (b)—

14 (A) by striking ‘‘implemented—’’ and all

15 that follows through ‘‘(2)’’ and inserting ‘‘im16 plemented’’; and

17 (B) by striking ‘‘for subsequent State

18 plans’’;

19 (2) in subsection (c)—

20 (A) in paragraph (2)—

21 (i) in subparagraph (A)—

22 (I) in clause (i) by striking ‘‘,

23 other than through assistance pro24 vided under paragraph (3)(C),’’; and
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1 (II) by striking ‘‘except’’ and all

2 that follows through ‘‘1992’’, and in3 serting ‘‘and provide a detailed de4 scription of the procedures the State

5 will implement to carry out the re6 quirements of this subparagraph’’;

7 (ii) in subparagraph (B)—

8 (I) by striking ‘‘Provide assur9 ances’’ and inserting ‘‘Certify’’; and

10 (II) by inserting before the pe11 riod at the end ‘‘and provide a de12 tailed description of such procedures’’;

13 (iii) in subparagraph (C)—

14 (I) by striking ‘‘Provide assur15 ances’’ and inserting ‘‘Certify’’; and

16 (II) by inserting before the pe17 riod at the end ‘‘and provide a de18 tailed description of how such record

19 is maintained and is made available’’;

20 (iv) by amending subparagraph (D) to

21 read as follows:

22 ‘‘(D) CONSUMER EDUCATION INFORMA23 TION.—Certify that the State will collect and

24 disseminate to parents of eligible children and

25 the general public, consumer education informa-
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1 tion that will promote informed child care

2 choices.’’;

3 (v) by amending subparagraph (E) to

4 read as follows:

5 ‘‘(E) COMPLIANCE WITH STATE LICENSING

6 REQUIREMENTS.—

7 ‘‘(i) IN GENERAL.—Certify that the

8 State has in effect licensing requirements

9 applicable to child care services provided

10 within the State, and provide a detailed de11 scription of such requirements and of how

12 such requirements are effectively enforced.

13 Nothing in the preceding sentence shall be

14 construed to require that licensing require15 ments be applied to specific types of pro16 viders of child care services.

17 ‘‘(ii) INDIAN TRIBES AND TRIBAL OR18 GANIZATIONS.—In lieu of any licensing

19 and regulatory requirements applicable

20 under State and local law, the Secretary,

21 in consultation with Indian tribes and trib22 al organizations, shall develop minimum

23 child care standards (that appropriately re24 flect tribal needs and available resources)

25 that shall be applicable to Indian tribes
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1 and tribal organization receiving assistance

2 under this subchapter.’’;

3 (vi) in subparagraph (G), by striking

4 ‘‘Provide assurances’’ and inserting ‘‘Cer5 tify’’; and

6 (vii) by striking subparagraphs (H),

7 (I), and (J) and inserting the following:

8 ‘‘(H) MEETING THE NEEDS OF CERTAIN

9 POPULATIONS.—Demonstrate the manner in

10 which the State will meet the specific child care

11 needs of families who are receiving assistance

12 under a State program under part A of title IV

13 of the Social Security Act, families who are at14 tempting through work activities to transition

15 off of such assistance program, and families

16 that are at risk of becoming dependent on such

17 assistance program.’’;

18 (B) in paragraph (3)—

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

20 ‘‘(B) and (C)’’ and inserting ‘‘(B) through

21 (D)’’;

22 (ii) in subparagraph (B)—

23 (I) by striking ‘‘.—Subject to the

24 reservation contained in subparagraph
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1 (C), the’’ and inserting ‘‘AND RELAT2 ED ACTIVITIES.—The’’;

3 (II) in clause (i) by striking ‘‘;

4 and’’ at the end and inserting a pe5 riod;

6 (III) by striking ‘‘for—’’ and all

7 that follows through ‘‘section

8 658E(c)(2)(A)’’ and inserting ‘‘for

9 child care services on sliding fee scale

10 basis, activities that improve the qual11 ity or availability of such services, and

12 any other activity that the State

13 deems appropriate to realize any of

14 the goals specified in paragraphs (2)

15 through (5) of section 658A(b)’’; and

16 (IV) by striking clause (ii);

17 (iii) by amending subparagraph (C) to

18 read as follows:

19 ‘‘(C) LIMITATION ON ADMINISTRATIVE

20 COSTS.—Not more than 5 percent of the aggre21 gate amount of funds available to the State to

22 carry out this subchapter by a State in each fis23 cal year may be expended for administrative

24 costs incurred by such State to carry out all of

25 its functions and duties under this subchapter.
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1 As used in the preceding sentence, the term

2 ‘administrative costs’ shall not include the costs

3 of providing direct services.’’; and

4 (iv) by adding at the end thereof the

5 following:

6 ‘‘(D) ASSISTANCE FOR CERTAIN FAMI7 LIES.—A State shall ensure that a substantial

8 portion of the amounts available (after the

9 State has complied with the requirement of sec10 tion 418(b)(2) of the Social Security Act with

11 respect to each of the fiscal years 1997 through

12 2002) to the State to carry out activities under

13 this subchapter in each fiscal year is used to

14 provide assistance to low-income working fami15 lies other than families described in paragraph

16 (2)(F).’’; and

17 (C) in paragraph (4)(A)—

18 (i) by striking ‘‘provide assurances’’

19 and inserting ‘‘certify’’;

20 (ii) in the first sentence by inserting

21 ‘‘and shall provide a summary of the facts

22 relied on by the State to determine that

23 such rates are sufficient to ensure such ac24 cess’’ before the period; and

25 (iii) by striking the last sentence.
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1 SEC. 4806. LIMITATION ON STATE ALLOTMENTS.

2 Section 658F(b)(1) (42 U.S.C. 9858d(b)(1)) is

3 amended by striking ‘‘No’’ and inserting ‘‘Except as pro4 vided for in section 658O(c)(6), no’’.

5 SEC. 4807. ACTIVITIES TO IMPROVE THE QUALITY OF

6 CHILD CARE.

7 Section 658G (42 U.S.C. 9858e) is amended to read

8 as follows:

9 ‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF

10 CHILD CARE.

11 ‘‘A State that receives funds to carry out this sub12 chapter for a fiscal year, shall use not less than 3 percent

13 of the amount of such funds for activities that are de14 signed to provide comprehensive consumer education to

15 parents and the public, activities that increase parental

16 choice, and activities designed to improve the quality and

17 availability of child care (such as resource and referral

18 services).’’.

19 SEC. 4808. REPEAL OF EARLY CHILDHOOD DEVELOPMENT

20 AND BEFORE- AND AFTER-SCHOOL CARE RE21 QUIREMENT.

22 Section 658H (42 U.S.C. 9858f) is repealed.

23 SEC. 4809. ADMINISTRATION AND ENFORCEMENT.

24 Section 658I(b) (42 U.S.C. 9858g(b)) is amended—

25 (1) in paragraph (1), by striking ‘‘, and shall

26 have’’ and all that follows through ‘‘(2)’’; and
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1 (2) in the matter following clause (ii) of para2 graph (2)(A), by striking ‘‘finding and that’’ and all

3 that follows through the period and inserting ‘‘find4 ing and shall require that the State reimburse the

5 Secretary for any funds that were improperly ex6 pended for purposes prohibited or not authorized by

7 this subchapter, that the Secretary deduct from the

8 administrative portion of the State allotment for the

9 following fiscal year an amount that is less than or

10 equal to any improperly expended funds, or a com11 bination of such options.’’.

12 SEC. 4810. PAYMENTS.

13 Section 658J(c) (42 U.S.C. 9858h(c)) is amended by

14 striking ‘‘expended’’ and inserting ‘‘obligated’’.

15 SEC. 4811. ANNUAL REPORT AND AUDITS.

16 Section 658K (42 U.S.C. 9858i) is amended—

17 (1) in the section heading by striking ‘‘ANNUAL

18 REPORT’’ and inserting ‘‘REPORTS’’;

19 (2) in subsection (a), to read as follows:

20 ‘‘(a) REPORTS.—

21 ‘‘(1) COLLECTION OF INFORMATION BY

22 STATES.—

23 ‘‘(A) IN GENERAL.—A State that receives

24 funds to carry out this subchapter shall collect
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1 the information described in subparagraph (B)

2 on a monthly basis.

3 ‘‘(B) REQUIRED INFORMATION.—The in4 formation required under this subparagraph

5 shall include, with respect to a family unit re6 ceiving assistance under this subchapter infor7 mation concerning—

8 ‘‘(i) family income;

9 ‘‘(ii) county of residence;

10 ‘‘(iii) the gender, race, and age of

11 children receiving such assistance;

12 ‘‘(iv) whether the family includes only

13 1 parent;

14 ‘‘(v) the sources of family income, in15 cluding the amount obtained from (and

16 separately identified)—

17 ‘‘(I) employment, including self18 employment;

19 ‘‘(II) cash or other assistance

20 under part A of title IV of the Social

21 Security Act;

22 ‘‘(III) housing assistance;

23 ‘‘(IV) assistance under the Food

24 Stamp Act of 1977; and

25 ‘‘(V) other assistance programs;
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1 ‘‘(vi) the number of months the family

2 has received benefits;

3 ‘‘(vii) the type of child care in which

4 the child was enrolled (such as family child

5 care, home care, or center-based child

6 care);

7 ‘‘(viii) whether the child care provider

8 involved was a relative;

9 ‘‘(ix) the cost of child care for such

10 families; and

11 ‘‘(x) the average hours per week of

12 such care;

13 during the period for which such information is

14 required to be submitted.

15 ‘‘(C) SUBMISSION TO SECRETARY.—A

16 State described in subparagraph (A) shall, on a

17 quarterly basis, submit the information required

18 to be collected under subparagraph (B) to the

19 Secretary.

20 ‘‘(D) SAMPLING.—The Secretary may dis21 approve the information collected by a State

22 under this paragraph if the State uses sampling

23 methods to collect such information.

24 ‘‘(2) BIANNUAL REPORTS.—Not later than De25 cember 31, 1997, and every 6 months thereafter, a
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1 State described in paragraph (1)(A) shall prepare

2 and submit to the Secretary a report that includes

3 aggregate data concerning—

4 ‘‘(A) the number of child care providers

5 that received funding under this subchapter as

6 separately identified based on the types of pro7 viders listed in section 658P(5);

8 ‘‘(B) the monthly cost of child care serv9 ices, and the portion of such cost that is paid

10 for with assistance provided under this sub11 chapter, listed by the type of child care services

12 provided;

13 ‘‘(C) the number of payments made by the

14 State through vouchers, contracts, cash, and

15 disregards under public benefit programs, listed

16 by the type of child care services provided;

17 ‘‘(D) the manner in which consumer edu18 cation information was provided to parents and

19 the number of parents to whom such informa20 tion was provided; and

21 ‘‘(E) the total number (without duplica22 tion) of children and families served under this

23 subchapter;

24 during the period for which such report is required

25 to be submitted.’’; and
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1 (2) in subsection (b)—

2 (A) in paragraph (1) by striking ‘‘a appli3 cation’’ and inserting ‘‘an application’’;

4 (B) in paragraph (2) by striking ‘‘any

5 agency administering activities that receive’’

6 and inserting ‘‘the State that receives’’; and

7 (C) in paragraph (4) by striking ‘‘entitles’’

8 and inserting ‘‘entitled’’.

9 SEC. 4812. REPORT BY THE SECRETARY.

10 Section 658L (42 U.S.C. 9858j) is amended—

11 (1) by striking ‘‘1993’’ and inserting ‘‘1997’’;

12 (2) by striking ‘‘annually’’ and inserting ‘‘bien13 nially’’; and

14 (3) by striking ‘‘Education and Labor’’ and in15 serting ‘‘Economic and Educational Opportunities’’.

16 SEC. 4813. ALLOTMENTS.

17 Section 658O (42 U.S.C. 9858m) is amended—

18 (1) in subsection (a)—

19 (A) in paragraph (1)

20 (i) by striking ‘‘POSSESSIONS’’ and in21 serting ‘‘POSSESSIONS’’;

22 (ii) by inserting ‘‘and’’ after

23 ‘‘States,’’; and

24 (iii) by striking ‘‘, and the Trust Ter25 ritory of the Pacific Islands’’; and
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1 (B) in paragraph (2), by striking ‘‘3 per2 cent’’ and inserting ‘‘1 percent’’;

3 (2) in subsection (c)—

4 (A) in paragraph (5) by striking ‘‘our’’ and

5 inserting ‘‘out’’; and

6 (B) by adding at the end thereof the fol7 lowing new paragraph:

8 ‘‘(6) CONSTRUCTION OR RENOVATION OF FA9 CILITIES.—

10 ‘‘(A) REQUEST FOR USE OF FUNDS.—An

11 Indian tribe or tribal organization may submit

12 to the Secretary a request to use amounts pro13 vided under this subsection for construction or

14 renovation purposes.

15 ‘‘(B) DETERMINATION.—With respect to a

16 request submitted under subparagraph (A), and

17 except as provided in subparagraph (C), upon

18 a determination by the Secretary that adequate

19 facilities are not otherwise available to an In20 dian tribe or tribal organization to enable such

21 tribe or organization to carry out child care

22 programs in accordance with this subchapter,

23 and that the lack of such facilities will inhibit

24 the operation of such programs in the future,

25 the Secretary may permit the tribe or organiza-
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1 tion to use assistance provided under this sub2 section to make payments for the construction

3 or renovation of facilities that will be used to

4 carry out such programs.

5 ‘‘(C) LIMITATION.—The Secretary may not

6 permit an Indian tribe or tribal organization to

7 use amounts provided under this subsection for

8 construction or renovation if such use will re9 sult in a decrease in the level of child care serv10 ices provided by the tribe or organization as

11 compared to the level of such services provided

12 by the tribe or organization in the fiscal year

13 preceding the year for which the determination

14 under subparagraph (A) is being made.

15 ‘‘(D) UNIFORM PROCEDURES.—The Sec16 retary shall develop and implement uniform

17 procedures for the solicitation and consideration

18 of requests under this paragraph.’’; and

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

20 thereof the following new paragraph:

21 ‘‘(4) INDIAN TRIBES OR TRIBAL ORGANIZA22 TIONS.—Any portion of a grant or contract made to

23 an Indian tribe or tribal organization under sub24 section (c) that the Secretary determines is not

25 being used in a manner consistent with the provision
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1 of this subchapter in the period for which the grant

2 or contract is made available, shall be allotted by the

3 Secretary to other tribes or organizations that have

4 submitted applications under subsection (c) in ac5 cordance with their respective needs.’’.

6 SEC. 4814. DEFINITIONS.

7 Section 658P (42 U.S.C. 9858n) is amended—

8 (1) in paragraph (2), in the first sentence by

9 inserting ‘‘or as a deposit for child care services if

10 such a deposit is required of other children being

11 cared for by the provider’’ after ‘‘child care serv12 ices’’; and

13 (2) by striking paragraph (3);

14 (3) in paragraph (4)(B), by striking ‘‘75 per15 cent’’ and inserting ‘‘85 percent’’;

16 (4) in paragraph (5)(B)—

17 (A) by inserting ‘‘great grandchild, sibling

18 (if such provider lives in a separate residence),’’

19 after ‘‘grandchild,’’;

20 (B) by striking ‘‘is registered and’’; and

21 (C) by striking ‘‘State’’ and inserting ‘‘ap22 plicable’’.

23 (5) by striking paragraph (10);

24 (6) in paragraph (13)—

25 (A) by inserting ‘‘or’’ after ‘‘Samoa,’’; and
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1 (B) by striking ‘‘, and the Trust Territory

2 of the Pacific Islands’’;

3 (7) in paragraph (14)—

4 (A) by striking ‘‘The term’’ and inserting

5 the following:

6 ‘‘(A) IN GENERAL.—The term’’; and

7 (B) by adding at the end thereof the fol8 lowing new subparagraph:

9 ‘‘(B) OTHER ORGANIZATIONS.—Such term

10 includes a Native Hawaiian Organization, as

11 defined in section 4009(4) of the Augustus F.

12 Hawkins-Robert T. Stafford Elementary and

13 Secondary School Improvement Amendments of

14 1988 (20 U.S.C. 4909(4)) and a private non15 profit organization established for the purpose

16 of serving youth who are Indians or Native Ha17 waiians.’’.

18 SEC. 4815. REPEALS.

19 (a) CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP

20 ASSISTANCE ACT OF 1985.—Title VI of the Human Serv21 ices Reauthorization Act of 1986 (42 U.S.C. 10901–

22 10905) is repealed.

23 (b) STATE DEPENDENT CARE DEVELOPMENT

24 GRANTS ACT.—Subchapter E of chapter 8 of subtitle A
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1 of title VI of the Omnibus Budget Reconciliation Act of

2 1981 (42 U.S.C. 9871–9877) is repealed.

3 (c) PROGRAMS OF NATIONAL SIGNIFICANCE.—Title

4 X of the Elementary and Secondary Education Act of

5 1965, as amended by Public Law 103–382 (108 Stat.

6 3809 et seq.), is amended—

7 (1) in section 10413(a) by striking paragraph

8 (4),

9 (2) in section 10963(b)(2) by striking subpara10 graph (G), and

11 (3) in section 10974(a)(6) by striking subpara12 graph (G).

13 (d) NATIVE HAWAIIAN FAMILY-BASED EDUCATION

14 CENTERS.—Section 9205 of the Native Hawaiian Edu15 cation Act, as amended by section 101 of Public Law 103–

16 382, (108 Stat. 3794) is repealed.

17 SEC. 4816. EFFECTIVE DATE.

18 (a) IN GENERAL.—Except as provided in subsection

19 (b), this subtitle and the amendments made by this sub20 title shall take effect on October 1, 1996.

21 (b) EXCEPTION.—The amendment made by section

22 803(a) shall take effect on the date of enactment of this

23 Act.
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1 Subtitle H—Miscellaneous

2 SEC. 4901. APPROPRIATION BY STATE LEGISLATURES.

3 (a) IN GENERAL.—Any funds received by a State

4 under the provisions of law specified in subsection (b) shall

5 be subject to appropriation by the State legislature, con6 sistent with the terms and conditions required under such

7 provisions of law.

8 (b) PROVISIONS OF LAW.—The provisions of law

9 specified in this subsection are the following:

10 (1) Part A of title IV of the Social Security Act

11 (relating to block grants for temporary assistance

12 for needy families).

13 (2) Section 25 of the Food Stamp Act of 1977

14 (relating to the optional State food assistance block

15 grant).

16 (3) The Child Care and Development Block

17 Grant Act of 1990 (relating to block grants for child

18 care).

19 SEC. 4902. SANCTIONING FOR TESTING POSITIVE FOR CON20 TROLLED SUBSTANCES.

21 Notwithstanding any other provision of law, States

22 shall not be prohibited by the Federal Government from

23 testing welfare recipients for use of controlled substances

24 nor from sanctioning welfare recipients who test positive

25 for use of controlled substances.
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1 SEC. 4903. REDUCTION IN BLOCK GRANTS TO STATES FOR

2 SOCIAL SERVICES.

3 Section 2003(c) of the Social Security Act (42 U.S.C.

4 1397b(c)) is amended—

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

6 (4); and

7 (2) by striking paragraph (5) and inserting the

8 following:

9 ‘‘(5) $2,800,000,000 for each of the fiscal years

10 1990 through 1995;

11 ‘‘(6) $2,520,000,000 for each of the fiscal years

12 1997 through 2002; and

13 ‘‘(7) $2,380,000,000 for the fiscal year 2003

14 and each succeeding fiscal year.’’.

15 SEC. 4904. RULES RELATING TO DENIAL OF EARNED IN16 COME CREDIT ON BASIS OF DISQUALIFIED

17 INCOME.

18 (a) REDUCTION IN DISQUALIFIED INCOME THRESH19 OLD.—

20 (1) IN GENERAL.—Paragraph (1) of section

21 32(i) of the Internal Revenue Code of 1986 (relating

22 to denial of credit for individuals having excessive

23 investment income) is amended by striking ‘‘$2,350’’

24 and inserting ‘‘$2,250’’.
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1 (2) ADJUSTMENT FOR INFLATION.—Subsection

2 (j) of section 32 of such Code is amended to read

3 as follows:

4 ‘‘(j) INFLATION ADJUSTMENTS.—

5 ‘‘(1) IN GENERAL.—In the case of any taxable

6 year beginning after 1997, each of the dollar

7 amounts in subsections (b)(2) and (i)(1) shall be in8 creased by an amount equal to—

9 ‘‘(A) such dollar amount, multiplied by

10 ‘‘(B) the cost-of-living adjustment deter11 mined under section 1(f)(3) for the calendar

12 year in which the taxable year begins, deter13 mined by substituting ‘calendar year 1996’ for

14 ‘calendar year 1992’ in subparagraph (B)

15 thereof.

16 ‘‘(2) ROUNDING.—

17 ‘‘(A) IN GENERAL.—If any dollar amount

18 in subsection (b)(2), after being increased

19 under paragraph (1), is not a multiple of $10,

20 such dollar amount shall be rounded to the

21 nearest multiple of $10.

22 ‘‘(B) DISQUALIFIED INCOME THRESHOLD

23 AMOUNT.—If the dollar amount in subsection

24 (i)(1), after being increased under paragraph
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1 (1), is not a multiple of $50, such amount shall

2 be rounded to the next lowest multiple of $50.’’

3 (b) DEFINITION OF DISQUALIFIED INCOME.—Para4 graph (2) of section 32(i) of such Code (defining disquali5 fied income) is amended by striking ‘‘and’’ at the end of

6 subparagraph (B), by striking the period at the end of

7 subparagraph (C) and inserting a comma, and by adding

8 at the end the following new subparagraphs:

9 ‘‘(D) the capital gain net income (as de10 fined in section 1222) of the taxpayer for such

11 taxable year, and

12 ‘‘(E) the excess (if any) of—

13 ‘‘(i) the aggregate income from all

14 passive activities for the taxable year (de15 termined without regard to any amount in16 cluded in earned income under subsection

17 (c)(2) or described in a preceding subpara18 graph), over

19 ‘‘(ii) the aggregate losses from all pas20 sive activities for the taxable year (as so

21 determined).

22 For purposes of subparagraph (E), the term ‘passive

23 activity’ has the meaning given such term by section

24 469.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1996.

4 SEC. 4905. MODIFICATION OF ADJUSTED GROSS INCOME

5 DEFINITION FOR EARNED INCOME CREDIT.

6 (a) IN GENERAL.—Subsections (a)(2)(B), (c)(1)(C),

7 and (f)(2)(B) of section 32 of the Internal Revenue Code

8 of 1986 are each amended by striking ‘‘adjusted gross in9 come’’ each place it appears and inserting ‘‘modified ad10 justed gross income’’.

11 (b) MODIFIED ADJUSTED GROSS INCOME DE12 FINED.—Section 32(c) of such Code (relating to defini13 tions and special rules) is amended by adding at the end

14 the following new paragraph:

15 ‘‘(5) MODIFIED ADJUSTED GROSS INCOME.—

16 ‘‘(A) IN GENERAL.—The term ‘modified

17 adjusted gross income’ means adjusted gross in18 come determined without regard to the amounts

19 described in subparagraph (B).

20 ‘‘(B) CERTAIN AMOUNTS DISREGARDED.—

21 An amount is described in this subparagraph if

22 it is—

23 ‘‘(i) the amount of losses from sales

24 or exchanges of capital assets in excess of

25 gains from such sales or exchanges to the
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1 extent such amount does not exceed the

2 amount under section 1211(b)(1),

3 ‘‘(ii) the net loss from estates and

4 trusts,

5 ‘‘(iii) the excess (if any) of amounts

6 described in subsection (i)(2)(C)(ii) over

7 the amounts described in subsection

8 (i)(2)(C)(i) (relating to nonbusiness rents

9 and royalties), and

10 ‘‘(iv) 50 percent of the net loss from

11 the carrying on of trades or businesses,

12 computed separately with respect to—

13 ‘‘(I) trades or businesses (other

14 than farming) conducted as sole pro15 prietorships,

16 ‘‘(II) trades or businesses of

17 farming conducted as sole proprietor18 ships, and

19 ‘‘(III) other trades or businesses.

20 For purposes of clause (iv), there shall not be

21 taken into account items which are attributable

22 to a trade or business which consists of the per23 formance of services by the taxpayer as an em24 ployee.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1996.

4 SEC. 4906. MODIFICATION OF EARNED INCOME CREDIT

5 AMOUNT AND PHASEOUT.

6 (a) MODIFICATION OF PHASEOUT.—Subparagraph

7 (B) of section 32(a)(2) of the Internal Revenue Code of

8 1986, as amended by section 4905 of this Act, is amended

9 to read as follows:

10 ‘‘(B) the sum of—

11 ‘‘(i) the initial phaseout percentage of

12 so much of the modified adjusted gross in13 come (or, if greater, the earned income) of

14 the taxpayer for the taxable year as ex15 ceeds the initial phaseout amount but does

16 not exceed the final phaseout amount, plus

17 ‘‘(ii) the final phaseout percentage of

18 so much of the modified adjusted gross in19 come (or, if greater, the earned income) of

20 the taxpayer for the taxable year as ex21 ceeds the final phaseout amount.’’

22 (b) PERCENTAGES AND AMOUNTS.—Subsection (b)

23 of section 32 of such Code is amended to read as follows:

24 ‘‘(b) PERCENTAGES AND AMOUNTS.—For purposes

25 of subsection (a)—
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1 ‘‘(1) PERCENTAGES.—The credit percentage,

2 the initial phaseout percentage, and the final phase3 out percentage shall be determined as follows:

‘‘In the case of an eligible individual

with:

The credit percentage is:The initial phaseout percentage is:The final phaseout percentage is:

1 qualifying child ......................... 34 15.98 18

2 or more qualifying children ....... 40 21.06 23

No qualifying children .................. 7.65 7.65 0

4 ‘‘(2) AMOUNTS.—The earned income amount,

5 the initial phaseout amount, and the final phaseout

6 amount shall be determined as follows:

‘‘In the case of an eligible individual

with:

The earned income amount is:The initial phaseout amount is:The final phaseout amount is:

1 qualifying child ......................... $6,500 $11,910 $17,340

2 or more qualifying children ....... $9,120 $11,910 $21,360

No qualifying children .................. $4,330 $5,420 $0’’.

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

8 this section shall apply to taxable years beginning after

9 December 31, 1996.