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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3734 Enrolled Bill (ENR)]

        H.R.3734

                       One Hundred Fourth Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

         Begun and held at the City of Washington on Wednesday,
   the third day of January, one thousand nine hundred and ninety-six

                                 An Act

 
   To provide for reconciliation pursuant to section 201(a)(1) of the 
        concurrent resolution on the budget for fiscal year 1997.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

    TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

Sec. 101. Findings.
Sec. 102. Reference to Social Security Act.
Sec. 103. Block grants to States.
Sec. 104. Services provided by charitable, religious, or private 
          organizations.
Sec. 105. Census data on grandparents as primary caregivers for their 
          grandchildren.
Sec. 106. Report on data processing.
Sec. 107. Study on alternative outcomes measures.
Sec. 108. Conforming amendments to the Social Security Act.
Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and 
          related provisions.
Sec. 110. Conforming amendments to other laws.
Sec. 111. Development of prototype of counterfeit-resistant Social 
          Security card required.
Sec. 112. Modifications to the job opportunities for certain low-income 
          individuals program.
Sec. 113. Secretarial submission of legislative proposal for technical 
          and conforming amendments.
Sec. 114. Assuring medicaid coverage for low-income families.
Sec. 115. Denial of assistance and benefits for certain drug-related 
          convictions.
Sec. 116. Effective date; transition rule.

                 TITLE II--SUPPLEMENTAL SECURITY INCOME

Sec. 200. Reference to Social Security Act.

                  Subtitle A--Eligibility Restrictions

Sec. 201. 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. 202. Denial of SSI benefits for fugitive felons and probation and 
          parole violators.
Sec. 203. Treatment of prisoners.
Sec. 204. Effective date of application for benefits.

               Subtitle B--Benefits for Disabled Children

Sec. 211. Definition and eligibility rules.
Sec. 212. Eligibility redeterminations and continuing disability 
          reviews.
Sec. 213. Additional accountability requirements.
Sec. 214. Reduction in cash benefits payable to institutionalized 
          individuals whose medical costs are covered by private 
          insurance.
Sec. 215. Regulations.

              Subtitle C--Additional Enforcement Provision

Sec. 221. Installment payment of large past-due supplemental security 
          income benefits.
Sec. 222. Regulations.

   Subtitle D--Studies Regarding Supplemental Security Income Program

Sec. 231. Annual report on the supplemental security income program.
Sec. 232. Study by General Accounting Office.

                        TITLE III--CHILD SUPPORT

Sec. 300. Reference to Social Security Act.

     Subtitle A--Eligibility for Services; Distribution of Payments

Sec. 301. State obligation to provide child support enforcement 
          services.
Sec. 302. Distribution of child support collections.
Sec. 303. Privacy safeguards.
Sec. 304. Rights to notification of hearings.

                  Subtitle B--Locate and Case Tracking

Sec. 311. State case registry.
Sec. 312. Collection and disbursement of support payments.
Sec. 313. State directory of new hires.
Sec. 314. Amendments concerning income withholding.
Sec. 315. Locator information from interstate networks.
Sec. 316. Expansion of the Federal Parent Locator Service.
Sec. 317. Collection and use of Social Security numbers for use in child 
          support enforcement.

          Subtitle C--Streamlining and Uniformity of Procedures

Sec. 321. Adoption of uniform State laws.
Sec. 322. Improvements to full faith and credit for child support 
          orders.
Sec. 323. Administrative enforcement in interstate cases.
Sec. 324. Use of forms in interstate enforcement.
Sec. 325. State laws providing expedited procedures.

                   Subtitle D--Paternity Establishment

Sec. 331. State laws concerning paternity establishment.
Sec. 332. Outreach for voluntary paternity establishment.
Sec. 333. Cooperation by applicants for and recipients of part A 
          assistance.

             Subtitle E--Program Administration and Funding

Sec. 341. Performance-based incentives and penalties.
Sec. 342. Federal and State reviews and audits.
Sec. 343. Required reporting procedures.
Sec. 344. Automated data processing requirements.
Sec. 345. Technical assistance.
Sec. 346. Reports and data collection by the Secretary.

      Subtitle F--Establishment and Modification of Support Orders

Sec. 351. Simplified process for review and adjustment of child support 
          orders.
Sec. 352. Furnishing consumer reports for certain purposes relating to 
          child support.
Sec. 353. Nonliability for financial institutions providing financial 
          records to State child support enforcement agencies in child 
          support cases.

                Subtitle G--Enforcement of Support Orders

Sec. 361. Internal Revenue Service collection of arrearages.
Sec. 362. Authority to collect support from Federal employees.
Sec. 363. Enforcement of child support obligations of members of the 
          Armed Forces.
Sec. 364. Voiding of fraudulent transfers.
Sec. 365. Work requirement for persons owing past-due child support.
Sec. 366. Definition of support order.
Sec. 367. Reporting arrearages to credit bureaus.
Sec. 368. Liens.
Sec. 369. State law authorizing suspension of licenses.
Sec. 370. Denial of passports for nonpayment of child support.
Sec. 371. International support enforcement.
Sec. 372. Financial institution data matches.
Sec. 373. Enforcement of orders against paternal or maternal 
          grandparents in cases of minor parents.
Sec. 374. Nondischargeability in bankruptcy of certain debts for the 
          support of a child.
Sec. 375. Child support enforcement for Indian tribes.

                       Subtitle H--Medical Support

Sec. 381. Correction to ERISA definition of medical child support order.
Sec. 382. Enforcement of orders for health care coverage.

Subtitle I--Enhancing Responsibility and Opportunity for Non-Residential 
                                 Parents

Sec. 391. Grants to States for access and visitation programs.

          Subtitle J--Effective Dates and Conforming Amendments

Sec. 395. Effective dates and conforming amendments.

      TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

Sec. 400. Statements of national policy concerning welfare and 
          immigration.

              Subtitle A--Eligibility for Federal Benefits

Sec. 401. Aliens who are not qualified aliens ineligible for Federal 
          public benefits.
Sec. 402. Limited eligibility of qualified aliens for certain Federal 
          programs.
Sec. 403. Five-year limited eligibility of qualified aliens for Federal 
          means-tested public benefit.
Sec. 404. Notification and information reporting.

  Subtitle B--Eligibility for State and Local Public Benefits Programs

Sec. 411. Aliens who are not qualified aliens or nonimmigrants 
          ineligible for State and local public benefits.
Sec. 412. State authority to limit eligibility of qualified aliens for 
          State public benefits.

       Subtitle C--Attribution of Income and Affidavits of Support

Sec. 421. Federal attribution of sponsor's income and resources to 
          alien.
Sec. 422. Authority for States to provide for attribution of sponsors 
          income and resources to the alien with respect to State 
          programs.
Sec. 423. Requirements for sponsor's affidavit of support.

                     Subtitle D--General Provisions

Sec. 431. Definitions.
Sec. 432. Verification of eligibility for Federal public benefits.
Sec. 433. Statutory construction.
Sec. 434. Communication between State and local government agencies and 
          the Immigration and Naturalization Service.
Sec. 435. Qualifying quarters.

     Subtitle E--Conforming Amendments Relating to Assisted Housing

Sec. 441. Conforming amendments relating to assisted housing.

   Subtitle F--Earning Income Credit Denied to Unauthorized Employees

Sec. 451. Earned income credit denied to individuals not authorized to 
          be employed in the United States.

                        TITLE V--CHILD PROTECTION

Sec. 501. Authority of States to make foster care maintenance payments 
          on behalf of children in any private child care institution.
Sec. 502. Extension of enhanced match for implementation of statewide 
          automated child welfare information systems.
Sec. 503. National random sample study of child welfare.
Sec. 504. Redesignation of section 1123.
Sec. 505. Kinship care.

                          TITLE VI--CHILD CARE

Sec. 601. Short title and references.
Sec. 602. Goals.
Sec. 603. Authorization of appropriations and entitlement authority.
Sec. 604. Lead agency.
Sec. 605. Application and plan.
Sec. 606. Limitation on State allotments.
Sec. 607. Activities to improve the quality of child care.
Sec. 608. Repeal of early childhood development and before- and after-
          school care requirement.
Sec. 609. Administration and enforcement.
Sec. 610. Payments.
Sec. 611. Annual report and audits.
Sec. 612. Report by the Secretary.
Sec. 613. Allotments.
Sec. 614. Definitions.
Sec. 615. Effective date.

                   TITLE VII--CHILD NUTRITION PROGRAMS

                  Subtitle A--National School Lunch Act

Sec. 701. State disbursement to schools.
Sec. 702. Nutritional and other program requirements.
Sec. 703. Free and reduced price policy statement.
Sec. 704. Special assistance.
Sec. 705. Miscellaneous provisions and definitions.
Sec. 706. Summer food service program for children.
Sec. 707. Commodity distribution.
Sec. 708. Child and adult care food program.
Sec. 709. Pilot projects.
Sec. 710. Reduction of paperwork.
Sec. 711. Information on income eligibility.
Sec. 712. Nutrition guidance for child nutrition programs.

                 Subtitle B--Child Nutrition Act of 1966

Sec. 721. Special milk program.
Sec. 722. Free and reduced price policy statement.
Sec. 723. School breakfast program authorization.
Sec. 724. State administrative expenses.
Sec. 725. Regulations.
Sec. 726. Prohibitions.
Sec. 727. Miscellaneous provisions and definitions.
Sec. 728. Accounts and records.
Sec. 729. Special supplemental nutrition program for women, infants, and 
          children.
Sec. 730. Cash grants for nutrition education.
Sec. 731. Nutrition education and training.

                  Subtitle C--Miscellaneous Provisions

Sec. 741. Coordination of school lunch, school breakfast, and summer 
          food service programs.
Sec. 742. Requirements relating to provision of benefits based on 
          citizenship, alienage, or immigration status under the 
          National School Lunch Act, the Child Nutrition Act of 1966, 
          and certain other acts.

           TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION

                     Subtitle A--Food Stamp Program

Sec. 801. Definition of certification period.
Sec. 802. Definition of coupon.
Sec. 803. Treatment of children living at home.
Sec. 804. Adjustment of thrifty food plan.
Sec. 805. Definition of homeless individual.
Sec. 806. State option for eligibility standards.
Sec. 807. Earnings of students.
Sec. 808. Energy assistance.
Sec. 809. Deductions from income.
Sec. 810. Vehicle allowance.
Sec. 811. Vendor payments for transitional housing counted as income.
Sec. 812. Simplified calculation of income for the self-employed.
Sec. 813. Doubled penalties for violating food stamp program 
          requirements.
Sec. 814. Disqualification of convicted individuals.
Sec. 815. Disqualification.
Sec. 816. Caretaker exemption.
Sec. 817. Employment and training.
Sec. 818. Food stamp eligibility.
Sec. 819. Comparable treatment for disqualification.
Sec. 820. Disqualification for receipt of multiple food stamp benefits.
Sec. 821. Disqualification of fleeing felons.
Sec. 822. Cooperation with child support agencies.
Sec. 823. Disqualification relating to child support arrears.
Sec. 824. Work requirement.
Sec. 825. Encouragement of electronic benefit transfer systems.
Sec. 826. Value of minimum allotment.
Sec. 827. Benefits on recertification.
Sec. 828. Optional combined allotment for expedited households.
Sec. 829. Failure to comply with other means-tested public assistance 
          programs.
Sec. 830. Allotments for households residing in centers.
Sec. 831. Condition precedent for approval of retail food stores and 
          wholesale food concerns.
Sec. 832. Authority to establish authorization periods.
Sec. 833. Information for verifying eligibility for authorization.
Sec. 834. Waiting period for stores that fail to meet authorization 
          criteria.
Sec. 835. Operation of food stamp offices.
Sec. 836. State employee and training standards.
Sec. 837. Exchange of law enforcement information.
Sec. 838. Expedited coupon service.
Sec. 839. Withdrawing fair hearing requests.
Sec. 840. Income, eligibility, and immigration status verification 
          systems.
Sec. 841. Investigations.
Sec. 842. Disqualification of retailers who intentionally submit 
          falsified applications.
Sec. 843. Disqualification of retailers who are disqualified under the 
          WIC program.
Sec. 844. Collection of overissuances.
Sec. 845. Authority to suspend stores violating program requirements 
          pending administrative and judicial review.
Sec. 846. Expanded criminal forfeiture for violations.
Sec. 847. Limitation on Federal match.
Sec. 848. Standards for administration.
Sec. 849. Work supplementation or support program.
Sec. 850. Waiver authority.
Sec. 851. Response to waivers.
Sec. 852. Employment initiatives program.
Sec. 853. Reauthorization.
Sec. 854. Simplified food stamp program.
Sec. 855. Study of the use of food stamps to purchase vitamins and 
          minerals.
Sec. 856. Deficit reduction.

               Subtitle B--Commodity Distribution Programs

Sec. 871. Emergency food assistance program.
Sec. 872. Food bank demonstration project.
Sec. 873. Hunger prevention programs.
Sec. 874. Report on entitlement commodity processing.

             Subtitle C--Electronic Benefit Transfer Systems

Sec. 891. Provisions to encourage electronic benefit transfer systems.

                         TITLE IX--MISCELLANEOUS

Sec. 901. Appropriation by State legislatures.
Sec. 902. Sanctioning for testing positive for controlled substances.
Sec. 903. Elimination of housing assistance with respect to fugitive 
          felons and probation and parole violators.
Sec. 904. Sense of the Senate regarding the inability of the 
          noncustodial parent to pay child support.
Sec. 905. Establishing national goals to prevent teenage pregnancies.
Sec. 906. Sense of the Senate regarding enforcement of statutory rape 
          laws.
Sec. 907. Provisions to encourage electronic benefit transfer systems.
Sec. 908. Reduction of block grants to States for social services; use 
          of vouchers.
Sec. 909. Rules relating to denial of earned income credit on basis of 
          disqualified income.
Sec. 910. Modification of adjusted gross income definition for earned 
          income credit.
Sec. 911. Fraud under means-tested welfare and public assistance 
          programs.
Sec. 912. Abstinence education.
Sec. 913. Change in reference.

   TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

SEC. 101. FINDINGS.

    The Congress makes the following findings:
        (1) Marriage is the foundation of a successful society.
        (2) Marriage is an essential institution of a successful 
    society which promotes the interests of children.
        (3) Promotion of responsible fatherhood and motherhood is 
    integral to successful child rearing and the well-being of 
    children.
        (4) In 1992, only 54 percent of single-parent families with 
    children had a child support order established and, of that 54 
    percent, only about one-half received the full amount due. Of the 
    cases enforced through the public child support enforcement system, 
    only 18 percent of the caseload has a collection.
        (5) The number of individuals receiving aid to families with 
    dependent children (in this section referred to as ``AFDC'') has 
    more than tripled since 1965. More than two-thirds of these 
    recipients are children. Eighty-nine percent of children receiving 
    AFDC benefits now live in homes in which no father is present.
            (A)(i) The average monthly number of children receiving 
        AFDC benefits--
                (I) was 3,300,000 in 1965;
                (II) was 6,200,000 in 1970;
                (III) was 7,400,000 in 1980; and
                (IV) was 9,300,000 in 1992.
            (ii) While the number of children receiving AFDC benefits 
        increased nearly threefold between 1965 and 1992, the total 
        number of children in the United States aged 0 to 18 has 
        declined by 5.5 percent.
            (B) The Department of Health and Human Services has 
        estimated that 12,000,000 children will receive AFDC benefits 
        within 10 years.
            (C) The increase in the number of children receiving public 
        assistance is closely related to the increase in births to 
        unmarried women. Between 1970 and 1991, the percentage of live 
        births to unmarried women increased nearly threefold, from 10.7 
        percent to 29.5 percent.
        (6) The increase of out-of-wedlock pregnancies and births is 
    well documented as follows:
            (A) It is estimated that the rate of nonmarital teen 
        pregnancy rose 23 percent from 54 pregnancies per 1,000 
        unmarried teenagers in 1976 to 66.7 pregnancies in 1991. The 
        overall rate of nonmarital pregnancy rose 14 percent from 90.8 
        pregnancies per 1,000 unmarried women in 1980 to 103 in both 
        1991 and 1992. In contrast, the overall pregnancy rate for 
        married couples decreased 7.3 percent between 1980 and 1991, 
        from 126.9 pregnancies per 1,000 married women in 1980 to 117.6 
        pregnancies in 1991.
            (B) The total of all out-of-wedlock births between 1970 and 
        1991 has risen from 10.7 percent to 29.5 percent and if the 
        current trend continues, 50 percent of all births by the year 
        2015 will be out-of-wedlock.
        (7) An effective strategy to combat teenage pregnancy must 
    address the issue of male responsibility, including statutory rape 
    culpability and prevention. The increase of teenage pregnancies 
    among the youngest girls is particularly severe and is linked to 
    predatory sexual practices by men who are significantly older.
            (A) It is estimated that in the late 1980's, the rate for 
        girls age 14 and under giving birth increased 26 percent.
            (B) Data indicates that at least half of the children born 
        to teenage mothers are fathered by adult men. Available data 
        suggests that almost 70 percent of births to teenage girls are 
        fathered by men over age 20.
            (C) Surveys of teen mothers have revealed that a majority 
        of such mothers have histories of sexual and physical abuse, 
        primarily with older adult men.
        (8) The negative consequences of an out-of-wedlock birth on the 
    mother, the child, the family, and society are well documented as 
    follows:
            (A) Young women 17 and under who give birth outside of 
        marriage are more likely to go on public assistance and to 
        spend more years on welfare once enrolled. These combined 
        effects of ``younger and longer'' increase total AFDC costs per 
        household by 25 percent to 30 percent for 17-year-olds.
            (B) Children born out-of-wedlock have a substantially 
        higher risk of being born at a very low or moderately low birth 
        weight.
            (C) Children born out-of-wedlock are more likely to 
        experience low verbal cognitive attainment, as well as more 
        child abuse, and neglect.
            (D) Children born out-of-wedlock were more likely to have 
        lower cognitive scores, lower educational aspirations, and a 
        greater likelihood of becoming teenage parents themselves.
            (E) Being born out-of-wedlock significantly reduces the 
        chances of the child growing up to have an intact marriage.
            (F) Children born out-of-wedlock are 3 times more likely to 
        be on welfare when they grow up.
        (9) Currently 35 percent of children in single-parent homes 
    were born out-of-wedlock, nearly the same percentage as that of 
    children in single-parent homes whose parents are divorced (37 
    percent). While many parents find themselves, through divorce or 
    tragic circumstances beyond their control, facing the difficult 
    task of raising children alone, nevertheless, the negative 
    consequences of raising children in single-parent homes are well 
    documented as follows:
            (A) Only 9 percent of married-couple families with children 
        under 18 years of age have income below the national poverty 
        level. In contrast, 46 percent of female-headed households with 
        children under 18 years of age are below the national poverty 
        level.
            (B) Among single-parent families, nearly \1/2\ of the 
        mothers who never married received AFDC while only \1/5\ of 
        divorced mothers received AFDC.
            (C) Children born into families receiving welfare 
        assistance are 3 times more likely to be on welfare when they 
        reach adulthood than children not born into families receiving 
        welfare.
            (D) Mothers under 20 years of age are at the greatest risk 
        of bearing low birth weight babies.
            (E) The younger the single-parent mother, the less likely 
        she is to finish high school.
            (F) Young women who have children before finishing high 
        school are more likely to receive welfare assistance for a 
        longer period of time.
            (G) Between 1985 and 1990, the public cost of births to 
        teenage mothers under the aid to families with dependent 
        children program, the food stamp program, and the medicaid 
        program has been estimated at $120,000,000,000.
            (H) The absence of a father in the life of a child has a 
        negative effect on school performance and peer adjustment.
            (I) Children of teenage single parents have lower cognitive 
        scores, lower educational aspirations, and a greater likelihood 
        of becoming teenage parents themselves.
            (J) Children of single-parent homes are 3 times more likely 
        to fail and repeat a year in grade school than are children 
        from intact 2-parent families.
            (K) Children from single-parent homes are almost 4 times 
        more likely to be expelled or suspended from school.
            (L) Neighborhoods with larger percentages of youth aged 12 
        through 20 and areas with higher percentages of single-parent 
        households have higher rates of violent crime.
            (M) Of those youth held for criminal offenses within the 
        State juvenile justice system, only 29.8 percent lived 
        primarily in a home with both parents. In contrast to these 
        incarcerated youth, 73.9 percent of the 62,800,000 children in 
        the Nation's resident population were living with both parents.
        (10) Therefore, in light of this demonstration of the crisis in 
    our Nation, it is the sense of the Congress that prevention of out-
    of-wedlock pregnancy and reduction in out-of-wedlock birth are very 
    important Government interests and the policy contained in part A 
    of title IV of the Social Security Act (as amended by section 
    103(a) of this Act) is intended to address the crisis.

SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.

    Except as otherwise specifically provided, wherever in this title 
an amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

SEC. 103. BLOCK GRANTS TO STATES.

    (a) In General.--Part A of title IV (42 U.S.C. 601 et seq.) is 
amended--
        (1) by striking all that precedes section 418 (as added by 
    section 603(b)(2) of this Act) and inserting the following:

  ``PART A--BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY 
                                FAMILIES

``SEC. 401. PURPOSE.

    ``(a) In General.--The purpose of this part is to increase the 
flexibility of States in operating a program designed to--
        ``(1) provide assistance to needy families so that children may 
    be cared for in their own homes or in the homes of relatives;
        ``(2) end the dependence of needy parents on government 
    benefits by promoting job preparation, work, and marriage;
        ``(3) prevent and reduce the incidence of out-of-wedlock 
    pregnancies and establish annual numerical goals for preventing and 
    reducing the incidence of these pregnancies; and
        ``(4) encourage the formation and maintenance of two-parent 
    families.
    ``(b) No Individual Entitlement.--This part shall not be 
interpreted to entitle any individual or family to assistance under any 
State program funded under this part.

``SEC. 402. ELIGIBLE STATES; STATE PLAN.

    ``(a) In General.--As used in this part, the term `eligible State' 
means, with respect to a fiscal year, a State that, during the 2-year 
period immediately preceding the fiscal year, has submitted to the 
Secretary a plan that the Secretary has found includes the following:
        ``(1) Outline of family assistance program.--
            ``(A) General provisions.--A written document that outlines 
        how the State intends to do the following:
                ``(i) Conduct a program, designed to serve all 
            political subdivisions in the State (not necessarily in a 
            uniform manner), that provides assistance to needy families 
            with (or expecting) children and provides parents with job 
            preparation, work, and support services to enable them to 
            leave the program and become self-sufficient.
                ``(ii) Require a parent or caretaker receiving 
            assistance under the program to engage in work (as defined 
            by the State) once the State determines the parent or 
            caretaker is ready to engage in work, or once the parent or 
            caretaker has received assistance under the program for 24 
            months (whether or not consecutive), whichever is earlier.
                ``(iii) Ensure that parents and caretakers receiving 
            assistance under the program engage in work activities in 
            accordance with section 407.
                ``(iv) Take such reasonable steps as the State deems 
            necessary to restrict the use and disclosure of information 
            about individuals and families receiving assistance under 
            the program attributable to funds provided by the Federal 
            Government.
                ``(v) Establish goals and take action to prevent and 
            reduce the incidence of out-of-wedlock pregnancies, with 
            special emphasis on teenage pregnancies, and establish 
            numerical goals for reducing the illegitimacy ratio of the 
            State (as defined in section 403(a)(2)(B)) for calendar 
            years 1996 through 2005.
                ``(vi) Conduct a program, designed to reach State and 
            local law enforcement officials, the education system, and 
            relevant counseling services, that provides education and 
            training on the problem of statutory rape so that teenage 
            pregnancy prevention programs may be expanded in scope to 
            include men.
            ``(B) Special provisions.--
                ``(i) The document shall indicate whether the State 
            intends to treat families moving into the State from 
            another State differently than other families under the 
            program, and if so, how the State intends to treat such 
            families under the program.
                ``(ii) The document shall indicate whether the State 
            intends to provide assistance under the program to 
            individuals who are not citizens of the United States, and 
            if so, shall include an overview of such assistance.
                ``(iii) The document shall set forth objective criteria 
            for the delivery of benefits and the determination of 
            eligibility and for fair and equitable treatment, including 
            an explanation of how the State will provide opportunities 
            for recipients who have been adversely affected to be heard 
            in a State administrative or appeal process.
                ``(iv) Not later than 1 year after the date of 
            enactment of this Act, unless the chief executive officer 
            of the State opts out of this provision by notifying the 
            Secretary, a State shall, consistent with the exception 
            provided in section 407(e)(2), require a parent or 
            caretaker receiving assistance under the program who, after 
            receiving such assistance for 2 months is not exempt from 
            work requirements and is not engaged in work, as determined 
            under section 407(c), to participate in community service 
            employment, with minimum hours per week and tasks to be 
            determined by the State.
        ``(2) Certification that the state will operate a child support 
    enforcement program.--A certification by the chief executive 
    officer of the State that, during the fiscal year, the State will 
    operate a child support enforcement program under the State plan 
    approved under part D.
        ``(3) Certification that the state will operate a foster care 
    and adoption assistance program.--A certification by the chief 
    executive officer of the State that, during the fiscal year, the 
    State will operate a foster care and adoption assistance program 
    under the State plan approved under part E, and that the State will 
    take such actions as are necessary to ensure that children 
    receiving assistance under such part are eligible for medical 
    assistance under the State plan under title XIX.
        ``(4) Certification of the administration of the program.--A 
    certification by the chief executive officer of the State 
    specifying which State agency or agencies will administer and 
    supervise the program referred to in paragraph (1) for the fiscal 
    year, which shall include assurances that local governments and 
    private sector organizations--
            ``(A) have been consulted regarding the plan and design of 
        welfare services in the State so that services are provided in 
        a manner appropriate to local populations; and
            ``(B) have had at least 45 days to submit comments on the 
        plan and the design of such services.
        ``(5) Certification that the state will provide indians with 
    equitable access to assistance.--A certification by the chief 
    executive officer of the State that, during the fiscal year, the 
    State will provide each member of an Indian tribe, who is domiciled 
    in the State and is not eligible for assistance under a tribal 
    family assistance plan approved under section 412, with equitable 
    access to assistance under the State program funded under this part 
    attributable to funds provided by the Federal Government.
        ``(6) Certification of standards and procedures to ensure 
    against program fraud and abuse.--A certification by the chief 
    executive officer of the State that the State has established and 
    is enforcing standards and procedures to ensure against program 
    fraud and abuse, including standards and procedures concerning 
    nepotism, conflicts of interest among individuals responsible for 
    the administration and supervision of the State program, kickbacks, 
    and the use of political patronage.
        ``(7) Optional certification of standards and procedures to 
    ensure that the state will screen for and identify domestic 
    violence.--
            ``(A) In general.--At the option of the State, a 
        certification by the chief executive officer of the State that 
        the State has established and is enforcing standards and 
        procedures to--
                ``(i) screen and identify individuals receiving 
            assistance under this part with a history of domestic 
            violence while maintaining the confidentiality of such 
            individuals;
                ``(ii) refer such individuals to counseling and 
            supportive services; and
                ``(iii) waive, pursuant to a determination of good 
            cause, other program requirements such as time limits (for 
            so long as necessary) for individuals receiving assistance, 
            residency requirements, child support cooperation 
            requirements, and family cap provisions, in cases where 
            compliance with such requirements would make it more 
            difficult for individuals receiving assistance under this 
            part to escape domestic violence or unfairly penalize such 
            individuals who are or have been victimized by such 
            violence, or individuals who are at risk of further 
            domestic violence.
            ``(B) Domestic violence defined.--For purposes of this 
        paragraph, the term `domestic violence' has the same meaning as 
        the term `battered or subjected to extreme cruelty', as defined 
        in section 408(a)(7)(C)(iii).
    ``(b) Public Availability of State Plan Summary.--The State shall 
make available to the public a summary of any plan submitted by the 
State under this section.

``SEC. 403. GRANTS TO STATES.

    ``(a) Grants.--
        ``(1) Family assistance grant.--
            ``(A) In general.--Each eligible State shall be entitled to 
        receive from the Secretary, for each of fiscal years 1996, 
        1997, 1998, 1999, 2000, 2001, and 2002, a grant in an amount 
        equal to the State family assistance grant.
            ``(B) State family assistance grant defined.--As used in 
        this part, the term `State family assistance grant' means the 
        greatest of--
                ``(i) \1/3\ of the total amount required to be paid to 
            the State under former section 403 (as in effect on 
            September 30, 1995) for fiscal years 1992, 1993, and 1994 
            (other than with respect to amounts expended by the State 
            for child care under subsection (g) or (i) of former 
            section 402 (as so in effect));
                ``(ii)(I) the total amount required to be paid to the 
            State under former section 403 for fiscal year 1994 (other 
            than with respect to amounts expended by the State for 
            child care under subsection (g) or (i) of former section 
            402 (as so in effect)); plus
                ``(II) an amount equal to 85 percent of the amount (if 
            any) by which the total amount required to be paid to the 
            State under former section 403(a)(5) for emergency 
            assistance for fiscal year 1995 exceeds the total amount 
            required to be paid to the State under former section 
            403(a)(5) for fiscal year 1994, if, during fiscal year 1994 
            or 1995, the Secretary approved under former section 402 an 
            amendment to the former State plan with respect to the 
            provision of emergency assistance; or
                ``(iii) \4/3\ of the total amount required to be paid 
            to the State under former section 403 (as in effect on 
            September 30, 1995) for the 1st 3 quarters of fiscal year 
            1995 (other than with respect to amounts expended by the 
            State under the State plan approved under part F (as so in 
            effect) or for child care under subsection (g) or (i) of 
            former section 402 (as so in effect)), plus the total 
            amount required to be paid to the State for fiscal year 
            1995 under former section 403(l) (as so in effect).
            ``(C) Total amount required to be paid to the state under 
        former section 403 defined.--As used in this part, the term 
        `total amount required to be paid to the State under former 
        section 403' means, with respect to a fiscal year--
                ``(i) in the case of a State to which section 1108 does 
            not apply, the sum of--

                    ``(I) the Federal share of maintenance assistance 
                expenditures for the fiscal year, before reduction 
                pursuant to subparagraph (B) or (C) of section 
                403(b)(2) (as in effect on September 30, 1995), as 
                reported by the State on ACF Form 231;
                    ``(II) the Federal share of administrative 
                expenditures (including administrative expenditures for 
                the development of management information systems) for 
                the fiscal year, as reported by the State on ACF Form 
                231;
                    ``(III) the Federal share of emergency assistance 
                expenditures for the fiscal year, as reported by the 
                State on ACF Form 231;
                    ``(IV) the Federal share of expenditures for the 
                fiscal year with respect to child care pursuant to 
                subsections (g) and (i) of former section 402 (as in 
                effect on September 30, 1995), as reported by the State 
                on ACF Form 231; and
                    ``(V) the Federal obligations made to the State 
                under section 403 for the fiscal year with respect to 
                the State program operated under part F (as in effect 
                on September 30, 1995), as determined by the Secretary, 
                including additional obligations or reductions in 
                obligations made after the close of the fiscal year; 
                and

                ``(ii) in the case of a State to which section 1108 
            applies, the lesser of--

                    ``(I) the sum described in clause (i); or
                    ``(II) the total amount certified by the Secretary 
                under former section 403 (as in effect during the 
                fiscal year) with respect to the territory.

            ``(D) Information to be used in determining amounts.--
                ``(i) For fiscal years 1992 and 1993.--

                    ``(I) In determining the amounts described in 
                subclauses (I) through (IV) of subparagraph (C)(i) for 
                any State for each of fiscal years 1992 and 1993, the 
                Secretary shall use information available as of April 
                28, 1995.
                    ``(II) In determining the amount described in 
                subparagraph (C)(i)(V) for any State for each of fiscal 
                years 1992 and 1993, the Secretary shall use 
                information available as of January 6, 1995.

                ``(ii) For fiscal year 1994.--In determining the 
            amounts described in subparagraph (C)(i) for any State for 
            fiscal year 1994, the Secretary shall use information 
            available as of April 28, 1995.
                ``(iii) For fiscal year 1995.--

                    ``(I) In determining the amount described in 
                subparagraph (B)(ii)(II) for any State for fiscal year 
                1995, the Secretary shall use the information which was 
                reported by the States and estimates made by the States 
                with respect to emergency assistance expenditures and 
                was available as of August 11, 1995.
                    ``(II) In determining the amounts described in 
                subclauses (I) through (III) of subparagraph (C)(i) for 
                any State for fiscal year 1995, the Secretary shall use 
                information available as of October 2, 1995.
                    ``(III) In determining the amount described in 
                subparagraph (C)(i)(IV) for any State for fiscal year 
                1995, the Secretary shall use information available as 
                of February 28, 1996.
                    ``(IV) In determining the amount described in 
                subparagraph (C)(i)(V) for any State for fiscal year 
                1995, the Secretary shall use information available as 
                of October 5, 1995.

            ``(E) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated for fiscal years 1996, 1997, 1998, 1999, 2000, 
        2001, and 2002 such sums as are necessary for grants under this 
        paragraph.
        ``(2) Bonus to reward decrease in illegitimacy.--
            ``(A) In general.--Each eligible State shall be entitled to 
        receive from the Secretary a grant for each bonus year for 
        which the State demonstrates a net decrease in out-of-wedlock 
        births.
            ``(B) Amount of grant.--
                ``(i) If 5 eligible states.--If there are 5 eligible 
            States for a bonus year, the amount of the grant shall be 
            $20,000,000.
                ``(ii) If fewer than 5 eligible states.--If there are 
            fewer than 5 eligible States for a bonus year, the amount 
            of the grant shall be $25,000,000.
            ``(C) Definitions.--As used in this paragraph:
                ``(i) Eligible state.--

                    ``(I) In general.--The term `eligible State' means 
                a State that the Secretary determines meets the 
                following requirements:

                        ``(aa) The State demonstrates that the number 
                    of out-of-wedlock births that occurred in the State 
                    during the most recent 2-year period for which such 
                    information is available decreased as compared to 
                    the number of such births that occurred during the 
                    previous 2-year period, and the magnitude of the 
                    decrease for the State for the period is not 
                    exceeded by the magnitude of the corresponding 
                    decrease for 5 or more other States for the period.
                        ``(bb) The rate of induced pregnancy 
                    terminations in the State for the fiscal year is 
                    less than the rate of induced pregnancy 
                    terminations in the State for fiscal year 1995.

                    ``(II) Disregard of changes in data due to changed 
                reporting methods.--In making the determination 
                required by subclause (I), the Secretary shall 
                disregard--

                        ``(aa) any difference between the number of 
                    out-of-wedlock births that occurred in a State for 
                    a fiscal year and the number of out-of-wedlock 
                    births that occurred in a State for fiscal year 
                    1995 which is attributable to a change in State 
                    methods of reporting data used to calculate the 
                    number of out-of-wedlock births; and
                        ``(bb) any difference between the rate of 
                    induced pregnancy terminations in a State for a 
                    fiscal year and such rate for fiscal year 1995 
                    which is attributable to a change in State methods 
                    of reporting data used to calculate such rate.
                ``(ii) Bonus year.--The term `bonus year' means fiscal 
            years 1999, 2000, 2001, and 2002.
            ``(D) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated for fiscal years 1999 through 2002, such sums as 
        are necessary for grants under this paragraph.
        ``(3) Supplemental grant for population increases in certain 
    states.--
            ``(A) In general.--Each qualifying State shall, subject to 
        subparagraph (F), be entitled to receive from the Secretary--
                ``(i) for fiscal year 1998 a grant in an amount equal 
            to 2.5 percent of the total amount required to be paid to 
            the State under former section 403 (as in effect during 
            fiscal year 1994) for fiscal year 1994; and
                ``(ii) for each of fiscal years 1999, 2000, and 2001, a 
            grant in an amount equal to the sum of--

                    ``(I) the amount (if any) required to be paid to 
                the State under this paragraph for the immediately 
                preceding fiscal year; and
                    ``(II) 2.5 percent of the sum of--

                        ``(aa) the total amount required to be paid to 
                    the State under former section 403 (as in effect 
                    during fiscal year 1994) for fiscal year 1994; and
                        ``(bb) the amount (if any) required to be paid 
                    to the State under this paragraph for the fiscal 
                    year preceding the fiscal year for which the grant 
                    is to be made.
            ``(B) Preservation of grant without increases for states 
        failing to remain qualifying states.--Each State that is not a 
        qualifying State for a fiscal year specified in subparagraph 
        (A)(ii) but was a qualifying State for a prior fiscal year 
        shall, subject to subparagraph (F), be entitled to receive from 
        the Secretary for the specified fiscal year, a grant in an 
        amount equal to the amount required to be paid to the State 
        under this paragraph for the most recent fiscal year for which 
        the State was a qualifying State.
            ``(C) Qualifying state.--
                ``(i) In general.--For purposes of this paragraph, a 
            State is a qualifying State for a fiscal year if--

                    ``(I) the level of welfare spending per poor person 
                by the State for the immediately preceding fiscal year 
                is less than the national average level of State 
                welfare spending per poor person for such preceding 
                fiscal year; and
                    ``(II) the population growth rate of the State (as 
                determined by the Bureau of the Census) for the most 
                recent fiscal year for which information is available 
                exceeds the average population growth rate for all 
                States (as so determined) for such most recent fiscal 
                year.

                ``(ii) State must qualify in fiscal year 1997.--
            Notwithstanding clause (i), a State shall not be a 
            qualifying State for any fiscal year after 1998 by reason 
            of clause (i) if the State is not a qualifying State for 
            fiscal year 1998 by reason of clause (i).
                ``(iii) Certain states deemed qualifying states.--For 
            purposes of this paragraph, a State is deemed to be a 
            qualifying State for fiscal years 1998, 1999, 2000, and 
            2001 if--

                    ``(I) the level of welfare spending per poor person 
                by the State for fiscal year 1994 is less than 35 
                percent of the national average level of State welfare 
                spending per poor person for fiscal year 1994; or
                    ``(II) the population of the State increased by 
                more than 10 percent from April 1, 1990 to July 1, 
                1994, according to the population estimates in 
                publication CB94-204 of the Bureau of the Census.

            ``(D) Definitions.--As used in this paragraph:
                ``(i) Level of welfare spending per poor person.--The 
            term `level of State welfare spending per poor person' 
            means, with respect to a State and a fiscal year--

                    ``(I) the sum of--

                        ``(aa) the total amount required to be paid to 
                    the State under former section 403 (as in effect 
                    during fiscal year 1994) for fiscal year 1994; and
                        ``(bb) the amount (if any) paid to the State 
                    under this paragraph for the immediately preceding 
                    fiscal year; divided by

                    ``(II) the number of individuals, according to the 
                1990 decennial census, who were residents of the State 
                and whose income was below the poverty line.

                ``(ii) National average level of state welfare spending 
            per poor person.--The term `national average level of State 
            welfare spending per poor person' means, with respect to a 
            fiscal year, an amount equal to--

                    ``(I) the total amount required to be paid to the 
                States under former section 403 (as in effect during 
                fiscal year 1994) for fiscal year 1994; divided by
                    ``(II) the number of individuals, according to the 
                1990 decennial census, who were residents of any State 
                and whose income was below the poverty line.

                ``(iii) State.--The term `State' means each of the 50 
            States of the United States and the District of Columbia.
            ``(E) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated for fiscal years 1998, 1999, 2000, and 2001 such 
        sums as are necessary for grants under this paragraph, in a 
        total amount not to exceed $800,000,000.
            ``(F) Grants reduced pro rata if insufficient 
        appropriations.--If the amount appropriated pursuant to this 
        paragraph for a fiscal year is less than the total amount of 
        payments otherwise required to be made under this paragraph for 
        the fiscal year, then the amount otherwise payable to any State 
        for the fiscal year under this paragraph shall be reduced by a 
        percentage equal to the amount so appropriated divided by such 
        total amount.
            ``(G) Budget scoring.--Notwithstanding section 257(b)(2) of 
        the Balanced Budget and Emergency Deficit Control Act of 1985, 
        the baseline shall assume that no grant shall be made under 
        this paragraph after fiscal year 2001.
        ``(4) Bonus to reward high performance states.--
            ``(A) In general.--The Secretary shall make a grant 
        pursuant to this paragraph to each State for each bonus year 
        for which the State is a high performing State.
            ``(B) Amount of grant.--
                ``(i) In general.--Subject to clause (ii) of this 
            subparagraph, the Secretary shall determine the amount of 
            the grant payable under this paragraph to a high performing 
            State for a bonus year, which shall be based on the score 
            assigned to the State under subparagraph (D)(i) for the 
            fiscal year that immediately precedes the bonus year.
                ``(ii) Limitation.--The amount payable to a State under 
            this paragraph for a bonus year shall not exceed 5 percent 
            of the State family assistance grant.
            ``(C) Formula for measuring state performance.--Not later 
        than 1 year after the date of the enactment of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        the Secretary, in consultation with the National Governors' 
        Association and the American Public Welfare Association, shall 
        develop a formula for measuring State performance in operating 
        the State program funded under this part so as to achieve the 
        goals set forth in section 401(a).
            ``(D) Scoring of state performance; setting of performance 
        thresholds.--For each bonus year, the Secretary shall--
                ``(i) use the formula developed under subparagraph (C) 
            to assign a score to each eligible State for the fiscal 
            year that immediately precedes the bonus year; and
                ``(ii) prescribe a performance threshold in such a 
            manner so as to ensure that--

                    ``(I) the average annual total amount of grants to 
                be made under this paragraph for each bonus year equals 
                $200,000,000; and
                    ``(II) the total amount of grants to be made under 
                this paragraph for all bonus years equals 
                $1,000,000,000.

            ``(E) Definitions.--As used in this paragraph:
                ``(i) Bonus year.--The term `bonus year' means fiscal 
            years 1999, 2000, 2001, 2002, and 2003.
                ``(ii) High performing state.--The term `high 
            performing State' means, with respect to a bonus year, an 
            eligible State whose score assigned pursuant to 
            subparagraph (D)(i) for the fiscal year immediately 
            preceding the bonus year equals or exceeds the performance 
            threshold prescribed under subparagraph (D)(ii) for such 
            preceding fiscal year.
            ``(F) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated for fiscal years 1999 through 2003 $1,000,000,000 
        for grants under this paragraph.
    ``(b) Contingency Fund.--
        ``(1) Establishment.--There is hereby established in the 
    Treasury of the United States a fund which shall be known as the 
    `Contingency Fund for State Welfare Programs' (in this section 
    referred to as the `Fund').
        ``(2) Deposits into fund.--Out of any money in the Treasury of 
    the United States not otherwise appropriated, there are 
    appropriated for fiscal years 1997, 1998, 1999, 2000, and 2001 such 
    sums as are necessary for payment to the Fund in a total amount not 
    to exceed $2,000,000,000.
        ``(3) Grants.--
            ``(A) Provisional payments.--If an eligible State submits 
        to the Secretary a request for funds under this paragraph 
        during an eligible month, the Secretary shall, subject to this 
        paragraph, pay to the State, from amounts appropriated pursuant 
        to paragraph (2), an amount equal to the amount of funds so 
        requested.
            ``(B) Payment priority.--The Secretary shall make payments 
        under subparagraph (A) in the order in which the Secretary 
        receives requests for such payments.
            ``(C) Limitations.--
                ``(i) Monthly payment to a state.--The total amount 
            paid to a single State under subparagraph (A) during a 
            month shall not exceed \1/12\ of 20 percent of the State 
            family assistance grant.
                ``(ii) Payments to all states.--The total amount paid 
            to all States under subparagraph (A) during fiscal years 
            1997 through 2001 shall not exceed the total amount 
            appropriated pursuant to paragraph (2).
        ``(4) Annual reconciliation.--Notwithstanding paragraph (3), at 
    the end of each fiscal year, each State shall remit to the 
    Secretary an amount equal to the amount (if any) by which the total 
    amount paid to the State under paragraph (3) during the fiscal year 
    exceeds--
            ``(A) the Federal medical assistance percentage for the 
        State for the fiscal year (as defined in section 1905(b), as in 
        effect on September 30, 1995) of the amount (if any) by which--
                ``(i) if the Secretary makes a payment to the State 
            under section 418(a)(2) in the fiscal year--

                    ``(I) the expenditures under the State program 
                funded under this part for the fiscal year, excluding 
                any amounts made available by the Federal Government 
                (except amounts paid to the State under paragraph (3) 
                during the fiscal year that have been expended by the 
                State) and any amounts expended by the State during the 
                fiscal year for child care; exceeds
                    ``(II) historic State expenditures (as defined in 
                section 409(a)(7)(B)(iii)), excluding the expenditures 
                by the State for child care under subsection (g) or (i) 
                of section 402 (as in effect during fiscal year 1994) 
                for fiscal year 1994 minus any Federal payment with 
                respect to such child care expenditures; or

                ``(ii) if the Secretary does not make a payment to the 
            State under section 418(a)(2) in the fiscal year--

                    ``(I) the expenditures under the State program 
                funded under this part for the fiscal year (excluding 
                any amounts made available by the Federal Government, 
                except amounts paid to the State under paragraph (3) 
                during the fiscal year that have been expended by the 
                State); exceeds
                    ``(II) historic State expenditures (as defined in 
                section 409(a)(7)(B)(iii)); multiplied by

            ``(B) \1/12\ times the number of months during the fiscal 
        year for which the Secretary makes a payment to the State under 
        this subsection.
        ``(5) Eligible month.--As used in paragraph (3)(A), the term 
    `eligible month' means, with respect to a State, a month in the 2-
    month period that begins with any month for which the State is a 
    needy State.
        ``(6) Needy state.--For purposes of paragraph (5), a State is a 
    needy State for a month if--
            ``(A) the average rate of--
                ``(i) total unemployment in such State (seasonally 
            adjusted) for the period consisting of the most recent 3 
            months for which data for all States are published equals 
            or exceeds 6.5 percent; and
                ``(ii) total unemployment in such State (seasonally 
            adjusted) for the 3-month period equals or exceeds 110 
            percent of such average rate for either (or both) of the 
            corresponding 3-month periods ending in the 2 preceding 
            calendar years; or
            ``(B) as determined by the Secretary of Agriculture (in the 
        discretion of the Secretary of Agriculture), the monthly 
        average number of individuals (as of the last day of each 
        month) participating in the food stamp program in the State in 
        the then most recently concluded 3-month period for which data 
        are available exceeds by not less than 10 percent the lesser 
        of--
                ``(i) the monthly average number of individuals (as of 
            the last day of each month) in the State that would have 
            participated in the food stamp program in the corresponding 
            3-month period in fiscal year 1994 if the amendments made 
            by titles IV and VIII of the Personal Responsibility and 
            Work Opportunity Reconciliation Act of 1996 had been in 
            effect throughout fiscal year 1994; or
                ``(ii) the monthly average number of individuals (as of 
            the last day of each month) in the State that would have 
            participated in the food stamp program in the corresponding 
            3-month period in fiscal year 1995 if the amendments made 
            by titles IV and VIII of the Personal Responsibility and 
            Work Opportunity Reconciliation Act of 1996 had been in 
            effect throughout fiscal year 1995.
        ``(7) Other terms defined.--As used in this subsection:
            ``(A) State.--The term `State' means each of the 50 States 
        of the United States and the District of Columbia.
            ``(B) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.
        ``(8) Annual reports.--The Secretary shall annually report to 
    the Congress on the status of the Fund.

``SEC. 404. USE OF GRANTS.

    ``(a) General Rules.--Subject to this part, a State to which a 
grant is made under section 403 may use the grant--
        ``(1) in any manner that is reasonably calculated to accomplish 
    the purpose of this part, including to provide low income 
    households with assistance in meeting home heating and cooling 
    costs; or
        ``(2) in any manner that the State was authorized to use 
    amounts received under part A or F, as such parts were in effect on 
    September 30, 1995.
    ``(b) Limitation on Use of Grant for Administrative Purposes.--
        ``(1) Limitation.--A State to which a grant is made under 
    section 403 shall not expend more than 15 percent of the grant for 
    administrative purposes.
        ``(2) Exception.--Paragraph (1) shall not apply to the use of a 
    grant for information technology and computerization needed for 
    tracking or monitoring required by or under this part.
    ``(c) Authority To Treat Interstate Immigrants Under Rules of 
Former State.--A State operating a program funded under this part may 
apply to a family the rules (including benefit amounts) of the program 
funded under this part of another State if the family has moved to the 
State from the other State and has resided in the State for less than 
12 months.
    ``(d) Authority To Use Portion of Grant for Other Purposes.--
        ``(1) In general.--A State may use not more than 30 percent of 
    the amount of any grant made to the State under section 403(a) for 
    a fiscal year to carry out a State program pursuant to any or all 
    of the following provisions of law:
            ``(A) Title XX of this Act.
            ``(B) The Child Care and Development Block Grant Act of 
        1990.
        ``(2) Limitation on amount transferable to title xx programs.--
    Notwithstanding paragraph (1), not more than \1/3\ of the total 
    amount paid to a State under this part for a fiscal year that is 
    used to carry out State programs pursuant to provisions of law 
    specified in paragraph (1) may be used to carry out State programs 
    pursuant to title XX.
        ``(3) Applicable rules.--
            ``(A) In general.--Except as provided in subparagraph (B) 
        of this paragraph, any amount paid to a State under this part 
        that is used to carry out a State program pursuant to a 
        provision of law specified in paragraph (1) shall not be 
        subject to the requirements of this part, but shall be subject 
        to the requirements that apply to Federal funds provided 
        directly under the provision of law to carry out the program, 
        and the expenditure of any amount so used shall not be 
        considered to be an expenditure under this part.
            ``(B) Exception relating to title xx programs.--All amounts 
        paid to a State under this part that are used to carry out 
        State programs pursuant to title XX shall be used only for 
        programs and services to children or their families whose 
        income is less than 200 percent of the income official poverty 
        line (as defined by the Office of Management and Budget, and 
        revised annually in accordance with section 673(2) of the 
        Omnibus Budget Reconciliation Act of 1981) applicable to a 
        family of the size involved.
    ``(e) Authority to Reserve Certain Amounts for Assistance.--A State 
may reserve amounts paid to the State under this part for any fiscal 
year for the purpose of providing, without fiscal year limitation, 
assistance under the State program funded under this part.
    ``(f) Authority to Operate Employment Placement Program.--A State 
to which a grant is made under section 403 may use the grant to make 
payments (or provide job placement vouchers) to State-approved public 
and private job placement agencies that provide employment placement 
services to individuals who receive assistance under the State program 
funded under this part.
    ``(g) Implementation of Electronic Benefit Transfer System.--A 
State to which a grant is made under section 403 is encouraged to 
implement an electronic benefit transfer system for providing 
assistance under the State program funded under this part, and may use 
the grant for such purpose.
    ``(h) Use of Funds for Individual Development Accounts.--
        ``(1) In general.--A State to which a grant is made under 
    section 403 may use the grant to carry out a program to fund 
    individual development accounts (as defined in paragraph (2)) 
    established by individuals eligible for assistance under the State 
    program funded under this part.
        ``(2) Individual development accounts.--
            ``(A) Establishment.--Under a State program carried out 
        under paragraph (1), an individual development account may be 
        established by or on behalf of an individual eligible for 
        assistance under the State program operated under this part for 
        the purpose of enabling the individual to accumulate funds for 
        a qualified purpose described in subparagraph (B).
            ``(B) Qualified purpose.--A qualified purpose described in 
        this subparagraph is 1 or more of the following, as provided by 
        the qualified entity providing assistance to the individual 
        under this subsection:
                ``(i) Postsecondary educational expenses.--
            Postsecondary educational expenses paid from an individual 
            development account directly to an eligible educational 
            institution.
                ``(ii) First home purchase.--Qualified acquisition 
            costs with respect to a qualified principal residence for a 
            qualified first-time homebuyer, if paid from an individual 
            development account directly to the persons to whom the 
            amounts are due.
                ``(iii) Business capitalization.--Amounts paid from an 
            individual development account directly to a business 
            capitalization account which is established in a federally 
            insured financial institution and is restricted to use 
            solely for qualified business capitalization expenses.
            ``(C) Contributions to be from earned income.--An 
        individual may only contribute to an individual development 
        account such amounts as are derived from earned income, as 
        defined in section 911(d)(2) of the Internal Revenue Code of 
        1986.
            ``(D) Withdrawal of funds.--The Secretary shall establish 
        such regulations as may be necessary to ensure that funds held 
        in an individual development account are not withdrawn except 
        for 1 or more of the qualified purposes described in 
        subparagraph (B).
        ``(3) Requirements.--
            ``(A) In general.--An individual development account 
        established under this subsection shall be a trust created or 
        organized in the United States and funded through periodic 
        contributions by the establishing individual and matched by or 
        through a qualified entity for a qualified purpose (as 
        described in paragraph (2)(B)).
            ``(B) Qualified entity.--As used in this subsection, the 
        term `qualified entity' means--
                ``(i) a not-for-profit organization described in 
            section 501(c)(3) of the Internal Revenue Code of 1986 and 
            exempt from taxation under section 501(a) of such Code; or
                ``(ii) a State or local government agency acting in 
            cooperation with an organization described in clause (i).
        ``(4) No reduction in benefits.--Notwithstanding any other 
    provision of Federal law (other than the Internal Revenue Code of 
    1986) that requires consideration of 1 or more financial 
    circumstances of an individual, for the purpose of determining 
    eligibility to receive, or the amount of, any assistance or benefit 
    authorized by such law to be provided to or for the benefit of such 
    individual, funds (including interest accruing) in an individual 
    development account under this subsection shall be disregarded for 
    such purpose with respect to any period during which such 
    individual maintains or makes contributions into such an account.
        ``(5) Definitions.--As used in this subsection--
            ``(A) Eligible educational institution.--The term `eligible 
        educational institution' means the following:
                ``(i) An institution described in section 481(a)(1) or 
            1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
            1088(a)(1) or 1141(a)), as such sections are in effect on 
            the date of the enactment of this subsection.
                ``(ii) An area vocational education school (as defined 
            in subparagraph (C) or (D) of section 521(4) of the Carl D. 
            Perkins Vocational and Applied Technology Education Act (20 
            U.S.C. 2471(4))) which is in any State (as defined in 
            section 521(33) of such Act), as such sections are in 
            effect on the date of the enactment of this subsection.
            ``(B) Post-secondary educational expenses.--The term `post-
        secondary educational expenses' means--
                ``(i) tuition and fees required for the enrollment or 
            attendance of a student at an eligible educational 
            institution, and
                ``(ii) fees, books, supplies, and equipment required 
            for courses of instruction at an eligible educational 
            institution.
            ``(C) Qualified acquisition costs.--The term `qualified 
        acquisition costs' means the costs of acquiring, constructing, 
        or reconstructing a residence. The term includes any usual or 
        reasonable settlement, financing, or other closing costs.
            ``(D) Qualified business.--The term `qualified business' 
        means any business that does not contravene any law or public 
        policy (as determined by the Secretary).
            ``(E) Qualified business capitalization expenses.--The term 
        `qualified business capitalization expenses' means qualified 
        expenditures for the capitalization of a qualified business 
        pursuant to a qualified plan.
            ``(F) Qualified expenditures.--The term `qualified 
        expenditures' means expenditures included in a qualified plan, 
        including capital, plant, equipment, working capital, and 
        inventory expenses.
            ``(G) Qualified first-time homebuyer.--
                ``(i) In general.--The term `qualified first-time 
            homebuyer' means a taxpayer (and, if married, the 
            taxpayer's spouse) who has no present ownership interest in 
            a principal residence during the 3-year period ending on 
            the date of acquisition of the principal residence to which 
            this subsection applies.
                ``(ii) Date of acquisition.--The term `date of 
            acquisition' means the date on which a binding contract to 
            acquire, construct, or reconstruct the principal residence 
            to which this subparagraph applies is entered into.
            ``(H) Qualified plan.--The term `qualified plan' means a 
        business plan which--
                ``(i) is approved by a financial institution, or by a 
            nonprofit loan fund having demonstrated fiduciary 
            integrity,
                ``(ii) includes a description of services or goods to 
            be sold, a marketing plan, and projected financial 
            statements, and
                ``(iii) may require the eligible individual to obtain 
            the assistance of an experienced entrepreneurial advisor.
            ``(I) Qualified principal residence.--The term `qualified 
        principal residence' means a principal residence (within the 
        meaning of section 1034 of the Internal Revenue Code of 1986), 
        the qualified acquisition costs of which do not exceed 100 
        percent of the average area purchase price applicable to such 
        residence (determined in accordance with paragraphs (2) and (3) 
        of section 143(e) of such Code).
    ``(i) Sanction Welfare Recipients for Failing To Ensure That Minor 
Dependent Children Attend School.--A State to which a grant is made 
under section 403 shall not be prohibited from sanctioning a family 
that includes an adult who has received assistance under any State 
program funded under this part attributable to funds provided by the 
Federal Government or under the food stamp program, as defined in 
section 3(h) of the Food Stamp Act of 1977, if such adult fails to 
ensure that the minor dependent children of such adult attend school as 
required by the law of the State in which the minor children reside.
    ``(j) Requirement for High School Diploma or Equivalent.--A State 
to which a grant is made under section 403 shall not be prohibited from 
sanctioning a family that includes an adult who is older than age 20 
and younger than age 51 and who has received assistance under any State 
program funded under this part attributable to funds provided by the 
Federal Government or under the food stamp program, as defined in 
section 3(h) of the Food Stamp Act of 1977, if such adult does not 
have, or is not working toward attaining, a secondary school diploma or 
its recognized equivalent unless such adult has been determined in the 
judgment of medical, psychiatric, or other appropriate professionals to 
lack the requisite capacity to complete successfully a course of study 
that would lead to a secondary school diploma or its recognized 
equivalent.

``SEC. 405. ADMINISTRATIVE PROVISIONS.

    ``(a) Quarterly.--The Secretary shall pay each grant payable to a 
State under section 403 in quarterly installments, subject to this 
section.
    ``(b) Notification.--Not later than 3 months before the payment of 
any such quarterly installment to a State, the Secretary shall notify 
the State of the amount of any reduction determined under section 
412(a)(1)(B) with respect to the State.
    ``(c) Computation and Certification of Payments to States.--
        ``(1) Computation.--The Secretary shall estimate the amount to 
    be paid to each eligible State for each quarter under this part, 
    such estimate to be based on a report filed by the State containing 
    an estimate by the State of the total sum to be expended by the 
    State in the quarter under the State program funded under this part 
    and such other information as the Secretary may find necessary.
        ``(2) Certification.--The Secretary of Health and Human 
    Services shall certify to the Secretary of the Treasury the amount 
    estimated under paragraph (1) with respect to a State, reduced or 
    increased to the extent of any overpayment or underpayment which 
    the Secretary of Health and Human Services determines was made 
    under this part to the State for any prior quarter and with respect 
    to which adjustment has not been made under this paragraph.
    ``(d) Payment Method.--Upon receipt of a certification under 
subsection (c)(2) with respect to a State, the Secretary of the 
Treasury shall, through the Fiscal Service of the Department of the 
Treasury and before audit or settlement by the General Accounting 
Office, pay to the State, at the time or times fixed by the Secretary 
of Health and Human Services, the amount so certified.

``SEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS.

    ``(a) Loan Authority.--
        ``(1) In general.--The Secretary shall make loans to any loan-
    eligible State, for a period to maturity of not more than 3 years.
        ``(2) Loan-eligible state.--As used in paragraph (1), the term 
    `loan-eligible State' means a State against which a penalty has not 
    been imposed under section 409(a)(1).
    ``(b) Rate of Interest.--The Secretary shall charge and collect 
interest on any loan made under this section at a rate equal to the 
current average market yield on outstanding marketable obligations of 
the United States with remaining periods to maturity comparable to the 
period to maturity of the loan.
    ``(c) Use of Loan.--A State shall use a loan made to the State 
under this section only for any purpose for which grant amounts 
received by the State under section 403(a) may be used, including--
        ``(1) welfare anti-fraud activities; and
        ``(2) the provision of assistance under the State program to 
    Indian families that have moved from the service area of an Indian 
    tribe with a tribal family assistance plan approved under section 
    412.
    ``(d) Limitation on Total Amount of Loans to a State.--The 
cumulative dollar amount of all loans made to a State under this 
section during fiscal years 1997 through 2002 shall not exceed 10 
percent of the State family assistance grant.
    ``(e) Limitation on Total Amount of Outstanding Loans.--The total 
dollar amount of loans outstanding under this section may not exceed 
$1,700,000,000.
    ``(f) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are appropriated such 
sums as may be necessary for the cost of loans under this section.

``SEC. 407. MANDATORY WORK REQUIREMENTS.

    ``(a) Participation Rate Requirements.--
        ``(1) All families.--A State to which a grant is made under 
    section 403 for a fiscal year shall achieve the minimum 
    participation rate specified in the following table for the fiscal 
    year with respect to all families receiving assistance under the 
    State program funded under this part:

            
                                                             The minimum
            
                                                           participation
        ``If the fiscal year is:
                                                                rate is:
            1997........................................
                                                                   25   
            1998........................................
                                                                   30   
            1999........................................
                                                                   35   
            2000........................................
                                                                   40   
            2001........................................
                                                                   45   
            2002 or thereafter..........................
                                                                   50.  

        ``(2) 2-parent families.--A State to which a grant is made 
    under section 403 for a fiscal year shall achieve the minimum 
    participation rate specified in the following table for the fiscal 
    year with respect to 2-parent families receiving assistance under 
    the State program funded under this part:

            
                                                             The minimum
            
                                                           participation
        ``If the fiscal year is:
                                                                rate is:
            1997........................................
                                                                   75   
            1998........................................
                                                                   75   
            1999 or thereafter..........................
                                                                   90.  

    ``(b) Calculation of Participation Rates.--
        ``(1) All families.--
            ``(A) Average monthly rate.--For purposes of subsection 
        (a)(1), the participation rate for all families of a State for 
        a fiscal year is the average of the participation rates for all 
        families of the State for each month in the fiscal year.
            ``(B) Monthly participation rates.--The participation rate 
        of a State for all families of the State for a month, expressed 
        as a percentage, is--
                ``(i) the number of families receiving assistance under 
            the State program funded under this part that include an 
            adult or a minor child head of household who is engaged in 
            work for the month; divided by
                ``(ii) the amount by which--

                    ``(I) the number of families receiving such 
                assistance during the month that include an adult or a 
                minor child head of household receiving such 
                assistance; exceeds
                    ``(II) the number of families receiving such 
                assistance that are subject in such month to a penalty 
                described in subsection (e)(1) but have not been 
                subject to such penalty for more than 3 months within 
                the preceding 12-month period (whether or not 
                consecutive).

        ``(2) 2-parent families.--
            ``(A) Average monthly rate.--For purposes of subsection 
        (a)(2), the participation rate for 2-parent families of a State 
        for a fiscal year is the average of the participation rates for 
        2-parent families of the State for each month in the fiscal 
        year.
            ``(B) Monthly participation rates.--The participation rate 
        of a State for 2-parent families of the State for a month shall 
        be calculated by use of the formula set forth in paragraph 
        (1)(B), except that in the formula the term `number of 2-parent 
        families' shall be substituted for the term `number of 
        families' each place such latter term appears.
        ``(3) Pro rata reduction of participation rate due to caseload 
    reductions not required by federal law.--
            ``(A) In general.--The Secretary shall prescribe 
        regulations for reducing the minimum participation rate 
        otherwise required by this section for a fiscal year by the 
        number of percentage points equal to the number of percentage 
        points (if any) by which--
                ``(i) the average monthly number of families receiving 
            assistance during the immediately preceding fiscal year 
            under the State program funded under this part is less than
                ``(ii) the average monthly number of families that 
            received aid under the State plan approved under part A (as 
            in effect on September 30, 1995) during fiscal year 1995.
        The minimum participation rate shall not be reduced to the 
        extent that the Secretary determines that the reduction in the 
        number of families receiving such assistance is required by 
        Federal law.
            ``(B) Eligibility changes not counted.--The regulations 
        required by subparagraph (A) shall not take into account 
        families that are diverted from a State program funded under 
        this part as a result of differences in eligibility criteria 
        under a State program funded under this part and eligibility 
        criteria under the State program operated under the State plan 
        approved under part A (as such plan and such part were in 
        effect on September 30, 1995). Such regulations shall place the 
        burden on the Secretary to prove that such families were 
        diverted as a direct result of differences in such eligibility 
        criteria.
        ``(4) State option to include individuals receiving assistance 
    under a tribal family assistance plan.--For purposes of paragraphs 
    (1)(B) and (2)(B), a State may, at its option, include families in 
    the State that are receiving assistance under a tribal family 
    assistance plan approved under section 412.
        ``(5) State option for participation requirement exemptions.--
    For any fiscal year, a State may, at its option, not require an 
    individual who is a single custodial parent caring for a child who 
    has not attained 12 months of age to engage in work, and may 
    disregard such an individual in determining the participation rates 
    under subsection (a) for not more than 12 months.
    ``(c) Engaged in Work.--
        ``(1) General rules.--
            ``(A) All families.--For purposes of subsection 
        (b)(1)(B)(i), a recipient is engaged in work for a month in a 
        fiscal year if the recipient is participating in work 
        activities for at least the minimum average number of hours per 
        week specified in the following table during the month, not 
        fewer than 20 hours per week of which are attributable to an 
        activity described in paragraph (1), (2), (3), (4), (5), (6), 
        (7), (8), or (12) of subsection (d), subject to this 
        subsection:

           
                                                             The minimum
          ``If the month is
                                                       average number of
            in fiscal year:
                                                      hours per week is:
              1997......................................
                                                                   20   
              1998......................................
                                                                   20   
              1999......................................
                                                                   25   
              2000 or thereafter........................
                                                                   30.  

            ``(B) 2-parent families.--For purposes of subsection 
        (b)(2)(B), an individual is engaged in work for a month in a 
        fiscal year if--
                ``(i) the individual is making progress in work 
            activities for at least 35 hours per week during the month, 
            not fewer than 30 hours per week of which are attributable 
            to an activity described in paragraph (1), (2), (3), (4), 
            (5), (6), (7), (8), or (12) of subsection (d), subject to 
            this subsection; and
                ``(ii) if the family of the individual receives 
            federally-funded child care assistance and an adult in the 
            family is not disabled or caring for a severely disabled 
            child, the individual's spouse is making progress in work 
            activities during the month, not fewer than 20 hours per 
            week of which are attributable to an activity described in 
            paragraph (1), (2), (3), (4), (5), or (7) of subsection 
            (d).
        ``(2) Limitations and special rules.--
            ``(A) Number of weeks for which job search counts as 
        work.--
                ``(i) Limitation.--Notwithstanding paragraph (1) of 
            this subsection, an individual shall not be considered to 
            be engaged in work by virtue of participation in an 
            activity described in subsection (d)(6) of a State program 
            funded under this part, after the individual has 
            participated in such an activity for 6 weeks (or, if the 
            unemployment rate of the State is at least 50 percent 
            greater than the unemployment rate of the United States, 12 
            weeks), or if the participation is for a week that 
            immediately follows 4 consecutive weeks of such 
            participation.
                ``(ii) Limited authority to count less than full week 
            of participation.--For purposes of clause (i) of this 
            subparagraph, on not more than 1 occasion per individual, 
            the State shall consider participation of the individual in 
            an activity described in subsection (d)(6) for 3 or 4 days 
            during a week as a week of participation in the activity by 
            the individual.
            ``(B) Single parent with child under age 6 deemed to be 
        meeting work participation requirements if parent is engaged in 
        work for 20 hours per week.--For purposes of determining 
        monthly participation rates under subsection (b)(1)(B)(i), a 
        recipient in a 1-parent family who is the parent of a child who 
        has not attained 6 years of age is deemed to be engaged in work 
        for a month if the recipient is engaged in work for an average 
        of at least 20 hours per week during the month.
            ``(C) Teen head of household who maintains satisfactory 
        school attendance deemed to be meeting work participation 
        requirements.--For purposes of determining monthly 
        participation rates under sub- section (b)(1)(B)(i), a 
        recipient who is a single head of household and has not 
        attained 20 years of age is deemed, subject to subparagraph (D) 
        of this paragraph, to be engaged in work for a month in a 
        fiscal year if the recipient--
                ``(i) maintains satisfactory attendance at secondary 
            school or the equivalent during the month; or
                ``(ii) participates in education directly related to 
            employment for at least the minimum average number of hours 
            per week specified in the table set forth in paragraph 
            (1)(A) of this subsection.
            ``(D) Number of persons that may be treated as engaged in 
        work by virtue of participation in vocational education 
        activities or being a teen head of household who maintains 
        satisfactory school attendance.--For purposes of determining 
        monthly participation rates under paragraphs (1)(B)(i) and 
        (2)(B) of subsection (b), not more than 20 percent of 
        individuals in all families and in 2-parent families may be 
        determined to be engaged in work in the State for a month by 
        reason of participation in vocational educational training or 
        deemed to be engaged in work by reason of subparagraph (C) of 
        this paragraph.
    ``(d) Work Activities Defined.--As used in this section, the term 
`work activities' means--
        ``(1) unsubsidized employment;
        ``(2) subsidized private sector employment;
        ``(3) subsidized public sector employment;
        ``(4) work experience (including work associated with the 
    refurbishing of publicly assisted housing) if sufficient private 
    sector employment is not available;
        ``(5) on-the-job training;
        ``(6) job search and job readiness assistance;
        ``(7) community service programs;
        ``(8) vocational educational training (not to exceed 12 months 
    with respect to any individual);
        ``(9) job skills training directly related to employment;
        ``(10) education directly related to employment, in the case of 
    a recipient who has not received a high school diploma or a 
    certificate of high school equivalency;
        ``(11) satisfactory attendance at secondary school or in a 
    course of study leading to a certificate of general equivalence, in 
    the case of a recipient who has not completed secondary school or 
    received such a certificate; and
        ``(12) the provision of child care services to an individual 
    who is participating in a community service program.
    ``(e) Penalties Against Individuals.--
        ``(1) In general.--Except as provided in paragraph (2), if an 
    individual in a family receiving assistance under the State program 
    funded under this part refuses to engage in work required in 
    accordance with this section, the State shall--
            ``(A) reduce the amount of assistance otherwise payable to 
        the family pro rata (or more, at the option of the State) with 
        respect to any period during a month in which the individual so 
        refuses; or
            ``(B) terminate such assistance,
    subject to such good cause and other exceptions as the State may 
    establish.
        ``(2) Exception.--Notwithstanding paragraph (1), a State may 
    not reduce or terminate assistance under the State program funded 
    under this part based on a refusal of an individual to work if the 
    individual is a single custodial parent caring for a child who has 
    not attained 6 years of age, and the individual proves that the 
    individual has a demonstrated inability (as determined by the 
    State) to obtain needed child care, for 1 or more of the following 
    reasons:
            ``(A) Unavailability of appropriate child care within a 
        reasonable distance from the individual's home or work site.
            ``(B) Unavailability or unsuitability of informal child 
        care by a relative or under other arrangements.
            ``(C) Unavailability of appropriate and affordable formal 
        child care arrangements.
    ``(f) Nondisplacement in Work Activities.--
        ``(1) In general.--Subject to paragraph (2), an adult in a 
    family receiving assistance under a State program funded under this 
    part attributable to funds provided by the Federal Government may 
    fill a vacant employment position in order to engage in a work 
    activity described in subsection (d).
        ``(2) No filling of certain vacancies.--No adult in a work 
    activity described in subsection (d) which is funded, in whole or 
    in part, by funds provided by the Federal Government shall be 
    employed or assigned--
            ``(A) when any other individual is on layoff from the same 
        or any substantially equivalent job; or
            ``(B) if the employer has terminated the employment of any 
        regular employee or otherwise caused an involuntary reduction 
        of its workforce in order to fill the vacancy so created with 
        an adult described in paragraph (1).
        ``(3) Grievance procedure.--A State with a program funded under 
    this part shall establish and maintain a grievance procedure for 
    resolving complaints of alleged violations of paragraph (2).
        ``(4) No preemption.--Nothing in this subsection shall preempt 
    or supersede any provision of State or local law that provides 
    greater protection for employees from displacement.
    ``(g) Sense of the Congress.--It is the sense of the Congress that 
in complying with this section, each State that operates a program 
funded under this part is encouraged to assign the highest priority to 
requiring adults in 2-parent families and adults in single-parent 
families that include older preschool or school-age children to be 
engaged in work activities.
    ``(h) Sense of the Congress That States Should Impose Certain 
Requirements on Noncustodial, Nonsupporting Minor Parents.--It is the 
sense of the Congress that the States should require noncustodial, 
nonsupporting parents who have not attained 18 years of age to fulfill 
community work obligations and attend appropriate parenting or money 
management classes after school.
    ``(i) Review of Implementation of State Work Programs.--During 
fiscal year 1999, the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate shall hold 
hearings and engage in other appropriate activities to review the 
implementation of this section by the States, and shall invite the 
Governors of the States to testify before them regarding such 
implementation. Based on such hearings, such Committees may introduce 
such legislation as may be appropriate to remedy any problems with the 
State programs operated pursuant to this section.

``SEC. 408. PROHIBITIONS; REQUIREMENTS.

    ``(a) In General.--
        ``(1) No assistance for families without a minor child.--A 
    State to which a grant is made under section 403 shall not use any 
    part of the grant to provide assistance to a family--
            ``(A) unless the family includes--
                ``(i) a minor child who resides with a custodial parent 
            or other adult caretaker relative of the child; or
                ``(ii) a pregnant individual; and
            ``(B) if the family includes an adult who has received 
        assistance under any State program funded under this part 
        attributable to funds provided by the Federal Government, for 
        60 months (whether or not consecutive) after the date the State 
        program funded under this part commences (unless an exception 
        described in subparagraph (B), (C), or (D) of paragraph (7) 
        applies).
        ``(2) Reduction or elimination of assistance for noncooperation 
    in establishing paternity or obtaining child support.--If the 
    agency responsible for administering the State plan approved under 
    part D determines that an individual is not cooperating with the 
    State in establishing paternity or in establishing, modifying, or 
    enforcing a support order with respect to a child of the 
    individual, and the individual does not qualify for any good cause 
    or other exception established by the State pursuant to section 
    454(29), then the State--
            ``(A) shall deduct from the assistance that would otherwise 
        be provided to the family of the individual under the State 
        program funded under this part an amount equal to not less than 
        25 percent of the amount of such assistance; and
            ``(B) may deny the family any assistance under the State 
        program.
        ``(3) No assistance for families not assigning certain support 
    rights to the state.--
            ``(A) In general.--A State to which a grant is made under 
        section 403 shall require, as a condition of providing 
        assistance to a family under the State program funded under 
        this part, that a member of the family assign to the State any 
        rights the family member may have (on behalf of the family 
        member or of any other person for whom the family member has 
        applied for or is receiving such assistance) to support from 
        any other person, not exceeding the total amount of assistance 
        so provided to the family, which accrue (or have accrued) 
        before the date the family leaves the program, which 
        assignment, on and after the date the family leaves the 
        program, shall not apply with respect to any support (other 
        than support collected pursuant to section 464) which accrued 
        before the family received such assistance and which the State 
        has not collected by--
                ``(i) September 30, 2000, if the assignment is executed 
            on or after October 1, 1997, and before October 1, 2000; or
                ``(ii) the date the family leaves the program, if the 
            assignment is executed on or after October 1, 2000.
            ``(B) Limitation.--A State to which a grant is made under 
        section 403 shall not require, as a condition of providing 
        assistance to any family under the State program funded under 
        this part, that a member of the family assign to the State any 
        rights to support described in subparagraph (A) which accrue 
        after the date the family leaves the program.
        ``(4) No assistance for teenage parents who do not attend high 
    school or other equivalent training program.--A State to which a 
    grant is made under section 403 shall not use any part of the grant 
    to provide assistance to an individual who has not attained 18 
    years of age, is not married, has a minor child at least 12 weeks 
    of age in his or her care, and has not successfully completed a 
    high-school education (or its equivalent), if the individual does 
    not participate in--
            ``(A) educational activities directed toward the attainment 
        of a high school diploma or its equivalent; or
            ``(B) an alternative educational or training program that 
        has been approved by the State.
        ``(5) No assistance for teenage parents not living in adult-
    supervised settings.--
            ``(A) In general.--
                ``(i) Requirement.--Except as provided in subparagraph 
            (B), a State to which a grant is made under section 403 
            shall not use any part of the grant to provide assistance 
            to an individual described in clause (ii) of this 
            subparagraph if the individual and the minor child referred 
            to in clause (ii)(II) do not reside in a place of residence 
            maintained by a parent, legal guardian, or other adult 
            relative of the individual as such parent's, guardian's, or 
            adult relative's own home.
                ``(ii) Individual described.-- For purposes of clause 
            (i), an individual described in this clause is an 
            individual who--

                    ``(I) has not attained 18 years of age; and
                    ``(II) is not married, and has a minor child in his 
                or her care.

            ``(B) Exception.--
                ``(i) Provision of, or assistance in locating, adult-
            supervised living arrangement.--In the case of an 
            individual who is described in clause (ii), the State 
            agency referred to in section 402(a)(4) shall provide, or 
            assist the individual in locating, a second chance home, 
            maternity home, or other appropriate adult-supervised 
            supportive living arrangement, taking into consideration 
            the needs and concerns of the individual, unless the State 
            agency determines that the individual's current living 
            arrangement is appropriate, and thereafter shall require 
            that the individual and the minor child referred to in 
            subparagraph (A)(ii)(II) reside in such living arrangement 
            as a condition of the continued receipt of assistance under 
            the State program funded under this part attributable to 
            funds provided by the Federal Government (or in an 
            alternative appropriate arrangement, should circumstances 
            change and the current arrangement cease to be 
            appropriate).
                ``(ii) Individual described.--For purposes of clause 
            (i), an individual is described in this clause if the 
            individual is described in subparagraph (A)(ii), and--

                    ``(I) the individual has no parent, legal guardian, 
                or other appropriate adult relative described in 
                subclause (II) of his or her own who is living or whose 
                whereabouts are known;
                    ``(II) no living parent, legal guardian, or other 
                appropriate adult relative, who would otherwise meet 
                applicable State criteria to act as the individual's 
                legal guardian, of such individual allows the 
                individual to live in the home of such parent, 
                guardian, or relative;
                    ``(III) the State agency determines that--

                        ``(aa) the individual or the minor child 
                    referred to in subparagraph (A)(ii)(II) is being or 
                    has been subjected to serious physical or emotional 
                    harm, sexual abuse, or exploitation in the 
                    residence of the individual's own parent or legal 
                    guardian; or
                        ``(bb) substantial evidence exists of an act or 
                    failure to act that presents an imminent or serious 
                    harm if the individual and the minor child lived in 
                    the same residence with the individual's own parent 
                    or legal guardian; or

                    ``(IV) the State agency otherwise determines that 
                it is in the best interest of the minor child to waive 
                the requirement of subparagraph (A) with respect to the 
                individual or the minor child.

                ``(iii) Second-chance home.--For purposes of this 
            subparagraph, the term `second-chance home' means an entity 
            that provides individuals described in clause (ii) with a 
            supportive and supervised living arrangement in which such 
            individuals are required to learn parenting skills, 
            including child development, family budgeting, health and 
            nutrition, and other skills to promote their long-term 
            economic independence and the well-being of their children.
        ``(6) No medical services.--
            ``(A) In general.--A State to which a grant is made under 
        section 403 shall not use any part of the grant to provide 
        medical services.
            ``(B) Exception for prepregnancy family planning 
        services.--As used in subparagraph (A), the term `medical 
        services' does not include prepregnancy family planning 
        services.
        ``(7) No assistance for more than 5 years.--
            ``(A) In general.--A State to which a grant is made under 
        section 403 shall not use any part of the grant to provide 
        assistance to a family that includes an adult who has received 
        assistance under any State program funded under this part 
        attributable to funds provided by the Federal Government, for 
        60 months (whether or not consecutive) after the date the State 
        program funded under this part commences, subject to this 
        paragraph.
            ``(B) Minor child exception.--In determining the number of 
        months for which an individual who is a parent or pregnant has 
        received assistance under the State program funded under this 
        part, the State shall disregard any month for which such 
        assistance was provided with respect to the individual and 
        during which the individual was--
                ``(i) a minor child; and
                ``(ii) not the head of a household or married to the 
            head of a household.
            ``(C) Hardship exception.--
                ``(i) In general.--The State may exempt a family from 
            the application of subparagraph (A) by reason of hardship 
            or if the family includes an individual who has been 
            battered or subjected to extreme cruelty.
                ``(ii) Limitation.--The number of families with respect 
            to which an exemption made by a State under clause (i) is 
            in effect for a fiscal year shall not exceed 20 percent of 
            the average monthly number of families to which assistance 
            is provided under the State program funded under this part.
                ``(iii) Battered or subject to extreme cruelty 
            defined.--For purposes of clause (i), an individual has 
            been battered or subjected to extreme cruelty if the 
            individual has been subjected to--

                    ``(I) physical acts that resulted in, or threatened 
                to result in, physical injury to the individual;
                    ``(II) sexual abuse;
                    ``(III) sexual activity involving a dependent 
                child;
                    ``(IV) being forced as the caretaker relative of a 
                dependent child to engage in nonconsensual sexual acts 
                or activities;
                    ``(V) threats of, or attempts at, physical or 
                sexual abuse;
                    ``(VI) mental abuse; or
                    ``(VII) neglect or deprivation of medical care.

            ``(D) Disregard of months of assistance received by adult 
        while living on an indian reservation or in an alaskan native 
        village with 50 percent unemployment.--In determining the 
        number of months for which an adult has received assistance 
        under the State program funded under this part, the State shall 
        disregard any month during which the adult lived on an Indian 
        reservation or in an Alaskan Native village if, during the 
        month--
                ``(i) at least 1,000 individuals were living on the 
            reservation or in the village ; and
                ``(ii) at least 50 percent of the adults living on the 
            reservation or in the village were unemployed.
            ``(E) Rule of interpretation.--Subparagraph (A) shall not 
        be interpreted to require any State to provide assistance to 
        any individual for any period of time under the State program 
        funded under this part.
            ``(F) Rule of interpretation.--This part shall not be 
        interpreted to prohibit any State from expending State funds 
        not originating with the Federal Government on benefits for 
        children or families that have become ineligible for assistance 
        under the State program funded under this part by reason of 
        subparagraph (A).
        ``(8) Denial of assistance for 10 years to a person found to 
    have fraudulently misrepresented residence in order to obtain 
    assistance in 2 or more states.--A State to which a grant is made 
    under section 403 shall not use any part of the grant to provide 
    cash assistance to an individual during the 10-year period that 
    begins on the date the individual is convicted in Federal or State 
    court of having made a fraudulent statement or representation with 
    respect to the place of residence of the individual in order to 
    receive assistance simultaneously from 2 or more States under 
    programs that are funded under this title, title XIX, or the Food 
    Stamp Act of 1977, or benefits in 2 or more States under the 
    supplemental security income program under title XVI. The preceding 
    sentence shall not apply with respect to a conviction of an 
    individual, for any month beginning after the President of the 
    United States grants a pardon with respect to the conduct which was 
    the subject of the conviction.
        ``(9) Denial of assistance for fugitive felons and probation 
    and parole violators.--
            ``(A) In general.--A State to which a grant is made under 
        section 403 shall not use any part of the grant to provide 
        assistance to any individual who is--
                ``(i) fleeing to avoid prosecution, or custody or 
            confinement after conviction, under the laws of the place 
            from which the individual flees, for a crime, or an attempt 
            to commit a crime, which is a felony under the laws of the 
            place from which the individual flees, or which, in the 
            case of the State of New Jersey, is a high misdemeanor 
            under the laws of such State; or
                ``(ii) violating a condition of probation or parole 
            imposed under Federal or State law.
        The preceding sentence shall not apply with respect to conduct 
        of an individual, for any month beginning after the President 
        of the United States grants a pardon with respect to the 
        conduct.
            ``(B) Exchange of information with law enforcement 
        agencies.--If a State to which a grant is made under section 
        403 establishes safeguards against the use or disclosure of 
        information about applicants or recipients of assistance under 
        the State program funded under this part, the safeguards shall 
        not prevent the State agency administering the program from 
        furnishing a Federal, State, or local law enforcement officer, 
        upon the request of the officer, with the current address of 
        any recipient if the officer furnishes the agency with the name 
        of the recipient and notifies the agency that--
                ``(i) the recipient--

                    ``(I) is described in subparagraph (A); or
                    ``(II) has information that is necessary for the 
                officer to conduct the official duties of the officer; 
                and

                ``(ii) the location or apprehension of the recipient is 
            within such official duties.
        ``(10) Denial of assistance for minor children who are absent 
    from the home for a significant period.--
            ``(A) In general.--A State to which a grant is made under 
        section 403 shall not use any part of the grant to provide 
        assistance for a minor child who has been, or is expected by a 
        parent (or other caretaker relative) of the child to be, absent 
        from the home for a period of 45 consecutive days or, at the 
        option of the State, such period of not less than 30 and not 
        more than 180 consecutive days as the State may provide for in 
        the State plan submitted pursuant to section 402.
            ``(B) State authority to establish good cause exceptions.--
        The State may establish such good cause exceptions to 
        subparagraph (A) as the State considers appropriate if such 
        exceptions are provided for in the State plan submitted 
        pursuant to section 402.
            ``(C) Denial of assistance for relative who fails to notify 
        state agency of absence of child.--A State to which a grant is 
        made under section 403 shall not use any part of the grant to 
        provide assistance for an individual who is a parent (or other 
        caretaker relative) of a minor child and who fails to notify 
        the agency administering the State program funded under this 
        part of the absence of the minor child from the home for the 
        period specified in or provided for pursuant to subparagraph 
        (A), by the end of the 5-day period that begins with the date 
        that it becomes clear to the parent (or relative) that the 
        minor child will be absent for such period so specified or 
        provided for.
        ``(11) Medical assistance required to be provided for certain 
    families having earnings from employment or child support.--
            ``(A) Earnings from employment.--A State to which a grant 
        is made under section 403 and which has a State plan approved 
        under title XIX shall provide that in the case of a family that 
        is treated (under section 1931(b)(1)(A) for purposes of title 
        XIX) as receiving aid under a State plan approved under this 
        part (as in effect on July 16, 1996), that would become 
        ineligible for such aid because of hours of or income from 
        employment of the caretaker relative (as defined under this 
        part as in effect on such date) or because of section 
        402(a)(8)(B)(ii)(II) (as so in effect), and that was so treated 
        as receiving such aid in at least 3 of the 6 months immediately 
        preceding the month in which such ineligibility begins, the 
        family shall remain eligible for medical assistance under the 
        State's plan approved under title XIX for an extended period or 
        periods as provided in section 1925 or 1902(e)(1) (as 
        applicable), and that the family will be appropriately notified 
        of such extension as required by section 1925(a)(2).
            ``(B) Child support.--A State to which a grant is made 
        under section 403 and which has a State plan approved under 
        title XIX shall provide that in the case of a family that is 
        treated (under section 1931(b)(1)(A) for purposes of title XIX) 
        as receiving aid under a State plan approved under this part 
        (as in effect on July 16, 1996), that would become ineligible 
        for such aid as a result (wholly or partly) of the collection 
        of child or spousal support under part D and that was so 
        treated as receiving such aid in at least 3 of the 6 months 
        immediately preceding the month in which such ineligibility 
        begins, the family shall remain eligible for medical assistance 
        under the State's plan approved under title XIX for an extended 
        period or periods as provided in section 1931(c)(1).
    ``(b) Individual Responsibility Plans.--
        ``(1) Assessment.--The State agency responsible for 
    administering the State program funded under this part shall make 
    an initial assessment of the skills, prior work experience, and 
    employability of each recipient of assistance under the program 
    who--
            ``(A) has attained 18 years of age; or
            ``(B) has not completed high school or obtained a 
        certificate of high school equivalency, and is not attending 
        secondary school.
        ``(2) Contents of plans.--
            ``(A) In general.--On the basis of the assessment made 
        under subsection (a) with respect to an individual, the State 
        agency, in consultation with the individual, may develop an 
        individual responsibility plan for the individual, which--
                ``(i) sets forth an employment goal for the individual 
            and a plan for moving the individual immediately into 
            private sector employment;
                ``(ii) sets forth the obligations of the individual, 
            which may include a requirement that the individual attend 
            school, maintain certain grades and attendance, keep school 
            age children of the individual in school, immunize 
            children, attend parenting and money management classes, or 
            do other things that will help the individual become and 
            remain employed in the private sector;
                ``(iii) to the greatest extent possible is designed to 
            move the individual into whatever private sector employment 
            the individual is capable of handling as quickly as 
            possible, and to increase the responsibility and amount of 
            work the individual is to handle over time;
                ``(iv) describes the services the State will provide 
            the individual so that the individual will be able to 
            obtain and keep employment in the private sector, and 
            describe the job counseling and other services that will be 
            provided by the State; and
                ``(v) may require the individual to undergo appropriate 
            substance abuse treatment.
            ``(B) Timing.--The State agency may comply with paragraph 
        (1) with respect to an individual--
                ``(i) within 90 days (or, at the option of the State, 
            180 days) after the effective date of this part, in the 
            case of an individual who, as of such effective date, is a 
            recipient of aid under the State plan approved under part A 
            (as in effect immediately before such effective date); or
                ``(ii) within 30 days (or, at the option of the State, 
            90 days) after the individual is determined to be eligible 
            for such assistance, in the case of any other individual.
        ``(3) Penalty for noncompliance by individual.--In addition to 
    any other penalties required under the State program funded under 
    this part, the State may reduce, by such amount as the State 
    considers appropriate, the amount of assistance otherwise payable 
    under the State program to a family that includes an individual who 
    fails without good cause to comply with an individual 
    responsibility plan signed by the individual.
        ``(4) State discretion.--The exercise of the authority of this 
    subsection shall be within the sole discretion of the State.
    ``(c) Nondiscrimination Provisions.--The following provisions of 
law shall apply to any program or activity which receives funds 
provided under this part:
        ``(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
    seq.).
        ``(2) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
    794).
        ``(3) The Americans with Disabilities Act of 1990 (42 U.S.C. 
    12101 et seq.).
        ``(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d 
    et seq.).
    ``(d) Aliens.--For special rules relating to the treatment of 
aliens, see section 402 of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996.

``SEC. 409. PENALTIES.

    ``(a) In General.--Subject to this section:
        ``(1) Use of grant in violation of this part.--
            ``(A) General penalty.--If an audit conducted under chapter 
        75 of title 31, United States Code, finds that an amount paid 
        to a State under section 403 for a fiscal year has been used in 
        violation of this part, the Secretary shall reduce the grant 
        payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year quarter by the amount so 
        used.
            ``(B) Enhanced penalty for intentional violations.--If the 
        State does not prove to the satisfaction of the Secretary that 
        the State did not intend to use the amount in violation of this 
        part, the Secretary shall further reduce the grant payable to 
        the State under section 403(a)(1) for the immediately 
        succeeding fiscal year quarter by an amount equal to 5 percent 
        of the State family assistance grant.
        ``(2) Failure to submit required report.--
            ``(A) In general.--If the Secretary determines that a State 
        has not, within 1 month after the end of a fiscal quarter, 
        submitted the report required by section 411(a) for the 
        quarter, the Secretary shall reduce the grant payable to the 
        State under section 403(a)(1) for the immediately succeeding 
        fiscal year by an amount equal to 4 percent of the State family 
        assistance grant.
            ``(B) Rescission of penalty.--The Secretary shall rescind a 
        penalty imposed on a State under subparagraph (A) with respect 
        to a report if the State submits the report before the end of 
        the fiscal quarter that immediately succeeds the fiscal quarter 
        for which the report was required.
        ``(3) Failure to satisfy minimum participation rates.--
            ``(A) In general.--If the Secretary determines that a State 
        to which a grant is made under section 403 for a fiscal year 
        has failed to comply with section 407(a) for the fiscal year, 
        the Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        an amount equal to not more than the applicable percentage of 
        the State family assistance grant.
            ``(B) Applicable percentage defined.--As used in 
        subparagraph (A), the term `applicable percentage' means, with 
        respect to a State--
                ``(i) if a penalty was not imposed on the State under 
            subparagraph (A) for the immediately preceding fiscal year, 
            5 percent; or
                ``(ii) if a penalty was imposed on the State under 
            subparagraph (A) for the immediately preceding fiscal year, 
            the lesser of--

                    ``(I) the percentage by which the grant payable to 
                the State under section 403(a)(1) was reduced for such 
                preceding fiscal year, increased by 2 percentage 
                points; or
                    ``(II) 21 percent.

            ``(C) Penalty based on severity of failure.--The Secretary 
        shall impose reductions under subparagraph (A) with respect to 
        a fiscal year based on the degree of noncompliance, and may 
        reduce the penalty if the noncompliance is due to circumstances 
        that caused the State to become a needy State (as defined in 
        section 403(b)(6)) during the fiscal year.
        ``(4) Failure to participate in the income and eligibility 
    verification system.--If the Secretary determines that a State 
    program funded under this part is not participating during a fiscal 
    year in the income and eligibility verification system required by 
    section 1137, the Secretary shall reduce the grant payable to the 
    State under section 403(a)(1) for the immediately succeeding fiscal 
    year by an amount equal to not more than 2 percent of the State 
    family assistance grant.
        ``(5) Failure to comply with paternity establishment and child 
    support enforcement requirements under part d.--Notwithstanding any 
    other provision of this Act, if the Secretary determines that the 
    State agency that administers a program funded under this part does 
    not enforce the penalties requested by the agency administering 
    part D against recipients of assistance under the State program who 
    fail to cooperate in establishing paternity or in establishing, 
    modifying, or enforcing a child support order in accordance with 
    such part and who do not qualify for any good cause or other 
    exception established by the State under section 454(29), the 
    Secretary shall reduce the grant payable to the State under section 
    403(a)(1) for the immediately succeeding fiscal year (without 
    regard to this section) by not more than 5 percent.
        ``(6) Failure to timely repay a federal loan fund for state 
    welfare programs.--If the Secretary determines that a State has 
    failed to repay any amount borrowed from the Federal Loan Fund for 
    State Welfare Programs established under section 406 within the 
    period of maturity applicable to the loan, plus any interest owed 
    on the loan, the Secretary shall reduce the grant payable to the 
    State under section 403(a)(1) for the immediately succeeding fiscal 
    year quarter (without regard to this section) by the outstanding 
    loan amount, plus the interest owed on the outstanding amount. The 
    Secretary shall not forgive any outstanding loan amount or interest 
    owed on the outstanding amount.
        ``(7) Failure of any state to maintain certain level of 
    historic effort.--
            ``(A) In general.--The Secretary shall reduce the grant 
        payable to the State under section 403(a)(1) for fiscal year 
        1998, 1999, 2000, 2001, 2002, or 2003 by the amount (if any) by 
        which qualified State expenditures for the then immediately 
        preceding fiscal year are less than the applicable percentage 
        of historic State expenditures with respect to such preceding 
        fiscal year.
            ``(B) Definitions.--As used in this paragraph:
                ``(i) Qualified state expenditures.--

                    ``(I) In general.--The term `qualified State 
                expenditures' means, with respect to a State and a 
                fiscal year, the total expenditures by the State during 
                the fiscal year, under all State programs, for any of 
                the following with respect to eligible families:

                        ``(aa) Cash assistance.
                        ``(bb) Child care assistance.
                        ``(cc) Educational activities designed to 
                    increase self-sufficiency, job training, and work, 
                    excluding any expenditure for public education in 
                    the State except expenditures which involve the 
                    provision of services or assistance to a member of 
                    an eligible family which is not generally available 
                    to persons who are not members of an eligible 
                    family.
                        ``(dd) Administrative costs in connection with 
                    the matters described in items (aa), (bb), (cc), 
                    and (ee), but only to the extent that such costs do 
                    not exceed 15 percent of the total amount of 
                    qualified State expenditures for the fiscal year.
                        ``(ee) Any other use of funds allowable under 
                    section 404(a)(1).

                    ``(II) Exclusion of transfers from other state and 
                local programs.--Such term does not include 
                expenditures under any State or local program during a 
                fiscal year, except to the extent that--

                        ``(aa) the expenditures exceed the amount 
                    expended under the State or local program in the 
                    fiscal year most recently ending before the date of 
                    the enactment of this part; or
                        ``(bb) the State is entitled to a payment under 
                    former section 403 (as in effect immediately before 
                    such date of enactment) with respect to the 
                    expenditures.

                    ``(III) Eligible families.--As used in subclause 
                (I), the term `eligible families' means families 
                eligible for assistance under the State program funded 
                under this part, and families that would be eligible 
                for such assistance but for the application of section 
                408(a)(7) of this Act or section 402 of the Personal 
                Responsibility and Work Opportunity Reconciliation Act 
                of 1996.

                ``(ii) Applicable percentage.--The term `applicable 
            percentage' means for fiscal years 1997 through 2002, 80 
            percent (or, if the State meets the requirements of section 
            407(a) for the fiscal year, 75 percent) reduced (if 
            appropriate) in accordance with subparagraph (C)(ii).
                ``(iii) Historic state expenditures.--The term 
            `historic State expenditures' means, with respect to a 
            State, the lesser of--

                    ``(I) the expenditures by the State under parts A 
                and F (as in effect during fiscal year 1994) for fiscal 
                year 1994; or
                    ``(II) the amount which bears the same ratio to the 
                amount described in subclause (I) as--

                        ``(aa) the State family assistance grant, plus 
                    the total amount required to be paid to the State 
                    under former section 403 for fiscal year 1994 with 
                    respect to amounts expended by the State for child 
                    care under subsection (g) or (i) of section 402 (as 
                    in effect during fiscal year 1994); bears to
                        ``(bb) the total amount required to be paid to 
                    the State under former section 403 (as in effect 
                    during fiscal year 1994) for fiscal year 1994.
            Such term does not include any expenditures under the State 
            plan approved under part A (as so in effect) on behalf of 
            individuals covered by a tribal family assistance plan 
            approved under section 412, as determined by the Secretary.
                ``(iv) Expenditures by the state.--The term 
            `expenditures by the State' does not include--

                    ``(I) any expenditures from amounts made available 
                by the Federal Government;
                    ``(II) any State funds expended for the medicaid 
                program under title XIX;
                    ``(III) any State funds which are used to match 
                Federal funds; or
                    ``(IV) any State funds which are expended as a 
                condition of receiving Federal funds under Federal 
                programs other than under this part.

            Notwithstanding subclause (IV) of the preceding sentence, 
            such term includes expenditures by a State for child care 
            in a fiscal year to the extent that the total amount of 
            such expenditures does not exceed an amount equal to the 
            amount of State expenditures in fiscal year 1994 or 1995 
            (whichever is greater) that equal the non-Federal share for 
            the programs described in section 418(a)(1)(A).
        ``(8) Substantial noncompliance of state child support 
    enforcement program with requirements of part d.--
            ``(A) In general.--If a State program operated under part D 
        is found as a result of a review conducted under section 
        452(a)(4) not to have complied substantially with the 
        requirements of such part for any quarter, and the Secretary 
        determines that the program is not complying substantially with 
        such requirements at the time the finding is made, the 
        Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the quarter and each subsequent quarter 
        that ends before the 1st quarter throughout which the program 
        is found to be in substantial compliance with such requirements 
        by--
                ``(i) not less than 1 nor more than 2 percent;
                ``(ii) not less than 2 nor more than 3 percent, if the 
            finding is the 2nd consecutive such finding made as a 
            result of such a review; or
                ``(iii) not less than 3 nor more than 5 percent, if the 
            finding is the 3rd or a subsequent consecutive such finding 
            made as a result of such a review.
            ``(B) Disregard of noncompliance which is of a technical 
        nature.--For purposes of subparagraph (A) and section 
        452(a)(4), a State which is not in full compliance with the 
        requirements of this part shall be determined to be in 
        substantial compliance with such requirements only if the 
        Secretary determines that any noncompliance with such 
        requirements is of a technical nature which does not adversely 
        affect the performance of the State's program operated under 
        part D.
        ``(9) Failure to comply with 5-year limit on assistance.--If 
    the Secretary determines that a State has not complied with section 
    408(a)(1)(B) during a fiscal year, the Secretary shall reduce the 
    grant payable to the State under section 403(a)(1) for the 
    immediately succeeding fiscal year by an amount equal to 5 percent 
    of the State family assistance grant.
        ``(10) Failure of state receiving amounts from contingency fund 
    to maintain 100 percent of historic effort.--If, at the end of any 
    fiscal year during which amounts from the Contingency Fund for 
    State Welfare Programs have been paid to a State, the Secretary 
    finds that the expenditures under the State program funded under 
    this part for the fiscal year (excluding any amounts made available 
    by the Federal Government) are less than 100 percent of historic 
    State expenditures (as defined in paragraph (7)(B)(iii) of this 
    subsection), the Secretary shall reduce the grant payable to the 
    State under section 403(a)(1) for the immediately succeeding fiscal 
    year by the total of the amounts so paid to the State.
        ``(11) Failure to maintain assistance to adult single custodial 
    parent who cannot obtain child care for child under age 6.--
            ``(A) In general.--If the Secretary determines that a State 
        to which a grant is made under section 403 for a fiscal year 
        has violated section 407(e)(2) during the fiscal year, the 
        Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        an amount equal to not more than 5 percent of the State family 
        assistance grant.
            ``(B) Penalty based on severity of failure.--The Secretary 
        shall impose reductions under subparagraph (A) with respect to 
        a fiscal year based on the degree of noncompliance.
        ``(12) Failure to expend additional state funds to replace 
    grant reductions.--If the grant payable to a State under section 
    403(a)(1) for a fiscal year is reduced by reason of this 
    subsection, the State shall, during the immediately succeeding 
    fiscal year, expend under the State program funded under this part 
    an amount equal to the total amount of such reductions.
    ``(b) Reasonable Cause Exception.--
        ``(1) In general.--The Secretary may not impose a penalty on a 
    State under subsection (a) with respect to a requirement if the 
    Secretary determines that the State has reasonable cause for 
    failing to comply with the requirement.
        ``(2) Exception.--Paragraph (1) of this subsection shall not 
    apply to any penalty under paragraph (7) or (8) of subsection (a).
    ``(c) Corrective Compliance Plan.--
        ``(1) In general.--
            ``(A) Notification of violation.--Before imposing a penalty 
        against a State under subsection (a) with respect to a 
        violation of this part, the Secretary shall notify the State of 
        the violation and allow the State the opportunity to enter into 
        a corrective compliance plan in accordance with this subsection 
        which outlines how the State will correct the violation and how 
        the State will insure continuing compliance with this part.
            ``(B) 60-day period to propose a corrective compliance 
        plan.--During the 60-day period that begins on the date the 
        State receives a notice provided under sub- paragraph (A) with 
        respect to a violation, the State may submit to the Federal 
        Government a corrective compliance plan to correct the 
        violation.
            ``(C) Consultation about modifications.--During the 60-day 
        period that begins with the date the Secretary receives a 
        corrective compliance plan submitted by a State in accordance 
        with subparagraph (B), the Secretary may consult with the State 
        on modifications to the plan.
            ``(D) Acceptance of plan.-- A corrective compliance plan 
        submitted by a State in accordance with subparagraph (B) is 
        deemed to be accepted by the Secretary if the Secretary does 
        not accept or reject the plan during 60-day period that begins 
        on the date the plan is submitted.
        ``(2) Effect of correcting violation.--The Secretary may not 
    impose any penalty under subsection (a) with respect to any 
    violation covered by a State corrective compliance plan accepted by 
    the Secretary if the State corrects the violation pursuant to the 
    plan.
        ``(3) Effect of failing to correct violation.--The Secretary 
    shall assess some or all of a penalty imposed on a State under 
    subsection (a) with respect to a violation if the State does not, 
    in a timely manner, correct the violation pursuant to a State 
    corrective compliance plan accepted by the Secretary.
        ``(4) Inapplicability to failure to timely repay a federal loan 
    fund for a state welfare program.--This subsection shall not apply 
    to the imposition of a penalty against a State under subsection 
    (a)(6).
    ``(d) Limitation on Amount of Penalties.--
        ``(1) In general.--In imposing the penalties described in 
    subsection (a), the Secretary shall not reduce any quarterly 
    payment to a State by more than 25 percent.
        ``(2) Carryforward of unrecovered penalties.--To the extent 
    that paragraph (1) of this subsection prevents the Secretary from 
    recovering during a fiscal year the full amount of penalties 
    imposed on a State under subsection (a) of this section for a prior 
    fiscal year, the Secretary shall apply any remaining amount of such 
    penalties to the grant payable to the State under section 403(a)(1) 
    for the immediately succeeding fiscal year.

``SEC. 410. APPEAL OF ADVERSE DECISION.

    ``(a) In General.--Within 5 days after the date the Secretary takes 
any adverse action under this part with respect to a State, the 
Secretary shall notify the chief executive officer of the State of the 
adverse action, including any action with respect to the State plan 
submitted under section 402 or the imposition of a penalty under 
section 409.
    ``(b) Administrative Review.--
        ``(1) In general.--Within 60 days after the date a State 
    receives notice under subsection (a) of an adverse action, the 
    State may appeal the action, in whole or in part, to the 
    Departmental Appeals Board established in the Department of Health 
    and Human Services (in this section referred to as the `Board') by 
    filing an appeal with the Board.
        ``(2) Procedural rules.--The Board shall consider an appeal 
    filed by a State under paragraph (1) on the basis of such 
    documentation as the State may submit and as the Board may require 
    to support the final decision of the Board. In deciding whether to 
    uphold an adverse action or any portion of such an action, the 
    Board shall conduct a thorough review of the issues and take into 
    account all relevant evidence. The Board shall make a final 
    determination with respect to an appeal filed under paragraph (1) 
    not less than 60 days after the date the appeal is filed.
    ``(c) Judicial Review of Adverse Decision.--
        ``(1) In general.--Within 90 days after the date of a final 
    decision by the Board under this section with respect to an adverse 
    action taken against a State, the State may obtain judicial review 
    of the final decision (and the findings incorporated into the final 
    decision) by filing an action in--
            ``(A) the district court of the United States for the 
        judicial district in which the principal or headquarters office 
        of the State agency is located; or
            ``(B) the United States District Court for the District of 
        Columbia.
        ``(2) Procedural rules.--The district court in which an action 
    is filed under paragraph (1) shall review the final decision of the 
    Board on the record established in the administrative proceeding, 
    in accordance with the standards of review prescribed by 
    subparagraphs (A) through (E) of section 706(2) of title 5, United 
    States Code. The review shall be on the basis of the documents and 
    supporting data submitted to the Board.

``SEC. 411. DATA COLLECTION AND REPORTING.

    ``(a) Quarterly Reports by States.--
        ``(1) General reporting requirement.--
            ``(A) Contents of report.--Each eligible State shall 
        collect on a monthly basis, and report to the Secretary on a 
        quarterly basis, the following disaggregated case record 
        information on the families receiving assistance under the 
        State program funded under this part:
                ``(i) The county of residence of the family.
                ``(ii) Whether a child receiving such assistance or an 
            adult in the family is disabled.
                ``(iii) The ages of the members of such families.
                ``(iv) The number of individuals in the family, and the 
            relation of each family member to the youngest child in the 
            family.
                ``(v) The employment status and earnings of the 
            employed adult in the family.
                ``(vi) The marital status of the adults in the family, 
            including whether such adults have never married, are 
            widowed, or are divorced.
                ``(vii) The race and educational status of each adult 
            in the family.
                ``(viii) The race and educational status of each child 
            in the family.
                ``(ix) Whether the family received subsidized housing, 
            medical assistance under the State plan approved under 
            title XIX, food stamps, or subsidized child care, and if 
            the latter 2, the amount received.
                ``(x) The number of months that the family has received 
            each type of assistance under the program.
                ``(xi) If the adults participated in, and the number of 
            hours per week of participation in, the following 
            activities:

                    ``(I) Education.
                    ``(II) Subsidized private sector employment.
                    ``(III) Unsubsidized employment.
                    ``(IV) Public sector employment, work experience, 
                or community service.
                    ``(V) Job search.
                    ``(VI) Job skills training or on-the-job training.
                    ``(VII) Vocational education.

                ``(xii) Information necessary to calculate 
            participation rates under section 407.
                ``(xiii) The type and amount of assistance received 
            under the program, including the amount of and reason for 
            any reduction of assistance (including sanctions).
                ``(xiv) Any amount of unearned income received by any 
            member of the family.
                ``(xv) The citizenship of the members of the family.
                ``(xvi) From a sample of closed cases, whether the 
            family left the program, and if so, whether the family left 
            due to--

                    ``(I) employment;
                    ``(II) marriage;
                    ``(III) the prohibition set forth in section 
                408(a)(7);
                    ``(IV) sanction; or
                    ``(V) State policy.

            ``(B) Use of estimates.--
                ``(i) Authority.--A State may comply with subparagraph 
            (A) by submitting an estimate which is obtained through the 
            use of scientifically acceptable sampling methods approved 
            by the Secretary.
                ``(ii) Sampling and other methods.--The Secretary shall 
            provide the States with such case sampling plans and data 
            collection procedures as the Secretary deems necessary to 
            produce statistically valid estimates of the performance of 
            State programs funded under this part. The Secretary may 
            develop and implement procedures for verifying the quality 
            of data submitted by the States.
        ``(2) Report on use of federal funds to cover administrative 
    costs and overhead.--The report required by paragraph (1) for a 
    fiscal quarter shall include a statement of the percentage of the 
    funds paid to the State under this part for the quarter that are 
    used to cover administrative costs or overhead.
        ``(3) Report on state expenditures on programs for needy 
    families.--The report required by paragraph (1) for a fiscal 
    quarter shall include a statement of the total amount expended by 
    the State during the quarter on programs for needy families.
        ``(4) Report on noncustodial parents participating in work 
    activities.--The report required by paragraph (1) for a fiscal 
    quarter shall include the number of noncustodial parents in the 
    State who participated in work activities (as defined in section 
    407(d)) during the quarter.
        ``(5) Report on transitional services.--The report required by 
    paragraph (1) for a fiscal quarter shall include the total amount 
    expended by the State during the quarter to provide transitional 
    services to a family that has ceased to receive assistance under 
    this part because of employment, along with a description of such 
    services.
        ``(6) Regulations.--The Secretary shall prescribe such 
    regulations as may be necessary to define the data elements with 
    respect to which reports are required by this subsection.
    ``(b) Annual Reports to the Congress by the Secretary.--Not later 
than 6 months after the end of fiscal year 1997, and each fiscal year 
thereafter, the Secretary shall transmit to the Congress a report 
describing--
        ``(1) whether the States are meeting--
            ``(A) the participation rates described in section 407(a); 
        and
            ``(B) the objectives of--
                ``(i) increasing employment and earnings of needy 
            families, and child support collections; and
                ``(ii) decreasing out-of-wedlock pregnancies and child 
            poverty;
        ``(2) the demographic and financial characteristics of families 
    applying for assistance, families receiving assistance, and 
    families that become ineligible to receive assistance;
        ``(3) the characteristics of each State program funded under 
    this part; and
        ``(4) the trends in employment and earnings of needy families 
    with minor children living at home.

``SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

    ``(a) Grants for Indian Tribes.--
        ``(1) Tribal family assistance grant.--
            ``(A) In general.--For each of fiscal years 1997, 1998, 
        1999, 2000, 2001, and 2002, the Secretary shall pay to each 
        Indian tribe that has an approved tribal family assistance plan 
        a tribal family assistance grant for the fiscal year in an 
        amount equal to the amount determined under subparagraph (B), 
        and shall reduce the grant payable under section 403(a)(1) to 
        any State in which lies the service area or areas of the Indian 
        tribe by that portion of the amount so determined that is 
        attributable to expenditures by the State.
            ``(B) Amount determined.--
                ``(i) In general.--The amount determined under this 
            subparagraph is an amount equal to the total amount of the 
            Federal payments to a State or States under section 403 (as 
            in effect during such fiscal year) for fiscal year 1994 
            attributable to expenditures (other than child care 
            expenditures) by the State or States under parts A and F 
            (as so in effect) for fiscal year 1994 for Indian families 
            residing in the service area or areas identified by the 
            Indian tribe pursuant to subsection (b)(1)(C) of this 
            section.
                ``(ii) Use of state submitted data.--

                    ``(I) In general.--The Secretary shall use State 
                submitted data to make each determination under clause 
                (i).
                    ``(II) Disagreement with determination.--If an 
                Indian tribe or tribal organization disagrees with 
                State submitted data described under subclause (I), the 
                Indian tribe or tribal organization may submit to the 
                Secretary such additional information as may be 
                relevant to making the determination under clause (i) 
                and the Secretary may consider such information before 
                making such determination.

        ``(2) Grants for indian tribes that received jobs funds.--
            ``(A) In general.--The Secretary shall pay to each eligible 
        Indian tribe for each of fiscal years 1997, 1998, 1999, 2000, 
        2001, and 2002 a grant in an amount equal to the amount 
        received by the Indian tribe in fiscal year 1994 under section 
        482(i) (as in effect during fiscal year 1994).
            ``(B) Eligible indian tribe.--For purposes of subparagraph 
        (A), the term `eligible Indian tribe' means an Indian tribe or 
        Alaska Native organization that conducted a job opportunities 
        and basic skills training program in fiscal year 1995 under 
        section 482(i) (as in effect during fiscal year 1995).
            ``(C) Use of grant.--Each Indian tribe to which a grant is 
        made under this paragraph shall use the grant for the purpose 
        of operating a program to make work activities available to 
        members of the Indian tribe.
            ``(D) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated $7,638,474 for each fiscal year specified in 
        subparagraph (A) for grants under subparagraph (A).
    ``(b) 3-Year Tribal Family Assistance Plan.--
        ``(1) In general.--Any Indian tribe that desires to receive a 
    tribal family assistance grant shall submit to the Secretary a 3-
    year tribal family assistance plan that--
            ``(A) outlines the Indian tribe's approach to providing 
        welfare-related services for the 3-year period, consistent with 
        this section;
            ``(B) specifies whether the welfare-related services 
        provided under the plan will be provided by the Indian tribe or 
        through agreements, contracts, or compacts with intertribal 
        consortia, States, or other entities;
            ``(C) identifies the population and service area or areas 
        to be served by such plan;
            ``(D) provides that a family receiving assistance under the 
        plan may not receive duplicative assistance from other State or 
        tribal programs funded under this part;
            ``(E) identifies the employment opportunities in or near 
        the service area or areas of the Indian tribe and the manner in 
        which the Indian tribe will cooperate and participate in 
        enhancing such opportunities for recipients of assistance under 
        the plan consistent with any applicable State standards; and
            ``(F) applies the fiscal accountability provisions of 
        section 5(f)(1) of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450c(f)(1)), relating to the 
        submission of a single-agency audit report required by chapter 
        75 of title 31, United States Code.
        ``(2) Approval.--The Secretary shall approve each tribal family 
    assistance plan submitted in accordance with paragraph (1).
        ``(3) Consortium of tribes.--Nothing in this section shall 
    preclude the development and submission of a single tribal family 
    assistance plan by the participating Indian tribes of an 
    intertribal consortium.
    ``(c) Minimum Work Participation Requirements and Time Limits.--The 
Secretary, with the participation of Indian tribes, shall establish for 
each Indian tribe receiving a grant under this section minimum work 
participation requirements, appropriate time limits for receipt of 
welfare-related services under the grant, and penalties against 
individuals--
        ``(1) consistent with the purposes of this section;
        ``(2) consistent with the economic conditions and resources 
    available to each tribe; and
        ``(3) similar to comparable provisions in section 407(e).
    ``(d) Emergency Assistance.--Nothing in this section shall preclude 
an Indian tribe from seeking emergency assistance from any Federal loan 
program or emergency fund.
    ``(e) Accountability.--Nothing in this section shall be construed 
to limit the ability of the Secretary to maintain program funding 
accountability consistent with--
        ``(1) generally accepted accounting principles; and
        ``(2) the requirements of the Indian Self-Determination and 
    Education Assistance Act (25 U.S.C. 450 et seq.).
    ``(f) Penalties.--
        ``(1) Subsections (a)(1), (a)(6), and (b) of section 409, shall 
    apply to an Indian tribe with an approved tribal assistance plan in 
    the same manner as such subsections apply to a State.
        ``(2) Section 409(a)(3) shall apply to an Indian tribe with an 
    approved tribal assistance plan by substituting `meet minimum work 
    participation requirements established under section 412(c)' for 
    `comply with section 407(a)'.
    ``(g) Data Collection and Reporting.--Section 411 shall apply to an 
Indian tribe with an approved tribal family assistance plan.
    ``(h) Special Rule for Indian Tribes in Alaska.--
        ``(1) In general.--Notwithstanding any other provision of this 
    section, and except as provided in paragraph (2), an Indian tribe 
    in the State of Alaska that receives a tribal family assistance 
    grant under this section shall use the grant to operate a program 
    in accordance with requirements comparable to the requirements 
    applicable to the program of the State of Alaska funded under this 
    part. Comparability of programs shall be established on the basis 
    of program criteria developed by the Secretary in consultation with 
    the State of Alaska and such Indian tribes.
        ``(2) Waiver.--An Indian tribe described in paragraph (1) may 
    apply to the appropriate State authority to receive a waiver of the 
    requirement of paragraph (1).

``SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

    ``(a) Research.--The Secretary shall conduct research on the 
benefits, effects, and costs of operating different State programs 
funded under this part, including time limits relating to eligibility 
for assistance. The research shall include studies on the effects of 
different programs and the operation of such programs on welfare 
dependency, illegitimacy, teen pregnancy, employment rates, child well-
being, and any other area the Secretary deems appropriate. The 
Secretary shall also conduct research on the costs and benefits of 
State activities under section 409.
    ``(b) Development and Evaluation of Innovative Approaches To 
Reducing Welfare Dependency and Increasing Child Well-Being.--
        ``(1) In general.--The Secretary may assist States in 
    developing, and shall evaluate, innovative approaches for reducing 
    welfare dependency and increasing the well-being of minor children 
    living at home with respect to recipients of assistance under 
    programs funded under this part. The Secretary may provide funds 
    for training and technical assistance to carry out the approaches 
    developed pursuant to this paragraph.
        ``(2) Evaluations.--In performing the evaluations under 
    paragraph (1), the Secretary shall, to the maximum extent feasible, 
    use random assignment as an evaluation methodology.
    ``(c) Dissemination of Information.--The Secretary shall develop 
innovative methods of disseminating information on any research, 
evaluations, and studies conducted under this section, including the 
facilitation of the sharing of information and best practices among 
States and localities through the use of computers and other 
technologies.
    ``(d) Annual Ranking of States and Review of Most and Least 
Successful Work Programs.--
        ``(1) Annual ranking of states.--The Secretary shall rank 
    annually the States to which grants are paid under section 403 in 
    the order of their success in placing recipients of assistance 
    under the State program funded under this part into long-term 
    private sector jobs, reducing the overall welfare caseload, and, 
    when a practicable method for calculating this information becomes 
    available, diverting individuals from formally applying to the 
    State program and receiving assistance. In ranking States under 
    this subsection, the Secretary shall take into account the average 
    number of minor children living at home in families in the State 
    that have incomes below the poverty line and the amount of funding 
    provided each State for such families.
        ``(2) Annual review of most and least successful work 
    programs.--The Secretary shall review the programs of the 3 States 
    most recently ranked highest under paragraph (1) and the 3 States 
    most recently ranked lowest under paragraph (1) that provide 
    parents with work experience, assistance in finding employment, and 
    other work preparation activities and support services to enable 
    the families of such parents to leave the program and become self-
    sufficient.
    ``(e) Annual Ranking of States and Review of Issues Relating to 
Out-of-Wedlock Births.--
        ``(1) Annual ranking of states.--
            ``(A) In general.--The Secretary shall annually rank States 
        to which grants are made under section 403 based on the 
        following ranking factors:
                ``(i) Absolute out-of-wedlock ratios.--The ratio 
            represented by--

                    ``(I) the total number of out-of-wedlock births in 
                families receiving assistance under the State program 
                under this part in the State for the most recent fiscal 
                year for which information is available; over
                    ``(II) the total number of births in families 
                receiving assistance under the State program under this 
                part in the State for such year.

                ``(ii) Net changes in the out-of-wedlock ratio.--The 
            difference between the ratio described in subparagraph 
            (A)(i) with respect to a State for the most recent fiscal 
            year for which such information is available and the ratio 
            with respect to the State for the immediately preceding 
            year.
        ``(2) Annual review.--The Secretary shall review the programs 
    of the 5 States most recently ranked highest under paragraph (1) 
    and the 5 States most recently ranked the lowest under paragraph 
    (1).
    ``(f) State-Initiated Evaluations.--A State shall be eligible to 
receive funding to evaluate the State program funded under this part 
if--
        ``(1) the State submits a proposal to the Secretary for the 
    evaluation;
        ``(2) the Secretary determines that the design and approach of 
    the evaluation is rigorous and is likely to yield information that 
    is credible and will be useful to other States; and
        ``(3) unless otherwise waived by the Secretary, the State 
    contributes to the cost of the evaluation, from non-Federal 
    sources, an amount equal to at least 10 percent of the cost of the 
    evaluation.
    ``(g) Report on Circumstances of Certain Children and Families.--
        ``(1) In general.--Beginning 3 years after the date of the 
    enactment of this Act, the Secretary of Health and Human Services 
    shall prepare and submit to the Committees on Ways and Means and on 
    Economic and Educational Opportunities of the House of 
    Representatives and to the Committees on Finance and on Labor and 
    Resources of the Senate annual reports that examine in detail the 
    matters described in paragraph (2) with respect to each of the 
    following groups for the period after such enactment:
            ``(A) Individuals who were children in families that have 
        become ineligible for assistance under a State program funded 
        under this part by reason of having reached a time limit on the 
        provision of such assistance.
            ``(B) Children born after such date of enactment to parents 
        who, at the time of such birth, had not attained 20 years of 
        age.
            ``(C) Individuals who, after such date of enactment, became 
        parents before attaining 20 years of age.
        ``(2) Matters described.--The matters described in this 
    paragraph are the following:
            ``(A) The percentage of each group that has dropped out of 
        secondary school (or the equivalent), and the percentage of 
        each group at each level of educational attainment.
            ``(B) The percentage of each group that is employed.
            ``(C) The percentage of each group that has been convicted 
        of a crime or has been adjudicated as a delinquent.
            ``(D) The rate at which the members of each group are born, 
        or have children, out-of-wedlock, and the percentage of each 
        group that is married.
            ``(E) The percentage of each group that continues to 
        participate in State programs funded under this part.
            ``(F) The percentage of each group that has health 
        insurance provided by a private entity (broken down by whether 
        the insurance is provided through an employer or otherwise), 
        the percentage that has health insurance provided by an agency 
        of government, and the percentage that does not have health 
        insurance.
            ``(G) The average income of the families of the members of 
        each group.
            ``(H) Such other matters as the Secretary deems 
        appropriate.
    ``(h) Funding of Studies and Demonstrations.--
        ``(1) In general.--Out of any money in the Treasury of the 
    United States not otherwise appropriated, there are appropriated 
    $15,000,000 for each of fiscal years 1997 through 2002 for the 
    purpose of paying--
            ``(A) the cost of conducting the research described in 
        subsection (a);
            ``(B) the cost of developing and evaluating innovative 
        approaches for reducing welfare dependency and increasing the 
        well-being of minor children under subsection (b);
            ``(C) the Federal share of any State-initiated study 
        approved under subsection (f); and
            ``(D) an amount determined by the Secretary to be necessary 
        to operate and evaluate demonstration projects, relating to 
        this part, that are in effect or approved under section 1115 as 
        of September 30, 1995, and are continued after such date.
        ``(2) Allocation.--Of the amount appropriated under paragraph 
    (1) for a fiscal year--
            ``(A) 50 percent shall be allocated for the pur- poses 
        described in subparagraphs (A) and (B) of paragraph (1), and
            ``(B) 50 percent shall be allocated for the purposes 
        described in subparagraphs (C) and (D) of paragraph (1).
        ``(3) Demonstrations of innovative strategies.--The Secretary 
    may implement and evaluate demonstrations of innovative and 
    promising strategies which--
            ``(A) provide one-time capital funds to establish, expand, 
        or replicate programs;
            ``(B) test performance-based grant-to-loan financing in 
        which programs meeting performance targets receive grants while 
        programs not meeting such targets repay funding on a prorated 
        basis; and
            ``(C) test strategies in multiple States and types of 
        communities.
    ``(i) Child Poverty Rates.--
        ``(1) In general.--Not later than 90 days after the date of the 
    enactment of this part, and annually thereafter, the chief 
    executive officer of each State shall submit to the Secretary a 
    statement of the child poverty rate in the State as of such date of 
    enactment or the date of the most recent prior statement under this 
    paragraph.
        ``(2) Submission of corrective action plan.--Not later than 90 
    days after the date a State submits a statement under paragraph (1) 
    which indicates that, as a result of the amendments made by section 
    103 of the Personal Responsibility and Work Opportunity 
    Reconciliation Act of 1996, the child poverty rate of the State has 
    increased by 5 percent or more since the most recent prior 
    statement under paragraph (1), the State shall prepare and submit 
    to the Secretary a corrective action plan in accordance with 
    paragraph (3).
        ``(3) Contents of plan.--A corrective action plan submitted 
    under paragraph (2) shall outline the manner in which the State 
    will reduce the child poverty rate in the State. The plan shall 
    include a description of the actions to be taken by the State under 
    such plan.
        ``(4) Compliance with plan.--A State that submits a corrective 
    action plan that the Secretary has found contains the information 
    required by this subsection shall implement the corrective action 
    plan until the State determines that the child poverty rate in the 
    State is less than the lowest child poverty rate on the basis of 
    which the State was required to submit the corrective action plan.
        ``(5) Methodology.--The Secretary shall prescribe regulations 
    establishing the methodology by which a State shall determine the 
    child poverty rate in the State. The methodology shall take into 
    account factors including the number of children who receive free 
    or reduced-price lunches, the number of food stamp households, and 
    the county-by-county estimates of children in poverty as determined 
    by the Census Bureau.

``SEC. 414. STUDY BY THE CENSUS BUREAU.

    ``(a) In General.--The Bureau of the Census shall continue to 
collect data on the 1992 and 1993 panels of the Survey of Income and 
Program Participation as necessary to obtain such information as will 
enable interested persons to evaluate the impact of the amendments made 
by title I of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 on a random national sample of recipients of 
assistance under State programs funded under this part and (as 
appropriate) other low-income families, and in doing so, shall pay 
particular attention to the issues of out-of-wedlock birth, welfare 
dependency, the beginning and end of welfare spells, and the causes of 
repeat welfare spells, and shall obtain information about the status of 
children participating in such panels.
    ``(b) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are appropriated 
$10,000,000 for each of fiscal years 1996, 1997, 1998, 1999, 2000, 
2001, and 2002 for payment to the Bureau of the Census to carry out 
subsection (a).

``SEC. 415. WAIVERS.

    ``(a) Continuation of Waivers.--
        ``(1) Waivers in effect on date of enactment of welfare 
    reform.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        if any waiver granted to a State under section 1115 of this Act 
        or otherwise which relates to the provision of assistance under 
        a State plan under this part (as in effect on September 30, 
        1996) is in effect as of the date of the enactment of the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996, the amendments made by the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (other than by 
        section 103(c) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996) shall not apply with 
        respect to the State before the expiration (determined without 
        regard to any extensions) of the waiver to the extent such 
        amendments are inconsistent with the waiver.
            ``(B) Financing limitation.--Notwithstanding any other 
        provision of law, beginning with fiscal year 1996, a State 
        operating under a waiver described in subparagraph (A) shall be 
        entitled to payment under section 403 for the fiscal year, in 
        lieu of any other payment provided for in the waiver.
        ``(2) Waivers granted subsequently.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        if any waiver granted to a State under section 1115 of this Act 
        or otherwise which relates to the provision of assistance under 
        a State plan under this part (as in effect on September 30, 
        1996) is submitted to the Secretary before the date of the 
        enactment of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 and approved by the Secretary on or 
        before July 1, 1997, and the State demonstrates to the 
        satisfaction of the Secretary that the waiver will not result 
        in Federal expenditures under title IV of this Act (as in 
        effect without regard to the amendments made by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996) 
        that are greater than would occur in the absence of the waiver, 
        the amendments made by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (other than by section 
        103(c) of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996) shall not apply with respect to the 
        State before the expiration (determined without regard to any 
        extensions) of the waiver to the extent the amendments made by 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 are inconsistent with the waiver.
            ``(B) No effect on new work requirements.--Notwithstanding 
        subparagraph (A), a waiver granted under section 1115 or 
        otherwise which relates to the provision of assistance under a 
        State program funded under this part (as in effect on September 
        30, 1996) shall not affect the applicability of section 407 to 
        the State.
    ``(b) State Option To Terminate Waiver.--
        ``(1) In general.--A State may terminate a waiver described in 
    subsection (a) before the expiration of the waiver.
        ``(2) Report.--A State which terminates a waiver under 
    paragraph (1) shall submit a report to the Secretary summarizing 
    the waiver and any available information concerning the result or 
    effect of the waiver.
        ``(3) Hold harmless provision.--
            ``(A) In general.--Notwithstanding any other provision of 
        law, a State that, not later than the date described in 
        subparagraph (B) of this paragraph, submits a written request 
        to terminate a waiver described in subsection (a) shall be held 
        harmless for accrued cost neutrality liabilities incurred under 
        the waiver.
            ``(B) Date described.--The date described in this 
        subparagraph is 90 days following the adjournment of the first 
        regular session of the State legislature that begins after the 
        date of the enactment of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996.
    ``(c) Secretarial Encouragement of Current Waivers.--The Secretary 
shall encourage any State operating a waiver described in subsection 
(a) to continue the waiver and to evaluate, using random sampling and 
other characteristics of accepted scientific evaluations, the result or 
effect of the waiver.
    ``(d) Continuation of Individual Waivers.--A State may elect to 
continue 1 or more individual waivers described in sub- section (a).

``SEC. 416. ADMINISTRATION.

    ``The programs under this part and part D shall be administered by 
an Assistant Secretary for Family Support within the Department of 
Health and Human Services, who shall be appointed by the President, by 
and with the advice and consent of the Senate, and who shall be in 
addition to any other Assistant Secretary of Health and Human Services 
provided for by law, and the Secretary shall reduce the Federal 
workforce within the Department of Health and Human Services by an 
amount equal to the sum of 75 percent of the full-time equivalent 
positions at such Department that relate to any direct spending 
program, or any program funded through discretionary spending, that has 
been converted into a block grant program under the Personal 
Responsibility and Work Opportunity Act of 1996 and the amendments made 
by such Act, and by an amount equal to 75 percent of that portion of 
the total full-time equivalent departmental management positions at 
such Department that bears the same relationship to the amount 
appropriated for any direct spending program, or any program funded 
through discretionary spending, that has been converted into a block 
grant program under the Personal Responsibility and Work Opportunity 
Act of 1996 and the amendments made by such Act, as such amount relates 
to the total amount appropriated for use by such Department, and, 
notwithstanding any other provision of law, the Secretary shall take 
such actions as may be necessary, including reductions in force 
actions, consistent with sections 3502 and 3595 of title 5, United 
States Code, to reduce the full-time equivalent positions within the 
Department of Health and Human Services by 245 full-time equivalent 
positions related to the program converted into a block grant under the 
amendment made by section 2103 of the Personal Responsibility and Work 
Opportunity Act of 1996, and by 60 full-time equivalent managerial 
positions in the Department.

``SEC. 417. LIMITATION ON FEDERAL AUTHORITY.

    ``No officer or employee of the Federal Government may regulate the 
conduct of States under this part or enforce any pro- vision of this 
part, except to the extent expressly provided in this part.''; and
        (2) by inserting after such section 418 the following:

``SEC. 419. DEFINITIONS.

    ``As used in this part:
        ``(1) Adult.--The term `adult' means an individual who is not a 
    minor child.
        ``(2) Minor child.--The term `minor child' means an individual 
    who--
            ``(A) has not attained 18 years of age; or
            ``(B) has not attained 19 years of age and is a full-time 
        student in a secondary school (or in the equivalent level of 
        vocational or technical training).
        ``(3) Fiscal year.--The term `fiscal year' means any 12-month 
    period ending on September 30 of a calendar year.
        ``(4) Indian, indian tribe, and tribal organization.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the terms `Indian', `Indian tribe', and `tribal organization' 
        have the meaning given such terms by section 4 of the Indian 
        Self-Determination and Education Assistance Act (25 U.S.C. 
        450b).
            ``(B) Special rule for indian tribes in alaska.--The term 
        `Indian tribe' means, with respect to the State of Alaska, only 
        the Metlakatla Indian Community of the Annette Islands Reserve 
        and the following Alaska Native regional nonprofit 
        corporations:
                ``(i) Arctic Slope Native Association.
                ``(ii) Kawerak, Inc.
                ``(iii) Maniilaq Association.
                ``(iv) Association of Village Council Presidents.
                ``(v) Tanana Chiefs Conference.
                ``(vi) Cook Inlet Tribal Council.
                ``(vii) Bristol Bay Native Association.
                ``(viii) Aleutian and Pribilof Island Association.
                ``(ix) Chugachmuit.
                ``(x) Tlingit Haida Central Council.
                ``(xi) Kodiak Area Native Association.
                ``(xii) Copper River Native Association.
        ``(5) State.--Except as otherwise specifically provided, the 
    term `State' means the 50 States of the United States, the District 
    of Columbia, the Commonwealth of Puerto Rico, the United States 
    Virgin Islands, Guam, and American Samoa.''.
    (b) Grants to Outlying Areas.--Section 1108 (42 U.S.C. 1308) is 
amended--
        (1) by striking subsections (d) and (e);
        (2) by redesignating subsection (c) as subsection (f); and
        (3) by striking all that precedes subsection (c) and inserting 
    the following:

``SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, 
              GUAM, AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS.

    ``(a) Limitation on Total Payments to Each Territory.--
Notwithstanding any other provision of this Act, the total amount 
certified by the Secretary of Health and Human Services under titles I, 
X, XIV, and XVI, under parts A and E of title IV, and under subsection 
(b) of this section, for payment to any territory for a fiscal year 
shall not exceed the ceiling amount for the territory for the fiscal 
year.
    ``(b) Entitlement to Matching Grant.--
        ``(1) In general.--Each territory shall be entitled to receive 
    from the Secretary for each fiscal year a grant in an amount equal 
    to 75 percent of the amount (if any) by which--
            ``(A) the total expenditures of the territory during the 
        fiscal year under the territory programs funded under parts A 
        and E of title IV; exceeds
            ``(B) the sum of--
                ``(i) the amount of the family assistance grant payable 
            to the territory without regard to section 409; and
                ``(ii) the total amount expended by the territory 
            during fiscal year 1995 pursuant to parts A and F of title 
            IV (as so in effect), other than for child care.
        ``(2) Appropriation.--Out of any money in the Treasury of the 
    United States not otherwise appropriated, there are appropriated 
    for fiscal years 1997 through 2002, such sums as are necessary for 
    grants under this paragraph.
    ``(c) Definitions.--As used in this section:
        ``(1) Territory.--The term `territory' means Puerto Rico, the 
    Virgin Islands, Guam, and American Samoa.
        ``(2) Ceiling amount.--The term `ceiling amount' means, with 
    respect to a territory and a fiscal year, the mandatory ceiling 
    amount with respect to the territory, reduced for the fiscal year 
    in accordance with subsection (e), and reduced by the amount of any 
    penalty imposed on the territory under any provision of law 
    specified in subsection (a) during the fiscal year.
        ``(3) Family assistance grant.--The term `family assistance 
    grant' has the meaning given such term by section 403(a)(1)(B).
        ``(4) Mandatory ceiling amount.--The term `mandatory ceiling 
    amount' means--
            ``(A) $107,255,000 with respect to Puerto Rico;
            ``(B) $4,686,000 with respect to Guam;
            ``(C) $3,554,000 with respect to the Virgin Islands; and
            ``(D) $1,000,000 with respect to American Samoa.
        ``(5) Total amount expended by the territory.--The term `total 
    amount expended by the territory'--
            ``(A) does not include expenditures during the fiscal year 
        from amounts made available by the Federal Government; and
            ``(B) when used with respect to fiscal year 1995, also does 
        not include--
                ``(i) expenditures during fiscal year 1995 under 
            subsection (g) or (i) of section 402 (as in effect on 
            September 30, 1995); or
                ``(ii) any expenditures during fiscal year 1995 for 
            which the territory (but for section 1108, as in effect on 
            September 30, 1995) would have received reimbursement from 
            the Federal Government.
    ``(d) Authority To Transfer Funds to Certain Programs.--A territory 
to which an amount is paid under subsection (b) of this section may use 
the amount in accordance with section 404(d).
    ``(e) Maintenance of Effort.--The ceiling amount with respect to a 
territory shall be reduced for a fiscal year by an amount equal to the 
amount (if any) by which--
        ``(1) the total amount expended by the territory under all 
    programs of the territory operated pursuant to the provisions of 
    law specified in subsection (a) (as such provisions were in effect 
    for fiscal year 1995) for fiscal year 1995; exceeds
        ``(2) the total amount expended by the territory under all 
    programs of the territory that are funded under the provisions of 
    law specified in subsection (a) for the fiscal year that 
    immediately precedes the fiscal year referred to in the matter 
    preceding paragraph (1).''.
    (c) Elimination of Child Care Programs Under the Social Security 
Act.--
        (1) AFDC and transitional child care programs.--Section 402 (42 
    U.S.C. 602) is amended by striking sub- section (g).
        (2) At-risk child care program.--
            (A) Authorization.--Section 402 (42 U.S.C. 602) is amended 
        by striking subsection (i).
            (B) Funding provisions.--Section 403 (42 U.S.C. 603) is 
        amended by striking subsection (n).

SEC. 104. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR PRIVATE 
              ORGANIZATIONS.

    (a) In General.--
        (1) State options.--A State may--
            (A) administer and provide services under the programs 
        described in subparagraphs (A) and (B)(i) of paragraph (2) 
        through contracts with charitable, religious, or private 
        organizations; and
            (B) provide beneficiaries of assistance under the programs 
        described in subparagraphs (A) and (B)(ii) of paragraph (2) 
        with certificates, vouchers, or other forms of disbursement 
        which are redeemable with such organizations.
        (2) Programs described.--The programs described in this 
    paragraph are the following programs:
            (A) A State program funded under part A of title IV of the 
        Social Security Act (as amended by section 103(a) of this Act).
            (B) Any other program established or modified under title I 
        or II of this Act, that--
                (i) permits contracts with organizations; or
                (ii) permits certificates, vouchers, or other forms of 
            disbursement to be provided to beneficiaries, as a means of 
            providing assistance.
    (b) Religious Organizations.--The purpose of this section is to 
allow States to contract with religious organizations, or to allow 
religious organizations to accept certificates, vouchers, or other 
forms of disbursement under any program described in subsection (a)(2), 
on the same basis as any other nongovernmental provider without 
impairing the religious character of such organizations, and without 
diminishing the religious freedom of beneficiaries of assistance funded 
under such program.
    (c) Nondiscrimination Against Religious Organizations.--In the 
event a State exercises its authority under subsection (a), religious 
organizations are eligible, on the same basis as any other private 
organization, as contractors to provide assistance, or to accept 
certificates, vouchers, or other forms of disbursement, under any 
program described in subsection (a)(2) so long as the programs are 
implemented consistent with the Establishment Clause of the United 
States Constitution. Except as provided in subsection (k), neither the 
Federal Government nor a State receiving funds under such programs 
shall discriminate against an organization which is or applies to be a 
contractor to provide assistance, or which accepts certificates, 
vouchers, or other forms of disbursement, on the basis that the 
organization has a religious character.
    (d) Religious Character and Freedom.--
        (1) Religious organizations.--A religious organization with a 
    contract described in subsection (a)(1)(A), or which accepts 
    certificates, vouchers, or other forms of disbursement under 
    subsection (a)(1)(B), shall retain its independence from Federal, 
    State, and local governments, including such organization's control 
    over the definition, development, practice, and expression of its 
    religious beliefs.
        (2) Additional safeguards.--Neither the Federal Government nor 
    a State shall require a religious organization to--
            (A) alter its form of internal governance; or
            (B) remove religious art, icons, scripture, or other 
        symbols;
    in order to be eligible to contract to provide assistance, or to 
    accept certificates, vouchers, or other forms of disbursement, 
    funded under a program described in subsection (a)(2).
    (e) Rights of Beneficiaries of Assistance.--
        (1) In general.--If an individual described in paragraph (2) 
    has an objection to the religious character of the organization or 
    institution from which the individual receives, or would receive, 
    assistance funded under any program described in subsection (a)(2), 
    the State in which the individual resides shall provide such 
    individual (if otherwise eligible for such assistance) within a 
    reasonable period of time after the date of such objection with 
    assistance from an alternative provider that is accessible to the 
    individual and the value of which is not less than the value of the 
    assistance which the individual would have received from such 
    organization.
        (2) Individual described.--An individual described in this 
    paragraph is an individual who receives, applies for, or requests 
    to apply for, assistance under a program described in subsection 
    (a)(2).
    (f) Employment Practices.--A religious organization's exemption 
provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C. 
2000e-1a) regarding employment practices shall not be affected by its 
participation in, or receipt of funds from, programs described in 
subsection (a)(2).
    (g) Nondiscrimination Against Beneficiaries.--Except as otherwise 
provided in law, a religious organization shall not discriminate 
against an individual in regard to rendering assistance funded under 
any program described in subsection (a)(2) on the basis of religion, a 
religious belief, or refusal to actively participate in a religious 
practice.
    (h) Fiscal Accountability.--
        (1) In general.--Except as provided in paragraph (2), any 
    religious organization contracting to provide assistance funded 
    under any program described in subsection (a)(2) shall be subject 
    to the same regulations as other contractors to account in accord 
    with generally accepted auditing principles for the use of such 
    funds provided under such programs.
        (2) Limited audit.--If such organization segregates Federal 
    funds provided under such programs into separate accounts, then 
    only the financial assistance provided with such funds shall be 
    subject to audit.
    (i) Compliance.--Any party which seeks to enforce its rights under 
this section may assert a civil action for injunctive relief 
exclusively in an appropriate State court against the entity or agency 
that allegedly commits such violation.
    (j) Limitations on Use of Funds for Certain Purposes.--No funds 
provided directly to institutions or organizations to provide services 
and administer programs under subsection (a)(1)(A) shall be expended 
for sectarian worship, instruction, or proselytization.
    (k) Preemption.--Nothing in this section shall be construed to 
preempt any provision of a State constitution or State statute that 
prohibits or restricts the expenditure of State funds in or by 
religious organizations.

SEC. 105. CENSUS DATA ON GRANDPARENTS AS PRIMARY CAREGIVERS FOR THEIR 
              GRANDCHILDREN.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the Secretary of Commerce, in carrying out 
section 141 of title 13, United States Code, shall expand the data 
collection efforts of the Bureau of the Census (in this section 
referred to as the ``Bureau'') to enable the Bureau to collect 
statistically significant data, in connection with its decennial census 
and its mid-decade census, concerning the growing trend of grandparents 
who are the primary caregivers for their grandchildren.
    (b) Expanded Census Question.--In carrying out subsection (a), the 
Secretary of Commerce shall expand the Bureau's census question that 
details households which include both grandparents and their 
grandchildren. The expanded question shall be formulated to distinguish 
between the following households:
        (1) A household in which a grandparent temporarily provides a 
    home for a grandchild for a period of weeks or months during 
    periods of parental distress.
        (2) A household in which a grandparent provides a home for a 
    grandchild and serves as the primary caregiver for the grandchild.

SEC. 106. REPORT ON DATA PROCESSING.

    (a) In General.--Within 6 months after the date of the enactment of 
this Act, the Secretary of Health and Human Services shall prepare and 
submit to the Congress a report on--
        (1) the status of the automated data processing systems 
    operated by the States to assist management in the admin- istration 
    of State programs under part A of title IV of the Social Security 
    Act (whether in effect before or after October 1, 1995); and
        (2) what would be required to establish a system cap- able of--
            (A) tracking participants in public programs over time; and
            (B) checking case records of the States to determine 
        whether individuals are participating in public programs of 2 
        or more States.
    (b) Preferred Contents.--The report required by subsection (a) 
should include--
        (1) a plan for building on the automated data processing 
    systems of the States to establish a system with the capabilities 
    described in subsection (a)(2); and
        (2) an estimate of the amount of time required to establish 
    such a system and of the cost of establishing such a system.

SEC. 107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

    (a) Study.--The Secretary shall, in cooperation with the States, 
study and analyze outcomes measures for evaluating the success of the 
States in moving individuals out of the welfare system through 
employment as an alternative to the minimum participation rates 
described in section 407 of the Social Security Act. The study shall 
include a determination as to whether such alternative outcomes 
measures should be applied on a national or a State-by-State basis and 
a preliminary assessment of the effects of section 409(a)(7)(C) of such 
Act.
    (b) Report.--Not later than September 30, 1998, the Secretary shall 
submit to the Committee on Finance of the Senate and the Committee on 
Ways and Means of the House of Represen- tatives a report containing 
the findings of the study required by subsection (a).

SEC. 108. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.

    (a) Amendments to Title II.--
        (1) Section 205(c)(2)(C)(vi) (42 U.S.C. 405(c)(2)(C)(vi)), as 
    so redesignated by section 321(a)(9)(B) of the Social Security 
    Independence and Program Improvements Act of 1994, is amended--
            (A) by inserting ``an agency administering a program funded 
        under part A of title IV or'' before ``an agency operating''; 
        and
            (B) by striking ``A or D of title IV of this Act'' and 
        inserting ``D of such title''.
        (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is amended by 
    inserting ``under a State program funded under'' before ``part A of 
    title IV''.
    (b) Amendments to Part B of Title IV.--Section 422(b)(2) (42 U.S.C. 
622(b)(2)) is amended--
        (1) by striking ``plan approved under part A of this title'' 
    and inserting ``program funded under part A''; and
        (2) by striking ``part E of this title'' and inserting ``under 
    the State plan approved under part E''.
    (c) Amendments to Part D of Title IV.--
        (1) Section 451 (42 U.S.C. 651) is amended by striking ``aid'' 
    and inserting ``assistance under a State program funded''.
        (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
    amended--
            (A) by striking ``aid to families with dependent children'' 
        and inserting ``assistance under a State program funded under 
        part A'';
            (B) by striking ``such aid'' and inserting ``such 
        assistance''; and
            (C) by striking ``under section 402(a)(26) or'' and 
        inserting ``pursuant to section 408(a)(3) or under section''.
        (3) Section 452(a)(10)(F) (42 U.S.C. 652(a)(10)(F)) is 
    amended--
            (A) by striking ``aid under a State plan approved'' and 
        inserting ``assistance under a State program funded''; and
            (B) by striking ``in accordance with the standards referred 
        to in section 402(a)(26)(B)(ii)'' and inserting ``by the 
        State''.
        (4) Section 452(b) (42 U.S.C. 652(b)) is amended in the first 
    sentence by striking ``aid under the State plan approved under part 
    A'' and inserting ``assistance under the State program funded under 
    part A''.
        (5) Section 452(d)(3)(B)(i) (42 U.S.C. 652(d)(3)(B)(i)) is 
    amended by striking ``1115(c)'' and inserting ``1115(b)''.
        (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C. 652(g)(2)(A)(ii)(I)) 
    is amended by striking ``aid is being paid under the State's plan 
    approved under part A or E'' and inserting ``assistance is being 
    provided under the State program funded under part A''.
        (7) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended in 
    the matter following clause (iii) by striking ``aid was being paid 
    under the State's plan approved under part A or E'' and inserting 
    ``assistance was being provided under the State program funded 
    under part A''.
        (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in the 
    matter following subparagraph (B)--
            (A) by striking ``who is a dependent child'' and inserting 
        ``with respect to whom assistance is being provided under the 
        State program funded under part A'';
            (B) by inserting ``by the State'' after ``found''; and
            (C) by striking ``to have good cause for refusing to 
        cooperate under section 402(a)(26)'' and inserting ``to qualify 
        for a good cause or other exception to cooperation pursuant to 
        section 454(29)''.
        (9) Section 452(h) (42 U.S.C. 652(h)) is amended by striking 
    ``under section 402(a)(26)'' and inserting ``pursuant to section 
    408(a)(3)''.
        (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is amended by 
    striking ``aid under part A of this title'' and inserting 
    ``assistance under a State program funded under part A''.
        (11) Section 454(5)(A) (42 U.S.C. 654(5)(A)) is amended--
            (A) by striking ``under section 402(a)(26)'' and inserting 
        ``pursuant to section 408(a)(3)''; and
            (B) by striking ``; except that this paragraph shall not 
        apply to such payments for any month following the first month 
        in which the amount collected is sufficient to make such family 
        ineligible for assistance under the State plan approved under 
        part A;'' and inserting a comma.
        (12) Section 454(6)(D) (42 U.S.C. 654(6)(D)) is amended by 
    striking ``aid under a State plan approved'' and inserting 
    ``assistance under a State program funded''.
        (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is amended by 
    striking ``under section 402(a)(26)''.
        (14) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amended 
    by striking ``402(a)(26)'' and inserting ``408(a)(3)''.
        (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is amended by 
    striking ``aid'' and inserting ``assistance under a State program 
    funded''.
        (16) Section 469(a) (42 U.S.C. 669(a)) is amended--
            (A) by striking ``aid under plans approved'' and inserting 
        ``assistance under State programs funded''; and
            (B) by striking ``such aid'' and inserting ``such 
        assistance''.
    (d) Amendments to Part E of Title IV.--
        (1) Section 470 (42 U.S.C. 670) is amended--
            (A) by striking ``would be'' and inserting ``would have 
        been''; and
            (B) by inserting ``(as such plan was in effect on June 1, 
        1995)'' after ``part A''.
        (2) Section 471(a)(17) (42 U.S.C. 671(a)(17)) is amended by 
    striking ``plans approved under parts A and D'' and inserting 
    ``program funded under part A and plan approved under part D''.
        (3) Section 472(a) (42 U.S.C. 672(a)) is amended--
            (A) in the matter preceding paragraph (1)--
                (i) by striking ``would meet'' and inserting ``would 
            have met'';
                (ii) by inserting ``(as such sections were in effect on 
            June 1, 1995)'' after ``407''; and
                (iii) by inserting ``(as so in effect)'' after 
            ``406(a)''; and
            (B) in paragraph (4)--
                (i) in subparagraph (A)--

                    (I) by inserting ``would have'' after ``(A)''; and
                    (II) by inserting ``(as in effect on June 1, 
                1995)'' after ``section 402''; and

                (ii) in subparagraph (B)(ii), by inserting ``(as in 
            effect on June 1, 1995)'' after ``406(a)''.
        (4) Section 472(h) (42 U.S.C. 672(h)) is amended to read as 
    follows:
    ``(h)(1) For purposes of title XIX, any child with respect to whom 
foster care maintenance payments are made under this section is deemed 
to be a dependent child as defined in section 406 (as in effect as of 
June 1, 1995) and deemed to be a recipient of aid to families with 
dependent children under part A of this title (as so in effect). For 
purposes of title XX, any child with respect to whom foster care 
maintenance payments are made under this section is deemed to be a 
minor child in a needy family under a State program funded under part A 
of this title and is deemed to be a recipient of assistance under such 
part.
    ``(2) For purposes of paragraph (1), a child whose costs in a 
foster family home or child care institution are covered by the foster 
care maintenance payments being made with respect to the child's minor 
parent, as provided in section 475(4)(B), shall be considered a child 
with respect to whom foster care maintenance payments are made under 
this section.''.
        (5) Section 473(a)(2) (42 U.S.C. 673(a)(2)) is amended--
            (A) in subparagraph (A)(i)--
                (i) by inserting ``(as such sections were in effect on 
            June 1, 1995)'' after ``407'';
                (ii) by inserting ``(as so in effect)'' after 
            ``specified in section 406(a)''; and
                (iii) by inserting ``(as such section was in effect on 
            June 1, 1995)'' after ``403'';
            (B) in subparagraph (B)(i)--
                (i) by inserting ``would have'' after ``(B)(i)''; and
                (ii) by inserting ``(as in effect on June 1, 1995)'' 
            after ``section 402''; and
            (C) in subparagraph (B)(ii)(II), by inserting ``(as in 
        effect on June 1, 1995)'' after ``406(a)''.
        (6) Section 473(b) (42 U.S.C. 673(b)) is amended to read as 
    follows:
    ``(b)(1) For purposes of title XIX, any child who is described in 
paragraph (3) is deemed to be a dependent child as defined in section 
406 (as in effect as of June 1, 1995) and deemed to be a recipient of 
aid to families with dependent children under part A of this title (as 
so in effect) in the State where such child resides.
    ``(2) For purposes of title XX, any child who is described in 
paragraph (3) is deemed to be a minor child in a needy family under a 
State program funded under part A of this title and deemed to be a 
recipient of assistance under such part.
    ``(3) A child described in this paragraph is any child--
        ``(A)(i) who is a child described in subsection (a)(2), and
        ``(ii) with respect to whom an adoption assistance agreement is 
    in effect under this section (whether or not adoption assistance 
    payments are provided under the agreement or are being made under 
    this section), including any such child who has been placed for 
    adoption in accordance with applicable State and local law (whether 
    or not an interlocutory or other judicial decree of adoption has 
    been issued), or
        ``(B) with respect to whom foster care maintenance payments are 
    being made under section 472.
    ``(4) For purposes of paragraphs (1) and (2), a child whose costs 
in a foster family home or child-care institution are covered by the 
foster care maintenance payments being made with respect to the child's 
minor parent, as provided in section 475(4)(B), shall be considered a 
child with respect to whom foster care maintenance payments are being 
made under section 472.''.
    (e) Repeal of Part F of Title IV.--Part F of title IV (42 U.S.C. 
681-687) is repealed.
    (f) Amendment to Title X.--Section 1002(a)(7) (42 U.S.C. 
1202(a)(7)) is amended by striking ``aid to families with dependent 
children under the State plan approved under section 402 of this Act'' 
and inserting ``assistance under a State program funded under part A of 
title IV''.
    (g) Amendments to Title XI.--
        (1) Section 1109 (42 U.S.C. 1309) is amended by striking ``or 
    part A of title IV,''.
        (2) Section 1115 (42 U.S.C. 1315) is amended--
            (A) in subsection (a)(2)--
                (i) by inserting ``(A)'' after ``(2)'';
                (ii) by striking ``403,'';
                (iii) by striking the period at the end and inserting 
            ``, and''; and
                (iv) by adding at the end the following new 
            subparagraph:
        ``(B) costs of such project which would not otherwise be a 
    permissible use of funds under part A of title IV and which are not 
    included as part of the costs of projects under section 1110, shall 
    to the extent and for the period prescribed by the Secretary, be 
    regarded as a permissible use of funds under such part.'';
            (B) in subsection (c)(3), by striking ``the program of aid 
        to families with dependent children'' and inserting ``part A of 
        such title''; and
            (C) by striking subsection (b) and redesignating 
        subsections (c) and (d) as subsections (b) and (c), 
        respectively.
        (3) Section 1116 (42 U.S.C. 1316) is amended--
            (A) in each of subsections (a)(1), (b), and (d), by 
        striking ``or part A of title IV,''; and
            (B) in subsection (a)(3), by striking ``404,''.
        (4) Section 1118 (42 U.S.C. 1318) is amended--
            (A) by striking ``403(a),'';
            (B) by striking ``and part A of title IV,''; and
            (C) by striking ``, and shall, in the case of American 
        Samoa, mean 75 per centum with respect to part A of title IV''.
        (5) Section 1119 (42 U.S.C. 1319) is amended--
            (A) by striking ``or part A of title IV''; and
            (B) by striking ``403(a),''.
        (6) Section 1133(a) (42 U.S.C. 1320b-3(a)) is amended by 
    striking ``or part A of title IV,''.
        (7) Section 1136 (42 U.S.C. 1320b-6) is repealed.
        (8) Section 1137 (42 U.S.C. 1320b-7) is amended--
            (A) in subsection (b), by striking paragraph (1) and 
        inserting the following:
        ``(1) any State program funded under part A of title IV of this 
    Act;''; and
            (B) in subsection (d)(1)(B)--
                (i) by striking ``In this subsection--'' and all that 
            follows through ``(ii) in'' and inserting ``In this 
            subsection, in'';
                (ii) by redesignating subclauses (I), (II), and (III) 
            as clauses (i), (ii), and (iii); and
                (iii) by moving such redesignated material 2 ems to the 
            left.
    (h) Amendment to Title XIV.--Section 1402(a)(7) (42 U.S.C. 
1352(a)(7)) is amended by striking ``aid to families with dependent 
children under the State plan approved under section 402 of this Act'' 
and inserting ``assistance under a State program funded under part A of 
title IV''.
    (i) Amendment to Title XVI as in Effect With Respect to the 
Territories.--Section 1602(a)(11), as in effect without regard to the 
amendment made by section 301 of the Social Security Amendments of 1972 
(42 U.S.C. 1382 note), is amended by striking ``aid under the State 
plan approved'' and inserting ``assistance under a State program 
funded''.
    (j) Amendment to Title XVI as in Effect With Respect to the 
States.--Section 1611(c)(5)(A) (42 U.S.C. 1382(c)(5)(A)) is amended to 
read as follows: ``(A) a State program funded under part A of title 
IV,''.
    (k) Amendment to Title XIX.--Section 1902(j) (42 U.S.C. 1396a(j)) 
is amended by striking ``1108(c)'' and inserting ``1108(f)''.

SEC. 109. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF 1977 AND 
              RELATED PROVISIONS.

    (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is 
amended--
        (1) in the second sentence of subsection (a), by striking 
    ``plan approved'' and all that follows through ``title IV of the 
    Social Security Act'' and inserting ``program funded under part A 
    of title IV of the Social Security Act (42 U.S.C. 601 et seq.)'';
        (2) in subsection (d)--
            (A) in paragraph (5), by striking ``assistance to families 
        with dependent children'' and inserting ``assistance under a 
        State program funded''; and
            (B) by striking paragraph (13) and redesignating paragraphs 
        (14), (15), and (16) as paragraphs (13), (14), and (15), 
        respectively;
        (3) in subsection (j), by striking ``plan approved under part A 
    of title IV of such Act (42 U.S.C. 601 et seq.)'' and inserting 
    ``program funded under part A of title IV of the Act (42 U.S.C. 601 
    et seq.)''; and
        (4) by striking subsection (m).
    (b) Section 6 of such Act (7 U.S.C. 2015) is amended--
        (1) in subsection (c)(5), by striking ``the State plan 
    approved'' and inserting ``the State program funded''; and
        (2) in subsection (e)(6), by striking ``aid to families with 
    dependent children'' and inserting ``benefits under a State program 
    funded''.
    (c) Section 16(g)(4) of such Act (7 U.S.C. 2025(g)(4)) is amended 
by striking ``State plans under the Aid to Families with Dependent 
Children Program under'' and inserting ``State programs funded under 
part A of''.
    (d) Section 17 of such Act (7 U.S.C. 2026) is amended--
        (1) in the first sentence of subsection (b)(1)(A), by striking 
    ``to aid to families with dependent children under part A of title 
    IV of the Social Security Act'' and inserting ``or are receiving 
    assistance under a State program funded under part A of title IV of 
    the Social Security Act (42 U.S.C. 601 et seq.)''; and
        (2) in subsection (b)(3), by adding at the end the following 
    new subparagraph:
    ``(I) The Secretary may not grant a waiver under this paragraph on 
or after the date of enactment of this subparagraph. Any reference in 
this paragraph to a provision of title IV of the Social Security Act 
shall be deemed to be a reference to such provision as in effect on the 
day before such date.'';
    (e) Section 20 of such Act (7 U.S.C. 2029) is amended--
        (1) in subsection (a)(2)(B) by striking ``operating--'' and all 
    that follows through ``(ii) any other'' and inserting ``operating 
    any''; and
        (2) in subsection (b)--
            (A) in paragraph (1)--
                (i) by striking ``(b)(1) A household'' and inserting 
            ``(b) A household''; and
                (ii) in subparagraph (B), by striking ``training 
            program'' and inserting ``activity'';
            (B) by striking paragraph (2); and
            (C) by redesignating subparagraphs (A) through (F) as 
        paragraphs (1) through (6), respectively.
    (f) Section 5(h)(1) of the Agriculture and Consumer Protection Act 
of 1973 (Public Law 93-186; 7 U.S.C. 612c note) is amended by striking 
``the program for aid to families with dependent children'' and 
inserting ``the State program funded''.
    (g) Section 9 of the National School Lunch Act (42 U.S.C. 1758) is 
amended--
        (1) in subsection (b)--
            (A) in paragraph (2)(C)(ii)(II)--
                (i) by striking ``program for aid to families with 
            dependent children'' and inserting ``State program 
            funded''; and
                (ii) by inserting before the period at the end the 
            following: ``that the Secretary determines complies with 
            standards established by the Secretary that ensure that the 
            standards under the State program are comparable to or more 
            restrictive than those in effect on June 1, 1995''; and
            (B) in paragraph (6)--
                (i) in subparagraph (A)(ii)--

                    (I) by striking ``an AFDC assistance unit (under 
                the aid to families with dependent children program 
                authorized'' and inserting ``a family (under the State 
                program funded''; and
                    (II) by striking ``, in a State'' and all that 
                follows through ``9902(2)))'' and inserting ``that the 
                Secretary determines complies with standards 
                established by the Secretary that ensure that the 
                standards under the State program are comparable to or 
                more restrictive than those in effect on June 1, 
                1995''; and

                (ii) in subparagraph (B), by striking ``aid to families 
            with dependent children'' and inserting ``assistance under 
            the State program funded under part A of title IV of the 
            Social Security Act (42 U.S.C. 601 et seq.) that the 
            Secretary determines complies with standards established by 
            the Secretary that ensure that the standards under the 
            State program are comparable to or more restrictive than 
            those in effect on June 1, 1995''; and
        (2) in subsection (d)(2)(C)--
            (A) by striking ``program for aid to families with 
        dependent children'' and inserting ``State program funded''; 
        and
            (B) by inserting before the period at the end the 
        following: ``that the Secretary determines complies with 
        standards established by the Secretary that ensure that the 
        standards under the State program are comparable to or more 
        restrictive than those in effect on June 1, 1995''.
    (h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amended--
        (1) by striking ``program for aid to families with dependent 
    children established'' and inserting ``State program funded''; and
        (2) by inserting before the semicolon the following: ``that the 
    Secretary determines complies with standards established by the 
    Secretary that ensure that the standards under the State program 
    are comparable to or more restrictive than those in effect on June 
    1, 1995''.

SEC. 110. CONFORMING AMENDMENTS TO OTHER LAWS.

    (a) Subsection (b) of section 508 of the Unemployment Compensation 
Amendments of 1976 (42 U.S.C. 603a; Public Law 94-566; 90 Stat. 2689) 
is amended to read as follows:
    ``(b) Provision for Reimbursement of Expenses.--For purposes of 
section 455 of the Social Security Act, expenses incurred to reimburse 
State employment offices for furnishing information requested of such 
offices--
        ``(1) pursuant to the third sentence of section 3(a) of the Act 
    entitled `An Act to provide for the establishment of a national 
    employment system and for cooperation with the States in the 
    promotion of such system, and for other purposes', approved June 6, 
    1933 (29 U.S.C. 49b(a)), or
        ``(2) by a State or local agency charged with the duty of 
    carrying a State plan for child support approved under part D of 
    title IV of the Social Security Act,
shall be considered to constitute expenses incurred in the 
administration of such State plan.''.
    (b) Section 9121 of the Omnibus Budget Reconciliation Act of 1987 
(42 U.S.C. 602 note) is repealed.
    (c) Section 9122 of the Omnibus Budget Reconciliation Act of 1987 
(42 U.S.C. 602 note) is repealed.
    (d) Section 221 of the Housing and Urban-Rural Recovery Act of 1983 
(42 U.S.C. 602 note), relating to treatment under AFDC of certain 
rental payments for federally assisted housing, is repealed.
    (e) Section 159 of the Tax Equity and Fiscal Responsibility Act of 
1982 (42 U.S.C. 602 note) is repealed.
    (f) Section 202(d) of the Social Security Amendments of 1967 (81 
Stat. 882; 42 U.S.C. 602 note) is repealed.
    (g) Section 903 of the Stewart B. McKinney Homeless Assistance 
Amendments Act of 1988 (42 U.S.C. 11381 note), relating to 
demonstration projects to reduce number of AFDC families in welfare 
hotels, is amended--
        (1) in subsection (a), by striking ``aid to families with 
    dependent children under a State plan approved'' and inserting 
    ``assistance under a State program funded''; and
        (2) in subsection (c), by striking ``aid to families with 
    dependent children in the State under a State plan approved'' and 
    inserting ``assistance in the State under a State program funded''.
    (h) The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
amended--
        (1) in section 404C(c)(3) (20 U.S.C. 1070a-23(c)(3)), by 
    striking ``(Aid to Families with Dependent Children)''; and
        (2) in section 480(b)(2) (20 U.S.C. 1087vv(b)(2)), by striking 
    ``aid to families with dependent children under a State plan 
    approved'' and inserting ``assistance under a State program 
    funded''.
    (i) The Carl D. Perkins Vocational and Applied Technology Education 
Act (20 U.S.C. 2301 et seq.) is amended--
        (1) in section 231(d)(3)(A)(ii) (20 U.S.C. 2341(d)(3)(A)(ii)), 
    by striking ``The program for aid to dependent children'' and 
    inserting ``The State program funded'';
        (2) in section 232(b)(2)(B) (20 U.S.C. 2341a(b)(2)(B)), by 
    striking ``the program for aid to families with dependent 
    children'' and inserting ``the State program funded''; and
        (3) in section 521(14)(B)(iii) (20 U.S.C. 2471(14)(B)(iii)), by 
    striking ``the program for aid to families with dependent 
    children'' and inserting ``the State program funded''.
    (j) The Elementary and Secondary Education Act of 1965 (20 U.S.C. 
2701 et seq.) is amended--
        (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by striking 
    ``Aid to Families with Dependent Children program'' and inserting 
    ``State program funded under part A of title IV of the Social 
    Security Act'';
        (2) in section 1124(c)(5) (20 U.S.C. 6333(c)(5)), by striking 
    ``the program of aid to families with dependent children under a 
    State plan approved under'' and inserting ``a State program funded 
    under part A of''; and
        (3) in section 5203(b)(2) (20 U.S.C. 7233(b)(2))--
            (A) in subparagraph (A)(xi), by striking ``Aid to Families 
        with Dependent Children benefits'' and inserting ``assistance 
        under a State program funded under part A of title IV of the 
        Social Security Act''; and
            (B) in subparagraph (B)(viii), by striking ``Aid to 
        Families with Dependent Children'' and inserting ``assistance 
        under the State program funded under part A of title IV of the 
        Social Security Act''.
    (k) The 4th proviso of chapter VII of title I of Public Law 99-88 
(25 U.S.C. 13d-1) is amended to read as follows: ``Provided further, 
That general assistance payments made by the Bureau of Indian Affairs 
shall be made--
        ``(1) after April 29, 1985, and before October 1, 1995, on the 
    basis of Aid to Families with Dependent Children (AFDC) standards 
    of need; and
        ``(2) on and after October 1, 1995, on the basis of standards 
    of need established under the State program funded under part A of 
    title IV of the Social Security Act,
except that where a State ratably reduces its AFDC or State program 
payments, the Bureau shall reduce general assistance payments in such 
State by the same percentage as the State has reduced the AFDC or State 
program payment.''.
    (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) is 
amended--
        (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking all 
    that follows ``agency as'' and inserting ``being eligible for 
    financial assistance under part A of title IV of the Social 
    Security Act and as having continually received such financial 
    assistance during the 90-day period which immediately precedes the 
    date on which such individual is hired by the employer.'';
        (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by striking 
    ``eligibility for aid or services,'' and all that follows through 
    ``children approved'' and inserting ``eligibility for assistance, 
    or the amount of such assistance, under a State program funded'';
        (3) in section 6103(l)(7)(D)(i) (26 U.S.C. 6103(l)(7)(D)(i)), 
    by striking ``aid to families with dependent children provided 
    under a State plan approved'' and inserting ``a State program 
    funded'';
        (4) in section 6103(l)(10) (26 U.S.C. 6103(l)(10))--
            (A) by striking ``(c) or (d)'' each place it appears and 
        inserting ``(c), (d), or (e)''; and
            (B) by adding at the end of subparagraph (B) the following 
        new sentence: ``Any return information disclosed with respect 
        to section 6402(e) shall only be disclosed to officers and 
        employees of the State agency requesting such information.'';
        (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the matter 
    preceding subparagraph (A)--
            (A) by striking ``(5), (10)'' and inserting ``(5)''; and
            (B) by striking ``(9), or (12)'' and inserting ``(9), (10), 
        or (12)'';
        (6) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), by 
    striking ``(relating to aid to families with dependent children)'';
        (7) in section 6402 (26 U.S.C. 6402)--
            (A) in subsection (a), by striking ``(c) and (d)'' and 
        inserting ``(c), (d), and (e)'';
            (B) by redesignating subsections (e) through (i) as 
        subsections (f) through (j), respectively; and
            (C) by inserting after subsection (d) the following:
    ``(e) Collection of Overpayments Under Title IV-A of the Social 
Security Act.--The amount of any overpayment to be refunded to the 
person making the overpayment shall be reduced (after reductions 
pursuant to subsections (c) and (d), but before a credit against future 
liability for an internal revenue tax) in accordance with section 
405(e) of the Social Security Act (concerning recovery of overpayments 
to individuals under State plans approved under part A of title IV of 
such Act).''; and
        (8) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by 
    striking ``aid to families with dependent children'' and inserting 
    ``assistance under a State program funded under part A of title IV 
    of the Social Security Act''.
    (m) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 49b(b)) is 
amended by striking ``State plan approved under part A of title IV'' 
and inserting ``State program funded under part A of title IV''.
    (n) The Job Training Partnership Act (29 U.S.C. 1501 et seq.) is 
amended--
        (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by 
    striking ``(42 U.S.C. 601 et seq.)'';
        (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by 
    striking ``State aid to families with dependent children records,'' 
    and inserting ``records collected under the State program funded 
    under part A of title IV of the Social Security Act,'';
        (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--
            (A) by striking ``the JOBS program'' and inserting ``the 
        work activities required under title IV of the Social Security 
        Act''; and
            (B) by striking the second sentence;
        (4) in section 123(c) (29 U.S.C. 1533(c))--
            (A) in paragraph (1)(E), by repealing clause (vi); and
            (B) in paragraph (2)(D), by repealing clause (v);
        (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by striking 
    ``, including recipients under the JOBS program'';
        (6) in subparagraphs (A) and (B) of section 204(a)(1) (29 
    U.S.C. 1604(a)(1) (A) and (B)), by striking ``(such as the JOBS 
    program)'' each place it appears;
        (7) in section 205(a) (29 U.S.C. 1605(a)), by striking 
    paragraph (4) and inserting the following:
        ``(4) the portions of title IV of the Social Security Act 
    relating to work activities;'';
        (8) in section 253 (29 U.S.C. 1632)--
            (A) in subsection (b)(2), by repealing subparagraph (C); 
        and
            (B) in paragraphs (1)(B) and (2)(B) of subsection (c), by 
        striking ``the JOBS program or'' each place it appears;
        (9) in section 264 (29 U.S.C. 1644)--
            (A) in subparagraphs (A) and (B) of subsection (b)(1), by 
        striking ``(such as the JOBS program)'' each place it appears; 
        and
            (B) in subparagraphs (A) and (B) of subsection (d)(3), by 
        striking ``and the JOBS program'' each place it appears;
        (10) in section 265(b) (29 U.S.C. 1645(b)), by striking 
    paragraph (6) and inserting the following:
        ``(6) the portion of title IV of the Social Security Act 
    relating to work activities;'';
        (11) in the second sentence of section 429(e) (29 U.S.C. 
    1699(e)), by striking ``and shall be in an amount that does not 
    exceed the maximum amount that may be provided by the State 
    pursuant to section 402(g)(1)(C) of the Social Security Act (42 
    U.S.C. 602(g)(1)(C))'';
        (12) in section 454(c) (29 U.S.C. 1734(c)), by striking ``JOBS 
    and'';
        (13) in section 455(b) (29 U.S.C. 1735(b)), by striking ``the 
    JOBS program,'';
        (14) in section 501(1) (29 U.S.C. 1791(1)), by striking ``aid 
    to families with dependent children under part A of title IV of the 
    Social Security Act (42 U.S.C. 601 et seq.)'' and inserting 
    ``assistance under the State program funded under part A of title 
    IV of the Social Security Act'';
        (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by striking 
    ``aid to families with dependent children'' and inserting 
    ``assistance under the State program funded'';
        (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by 
    striking ``aid to families with dependent children'' and inserting 
    ``assistance under the State program funded''; and
        (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))--
            (A) in clause (v), by striking the semicolon and inserting 
        ``; and''; and
            (B) by striking clause (vi).
    (o) Section 3803(c)(2)(C)(iv) of title 31, United States Code, is 
amended to read as follows:
        ``(iv) assistance under a State program funded under part A of 
    title IV of the Social Security Act;''.
    (p) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is amended to read 
as follows:
                ``(i) assistance under the State program funded under 
            part A of title IV of the Social Security Act;''.
    (q) Section 303(f)(2) of the Family Support Act of 1988 (42 U.S.C. 
602 note) is amended--
        (1) by striking ``(A)''; and
        (2) by striking subparagraphs (B) and (C).
    (r) The Balanced Budget and Emergency Deficit Control Act of 1985 
(2 U.S.C. 900 et seq.) is amended--
        (1) in the first section 255(h) (2 U.S.C. 905(h)), by striking 
    ``Aid to families with dependent children (75-0412-0-1-609);'' and 
    inserting ``Block grants to States for temporary assistance for 
    needy families;''; and
        (2) in section 256 (2 U.S.C. 906)--
            (A) by striking subsection (k); and
            (B) by redesignating subsection (l) as subsection (k).
    (s) The Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is 
amended--
        (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ``aid 
    under a State plan approved under'' each place it appears and 
    inserting ``assistance under a State program funded under'';
        (2) in section 245A(h) (8 U.S.C. 1255a(h))--
            (A) in paragraph (1)(A)(i), by striking ``program of aid to 
        families with dependent children'' and inserting ``State 
        program of assistance''; and
            (B) in paragraph (2)(B), by striking ``aid to families with 
        dependent children'' and inserting ``assistance under a State 
        program funded under part A of title IV of the Social Security 
        Act''; and
        (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking 
    ``State plan approved'' and inserting ``State program funded''.
    (t) Section 640(a)(4)(B)(i) of the Head Start Act (42 U.S.C. 
9835(a)(4)(B)(i)) is amended by striking ``program of aid to families 
with dependent children under a State plan approved'' and inserting 
``State program of assistance funded''.
    (u) Section 9 of the Act of April 19, 1950 (64 Stat. 47, chapter 
92; 25 U.S.C. 639) is repealed.
    (v) Subparagraph (E) of section 213(d)(6) of the School-To-Work 
Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is amended to read as 
follows:
            ``(E) part A of title IV of the Social Security Act (42 
        U.S.C. 601 et seq.) relating to work activities;''.
    (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United States Code, 
is amended by striking ``section 464 or 1137 of the Social Security 
Act'' and inserting ``section 404(e), 464, or 1137 of the Social 
Security Act''.

SEC. 111. DEVELOPMENT OF PROTOTYPE OF COUNTERFEIT-RESISTANT SOCIAL 
              SECURITY CARD REQUIRED.

    (a) Development.--
        (1) In general.--The Commissioner of Social Security (in this 
    section referred to as the ``Commissioner'') shall, in accordance 
    with this section, develop a prototype of a counterfeit-resistant 
    social security card. Such prototype card shall--
            (A) be made of a durable, tamper-resistant material such as 
        plastic or polyester,
            (B) employ technologies that provide security features, 
        such as magnetic stripes, holograms, and integrated circuits, 
        and
            (C) be developed so as to provide individuals with reliable 
        proof of citizenship or legal resident alien status.
        (2) Assistance by attorney general.--The Attorney General of 
    the United States shall provide such information and assistance as 
    the Commissioner deems necessary to enable the Commissioner to 
    comply with this section.
    (b) Study and Report.--
        (1) In general.--The Commissioner shall conduct a study and 
    issue a report to Congress which examines different methods of 
    improving the social security card application process.
        (2) Elements of study.--The study shall include an evaluation 
    of the cost and work load implications of issuing a counterfeit-
    resistant social security card for all individuals over a 3-, 5-, 
    and 10-year period. The study shall also evaluate the feasibility 
    and cost implications of imposing a user fee for replacement cards 
    and cards issued to individuals who apply for such a card prior to 
    the scheduled 3-, 5-, and 10-year phase-in options.
        (3) Distribution of report.--The Commissioner shall submit 
    copies of the report described in this subsection along with a 
    facsimile of the prototype card as described in subsection (a) to 
    the Committees on Ways and Means and Judiciary of the House of 
    Representatives and the Committees on Finance and Judiciary of the 
    Senate within 1 year after the date of the enactment of this Act.

SEC. 112. MODIFICATIONS TO THE JOB OPPORTUNITIES FOR CERTAIN LOW-INCOME 
              INDIVIDUALS PROGRAM.

    Section 505 of the Family Support Act of 1988 (42 U.S.C. 1315 note) 
is amended--
        (1) in the heading, by striking ``demonstration'';
        (2) by striking ``demonstration'' each place such term appears;
        (3) in subsection (a), by striking ``in each of fiscal years'' 
    and all that follows through ``10'' and inserting ``shall enter 
    into agreements with'';
        (4) in subsection (b)(3), by striking ``aid to families with 
    dependent children under part A of title IV of the Social Security 
    Act'' and inserting ``assistance under the program funded part A of 
    title IV of the Social Security Act of the State in which the 
    individual resides'';
        (5) in subsection (c)--
            (A) in paragraph (1)(C), by striking ``aid to families with 
        dependent children under title IV of the Social Security Act'' 
        and inserting ``assistance under a State program funded part A 
        of title IV of the Social Security Act'';
            (B) in paragraph (2), by striking ``aid to families with 
        dependent children under title IV of such Act'' and inserting 
        ``assistance under a State program funded part A of title IV of 
        the Social Security Act'';
        (6) in subsection (d), by striking ``job opportunities and 
    basic skills training program (as provided for under title IV of 
    the Social Security Act)'' and inserting ``the State program funded 
    under part A of title IV of the Social Security Act''; and
        (7) by striking subsections (e) through (g) and inserting the 
    following:
    ``(e) Authorization of Appropriations.--For the purpose of 
conducting projects under this section, there is authorized to be 
appropriated an amount not to exceed $25,000,000 for any fiscal 
year.''.

SEC. 113. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR TECHNICAL 
              AND CONFORMING AMENDMENTS.

    Not later than 90 days after the date of the enactment of this Act, 
the Secretary of Health and Human Services and the Commissioner of 
Social Security, in consultation, as appropriate, with the heads of 
other Federal agencies, shall submit to the appropriate committees of 
Congress a legislative proposal proposing such technical and conforming 
amendments as are necessary to bring the law into conformity with the 
policy embodied in this title.

SEC. 114. ASSURING MEDICAID COVERAGE FOR LOW-INCOME FAMILIES.

    (a) In General.--Title XIX is amended--
        (1) by redesignating section 1931 as section 1932; and
        (2) by inserting after section 1930 the following new section:

           ``assuring coverage for certain low-income families

    ``Sec. 1931. (a) References to Title IV-A Are References to Pre-
Welfare-Reform Provisions.--Subject to the succeeding provisions of 
this section, with respect to a State any reference in this title (or 
any other provision of law in relation to the operation of this title) 
to a provision of part A of title IV, or a State plan under such part 
(or a provision of such a plan), including income and resource 
standards and income and resource methodologies under such part or 
plan, shall be considered a reference to such a provision or plan as in 
effect as of July 16, 1996, with respect to the State.
    ``(b) Application of Pre-Welfare-Reform Eligibility Criteria.--
        ``(1) In general.--For purposes of this title, subject to 
    paragraphs (2) and (3), in determining eligibility for medical 
    assistance--
            ``(A) an individual shall be treated as receiving aid or 
        assistance under a State plan approved under part A of title IV 
        only if the individual meets--
                ``(i) the income and resource standards for determining 
            eligibility under such plan, and
                ``(ii) the eligibility requirements of such plan under 
            subsections (a) through (c) of section 406 and section 
            407(a),
        as in effect as of July 16, 1996; and
            ``(B) the income and resource methodologies under such plan 
        as of such date shall be used in the determination of whether 
        any individual meets income and resource standards under such 
        plan.
        ``(2) State option.--For purposes of applying this section, a 
    State--
            ``(A) may lower its income standards applicable with 
        respect to part A of title IV, but not below the income 
        standards applicable under its State plan under such part on 
        May 1, 1988;
            ``(B) may increase income or resource standards under the 
        State plan referred to in paragraph (1) over a period 
        (beginning after July 16, 1996) by a percentage that does not 
        exceed the percentage increase in the Consumer Price Index for 
        all urban consumers (all items; United States city average) 
        over such period; and
            ``(C) may use income and resource methodologies that are 
        less restrictive than the methodologies used under the State 
        plan under such part as of July 16, 1996.
        ``(3) Option to terminate medical assistance for failure to 
    meet work requirement.--
            ``(A) Individuals receiving cash assistance under tanf.--In 
        the case of an individual who--
                ``(i) is receiving cash assistance under a State 
            program funded under part A of title IV,
                ``(ii) is eligible for medical assistance under this 
            title on a basis not related to section 1902(l), and
                ``(iii) has the cash assistance under such program 
            terminated pursuant to section 407(e)(1)(B) (as in effect 
            on or after the welfare reform effective date) because of 
            refusing to work,
        the State may terminate such individual's eligibility for 
        medical assistance under this title until such time as there no 
        longer is a basis for the termination of such cash assistance 
        because of such refusal.
            ``(B) Exception for children.--Subparagraph (A) shall not 
        be construed as permitting a State to terminate medical 
        assistance for a minor child who is not the head of a household 
        receiving assistance under a State program funded under part A 
        of title IV.
    ``(c) Treatment for Purposes of Transitional Coverage Provisions.--
        ``(1) Transition in the case of child support collections.--The 
    provisions of section 406(h) (as in effect on July 16, 1996) shall 
    apply, in relation to this title, with respect to individuals (and 
    families composed of individuals) who are described in subsection 
    (b)(1)(A), in the same manner as they applied before such date with 
    respect to individuals who became ineligible for aid to families 
    with dependent children as a result (wholly or partly) of the 
    collection of child or spousal support under part D of title IV.
        ``(2) Transition in the case of earnings from employment.--For 
    continued medical assistance in the case of individuals (and 
    families composed of individuals) described in subsection (b)(1)(A) 
    who would otherwise become ineligible because of hours or income 
    from employment, see sections 1925 and 1902(e)(1).
    ``(d) Waivers.--In the case of a waiver of a provision of part A of 
title IV in effect with respect to a State as of July 16, 1996, or 
which is submitted to the Secretary before the date of the enactment of 
the Personal Responsibility and Work Opportunity Reconciliation Act of 
1996 and approved by the Secretary on or before July 1, 1997, if the 
waiver affects eligibility of individuals for medical assistance under 
this title, such waiver may (but need not) continue to be applied, at 
the option of the State, in relation to this title after the date the 
waiver would otherwise expire.
    ``(e) State Option To Use 1 Application Form.--Nothing in this 
section, or part A of title IV, shall be construed as preventing a 
State from providing for the same application form for assistance under 
a State program funded under part A of title IV (on or after the 
welfare reform effective date) and for medical assistance under this 
title.
    ``(f) Additional Rules of Construction.--
        ``(1) With respect to the reference in section 1902(a)(5) to a 
    State plan approved under part A of title IV, a State may treat 
    such reference as a reference either to a State program funded 
    under such part (as in effect on and after the welfare reform 
    effective date) or to the State plan under this title.
        ``(2) Any reference in section 1902(a)(55) to a State plan 
    approved under part A of title IV shall be deemed a reference to a 
    State program funded under such part.
        ``(3) In applying section 1903(f), the applicable income 
    limitation otherwise determined shall be subject to increase in the 
    same manner as income or resource standards of a State may be 
    increased under subsection (b)(2)(B).
    ``(g) Relation to Other Provisions.--The provisions of this section 
shall apply notwithstanding any other provision of this Act.
    ``(h) Transitional Increased Federal Matching Rate for Increased 
Administrative Costs.--
        ``(1) In general.--Subject to the succeeding provisions of this 
    subsection, the Secretary shall provide that with respect to 
    administrative expenditures described in paragraph (2) the per 
    centum specified in section 1903(a)(7) shall be increased to such 
    percentage as the Secretary specifies.
        ``(2) Administrative expenditures described.--The 
    administrative expenditures described in this paragraph are 
    expenditures described in section 1903(a)(7) that a State 
    demonstrates to the satisfaction of the Secretary are attributable 
    to administrative costs of eligibility determinations that (but for 
    the enactment of this section) would not be incurred.
        ``(3) Limitation.--The total amount of additional Federal funds 
    that are expended as a result of the application of this subsection 
    for the period beginning with fiscal year 1997 and ending with 
    fiscal year 2000 shall not exceed $500,000,000. In applying this 
    paragraph, the Secretary shall ensure the equitable distribution of 
    additional funds among the States.
        ``(4) Time limitation.--This subsection shall only apply with 
    respect to a State for expenditures incurred during the first 12 
    calendar quarters in which the State program funded under part A of 
    title IV (as in effect on and after the welfare reform effective 
    date) is in effect.
    ``(i) Welfare Reform Effective Date.--In this section, the term 
`welfare reform effective date' means the effective date, with respect 
to a State, of title I of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (as specified in section 116 of 
such Act).''.
    (b) Plan Amendment.--Section 1902(a) (42 U.S.C. 1396a(a)) is 
amended--
        (1) by striking ``and'' at the end of paragraph (61),
        (2) by striking the period at the end of paragraph (62) and 
    inserting ``; and'', and
        (3) by inserting after paragraph (62) the following new 
    paragraph:
        ``(63) provide for administration and determinations of 
    eligibility with respect to individuals who are (or seek to be) 
    eligible for medical assistance based on the application of section 
    1931.''.
    (c) Extension of Work Transition Provisions.--Sections 
1902(e)(1)(B) and 1925(f) (42 U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are 
each amended by striking ``1998'' and inserting ``2001''.
    (d) Elimination of Requirement of Minimum AFDC Payment Levels.--(1) 
Section 1902(c) (42 U.S.C. 1396a(c)) is amended by striking ``if--'' 
and all that follows and inserting the following: ``if the State 
requires individuals described in subsection (l)(1) to apply for 
assistance under the State program funded under part A of title IV as a 
condition of applying for or receiving medical assistance under this 
title.''.
    (2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended by striking 
paragraph (9).

SEC. 115. DENIAL OF ASSISTANCE AND BENEFITS FOR CERTAIN DRUG-RELATED 
              CONVICTIONS.

    (a) In General.--An individual convicted (under Federal or State 
law) of any offense which is classified as a felony by the law of the 
jurisdiction involved and which has as an element the possession, use, 
or distribution of a controlled substance (as defined in section 102(6) 
of the Controlled Substances Act (21 U.S.C. 802(6))) shall not be 
eligible for--
        (1) assistance under any State program funded under part A of 
    title IV of the Social Security Act, or
        (2) benefits under the food stamp program (as defined in 
    section 3(h) of the Food Stamp Act of 1977) or any State program 
    carried out under the Food Stamp Act of 1977.
    (b) Effects on Assistance and Benefits for Others.--
        (1) Program of temporary assistance for needy families.--The 
    amount of assistance otherwise required to be provided under a 
    State program funded under part A of title IV of the Social 
    Security Act to the family members of an individual to whom 
    subsection (a) applies shall be reduced by the amount which would 
    have otherwise been made available to the individual under such 
    part.
        (2) Benefits under the food stamp act of 1977.--The amount of 
    benefits otherwise required to be provided to a household under the 
    food stamp program (as defined in section 3(h) of the Food Stamp 
    Act of 1977), or any State program carried out under the Food Stamp 
    Act of 1977, shall be determined by considering the individual to 
    whom subsection (a) applies not to be a member of such household, 
    except that the income and resources of the individual shall be 
    considered to be income and resources of the household.
    (c) Enforcement.--A State that has not exercised its authority 
under subsection (d)(1)(A) shall require each individual applying for 
assistance or benefits referred to in subsection (a), during the 
application process, to state, in writing, whether the individual, or 
any member of the household of the individual, has been convicted of a 
crime described in subsection (a).
    (d) Limitations.--
        (1) State elections.--
            (A) Opt out.--A State may, by specific reference in a law 
        enacted after the date of the enactment of this Act, exempt any 
        or all individuals domiciled in the State from the application 
        of subsection (a).
            (B) Limit period of prohibition.--A State may, by law 
        enacted after the date of the enactment of this Act, limit the 
        period for which subsection (a) shall apply to any or all 
        individuals domiciled in the State.
        (2) Inapplicability to convictions occurring on or before 
    enactment.--Subsection (a) shall not apply to convictions occurring 
    on or before the date of the enactment of this Act.
    (e) Definitions of State.--For purposes of this section, the term 
``State'' has the meaning given it--
        (1) in section 419(5) of the Social Security Act, when 
    referring to assistance provided under a State program funded under 
    part A of title IV of the Social Security Act, and
        (2) in section 3(m) of the Food Stamp Act of 1977, when 
    referring to the food stamp program (as defined in section 3(h) of 
    the Food Stamp Act of 1977) or any State program carried out under 
    the Food Stamp Act of 1977.
    (f) Rule of Interpretation.--Nothing in this section shall be 
construed to deny the following Federal benefits:
        (1) Emergency medical services under title XIX of the Social 
    Security Act.
        (2) Short-term, noncash, in-kind emergency disaster relief.
        (3)(A) Public health assistance for immunizations.
        (B) Public health assistance for testing and treatment of 
    communicable diseases if the Secretary of Health and Human Services 
    determines that it is necessary to prevent the spread of such 
    disease.
        (4) Prenatal care.
        (5) Job training programs.
        (6) Drug treatment programs.

SEC. 116. EFFECTIVE DATE; TRANSITION RULE.

    (a) Effective Dates.--
        (1) In general.--Except as otherwise provided in this title, 
    this title and the amendments made by this title shall take effect 
    on July 1, 1997.
        (2) Delayed effective date for certain provisions.--
    Notwithstanding any other provision of this section, paragraphs 
    (2), (3), (4), (5), (8), and (10) of section 409(a) and section 
    411(a) of the Social Security Act (as added by the amendments made 
    by section 103(a) of this Act) shall not take effect with respect 
    to a State until, and shall apply only with respect to conduct that 
    occurs on or after, the later of--
            (A) July 1, 1997; or
            (B) the date that is 6 months after the date the Secretary 
        of Health and Human Services receives from the State a plan 
        described in section 402(a) of the Social Security Act (as 
        added by such amendment).
        (3) Grants to outlying areas.--The amendments made by section 
    103(b) shall take effect on October 1, 1996.
        (4) Elimination of child care programs.--The amendments made by 
    section 103(c) shall take effect on October 1, 1996.
        (5) Definitions applicable to new child care entitlement.--
    Sections 403(a)(1)(C), 403(a)(1)(D), and 419(4) of the Social 
    Security Act, as added by the amendments made by section 103(a) of 
    this Act, shall take effect on October 1, 1996.
    (b) Transition Rules.--Effective on the date of the enactment of 
this Act:
        (1) State option to accelerate effective date.--
            (A) In general.--If the Secretary of Health and Human 
        Services receives from a State a plan described in section 
        402(a) of the Social Security Act (as added by the amendment 
        made by section 103(a)(1) of this Act), then--
                (i) on and after the date of such receipt--

                    (I) except as provided in clause (ii), this title 
                and the amendments made by this title (other than by 
                section 103(c) of this Act) shall apply with respect to 
                the State; and
                    (II) the State shall be considered an eligible 
                State for purposes of part A of title IV of the Social 
                Security Act (as in effect pursuant to the amendments 
                made by such section 103(a)); and

                (ii) during the period that begins on the date of such 
            receipt and ends on June 30, 1997, there shall remain in 
            effect with respect to the State--

                    (I) section 403(h) of the Social Security Act (as 
                in effect on September 30, 1995); and
                    (II) all State reporting requirements under parts A 
                and F of title IV of the Social Security Act (as in 
                effect on September 30, 1995), modified by the 
                Secretary as appropriate, taking into account the State 
                program under part A of title IV of the Social Security 
                Act (as in effect pursuant to the amendments made by 
                such section 103(a)).

            (B) Limitations on federal obligations.--
                (i) Under afdc program.--The total obligations of the 
            Federal Government to a State under part A of title IV of 
            the Social Security Act (as in effect on September 30, 
            1995) with respect to expenditures in fiscal year 1997 
            shall not exceed an amount equal to the State family 
            assistance grant.
                (ii) Under temporary family assistance program.--
            Notwithstanding section 403(a)(1) of the Social Security 
            Act (as in effect pursuant to the amendments made by 
            section 103(a) of this Act), the total obligations of the 
            Federal Government to a State under such section 
            403(a)(1)--

                    (I) for fiscal year 1996, shall be an amount equal 
                to--

                        (aa) the State family assistance grant; 
                    multiplied by
                        (bb) \1/366\ of the number of days during the 
                    period that begins on the date the Secretary of 
                    Health and Human Services first receives from the 
                    State a plan described in section 402(a) of the 
                    Social Security Act (as added by the amendment made 
                    by section 103(a)(1) of this Act) and ends on 
                    September 30, 1996; and

                    (II) for fiscal year 1997, shall be an amount equal 
                to the lesser of--

                        (aa) the amount (if any) by which the State 
                    family assistance grant exceeds the total 
                    obligations of the Federal Government to the State 
                    under part A of title IV of the Social Security Act 
                    (as in effect on September 30, 1995) with respect 
                    to expenditures in fiscal year 1997; or
                        (bb) the State family assistance grant, 
                    multiplied by \1/365\ of the number of days during 
                    the period that begins on October 1, 1996, or the 
                    date the Secretary of Health and Human Services 
                    first receives from the State a plan described in 
                    section 402(a) of the Social Security Act (as added 
                    by the amendment made by section 103(a)(1) of this 
                    Act), whichever is later, and ends on September 30, 
                    1997.
                (iii) Child care obligations excluded in determining 
            federal afdc obligations.--As used in this subparagraph, 
            the term ``obligations of the Federal Government to the 
            State under part A of title IV of the Social Security Act'' 
            does not include any obligation of the Federal Government 
            with respect to child care expenditures by the State.
            (C) Submission of state plan for fiscal year 1996 or 1997 
        deemed acceptance of grant limitations and formula and 
        termination of afdc entitlement.--The submission of a plan by a 
        State pursuant to subparagraph (A) is deemed to constitute--
                (i) the State's acceptance of the grant reductions 
            under subparagraph (B) (including the formula for computing 
            the amount of the reduction); and
                (ii) the termination of any entitlement of any 
            individual or family to benefits or services under the 
            State AFDC program.
            (D) Definitions.--As used in this paragraph:
                (i) State afdc program.--The term ``State AFDC 
            program'' means the State program under parts A and F of 
            title IV of the Social Security Act (as in effect on 
            September 30, 1995).
                (ii) State.--The term ``State'' means the 50 States and 
            the District of Columbia.
                (iii) State family assistance grant.--The term ``State 
            family assistance grant'' means the State family assistance 
            grant (as defined in section 403(a)(1)(B) of the Social 
            Security Act, as added by the amendment made by section 
            103(a)(1) of this Act).
        (2) Claims, actions, and proceedings.--The amendments made by 
    this title shall not apply with respect to--
            (A) powers, duties, functions, rights, claims, penalties, 
        or obligations applicable to aid, assistance, or services 
        provided before the effective date of this title under the 
        provisions amended; and
            (B) administrative actions and proceedings commenced before 
        such date, or authorized before such date to be commenced, 
        under such provisions.
        (3) Closing out account for those programs terminated or 
    substantially modified by this title.--In closing out accounts, 
    Federal and State officials may use scientifically acceptable 
    statistical sampling techniques. Claims made with respect to State 
    expenditures under a State plan approved under part A of title IV 
    of the Social Security Act (as in effect on September 30, 1995) 
    with respect to assistance or services provided on or before 
    September 30, 1995, shall be treated as claims with respect to 
    expenditures during fiscal year 1995 for purposes of reimbursement 
    even if payment was made by a State on or after October 1, 1995. 
    Each State shall complete the filing of all claims under the State 
    plan (as so in effect) within 2 years after the date of the 
    enactment of this Act. The head of each Federal department shall--
            (A) use the single audit procedure to review and resolve 
        any claims in connection with the close out of programs under 
        such State plans; and
            (B) reimburse States for any payments made for assistance 
        or services provided during a prior fiscal year from funds for 
        fiscal year 1995, rather than from funds authorized by this 
        title.
        (4) Continuance in office of assistant secretary for family 
    support.--The individual who, on the day before the effective date 
    of this title, is serving as Assistant Secretary for Family Support 
    within the Department of Health and Human Services shall, until a 
    successor is appointed to such position--
            (A) continue to serve in such position; and
            (B) except as otherwise provided by law--
                (i) continue to perform the functions of the Assistant 
            Secretary for Family Support under section 417 of the 
            Social Security Act (as in effect before such effective 
            date); and
                (ii) have the powers and duties of the Assistant 
            Secretary for Family Support under section 416 of the 
            Social Security Act (as in effect pursuant to the amendment 
            made by section 103(a)(1) of this Act).
    (c) Termination of Entitlement Under AFDC Program.--Effective 
October 1, 1996, no individual or family shall be entitled to any 
benefits or services under any State plan approved under part A or F of 
title IV of the Social Security Act (as in effect on September 30, 
1995).

                 TITLE II--SUPPLEMENTAL SECURITY INCOME

SEC. 200. REFERENCE TO SOCIAL SECURITY ACT.

    Except as otherwise specifically provided, wherever in this title 
an amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

                  Subtitle A--Eligibility Restrictions

SEC. 201. 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.

    (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as amended by 
section 105(b)(4)(A) of the Contract with America Advancement Act of 
1996, is amended by redesignating paragraph (5) as paragraph (3) and by 
adding at the end the following new paragraph:
    ``(4)(A) No person shall be considered an eligible individual or 
eligible spouse for purposes of this title during the 10-year period 
that begins on the date the person is convicted in Federal or State 
court of having made a fraudulent statement or representation with 
respect to the place of residence of the person in order to receive 
assistance simultaneously from 2 or more States under programs that are 
funded under title IV, title XIX, or the Food Stamp Act of 1977, or 
benefits in 2 or more States under the supplemental security income 
program under this title.
    ``(B) As soon as practicable after the conviction of a person in a 
Federal or State court as described in subparagraph (A), an official of 
such court shall notify the Commissioner of such conviction.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND PROBATION AND 
              PAROLE VIOLATORS.

    (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as amended by 
section 201(a) of this Act, is amended by adding at the end the 
following new paragraph:
    ``(5) No person shall be considered an eligible individual or 
eligible spouse for purposes of this title with respect to any month if 
during such month the person is--
        ``(A) fleeing to avoid prosecution, or custody or confinement 
    after conviction, under the laws of the place from which the person 
    flees, for a crime, or an attempt to commit a crime, which is a 
    felony under the laws of the place from which the person flees, or 
    which, in the case of the State of New Jersey, is a high 
    misdemeanor under the laws of such State; or
        ``(B) violating a condition of probation or parole imposed 
    under Federal or State law.''.
    (b) Exchange of Information.--Section 1611(e) (42 U.S.C. 1382(e)), 
as amended by section 201(a) of this Act and subsection (a) of this 
section, is amended by adding at the end the following new paragraph:
    ``(6) Notwithstanding any other provision of law (other than 
section 6103 of the Internal Revenue Code of 1986), the Commissioner 
shall furnish any Federal, State, or local law enforcement officer, 
upon the written request of the officer, with the current address, 
Social Security number, and photograph (if applicable) of any recipient 
of benefits under this title, if the officer furnishes the Commissioner 
with the name of the recipient, and other identifying information as 
reasonably required by the Commissioner to establish the unique 
identity of the recipient, and notifies the Commissioner that--
        ``(A) the recipient--
            ``(i) is described in subparagraph (A) or (B) of paragraph 
        (5); and
            ``(ii) has information that is necessary for the officer to 
        conduct the officer's official duties; and
        ``(B) the location or apprehension of the recipient is within 
    the officer's official duties.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 203. TREATMENT OF PRISONERS.

    (a) Implementation of Prohibition Against Payment of Benefits to 
Prisoners.--
        (1) In general.--Section 1611(e)(1) (42 U.S.C. 1382(e)(1)) is 
    amended by adding at the end the following new subparagraph:
    ``(I)(i) The Commissioner shall enter into an agreement, with any 
interested State or local institution described in clause (i) or (ii) 
of section 202(x)(1)(A) the primary purpose of which is to confine 
individuals as described in section 202(x)(1)(A), under which--
        ``(I) the institution shall provide to the Commissioner, on a 
    monthly basis and in a manner specified by the Commissioner, the 
    names, social security account numbers, dates of birth, confinement 
    commencement dates, and, to the extent available to the 
    institution, such other identifying information concerning the 
    inmates of the institution as the Commissioner may require for the 
    purpose of carrying out paragraph (1); and
        ``(II) the Commissioner shall pay to any such institution, with 
    respect to each inmate of the institution who is eligible for a 
    benefit under this title for the month preceding the first month 
    throughout which such inmate is in such institution and becomes 
    ineligible for such benefit as a result of the application of this 
    subparagraph, $400 if the institution furnishes the information 
    described in subclause (I) to the Commissioner within 30 days after 
    the date such individual becomes an inmate of such institution, or 
    $200 if the institution furnishes such information after 30 days 
    after such date but within 90 days after such date.
    ``(ii)(I) The provisions of section 552a of title 5, United States 
Code, shall not apply to any agreement entered into under clause (i) or 
to information exchanged pursuant to such agreement.
    ``(II) The Commissioner is authorized to provide, on a reimbursable 
basis, information obtained pursuant to agreements entered into under 
clause (i) to any Federal or federally-assisted cash, food, or medical 
assistance program for eligibility purposes.
    ``(iii) Payments to institutions required by clause (i)(II) shall 
be made from funds otherwise available for the payment of benefits 
under this title and shall be treated as direct spending for purposes 
of the Balanced Budget and Emergency Deficit Control Act of 1985.''.
        (2) Effective date.--The amendment made by this subsection 
    shall apply to individuals whose period of confinement in an 
    institution commences on or after the first day of the seventh 
    month beginning after the month in which this Act is enacted.
    (b) Study of Other Potential Improvements in the Collection of 
Information Respecting Public Inmates.--
        (1) Study.--The Commissioner of Social Security shall conduct a 
    study of the desirability, feasibility, and cost of--
            (A) establishing a system under which Federal, State, and 
        local courts would furnish to the Commissioner such information 
        respecting court orders by which individuals are confined in 
        jails, prisons, or other public penal, correctional, or medical 
        facilities as the Commissioner may require for the purpose of 
        carrying out section 1611(e)(1) of the Social Security Act; and
            (B) requiring that State and local jails, prisons, and 
        other institutions that enter into agreements with the 
        Commissioner under section 1611(e)(1)(I) of the Social Security 
        Act furnish the information required by such agreements to the 
        Commissioner by means of an electronic or other sophisticated 
        data exchange system.
        (2) Report.--Not later than 1 year after the date of the 
    enactment of this Act, the Commissioner of Social Security shall 
    submit a report on the results of the study conducted pursuant to 
    this subsection to the Committee on Finance of the Senate and the 
    Committee on Ways and Means of the House of Representatives.
    (c) Additional Report to Congress.--Not later than October 1, 1998, 
the Commissioner of Social Security shall provide to the Committee on 
Finance of the Senate and the Committee on Ways and Means of the House 
of Representatives a list of the institutions that are and are not 
providing information to the Commissioner under section 1611(e)(1)(I) 
of the Social Security Act (as added by this section).

SEC. 204. EFFECTIVE DATE OF APPLICATION FOR BENEFITS.

    (a) In General.--Subparagraphs (A) and (B) of section 1611(c)(7) 
(42 U.S.C. 1382(c)(7)) are amended to read as follows:
        ``(A) the first day of the month following the date such 
    application is filed, or
        ``(B) the first day of the month following the date such 
    individual becomes eligible for such benefits with respect to such 
    application.''.
    (b) Special Rule Relating to Emergency Advance Payments.--Section 
1631(a)(4)(A) (42 U.S.C. 1383(a)(4)(A)) is amended--
        (1) by inserting ``for the month following the date the 
    application is filed'' after ``is presumptively eligible for such 
    benefits''; and
        (2) by inserting ``, which shall be repaid through 
    proportionate reductions in such benefits over a period of not more 
    than 6 months'' before the semicolon.
    (c) Conforming Amendments.--
        (1) Section 1614(b) (42 U.S.C. 1382c(b)) is amended--
            (A) by striking ``or requests'' and inserting ``, on the 
        first day of the month following the date the application is 
        filed, or, in any case in which either spouse requests''; and
            (B) by striking ``application or''.
        (2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3)) is amended by 
    inserting ``following the month'' after ``beginning with the 
    month''.
    (d) Effective Date.--
        (1) In general.--The amendments made by this section shall 
    apply to applications for benefits under title XVI of the Social 
    Security Act filed on or after the date of the enactment of this 
    Act, without regard to whether regulations have been issued to 
    implement such amendments.
        (2) Benefits under title xvi.--For purposes of this subsection, 
    the term ``benefits under title XVI of the Social Security Act'' 
    includes supplementary payments pursuant to an agreement for 
    Federal administration under section 1616(a) of the Social Security 
    Act, and payments pursuant to an agreement entered into under 
    section 212(b) of Public Law 93-66.

               Subtitle B--Benefits for Disabled Children

SEC. 211. DEFINITION AND ELIGIBILITY RULES.

    (a) Definition of Childhood Disability.--Section 1614(a)(3) (42 
U.S.C. 1382c(a)(3)), as amended by section 105(b)(1) of the Contract 
with America Advancement Act of 1996, is amended--
        (1) in subparagraph (A), by striking ``An individual'' and 
    inserting ``Except as provided in subparagraph (C), an indi- 
    vidual'';
        (2) in subparagraph (A), by striking ``(or, in the case of an 
    individual under the age of 18, if he suffers from any medically 
    determinable physical or mental impairment of comparable 
    severity)'';
        (3) by redesignating subparagraphs (C) through (I) as 
    subparagraphs (D) through (J), respectively;
        (4) by inserting after subparagraph (B) the following new 
    subparagraph:
    ``(C)(i) An individual under the age of 18 shall be considered 
disabled for the purposes of this title if that individual has a 
medically determinable physical or mental impairment, which results in 
marked and severe functional limitations, and which can be expected to 
result in death or which has lasted or can be expected to last for a 
continuous period of not less than 12 months.
    ``(ii) Notwithstanding clause (i), no individual under the age of 
18 who engages in substantial gainful activity (determined in 
accordance with regulations prescribed pursuant to subparagraph (E)) 
may be considered to be disabled.''; and
        (5) in subparagraph (F), as redesignated by paragraph (3), by 
    striking ``(D)'' and inserting ``(E)''.
    (b) Changes to Childhood SSI Regulations.--
        (1) Modification to medical criteria for evaluation of mental 
    and emotional disorders.--The Commissioner of Social Security shall 
    modify sections 112.00C.2. and 112.02B.2.c.(2) of appendix 1 to 
    subpart P of part 404 of title 20, Code of Federal Regulations, to 
    eliminate references to maladaptive behavior in the domain of 
    personal/behavorial function.
        (2) Discontinuance of individualized functional assessment.--
    The Commissioner of Social Security shall discontinue the 
    individualized functional assessment for children set forth in 
    sections 416.924d and 416.924e of title 20, Code of Federal 
    Regulations.
    (c) Medical Improvement Review Standard as it Applies to 
Individuals Under the Age of 18.--Section 1614(a)(4) (42 U.S.C. 
1382(a)(4)) is amended--
        (1) by redesignating subclauses (I) and (II) of clauses (i) and 
    (ii) of subparagraph (B) as items (aa) and (bb), respectively;
        (2) by redesignating clauses (i) and (ii) of subparagraphs (A) 
    and (B) as subclauses (I) and (II), respectively;
        (3) by redesignating subparagraphs (A) through (C) as clauses 
    (i) through (iii), respectively;
        (4) by inserting before clause (i) (as redesignated by 
    paragraph (3)) the following new subparagraph:
        ``(A) in the case of an individual who is age 18 or older--'';
        (5) by inserting after and below subparagraph (A)(iii) (as so 
    redesignated) the following new subparagraph:
        ``(B) in the case of an individual who is under the age of 18--
            ``(i) substantial evidence which demonstrates that there 
        has been medical improvement in the individual's impairment or 
        combination of impairments, and that such impairment or 
        combination of impairments no longer results in marked and 
        severe functional limitations; or
            ``(ii) substantial evidence which demonstrates that, as 
        determined on the basis of new or improved diagnostic 
        techniques or evaluations, the individual's impairment or 
        combination of impairments, is not as disabling as it was 
        considered to be at the time of the most recent prior decision 
        that the individual was under a disability or continued to be 
        under a disability, and such impairment or combination of 
        impairments does not result in marked and severe functional 
        limitations; or'';
        (6) by redesignating subparagraph (D) as subparagraph (C) and 
    by inserting in such subparagraph ``in the case of any 
    individual,'' before ``substantial evidence''; and
        (7) in the first sentence following subparagraph (C) (as 
    redesignated by paragraph (6)), by--
            (A) inserting ``(i)'' before ``to restore''; and
            (B) inserting ``, or (ii) in the case of an individual 
        under the age of 18, to eliminate or improve the individual's 
        impairment or combination of impairments so that it no longer 
        results in marked and severe functional limitations'' 
        immediately before the period.
    (d) Effective Dates, Etc.--
        (1) Effective dates.--
            (A) Subsections (a) and (b).--
                (i) In general.--The provisions of, and amendments made 
            by, subsections (a) and (b) of this section shall apply to 
            any individual who applies for, or whose claim is finally 
            adjudicated with respect to, benefits under title XVI of 
            the Social Security Act on or after the date of the 
            enactment of this Act, without regard to whether 
            regulations have been issued to implement such provisions 
            and amendments.
                (ii) Determination of final adjudication.--For purposes 
            of clause (i), no individual's claim with respect to such 
            benefits may be considered to be finally adjudicated before 
            such date of enactment if, on or after such date, there is 
            pending a request for either administrative or judicial 
            review with respect to such claim that has been denied in 
            whole, or there is pending, with respect to such claim, 
            readjudication by the Commissioner of Social Security 
            pursuant to relief in a class action or implementation by 
            the Commissioner of a court remand order.
            (B) Subsection (c).--The amendments made by subsection (c) 
        of this section shall apply with respect to benefits under 
        title XVI of the Social Security Act for months beginning on or 
        after the date of the enactment of this Act, without regard to 
        whether regulations have been issued to implement such 
        amendments.
        (2) Application to current recipients.--
            (A) Eligibility redeterminations.--During the period 
        beginning on the date of the enactment of this Act and ending 
        on the date which is 1 year after such date of enactment, the 
        Commissioner of Social Security shall redetermine the 
        eligibility of any individual under age 18 who is eligible for 
        supplemental security income benefits by reason of disability 
        under title XVI of the Social Security Act as of the date of 
        the enactment of this Act and whose eligibility for such 
        benefits may terminate by reason of the provisions of, or 
        amendments made by, subsections (a) and (b) of this section. 
        With respect to any redetermination under this subparagraph--
                (i) section 1614(a)(4) of the Social Security Act (42 
            U.S.C. 1382c(a)(4)) shall not apply;
                (ii) the Commissioner of Social Security shall apply 
            the eligibility criteria for new applicants for benefits 
            under title XVI of such Act;
                (iii) the Commissioner shall give such redetermination 
            priority over all continuing eligibility reviews and other 
            reviews under such title; and
                (iv) such redetermination shall be counted as a review 
            or redetermination otherwise required to be made under 
            section 208 of the Social Security Independence and Program 
            Improvements Act of 1994 or any other provision of title 
            XVI of the Social Security Act.
            (B) Grandfather provision.--The provisions of, and 
        amendments made by, subsections (a) and (b) of this section, 
        and the redetermination under subparagraph (A), shall only 
        apply with respect to the benefits of an individual described 
        in subparagraph (A) for months beginning on or after the later 
        of July 1, 1997, or the date of the redetermination with 
        respect to such individual.
            (C) Notice.--Not later than January 1, 1997, the 
        Commissioner of Social Security shall notify an individual 
        described in subparagraph (A) of the provisions of this 
        paragraph.
        (3) Report.--The Commissioner of Social Security shall report 
    to the Congress regarding the progress made in implementing the 
    provisions of, and amendments made by, this section on child 
    disability evaluations not later than 180 days after the date of 
    the enactment of this Act.
        (4) Regulations.--Notwithstanding any other provision of law, 
    the Commissioner of Social Security shall submit for review to the 
    committees of jurisdiction in the Congress any final regulation 
    pertaining to the eligibility of individuals under age 18 for 
    benefits under title XVI of the Social Security Act at least 45 
    days before the effective date of such regulation. The submission 
    under this paragraph shall include supporting documentation 
    providing a cost analysis, workload impact, and projections as to 
    how the regulation will effect the future number of recipients 
    under such title.
        (5) Cap adjustment for ssi administrative work required by 
    welfare reform.--
            (A) Authorization.--For the additional costs of continuing 
        disability reviews and redeterminations under title XVI of the 
        Social Security Act, there is hereby authorized to be 
        appropriated to the Social Security Administration, in addition 
        to amounts authorized under section 201(g)(1)(A) of the Social 
        Security Act, $150,000,000 in fiscal year 1997 and $100,000,000 
        in fiscal year 1998.
            (B) Cap adjustment.--Section 251(b)(2)(H) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985, as amended by 
        section 103(b) of the Contract with America Advancement Act of 
        1996, is amended--
                (i) in clause (i)--

                    (I) in subclause (II) by--

                        (aa) striking ``$25,000,000'' and inserting 
                    ``$175,000,000''; and
                        (bb) striking ``$160,000,000'' and inserting 
                    ``$310,000,000''; and

                    (II) in subclause (III) by--

                        (aa) striking ``$145,000,000'' and inserting 
                    ``$245,000,000''; and
                        (bb) striking ``$370,000,000'' and inserting 
                    ``$470,000,000''; and
                (ii) by amending clause (ii)(I) to read as follows:
                ``(I) the term `continuing disability reviews' means 
            reviews or redeterminations as defined under section 
            201(g)(1)(A) of the Social Security Act and reviews and 
            redeterminations authorized under section 211 of the 
            Personal Responsibility and Work Opportunity Reconciliation 
            Act of 1996;''.
            (C) Adjustments.--Section 606(e)(1)(B) of the Congressional 
        Budget Act of 1974 is amended by adding at the end the 
        following new sentences: ``If the adjustments referred to in 
        the preceding sentence are made for an appropriations measure 
        that is not enacted into law, then the Chairman of the 
        Committee on the Budget of the House of Representatives shall, 
        as soon as practicable, reverse those adjustments. The Chairman 
        of the Committee on the Budget of the House of Representatives 
        shall submit any adjustments made under this subparagraph to 
        the House of Representatives and have such adjustments 
        published in the Congressional Record.''.
            (D) Conforming amendment.--Section 103(d)(1) of the 
        Contract with America Advancement Act of 1996 (42 U.S.C. 401 
        note) is amended by striking ``medicaid programs.'' and 
        inserting ``medicaid programs, except that the amounts 
        appropriated pursuant to the authorization and discretionary 
        spending allowance provisions in section 211(d)(2)(5) of the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 shall be used only for continuing disability reviews 
        and redeterminations under title XVI of the Social Security 
        Act.''.
        (6) Benefits under title xvi.--For purposes of this subsection, 
    the term ``benefits under title XVI of the Social Security Act'' 
    includes supplementary payments pursuant to an agreement for 
    Federal administration under section 1616(a) of the Social Security 
    Act, and payments pursuant to an agreement entered into under 
    section 212(b) of Public Law 93-66.

SEC. 212. ELIGIBILITY REDETERMINATIONS AND CONTINUING DISABILITY 
              REVIEWS.

    (a) Continuing Disability Reviews Relating to Certain Children.--
Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as redesignated by 
section 211(a)(3) of this Act, is amended--
        (1) by inserting ``(i)'' after ``(H)''; and
        (2) by adding at the end the following new clause:
    ``(ii)(I) Not less frequently than once every 3 years, the 
Commissioner shall review in accordance with paragraph (4) the 
continued eligibility for benefits under this title of each individual 
who has not attained 18 years of age and is eligible for such benefits 
by reason of an impairment (or combination of impairments) which is 
likely to improve (or, at the option of the Commissioner, which is 
unlikely to improve).
    ``(II) A representative payee of a recipient whose case is reviewed 
under this clause shall present, at the time of review, evidence 
demonstrating that the recipient is, and has been, receiving treatment, 
to the extent considered medically necessary and available, of the 
condition which was the basis for providing benefits under this title.
    ``(III) If the representative payee refuses to comply without good 
cause with the requirements of subclause (II), the Commissioner of 
Social Security shall, if the Commissioner determines it is in the best 
interest of the individual, promptly suspend payment of benefits to the 
representative payee, and provide for payment of benefits to an 
alternative representative payee of the individual or, if the interest 
of the individual under this title would be served thereby, to the 
individual.
    ``(IV) Subclause (II) shall not apply to the representative payee 
of any individual with respect to whom the Commissioner determines such 
application would be inappropriate or unnecessary. In making such 
determination, the Commissioner shall take into consideration the 
nature of the individual's impairment (or combination of impairments). 
Section 1631(c) shall not apply to a finding by the Commissioner that 
the requirements of subclause (II) should not apply to an individual's 
representative payee.''.
    (b) Disability Eligibility Redeterminations Required for SSI 
Recipients Who Attain 18 Years of Age.--
        (1) In general.--Section 1614(a)(3)(H) (42 U.S.C. 
    1382c(a)(3)(H)), as amended by subsection (a) of this section, is 
    amended by adding at the end the following new clause:
    ``(iii) If an individual is eligible for benefits under this title 
by reason of disability for the month preceding the month in which the 
individual attains the age of 18 years, the Commissioner shall 
redetermine such eligibility--
        ``(I) during the 1-year period beginning on the individual's 
    18th birthday; and
        ``(II) by applying the criteria used in determining the initial 
    eligibility for applicants who are age 18 or older.
With respect to a redetermination under this clause, paragraph (4) 
shall not apply and such redetermination shall be considered a 
substitute for a review or redetermination otherwise required under any 
other provision of this subparagraph during that 1-year period.''.
        (2) Conforming repeal.--Section 207 of the Social Security 
    Independence and Program Improvements Act of 1994 (42 U.S.C. 1382 
    note; 108 Stat. 1516) is hereby repealed.
    (c) Continuing Disability Review Required for Low Birth Weight 
Babies.--Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as amended 
by subsections (a) and (b) of this section, is amended by adding at the 
end the following new clause:
    ``(iv)(I) Not later than 12 months after the birth of an 
individual, the Commissioner shall review in accordance with paragraph 
(4) the continuing eligibility for benefits under this title by reason 
of disability of such individual whose low birth weight is a 
contributing factor material to the Commissioner's determination that 
the individual is disabled.
    ``(II) A review under subclause (I) shall be considered a 
substitute for a review otherwise required under any other provision of 
this subparagraph during that 12-month period.
    ``(III) A representative payee of a recipient whose case is 
reviewed under this clause shall present, at the time of review, 
evidence demonstrating that the recipient is, and has been, receiving 
treatment, to the extent considered medically necessary and available, 
of the condition which was the basis for providing benefits under this 
title.
    ``(IV) If the representative payee refuses to comply without good 
cause with the requirements of subclause (III), the Commissioner of 
Social Security shall, if the Commissioner determines it is in the best 
interest of the individual, promptly suspend payment of benefits to the 
representative payee, and provide for payment of benefits to an 
alternative representative payee of the individual or, if the interest 
of the individual under this title would be served thereby, to the 
individual.
    ``(V) Subclause (III) shall not apply to the representative payee 
of any individual with respect to whom the Commissioner determines such 
application would be inappropriate or unnecessary. In making such 
determination, the Commissioner shall take into consideration the 
nature of the individual's impairment (or combination of impairments). 
Section 1631(c) shall not apply to a finding by the Commissioner that 
the requirements of subclause (III) should not apply to an individual's 
representative payee.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to benefits for months beginning on or after the date of the 
enactment of this Act, without regard to whether regulations have been 
issued to implement such amendments.

SEC. 213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

    (a) Requirement To Establish Account.--Section 1631(a)(2) (42 
U.S.C. 1383(a)(2)) is amended--
        (1) by redesignating subparagraphs (F) and (G) as subparagraphs 
    (G) and (H), respectively; and
        (2) by inserting after subparagraph (E) the following new 
    subparagraph:
    ``(F)(i)(I) Each representative payee of an eligible individual 
under the age of 18 who is eligible for the payment of benefits 
described in subclause (II) shall establish on behalf of such 
individual an account in a financial institution into which such 
benefits shall be paid, and shall thereafter maintain such account for 
use in accordance with clause (ii).
    ``(II) Benefits described in this subclause are past-due monthly 
benefits under this title (which, for purposes of this subclause, 
include State supplementary payments made by the Commissioner pursuant 
to an agreement under section 1616 or section 212(b) of Public Law 93-
66) in an amount (after any withholding by the Commissioner for 
reimbursement to a State for interim assistance under subsection (g)) 
that exceeds the product of--
        ``(aa) 6, and
        ``(bb) the maximum monthly benefit payable under this title to 
    an eligible individual.
    ``(ii)(I) A representative payee shall use funds in the account 
established under clause (i) to pay for allowable expenses described in 
subclause (II).
    ``(II) An allowable expense described in this subclause is an 
expense for--
        ``(aa) education or job skills training;
        ``(bb) personal needs assistance;
        ``(cc) special equipment;
        ``(dd) housing modification;
        ``(ee) medical treatment;
        ``(ff) therapy or rehabilitation; or
        ``(gg) any other item or service that the Commissioner 
    determines to be appropriate;
provided that such expense benefits such individual and, in the case of 
an expense described in item (bb), (cc), (dd), (ff), or (gg), is 
related to the impairment (or combination of impairments) of such 
individual.
    ``(III) The use of funds from an account established under clause 
(i) in any manner not authorized by this clause--
        ``(aa) by a representative payee shall be considered a 
    misapplication of benefits for all purposes of this paragraph, and 
    any representative payee who knowingly misapplies benefits from 
    such an account shall be liable to the Commissioner in an amount 
    equal to the total amount of such benefits; and
        ``(bb) by an eligible individual who is his or her own payee 
    shall be considered a misapplication of benefits for all purposes 
    of this paragraph and the total amount of such benefits so used 
    shall be considered to be the uncompensated value of a disposed 
    resource and shall be subject to the provisions of section 1613(c).
    ``(IV) This clause shall continue to apply to funds in the account 
after the child has reached age 18, regardless of whether benefits are 
paid directly to the beneficiary or through a representative payee.
    ``(iii) The representative payee may deposit into the account 
established pursuant to clause (i)--
        ``(I) past-due benefits payable to the eligible individual in 
    an amount less than that specified in clause (i)(II), and
        ``(II) any other funds representing an underpayment under this 
    title to such individual, provided that the amount of such 
    underpayment is equal to or exceeds the maximum monthly benefit 
    payable under this title to an eligible individual.
    ``(iv) The Commissioner of Social Security shall establish a system 
for accountability monitoring whereby such representative payee shall 
report, at such time and in such manner as the Commissioner shall 
require, on activity respecting funds in the account established 
pursuant to clause (i).''.
    (b) Exclusion From Resources.--Section 1613(a) (42 U.S.C. 1382b(a)) 
is amended--
        (1) by striking ``and'' at the end of paragraph (10);
        (2) by striking the period at the end of paragraph (11) and 
    inserting ``; and''; and
        (3) by inserting after paragraph (11) the following new 
    paragraph:
        ``(12) any account, including accrued interest or other 
    earnings thereon, established and maintained in accordance with 
    section 1631(a)(2)(F).''.
    (c) Exclusion From Income.--Section 1612(b) (42 U.S.C. 1382a(b)) is 
amended--
        (1) by striking ``and'' at the end of paragraph (19);
        (2) by striking the period at the end of paragraph (20) and 
    inserting ``; and''; and
        (3) by adding at the end the following new paragraph:
        ``(21) the interest or other earnings on any account 
    established and maintained in accordance with section 
    1631(a)(2)(F).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to payments made after the date of the enactment of this Act.

SEC. 214. REDUCTION IN CASH BENEFITS PAYABLE TO INSTITUTIONALIZED 
              INDIVIDUALS WHOSE MEDICAL COSTS ARE COVERED BY PRIVATE 
              INSURANCE.

    (a) In General.--Section 1611(e)(1)(B) (42 U.S.C. 1382(e)(1)(B)) is 
amended by inserting ``or, in the case of an eligible individual who is 
a child under the age of 18, receiving payments (with respect to such 
individual) under any health insurance policy issued by a private 
provider of such insurance'' after ``section 1614(f)(2)(B),''.
    (b) Effective Date.--The amendment made by this section shall apply 
to benefits for months beginning 90 or more days after the date of the 
enactment of this Act, without regard to whether regulations have been 
issued to implement such amendments.

SEC. 215. REGULATIONS.

    Within 3 months after the date of the enactment of this Act, the 
Commissioner of Social Security shall prescribe such regulations as may 
be necessary to implement the amendments made by this subtitle.

              Subtitle C--Additional Enforcement Provision

SEC. 221. INSTALLMENT PAYMENT OF LARGE PAST-DUE SUPPLEMENTAL SECURITY 
              INCOME BENEFITS.

    (a) In General.--Section 1631(a) (42 U.S.C. 1383) is amended by 
adding at the end the following new paragraph:
    ``(10)(A) If an individual is eligible for past-due monthly 
benefits under this title in an amount that (after any withholding for 
reimbursement to a State for interim assistance under subsection (g)) 
equals or exceeds the product of--
        ``(i) 12, and
        ``(ii) the maximum monthly benefit payable under this title to 
    an eligible individual (or, if appropriate, to an eligible indi- 
    vidual and eligible spouse),
then the payment of such past-due benefits (after any such 
reimbursement to a State) shall be made in installments as provided in 
subparagraph (B).
    ``(B)(i) The payment of past-due benefits subject to this 
subparagraph shall be made in not to exceed 3 installments that are 
made at 6-month intervals.
    ``(ii) Except as provided in clause (iii), the amount of each of 
the first and second installments may not exceed an amount equal to the 
product of clauses (i) and (ii) of subparagraph (A).
    ``(iii) In the case of an individual who has--
        ``(I) outstanding debt attributable to--
            ``(aa) food,
            ``(bb) clothing,
            ``(cc) shelter, or
            ``(dd) medically necessary services, supplies or equipment, 
        or medicine; or
        ``(II) current expenses or expenses anticipated in the near 
    term attributable to--
            ``(aa) medically necessary services, supplies or equipment, 
        or medicine, or
            ``(bb) the purchase of a home, and
such debt or expenses are not subject to reimbursement by a public 
assistance program, the Secretary under title XVIII, a State plan 
approved under title XIX, or any private entity legally liable to 
provide payment pursuant to an insurance policy, pre-paid plan, or 
other arrangement, the limitation specified in clause (ii) may be 
exceeded by an amount equal to the total of such debt and expenses.
    ``(C) This paragraph shall not apply to any individual who, at the 
time of the Commissioner's determination that such individual is 
eligible for the payment of past-due monthly benefits under this 
title--
        ``(i) is afflicted with a medically determinable impairment 
    that is expected to result in death within 12 months; or
        ``(ii) is ineligible for benefits under this title and the 
    Commissioner determines that such individual is likely to remain 
    ineligible for the next 12 months.
    ``(D) For purposes of this paragraph, the term `benefits under this 
title' includes supplementary payments pursuant to an agreement for 
Federal administration under section 1616(a), and payments pursuant to 
an agreement entered into under section 212(b) of Public Law 93-66.''.
    (b) Conforming Amendment.--Section 1631(a)(1) (42 U.S.C. 
1383(a)(1)) is amended by inserting ``(subject to paragraph (10))'' 
immediately before ``in such installments''.
    (c) Effective Date.--
        (1) In general.--The amendments made by this section are 
    effective with respect to past-due benefits payable under title XVI 
    of the Social Security Act after the third month following the 
    month in which this Act is enacted.
        (2) Benefits payable under title xvi.--For purposes of this 
    subsection, the term ``benefits payable under title XVI of the 
    Social Security Act'' includes supplementary payments pursuant to 
    an agreement for Federal administration under section 1616(a) of 
    the Social Security Act, and payments pursuant to an agreement 
    entered into under section 212(b) of Public Law 93-66.

SEC. 222. REGULATIONS.

    Within 3 months after the date of the enactment of this Act, the 
Commissioner of Social Security shall prescribe such regulations as may 
be necessary to implement the amendments made by this subtitle.

   Subtitle D--Studies Regarding Supplemental Security Income Program

SEC. 231. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY INCOME PROGRAM.

    Title XVI (42 U.S.C. 1381 et seq.), as amended by section 105(b)(3) 
of the Contract with America Advancement Act of 1996, is amended by 
adding at the end the following new section:

                        ``ANNUAL REPORT ON PROGRAM

    ``Sec. 1637. (a) Not later than May 30 of each year, the 
Commissioner of Social Security shall prepare and deliver a report 
annually to the President and the Congress regarding the program under 
this title, including--
        ``(1) a comprehensive description of the program;
        ``(2) historical and current data on allowances and denials, 
    including number of applications and allowance rates for initial 
    determinations, reconsideration determinations, administrative law 
    judge hearings, appeals council reviews, and Federal court 
    decisions;
        ``(3) historical and current data on characteristics of 
    recipients and program costs, by recipient group (aged, blind, 
    disabled adults, and disabled children);
        ``(4) historical and current data on prior enrollment by 
    recipients in public benefit programs, including State programs 
    funded under part A of title IV of the Social Security Act and 
    State general assistance programs;
        ``(5) projections of future number of recipients and program 
    costs, through at least 25 years;
        ``(6) number of redeterminations and continuing dis- ability 
    reviews, and the outcomes of such redeterminations and reviews;
        ``(7) data on the utilization of work incentives;
        ``(8) detailed information on administrative and other program 
    operation costs;
        ``(9) summaries of relevant research undertaken by the Social 
    Security Administration, or by other researchers;
        ``(10) State supplementation program operations;
        ``(11) a historical summary of statutory changes to this title; 
    and
        ``(12) such other information as the Commissioner deems useful.
    ``(b) Each member of the Social Security Advisory Board shall be 
permitted to provide an individual report, or a joint report if agreed, 
of views of the program under this title, to be included in the annual 
report required under this section.''.

SEC. 232. STUDY BY GENERAL ACCOUNTING OFFICE.

    Not later than January 1, 1999, the Comptroller General of the 
United States shall study and report on--
        (1) the impact of the amendments made by, and the provisions 
    of, this title on the supplemental security income program under 
    title XVI of the Social Security Act; and
        (2) extra expenses incurred by families of children receiving 
    benefits under such title that are not covered by other Federal, 
    State, or local programs.

                        TITLE III--CHILD SUPPORT

SEC. 300. REFERENCE TO SOCIAL SECURITY ACT.

    Except as otherwise specifically provided, wherever in this title 
an amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

     Subtitle A--Eligibility for Services; Distribution of Payments

SEC. 301. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCEMENT 
              SERVICES.

    (a) State Plan Requirements.--Section 454 (42 U.S.C. 654) is 
amended--
        (1) by striking paragraph (4) and inserting the following new 
    paragraph:
        ``(4) provide that the State will--
            ``(A) provide services relating to the establishment of 
        paternity or the establishment, modification, or enforcement of 
        child support obligations, as appropriate, under the plan with 
        respect to--
                ``(i) each child for whom (I) assistance is provided 
            under the State program funded under part A of this title, 
            (II) benefits or services for foster care maintenance are 
            provided under the State program funded under part E of 
            this title, or (III) medical assistance is provided under 
            the State plan approved under title XIX, unless, in 
            accordance with paragraph (29), good cause or other 
            exceptions exist;
                ``(ii) any other child, if an individual applies for 
            such services with respect to the child; and
            ``(B) enforce any support obligation established with 
        respect to--
                ``(i) a child with respect to whom the State provides 
            services under the plan; or
                ``(ii) the custodial parent of such a child;''; and
        (2) in paragraph (6)--
            (A) by striking ``provide that'' and inserting ``provide 
        that--'';
            (B) by striking subparagraph (A) and inserting the 
        following new subparagraph:
            ``(A) services under the plan shall be made available to 
        residents of other States on the same terms as to residents of 
        the State submitting the plan;'';
            (C) in subparagraph (B), by inserting ``on individuals not 
        receiving assistance under any State program funded under part 
        A'' after ``such services shall be imposed'';
            (D) in each of subparagraphs (B), (C), (D), and (E)--
                (i) by indenting the subparagraph in the same manner 
            as, and aligning the left margin of the subparagraph with 
            the left margin of, the matter inserted by subparagraph (B) 
            of this paragraph; and
                (ii) by striking the final comma and inserting a 
            semicolon; and
            (E) in subparagraph (E), by indenting each of clauses (i) 
        and (ii) 2 additional ems.
    (b) Continuation of Services for Families Ceasing To Receive 
Assistance Under the State Program Funded Under Part A.--Section 454 
(42 U.S.C. 654) is amended--
        (1) by striking ``and'' at the end of paragraph (23);
        (2) by striking the period at the end of paragraph (24) and 
    inserting ``; and''; and
        (3) by adding after paragraph (24) the following new paragraph:
        ``(25) provide that if a family with respect to which services 
    are provided under the plan ceases to receive assistance under the 
    State program funded under part A, the State shall provide 
    appropriate notice to the family and continue to provide such 
    services, subject to the same conditions and on the same basis as 
    in the case of other individuals to whom services are furnished 
    under the plan, except that an application or other request to 
    continue services shall not be required of such a family and 
    paragraph (6)(B) shall not apply to the family.''.
    (c) Conforming Amendments.--
        (1) Section 452(b) (42 U.S.C. 652(b)) is amended by striking 
    ``454(6)'' and inserting ``454(4)''.
        (2) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended by 
    striking ``454(6)'' each place it appears and inserting 
    ``454(4)(A)(ii)''.
        (3) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amended by 
    striking ``in the case of overdue support which a State has agreed 
    to collect under section 454(6)'' and inserting ``in any other 
    case''.
        (4) Section 466(e) (42 U.S.C. 666(e)) is amended by striking 
    ``paragraph (4) or (6) of section 454'' and inserting ``section 
    454(4)''.

SEC. 302. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS.

    (a) In General.--Section 457 (42 U.S.C. 657) is amended to read as 
follows:

``SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

    ``(a) In General.--Subject to subsection (e), an amount collected 
on behalf of a family as support by a State pursuant to a plan approved 
under this part shall be distributed as follows:
        ``(1) Families receiving assistance.--In the case of a family 
    receiving assistance from the State, the State shall--
            ``(A) pay to the Federal Government the Federal share of 
        the amount so collected; and
            ``(B) retain, or distribute to the family, the State share 
        of the amount so collected.
        ``(2) Families that formerly received assistance.--In the case 
    of a family that formerly received assistance from the State:
            ``(A) Current support payments.--To the extent that the 
        amount so collected does not exceed the amount required to be 
        paid to the family for the month in which collected, the State 
        shall distribute the amount so collected to the family.
            ``(B) Payments of arrearages.--To the extent that the 
        amount so collected exceeds the amount required to be paid to 
        the family for the month in which collected, the State shall 
        distribute the amount so collected as follows:
                ``(i) Distribution of arrearages that accrued after the 
            family ceased to receive assistance.--

                    ``(I) Pre-october 1997.--Except as provided in 
                subclause (II), the provisions of this section (other 
                than subsection (b)(1)) as in effect and applied on the 
                day before the date of the enactment of section 302 of 
                the Personal Responsibility and Work Opportunity Act 
                Reconciliation of 1996 shall apply with respect to the 
                distribution of support arrearages that--

                        ``(aa) accrued after the family ceased to 
                    receive assistance, and
                        ``(bb) are collected before October 1, 1997.

                    ``(II) Post-september 1997.--With respect to the 
                amount so collected on or after October 1, 1997 (or 
                before such date, at the option of the State)--

                        ``(aa) In general.--The State shall first 
                    distribute the amount so collected (other than any 
                    amount described in clause (iv)) to the family to 
                    the extent necessary to satisfy any support 
                    arrearages with respect to the family that accrued 
                    after the family ceased to receive assistance from 
                    the State.
                        ``(bb) Reimbursement of governments for 
                    assistance provided to the family.--After the 
                    application of division (aa) and clause 
                    (ii)(II)(aa) with respect to the amount so 
                    collected, the State shall retain the State share 
                    of the amount so collected, and pay to the Federal 
                    Government the Federal share (as defined in 
                    subsection (c)(2)) of the amount so collected, but 
                    only to the extent necessary to reimburse amounts 
                    paid to the family as assistance by the State.
                        ``(cc) Distribution of the remainder to the 
                    family.--To the extent that neither division (aa) 
                    nor division (bb) applies to the amount so 
                    collected, the State shall distribute the amount to 
                    the family.
                ``(ii) Distribution of arrearages that accrued before 
            the family received assistance.--

                    ``(I) Pre-october 2000.--Except as provided in 
                subclause (II), the provisions of this section (other 
                than subsection (b)(1)) as in effect and applied on the 
                day before the date of the enactment of section 302 of 
                the Personal Responsibility and Work Opportunity 
                Reconciliation Act of 1996 shall apply with respect to 
                the distribution of support arrearages that--

                        ``(aa) accrued before the family received 
                    assistance, and
                        ``(bb) are collected before October 1, 2000.

                    ``(II) Post-september 2000.--Unless, based on the 
                report required by paragraph (4), the Congress 
                determines otherwise, with respect to the amount so 
                collected on or after October 1, 2000 (or before such 
                date, at the option of the State)--

                        ``(aa) In general.--The State shall first 
                    distribute the amount so collected (other than any 
                    amount described in clause (iv)) to the family to 
                    the extent necessary to satisfy any support 
                    arrearages with respect to the family that accrued 
                    before the family received assistance from the 
                    State.
                        ``(bb) Reimbursement of governments for 
                    assistance provided to the family.--After the 
                    application of clause (i)(II)(aa) and division (aa) 
                    with respect to the amount so collected, the State 
                    shall retain the State share of the amount so 
                    collected, and pay to the Federal Government the 
                    Federal share (as defined in subsection (c)(2)) of 
                    the amount so collected, but only to the extent 
                    necessary to reimburse amounts paid to the family 
                    as assistance by the State.
                        ``(cc) Distribution of the remainder to the 
                    family.--To the extent that neither division (aa) 
                    nor division (bb) applies to the amount so 
                    collected, the State shall distribute the amount to 
                    the family.
                ``(iii) Distribution of arrearages that accrued while 
            the family received assistance.--In the case of a family 
            described in this subparagraph, the provisions of paragraph 
            (1) shall apply with respect to the distribution of support 
            arrearages that accrued while the family received 
            assistance.
                ``(iv) Amounts collected pursuant to section 464.--
            Notwithstanding any other provision of this section, any 
            amount of support collected pursuant to section 464 shall 
            be retained by the State to the extent past-due support has 
            been assigned to the State as a condition of receiving 
            assistance from the State, up to the amount necessary to 
            reimburse the State for amounts paid to the family as 
            assistance by the State. The State shall pay to the Federal 
            Government the Federal share of the amounts so retained. To 
            the extent the amount collected pursuant to section 464 
            exceeds the amount so retained, the State shall distribute 
            the excess to the family.
                ``(v) Ordering rules for distributions.--For purposes 
            of this subparagraph, unless an earlier effective date is 
            required by this section, effective October 1, 2000, the 
            State shall treat any support arrearages collected, except 
            for amounts collected pursuant to section 464, as accruing 
            in the following order:

                    ``(I) To the period after the family ceased to 
                receive assistance.
                    ``(II) To the period before the family received 
                assistance.
                    ``(III) To the period while the family was 
                receiving assistance.

        ``(3) Families that never received assistance.--In the case of 
    any other family, the State shall distribute the amount so 
    collected to the family.
        ``(4) Families under certain agreements.--In the case of a 
    family receiving assistance from an Indian tribe, distribute the 
    amount so collected pursuant to an agreement entered into pursuant 
    to a State plan under section 454(33).
        ``(5) Study and report.--Not later than October 1, 1998, the 
    Secretary shall report to the Congress the Secretary's findings 
    with respect to--
            ``(A) whether the distribution of post-assistance 
        arrearages to families has been effective in moving people off 
        of welfare and keeping them off of welfare;
            ``(B) whether early implementation of a pre-assistance 
        arrearage program by some States has been effective in moving 
        people off of welfare and keeping them off of welfare;
            ``(C) what the overall impact has been of the amendments 
        made by the Personal Responsibility and Work Opportunity Act of 
        1996 with respect to child support enforcement in moving people 
        off of welfare and keeping them off of welfare; and
            ``(D) based on the information and data the Secretary has 
        obtained, what changes, if any, should be made in the policies 
        related to the distribution of child support arrearages.
    ``(b) Continuation of Assignments.--Any rights to support 
obligations, which were assigned to a State as a condition of receiving 
assistance from the State under part A and which were in effect on the 
day before the date of the enactment of the Personal Responsibility and 
Work Opportunity Act of 1996, shall remain assigned after such date.
    ``(c) Definitions.--As used in subsection (a):
        ``(1) Assistance.--The term `assistance from the State' means--
            ``(A) assistance under the State program funded under part 
        A or under the State plan approved under part A of this title 
        (as in effect on the day before the date of the enactment of 
        the Personal Responsibility and Work Opportunity Act of 1996); 
        and
            ``(B) foster care maintenance payments under the State plan 
        approved under part E of this title.
        ``(2) Federal share.--The term `Federal share' means that 
    portion of the amount collected resulting from the application of 
    the Federal medical assistance percentage in effect for the fiscal 
    year in which the amount is collected.
        ``(3) Federal medical assistance percentage.--The term `Federal 
    medical assistance percentage' means--
            ``(A) the Federal medical assistance percentage (as defined 
        in section 1118), in the case of Puerto Rico, the Virgin 
        Islands, Guam, and American Samoa; or
            ``(B) the Federal medical assistance percentage (as defined 
        in section 1905(b), as in effect on September 30, 1996) in the 
        case of any other State.
        ``(4) State share.--The term `State share' means 100 percent 
    minus the Federal share.
    ``(d) Hold Harmless Provision.--If the amounts collected which 
could be retained by the State in the fiscal year (to the extent 
necessary to reimburse the State for amounts paid to families as 
assistance by the State) are less than the State share of the amounts 
collected in fiscal year 1995 (determined in accordance with section 
457 as in effect on the day before the date of the enactment of the 
Personal Responsibility and Work Opportunity Act of 1996), the State 
share for the fiscal year shall be an amount equal to the State share 
in fiscal year 1995.
    ``(e) Gap Payments Not Subject to Distribution Under This 
Section.--At State option, this section shall not apply to any amount 
collected on behalf of a family as support by the State (and paid to 
the family in addition to the amount of assistance otherwise payable to 
the family) pursuant to a plan approved under this part if such amount 
would have been paid to the family by the State under section 
402(a)(28), as in effect and applied on the day before the date of the 
enactment of section 302 of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996. For purposes of subsection (d), 
the State share of such amount paid to the family shall be considered 
amounts which could be retained by the State if such payments were 
reported by the State as part of the State share of amounts collected 
in fiscal year 1995.''.
    (b) Conforming Amendments.--
        (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is amended by 
    striking ``section 457(b)(4) or (d)(3)'' and inserting ``section 
    457''.
        (2) Section 454 (42 U.S.C. 654) is amended--
            (A) in paragraph (11)--
                (i) by striking ``(11)'' and inserting ``(11)(A)''; and
                (ii) by inserting after the semicolon ``and''; and
            (B) by redesignating paragraph (12) as subparagraph (B) of 
        paragraph (11).
    (c) Effective Dates.--
        (1) In General.--Except as provided in paragraph (2), the 
    amendments made by this section shall be effective on October 1, 
    1996, or earlier at the State's option.
        (2) Conforming amendments.--The amendments made by subsection 
    (b)(2) shall become effective on the date of the enactment of this 
    Act.

SEC. 303. PRIVACY SAFEGUARDS.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by section 301(b) of this Act, is amended--
        (1) by striking ``and'' at the end of paragraph (24);
        (2) by striking the period at the end of paragraph (25) and 
    inserting ``; and''; and
        (3) by adding after paragraph (25) the following new paragraph:
        ``(26) will have in effect safeguards, applicable to all 
    confidential information handled by the State agency, that are 
    designed to protect the privacy rights of the parties, including--
            ``(A) safeguards against unauthorized use or disclosure of 
        information relating to proceedings or actions to establish 
        paternity, or to establish or enforce support;
            ``(B) prohibitions against the release of information on 
        the whereabouts of 1 party to another party against whom a 
        protective order with respect to the former party has been 
        entered; and
            ``(C) prohibitions against the release of information on 
        the whereabouts of 1 party to another party if the State has 
        reason to believe that the release of the information may 
        result in physical or emotional harm to the former party.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective on October 1, 1997.

SEC. 304. RIGHTS TO NOTIFICATION OF HEARINGS.

    (a) In General.--Section 454 (42 U.S.C. 654), as amended by section 
302(b)(2) of this Act, is amended by inserting after paragraph (11) the 
following new paragraph:
        ``(12) provide for the establishment of procedures to require 
    the State to provide individuals who are applying for or receiving 
    services under the State plan, or who are parties to cases in which 
    services are being provided under the State plan--
            ``(A) with notice of all proceedings in which support 
        obligations might be established or modified; and
            ``(B) with a copy of any order establishing or modifying a 
        child support obligation, or (in the case of a petition for 
        modification) a notice of determination that there should be no 
        change in the amount of the child support award, within 14 days 
        after issuance of such order or determination;''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective on October 1, 1997.

                  Subtitle B--Locate and Case Tracking

SEC. 311. STATE CASE REGISTRY.

    Section 454A, as added by section 344(a)(2) of this Act, is amended 
by adding at the end the following new subsections:
    ``(e) State Case Registry.--
        ``(1) Contents.--The automated system required by this section 
    shall include a registry (which shall be known as the `State case 
    registry') that contains records with respect to--
            ``(A) each case in which services are being provided by the 
        State agency under the State plan approved under this part; and
            ``(B) each support order established or modified in the 
        State on or after October 1, 1998.
        ``(2) Linking of local registries.--The State case registry may 
    be established by linking local case registries of support orders 
    through an automated information network, subject to this section.
        ``(3) Use of standardized data elements.--Such records shall 
    use standardized data elements for both parents (such as names, 
    social security numbers and other uniform identification numbers, 
    dates of birth, and case identification numbers), and contain such 
    other information (such as on case status) as the Secretary may 
    require.
        ``(4) Payment records.--Each case record in the State case 
    registry with respect to which services are being provided under 
    the State plan approved under this part and with respect to which a 
    support order has been established shall include a record of--
            ``(A) the amount of monthly (or other periodic) support 
        owed under the order, and other amounts (including arrearages, 
        interest or late payment penalties, and fees) due or overdue 
        under the order;
            ``(B) any amount described in subparagraph (A) that has 
        been collected;
            ``(C) the distribution of such collected amounts;
            ``(D) the birth date of any child for whom the order 
        requires the provision of support; and
            ``(E) the amount of any lien imposed with respect to the 
        order pursuant to section 466(a)(4).
        ``(5) Updating and monitoring.--The State agency operating the 
    automated system required by this section shall promptly establish 
    and update, maintain, and regularly monitor, case records in the 
    State case registry with respect to which services are being 
    provided under the State plan approved under this part, on the 
    basis of--
            ``(A) information on administrative actions and 
        administrative and judicial proceedings and orders relating to 
        paternity and support;
            ``(B) information obtained from comparison with Federal, 
        State, or local sources of information;
            ``(C) information on support collections and distributions; 
        and
            ``(D) any other relevant information.
    ``(f) Information Comparisons and Other Disclosures of 
Information.--The State shall use the automated system required by this 
section to extract information from (at such times, and in such 
standardized format or formats, as may be required by the Secretary), 
to share and compare information with, and to receive information from, 
other data bases and information comparison services, in order to 
obtain (or provide) information necessary to enable the State agency 
(or the Secretary or other State or Federal agencies) to carry out this 
part, subject to section 6103 of the Internal Revenue Code of 1986. 
Such information comparison activities shall include the following:
        ``(1) Federal case registry of child support orders.--
    Furnishing to the Federal Case Registry of Child Support Orders 
    established under section 453(h) (and update as necessary, with 
    information including notice of expiration of orders) the minimum 
    amount of information on child support cases recorded in the State 
    case registry that is necessary to operate the registry (as 
    specified by the Secretary in regulations).
        ``(2) Federal parent locator service.--Exchanging information 
    with the Federal Parent Locator Service for the purposes specified 
    in section 453.
        ``(3) Temporary family assistance and medicaid agencies.--
    Exchanging information with State agencies (of the State and of 
    other States) administering programs funded under part A, programs 
    operated under a State plan approved under title XIX, and other 
    programs designated by the Secretary, as necessary to perform State 
    agency responsibilities under this part and under such programs.
        ``(4) Intrastate and interstate information comparisons.--
    Exchanging information with other agencies of the State, agencies 
    of other States, and interstate information networks, as necessary 
    and appropriate to carry out (or assist other States to carry out) 
    the purposes of this part.''.

SEC. 312. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 301(b) and 303(a) of this Act, is amended--
        (1) by striking ``and'' at the end of paragraph (25);
        (2) by striking the period at the end of paragraph (26) and 
    inserting ``; and''; and
        (3) by adding after paragraph (26) the following new paragraph:
        ``(27) provide that, on and after October 1, 1998, the State 
    agency will--
            ``(A) operate a State disbursement unit in accordance with 
        section 454B; and
            ``(B) have sufficient State staff (consisting of State 
        employees) and (at State option) contractors reporting directly 
        to the State agency to--
                ``(i) monitor and enforce support collections through 
            the unit in cases being enforced by the State pursuant to 
            section 454(4) (including carrying out the automated data 
            processing responsibilities described in section 454A(g)); 
            and
                ``(ii) take the actions described in section 466(c)(1) 
            in appropriate cases.''.
    (b) Establishment of State Disbursement Unit.--Part D of title IV 
(42 U.S.C. 651-669), as amended by section 344(a)(2) of this Act, is 
amended by inserting after section 454A the following new section:

``SEC. 454B. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

    ``(a) State Disbursement Unit.--
        ``(1) In general.--In order for a State to meet the 
    requirements of this section, the State agency must establish and 
    operate a unit (which shall be known as the `State disbursement 
    unit') for the collection and disbursement of payments under 
    support orders--
            ``(A) in all cases being enforced by the State pursuant to 
        section 454(4); and
            ``(B) in all cases not being enforced by the State under 
        this part in which the support order is initially issued in the 
        State on or after January 1, 1994, and in which the income of 
        the noncustodial parent is subject to withholding pursuant to 
        section 466(a)(8)(B).
        ``(2) Operation.--The State disbursement unit shall be 
    operated--
            ``(A) directly by the State agency (or 2 or more State 
        agencies under a regional cooperative agreement), or (to the 
        extent appropriate) by a contractor responsible directly to the 
        State agency; and
            ``(B) except in cases described in paragraph (1)(B), in 
        coordination with the automated system established by the State 
        pursuant to section 454A.
        ``(3) Linking of local disbursement units.--The State 
    disbursement unit may be established by linking local disbursement 
    units through an automated information network, subject to this 
    section, if the Secretary agrees that the system will not cost more 
    nor take more time to establish or operate than a centralized 
    system. In addition, employers shall be given 1 location to which 
    income withholding is sent.
    ``(b) Required Procedures.--The State disbursement unit shall use 
automated procedures, electronic processes, and computer-driven 
technology to the maximum extent feasible, efficient, and economical, 
for the collection and disbursement of support payments, including 
procedures--
        ``(1) for receipt of payments from parents, employers, and 
    other States, and for disbursements to custodial parents and other 
    obligees, the State agency, and the agencies of other States;
        ``(2) for accurate identification of payments;
        ``(3) to ensure prompt disbursement of the custodial parent's 
    share of any payment; and
        ``(4) to furnish to any parent, upon request, timely 
    information on the current status of support payments under an 
    order requiring payments to be made by or to the parent, except 
    that in cases described in subsection (a)(1)(B), the State 
    disbursement unit shall not be required to convert and maintain in 
    automated form records of payments kept pursuant to section 
    466(a)(8)(B)(iii) before the effective date of this section.
    ``(c) Timing of Disbursements.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    State disbursement unit shall distribute all amounts payable under 
    section 457(a) within 2 business days after receipt from the 
    employer or other source of periodic income, if sufficient 
    information identifying the payee is provided.
        ``(2) Permissive retention of arrearages.--The State 
    disbursement unit may delay the distribution of collections toward 
    arrearages until the resolution of any timely appeal with respect 
    to such arrearages.
    ``(d) Business Day Defined.--As used in this section, the term 
`business day' means a day on which State offices are open for regular 
business.''.
    (c) Use of Automated System.--Section 454A, as added by section 
344(a)(2) and as amended by section 311 of this Act, is amended by 
adding at the end the following new subsection:
    ``(g) Collection and Distribution of Support Payments.--
        ``(1) In general.--The State shall use the automated system 
    required by this section, to the maximum extent feasible, to assist 
    and facilitate the collection and disbursement of support payments 
    through the State disbursement unit operated under section 454B, 
    through the performance of functions, including, at a minimum--
            ``(A) transmission of orders and notices to employers (and 
        other debtors) for the withholding of income--
                ``(i) within 2 business days after receipt of notice 
            of, and the income source subject to, such withholding from 
            a court, another State, an employer, the Federal Parent 
            Locator Service, or another source recognized by the State; 
            and
                ``(ii) using uniform formats prescribed by the 
            Secretary;
            ``(B) ongoing monitoring to promptly identify failures to 
        make timely payment of support; and
            ``(C) automatic use of enforcement procedures (including 
        procedures authorized pursuant to section 466(c)) if payments 
        are not timely made.
        ``(2) Business day defined.--As used in paragraph (1), the term 
    `business day' means a day on which State offices are open for 
    regular business.''.
    (d) Effective Dates.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall become effective on October 
    1, 1998.
        (2) Limited exception to unit handling payments.--
    Notwithstanding section 454B(b)(1) of the Social Security Act, as 
    added by this section, any State which, as of the date of the 
    enactment of this Act, processes the receipt of child support 
    payments through local courts may, at the option of the State, 
    continue to process through September 30, 1999, such payments 
    through such courts as processed such payments on or before such 
    date of enactment.

SEC. 313. STATE DIRECTORY OF NEW HIRES.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 301(b), 303(a), and 312(a) of this Act, is 
amended--
        (1) by striking ``and'' at the end of paragraph (26);
        (2) by striking the period at the end of paragraph (27) and 
    inserting ``; and''; and
        (3) by adding after paragraph (27) the following new paragraph:
        ``(28) provide that, on and after October 1, 1997, the State 
    will operate a State Directory of New Hires in accordance with 
    section 453A.''.
    (b) State Directory of New Hires.--Part D of title IV (42 U.S.C. 
651-669) is amended by inserting after section 453 the following new 
section:

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

    ``(a) Establishment.--
        ``(1) In general.--
            ``(A) Requirement for States that have no directory.--
        Except as provided in subparagraph (B), not later than October 
        1, 1997, each State shall establish an automated directory (to 
        be known as the `State Directory of New Hires') which shall 
        contain information supplied in accordance with subsection (b) 
        by employers on each newly hired employee.
            ``(B) States with new hire reporting law in existence.--A 
        State which has a new hire reporting law in existence on the 
        date of the enactment of this section may continue to operate 
        under the State law, but the State must meet the requirements 
        of subsection (g)(2) not later than October 1, 1997, and the 
        requirements of this section (other than subsection (g)(2)) not 
        later than October 1, 1998.
        ``(2) Definitions.--As used in this section:
            ``(A) Employee.--The term `employee'--
                ``(i) means an individual who is an employee within the 
            meaning of chapter 24 of the Internal Revenue Code of 1986; 
            and
                ``(ii) does not include an employee of a Federal or 
            State agency performing intelligence or counterintelligence 
            functions, if the head of such agency has determined that 
            reporting pursuant to paragraph (1) with respect to the 
            employee could endanger the safety of the employee or 
            compromise an ongoing investigation or intelligence 
            mission.
            ``(B) Employer.--
                ``(i) In general.--The term `employer' has the meaning 
            given such term in section 3401(d) of the Internal Revenue 
            Code of 1986 and includes any governmental entity and any 
            labor organization.
                ``(ii) Labor organization.--The term `labor 
            organization' shall have the meaning given such term in 
            section 2(5) of the National Labor Relations Act, and 
            includes any entity (also known as a `hiring hall') which 
            is used by the organization and an employer to carry out 
            requirements described in section 8(f)(3) of such Act of an 
            agreement between the organization and the employer.
    ``(b) Employer Information.--
        ``(1) Reporting requirement.--
            ``(A) In general.--Except as provided in subparagraphs (B) 
        and (C), each employer shall furnish to the Directory of New 
        Hires of the State in which a newly hired employee works, a 
        report that contains the name, address, and social security 
        number of the employee, and the name and address of, and 
        identifying number assigned under section 6109 of the Internal 
        Revenue Code of 1986 to, the employer.
            ``(B) Multistate employers.--An employer that has employees 
        who are employed in 2 or more States and that transmits reports 
        magnetically or electronically may comply with subparagraph (A) 
        by designating 1 State in which such employer has employees to 
        which the employer will transmit the report described in 
        subparagraph (A), and transmitting such report to such State. 
        Any employer that transmits reports pursuant to this 
        subparagraph shall notify the Secretary in writing as to which 
        State such employer designates for the purpose of sending 
        reports.
            ``(C) Federal government employers.--Any department, 
        agency, or instrumentality of the United States shall comply 
        with subparagraph (A) by transmitting the report described in 
        subparagraph (A) to the National Directory of New Hires 
        established pursuant to section 453.
        ``(2) Timing of report.--Each State may provide the time within 
    which the report required by paragraph (1) shall be made with 
    respect to an employee, but such report shall be made--
            ``(A) not later than 20 days after the date the employer 
        hires the employee; or
            ``(B) in the case of an employer transmitting reports 
        magnetically or electronically, by 2 monthly transmissions (if 
        necessary) not less than 12 days nor more than 16 days apart.
    ``(c) Reporting Format and Method.--Each report required by 
subsection (b) shall be made on a W-4 form or, at the option of the 
employer, an equivalent form, and may be transmitted by 1st class mail, 
magnetically, or electronically.
    ``(d) Civil Money Penalties on Noncomplying Employers.--The State 
shall have the option to set a State civil money penalty which shall be 
less than--
        ``(1) $25; or
        ``(2) $500 if, under State law, the failure is the result of a 
    conspiracy between the employer and the employee to not supply the 
    required report or to supply a false or incomplete report.
    ``(e) Entry of Employer Information.--Information shall be entered 
into the data base maintained by the State Directory of New Hires 
within 5 business days of receipt from an employer pursuant to 
subsection (b).
    ``(f) Information Comparisons.--
        ``(1) In general.--Not later than May 1, 1998, an agency 
    designated by the State shall, directly or by contract, conduct 
    automated comparisons of the social security numbers reported by 
    employers pursuant to subsection (b) and the social security 
    numbers appearing in the records of the State case registry for 
    cases being enforced under the State plan.
        ``(2) Notice of match.--When an information comparison 
    conducted under paragraph (1) reveals a match with respect to the 
    social security number of an individual required to provide support 
    under a support order, the State Directory of New Hires shall 
    provide the agency administering the State plan approved under this 
    part of the appropriate State with the name, address, and social 
    security number of the employee to whom the social security number 
    is assigned, and the name and address of, and identifying number 
    assigned under section 6109 of the Internal Revenue Code of 1986 
    to, the employer.
    ``(g) Transmission of Information.--
        ``(1) Transmission of wage withholding notices to employers.--
    Within 2 business days after the date information regarding a newly 
    hired employee is entered into the State Directory of New Hires, 
    the State agency enforcing the employee's child support obligation 
    shall transmit a notice to the employer of the employee directing 
    the employer to withhold from the income of the employee an amount 
    equal to the monthly (or other periodic) child support obligation 
    (including any past due support obligation) of the employee, unless 
    the employee's income is not subject to withholding pursuant to 
    section 466(b)(3).
        ``(2) Transmissions to the national directory of new hires.--
            ``(A) New hire information.--Within 3 business days after 
        the date information regarding a newly hired employee is 
        entered into the State Directory of New Hires, the State 
        Directory of New Hires shall furnish the information to the 
        National Directory of New Hires.
            ``(B) Wage and unemployment compensation information.--The 
        State Directory of New Hires shall, on a quarterly basis, 
        furnish to the National Directory of New Hires extracts of the 
        reports required under section 303(a)(6) to be made to the 
        Secretary of Labor concerning the wages and unemployment 
        compensation paid to individuals, by such dates, in such 
        format, and containing such information as the Secretary of 
        Health and Human Services shall specify in regulations.
        ``(3) Business day defined.--As used in this subsection, the 
    term `business day' means a day on which State offices are open for 
    regular business.
    ``(h) Other Uses of New Hire Information.--
        ``(1) Location of child support obligors.--The agency 
    administering the State plan approved under this part shall use 
    information received pursuant to subsection (f)(2) to locate 
    individuals for purposes of establishing paternity and 
    establishing, modifying, and enforcing child support obligations, 
    and may disclose such information to any agent of the agency that 
    is under contract with the agency to carry out such purposes.
        ``(2) Verification of eligibility for certain programs.--A 
    State agency responsible for administering a program specified in 
    section 1137(b) shall have access to information reported by 
    employers pursuant to subsection (b) of this section for purposes 
    of verifying eligibility for the program.
        ``(3) Administration of employment security and workers' 
    compensation.--State agencies operating employment security and 
    workers' compensation programs shall have access to information 
    reported by employers pursuant to subsection (b) for the purposes 
    of administering such programs.''.
    (c) Quarterly Wage Reporting.--Section 1137(a)(3) (42 U.S.C. 1320b-
7(a)(3)) is amended--
        (1) by inserting ``(including State and local governmental 
    entities and labor organizations (as defined in section 
    453A(a)(2)(B)(iii))'' after ``employers''; and
        (2) by inserting ``, and except that no report shall be filed 
    with respect to an employee of a State or local agency performing 
    intelligence or counterintelligence functions, if the head of such 
    agency has determined that filing such a report could endanger the 
    safety of the employee or compromise an ongoing investigation or 
    intelligence mission'' after ``paragraph (2)''.
    (d) Disclosure to Certain Agents.--Section 303(e) (42 U.S.C. 
503(e)) is amended by adding at the end the following:
    ``(5) A State or local child support enforcement agency may 
disclose to any agent of the agency that is under contract with the 
agency to carry out the purposes described in paragraph (1)(B) wage 
information that is disclosed to an officer or employee of the agency 
under paragraph (1)(A). Any agent of a State or local child support 
agency that receives wage information under this paragraph shall comply 
with the safeguards established pursuant to paragraph (1)(B).''.

SEC. 314. AMENDMENTS CONCERNING INCOME WITHHOLDING.

    (a) Mandatory Income Withholding.--
        (1) In general.--Section 466(a)(1) (42 U.S.C. 666(a)(1)) is 
    amended to read as follows:
        ``(1)(A) Procedures described in subsection (b) for the 
    withholding from income of amounts payable as support in cases 
    subject to enforcement under the State plan.
        ``(B) Procedures under which the income of a person with a 
    support obligation imposed by a support order issued (or modified) 
    in the State before October 1, 1996, if not otherwise subject to 
    withholding under subsection (b), shall become subject to 
    withholding as provided in subsection (b) if arrearages occur, 
    without the need for a judicial or administrative hearing.''.
        (2) Conforming amendments.--
            (A) Section 466(b) (42 U.S.C. 666(b)) is amended in the 
        matter preceding paragraph (1), by striking ``subsection 
        (a)(1)'' and inserting ``subsection (a)(1)(A)''.
            (B) Section 466(b)(4) (42 U.S.C. 666(b)(4)) is amended to 
        read as follows:
        ``(4)(A) Such withholding must be carried out in full 
    compliance with all procedural due process requirements of the 
    State, and the State must send notice to each noncustodial parent 
    to whom paragraph (1) applies--
            ``(i) that the withholding has commenced; and
            ``(ii) of the procedures to follow if the noncustodial 
        parent desires to contest such withholding on the grounds that 
        the withholding or the amount withheld is improper due to a 
        mistake of fact.
        ``(B) The notice under subparagraph (A) of this paragraph shall 
    include the information provided to the employer under paragraph 
    (6)(A).''.
            (C) Section 466(b)(5) (42 U.S.C. 666(b)(5)) is amended by 
        striking all that follows ``administered by'' and inserting 
        ``the State through the State disbursement unit established 
        pursuant to section 454B, in accordance with the requirements 
        of section 454B.''.
            (D) Section 466(b)(6)(A) (42 U.S.C. 666(b)(6)(A)) is 
        amended--
                (i) in clause (i), by striking ``to the appropriate 
            agency'' and all that follows and inserting ``to the State 
            disbursement unit within 7 business days after the date the 
            amount would (but for this subsection) have been paid or 
            credited to the employee, for distribution in accordance 
            with this part. The employer shall withhold funds as 
            directed in the notice, except that when an employer 
            receives an income withholding order issued by another 
            State, the employer shall apply the income withholding law 
            of the state of the obligor's principal place of employment 
            in determining--
            ``(I) the employer's fee for processing an income 
        withholding order;
            ``(II) the maximum amount permitted to be withheld from the 
        obligor's income;
            ``(III) the time periods within which the employer must 
        implement the income withholding order and forward the child 
        support payment;
            ``(IV) the priorities for withholding and allocating income 
        withheld for multiple child support obligees; and
            ``(V) any withholding terms or conditions not specified in 
        the order.
    An employer who complies with an income withholding notice that is 
    regular on its face shall not be subject to civil liability to any 
    individual or agency for conduct in compliance with the notice.'';
                (ii) in clause (ii), by inserting ``be in a standard 
            format prescribed by the Secretary, and'' after ``shall''; 
            and
                (iii) by adding at the end the following new clause:
        ``(iii) As used in this subparagraph, the term `business day' 
    means a day on which State offices are open for regular 
    business.''.
            (E) Section 466(b)(6)(D) (42 U.S.C. 666(b)(6)(D)) is 
        amended by striking ``any employer'' and all that follows and 
        inserting ``any employer who--
            ``(i) discharges from employment, refuses to employ, or 
        takes disciplinary action against any noncustodial parent 
        subject to income withholding required by this subsection 
        because of the existence of such withholding and the 
        obligations or additional obligations which it imposes upon the 
        employer; or
            ``(ii) fails to withhold support from income or to pay such 
        amounts to the State disbursement unit in accordance with this 
        subsection.''.
            (F) Section 466(b) (42 U.S.C. 666(b)) is amended by adding 
        at the end the following new paragraph:
        ``(11) Procedures under which the agency administering the 
    State plan approved under this part may execute a withholding order 
    without advance notice to the obligor, including issuing the 
    withholding order through electronic means.''.
    (b) Definition of Income.--
        (1) In general.--Section 466(b)(8) (42 U.S.C. 666(b)(8)) is 
    amended to read as follows:
        ``(8) For purposes of subsection (a) and this subsection, the 
    term `income' means any periodic form of payment due to an 
    individual, regardless of source, including wages, salaries, 
    commissions, bonuses, worker's compensation, disability, payments 
    pursuant to a pension or retirement program, and interest.''.
        (2) Conforming amendments.--
            (A) Subsections (a)(8)(A), (a)(8)(B)(i), (b)(3)(A), 
        (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7) of section 
        466 (42 U.S.C. 666(a)(8)(A), (a)(8)(B)(i), (b)(3)(A), 
        (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7)) are each 
        amended by striking ``wages'' each place such term appears and 
        inserting ``income''.
            (B) Section 466(b)(1) (42 U.S.C. 666(b)(1)) is amended by 
        striking ``wages (as defined by the State for purposes of this 
        section)'' and inserting ``income''.
    (c) Conforming Amendment.--Section 466(c) (42 U.S.C. 666(c)) is 
repealed.

SEC. 315. LOCATOR INFORMATION FROM INTERSTATE NETWORKS.

    Section 466(a) (42 U.S.C. 666(a)) is amended by inserting after 
paragraph (11) the following new paragraph:
        ``(12) Locator information from interstate networks.--
    Procedures to ensure that all Federal and State agencies conducting 
    activities under this part have access to any system used by the 
    State to locate an individual for purposes relating to motor 
    vehicles or law enforcement.''.

SEC. 316. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE.

    (a) Expanded Authority To Locate Individuals and Assets.--Section 
453 (42 U.S.C. 653) is amended--
        (1) in subsection (a), by striking all that follows 
    ``subsection (c))'' and inserting ``, for the purpose of 
    establishing parentage, establishing, setting the amount of, 
    modifying, or enforcing child support obligations, or enforcing 
    child custody or visitation orders--
        ``(1) information on, or facilitating the discovery of, the 
    location of any individual--
            ``(A) who is under an obligation to pay child support or 
        provide child custody or visitation rights;
            ``(B) against whom such an obligation is sought;
            ``(C) to whom such an obligation is owed,
    including the individual's social security number (or numbers), 
    most recent address, and the name, address, and employer 
    identification number of the individual's employer;
        ``(2) information on the individual's wages (or other income) 
    from, and benefits of, employment (including rights to or 
    enrollment in group health care coverage); and
        ``(3) information on the type, status, location, and amount of 
    any assets of, or debts owed by or to, any such indi- vidual.''; 
    and
        (2) in subsection (b)--
            (A) in the matter preceding paragraph (1), by striking 
        ``social security'' and all that follows through ``absent 
        parent'' and inserting ``information described in subsection 
        (a)''; and
            (B) in the flush paragraph at the end, by adding the 
        following: ``No information shall be disclosed to any person if 
        the State has notified the Secretary that the State has 
        reasonable evidence of domestic violence or child abuse and the 
        disclosure of such information could be harmful to the 
        custodial parent or the child of such parent. Information 
        received or transmitted pursuant to this section shall be 
        subject to the safeguard provisions contained in section 
        454(26).''.
    (b) Authorized Person for Information Regarding Visitation 
Rights.--Section 453(c) (42 U.S.C. 653(c)) is amended--
        (1) in paragraph (1), by striking ``support'' and inserting 
    ``support or to seek to enforce orders providing child custody or 
    visitation rights''; and
        (2) in paragraph (2), by striking ``, or any agent of such 
    court; and'' and inserting ``or to issue an order against a 
    resident parent for child custody or visitation rights, or any 
    agent of such court;''.
    (c) Reimbursement for Information From Federal Agencies.--Section 
453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th sentence by 
inserting ``in an amount which the Secretary determines to be 
reasonable payment for the information exchange (which amount shall not 
include payment for the costs of obtaining, compiling, or maintaining 
the information)'' before the period.
    (d) Reimbursement for Reports by State Agencies.--Section 453 (42 
U.S.C. 653) is amended by adding at the end the following new 
subsection:
    ``(g) Reimbursement for Reports by State Agencies.--The Secretary 
may reimburse Federal and State agencies for the costs incurred by such 
entities in furnishing information requested by the Secretary under 
this section in an amount which the Secretary determines to be 
reasonable payment for the information exchange (which amount shall not 
include payment for the costs of obtaining, compiling, or maintaining 
the information).''.
    (e) Conforming Amendments.--
        (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and 
    463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), and 
    663(f)) are each amended by inserting ``Federal'' before ``Parent'' 
    each place such term appears.
        (2) Section 453 (42 U.S.C. 653) is amended in the heading by 
    adding ``federal'' before ``parent''.
    (f) New Components.--Section 453 (42 U.S.C. 653), as amended by 
subsection (d) of this section, is amended by adding at the end the 
following new subsections:
    ``(h) Federal Case Registry of Child Support Orders.--
        ``(1) In general.--Not later than October 1, 1998, in order to 
    assist States in administering programs under State plans approved 
    under this part and programs funded under part A, and for the other 
    purposes specified in this section, the Secretary shall establish 
    and maintain in the Federal Parent Locator Service an automated 
    registry (which shall be known as the `Federal Case Registry of 
    Child Support Orders'), which shall contain abstracts of support 
    orders and other information described in paragraph (2) with 
    respect to each case in each State case registry maintained 
    pursuant to section 454A(e), as furnished (and regularly updated), 
    pursuant to section 454A(f), by State agencies administering 
    programs under this part.
        ``(2) Case information.--The information referred to in 
    paragraph (1) with respect to a case shall be such information as 
    the Secretary may specify in regulations (including the names, 
    social security numbers or other uniform identification numbers, 
    and State case identification numbers) to identify the individuals 
    who owe or are owed support (or with respect to or on behalf of 
    whom support obligations are sought to be established), and the 
    State or States which have the case.
    ``(i) National Directory of New Hires.--
        ``(1) In general.--In order to assist States in administering 
    programs under State plans approved under this part and programs 
    funded under part A, and for the other purposes specified in this 
    section, the Secretary shall, not later than October 1, 1997, 
    establish and maintain in the Federal Parent Locator Service an 
    automated directory to be known as the National Directory of New 
    Hires, which shall contain the information supplied pursuant to 
    section 453A(g)(2).
        ``(2) Entry of data.--Information shall be entered into the 
    data base maintained by the National Directory of New Hires within 
    2 business days of receipt pursuant to section 453A(g)(2).
        ``(3) Administration of federal tax laws.--The Secretary of the 
    Treasury shall have access to the information in the National 
    Directory of New Hires for purposes of administering section 32 of 
    the Internal Revenue Code of 1986, or the advance payment of the 
    earned income tax credit under section 3507 of such Code, and 
    verifying a claim with respect to employment in a tax return.
        ``(4) List of multistate employers.--The Secretary shall 
    maintain within the National Directory of New Hires a list of 
    multistate employers that report information regarding newly hired 
    employees pursuant to section 453A(b)(1)(B), and the State which 
    each such employer has designated to receive such information.
    ``(j) Information Comparisons and Other Disclosures.--
        ``(1) Verification by social security administration.--
            ``(A) In general.--The Secretary shall transmit information 
        on individuals and employers maintained under this section to 
        the Social Security Administration to the extent necessary for 
        verification in accordance with subparagraph (B).
            ``(B) Verification by ssa.--The Social Security 
        Administration shall verify the accuracy of, correct, or supply 
        to the extent possible, and report to the Secretary, the 
        following information supplied by the Secretary pursuant to 
        subparagraph (A):
                ``(i) The name, social security number, and birth date 
            of each such individual.
                ``(ii) The employer identification number of each such 
            employer.
        ``(2) Information comparisons.--For the purpose of locating 
    individuals in a paternity establishment case or a case involving 
    the establishment, modification, or enforcement of a support order, 
    the Secretary shall--
            ``(A) compare information in the National Directory of New 
        Hires against information in the support case abstracts in the 
        Federal Case Registry of Child Support Orders not less often 
        than every 2 business days; and
            ``(B) within 2 business days after such a comparison 
        reveals a match with respect to an individual, report the 
        information to the State agency responsible for the case.
        ``(3) Information comparisons and disclosures of information in 
    all registries for title iv program purposes.--To the extent and 
    with the frequency that the Secretary determines to be effective in 
    assisting States to carry out their responsibilities under programs 
    operated under this part and programs funded under part A, the 
    Secretary shall--
            ``(A) compare the information in each component of the 
        Federal Parent Locator Service maintained under this section 
        against the information in each other such component (other 
        than the comparison required by paragraph (2)), and report 
        instances in which such a comparison reveals a match with 
        respect to an individual to State agencies operating such 
        programs; and
            ``(B) disclose information in such registries to such State 
        agencies.
        ``(4) Provision of new hire information to the social security 
    administration.--The National Directory of New Hires shall provide 
    the Commissioner of Social Security with all information in the 
    National Directory.
        ``(5) Research.--The Secretary may provide access to 
    information reported by employers pursuant to section 453A(b) for 
    research purposes found by the Secretary to be likely to contribute 
    to achieving the purposes of part A or this part, but without 
    personal identifiers.
    ``(k) Fees.--
        ``(1) For ssa verification.--The Secretary shall reimburse the 
    Commissioner of Social Security, at a rate negotiated between the 
    Secretary and the Commissioner, for the costs incurred by the 
    Commissioner in performing the verification services described in 
    subsection (j).
        ``(2) For information from state directories of new hires.--The 
    Secretary shall reimburse costs incurred by State directories of 
    new hires in furnishing information as required by subsection 
    (j)(3), at rates which the Secretary determines to be reasonable 
    (which rates shall not include payment for the costs of obtaining, 
    compiling, or maintaining such information).
        ``(3) For information furnished to state and federal 
    agencies.--A State or Federal agency that receives information from 
    the Secretary pursuant to this section shall reimburse the 
    Secretary for costs incurred by the Secretary in furnishing the 
    information, at rates which the Secretary determines to be 
    reasonable (which rates shall include payment for the costs of 
    obtaining, verifying, maintaining, and comparing the information).
    ``(l) Restriction on Disclosure and Use.--Information in the 
Federal Parent Locator Service, and information resulting from 
comparisons using such information, shall not be used or disclosed 
except as expressly provided in this section, subject to section 6103 
of the Internal Revenue Code of 1986.
    ``(m) Information Integrity and Security.--The Secretary shall 
establish and implement safeguards with respect to the entities 
established under this section designed to--
        ``(1) ensure the accuracy and completeness of information in 
    the Federal Parent Locator Service; and
        ``(2) restrict access to confidential information in the 
    Federal Parent Locator Service to authorized persons, and restrict 
    use of such information to authorized purposes.
    ``(n) Federal Government Reporting.--Each department, agency, and 
instrumentality of the United States shall on a quarterly basis report 
to the Federal Parent Locator Service the name and social security 
number of each employee and the wages paid to the employee during the 
previous quarter, except that such a report shall not be filed with 
respect to an employee of a department, agency, or instrumentality 
performing intelligence or counterintelligence functions, if the head 
of such department, agency, or instrumentality has determined that 
filing such a report could endanger the safety of the employee or 
compromise an ongoing investigation or intelligence mission.''.
    (g) Conforming Amendments.--
        (1) To part d of title iv of the social security act.--
            (A) Section 454(8)(B) (42 U.S.C. 654(8)(B)) is amended to 
        read as follows:
            ``(B) the Federal Parent Locator Service established under 
        section 453;''.
            (B) Section 454(13) (42 U.S.C.654(13)) is amended by 
        inserting ``and provide that information requests by parents 
        who are residents of other States be treated with the same 
        priority as requests by parents who are residents of the State 
        submitting the plan'' before the semicolon.
        (2) To federal unemployment tax act.--Section 3304(a)(16) of 
    the Internal Revenue Code of 1986 is amended--
            (A) by striking ``Secretary of Health, Education, and 
        Welfare'' each place such term appears and inserting 
        ``Secretary of Health and Human Services'';
            (B) in subparagraph (B), by striking ``such information'' 
        and all that follows and inserting ``information furnished 
        under subparagraph (A) or (B) is used only for the purposes 
        authorized under such subparagraph;'';
            (C) by striking ``and'' at the end of subparagraph (A);
            (D) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (E) by inserting after subparagraph (A) the following new 
        subparagraph:
        ``(B) wage and unemployment compensation information contained 
    in the records of such agency shall be furnished to the Secretary 
    of Health and Human Services (in accordance with regulations 
    promulgated by such Secretary) as necessary for the purposes of the 
    National Directory of New Hires established under section 453(i) of 
    the Social Security Act, and''.
        (3) To state grant program under title iii of the social 
    security act.--Subsection (h) of section 303 (42 U.S.C. 503) is 
    amended to read as follows:
    ``(h)(1) The State agency charged with the administration of the 
State law shall, on a reimbursable basis--
        ``(A) disclose quarterly, to the Secretary of Health and Human 
    Services, wage and claim information, as required pursuant to 
    section 453(i)(1), contained in the records of such agency;
        ``(B) ensure that information provided pursuant to subparagraph 
    (A) meets such standards relating to correctness and verification 
    as the Secretary of Health and Human Services, with the concurrence 
    of the Secretary of Labor, may find necessary; and
        ``(C) establish such safeguards as the Secretary of Labor 
    determines are necessary to insure that information disclosed under 
    subparagraph (A) is used only for purposes of section 453(i)(1) in 
    carrying out the child support enforcement program under title IV.
    ``(2) Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that there is a failure to 
comply substantially with the requirements of paragraph (1), the 
Secretary of Labor shall notify such State agency that further payments 
will not be made to the State until the Secretary of Labor is satisfied 
that there is no longer any such failure. Until the Secretary of Labor 
is so satisfied, the Secretary shall make no future certification to 
the Secretary of the Treasury with respect to the State.
    ``(3) For purposes of this subsection--
        ``(A) the term `wage information' means information regarding 
    wages paid to an individual, the social security account number of 
    such individual, and the name, address, State, and the Federal 
    employer identification number of the employer paying such wages to 
    such individual; and
        ``(B) the term `claim information' means information regarding 
    whether an individual is receiving, has received, or has made 
    application for, unemployment compensation, the amount of any such 
    compensation being received (or to be received by such individual), 
    and the individual's current (or most recent) home address.''.
        (4) Disclosure of certain information to agents of child 
    support enforcement agencies.--
            (A) In general.--Paragraph (6) of section 6103(l) of the 
        Internal Revenue Code of 1986 (relating to disclosure of return 
        information to Federal, State, and local child support 
        enforcement agencies) is amended by redesignating subparagraph 
        (B) as subparagraph (C) and by inserting after subparagraph (A) 
        the following new subparagraph:
            ``(B) Disclosure to certain agents.--The following 
        information disclosed to any child support enforcement agency 
        under subparagraph (A) with respect to any individual with 
        respect to whom child support obligations are sought to be 
        established or enforced may be disclosed by such agency to any 
        agent of such agency which is under contract with such agency 
        to carry out the purposes described in subparagraph (C):
                ``(i) The address and social security account number 
            (or numbers) of such individual.
                ``(ii) The amount of any reduction under section 
            6402(c) (relating to offset of past-due support against 
            overpayments) in any overpayment otherwise payable to such 
            individual.''.
            (B) Conforming amendments.--
                (i) Paragraph (3) of section 6103(a) of such Code is 
            amended by striking ``(l)(12)'' and inserting ``paragraph 
            (6) or (12) of subsection (l)''.
                (ii) Subparagraph (C) of section 6103(l)(6) of such 
            Code, as redesignated by subsection (a), is amended to read 
            as follows:
            ``(C) Restriction on disclosure.--Information may be 
        disclosed under this paragraph only for purposes of, and to the 
        extent necessary in, establishing and collecting child support 
        obligations from, and locating, individuals owing such 
        obligations.''.
                (iii) The material following subparagraph (F) of 
            section 6103(p)(4) of such Code is amended by striking 
            ``subsection (l)(12)(B)'' and inserting ``paragraph (6)(A) 
            or (12)(B) of subsection (l)''.
    (h) Requirement for Cooperation.--The Secretary of Labor and the 
Secretary of Health and Human Services shall work jointly to develop 
cost-effective and efficient methods of accessing the information in 
the various State directories of new hires and the National Directory 
of New Hires as established pursuant to the amendments made by this 
subtitle. In developing these methods the Secretaries shall take into 
account the impact, including costs, on the States, and shall also 
consider the need to insure the proper and authorized use of wage 
record information.

SEC. 317. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR USE IN 
              CHILD SUPPORT ENFORCEMENT.

    Section 466(a) (42 U.S.C. 666(a)), as amended by section 315 of 
this Act, is amended by inserting after paragraph (12) the following 
new paragraph:
        ``(13) Recording of social security numbers in certain family 
    matters.--Procedures requiring that the social security number of--
            ``(A) any applicant for a professional license, commercial 
        driver's license, occupational license, or marriage license be 
        recorded on the application;
            ``(B) any individual who is subject to a divorce decree, 
        support order, or paternity determination or acknowledgment be 
        placed in the records relating to the matter; and
            ``(C) any individual who has died be placed in the records 
        relating to the death and be recorded on the death certificate.
    For purposes of subparagraph (A), if a State allows the use of a 
    number other than the social security number, the State shall so 
    advise any applicants.''.

         Subtitle C--Streamlining and Uniformity of Procedures

SEC. 321. ADOPTION OF UNIFORM STATE LAWS.

    Section 466 (42 U.S.C. 666) is amended by adding at the end the 
following new subsection:
    ``(f) Uniform Interstate Family Support Act.--In order to satisfy 
section 454(20)(A), on and after January 1, 1998, each State must have 
in effect the Uniform Interstate Family Support Act, as approved by the 
American Bar Association on February 9, 1993, together with any 
amendments officially adopted before January 1, 1998 by the National 
Conference of Commissioners on Uniform State Laws.''.

SEC. 322. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD SUPPORT 
              ORDERS.

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

SEC. 323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315 and 
317 of this Act, is amended by inserting after paragraph (13) the 
following new paragraph:
        ``(14) Administrative enforcement in interstate cases.--
    Procedures under which--
            ``(A)(i) the State shall respond within 5 business days to 
        a request made by another State to enforce a support order; and
            ``(ii) the term `business day' means a day on which State 
        offices are open for regular business;
            ``(B) the State may, by electronic or other means, transmit 
        to another State a request for assistance in a case involving 
        the enforcement of a support order, which request--
                ``(i) shall include such information as will enable the 
            State to which the request is transmitted to compare the 
            information about the case to the information in the data 
            bases of the State; and
                ``(ii) shall constitute a certification by the re- 
            questing State--

                    ``(I) of the amount of support under the order the 
                payment of which is in arrears; and
                    ``(II) that the requesting State has complied with 
                all procedural due process requirements applicable to 
                the case;

            ``(C) if the State provides assistance to another State 
        pursuant to this paragraph with respect to a case, neither 
        State shall consider the case to be transferred to the caseload 
        of such other State; and
            ``(D) the State shall maintain records of--
                ``(i) the number of such requests for assistance 
            received by the State;
                ``(ii) the number of cases for which the State 
            collected support in response to such a request; and
                ``(iii) the amount of such collected support.''.

SEC. 324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

    (a) Promulgation.--Section 452(a) (42 U.S.C. 652(a)) is amended--
        (1) by striking ``and'' at the end of paragraph (9);
        (2) by striking the period at the end of paragraph (10) (as 
    amended by section 346(a) of this Act) and inserting ``; and''; and
        (3) by adding at the end the following new paragraph:
        ``(11) not later than October 1, 1996, after consulting with 
    the State directors of programs under this part, promulgate forms 
    to be used by States in interstate cases for--
            ``(A) collection of child support through income 
        withholding;
            ``(B) imposition of liens; and
            ``(C) administrative subpoenas.''.
    (b) Use by States.--Section 454(9) (42 U.S.C. 654(9)) is amended--
        (1) by striking ``and'' at the end of subparagraph (C);
        (2) by inserting ``and'' at the end of subparagraph (D); and
        (3) by adding at the end the following new subparagraph:
            ``(E) not later than March 1, 1997, in using the forms 
        promulgated pursuant to section 452(a)(11) for income 
        withholding, imposition of liens, and issuance of 
        administrative subpoenas in interstate child support cases;''.

SEC. 325. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

    (a) State Law Requirements.--Section 466 (42 U.S.C. 666), as 
amended by section 314 of this Act, is amended--
        (1) in subsection (a)(2), by striking the first sentence and 
    inserting the following: ``Expedited administrative and judicial 
    procedures (including the procedures specified in subsection (c)) 
    for establishing paternity and for establishing, modifying, and 
    enforcing support obligations.''; and
        (2) by inserting after subsection (b) the following new 
    subsection:
    ``(c) Expedited Procedures.--The procedures specified in this 
subsection are the following:
        ``(1) Administrative action by state agency.--Procedures which 
    give the State agency the authority to take the following actions 
    relating to establishment of paternity or to establishment, 
    modification, or enforcement of support orders, without the 
    necessity of obtaining an order from any other judicial or 
    administrative tribunal, and to recognize and enforce the authority 
    of State agencies of other States to take the following actions:
            ``(A) Genetic testing.--To order genetic testing for the 
        purpose of paternity establishment as provided in section 
        466(a)(5).
            ``(B) Financial or other information.--To subpoena any 
        financial or other information needed to establish, modify, or 
        enforce a support order, and to impose penalties for failure to 
        respond to such a subpoena.
            ``(C) Response to state agency request.--To require all 
        entities in the State (including for-profit, nonprofit, and 
        governmental employers) to provide promptly, in response to a 
        request by the State agency of that or any other State 
        administering a program under this part, information on the 
        employment, compensation, and benefits of any individual 
        employed by such entity as an employee or contractor, and to 
        sanction failure to respond to any such request.
            ``(D) Access to information contained in certain records.--
        To obtain access, subject to safeguards on privacy and 
        information security, and subject to the nonliability of 
        entities that afford such access under this subparagraph, to 
        information contained in the following records (including 
        automated access, in the case of records maintained in 
        automated data bases):
                ``(i) Records of other State and local government 
            agencies, including--

                    ``(I) vital statistics (including records of 
                marriage, birth, and divorce);
                    ``(II) State and local tax and revenue records 
                (including information on residence address, employer, 
                income and assets);
                    ``(III) records concerning real and titled personal 
                property;
                    ``(IV) records of occupational and professional 
                licenses, and records concerning the ownership and 
                control of corporations, partnerships, and other 
                business entities;
                    ``(V) employment security records;
                    ``(VI) records of agencies administering public 
                assistance programs;
                    ``(VII) records of the motor vehicle depart- ment; 
                and
                    ``(VIII) corrections records.

                ``(ii) Certain records held by private entities with 
            respect to individuals who owe or are owed support (or 
            against or with respect to whom a support obligation is 
            sought), consisting of--

                    ``(I) the names and addresses of such indi- viduals 
                and the names and addresses of the employers of such 
                individuals, as appearing in customer records of public 
                utilities and cable television companies, pursuant to 
                an administrative subpoena authorized by subparagraph 
                (B); and
                    ``(II) information (including information on assets 
                and liabilities) on such individuals held by financial 
                institutions.

            ``(E) Change in payee.--In cases in which support is 
        subject to an assignment in order to comply with a requirement 
        imposed pursuant to part A or section 1912, or to a requirement 
        to pay through the State disbursement unit established pursuant 
        to section 454B, upon providing notice to obligor and obligee, 
        to direct the obligor or other payor to change the payee to the 
        appropriate government entity.
            ``(F) Income withholding.--To order income withholding in 
        accordance with subsections (a)(1)(A) and (b) of section 466.
            ``(G) Securing assets.--In cases in which there is a 
        support arrearage, to secure assets to satisfy the arrearage 
        by--
                ``(i) intercepting or seizing periodic or lump-sum 
            payments from--

                    ``(I) a State or local agency, including 
                unemployment compensation, workers' compensation, and 
                other benefits; and
                    ``(II) judgments, settlements, and lotteries;

                ``(ii) attaching and seizing assets of the obligor held 
            in financial institutions;
                ``(iii) attaching public and private retirement funds; 
            and
                ``(iv) imposing liens in accordance with subsection 
            (a)(4) and, in appropriate cases, to force sale of property 
            and distribution of proceeds.
            ``(H) Increase monthly payments.--For the purpose of 
        securing overdue support, to increase the amount of monthly 
        support payments to include amounts for arrearages, subject to 
        such conditions or limitations as the State may provide.
    Such procedures shall be subject to due process safeguards, 
    including (as appropriate) requirements for notice, opportunity to 
    contest the action, and opportunity for an appeal on the record to 
    an independent administrative or judicial tribunal.
        ``(2) Substantive and procedural rules.--The expedited 
    procedures required under subsection (a)(2) shall include the 
    following rules and authority, applicable with respect to all 
    proceedings to establish paternity or to establish, modify, or 
    enforce support orders:
            ``(A) Locator information; presumptions con- cerning 
        notice.--Procedures under which--
                ``(i) each party to any paternity or child support 
            proceeding is required (subject to privacy safeguards) to 
            file with the tribunal and the State case registry upon 
            entry of an order, and to update as appropriate, 
            information on location and identity of the party, 
            including Social Security number, residential and mailing 
            addresses, telephone number, driver's license number, and 
            name, address, and telephone number of employer; and
                ``(ii) in any subsequent child support enforcement 
            action between the parties, upon sufficient showing that 
            diligent effort has been made to ascertain the location of 
            such a party, the tribunal may deem State due process 
            requirements for notice and service of process to be met 
            with respect to the party, upon delivery of written notice 
            to the most recent residential or employer address filed 
            with the tribunal pursuant to clause (i).
            ``(B) Statewide jurisdiction.--Procedures under which--
                ``(i) the State agency and any administrative or 
            judicial tribunal with authority to hear child support and 
            paternity cases exerts statewide jurisdiction over the 
            parties; and
                ``(ii) in a State in which orders are issued by courts 
            or administrative tribunals, a case may be transferred 
            between local jurisdictions in the State without need for 
            any additional filing by the petitioner, or service of 
            process upon the respondent, to retain jurisdiction over 
            the parties.
        ``(3) Coordination with erisa.--Notwithstanding subsection (d) 
    of section 514 of the Employee Retirement Income Security Act of 
    1974 (relating to effect on other laws), nothing in this subsection 
    shall be construed to alter, amend, modify, invalidate, impair, or 
    supersede subsections (a), (b), and (c) of such section 514 as it 
    applies with respect to any procedure referred to in paragraph (1) 
    and any expedited procedure referred to in paragraph (2), except to 
    the extent that such procedure would be consistent with the 
    requirements of section 206(d)(3) of such Act (relating to 
    qualified domestic relations orders) or the requirements of section 
    609(a) of such Act (relating to qualified medical child support 
    orders) if the reference in such section 206(d)(3) to a domestic 
    relations order and the reference in such section 609(a) to a 
    medical child support order were a reference to a support order 
    referred to in paragraphs (1) and (2) relating to the same matters, 
    respectively.''.
    (b) Automation of State Agency Functions.--Section 454A, as added 
by section 344(a)(2) and as amended by sections 311 and 312(c) of this 
Act, is amended by adding at the end the following new subsection:
    ``(h) Expedited Administrative Procedures.--The automated system 
required by this section shall be used, to the maximum extent feasible, 
to implement the expedited administrative procedures required by 
section 466(c).''.

                  Subtitle D--Paternity Establishment

SEC. 331. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

    (a) State Laws Required.--Section 466(a)(5) (42 U.S.C. 666(a)(5)) 
is amended to read as follows:
        ``(5) Procedures concerning paternity estab- lishment.--
            ``(A) Establishment process available from birth until age 
        18.--
                ``(i) Procedures which permit the establishment of the 
            paternity of a child at any time before the child attains 
            18 years of age.
                ``(ii) As of August 16, 1984, clause (i) shall also 
            apply to a child for whom paternity has not been 
            established or for whom a paternity action was brought but 
            dismissed because a statute of limitations of less than 18 
            years was then in effect in the State.
            ``(B) Procedures concerning genetic testing.--
                ``(i) Genetic testing required in certain contested 
            cases.--Procedures under which the State is required, in a 
            contested paternity case (unless otherwise barred by State 
            law) to require the child and all other parties (other than 
            individuals found under section 454(29) to have good cause 
            and other exceptions for refusing to cooperate) to submit 
            to genetic tests upon the request of any such party, if the 
            request is supported by a sworn statement by the party--

                    ``(I) alleging paternity, and setting forth facts 
                establishing a reasonable possibility of the requisite 
                sexual contact between the parties; or
                    ``(II) denying paternity, and setting forth facts 
                establishing a reasonable possibility of the 
                nonexistence of sexual contact between the parties.

                ``(ii) Other requirements.--Procedures which require 
            the State agency, in any case in which the agency orders 
            genetic testing--

                    ``(I) to pay costs of such tests, subject to 
                recoupment (if the State so elects) from the alleged 
                father if paternity is established; and
                    ``(II) to obtain additional testing in any case if 
                an original test result is contested, upon request and 
                advance payment by the contestant.

            ``(C) Voluntary paternity acknowledgment.--
                ``(i) Simple civil process.--Procedures for a simple 
            civil process for voluntarily acknowledging paternity under 
            which the State must provide that, before a mother and a 
            putative father can sign an acknowledgment of paternity, 
            the mother and the putative father must be given notice, 
            orally and in writing, of the alternatives to, the legal 
            consequences of, and the rights (including, if 1 parent is 
            a minor, any rights afforded due to minority status) and 
            responsibilities that arise from, signing the 
            acknowledgment.
                ``(ii) Hospital-based program.--Such procedures must 
            include a hospital-based program for the voluntary 
            acknowledgment of paternity focusing on the period 
            immediately before or after the birth of a child.
                ``(iii) Paternity establishment services.--

                    ``(I) State-offered services.--Such procedures must 
                require the State agency responsible for maintaining 
                birth records to offer voluntary paternity 
                establishment services.
                    ``(II) Regulations.--

                        ``(aa) Services offered by hospitals and birth 
                    record agencies.--The Secretary shall prescribe 
                    regulations governing voluntary paternity 
                    establishment services offered by hospitals and 
                    birth record agencies.
                        ``(bb) Services offered by other entities.--The 
                    Secretary shall prescribe regulations specifying 
                    the types of other entities that may offer 
                    voluntary paternity establishment services, and 
                    governing the provision of such services, which 
                    shall include a requirement that such an entity 
                    must use the same notice provisions used by, use 
                    the same materials used by, provide the personnel 
                    providing such services with the same training 
                    provided by, and evaluate the provision of such 
                    services in the same manner as the provision of 
                    such services is evaluated by, voluntary paternity 
                    establishment programs of hospitals and birth 
                    record agencies.
                ``(iv) Use of paternity acknowledgment affidavit.--Such 
            procedures must require the State to develop and use an 
            affidavit for the voluntary acknowledgment of paternity 
            which includes the minimum requirements of the affidavit 
            specified by the Secretary under section 452(a)(7) for the 
            voluntary acknowledgment of paternity, and to give full 
            faith and credit to such an affidavit signed in any other 
            State according to its procedures.
            ``(D) Status of signed paternity acknow- ledgment.--
                ``(i) Inclusion in birth records.--Procedures under 
            which the name of the father shall be included on the 
            record of birth of the child of unmarried parents only if--

                    ``(I) the father and mother have signed a voluntary 
                acknowledgment of paternity; or
                    ``(II) a court or an administrative agency of 
                competent jurisdiction has issued an adjudication of 
                paternity.

            Nothing in this clause shall preclude a State agency from 
            obtaining an admission of paternity from the father for 
            submission in a judicial or administrative proceeding, or 
            prohibit the issuance of an order in a judicial or 
            administrative proceeding which bases a legal finding of 
            paternity on an admission of paternity by the father and 
            any other additional showing required by State law.
                ``(ii) Legal finding of paternity.--Procedures under 
            which a signed voluntary acknowledgment of paternity is 
            considered a legal finding of paternity, subject to the 
            right of any signatory to rescind the acknowledgment within 
            the earlier of--

                    ``(I) 60 days; or
                    ``(II) the date of an administrative or judicial 
                proceeding relating to the child (including a 
                proceeding to establish a support order) in which the 
                signatory is a party.

                ``(iii) Contest.--Procedures under which, after the 60-
            day period referred to in clause (ii), a signed voluntary 
            acknowledgment of paternity may be challenged in court only 
            on the basis of fraud, duress, or material mistake of fact, 
            with the burden of proof upon the challenger, and under 
            which the legal responsibilities (including child support 
            obligations) of any signatory arising from the 
            acknowledgment may not be suspended during the challenge, 
            except for good cause shown.
            ``(E) Bar on acknowledgment ratification pro- ceedings.--
        Procedures under which judicial or administrative proceedings 
        are not required or permitted to ratify an unchallenged 
        acknowledgment of paternity.
            ``(F) Admissibility of genetic testing results.--
        Procedures--
                ``(i) requiring the admission into evidence, for 
            purposes of establishing paternity, of the results of any 
            genetic test that is--

                    ``(I) of a type generally acknowledged as reliable 
                by accreditation bodies designated by the Secretary; 
                and
                    ``(II) performed by a laboratory approved by such 
                an accreditation body;

                ``(ii) requiring an objection to genetic testing 
            results to be made in writing not later than a specified 
            number of days before any hearing at which the results may 
            be introduced into evidence (or, at State option, not later 
            than a specified number of days after receipt of the 
            results); and
                ``(iii) making the test results admissible as evidence 
            of paternity without the need for foundation testimony or 
            other proof of authenticity or accuracy, unless objection 
            is made.
            ``(G) Presumption of paternity in certain cases.--
        Procedures which create a rebuttable or, at the option of the 
        State, conclusive presumption of paternity upon genetic testing 
        results indicating a threshold probability that the alleged 
        father is the father of the child.
            ``(H) Default orders.--Procedures requiring a default order 
        to be entered in a paternity case upon a showing of service of 
        process on the defendant and any additional showing required by 
        State law.
            ``(I) No right to jury trial.--Procedures providing that 
        the parties to an action to establish paternity are not 
        entitled to a trial by jury.
            ``(J) Temporary support order based on probable paternity 
        in contested cases.--Procedures which require that a temporary 
        order be issued, upon motion by a party, requiring the 
        provision of child support pending an administrative or 
        judicial determination of parentage, if there is clear and 
        convincing evidence of paternity (on the basis of genetic tests 
        or other evidence).
            ``(K) Proof of certain support and paternity establishment 
        costs.--Procedures under which bills for pregnancy, childbirth, 
        and genetic testing are admissible as evidence without 
        requiring third-party foundation testimony, and shall 
        constitute prima facie evidence of amounts incurred for such 
        services or for testing on behalf of the child.
            ``(L) Standing of putative fathers.--Procedures ensuring 
        that the putative father has a reasonable opportunity to 
        initiate a paternity action.
            ``(M) Filing of acknowledgments and adjudications in state 
        registry of birth records.--Procedures under which voluntary 
        acknowledgments and adjudications of paternity by judicial or 
        administrative processes are filed with the State registry of 
        birth records for comparison with information in the State case 
        registry.''.
    (b) National Paternity Acknowledgment Affidavit.--Section 452(a)(7) 
(42 U.S.C. 652(a)(7)) is amended by inserting ``, and specify the 
minimum requirements of an affidavit to be used for the voluntary 
acknowledgment of paternity which shall include the Social Security 
number of each parent and, after consultation with the States, other 
common elements as determined by such designee'' before the semicolon.
    (c) Conforming Amendment.--Section 468 (42 U.S.C. 668) is amended 
by striking ``a simple civil process for voluntarily acknowledging 
paternity and''.

SEC. 332. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

    Section 454(23) (42 U.S.C. 654(23)) is amended by inserting ``and 
will publicize the availability and encourage the use of procedures for 
voluntary establishment of paternity and child support by means the 
State deems appropriate'' before the semicolon.

SEC. 333. COOPERATION BY APPLICANTS FOR AND RECIPIENTS OF PART A 
              ASSISTANCE.

    Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), 
312(a), and 313(a) of this Act, is amended--
        (1) by striking ``and'' at the end of paragraph (27);
        (2) by striking the period at the end of paragraph (28) and 
    inserting ``; and''; and
        (3) by inserting after paragraph (28) the following new 
    paragraph:
        ``(29) provide that the State agency responsible for 
    administering the State plan--
            ``(A) shall make the determination (and redetermination at 
        appropriate intervals) as to whether an individual who has 
        applied for or is receiving assistance under the State program 
        funded under part A of this title or the State program under 
        title XIX is cooperating in good faith with the State in 
        establishing the paternity of, or in establishing, modifying, 
        or enforcing a support order for, any child of the individual 
        by providing the State agency with the name of, and such other 
        information as the State agency may require with respect to, 
        the noncustodial parent of the child, subject to good cause and 
        other exceptions which--
                ``(i) shall be defined, taking into account the best 
            interests of the child, and
                ``(ii) shall be applied in each case,
        by, at the option of the State, the State agency administering 
        the State program under part A, this part, or title XIX;
            ``(B) shall require the individual to supply additional 
        necessary information and appear at interviews, hearings, and 
        legal proceedings;
            ``(C) shall require the individual and the child to submit 
        to genetic tests pursuant to judicial or administrative order;
            ``(D) may request that the individual sign a voluntary 
        acknowledgment of paternity, after notice of the rights and 
        consequences of such an acknowledgment, but may not require the 
        individual to sign an acknowledgment or otherwise relinquish 
        the right to genetic tests as a condition of cooperation and 
        eligibility for assistance under the State program funded under 
        part A, or the State program under title XIX; and
            ``(E) shall promptly notify the individual, the State 
        agency administering the State program funded under part A, and 
        the State agency administering the State program under title 
        XIX, of each such determination, and if noncooperation is 
        determined, the basis therefor.''.

             Subtitle E--Program Administration and Funding

SEC. 341. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

    (a) Development of New System.--The Secretary of Health and Human 
Services, in consultation with State directors of programs under part D 
of title IV of the Social Security Act, shall develop a new incentive 
system to replace, in a revenue neutral manner, the system under 
section 458 of such Act. The new system shall provide additional 
payments to any State based on such State's performance under such a 
program. Not later than March 1, 1997, the Secretary shall report on 
the new system to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate.
    (b) Conforming Amendments to Present System.--Section 458 (42 
U.S.C. 658) is amended--
        (1) in subsection (a), by striking ``aid to families with 
    dependent children under a State plan approved under part A of this 
    title'' and inserting ``assistance under a program funded under 
    part A'';
        (2) in subsection (b)(1)(A), by striking ``section 402(a)(26)'' 
    and inserting ``section 408(a)(4)'';
        (3) in subsections (b) and (c)--
            (A) by striking ``AFDC collections'' each place it appears 
        and inserting ``title IV-A collections'', and
            (B) by striking ``non-AFDC collections'' each place it 
        appears and inserting ``non-title IV-A collections''; and
        (4) in subsection (c), by striking ``combined AFDC/non-AFDC 
    administrative costs'' both places it appears and inserting 
    ``combined title IV-A/non-title IV-A administrative costs''.
    (c) Calculation of Paternity Establishment Percentage.--
        (1) Section 452(g)(1)(A) (42 U.S.C. 652(g)(1)(A)) is amended by 
    striking ``75'' and inserting ``90''.
        (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended--
            (A) by redesignating subparagraphs (B) through (E) as 
        subparagraphs (C) through (F), respectively, and by inserting 
        after subparagraph (A) the following new subparagraph:
        ``(B) for a State with a paternity establishment percentage of 
    not less than 75 percent but less than 90 percent for such fiscal 
    year, the paternity establishment percentage of the State for the 
    immediately preceding fiscal year plus 2 percentage points;''; and
            (B) by adding at the end the following new flush sentence:
``In determining compliance under this section, a State may use as its 
paternity establishment percentage either the State's IV-D paternity 
establishment percentage (as defined in paragraph (2)(A)) or the 
State's statewide paternity establishment percentage (as defined in 
paragraph (2)(B)).''.
        (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended--
            (A) in subparagraph (A)--
                (i) in the matter preceding clause (i)--

                    (I) by striking ``paternity establishment 
                percentage'' and inserting ``IV-D paternity 
                establishment percentage''; and
                    (II) by striking ``(or all States, as the case may 
                be)''; and

                (ii) by striking ``and'' at the end; and
            (B) by redesignating subparagraph (B) as subparagraph (C) 
        and by inserting after subparagraph (A) the following new 
        subparagraph:
        ``(B) the term `statewide paternity establishment percentage' 
    means, with respect to a State for a fiscal year, the ratio 
    (expressed as a percentage) that the total number of minor 
    children--
            ``(i) who have been born out of wedlock, and
            ``(ii) the paternity of whom has been established or 
        acknowledged during the fiscal year,
    bears to the total number of children born out of wedlock during 
    the preceding fiscal year; and''.
        (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended--
            (A) by striking subparagraph (A) and redesignating 
        subparagraphs (B) and (C) as subparagraphs (A) and (B), 
        respectively; and
            (B) in subparagraph (A) (as so redesignated), by striking 
        ``the percentage of children born out-of-wedlock in a State'' 
        and inserting ``the percentage of children in a State who are 
        born out of wedlock or for whom support has not been 
        established''.
    (d) Effective Dates.--
        (1) Incentive adjustments.--
            (A) In general.--The system developed under subsection (a) 
        and the amendments made by subsection (b) shall become 
        effective on October 1, 1999, except to the extent provided in 
        subparagraph (B).
            (B) Application of section 458.--Section 458 of the Social 
        Security Act, as in effect on the day before the date of the 
        enactment of this section, shall be effective for purposes of 
        incentive payments to States for fiscal years before fiscal 
        year 2000.
        (2) Penalty reductions.--The amendments made by subsection (c) 
    shall become effective with respect to calendar quarters beginning 
    on or after the date of the enactment of this Act.

SEC. 342. FEDERAL AND STATE REVIEWS AND AUDITS.

    (a) State Agency Activities.--Section 454 (42 U.S.C. 654) is 
amended--
        (1) in paragraph (14), by striking ``(14)'' and inserting 
    ``(14)(A)'';
        (2) by redesignating paragraph (15) as subparagraph (B) of 
    paragraph (14); and
        (3) by inserting after paragraph (14) the following new 
    paragraph:
        ``(15) provide for--
            ``(A) a process for annual reviews of and reports to the 
        Secretary on the State program operated under the State plan 
        approved under this part, including such information as may be 
        necessary to measure State compliance with Federal requirements 
        for expedited procedures, using such standards and procedures 
        as are required by the Secretary, under which the State agency 
        will determine the extent to which the program is operated in 
        compliance with this part; and
            ``(B) a process of extracting from the automated data 
        processing system required by paragraph (16) and transmitting 
        to the Secretary data and calculations concerning the levels of 
        accomplishment (and rates of improvement) with respect to 
        applicable performance indicators (including paternity 
        establishment percentages) to the extent necessary for purposes 
        of sections 452(g) and 458;''.
    (b) Federal Activities.--Section 452(a)(4) (42 U.S.C. 652(a)(4)) is 
amended to read as follows:
        ``(4)(A) review data and calculations transmitted by State 
    agencies pursuant to section 454(15)(B) on State program 
    accomplishments with respect to performance indicators for purposes 
    of subsection (g) of this section and section 458;
        ``(B) review annual reports submitted pursuant to section 
    454(15)(A) and, as appropriate, provide to the State comments, 
    recommendations for additional or alternative corrective actions, 
    and technical assistance; and
        ``(C) conduct audits, in accordance with the Government 
    auditing standards of the Comptroller General of the United 
    States--
            ``(i) at least once every 3 years (or more frequently, in 
        the case of a State which fails to meet the requirements of 
        this part concerning performance standards and reliability of 
        program data) to assess the completeness, reliability, and 
        security of the data and the accuracy of the reporting systems 
        used in calculating performance indicators under subsection (g) 
        of this section and section 458;
            ``(ii) of the adequacy of financial management of the State 
        program operated under the State plan approved under this part, 
        including assessments of--
                ``(I) whether Federal and other funds made available to 
            carry out the State program are being appropriately 
            expended, and are properly and fully accounted for; and
                ``(II) whether collections and disbursements of support 
            payments are carried out correctly and are fully accounted 
            for; and
            ``(iii) for such other purposes as the Secretary may find 
        necessary;''.
    (c) Effective Date.--The amendments made by this section shall be 
effective with respect to calendar quarters beginning 12 months or more 
after the date of the enactment of this Act.

SEC. 343. REQUIRED REPORTING PROCEDURES.

    (a) Establishment.--Section 452(a)(5) (42 U.S.C. 652(a)(5)) is 
amended by inserting ``, and establish procedures to be followed by 
States for collecting and reporting information required to be provided 
under this part, and establish uniform definitions (including those 
necessary to enable the measurement of State compliance with the 
requirements of this part relating to expedited processes) to be 
applied in following such procedures'' before the semicolon.
    (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 301(b), 303(a), 312(a), 313(a), and 333 of this 
Act, is amended--
        (1) by striking ``and'' at the end of paragraph (28);
        (2) by striking the period at the end of paragraph (29) and 
    inserting ``; and''; and
        (3) by adding after paragraph (29) the following new paragraph:
        ``(30) provide that the State shall use the definitions 
    established under section 452(a)(5) in collecting and reporting 
    information as required under this part.''.

SEC. 344. AUTOMATED DATA PROCESSING REQUIREMENTS.

    (a) Revised Requirements.--
        (1) In general.--Section 454(16) (42 U.S.C. 654(16)) is 
    amended--
            (A) by striking ``, at the option of the State,'';
            (B) by inserting ``and operation by the State agency'' 
        after ``for the establishment'';
            (C) by inserting ``meeting the requirements of section 
        454A'' after ``information retrieval system'';
            (D) by striking ``in the State and localities thereof, so 
        as (A)'' and inserting ``so as'';
            (E) by striking ``(i)''; and
            (F) by striking ``(including'' and all that follows and 
        inserting a semicolon.
        (2) Automated data processing.--Part D of title IV (42 U.S.C. 
    651-669) is amended by inserting after section 454 the following 
    new section:

``SEC. 454A. AUTOMATED DATA PROCESSING.

    ``(a) In General.--In order for a State to meet the requirements of 
this section, the State agency administering the State program under 
this part shall have in operation a single statewide automated data 
processing and information retrieval system which has the capability to 
perform the tasks specified in this section with the frequency and in 
the manner required by or under this part.
    ``(b) Program Management.--The automated system required by this 
section shall perform such functions as the Secretary may specify 
relating to management of the State program under this part, 
including--
        ``(1) controlling and accounting for use of Federal, State, and 
    local funds in carrying out the program; and
        ``(2) maintaining the data necessary to meet Federal reporting 
    requirements under this part on a timely basis.
    ``(c) Calculation of Performance Indicators.--In order to enable 
the Secretary to determine the incentive payments and penalty 
adjustments required by sections 452(g) and 458, the State agency 
shall--
        ``(1) use the automated system--
            ``(A) to maintain the requisite data on State performance 
        with respect to paternity establishment and child support 
        enforcement in the State; and
            ``(B) to calculate the paternity establishment percentage 
        for the State for each fiscal year; and
        ``(2) have in place systems controls to ensure the com- 
    pleteness and reliability of, and ready access to, the data 
    described in paragraph (1)(A), and the accuracy of the calculations 
    described in paragraph (1)(B).
    ``(d) Information Integrity and Security.--The State agency shall 
have in effect safeguards on the integrity, accuracy, and completeness 
of, access to, and use of data in the automated system required by this 
section, which shall include the following (in addition to such other 
safeguards as the Secretary may specify in regulations):
        ``(1) Policies restricting access.--Written policies concerning 
    access to data by State agency personnel, and sharing of data with 
    other persons, which--
            ``(A) permit access to and use of data only to the extent 
        necessary to carry out the State program under this part; and
            ``(B) specify the data which may be used for particular 
        program purposes, and the personnel permitted access to such 
        data.
        ``(2) Systems controls.--Systems controls (such as passwords or 
    blocking of fields) to ensure strict adherence to the policies 
    described in paragraph (1).
        ``(3) Monitoring of access.--Routine monitoring of access to 
    and use of the automated system, through methods such as audit 
    trails and feedback mechanisms, to guard against and promptly 
    identify unauthorized access or use.
        ``(4) Training and information.--Procedures to ensure that all 
    personnel (including State and local agency staff and contractors) 
    who may have access to or be required to use confidential program 
    data are informed of applicable requirements and penalties 
    (including those in section 6103 of the Internal Revenue Code of 
    1986), and are adequately trained in security procedures.
        ``(5) Penalties.--Administrative penalties (up to and including 
    dismissal from employment) for unauthorized access to, or 
    disclosure or use of, confidential data.''.
        (3) Regulations.--The Secretary of Health and Human Services 
    shall prescribe final regulations for implementation of section 
    454A of the Social Security Act not later than 2 years after the 
    date of the enactment of this Act.
        (4) Implementation timetable.--Section 454(24) (42 U.S.C. 
    654(24)), as amended by section 303(a)(1) of this Act, is amended 
    to read as follows:
        ``(24) provide that the State will have in effect an automated 
    data processing and information retrieval system--
            ``(A) by October 1, 1997, which meets all require- ments of 
        this part which were enacted on or before the date of enactment 
        of the Family Support Act of 1988, and
            ``(B) by October 1, 2000, which meets all require- ments of 
        this part enacted on or before the date of the enactment of the 
        Personal Responsibility and Work Opportunity Act of 1996, 
        except that such deadline shall be extended by 1 day for each 
        day (if any) by which the Secretary fails to meet the deadline 
        imposed by section 344(a)(3) of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996;''.
    (b) Special Federal Matching Rate for Development Costs of 
Automated Systems.--
        (1) In general.--Section 455(a) (42 U.S.C. 655(a)) is amended--
            (A) in paragraph (1)(B)--
                (i) by striking ``90 percent'' and inserting ``the 
            percent specified in paragraph (3)'';
                (ii) by striking ``so much of''; and
                (iii) by striking ``which the Secretary'' and all that 
            follows and inserting ``, and''; and
            (B) by adding at the end the following new paragraph:
    ``(3)(A) The Secretary shall pay to each State, for each quarter in 
fiscal years 1996 and 1997, 90 percent of so much of the State 
expenditures described in paragraph (1)(B) as the Secretary finds are 
for a system meeting the requirements specified in section 454(16) (as 
in effect on September 30, 1995) but limited to the amount approved for 
States in the advance planning documents of such States submitted on or 
before September 30, 1995.
    ``(B)(i) The Secretary shall pay to each State, for each quarter in 
fiscal years 1996 through 2001, the percentage specified in clause (ii) 
of so much of the State expenditures described in paragraph (1)(B) as 
the Secretary finds are for a system meeting the requirements of 
sections 454(16) and 454A.
    ``(ii) The percentage specified in this clause is 80 percent.''.
        (2) Temporary limitation on payments under special federal 
    matching rate.--
            (A) In general.--The Secretary of Health and Human Services 
        may not pay more than $400,000,000 in the aggregate under 
        section 455(a)(3)(B) of the Social Security Act for fiscal 
        years 1996 through 2001.
            (B) Allocation of limitation among states.--The total 
        amount payable to a State under section 455(a)(3)(B) of such 
        Act for fiscal years 1996 through 2001 shall not exceed the 
        limitation determined for the State by the Secretary of Health 
        and Human Services in regulations.
            (C) Allocation formula.--The regulations referred to in 
        subparagraph (B) shall prescribe a formula for allocating the 
        amount specified in subparagraph (A) among States with plans 
        approved under part D of title IV of the Social Security Act, 
        which shall take into account--
                (i) the relative size of State caseloads under such 
            part; and
                (ii) the level of automation needed to meet the 
            automated data processing requirements of such part.
    (c) Conforming Amendment.--Section 123(c) of the Family Support Act 
of 1988 (102 Stat. 2352; Public Law 100-485) is repealed.

SEC. 345. TECHNICAL ASSISTANCE.

    (a) For Training of Federal and State Staff, Research and 
Demonstration Programs, and Special Projects of Regional or National 
Significance.--Section 452 (42 U.S.C. 652) is amended by adding at the 
end the following new subsection:
    ``(j) Out of any money in the Treasury of the United States not 
otherwise appropriated, there is hereby appropriated to the Secretary 
for each fiscal year an amount equal to 1 percent of the total amount 
paid to the Federal Government pursuant to section 457(a) during the 
immediately preceding fiscal year (as determined on the basis of the 
most recent reliable data available to the Secretary as of the end of 
the third calendar quarter following the end of such preceding fiscal 
year), to cover costs incurred by the Secretary for--
        ``(1) information dissemination and technical assistance to 
    States, training of State and Federal staff, staffing studies, and 
    related activities needed to improve programs under this part 
    (including technical assistance concerning State automated systems 
    required by this part); and
        ``(2) research, demonstration, and special projects of regional 
    or national significance relating to the operation of State 
    programs under this part.
The amount appropriated under this subsection shall remain available 
until expended.''.
    (b) Operation of Federal Parent Locator Service.--Section 453 (42 
U.S.C. 653), as amended by section 316 of this Act, is amended by 
adding at the end the following new subsection:
    ``(o) Recovery of Costs.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there is hereby appropriated 
to the Secretary for each fiscal year an amount equal to 2 percent of 
the total amount paid to the Federal Government pursuant to section 
457(a) during the immediately preceding fiscal year (as determined on 
the basis of the most recent reliable data available to the Secretary 
as of the end of the third calendar quarter following the end of such 
preceding fiscal year), to cover costs incurred by the Secretary for 
operation of the Federal Parent Locator Service under this section, to 
the extent such costs are not recovered through user fees.''.

SEC. 346. REPORTS AND DATA COLLECTION BY THE SECRETARY.

    (a) Annual Report to Congress.--
        (1) Section 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is 
    amended--
            (A) by striking ``this part;'' and inserting ``this part, 
        including--''; and
            (B) by adding at the end the following new clauses:
                ``(i) the total amount of child support payments 
            collected as a result of services furnished during the 
            fiscal year to individuals receiving services under this 
            part;
                ``(ii) the cost to the States and to the Federal 
            Government of so furnishing the services; and
                ``(iii) the number of cases involving families--

                    ``(I) who became ineligible for assistance under 
                State programs funded under part A during a month in 
                the fiscal year; and
                    ``(II) with respect to whom a child support payment 
                was received in the month;''.

        (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
    amended--
            (A) in the matter preceding clause (i)--
                (i) by striking ``with the data required under each 
            clause being separately stated for cases'' and inserting 
            ``separately stated for cases'';
                (ii) by striking ``cases where the child was formerly 
            receiving'' and inserting ``or formerly received'';
                (iii) by inserting ``or 1912'' after ``471(a)(17)''; 
            and
                (iv) by inserting ``for'' before ``all other'';
            (B) in each of clauses (i) and (ii), by striking ``, and 
        the total amount of such obligations'';
            (C) in clause (iii), by striking ``described in'' and all 
        that follows and inserting ``in which support was collected 
        during the fiscal year;'';
            (D) by striking clause (iv); and
            (E) by redesignating clause (v) as clause (vii), and 
        inserting after clause (iii) the following new clauses:
                ``(iv) the total amount of support collected during 
            such fiscal year and distributed as current support;
                ``(v) the total amount of support collected during such 
            fiscal year and distributed as arrearages;
                ``(vi) the total amount of support due and unpaid for 
            all fiscal years; and''.
        (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G)) is amended 
    by striking ``on the use of Federal courts and''.
        (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended--
            (A) in subparagraph (H), by striking ``and'';
            (B) in subparagraph (I), by striking the period and 
        inserting ``; and''; and
            (C) by inserting after subparagraph (I) the following new 
        subparagraph:
            ``(J) compliance, by State, with the standards established 
        pursuant to subsections (h) and (i).''.
        (5) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended by 
    striking all that follows subparagraph (J), as added by paragraph 
    (4).
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective with respect to fiscal year 1997 and succeeding fiscal years.

      Subtitle F--Establishment and Modification of Support Orders

SEC. 351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CHILD SUPPORT 
              ORDERS.

    Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to read as 
follows:
        ``(10) Review and adjustment of support orders upon request.--
            ``(A) 3-year cycle.--
                ``(i) In general.--Procedures under which every 3 years 
            (or such shorter cycle as the State may determine), upon 
            the request of either parent, or, if there is an assignment 
            under part A, upon the request of the State agency under 
            the State plan or of either parent, the State shall with 
            respect to a support order being enforced under this part, 
            taking into account the best interests of the child 
            involved--

                    ``(I) review and, if appropriate, adjust the order 
                in accordance with the guidelines established pursuant 
                to section 467(a) if the amount of the child support 
                award under the order differs from the amount that 
                would be awarded in accordance with the guidelines;
                    ``(II) apply a cost-of-living adjustment to the 
                order in accordance with a formula developed by the 
                State; or
                    ``(III) use automated methods (including automated 
                comparisons with wage or State income tax data) to 
                identify orders eligible for review, conduct the 
                review, identify orders eligible for adjustment, and 
                apply the appropriate adjustment to the orders eligible 
                for adjustment under any threshold that may be 
                established by the State.

                ``(ii) Opportunity to request review of adjustment.--If 
            the State elects to conduct the review under subclause (II) 
            or (III) of clause (i), procedures which permit either 
            party to contest the adjustment, within 30 days after the 
            date of the notice of the adjustment, by making a request 
            for review and, if appropriate, adjustment of the order in 
            accordance with the child support guidelines established 
            pursuant to section 467(a).
                ``(iii) No proof of change in circumstances necessary 
            in 3-year cycle review.--Procedures which provide that any 
            adjustment under clause (i) shall be made without a 
            requirement for proof or showing of a change in 
            circumstances.
            ``(B) Proof of substantial change in circumstances 
        necessary in request for review outside 3-year cycle.--
        Procedures under which, in the case of a request for a review, 
        and if appropriate, an adjustment outside the 3-year cycle (or 
        such shorter cycle as the State may determine) under clause 
        (i), the State shall review and, if the requesting party 
        demonstrates a substantial change in circumstances, adjust the 
        order in accordance with the guidelines established pursuant to 
        section 467(a).
            ``(C) Notice of right to review.--Procedures which require 
        the State to provide notice not less than once every 3 years to 
        the parents subject to the order informing the parents of their 
        right to request the State to review and, if appropriate, 
        adjust the order pursuant to this paragraph. The notice may be 
        included in the order.''.

SEC. 352. FURNISHING CONSUMER REPORTS FOR CERTAIN PURPOSES RELATING TO 
              CHILD SUPPORT.

    Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is 
amended by adding at the end the following new paragraphs:
    ``(4) In response to a request by the head of a State or local 
child support enforcement agency (or a State or local government 
official authorized by the head of such an agency), if the person 
making the request certifies to the consumer reporting agency that--
        ``(A) the consumer report is needed for the purpose of 
    establishing an individual's capacity to make child support 
    payments or determining the appropriate level of such payments;
        ``(B) the paternity of the consumer for the child to which the 
    obligation relates has been established or acknowledged by the 
    consumer in accordance with State laws under which the obligation 
    arises (if required by those laws);
        ``(C) the person has provided at least 10 days' prior notice to 
    the consumer whose report is requested, by certified or registered 
    mail to the last known address of the consumer, that the report 
    will be requested; and
        ``(D) the consumer report will be kept confidential, will be 
    used solely for a purpose described in subparagraph (A), and will 
    not be used in connection with any other civil, administrative, or 
    criminal proceeding, or for any other purpose.
    ``(5) To an agency administering a State plan under section 454 of 
the Social Security Act (42 U.S.C. 654) for use to set an initial or 
modified child support award.''.

SEC. 353. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL 
              RECORDS TO STATE CHILD SUPPORT ENFORCEMENT AGENCIES IN 
              CHILD SUPPORT CASES.

    Part D of title IV (42 U.S.C. 651-669) is amended by adding at the 
end the following:

``SEC. 469A. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING 
              FINANCIAL RECORDS TO STATE CHILD SUPPORT ENFORCEMENT 
              AGENCIES IN CHILD SUPPORT CASES.

    ``(a) In General.--Notwithstanding any other provision of Federal 
or State law, a financial institution shall not be liable under any 
Federal or State law to any person for disclosing any financial record 
of an individual to a State child support enforcement agency attempting 
to establish, modify, or enforce a child support obligation of such 
individual.
    ``(b) Prohibition of Disclosure of Financial Record Obtained by 
State Child Support Enforcement Agency.--A State child support 
enforcement agency which obtains a financial record of an individual 
from a financial institution pursuant to subsection (a) may disclose 
such financial record only for the purpose of, and to the extent 
necessary in, establishing, modifying, or enforcing a child support 
obligation of such individual.
    ``(c) Civil Damages for Unauthorized Disclosure.--
        ``(1) Disclosure by state officer or employee.--If any person 
    knowingly, or by reason of negligence, discloses a financial record 
    of an individual in violation of subsection (b), such individual 
    may bring a civil action for damages against such person in a 
    district court of the United States.
        ``(2) No liability for good faith but erroneous 
    interpretation.--No liability shall arise under this subsection 
    with respect to any disclosure which results from a good faith, but 
    erroneous, interpretation of subsection (b).
        ``(3) Damages.--In any action brought under paragraph (1), upon 
    a finding of liability on the part of the defendant, the defendant 
    shall be liable to the plaintiff in an amount equal to the sum of--
            ``(A) the greater of--
                ``(i) $1,000 for each act of unauthorized disclosure of 
            a financial record with respect to which such defendant is 
            found liable; or
                ``(ii) the sum of--

                    ``(I) the actual damages sustained by the plaintiff 
                as a result of such unauthorized disclosure; plus
                    ``(II) in the case of a willful disclosure or a 
                disclosure which is the result of gross negligence, 
                punitive damages; plus

            ``(B) the costs (including attorney's fees) of the action.
    ``(d) Definitions.--For purposes of this section--
        ``(1) Financial institution.--The term `financial institution' 
    means--
            ``(A) a depository institution, as defined in section 3(c) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813(c));
            ``(B) an institution-affiliated party, as defined in 
        section 3(u) of such Act (12 U.S.C. 1813(u));
            ``(C) any Federal credit union or State credit union, as 
        defined in section 101 of the Federal Credit Union Act (12 
        U.S.C. 1752), including an institution-affiliated party of such 
        a credit union, as defined in section 206(r) of such Act (12 
        U.S.C. 1786(r)); and
            ``(D) any benefit association, insurance company, safe 
        deposit company, money-market mutual fund, or similar entity 
        authorized to do business in the State.
        ``(2) Financial record.--The term `financial record' has the 
    meaning given such term in section 1101 of the Right to Financial 
    Privacy Act of 1978 (12 U.S.C. 3401).''.

               Subtitle G--Enforcement of Support Orders

SEC. 361. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

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

SEC. 362. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL EMPLOYEES.

    (a) Consolidation and Streamlining of Authorities.--Section 459 (42 
U.S.C. 659) is amended to read as follows:

``SEC. 459. CONSENT BY THE UNITED STATES TO INCOME WITHHOLDING, 
              GARNISHMENT, AND SIMILAR PROCEEDINGS FOR ENFORCEMENT OF 
              CHILD SUPPORT AND ALIMONY OBLIGATIONS.

    ``(a) Consent to Support Enforcement.--Notwithstanding any other 
provision of law (including section 207 of this Act and section 5301 of 
title 38, United States Code), effective January 1, 1975, moneys (the 
entitlement to which is based upon remuneration for employment) due 
from, or payable by, the United States or the District of Columbia 
(including any agency, subdivision, or instrumentality thereof) to any 
individual, including members of the Armed Forces of the United States, 
shall be subject, in like manner and to the same extent as if the 
United States or the District of Columbia were a private person, to 
withholding in accordance with State law enacted pursuant to 
subsections (a)(1) and (b) of section 466 and regulations of the 
Secretary under such subsections, and to any other legal process 
brought, by a State agency administering a program under a State plan 
approved under this part or by an individual obligee, to enforce the 
legal obligation of the individual to provide child support or alimony.
    ``(b) Consent to Requirements Applicable to Private Person.--With 
respect to notice to withhold income pursuant to subsection (a)(1) or 
(b) of section 466, or any other order or process to enforce support 
obligations against an individual (if the order or process contains or 
is accompanied by sufficient data to permit prompt identification of 
the individual and the moneys involved), each governmental entity 
specified in subsection (a) shall be subject to the same requirements 
as would apply if the entity were a private person, except as otherwise 
provided in this section.
    ``(c) Designation of Agent; Response to Notice or Process--
        ``(1) Designation of agent.--The head of each agency subject to 
    this section shall--
            ``(A) designate an agent or agents to receive orders and 
        accept service of process in matters relating to child support 
        or alimony; and
            ``(B) annually publish in the Federal Register the 
        designation of the agent or agents, identified by title or 
        position, mailing address, and telephone number.
        ``(2) Response to notice or process.--If an agent designated 
    pursuant to paragraph (1) of this subsection receives notice 
    pursuant to State procedures in effect pursuant to subsection 
    (a)(1) or (b) of section 466, or is effectively served with any 
    order, process, or interrogatory, with respect to an individual's 
    child support or alimony payment obligations, the agent shall--
            ``(A) as soon as possible (but not later than 15 days) 
        thereafter, send written notice of the notice or service 
        (together with a copy of the notice or service) to the 
        individual at the duty station or last-known home address of 
        the individual;
            ``(B) within 30 days (or such longer period as may be 
        prescribed by applicable State law) after receipt of a notice 
        pursuant to such State procedures, comply with all applicable 
        provisions of section 466; and
            ``(C) within 30 days (or such longer period as may be 
        prescribed by applicable State law) after effective service of 
        any other such order, process, or interrogatory, respond to the 
        order, process, or interrogatory.
    ``(d) Priority of Claims.--If a governmental entity specified in 
subsection (a) receives notice or is served with process, as provided 
in this section, concerning amounts owed by an individual to more than 
1 person--
        ``(1) support collection under section 466(b) must be given 
    priority over any other process, as provided in section 466(b)(7);
        ``(2) allocation of moneys due or payable to an individual 
    among claimants under section 466(b) shall be governed by section 
    466(b) and the regulations prescribed under such section; and
        ``(3) such moneys as remain after compliance with paragraphs 
    (1) and (2) shall be available to satisfy any other such processes 
    on a first-come, first-served basis, with any such process being 
    satisfied out of such moneys as remain after the satisfaction of 
    all such processes which have been previously served.
    ``(e) No Requirement To Vary Pay Cycles.--A governmental entity 
that is affected by legal process served for the enforcement of an 
individual's child support or alimony payment obligations shall not be 
required to vary its normal pay and disbursement cycle in order to 
comply with the legal process.
    ``(f) Relief From Liability.--
        ``(1) Neither the United States, nor the government of the 
    District of Columbia, nor any disbursing officer shall be liable 
    with respect to any payment made from moneys due or payable from 
    the United States to any individual pursuant to legal process 
    regular on its face, if the payment is made in accordance with this 
    section and the regulations issued to carry out this section.
        ``(2) No Federal employee whose duties include taking actions 
    necessary to comply with the requirements of subsection (a) with 
    regard to any individual shall be subject under any law to any 
    disciplinary action or civil or criminal liability or penalty for, 
    or on account of, any disclosure of information made by the 
    employee in connection with the carrying out of such actions.
    ``(g) Regulations.--Authority to promulgate regulations for the 
implementation of this section shall, insofar as this section applies 
to moneys due from (or payable by)--
        ``(1) the United States (other than the legislative or judicial 
    branches of the Federal Government) or the government of the 
    District of Columbia, be vested in the President (or the designee 
    of the President);
        ``(2) the legislative branch of the Federal Government, be 
    vested jointly in the President pro tempore of the Senate and the 
    Speaker of the House of Representatives (or their designees), and
        ``(3) the judicial branch of the Federal Government, be vested 
    in the Chief Justice of the United States (or the designee of the 
    Chief Justice).
    ``(h) Moneys Subject to Process.--
        ``(1) In general.--Subject to paragraph (2), moneys paid or 
    payable to an individual which are considered to be based upon 
    remuneration for employment, for purposes of this section--
            ``(A) consist of--
                ``(i) compensation paid or payable for personal 
            services of the individual, whether the compensation is 
            denominated as wages, salary, commission, bonus, pay, 
            allowances, or otherwise (including severance pay, sick 
            pay, and incentive pay);
                ``(ii) periodic benefits (including a periodic benefit 
            as defined in section 228(h)(3)) or other payments--

                    ``(I) under the insurance system established by 
                title II;
                    ``(II) under any other system or fund established 
                by the United States which provides for the payment of 
                pensions, retirement or retired pay, annuities, 
                dependents' or survivors' benefits, or similar amounts 
                payable on account of personal services performed by 
                the individual or any other individual;
                    ``(III) as compensation for death under any Federal 
                program;
                    ``(IV) under any Federal program established to 
                provide `black lung' benefits; or
                    ``(V) by the Secretary of Veterans Affairs as 
                compensation for a service-connected disability paid by 
                the Secretary to a former member of the Armed Forces 
                who is in receipt of retired or retainer pay if the 
                former member has waived a portion of the retired or 
                retainer pay in order to receive such compensation; and

                ``(iii) worker's compensation benefits paid under 
            Federal or State law but
            ``(B) do not include any payment--
                ``(i) by way of reimbursement or otherwise, to defray 
            expenses incurred by the individual in carrying out duties 
            associated with the employment of the individual; or
                ``(ii) as allowances for members of the uniformed 
            services payable pursuant to chapter 7 of title 37, United 
            States Code, as prescribed by the Secretaries concerned 
            (defined by section 101(5) of such title) as necessary for 
            the efficient performance of duty.
        ``(2) Certain amounts excluded.--In determining the amount of 
    any moneys due from, or payable by, the United States to any 
    individual, there shall be excluded amounts which--
            ``(A) are owed by the individual to the United States;
            ``(B) are required by law to be, and are, deducted from the 
        remuneration or other payment involved, including Federal 
        employment taxes, and fines and forfeitures ordered by court-
        martial;
            ``(C) are properly withheld for Federal, State, or local 
        income tax purposes, if the withholding of the amounts is 
        authorized or required by law and if amounts withheld are not 
        greater than would be the case if the individual claimed all 
        dependents to which he was entitled (the withholding of 
        additional amounts pursuant to section 3402(i) of the Internal 
        Revenue Code of 1986 may be permitted only when the individual 
        presents evidence of a tax obligation which supports the 
        additional withholding);
            ``(D) are deducted as health insurance premiums;
            ``(E) are deducted as normal retirement contributions (not 
        including amounts deducted for supplementary coverage); or
            ``(F) are deducted as normal life insurance premiums from 
        salary or other remuneration for employment (not including 
        amounts deducted for supplementary coverage).
    ``(i) Definitions.--For purposes of this section--
        ``(1) United states.--The term `United States' includes any 
    department, agency, or instrumentality of the legislative, 
    judicial, or executive branch of the Federal Government, the United 
    States Postal Service, the Postal Rate Commission, any Federal 
    corporation created by an Act of Congress that is wholly owned by 
    the Federal Government, and the governments of the territories and 
    possessions of the United States.
        ``(2) Child support.--The term `child support', when used in 
    reference to the legal obligations of an individual to provide such 
    support, means amounts required to be paid under a judgment, 
    decree, or order, whether temporary, final, or subject to 
    modification, issued by a court or an administrative agency of 
    competent jurisdiction, for the support and maintenance of a child, 
    including a child who has attained the age of majority under the 
    law of the issuing State, or a child and the parent with whom the 
    child is living, which provides for monetary support, health care, 
    arrearages or reimbursement, and which may include other related 
    costs and fees, interest and penalties, income withholding, 
    attorney's fees, and other relief.
        ``(3) Alimony.--
            ``(A) In general.--The term `alimony', when used in 
        reference to the legal obligations of an individual to provide 
        the same, means periodic payments of funds for the support and 
        maintenance of the spouse (or former spouse) of the individual, 
        and (subject to and in accordance with State law) includes 
        separate maintenance, alimony pendente lite, maintenance, and 
        spousal support, and includes attorney's fees, interest, and 
        court costs when and to the extent that the same are expressly 
        made recoverable as such pursuant to a decree, order, or 
        judgment issued in accordance with applicable State law by a 
        court of competent jurisdiction.
            ``(B) Exceptions.--Such term does not include--
                ``(i) any child support; or
                ``(ii) any payment or transfer of property or its value 
            by an individual to the spouse or a former spouse of the 
            individual in compliance with any community property 
            settlement, equitable distribution of property, or other 
            division of property between spouses or former spouses.
        ``(4) Private person.--The term `private person' means a person 
    who does not have sovereign or other special immunity or privilege 
    which causes the person not to be subject to legal process.
        ``(5) Legal process.--The term `legal process' means any writ, 
    order, summons, or other similar process in the nature of 
    garnishment--
            ``(A) which is issued by--
                ``(i) a court or an administrative agency of competent 
            jurisdiction in any State, territory, or possession of the 
            United States;
                ``(ii) a court or an administrative agency of competent 
            jurisdiction in any foreign country with which the United 
            States has entered into an agreement which requires the 
            United States to honor the process; or
                ``(iii) an authorized official pursuant to an order of 
            such a court or an administrative agency of competent 
            jurisdiction or pursuant to State or local law; and
            ``(B) which is directed to, and the purpose of which is to 
        compel, a governmental entity which holds moneys which are 
        otherwise payable to an individual to make a payment from the 
        moneys to another party in order to satisfy a legal obligation 
        of the individual to provide child support or make alimony 
        payments.''.
    (b) Conforming Amendments.--
        (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C. 661 
    and 662) are repealed.
        (2) To title 5, united states code.--Section 5520a of title 5, 
    United States Code, is amended, in subsections (h)(2) and (i), by 
    striking ``sections 459, 461, and 462 of the Social Security Act 
    (42 U.S.C. 659, 661, and 662)'' and inserting ``section 459 of the 
    Social Security Act (42 U.S.C. 659)''.
    (c) Military Retired and Retainer Pay.--
        (1) Definition of court.--Section 1408(a)(1) of title 10, 
    United States Code, is amended--
            (A) by striking ``and'' at the end of subparagraph (B);
            (B) by striking the period at the end of subparagraph (C) 
        and inserting ``; and''; and
            (C) by adding after subparagraph (C) the following new 
        subparagraph:
            ``(D) any administrative or judicial tribunal of a State 
        competent to enter orders for support or maintenance (including 
        a State agency administering a program under a State plan 
        approved under part D of title IV of the Social Security Act), 
        and, for purposes of this subparagraph, the term `State' 
        includes the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, and American Samoa.''.
        (2) Definition of court order.--Section 1408(a)(2) of such 
    title is amended--
            (A) by inserting ``or a support order, as defined in 
        section 453(p) of the Social Security Act (42 U.S.C. 653(p)),'' 
        before ``which--'';
            (B) in subparagraph (B)(i), by striking ``(as defined in 
        section 462(b) of the Social Security Act (42 U.S.C. 662(b)))'' 
        and inserting ``(as defined in section 459(i)(2) of the Social 
        Security Act (42 U.S.C. 659(i)(2)))''; and
            (C) in subparagraph (B)(ii), by striking ``(as defined in 
        section 462(c) of the Social Security Act (42 U.S.C. 662(c)))'' 
        and inserting ``(as defined in section 459(i)(3) of the Social 
        Security Act (42 U.S.C. 659(i)(3)))''.
        (3) Public payee.--Section 1408(d) of such title is amended--
            (A) in the heading, by inserting ``(or for Benefit of)'' 
        before ``Spouse or''; and
            (B) in paragraph (1), in the first sentence, by inserting 
        ``(or for the benefit of such spouse or former spouse to a 
        State disbursement unit established pursuant to section 454B of 
        the Social Security Act or other public payee designated by a 
        State, in accordance with part D of title IV of the Social 
        Security Act, as directed by court order, or as otherwise 
        directed in accordance with such part D)'' before ``in an 
        amount sufficient''.
        (4) Relationship to part d of title iv.--Section 1408 of such 
    title is amended by adding at the end the following new subsection:
    ``(j) Relationship to Other Laws.--In any case involving an order 
providing for payment of child support (as defined in section 459(i)(2) 
of the Social Security Act) by a member who has never been married to 
the other parent of the child, the provisions of this section shall not 
apply, and the case shall be subject to the provisions of section 459 
of such Act.''.
    (d) Effective Date.--The amendments made by this section shall 
become effective 6 months after the date of the enactment of this Act.

SEC. 363. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF MEMBERS OF THE 
              ARMED FORCES.

    (a) Availability of Locator Information.--
        (1) Maintenance of address information.--The Secretary of 
    Defense shall establish a centralized personnel locator service 
    that includes the address of each member of the Armed Forces under 
    the jurisdiction of the Secretary. Upon request of the Secretary of 
    Transportation, addresses for members of the Coast Guard shall be 
    included in the centralized personnel locator service.
        (2) Type of address.--
            (A) Residential address.--Except as provided in 
        subparagraph (B), the address for a member of the Armed Forces 
        shown in the locator service shall be the residential address 
        of that member.
            (B) Duty address.--The address for a member of the Armed 
        Forces shown in the locator service shall be the duty address 
        of that member in the case of a member--
                (i) who is permanently assigned overseas, to a vessel, 
            or to a routinely deployable unit; or
                (ii) with respect to whom the Secretary concerned makes 
            a determination that the member's residential address 
            should not be disclosed due to national security or safety 
            concerns.
        (3) Updating of locator information.--Within 30 days after a 
    member listed in the locator service establishes a new residential 
    address (or a new duty address, in the case of a member covered by 
    paragraph (2)(B)), the Secretary concerned shall update the locator 
    service to indicate the new address of the member.
        (4) Availability of information.--The Secretary of Defense 
    shall make information regarding the address of a member of the 
    Armed Forces listed in the locator service available, on request, 
    to the Federal Parent Locator Service established under section 453 
    of the Social Security Act.
    (b) Facilitating Granting of Leave for Attendance at Hearings.--
        (1) Regulations.--The Secretary of each military department, 
    and the Secretary of Transportation with respect to the Coast Guard 
    when it is not operating as a service in the Navy, shall prescribe 
    regulations to facilitate the granting of leave to a member of the 
    Armed Forces under the jurisdiction of that Secretary in a case in 
    which--
            (A) the leave is needed for the member to attend a hearing 
        described in paragraph (2);
            (B) the member is not serving in or with a unit deployed in 
        a contingency operation (as defined in section 101 of title 10, 
        United States Code); and
            (C) the exigencies of military service (as determined by 
        the Secretary concerned) do not otherwise require that such 
        leave not be granted.
        (2) Covered hearings.--Paragraph (1) applies to a hearing that 
    is conducted by a court or pursuant to an administrative process 
    established under State law, in connection with a civil action--
            (A) to determine whether a member of the Armed Forces is a 
        natural parent of a child; or
            (B) to determine an obligation of a member of the Armed 
        Forces to provide child support.
        (3) Definitions.--For purposes of this subsection--
            (A) The term ``court'' has the meaning given that term in 
        section 1408(a) of title 10, United States Code.
            (B) The term ``child support'' has the meaning given such 
        term in section 459(i) of the Social Security Act (42 U.S.C. 
        659(i)).
    (c) Payment of Military Retired Pay in Compliance With Child 
Support Orders.--
        (1) Date of certification of court order.--Section 1408 of 
    title 10, United States Code, as amended by section 362(c)(4) of 
    this Act, is amended--
            (A) by redesignating subsections (i) and (j) as subsections 
        (j) and (k), respectively; and
            (B) by inserting after subsection (h) the following new 
        subsection:
    ``(i) Certification Date.--It is not necessary that the date of a 
certification of the authenticity or completeness of a copy of a court 
order for child support received by the Secretary concerned for the 
purposes of this section be recent in relation to the date of receipt 
by the Secretary.''.
        (2) Payments consistent with assignments of rights to states.--
    Section 1408(d)(1) of such title is amended by inserting after the 
    first sentence the following new sentence: ``In the case of a 
    spouse or former spouse who, pursuant to section 408(a)(3) of the 
    Social Security Act (42 U.S.C. 608(a)(4)), assigns to a State the 
    rights of the spouse or former spouse to receive support, the 
    Secretary concerned may make the child support payments referred to 
    in the preceding sentence to that State in amounts consistent with 
    that assignment of rights.''.
        (3) Arrearages owed by members of the uniformed services.--
    Section 1408(d) of such title is amended by adding at the end the 
    following new paragraph:
    ``(6) In the case of a court order for which effective service is 
made on the Secretary concerned on or after the date of the enactment 
of this paragraph and which provides for payments from the disposable 
retired pay of a member to satisfy the amount of child support set 
forth in the order, the authority provided in paragraph (1) to make 
payments from the disposable retired pay of a member to satisfy the 
amount of child support set forth in a court order shall apply to 
payment of any amount of child support arrearages set forth in that 
order as well as to amounts of child support that currently become 
due.''.
        (4) Payroll deductions.--The Secretary of Defense shall begin 
    payroll deductions within 30 days after receiving notice of 
    withholding, or for the first pay period that begins after such 30-
    day period.

SEC. 364. VOIDING OF FRAUDULENT TRANSFERS.

    Section 466 (42 U.S.C. 666), as amended by section 321 of this Act, 
is amended by adding at the end the following new subsection:
    ``(g) Laws Voiding Fraudulent Transfers.--In order to satisfy 
section 454(20)(A), each State must have in effect--
        ``(1)(A) the Uniform Fraudulent Conveyance Act of 1981;
        ``(B) the Uniform Fraudulent Transfer Act of 1984; or
        ``(C) another law, specifying indicia of fraud which create a 
    prima facie case that a debtor transferred income or property to 
    avoid payment to a child support creditor, which the Secretary 
    finds affords comparable rights to child support creditors; and
        ``(2) procedures under which, in any case in which the State 
    knows of a transfer by a child support debtor with respect to which 
    such a prima facie case is established, the State must--
            ``(A) seek to void such transfer; or
            ``(B) obtain a settlement in the best interests of the 
        child support creditor.''.

SEC. 365. WORK REQUIREMENT FOR PERSONS OWING PAST-DUE CHILD SUPPORT.

    (a) In General.--Section 466(a) (42 U.S.C. 666(a)), as amended by 
sections 315, 317, and 323 of this Act, is amended by inserting after 
paragraph (14) the following new paragraph:
        ``(15) Procedures to ensure that persons owing past-due support 
    work or have a plan for payment of such support.--
            ``(A) In general.--Procedures under which the State has the 
        authority, in any case in which an individual owes past-due 
        support with respect to a child receiving assistance under a 
        State program funded under part A, to issue an order or to 
        request that a court or an administrative process established 
        pursuant to State law issue an order that requires the 
        individual to--
                ``(i) pay such support in accordance with a plan 
            approved by the court, or, at the option of the State, a 
            plan approved by the State agency administering the State 
            program under this part; or
                ``(ii) if the individual is subject to such a plan and 
            is not incapacitated, participate in such work activities 
            (as defined in section 407(d)) as the court, or, at the 
            option of the State, the State agency administering the 
            State program under this part, deems appropriate.
            ``(B) Past-due support defined.--For purposes of 
        subparagraph (A), the term `past-due support' means the amount 
        of a delinquency, determined under a court order, or an order 
        of an administrative process established under State law, for 
        support and maintenance of a child, or of a child and the 
        parent with whom the child is living.''.
    (b) Conforming Amendment.--The flush paragraph at the end of 
section 466(a) (42 U.S.C. 666(a)) is amended by striking ``and (7)'' 
and inserting ``(7), and (15)''.

SEC. 366. DEFINITION OF SUPPORT ORDER.

    Section 453 (42 U.S.C. 653) as amended by sections 316 and 345(b) 
of this Act, is amended by adding at the end the following new 
subsection:
    ``(p) Support Order Defined.--As used in this part, the term 
`support order' means a judgment, decree, or order, whether temporary, 
final, or subject to modification, issued by a court or an 
administrative agency of competent jurisdiction, for the support and 
maintenance of a child, including a child who has attained the age of 
majority under the law of the issuing State, or a child and the parent 
with whom the child is living, which provides for monetary support, 
health care, arrearages, or reimbursement, and which may include 
related costs and fees, interest and penalties, income withholding, 
attorneys' fees, and other relief.''.

SEC. 367. REPORTING ARREARAGES TO CREDIT BUREAUS.

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

SEC. 368. LIENS.

    Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended to read as 
follows:
        ``(4) Liens.--Procedures under which--
            ``(A) liens arise by operation of law against real and 
        personal property for amounts of overdue support owed by a 
        noncustodial parent who resides or owns property in the State; 
        and
            ``(B) the State accords full faith and credit to liens 
        described in subparagraph (A) arising in another State, when 
        the State agency, party, or other entity seeking to enforce 
        such a lien complies with the procedural rules relating to 
        recording or serving liens that arise within the State, except 
        that such rules may not require judicial notice or hearing 
        prior to the enforcement of such a lien.''.

SEC. 369. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 
323, and 365 of this Act, is amended by inserting after paragraph (15) 
the following:
        ``(16) Authority to withhold or suspend licenses.--Procedures 
    under which the State has (and uses in appropriate cases) authority 
    to withhold or suspend, or to restrict the use of driver's 
    licenses, professional and occupational licenses, and recreational 
    licenses of individuals owing overdue support or failing, after 
    receiving appropriate notice, to comply with subpoenas or warrants 
    relating to paternity or child support proceedings.''.

SEC. 370. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUPPORT.

    (a) HHS Certification Procedure.--
        (1) Secretarial responsibility.--Section 452 (42 U.S.C. 652), 
    as amended by section 345 of this Act, is amended by adding at the 
    end the following new subsection:
    ``(k)(1) If the Secretary receives a certification by a State 
agency in accordance with the requirements of section 454(31) that an 
individual owes arrearages of child support in an amount exceeding 
$5,000, the Secretary shall transmit such certification to the 
Secretary of State for action (with respect to denial, revocation, or 
limitation of passports) pursuant to paragraph (2).
    ``(2) The Secretary of State shall, upon certification by the 
Secretary transmitted under paragraph (1), refuse to issue a passport 
to such individual, and may revoke, restrict, or limit a passport 
issued previously to such individual.
    ``(3) The Secretary and the Secretary of State shall not be liable 
to an individual for any action with respect to a certification by a 
State agency under this section.''.
        (2) State agency responsibility.--Section 454 (42 U.S.C. 654), 
    as amended by sections 301(b), 303(a), 312(b), 313(a), 333, and 
    343(b) of this Act, is amended--
            (A) by striking ``and'' at the end of paragraph (29);
            (B) by striking the period at the end of paragraph (30) and 
        inserting ``; and''; and
            (C) by adding after paragraph (30) the following new 
        paragraph:
        ``(31) provide that the State agency will have in effect a 
    procedure for certifying to the Secretary, for purposes of the 
    procedure under section 452(k), determinations that individuals owe 
    arrearages of child support in an amount exceeding $5,000, under 
    which procedure--
            ``(A) each individual concerned is afforded notice of such 
        determination and the consequences thereof, and an opportunity 
        to contest the determination; and
            ``(B) the certification by the State agency is furnished to 
        the Secretary in such format, and accompanied by such 
        supporting documentation, as the Secretary may require.''.
    (b) Effective Date.--This section and the amendments made by this 
section shall become effective October 1, 1997.

SEC. 371. INTERNATIONAL SUPPORT ENFORCEMENT.

    (a) Authority for International Agreements.--Part D of title IV, as 
amended by section 362(a) of this Act, is amended by adding after 
section 459 the following new section:

``SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT.

    ``(a) Authority for Declarations.--
        ``(1) Declaration.--The Secretary of State, with the 
    concurrence of the Secretary of Health and Human Services, is 
    authorized to declare any foreign country (or a political 
    subdivision thereof) to be a foreign reciprocating country if the 
    foreign country has established, or undertakes to establish, 
    procedures for the establishment and enforcement of duties of 
    support owed to obligees who are residents of the United States, 
    and such procedures are substantially in conformity with the 
    standards prescribed under subsection (b).
        ``(2) Revocation.--A declaration with respect to a foreign 
    country made pursuant to paragraph (1) may be revoked if the 
    Secretaries of State and Health and Human Services determine that--
            ``(A) the procedures established by the foreign country 
        regarding the establishment and enforcement of duties of 
        support have been so changed, or the foreign country's 
        implementation of such procedures is so unsatisfactory, that 
        such procedures do not meet the criteria for such a 
        declaration; or
            ``(B) continued operation of the declaration is not 
        consistent with the purposes of this part.
        ``(3) Form of declaration.--A declaration under paragraph (1) 
    may be made in the form of an international agreement, in 
    connection with an international agreement or corresponding foreign 
    declaration, or on a unilateral basis.
    ``(b) Standards for Foreign Support Enforcement Procedures.--
        ``(1) Mandatory elements.--Support enforcement procedures of a 
    foreign country which may be the subject of a declaration pursuant 
    to subsection (a)(1) shall include the following elements:
            ``(A) The foreign country (or political subdivision 
        thereof) has in effect procedures, available to residents of 
        the United States--
                ``(i) for establishment of paternity, and for 
            establishment of orders of support for children and 
            custodial parents; and
                ``(ii) for enforcement of orders to provide support to 
            children and custodial parents, including procedures for 
            collection and appropriate distribution of support payments 
            under such orders.
            ``(B) The procedures described in subparagraph (A), 
        including legal and administrative assistance, are provided to 
        residents of the United States at no cost.
            ``(C) An agency of the foreign country is designated as a 
        Central Authority responsible for--
                ``(i) facilitating support enforcement in cases 
            involving residents of the foreign country and residents of 
            the United States; and
                ``(ii) ensuring compliance with the standards 
            established pursuant to this subsection.
        ``(2) Additional elements.--The Secretary of Health and Human 
    Services and the Secretary of State, in consultation with the 
    States, may establish such additional standards as may be 
    considered necessary to further the purposes of this section.
    ``(c) Designation of United States Central Authority.--It shall be 
the responsibility of the Secretary of Health and Human Services to 
facilitate support enforcement in cases involving residents of the 
United States and residents of foreign countries that are the subject 
of a declaration under this section, by activities including--
        ``(1) development of uniform forms and procedures for use in 
    such cases;
        ``(2) notification of foreign reciprocating countries of the 
    State of residence of individuals sought for support enforcement 
    purposes, on the basis of information provided by the Federal 
    Parent Locator Service; and
        ``(3) such other oversight, assistance, and coordination 
    activities as the Secretary may find necessary and appropriate.
    ``(d) Effect on Other Laws.--States may enter into reciprocal 
arrangements for the establishment and enforcement of support 
obligations with foreign countries that are not the subject of a 
declaration pursuant to subsection (a), to the extent consistent with 
Federal law.''.
    (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 301(b), 303(a), 312(b), 313(a), 333, 343(b), and 
370(a)(2) of this Act, is amended--
        (1) by striking ``and'' at the end of paragraph (30);
        (2) by striking the period at the end of paragraph (31) and 
    inserting ``; and''; and
        (3) by adding after paragraph (31) the following new paragraph:
        ``(32)(A) provide that any request for services under this part 
    by a foreign reciprocating country or a foreign country with which 
    the State has an arrangement described in section 459A(d)(2) shall 
    be treated as a request by a State;
        ``(B) provide, at State option, notwithstanding paragraph (4) 
    or any other provision of this part, for services under the plan 
    for enforcement of a spousal support order not described in 
    paragraph (4)(B) entered by such a country (or subdivision); and
        ``(C) provide that no applications will be required from, and 
    no costs will be assessed for such services against, the foreign 
    reciprocating country or foreign obligee (but costs may at State 
    option be assessed against the obligor).''.

SEC. 372. FINANCIAL INSTITUTION DATA MATCHES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 
323, 365, and 369 of this Act, is amended by inserting after paragraph 
(16) the following new paragraph:
        ``(17) Financial institution data matches.--
            ``(A) In general.--Procedures under which the State agency 
        shall enter into agreements with financial institutions doing 
        business in the State--
                ``(i) to develop and operate, in coordination with such 
            financial institutions, a data match system, using 
            automated data exchanges to the maximum extent feasible, in 
            which each such financial institution is required to 
            provide for each calendar quarter the name, record address, 
            social security number or other taxpayer identification 
            number, and other identifying information for each 
            noncustodial parent who maintains an account at such 
            institution and who owes past-due support, as identified by 
            the State by name and social security number or other 
            taxpayer identification number; and
                ``(ii) in response to a notice of lien or levy, 
            encumber or surrender, as the case may be, assets held by 
            such institution on behalf of any noncustodial parent who 
            is subject to a child support lien pursuant to paragraph 
            (4).
            ``(B) Reasonable fees.--The State agency may pay a 
        reasonable fee to a financial institution for conducting the 
        data match provided for in subparagraph (A)(i), not to exceed 
        the actual costs incurred by such financial institution.
            ``(C) Liability.--A financial institution shall not be 
        liable under any Federal or State law to any person--
                ``(i) for any disclosure of information to the State 
            agency under subparagraph (A)(i);
                ``(ii) for encumbering or surrendering any assets held 
            by such financial institution in response to a notice of 
            lien or levy issued by the State agency as provided for in 
            subparagraph (A)(ii); or
                ``(iii) for any other action taken in good faith to 
            comply with the requirements of subparagraph (A).
            ``(D) Definitions.--For purposes of this paragraph--
                ``(i) Financial institution.--The term `financial 
            institution' has the meaning given to such term by section 
            469A(d)(1).
                ``(ii) Account.--The term `account' means a demand 
            deposit account, checking or negotiable withdrawal order 
            account, savings account, time deposit account, or money-
            market mutual fund account.''.

SEC. 373. ENFORCEMENT OF ORDERS AGAINST PATERNAL OR MATERNAL 
              GRANDPARENTS IN CASES OF MINOR PARENTS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 
323, 365, 369, and 372 of this Act, is amended by inserting after 
paragraph (17) the following new paragraph:
        ``(18) Enforcement of orders against paternal or maternal 
    grandparents.--Procedures under which, at the State's option, any 
    child support order enforced under this part with respect to a 
    child of minor parents, if the custodial parent of such child is 
    receiving assistance under the State program under part A, shall be 
    enforceable, jointly and severally, against the parents of the 
    noncustodial parent of such child.''.

SEC. 374. NONDISCHARGEABILITY IN BANKRUPTCY OF CERTAIN DEBTS FOR THE 
              SUPPORT OF A CHILD.

    (a) Amendment to Title 11 of the United States Code.--Section 
523(a) of title 11, United States Code, is amended--
        (1) by striking ``or'' at the end of paragraph (16);
        (2) by striking the period at the end of paragraph (17) and 
    inserting ``; or'';
        (3) by adding at the end the following:
        ``(18) owed under State law to a State or municipality that 
    is--
            ``(A) in the nature of support, and
            ``(B) enforceable under part D of title IV of the Social 
        Security Act (42 U.S.C. 601 et seq.).''; and
        (4) in paragraph (5), by striking ``section 402(a)(26)'' and 
    inserting ``section 408(a)(3)''.
    (b) Amendment to the Social Security Act.--Section 456(b) (42 
U.S.C. 656(b)) is amended to read as follows:
    ``(b) Nondischargeability.--A debt (as defined in section 101 of 
title 11 of the United States Code) owed under State law to a State (as 
defined in such section) or municipality (as defined in such section) 
that is in the nature of support and that is enforceable under this 
part is not released by a discharge in bankruptcy under title 11 of the 
United States Code.''.
    (c) Application of Amendments.--The amendments made by this section 
shall apply only with respect to cases commenced under title 11 of the 
United States Code after the date of the enactment of this Act.

SEC. 375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

    (a) Child Support Enforcement Agreements.--Section 454 (42 U.S.C. 
654), as amended by sections 301(b), 303(a), 312(b), 313(a), 333, 
343(b), 370(a)(2), and 371(b) of this Act, is amended--
        (1) by striking ``and'' at the end of paragraph (31);
        (2) by striking the period at the end of paragraph (32) and 
    inserting ``; and'';
        (3) by adding after paragraph (32) the following new paragraph:
        ``(33) provide that a State that receives funding pursuant to 
    section 428 and that has within its borders Indian country (as 
    defined in section 1151 of title 18, United States Code) may enter 
    into cooperative agreements with an Indian tribe or tribal 
    organization (as defined in subsections (e) and (l) of section 4 of 
    the Indian Self-Determination and Education Assistance Act (25 
    U.S.C. 450b)), if the Indian tribe or tribal organization 
    demonstrates that such tribe or organization has an established 
    tribal court system or a Court of Indian Offenses with the 
    authority to establish paternity, establish, modify, and enforce 
    support orders, and to enter support orders in accordance with 
    child support guidelines established by such tribe or organization, 
    under which the State and tribe or organization shall provide for 
    the cooperative delivery of child support enforcement services in 
    Indian country and for the forwarding of all funding collected 
    pursuant to the functions performed by the tribe or organization to 
    the State agency, or conversely, by the State agency to the tribe 
    or organization, which shall distribute such funding in accordance 
    with such agreement.''; and
        (4) by adding at the end the following new sentence: ``Nothing 
    in paragraph (33) shall void any provision of any cooperative 
    agreement entered into before the date of the enactment of such 
    paragraph, nor shall such paragraph deprive any State of 
    jurisdiction over Indian country (as so defined) that is lawfully 
    exercised under section 402 of the Act entitled `An Act to 
    prescribe penalties for certain acts of violence or intimidation, 
    and for other purposes', approved April 11, 1968 (25 U.S.C. 
    1322).''.
    (b) Direct Federal Funding to Indian Tribes and Tribal 
Organizations.--Section 455 (42 U.S.C. 655) is amended by adding at the 
end the following new subsection:
    ``(b) The Secretary may, in appropriate cases, make direct payments 
under this part to an Indian tribe or tribal organization which has an 
approved child support enforcement plan under this title. In 
determining whether such payments are appropriate, the Secretary shall, 
at a minimum, consider whether services are being provided to eligible 
Indian recipients by the State agency through an agreement entered into 
pursuant to section 454(34).''.
    (c) Cooperative Enforcement Agreements.--Paragraph (7) of section 
454 (42 U.S.C. 654) is amended by inserting ``and Indian tribes or 
tribal organizations (as defined in subsections (e) and (l) of section 
4 of the Indian Self-Determination and Education Assistance Act (25 
U.S.C. 450b))'' after ``law enforcement officials''.
    (d) Conforming Amendment.--Subsection (c) of section 428 (42 U.S.C. 
628) is amended to read as follows:
    ``(c) For purposes of this section, the terms `Indian tribe' and 
`tribal organization' shall have the meanings given such terms by 
subsections (e) and (l) of section 4 of the Indian Self-Determination 
and Education Assistance Act (25 U.S.C. 450b), respectively.''.

                      Subtitle H--Medical Support

SEC. 381. CORRECTION TO ERISA DEFINITION OF MEDICAL CHILD SUPPORT 
              ORDER.

    (a) In General.--Section 609(a)(2)(B) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended--
        (1) by striking ``issued by a court of competent 
    jurisdiction'';
        (2) by striking the period at the end of clause (ii) and 
    inserting a comma; and
        (3) by adding, after and below clause (ii), the following:
        ``if such judgment, decree, or order (I) is issued by a court 
        of competent jurisdiction or (II) is issued through an 
        administrative process established under State law and has the 
        force and effect of law under applicable State law.''.
    (b) Effective Date.--
        (1) In general.--The amendments made by this section shall take 
    effect on the date of the enactment of this Act.
        (2) Plan amendments not required until january 1, 1997.--Any 
    amendment to a plan required to be made by an amendment made by 
    this section shall not be required to be made before the 1st plan 
    year beginning on or after January 1, 1997, if--
            (A) during the period after the date before the date of the 
        enactment of this Act and before such 1st plan year, the plan 
        is operated in accordance with the requirements of the 
        amendments made by this section; and
            (B) such plan amendment applies retroactively to the period 
        after the date before the date of the enactment of this Act and 
        before such 1st plan year.
    A plan shall not be treated as failing to be operated in accordance 
    with the provisions of the plan merely because it operates in 
    accordance with this paragraph.

SEC. 382. ENFORCEMENT OF ORDERS FOR HEALTH CARE COVERAGE.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 
323, 365, 369, 372, and 373 of this Act, is amended by inserting after 
paragraph (18) the following new paragraph:
        ``(19) Health care coverage.--Procedures under which all child 
    support orders enforced pursuant to this part shall include a 
    provision for the health care coverage of the child, and in the 
    case in which a noncustodial parent provides such coverage and 
    changes employment, and the new employer provides health care 
    coverage, the State agency shall transfer notice of the provision 
    to the employer, which notice shall operate to enroll the child in 
    the noncustodial parent's health plan, unless the noncustodial 
    parent contests the notice.''.

     Subtitle I--Enhancing Responsibility and Opportunity for Non-
                          Residential Parents

SEC. 391. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    Part D of title IV (42 U.S.C. 651-669), as amended by section 353 
of this Act, is amended by adding at the end the following new section:

``SEC. 469B. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    ``(a) In General.--The Administration for Children and Families 
shall make grants under this section to enable States to establish and 
administer programs to support and facilitate noncustodial parents' 
access to and visitation of their children, by means of activities 
including mediation (both voluntary and mandatory), counseling, 
education, development of parenting plans, visitation enforcement 
(including monitoring, supervision and neutral drop-off and pickup), 
and development of guidelines for visitation and alternative custody 
arrangements.
    ``(b) Amount of Grant.--The amount of the grant to be made to a 
State under this section for a fiscal year shall be an amount equal to 
the lesser of--
        ``(1) 90 percent of State expenditures during the fiscal year 
    for activities described in subsection (a); or
        ``(2) the allotment of the State under subsection (c) for the 
    fiscal year.
    ``(c) Allotments to States.--
        ``(1) In general.--The allotment of a State for a fiscal year 
    is the amount that bears the same ratio to $10,000,000 for grants 
    under this section for the fiscal year as the number of children in 
    the State living with only 1 biological parent bears to the total 
    number of such children in all States.
        ``(2) Minimum allotment.--The Administration for Children and 
    Families shall adjust allotments to States under paragraph (1) as 
    necessary to ensure that no State is allotted less than--
            ``(A) $50,000 for fiscal year 1997 or 1998; or
            ``(B) $100,000 for any succeeding fiscal year.
    ``(d) No Supplantation of State Expenditures for Similar 
Activities.--A State to which a grant is made under this section may 
not use the grant to supplant expenditures by the State for activities 
specified in subsection (a), but shall use the grant to supplement such 
expenditures at a level at least equal to the level of such 
expenditures for fiscal year 1995.
    ``(e) State Administration.--Each State to which a grant is made 
under this section--
        ``(1) may administer State programs funded with the grant, 
    directly or through grants to or contracts with courts, local 
    public agencies, or nonprofit private entities;
        ``(2) shall not be required to operate such programs on a 
    statewide basis; and
        ``(3) shall monitor, evaluate, and report on such programs in 
    accordance with regulations prescribed by the Secretary.''.

         Subtitle J--Effective Dates and Conforming Amendments

SEC. 395. EFFECTIVE DATES AND CONFORMING AMENDMENTS.

    (a) In General.--Except as otherwise specifically provided (but 
subject to subsections (b) and (c))--
        (1) the provisions of this title requiring the enactment or 
    amendment of State laws under section 466 of the Social Security 
    Act, or revision of State plans under section 454 of such Act, 
    shall be effective with respect to periods beginning on and after 
    October 1, 1996; and
        (2) all other provisions of this title shall become effective 
    upon the date of the enactment of this Act.
    (b) Grace Period for State Law Changes.--The provisions of this 
title shall become effective with respect to a State on the later of--
        (1) the date specified in this title, or
        (2) the effective date of laws enacted by the legislature of 
    such State implementing such provisions,
but in no event later than the 1st day of the 1st calendar quarter 
beginning after the close of the 1st regular session of the State 
legislature that begins after the date of the enactment of this Act. 
For purposes of the previous sentence, in the case of a State that has 
a 2-year legislative session, each year of such session shall be deemed 
to be a separate regular session of the State legislature.
    (c) Grace Period for State Constitutional Amendment.--A State shall 
not be found out of compliance with any requirement enacted by this 
title if the State is unable to so comply without amending the State 
constitution until the earlier of--
        (1) 1 year after the effective date of the necessary State 
    constitutional amendment; or
        (2) 5 years after the date of the enactment of this Act.
    (d) Conforming Amendments.--
        (1) The following provisions are amended by striking ``absent'' 
    each place it appears and inserting ``noncustodial'':
            (A) Section 451 (42 U.S.C. 651).
            (B) Subsections (a)(1), (a)(8), (a)(10)(E), (a)(10)(F), 
        (f), and (h) of section 452 (42 U.S.C. 652).
            (C) Section 453(f) (42 U.S.C. 653(f)).
            (D) Paragraphs (8), (13), and (21)(A) of section 454 (42 
        U.S.C. 654).
            (E) Section 455(e)(1) (42 U.S.C. 655(e)(1)).
            (F) Section 458(a) (42 U.S.C. 658(a)).
            (G) Subsections (a), (b), and (c) of section 463 (42 U.S.C. 
        663).
            (H) Subsections (a)(3)(A), (a)(3)(C), (a)(6), and 
        (a)(8)(B)(ii), the last sentence of subsection (a), and 
        subsections (b)(1), (b)(3)(B), (b)(3)(B)(i), (b)(6)(A)(i), 
        (b)(9), and (e) of section 466 (42 U.S.C. 666).
        (2) The following provisions are amended by striking ``an 
    absent'' each place it appears and inserting ``a noncustodial'':
            (A) Paragraphs (2) and (3) of section 453(c) (42 U.S.C. 
        653(c)).
            (B) Subparagraphs (B) and (C) of section 454(9) (42 U.S.C. 
        654(9)).
            (C) Section 456(a)(3) (42 U.S.C. 656(a)(3)).
            (D) Subsections (a)(3)(A), (a)(6), (a)(8)(B)(i), (b)(3)(A), 
        and (b)(3)(B) of section 466 (42 U.S.C. 666).
            (E) Paragraphs (2) and (4) of section 469(b) (42 U.S.C. 
        669(b)).

      TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

SEC. 400. STATEMENTS OF NATIONAL POLICY CONCERNING WELFARE AND 
              IMMIGRATION.

    The Congress makes the following statements concerning national 
policy with respect to welfare and immigration:
        (1) Self-sufficiency has been a basic principle of United 
    States immigration law since this country's earliest immigration 
    statutes.
        (2) It continues to be the immigration policy of the United 
    States that--
            (A) aliens within the Nation's borders not depend on public 
        resources to meet their needs, but rather rely on their own 
        capabilities and the resources of their families, their 
        sponsors, and private organizations, and
            (B) the availability of public benefits not constitute an 
        incentive for immigration to the United States.
        (3) Despite the principle of self-sufficiency, aliens have been 
    applying for and receiving public benefits from Federal, State, and 
    local governments at increasing rates.
        (4) Current eligibility rules for public assistance and 
    unenforceable financial support agreements have proved wholly 
    incapable of assuring that individual aliens not burden the public 
    benefits system.
        (5) It is a compelling government interest to enact new rules 
    for eligibility and sponsorship agreements in order to assure that 
    aliens be self-reliant in accordance with national immigration 
    policy.
        (6) It is a compelling government interest to remove the 
    incentive for illegal immigration provided by the availability of 
    public benefits.
        (7) With respect to the State authority to make determinations 
    concerning the eligibility of qualified aliens for public benefits 
    in this title, a State that chooses to follow the Federal 
    classification in determining the eligibility of such aliens for 
    public assistance shall be considered to have chosen the least 
    restrictive means available for achieving the compelling 
    governmental interest of assuring that aliens be self-reliant in 
    accordance with national immigration policy.

              Subtitle A--Eligibility for Federal Benefits

SEC. 401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELIGIBLE FOR FEDERAL 
              PUBLIC BENEFITS.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsection (b), an alien who is not a qualified 
alien (as defined in section 431) is not eligible for any Federal 
public benefit (as defined in subsection (c)).
    (b) Exceptions.--
        (1) Subsection (a) shall not apply with respect to the fol- 
    lowing Federal public benefits:
            (A) Medical assistance under title XIX of the Social 
        Security Act (or any successor program to such title) for care 
        and services that are necessary for the treatment of an 
        emergency medical condition (as defined in section 1903(v)(3) 
        of such Act) of the alien involved and are not related to an 
        organ transplant procedure, if the alien involved otherwise 
        meets the eligibility requirements for medical assistance under 
        the State plan approved under such title (other than the 
        requirement of the receipt of aid or assistance under title IV 
        of such Act, supplemental security income benefits under title 
        XVI of such Act, or a State supplementary payment).
            (B) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (C) Public health assistance (not including any assistance 
        under title XIX of the Social Security Act) for immunizations 
        with respect to immunizable diseases and for testing and 
        treatment of symptoms of communicable diseases whether or not 
        such symptoms are caused by a communicable disease.
            (D) Programs, services, or assistance (such as soup 
        kitchens, crisis counseling and intervention, and short-term 
        shelter) specified by the Attorney General, in the Attorney 
        General's sole and unreviewable discretion after consultation 
        with appropriate Federal agencies and departments, which (i) 
        deliver in-kind services at the community level, including 
        through public or private nonprofit agencies; (ii) do not 
        condition the provision of assistance, the amount of assistance 
        provided, or the cost of assistance provided on the individual 
        recipient's income or resources; and (iii) are necessary for 
        the protection of life or safety.
            (E) Programs for housing or community development 
        assistance or financial assistance administered by the 
        Secretary of Housing and Urban Development, any program under 
        title V of the Housing Act of 1949, or any assistance under 
        section 306C of the Consolidated Farm and Rural Development 
        Act, to the extent that the alien is receiving such a benefit 
        on the date of the enactment of this Act.
        (2) Subsection (a) shall not apply to any benefit payable under 
    title II of the Social Security Act to an alien who is lawfully 
    present in the United States as determined by the Attorney General, 
    to any benefit if nonpayment of such benefit would contravene an 
    international agreement described in section 233 of the Social 
    Security Act, to any benefit if nonpayment would be contrary to 
    section 202(t) of the Social Security Act, or to any benefit 
    payable under title II of the Social Security Act to which 
    entitlement is based on an application filed in or before the month 
    in which this Act becomes law.
    (c) Federal Public Benefit Defined.--
        (1) Except as provided in paragraph (2), for purposes of this 
    title the term ``Federal public benefit'' means--
            (A) any grant, contract, loan, professional license, or 
        commercial license provided by an agency of the United States 
        or by appropriated funds of the United States; and
            (B) any retirement, welfare, health, disability, public or 
        assisted housing, postsecondary education, food assistance, 
        unemployment benefit, or any other similar benefit for which 
        payments or assistance are provided to an individual, 
        household, or family eligibility unit by an agency of the 
        United States or by appropriated funds of the United States.
        (2) Such term shall not apply--
            (A) to any contract, professional license, or commercial 
        license for a nonimmigrant whose visa for entry is related to 
        such employment in the United States; or
            (B) with respect to benefits for an alien who as a work 
        authorized nonimmigrant or as an alien lawfully admitted for 
        permanent residence under the Immigration and Nationality Act 
        qualified for such benefits and for whom the United States 
        under reciprocal treaty agreements is required to pay benefits, 
        as determined by the Attorney General, after consultation with 
        the Secretary of State.

SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN FEDERAL 
              PROGRAMS.

    (a) Limited Eligibility for Specified Federal Programs.--
        (1) In general.--Notwithstanding any other provision of law and 
    except as provided in paragraph (2), an alien who is a qualified 
    alien (as defined in section 431) is not eligible for any specified 
    Federal program (as defined in para- graph (3)).
        (2) Exceptions.--
            (A) Time-limited exception for refugees and asylees.--
        Paragraph (1) shall not apply to an alien until 5 years after 
        the date--
                (i) an alien is admitted to the United States as a 
            refugee under section 207 of the Immigration and 
            Nationality Act;
                (ii) an alien is granted asylum under section 208 of 
            such Act; or
                (iii) an alien's deportation is withheld under section 
            243(h) of such Act.
            (B) Certain permanent resident aliens.--Paragraph (1) shall 
        not apply to an alien who--
                (i) is lawfully admitted to the United States for 
            permanent residence under the Immigration and Nationality 
            Act; and
                (ii)(I) has worked 40 qualifying quarters of coverage 
            as defined under title II of the Social Security Act or can 
            be credited with such qualifying quarters as provided under 
            section 435, and (II) in the case of any such qualifying 
            quarter creditable for any period beginning after December 
            31, 1996, did not receive any Federal means-tested public 
            benefit (as provided under section 403) during any such 
            period.
            (C) Veteran and active duty exception.--Paragraph (1) shall 
        not apply to an alien who is lawfully residing in any State and 
        is--
                (i) a veteran (as defined in section 101 of title 38, 
            United States Code) with a discharge characterized as an 
            honorable discharge and not on account of alienage,
                (ii) on active duty (other than active duty for 
            training) in the Armed Forces of the United States, or
                (iii) the spouse or unmarried dependent child of an 
            individual described in clause (i) or (ii).
            (D) Transition for aliens currently receiving benefits.--
                (i) SSI.--

                    (I) In general.--With respect to the specified 
                Federal program described in paragraph (3)(A), during 
                the period beginning on the date of the enactment of 
                this Act and ending on the date which is 1 year after 
                such date of enactment, the Commissioner of Social 
                Security shall redetermine the eligibility of any 
                individual who is receiving benefits under such program 
                as of the date of the enactment of this Act and whose 
                eligibility for such benefits may terminate by reason 
                of the provisions of this subsection.
                    (II) Redetermination criteria.-- With respect to 
                any redetermination under subclause (I), the 
                Commissioner of Social Security shall apply the 
                eligibility criteria for new applicants for benefits 
                under such program.
                    (III) Grandfather provision.--The provisions of 
                this subsection and the redetermination under subclause 
                (I), shall only apply with respect to the benefits of 
                an individual described in subclause (I) for months 
                beginning on or after the date of the redetermination 
                with respect to such individual.
                    (IV) Notice.--Not later than March 31, 1997, the 
                Commissioner of Social Security shall notify an 
                individual described in subclause (I) of the provisions 
                of this clause.

                (ii) Food stamps.--

                    (I) In general.--With respect to the specified 
                Federal program described in paragraph (3)(B), during 
                the period beginning on the date of enactment of this 
                Act and ending on the date which is 1 year after the 
                date of enactment, the State agency shall, at the time 
                of the recertification, recertify the eligibility of 
                any individual who is receiving benefits under such 
                program as of the date of enactment of this Act and 
                whose eligibility for such benefits may terminate by 
                reason of the provisions of this subsection.
                    (II) Recertification criteria.--With respect to any 
                recertification under subclause (I), the State agency 
                shall apply the eligibility criteria for applicants for 
                benefits under such program.
                    (III) Grandfather provision.--The provisions of 
                this subsection and the recertification under subclause 
                (I) shall only apply with respect to the eligibility of 
                an alien for a program for months beginning on or after 
                the date of recertification, if on the date of 
                enactment of this Act the alien is lawfully residing in 
                any State and is receiving benefits under such program 
                on such date of enactment.

        (3) Specified federal program defined.--For purposes of this 
    title, the term ``specified Federal program'' means any of the 
    following:
            (A) SSI.--The supplemental security income program under 
        title XVI of the Social Security Act, including supplementary 
        payments pursuant to an agreement for Federal administration 
        under section 1616(a) of the Social Security Act and payments 
        pursuant to an agreement entered into under section 212(b) of 
        Public Law 93-66.
            (B) Food stamps.--The food stamp program as defined in 
        section 3(h) of the Food Stamp Act of 1977.
    (b) Limited Eligibility for Designated Federal Programs.--
        (1) In general.--Notwithstanding any other provision of law and 
    except as provided in section 403 and paragraph (2), a State is 
    authorized to determine the eligibility of an alien who is a 
    qualified alien (as defined in section 431) for any designated 
    Federal program (as defined in paragraph (3)).
        (2) Exceptions.--Qualified aliens under this paragraph shall be 
    eligible for any designated Federal program.
            (A) Time-limited exception for refugees and asylees.--
                (i) An alien who is admitted to the United States as a 
            refugee under section 207 of the Immigration and 
            Nationality Act until 5 years after the date of an alien's 
            entry into the United States.
                (ii) An alien who is granted asylum under section 208 
            of such Act until 5 years after the date of such grant of 
            asylum.
                (iii) An alien whose deportation is being withheld 
            under section 243(h) of such Act until 5 years after such 
            withholding.
            (B) Certain permanent resident aliens.--An alien who--
                (i) is lawfully admitted to the United States for 
            permanent residence under the Immigration and Nationality 
            Act; and
                (ii)(I) has worked 40 qualifying quarters of coverage 
            as defined under title II of the Social Security Act or can 
            be credited with such qualifying quarters as provided under 
            section 435, and (II) in the case of any such qualifying 
            quarter creditable for any period beginning after December 
            31, 1996, did not receive any Federal means-tested public 
            benefit (as provided under section 403) during any such 
            period.
            (C) Veteran and active duty exception.--An alien who is 
        lawfully residing in any State and is--
                (i) a veteran (as defined in section 101 of title 38, 
            United States Code) with a discharge characterized as an 
            honorable discharge and not on account of alienage,
                (ii) on active duty (other than active duty for 
            training) in the Armed Forces of the United States, or
                (iii) the spouse or unmarried dependent child of an 
            individual described in clause (i) or (ii).
            (D) Transition for those currently receiving benefits.--An 
        alien who on the date of the enactment of this Act is lawfully 
        residing in any State and is receiving benefits under such 
        program on the date of the enactment of this Act shall continue 
        to be eligible to receive such benefits until January 1, 1997.
        (3) Designated federal program defined.--For purposes of this 
    title, the term ``designated Federal program'' means any of the 
    following:
            (A) Temporary assistance for needy families.--The program 
        of block grants to States for temporary assistance for needy 
        families under part A of title IV of the Social Security Act.
            (B) Social services block grant.--The program of block 
        grants to States for social services under title XX of the 
        Social Security Act.
            (C) Medicaid.--A State plan approved under title XIX of the 
        Social Security Act, other than medical assistance described in 
        section 401(b)(1)(A).

SEC. 403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR FEDERAL 
              MEANS-TESTED PUBLIC BENEFIT.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsections (b), (c), and (d), an alien who is a 
qualified alien (as defined in section 431) and who enters the United 
States on or after the date of the enactment of this Act is not 
eligible for any Federal means-tested public benefit for a period of 5 
years beginning on the date of the alien's entry into the United States 
with a status within the meaning of the term ``qualified alien''.
    (b) Exceptions.--The limitation under subsection (a) shall not 
apply to the following aliens:
        (1) Exception for refugees and asylees.--
            (A) An alien who is admitted to the United States as a 
        refugee under section 207 of the Immigration and Nationality 
        Act.
            (B) An alien who is granted asylum under section 208 of 
        such Act.
            (C) An alien whose deportation is being withheld under 
        section 243(h) of such Act.
        (2) Veteran and active duty exception.--An alien who is 
    lawfully residing in any State and is--
            (A) a veteran (as defined in section 101 of title 38, 
        United States Code) with a discharge characterized as an 
        honorable discharge and not on account of alienage,
            (B) on active duty (other than active duty for training) in 
        the Armed Forces of the United States, or
            (C) the spouse or unmarried dependent child of an 
        individual described in subparagraph (A) or (B).
    (c) Application of Term Federal Means-tested Public Benefit.--
        (1) The limitation under subsection (a) shall not apply to 
    assistance or benefits under paragraph (2).
        (2) Assistance and benefits under this paragraph are as 
    follows:
            (A) Medical assistance described in section 401(b)(1)(A).
            (B) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (C) Assistance or benefits under the National School Lunch 
        Act.
            (D) Assistance or benefits under the Child Nutrition Act of 
        1966.
            (E) Public health assistance (not including any assistance 
        under title XIX of the Social Security Act) for immunizations 
        with respect to immunizable diseases and for testing and 
        treatment of symptoms of communicable diseases whether or not 
        such symptoms are caused by a communicable disease.
            (F) Payments for foster care and adoption assistance under 
        parts B and E of title IV of the Social Security Act for a 
        parent or a child who would, in the absence of subsection (a), 
        be eligible to have such payments made on the child's behalf 
        under such part, but only if the foster or adoptive parent (or 
        parents) of such child is a qualified alien (as defined in 
        section 431).
            (G) Programs, services, or assistance (such as soup 
        kitchens, crisis counseling and intervention, and short-term 
        shelter) specified by the Attorney General, in the Attorney 
        General's sole and unreviewable discretion after consultation 
        with appropriate Federal agencies and departments, which (i) 
        deliver in-kind services at the community level, including 
        through public or private nonprofit agencies; (ii) do not 
        condition the provision of assistance, the amount of assistance 
        provided, or the cost of assistance provided on the individual 
        recipient's income or resources; and (iii) are necessary for 
        the protection of life or safety.
            (H) Programs of student assistance under titles IV, V, IX, 
        and X of the Higher Education Act of 1965, and titles III, VII, 
        and VIII of the Public Health Service Act.
            (I) Means-tested programs under the Elementary and 
        Secondary Education Act of 1965.
            (J) Benefits under the Head Start Act.
            (K) Benefits under the Job Training Partnership Act.
    (d) Special Rule for Refugee and Entrant Assistance for Cuban and 
Haitian Entrants.--The limitation under subsection (a) shall not apply 
to refugee and entrant assistance activities, authorized by title IV of 
the Immigration and Nationality Act and section 501 of the Refugee 
Education Assistance Act of 1980, for Cuban and Haitian entrants as 
defined in section 501(e)(2) of the Refugee Education Assistance Act of 
1980.

SEC. 404. NOTIFICATION AND INFORMATION REPORTING.

    (a) Notification.--Each Federal agency that administers a program 
to which section 401, 402, or 403 applies shall, directly or through 
the States, post information and provide general notification to the 
public and to program recipients of the changes regarding eligibility 
for any such program pursuant to this subtitle.
    (b) Information Reporting Under Title IV of the Social Security 
Act.--Part A of title IV of the Social Security Act is amended by 
inserting the following new section after section 411:

``SEC. 411A. STATE REQUIRED TO PROVIDE CERTAIN INFORMATION.

    ``Each State to which a grant is made under section 403 shall, at 
least 4 times annually and upon request of the Immigration and 
Naturalization Service, furnish the Immigration and Naturalization 
Service with the name and address of, and other identifying information 
on, any individual who the State knows is unlawfully in the United 
States.''.
    (c) SSI.--Section 1631(e) of such Act (42 U.S.C. 1383(e)) is 
amended--
        (1) by redesignating the paragraphs (6) and (7) inserted by 
    sections 206(d)(2) and 206(f)(1) of the Social Security 
    Independence and Programs Improvement Act of 1994 (Public Law 103-
    296; 108 Stat. 1514, 1515) as paragraphs (7) and (8), respectively; 
    and
        (2) by adding at the end the following new paragraph:
    ``(9) Notwithstanding any other provision of law, the Commissioner 
shall, at least 4 times annually and upon request of the Immigration 
and Naturalization Service (hereafter in this paragraph referred to as 
the `Service'), furnish the Service with the name and address of, and 
other identifying information on, any individual who the Commissioner 
knows is unlawfully in the United States, and shall ensure that each 
agreement entered into under section 1616(a) with a State provides that 
the State shall furnish such information at such times with respect to 
any individual who the State knows is unlawfully in the United 
States.''.
    (d) Information Reporting for Housing Programs.--Title I of the 
United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended 
by adding at the end the following new section:

``SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCEMENT AND OTHER 
              AGENCIES.

    ``Notwithstanding any other provision of law, the Secretary shall, 
at least 4 times annually and upon request of the Immigration and 
Naturalization Service (hereafter in this section referred to as the 
`Service'), furnish the Service with the name and address of, and other 
identifying information on, any individual who the Secretary knows is 
unlawfully in the United States, and shall ensure that each contract 
for assistance entered into under section 6 or 8 of this Act with a 
public housing agency provides that the public housing agency shall 
furnish such information at such times with respect to any individual 
who the public housing agency knows is unlawfully in the United 
States.''.

  Subtitle B--Eligibility for State and Local Public Benefits Programs

SEC. 411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR NONIMMIGRANTS 
              INELIGIBLE FOR STATE AND LOCAL PUBLIC BENEFITS.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsections (b) and (d), an alien who is not--
        (1) a qualified alien (as defined in section 431),
        (2) a nonimmigrant under the Immigration and Nationality Act, 
    or
        (3) an alien who is paroled into the United States under 
    section 212(d)(5) of such Act for less than one year,
is not eligible for any State or local public benefit (as defined in 
subsection (c)).
    (b) Exceptions.--Subsection (a) shall not apply with respect to the 
following State or local public benefits:
        (1) Assistance for health care items and services that are 
    necessary for the treatment of an emergency medical condition (as 
    defined in section 1903(v)(3) of the Social Security Act) of the 
    alien involved and are not related to an organ transplant 
    procedure.
        (2) Short-term, non-cash, in-kind emergency disaster relief.
        (3) Public health assistance for immunizations with respect to 
    immunizable diseases and for testing and treatment of symptoms of 
    communicable diseases whether or not such symptoms are caused by a 
    communicable disease.
        (4) Programs, services, or assistance (such as soup kitchens, 
    crisis counseling and intervention, and short-term shelter) 
    specified by the Attorney General, in the Attorney General's sole 
    and unreviewable discretion after consultation with appropriate 
    Federal agencies and departments, which (A) deliver in-kind 
    services at the community level, including through public or 
    private nonprofit agencies; (B) do not condition the provision of 
    assistance, the amount of assistance provided, or the cost of 
    assistance provided on the individual recipient's income or 
    resources; and (C) are necessary for the protection of life or 
    safety.
    (c) State or Local Public Benefit Defined.--
        (1) Except as provided in paragraphs (2) and (3), for purposes 
    of this subtitle the term ``State or local public benefit'' means--
            (A) any grant, contract, loan, professional license, or 
        commercial license provided by an agency of a State or local 
        government or by appropriated funds of a State or local 
        government; and
            (B) any retirement, welfare, health, disability, public or 
        assisted housing, postsecondary education, food assistance, 
        unemployment benefit, or any other similar benefit for which 
        payments or assistance are provided to an individual, 
        household, or family eligibility unit by an agency of a State 
        or local government or by appropriated funds of a State or 
        local government.
        (2) Such term shall not apply--
            (A) to any contract, professional license, or commercial 
        license for a nonimmigrant whose visa for entry is related to 
        such employment in the United States; or
            (B) with respect to benefits for an alien who as a work 
        authorized nonimmigrant or as an alien lawfully admitted for 
        permanent residence under the Immigration and Nationality Act 
        qualified for such benefits and for whom the United States 
        under reciprocal treaty agreements is required to pay benefits, 
        as determined by the Secretary of State, after consultation 
        with the Attorney General.
        (3) Such term does not include any Federal public benefit under 
    section 4001(c).
    (d) State Authority to Provide for Eligibility of Illegal Aliens 
for State and Local Public Benefits.--A State may provide that an alien 
who is not lawfully present in the United States is eligible for any 
State or local public benefit for which such alien would otherwise be 
ineligible under subsection (a) only through the enactment of a State 
law after the date of the enactment of this Act which affirmatively 
provides for such eligibility.

SEC. 412. STATE AUTHORITY TO LIMIT ELIGIBILITY OF QUALIFIED ALIENS FOR 
              STATE PUBLIC BENEFITS.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsection (b), a State is authorized to 
determine the eligibility for any State public benefits of an alien who 
is a qualified alien (as defined in section 431), a nonimmigrant under 
the Immigration and Nationality Act, or an alien who is paroled into 
the United States under section 212(d)(5) of such Act for less than one 
year.
    (b) Exceptions.--Qualified aliens under this subsection shall be 
eligible for any State public benefits.
        (1) Time-limited exception for refugees and asylees.--
            (A) An alien who is admitted to the United States as a 
        refugee under section 207 of the Immigration and Nationality 
        Act until 5 years after the date of an alien's entry into the 
        United States.
            (B) An alien who is granted asylum under section 208 of 
        such Act until 5 years after the date of such grant of asylum.
            (C) An alien whose deportation is being withheld under 
        section 243(h) of such Act until 5 years after such with- 
        holding.
        (2) Certain permanent resident aliens.--An alien who--
            (A) is lawfully admitted to the United States for permanent 
        residence under the Immigration and Nationality Act; and
            (B)(i) has worked 40 qualifying quarters of coverage as 
        defined under title II of the Social Security Act or can be 
        credited with such qualifying quarters as provided under 
        section 435, and (ii) in the case of any such qualifying 
        quarter creditable for any period beginning after December 31, 
        1996, did not receive any Federal means-tested public benefit 
        (as provided under section 403) during any such period.
        (3) Veteran and active duty exception.--An alien who is 
    lawfully residing in any State and is--
            (A) a veteran (as defined in section 101 of title 38, 
        United States Code) with a discharge characterized as an 
        honorable discharge and not on account of alienage,
            (B) on active duty (other than active duty for training) in 
        the Armed Forces of the United States, or
            (C) the spouse or unmarried dependent child of an 
        individual described in subparagraph (A) or (B).
        (4) Transition for those currently receiving benefits.--An 
    alien who on the date of the enactment of this Act is lawfully 
    residing in any State and is receiving benefits on the date of the 
    enactment of this Act shall continue to be eligible to receive such 
    benefits until January 1, 1997.

      Subtitle C--Attribution of Income and Affidavits of Support

SEC. 421. FEDERAL ATTRIBUTION OF SPONSOR'S INCOME AND RESOURCES TO 
              ALIEN.

    (a) In General.--Notwithstanding any other provision of law, in 
determining the eligibility and the amount of benefits of an alien for 
any Federal means-tested public benefits program (as provided under 
section 403), the income and resources of the alien shall be deemed to 
include the following:
        (1) The income and resources of any person who executed an 
    affidavit of support pursuant to section 213A of the Immigration 
    and Nationality Act (as added by section 423) on behalf of such 
    alien.
        (2) The income and resources of the spouse (if any) of the 
    person.
    (b) Duration of Attribution Period.--Subsection (a) shall apply 
with respect to an alien until such time as the alien--
        (1) achieves United States citizenship through naturalization 
    pursuant to chapter 2 of title III of the Immigration and 
    Nationality Act; or
        (2)(A) has worked 40 qualifying quarters of coverage as defined 
    under title II of the Social Security Act or can be credited with 
    such qualifying quarters as provided under section 435, and (B) in 
    the case of any such qualifying quarter creditable for any period 
    beginning after December 31, 1996, did not receive any Federal 
    means-tested public benefit (as provided under section 403) during 
    any such period.
    (c) Review of Income and Resources of Alien Upon Reapplication.--
Whenever an alien is required to reapply for benefits under any Federal 
means-tested public benefits program, the applicable agency shall 
review the income and resources attributed to the alien under 
subsection (a).
    (d) Application.--
        (1) If on the date of the enactment of this Act, a Federal 
    means-tested public benefits program attributes a sponsor's income 
    and resources to an alien in determining the alien's eligibility 
    and the amount of benefits for an alien, this section shall apply 
    to any such determination beginning on the day after the date of 
    the enactment of this Act.
        (2) If on the date of the enactment of this Act, a Federal 
    means-tested public benefits program does not attribute a sponsor's 
    income and resources to an alien in determining the alien's 
    eligibility and the amount of benefits for an alien, this section 
    shall apply to any such determination beginning 180 days after the 
    date of the enactment of this Act.

SEC. 422. AUTHORITY FOR STATES TO PROVIDE FOR ATTRIBUTION OF SPONSORS 
              INCOME AND RESOURCES TO THE ALIEN WITH RESPECT TO STATE 
              PROGRAMS.

    (a) Optional Application to State Programs.--Except as provided in 
subsection (b), in determining the eligibility and the amount of 
benefits of an alien for any State public benefits (as defined in 
section 412(c)), the State or political subdivision that offers the 
benefits is authorized to provide that the income and resources of the 
alien shall be deemed to include--
        (1) the income and resources of any individual who executed an 
    affidavit of support pursuant to section 213A of the Immigration 
    and Nationality Act (as added by section 423) on behalf of such 
    alien, and
        (2) the income and resources of the spouse (if any) of the 
    individual.
    (b) Exceptions.--Subsection (a) shall not apply with respect to the 
following State public benefits:
        (1) Assistance described in section 411(b)(1).
        (2) Short-term, non-cash, in-kind emergency disaster relief.
        (3) Programs comparable to assistance or benefits under the 
    National School Lunch Act.
        (4) Programs comparable to assistance or benefits under the 
    Child Nutrition Act of 1966.
        (5) Public health assistance for immunizations with respect to 
    immunizable diseases and for testing and treatment of symptoms of 
    communicable diseases whether or not such symptoms are caused by a 
    communicable disease.
        (6) Payments for foster care and adoption assistance.
        (7) Programs, services, or assistance (such as soup kitchens, 
    crisis counseling and intervention, and short-term shelter) 
    specified by the Attorney General of a State, after consultation 
    with appropriate agencies and departments, which (A) deliver in-
    kind services at the community level, including through public or 
    private nonprofit agencies; (B) do not condition the provision of 
    assistance, the amount of assistance provided, or the cost of 
    assistance provided on the individual recipient's income or 
    resources; and (C) are necessary for the protection of life or 
    safety.

SEC. 423. REQUIREMENTS FOR SPONSOR'S AFFIDAVIT OF SUPPORT.

    (a) In General.--Title II of the Immigration and Nationality Act is 
amended by inserting after section 213 the following new section:

            ``requirements for sponsor's affidavit of support

    ``Sec. 213A. (a) Enforceability.--(1) No affidavit of support may 
be accepted by the Attorney General or by any consular officer to 
establish that an alien is not excludable as a public charge under 
section 212(a)(4) unless such affidavit is executed as a contract--
        ``(A) which is legally enforceable against the sponsor by the 
    sponsored alien, the Federal Government, and by any State (or any 
    political subdivision of such State) which provides any means-
    tested public benefits program, but not later than 10 years after 
    the alien last receives any such benefit;
        ``(B) in which the sponsor agrees to financially support the 
    alien, so that the alien will not become a public charge; and
        ``(C) in which the sponsor agrees to submit to the jurisdiction 
    of any Federal or State court for the purpose of actions brought 
    under subsection (e)(2).
    ``(2) A contract under paragraph (1) shall be enforceable with 
respect to benefits provided to the alien until such time as the alien 
achieves United States citizenship through naturalization pursuant to 
chapter 2 of title III.
    ``(b) Forms.--Not later than 90 days after the date of enactment of 
this section, the Attorney General, in consultation with the Secretary 
of State and the Secretary of Health and Human Services, shall 
formulate an affidavit of support consistent with the provisions of 
this section.
    ``(c) Remedies.--Remedies available to enforce an affidavit of 
support under this section include any or all of the remedies described 
in section 3201, 3203, 3204, or 3205 of title 28, United States Code, 
as well as an order for specific performance and payment of legal fees 
and other costs of collection, and include corresponding remedies 
available under State law. A Federal agency may seek to collect amounts 
owed under this section in accordance with the provisions of subchapter 
II of chapter 37 of title 31, United States Code.
    ``(d) Notification of Change of Address.--
        ``(1) In general.--The sponsor shall notify the Attorney 
    General and the State in which the sponsored alien is currently 
    resident within 30 days of any change of address of the sponsor 
    during the period specified in subsection (a)(2).
        ``(2) Penalty.--Any person subject to the requirement of 
    paragraph (1) who fails to satisfy such requirement shall be 
    subject to a civil penalty of--
            ``(A) not less than $250 or more than $2,000, or
            ``(B) if such failure occurs with knowledge that the alien 
        has received any means-tested public benefit, not less than 
        $2,000 or more than $5,000.
    ``(e) Reimbursement of Government Expenses.--(1)(A) Upon 
notification that a sponsored alien has received any benefit under any 
means-tested public benefits program, the appropriate Federal, State, 
or local official shall request reimbursement by the sponsor in the 
amount of such assistance.
    ``(B) The Attorney General, in consultation with the Secretary of 
Health and Human Services, shall prescribe such regulations as may be 
necessary to carry out subparagraph (A).
    ``(2) If within 45 days after requesting reimbursement, the 
appropriate Federal, State, or local agency has not received a response 
from the sponsor indicating a willingness to commence payments, an 
action may be brought against the sponsor pursuant to the affidavit of 
support.
    ``(3) If the sponsor fails to abide by the repayment terms 
established by such agency, the agency may, within 60 days of such 
failure, bring an action against the sponsor pursuant to the affidavit 
of support.
    ``(4) No cause of action may be brought under this subsection later 
than 10 years after the alien last received any benefit under any 
means-tested public benefits program.
    ``(5) If, pursuant to the terms of this subsection, a Federal, 
State, or local agency requests reimbursement from the sponsor in the 
amount of assistance provided, or brings an action against the sponsor 
pursuant to the affidavit of support, the appropriate agency may 
appoint or hire an individual or other person to act on behalf of such 
agency acting under the authority of law for purposes of collecting any 
moneys owed. Nothing in this subsection shall preclude any appropriate 
Federal, State, or local agency from directly requesting reimbursement 
from a sponsor for the amount of assistance provided, or from bringing 
an action against a sponsor pursuant to an affidavit of support.
    ``(f) Definitions.--For the purposes of this section--
        ``(1) Sponsor.--The term `sponsor' means an indi- vidual who--
            ``(A) is a citizen or national of the United States or an 
        alien who is lawfully admitted to the United States for 
        permanent residence;
            ``(B) is 18 years of age or over;
            ``(C) is domiciled in any of the 50 States or the District 
        of Columbia; and
            ``(D) is the person petitioning for the admission of the 
        alien under section 204.''.
    (b) Clerical Amendment.--The table of contents of such Act is 
amended by inserting after the item relating to section 213 the 
following:
``Sec. 213A. Requirements for sponsor's affidavit of support.''.

    (c) Effective Date.--Subsection (a) of section 213A of the 
Immigration and Nationality Act, as inserted by subsection (a) of this 
section, shall apply to affidavits of support executed on or after a 
date specified by the Attorney General, which date shall be not earlier 
than 60 days (and not later than 90 days) after the date the Attorney 
General formulates the form for such affidavits under subsection (b) of 
such section.
    (d) Benefits Not Subject to Reimbursement.--Requirements for 
reimbursement by a sponsor for benefits provided to a sponsored alien 
pursuant to an affidavit of support under section 213A of the 
Immigration and Nationality Act shall not apply with respect to the 
following:
        (1) Medical assistance described in section 401(b)(1)(A) or 
    assistance described in section 411(b)(1).
        (2) Short-term, non-cash, in-kind emergency disaster relief.
        (3) Assistance or benefits under the National School Lunch Act.
        (4) Assistance or benefits under the Child Nutrition Act of 
    1966.
        (5) Public health assistance for immunizations (not including 
    any assistance under title XIX of the Social Security Act) with 
    respect to immunizable diseases and for testing and treatment of 
    symptoms of communicable diseases whether or not such symptoms are 
    caused by a communicable disease.
        (6) Payments for foster care and adoption assistance under 
    parts B and E of title IV of the Social Security Act for a parent 
    or a child, but only if the foster or adoptive parent (or parents) 
    of such child is a qualified alien (as defined in section 431).
        (7) Programs, services, or assistance (such as soup kitchens, 
    crisis counseling and intervention, and short-term shelter) 
    specified by the Attorney General, in the Attorney General's sole 
    and unreviewable discretion after consultation with appropriate 
    Federal agencies and departments, which (A) deliver in-kind 
    services at the community level, including through public or 
    private nonprofit agencies; (B) do not condition the provision of 
    assistance, the amount of assistance provided, or the cost of 
    assistance provided on the individual recipient's income or 
    resources; and (C) are necessary for the protection of life or 
    safety.
        (8) Programs of student assistance under titles IV, V, IX, and 
    X of the Higher Education Act of 1965, and titles III, VII, and 
    VIII of the Public Health Service Act.
        (9) Benefits under the Head Start Act.
        (10) Means-tested programs under the Elementary and Secondary 
    Education Act of 1965.
        (11) Benefits under the Job Training Partnership Act.

                     Subtitle D--General Provisions

SEC. 431. DEFINITIONS.

    (a) In General.--Except as otherwise provided in this title, the 
terms used in this title have the same meaning given such terms in 
section 101(a) of the Immigration and Nationality Act.
    (b) Qualified Alien.--For purposes of this title, the term 
``qualified alien'' means an alien who, at the time the alien applies 
for, receives, or attempts to receive a Federal public benefit, is--
        (1) an alien who is lawfully admitted for permanent residence 
    under the Immigration and Nationality Act,
        (2) an alien who is granted asylum under section 208 of such 
    Act,
        (3) a refugee who is admitted to the United States under 
    section 207 of such Act,
        (4) an alien who is paroled into the United States under 
    section 212(d)(5) of such Act for a period of at least 1 year,
        (5) an alien whose deportation is being withheld under section 
    243(h) of such Act, or
        (6) an alien who is granted conditional entry pursuant to 
    section 203(a)(7) of such Act as in effect prior to April 1, 1980.

SEC. 432. VERIFICATION OF ELIGIBILITY FOR FEDERAL PUBLIC BENEFITS.

    (a) In General.--Not later than 18 months after the date of the 
enactment of this Act, the Attorney General of the United States, after 
consultation with the Secretary of Health and Human Services, shall 
promulgate regulations requiring verification that a person applying 
for a Federal public benefit (as defined in section 401(c)), to which 
the limitation under section 401 applies, is a qualified alien and is 
eligible to receive such benefit. Such regulations shall, to the extent 
feasible, require that information requested and exchanged be similar 
in form and manner to information requested and exchanged under section 
1137 of the Social Security Act.
    (b) State Compliance.--Not later than 24 months after the date the 
regulations described in subsection (a) are adopted, a State that 
administers a program that provides a Federal public benefit shall have 
in effect a verification system that complies with the regulations.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the purpose of 
this section.

SEC. 433. STATUTORY CONSTRUCTION.

    (a) Limitation.--
        (1) Nothing in this title may be construed as an entitlement or 
    a determination of an individual's eligibility or fulfillment of 
    the requisite requirements for any Federal, State, or local 
    governmental program, assistance, or benefits. For purposes of this 
    title, eligibility relates only to the general issue of eligibility 
    or ineligibility on the basis of alienage.
        (2) Nothing in this title may be construed as addressing alien 
    eligibility for a basic public education as determined by the 
    Supreme Court of the United States under Plyler v. Doe (457 U.S. 
    202)(1982).
    (b) Not Applicable to Foreign Assistance.--This title does not 
apply to any Federal, State, or local governmental program, assistance, 
or benefits provided to an alien under any program of foreign 
assistance as determined by the Secretary of State in consultation with 
the Attorney General.
    (c) Severability.--If any provision of this title or the 
application of such provision to any person or circumstance is held to 
be unconstitutional, the remainder of this title and the application of 
the provisions of such to any person or circumstance shall not be 
affected thereby.

SEC. 434. COMMUNICATION BETWEEN STATE AND LOCAL GOVERNMENT AGENCIES AND 
              THE IMMIGRATION AND NATURALIZATION SERVICE.

    Notwithstanding any other provision of Federal, State, or local 
law, no State or local government entity may be prohibited, or in any 
way restricted, from sending to or receiving from the Immigration and 
Naturalization Service information regarding the immigration status, 
lawful or unlawful, of an alien in the United States.

SEC. 435. QUALIFYING QUARTERS.

    For purposes of this title, in determining the number of qualifying 
quarters of coverage under title II of the Social Security Act an alien 
shall be credited with--
        (1) all of the qualifying quarters of coverage as defined under 
    title II of the Social Security Act worked by a parent of such 
    alien while the alien was under age 18, and
        (2) all of the qualifying quarters worked by a spouse of such 
    alien during their marriage and the alien remains married to such 
    spouse or such spouse is deceased.
No such qualifying quarter of coverage that is creditable under title 
II of the Social Security Act for any period beginning after December 
31, 1996, may be credited to an alien under paragraph (1) or (2) if the 
parent or spouse (as the case may be) of such alien received any 
Federal means-tested public benefit (as provided under section 403) 
during the period for which such qualifying quarter of coverage is so 
credited.

     Subtitle E--Conforming Amendments Relating to Assisted Housing

SEC. 441. CONFORMING AMENDMENTS RELATING TO ASSISTED HOUSING.

    (a) Limitations on Assistance.--Section 214 of the Housing and 
Community Development Act of 1980 (42 U.S.C. 1436a) is amended--
        (1) by striking ``Secretary of Housing and Urban Development'' 
    each place it appears and inserting ``applicable Secretary'';
        (2) in subsection (b), by inserting after ``National Housing 
    Act,'' the following: ``the direct loan program under section 502 
    of the Housing Act of 1949 or section 502(c)(5)(D), 504, 
    521(a)(2)(A), or 542 of such Act, subtitle A of title III of the 
    Cranston-Gonzalez National Affordable Housing Act,'';
        (3) in paragraphs (2) through (6) of subsection (d), by 
    striking ``Secretary'' each place it appears and inserting 
    ``applicable Secretary'';
        (4) in subsection (d), in the matter following paragraph (6), 
    by striking ``the term `Secretary''' and inserting ``the term 
    `applicable Secretary'''; and
        (5) by adding at the end the following new subsection:
    ``(h) For purposes of this section, the term `applicable Secretary' 
means--
        ``(1) the Secretary of Housing and Urban Development, with 
    respect to financial assistance administered by such Secretary and 
    financial assistance under subtitle A of title III of the Cranston-
    Gonzalez National Affordable Housing Act; and
        ``(2) the Secretary of Agriculture, with respect to financial 
    assistance administered by such Secretary.''.
    (b) Conforming Amendments.--Section 501(h) of the Housing Act of 
1949 (42 U.S.C. 1471(h)) is amended--
        (1) by striking ``(1)'';
        (2) by striking ``by the Secretary of Housing and Urban 
    Development''; and
        (3) by striking paragraph (2).

   Subtitle F--Earned Income Credit Denied to Unauthorized Employees

SEC. 451. EARNED INCOME CREDIT DENIED TO INDIVIDUALS NOT AUTHORIZED TO 
              BE EMPLOYED IN THE UNITED STATES.

    (a) In General.--Section 32(c)(1) of the Internal Revenue Code of 
1986 (relating to individuals eligible to claim the earned income 
credit) is amended by adding at the end the following new subparagraph:
            ``(F) Identification number requirement.--The term 
        `eligible individual' does not include any individual who does 
        not include on the return of tax for the taxable year--
                ``(i) such individual's taxpayer identification number, 
            and
                ``(ii) if the individual is married (within the meaning 
            of section 7703), the taxpayer identification number of 
            such individual's spouse.''.
    (b) Special Identification Number.--Section 32 of such Code is 
amended by adding at the end the following new subsection:
    ``(l) Identification Numbers.--Solely for purposes of subsections 
(c)(1)(F) and (c)(3)(D), a taxpayer identification number means a 
social security number issued to an individual by the Social Security 
Administration (other than a social security number issued pursuant to 
clause (II) (or that portion of clause (III) that relates to clause 
(II)) of section 205(c)(2)(B)(i) of the Social Security Act).''.
    (c) Extension of Procedures Applicable to Mathematical or Clerical 
Errors.--Section 6213(g)(2) of such Code (relating to the definition of 
mathematical or clerical errors) is amended by striking ``and'' at the 
end of subparagraph (D), by striking the period at the end of 
subparagraph (E) and inserting a comma, and by inserting after 
subparagraph (E) the following new subparagraphs:
            ``(F) an omission of a correct taxpayer identification 
        number required under section 32 (relating to the earned income 
        credit) to be included on a return, and
            ``(G) an entry on a return claiming the credit under 
        section 32 with respect to net earnings from self-employment 
        described in section 32(c)(2)(A) to the extent the tax imposed 
        by section 1401 (relating to self-employment tax) on such net 
        earnings has not been paid.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to returns the due date for which (without regard to 
extensions) is more than 30 days after the date of the enactment of 
this Act.

                       TITLE V--CHILD PROTECTION

SEC. 501. AUTHORITY OF STATES TO MAKE FOSTER CARE MAINTENANCE PAYMENTS 
              ON BEHALF OF CHILDREN IN ANY PRIVATE CHILD CARE 
              INSTITUTION.

    Section 472(c)(2) of the Social Security Act (42 U.S.C. 672(c)(2)) 
is amended by striking ``nonprofit''.

SEC. 502. EXTENSION OF ENHANCED MATCH FOR IMPLEMENTATION OF STATEWIDE 
              AUTOMATED CHILD WELFARE INFORMATION SYSTEMS.

    Section 13713(b)(2) of the Omnibus Budget Reconciliation Act of 
1993 (42 U.S.C. 674 note; 107 Stat. 657) is amended by striking 
``1996'' and inserting ``1997''.

SEC. 503. NATIONAL RANDOM SAMPLE STUDY OF CHILD WELFARE.

    Part B of title IV of the Social Security Act (42 U.S.C. 620-628a) 
is amended by adding at the end the following:

``SEC. 429A. NATIONAL RANDOM SAMPLE STUDY OF CHILD WELFARE.

    ``(a) In General.--The Secretary shall conduct a national study 
based on random samples of children who are at risk of child abuse or 
neglect, or are determined by States to have been abused or neglected.
    ``(b) Requirements.--The study required by subsection (a) shall--
        ``(1) have a longitudinal component; and
        ``(2) yield data reliable at the State level for as many States 
    as the Secretary determines is feasible.
    ``(c) Preferred Contents.--In conducting the study required by 
subsection (a), the Secretary should--
        ``(1) carefully consider selecting the sample from cases of 
    confirmed abuse or neglect; and
        ``(2) follow each case for several years while obtaining 
    information on, among other things--
            ``(A) the type of abuse or neglect involved;
            ``(B) the frequency of contact with State or local 
        agencies;
            ``(C) whether the child involved has been separated from 
        the family, and, if so, under what circumstances;
            ``(D) the number, type, and characteristics of out-of-home 
        placements of the child; and
            ``(E) the average duration of each placement.
    ``(d) Reports.--
        ``(1) In general.--From time to time, the Secretary shall 
    prepare reports summarizing the results of the study required by 
    subsection (a).
        ``(2) Availability.--The Secretary shall make available to the 
    public any report prepared under paragraph (1), in writing or in 
    the form of an electronic data tape.
        ``(3) Authority to charge fee.--The Secretary may charge and 
    collect a fee for the furnishing of reports under para- graph (2).
    ``(e) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are appropriated to the 
Secretary for each of fiscal years 1996 through 2002 $6,000,000 to 
carry out this section.''.

SEC. 504. REDESIGNATION OF SECTION 1123.

    The Social Security Act is amended by redesignating sec- tion 1123, 
the second place it appears (42 U.S.C. 1320a-1a), as section 1123A.

SEC. 505. KINSHIP CARE.

    Section 471(a) of the Social Security Act (42 U.S.C. 671(a)) is 
amended--
        (1) by striking ``and'' at the end of paragraph (16);
        (2) by striking the period at the end of paragraph (17) and 
    inserting ``; and''; and
        (3) by adding at the end the following:
        ``(18) provides that the State shall consider giving preference 
    to an adult relative over a non-related caregiver when determining 
    a placement for a child, provided that the relative caregiver meets 
    all relevant State child protection standards.''.

                          TITLE VI--CHILD CARE

SEC. 601. SHORT TITLE AND REFERENCES.

    (a) Short Title.--This title may be cited as the ``Child Care and 
Development Block Grant Amendments of 1996''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this title an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
seq.).

SEC. 602. GOALS.

    Section 658A (42 U.S.C. 9801 note) is amended--
        (1) in the section heading by inserting ``and goals'' after 
    ``title'';
        (2) by inserting ``(a) Short Title.--'' before ``This''; and
        (3) by adding at the end the following:
    ``(b) Goals.--The goals of this subchapter are--
        ``(1) to allow each State maximum flexibility in developing 
    child care programs and policies that best suit the needs of 
    children and parents within such State;
        ``(2) to promote parental choice to empower working parents to 
    make their own decisions on the child care that best suits their 
    family's needs;
        ``(3) to encourage States to provide consumer education 
    information to help parents make informed choices about child care;
        ``(4) to assist States to provide child care to parents trying 
    to achieve independence from public assistance; and
        ``(5) to assist States in implementing the health, safety, 
    licensing, and registration standards established in State 
    regulations.''.

SEC. 603. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT AUTHORITY.

    (a) In General.--Section 658B (42 U.S.C. 9858) is amended to read 
as follows:

``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this 
subchapter $1,000,000,000 for each of the fiscal years 1996 through 
2002.''.
    (b) Social Security Act.--Part A of title IV of the Social Security 
Act (42 U.S.C. 601-617) is amended by adding at the end the following 
new section:

``SEC. 418. FUNDING FOR CHILD CARE.

    ``(a) General Child Care Entitlement.--
        ``(1) General entitlement.--Subject to the amount appropriated 
    under paragraph (3), each State shall, for the purpose of providing 
    child care assistance, be entitled to payments under a grant under 
    this subsection for a fiscal year in an amount equal to--
            ``(A) the sum of the total amount required to be paid to 
        the State under section 403 for fiscal year 1994 or 1995 
        (whichever is greater) with respect to amounts expended for 
        child care under section--
                ``(i) 402(g) of this Act (as such section was in effect 
            before October 1, 1995); and
                ``(ii) 402(i) of this Act (as so in effect); or
            ``(B) the average of the total amounts required to be paid 
        to the State for fiscal years 1992 through 1994 under the 
        sections referred to in subparagraph (A);
    whichever is greater.
        ``(2) Remainder.--
            ``(A) Grants.--The Secretary shall use any amounts 
        appropriated for a fiscal year under paragraph (3), and 
        remaining after the reservation described in paragraph (4) and 
        after grants are awarded under paragraph (1), to make grants to 
        States under this paragraph.
            ``(B) Amount.--Subject to subparagraph (C), the amount of a 
        grant awarded to a State for a fiscal year under this paragraph 
        shall be based on the formula used for determining the amount 
        of Federal payments to the State under section 403(n) (as such 
        section was in effect before October 1, 1995).
            ``(C) Matching requirement.--The Secretary shall pay to 
        each eligible State in a fiscal year an amount, under a grant 
        under subparagraph (A), equal to the Federal medical assistance 
        percentage for such State for fiscal year 1995 (as defined in 
        section 1905(b)) of so much of the expenditures by the State 
        for child care in such year as exceed the State set-aside for 
        such State under paragraph (1)(A) for such year and the amount 
        of State expenditures in fiscal year 1994 or 1995 (whichever is 
        greater) that equal the non-Federal share for the programs 
        described in subparagraph (A) of paragraph (1).
            ``(D) Redistribution.--
                ``(i) In general.--With respect to any fiscal year, if 
            the Secretary determines (in accordance with clause (ii)) 
            that amounts under any grant awarded to a State under this 
            paragraph for such fiscal year will not be used by such 
            State during such fiscal year for carrying out the purpose 
            for which the grant is made, the Secretary shall make such 
            amounts available in the subsequent fiscal year for 
            carrying out such purpose to one or more States which apply 
            for such funds to the extent the Secretary determines that 
            such States will be able to use such additional amounts for 
            carrying out such purpose. Such available amounts shall be 
            redistributed to a State pursuant to section 403(n) (as 
            such section was in effect before October 1, 1995) by 
            substituting `the number of children residing in all States 
            applying for such funds' for `the number of children 
            residing in the United States in the second preceding 
            fiscal year'.
                ``(ii) Time of determination and distribution.--The 
            determination of the Secretary under clause (i) for a 
            fiscal year shall be made not later than the end of the 
            first quarter of the subsequent fiscal year. The 
            redistribution of amounts under clause (i) shall be made as 
            close as practicable to the date on which such 
            determination is made. Any amount made available to a State 
            from an appropriation for a fiscal year in accordance with 
            this subparagraph shall, for purposes of this part, be 
            regarded as part of such State's payment (as determined 
            under this subsection) for the fiscal year in which the 
            redistribution is made.
        ``(3) Appropriation.--For grants under this section, there are 
    appropriated--
            ``(A) $1,967,000,000 for fiscal year 1997;
            ``(B) $2,067,000,000 for fiscal year 1998;
            ``(C) $2,167,000,000 for fiscal year 1999;
            ``(D) $2,367,000,000 for fiscal year 2000;
            ``(E) $2,567,000,000 for fiscal year 2001; and
            ``(F) $2,717,000,000 for fiscal year 2002.
        ``(4) Indian tribes.--The Secretary shall reserve not less than 
    1 percent, and not more than 2 percent, of the aggregate amount 
    appropriated to carry out this section in each fiscal year for 
    payments to Indian tribes and tribal organizations.
    ``(b) Use of Funds.--
        ``(1) In general.--Amounts received by a State under this 
    section shall only be used to provide child care assistance. 
    Amounts received by a State under a grant under subsection (a)(1) 
    shall be available for use by the State without fiscal year 
    limitation.
        ``(2) Use for certain populations.--A State shall ensure that 
    not less than 70 percent of the total amount of funds received by 
    the State in a fiscal year under this section are used to provide 
    child care assistance to families who are receiving assistance 
    under a State program under this part, families who are attempting 
    through work activities to transition off of such assistance 
    program, and families who are at risk of becoming dependent on such 
    assistance program.
    ``(c) Application of Child Care and Development Block Grant Act of 
1990.--Notwithstanding any other provision of law, amounts provided to 
a State under this section shall be transferred to the lead agency 
under the Child Care and Development Block Grant Act of 1990, 
integrated by the State into the programs established by the State 
under such Act, and be subject to requirements and limitations of such 
Act.
    ``(d) Definition.--As used in this section, the term `State' means 
each of the 50 States or the District of Columbia.''.

SEC. 604. LEAD AGENCY.

    Section 658D(b) (42 U.S.C. 9858b(b)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A), by striking ``State'' the first 
        place that such appears and inserting ``governmental or 
        nongovernmental''; and
            (B) in subparagraph (C), by inserting ``with sufficient 
        time and Statewide distribution of the notice of such 
        hearing,'' after ``hearing in the State''; and
        (2) in paragraph (2), by striking the second sentence.

SEC. 605. APPLICATION AND PLAN.

    Section 658E (42 U.S.C. 9858c) is amended--
        (1) in subsection (b)--
            (A) by striking ``implemented--'' and all that follows 
        through ``(2)'' and inserting ``implemented''; and
            (B) by striking ``for subsequent State plans'';
        (2) in subsection (c)--
            (A) in paragraph (2)--
                (i) in subparagraph (A)--

                    (I) in clause (i) by striking ``, other than 
                through assistance provided under paragraph (3)(C),''; 
                and
                    (II) by striking ``except'' and all that follows 
                through ``1992'', and inserting ``and provide a 
                detailed description of the procedures the State will 
                implement to carry out the requirements of this 
                subparagraph'';

                (ii) in subparagraph (B)--

                    (I) by striking ``Provide assurances'' and 
                inserting ``Certify''; and
                    (II) by inserting before the period at the end 
                ``and provide a detailed description of such 
                procedures'';

                (iii) in subparagraph (C)--

                    (I) by striking ``Provide assurances'' and 
                inserting ``Certify''; and
                    (II) by inserting before the period at the end 
                ``and provide a detailed description of how such record 
                is maintained and is made available'';

                (iv) by amending subparagraph (D) to read as follows:
            ``(D) Consumer education information.--Certify that the 
        State will collect and disseminate to parents of eligible 
        children and the general public, consumer education information 
        that will promote informed child care choices.'';
                (v) in subparagraph (E), to read as follows:
            ``(E) Compliance with state licensing requirements.--
                ``(i) In general.--Certify that the State has in effect 
            licensing requirements applicable to child care services 
            provided within the State, and provide a detailed 
            description of such requirements and of how such 
            requirements are effectively enforced. Nothing in the 
            preceding sentence shall be construed to require that 
            licensing requirements be applied to specific types of 
            providers of child care services.
                ``(ii) Indian tribes and tribal organizations.--In lieu 
            of any licensing and regulatory requirements applicable 
            under State and local law, the Secretary, in consultation 
            with Indian tribes and tribal organizations, shall develop 
            minimum child care standards (that appropriately reflect 
            tribal needs and available resources) that shall be 
            applicable to Indian tribes and tribal organization 
            receiving assistance under this subchapter.'';
                (vi) in subparagraph (F) by striking ``Provide 
            assurances'' and inserting ``Certify'';
                (vii) in subparagraph (G) by striking ``Provide 
            assurances'' and inserting ``Certify''; and
                (viii) by striking subparagraphs (H), (I), and (J) and 
            inserting the following:
            ``(H) Meeting the needs of certain populations.--
        Demonstrate the manner in which the State will meet the 
        specific child care needs of families who are receiving 
        assistance under a State program under part A of title IV of 
        the Social Security Act, families who are attempting through 
        work activities to transition off of such assistance program, 
        and families that are at risk of becoming dependent on such 
        assistance program.'';
            (B) in paragraph (3)--
                (i) in subparagraph (A), by striking ``(B) and (C)'' 
            and inserting ``(B) through (D)'';
                (ii) in subparagraph (B)--

                    (I) by striking ``.--Subject to the reservation 
                contained in subparagraph (C), the'' and inserting 
                ``and related activities.--The'';
                    (II) in clause (i) by striking ``; and'' at the end 
                and inserting a period;
                    (III) by striking ``for--'' and all that follows 
                through ``section 658E(c)(2)(A)'' and inserting ``for 
                child care services on a sliding fee scale basis, 
                activities that improve the quality or availability of 
                such services, and any other activity that the State 
                deems appropriate to realize any of the goals specified 
                in paragraphs (2) through (5) of section 658A(b)''; and
                    (IV) by striking clause (ii);

                (iii) by amending subparagraph (C) to read as follows:
            ``(C) Limitation on administrative costs.--Not more than 5 
        percent of the aggregate amount of funds available to the State 
        to carry out this subchapter by a State in each fiscal year may 
        be expended for administrative costs incurred by such State to 
        carry out all of its functions and duties under this 
        subchapter. As used in the preceding sentence, the term 
        `administrative costs' shall not include the costs of providing 
        direct services.''; and
                (iv) by adding at the end thereof the following:
            ``(D) Assistance for certain families.--A State shall 
        ensure that a substantial portion of the amounts available 
        (after the State has complied with the requirement of section 
        418(b)(2) of the Social Security Act with respect to each of 
        the fiscal years 1997 through 2002) to the State to carry out 
        activities under this subchapter in each fiscal year is used to 
        provide assistance to low-income working families other than 
        families described in paragraph (2)(H).''; and
            (C) in paragraph (4)(A)--
                (i) by striking ``provide assurances'' and inserting 
            ``certify'';
                (ii) in the first sentence by inserting ``and shall 
            provide a summary of the facts relied on by the State to 
            determine that such rates are sufficient to ensure such 
            access'' before the period; and
                (iii) by striking the last sentence.

SEC. 606. LIMITATION ON STATE ALLOTMENTS.

    Section 658F(b)(1) (42 U.S.C. 9858d(b)(1)) is amended by striking 
``No'' and inserting ``Except as provided for in section 658O(c)(6), 
no''.

SEC. 607. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    Section 658G (42 U.S.C. 9858e) is amended to read as follows:

``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    ``A State that receives funds to carry out this subchapter for a 
fiscal year, shall use not less than 4 percent of the amount of such 
funds for activities that are designed to provide comprehensive 
consumer education to parents and the public, activities that increase 
parental choice, and activities designed to improve the quality and 
availability of child care (such as resource and referral services).''.

SEC. 608. REPEAL OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-
              SCHOOL CARE REQUIREMENT.

    Section 658H (42 U.S.C. 9858f) is repealed.

SEC. 609. ADMINISTRATION AND ENFORCEMENT.

    Section 658I(b) (42 U.S.C. 9858g(b)) is amended--
        (1) in paragraph (1), by striking ``, and shall have'' and all 
    that follows through ``(2)''; and
        (2) in the matter following clause (ii) of paragraph (2)(A), by 
    striking ``finding and that'' and all that follows through the 
    period and inserting ``finding and shall require that the State 
    reimburse the Secretary for any funds that were improperly expended 
    for purposes prohibited or not authorized by this subchapter, that 
    the Secretary deduct from the administrative portion of the State 
    allotment for the following fiscal year an amount that is less than 
    or equal to any improperly expended funds, or a combination of such 
    options.''.

SEC. 610. PAYMENTS.

    Section 658J(c) (42 U.S.C. 9858h(c)) is amended--
        (1) by striking ``expended'' and inserting ``obligated''; and
        (2) by striking ``3 fiscal years'' and inserting ``fiscal 
    year''.

SEC. 611. ANNUAL REPORT AND AUDITS.

    Section 658K (42 U.S.C. 9858i) is amended--
        (1) in the section heading by striking ``annual report'' and 
    inserting ``reports'';
        (2) in subsection (a), to read as follows:
    ``(a) Reports.--
        ``(1) Collection of information by states.--
            ``(A) In general.--A State that receives funds to carry out 
        this subchapter shall collect the information described in 
        subparagraph (B) on a monthly basis.
            ``(B) Required information.--The information required under 
        this subparagraph shall include, with respect to a family unit 
        receiving assistance under this subchapter information 
        concerning--
                ``(i) family income;
                ``(ii) county of residence;
                ``(iii) the gender, race, and age of children receiving 
            such assistance;
                ``(iv) whether the family includes only one parent;
                ``(v) the sources of family income, including the 
            amount obtained from (and separately identified)--

                    ``(I) employment, including self-employment;
                    ``(II) cash or other assistance under part A of 
                title IV of the Social Security Act;
                    ``(III) housing assistance;
                    ``(IV) assistance under the Food Stamp Act of 1977; 
                and
                    ``(V) other assistance programs;

                ``(vi) the number of months the family has received 
            benefits;
                ``(vii) the type of child care in which the child was 
            enrolled (such as family child care, home care, or center-
            based child care);
                ``(viii) whether the child care provider involved was a 
            relative;
                ``(ix) the cost of child care for such families; and
                ``(x) the average hours per week of such care;
        during the period for which such information is required to be 
        submitted.
            ``(C) Submission to secretary.--A State described in 
        subparagraph (A) shall, on a quarterly basis, submit the 
        information required to be collected under subparagraph (B) to 
        the Secretary.
            ``(D) Sampling.--The Secretary may disapprove the 
        information collected by a State under this paragraph if the 
        State uses sampling methods to collect such information.
        ``(2) Biannual reports.--Not later than December 31, 1997, and 
    every 6 months thereafter, a State described in paragraph (1)(A) 
    shall prepare and submit to the Secretary a report that includes 
    aggregate data concerning--
            ``(A) the number of child care providers that received 
        funding under this subchapter as separately identified based on 
        the types of providers listed in section 658P(5);
            ``(B) the monthly cost of child care services, and the 
        portion of such cost that is paid for with assistance provided 
        under this subchapter, listed by the type of child care 
        services provided;
            ``(C) the number of payments made by the State through 
        vouchers, contracts, cash, and disregards under public benefit 
        programs, listed by the type of child care services provided;
            ``(D) the manner in which consumer education information 
        was provided to parents and the number of parents to whom such 
        information was provided; and
            ``(E) the total number (without duplication) of children 
        and families served under this subchapter;
    during the period for which such report is required to be sub- 
    mitted.''; and
        (2) in subsection (b)--
            (A) in paragraph (1) by striking ``a application'' and 
        inserting ``an application'';
            (B) in paragraph (2) by striking ``any agency administering 
        activities that receive'' and inserting ``the State that 
        receives''; and
            (C) in paragraph (4) by striking ``entitles'' and inserting 
        ``entitled''.

SEC. 612. REPORT BY THE SECRETARY.

    Section 658L (42 U.S.C. 9858j) is amended--
        (1) by striking ``1993'' and inserting ``1997'';
        (2) by striking ``annually'' and inserting ``biennially''; and
        (3) by striking ``Education and Labor'' and inserting 
    ``Economic and Educational Opportunities''.

SEC. 613. ALLOTMENTS.

    Section 658O (42 U.S.C. 9858m) is amended--
        (1) in subsection (a)--
            (A) in paragraph (1)--
                (i) by striking ``Possessions'' and inserting 
            ``possessions'';
                (ii) by inserting ``and'' after ``States,''; and
                (iii) by striking ``, and the Trust Territory of the 
            Pacific Islands''; and
            (B) in paragraph (2), by striking ``more than 3 percent'' 
        and inserting ``less than 1 percent, and not more than 2 
        percent,'';
        (2) in subsection (c)--
            (A) in paragraph (5) by striking ``our'' and inserting 
        ``out''; and
            (B) by adding at the end thereof the following new 
        paragraph:
        ``(6) Construction or renovation of facilities.--
            ``(A) Request for use of funds.--An Indian tribe or tribal 
        organization may submit to the Secretary a request to use 
        amounts provided under this subsection for construction or 
        renovation purposes.
            ``(B) Determination.--With respect to a request submitted 
        under subparagraph (A), and except as provided in subparagraph 
        (C), upon a determination by the Secretary that adequate 
        facilities are not otherwise available to an Indian tribe or 
        tribal organization to enable such tribe or organization to 
        carry out child care programs in accordance with this 
        subchapter, and that the lack of such facilities will inhibit 
        the operation of such programs in the future, the Secretary may 
        permit the tribe or organization to use assistance provided 
        under this subsection to make payments for the construction or 
        renovation of facilities that will be used to carry out such 
        programs.
            ``(C) Limitation.--The Secretary may not permit an Indian 
        tribe or tribal organization to use amounts provided under this 
        subsection for construction or renovation if such use will 
        result in a decrease in the level of child care services 
        provided by the tribe or organization as compared to the level 
        of such services provided by the tribe or organization in the 
        fiscal year preceding the year for which the determination 
        under subparagraph (A) is being made.
            ``(D) Uniform procedures.--The Secretary shall develop and 
        implement uniform procedures for the solicitation and 
        consideration of requests under this paragraph.''; and
        (3) in subsection (e), by adding at the end thereof the 
    following new paragraph:
        ``(4) Indian tribes or tribal organizations.--Any portion of a 
    grant or contract made to an Indian tribe or tribal organization 
    under subsection (c) that the Secretary determines is not being 
    used in a manner consistent with the provision of this subchapter 
    in the period for which the grant or contract is made available, 
    shall be allotted by the Secretary to other tribes or organizations 
    that have submitted applications under subsection (c) in accordance 
    with their respective needs.''.

SEC. 614. DEFINITIONS.

    Section 658P (42 U.S.C. 9858n) is amended--
        (1) in paragraph (2), in the first sentence by inserting ``or 
    as a deposit for child care services if such a deposit is required 
    of other children being cared for by the provider'' after ``child 
    care services''; and
        (2) by striking paragraph (3);
        (3) in paragraph (4)(B), by striking ``75 percent'' and 
    inserting ``85 percent'';
        (4) in paragraph (5)(B)--
            (A) by inserting ``great grandchild, sibling (if such 
        provider lives in a separate residence),'' after 
        ``grandchild,'';
            (B) by striking ``is registered and''; and
            (C) by striking ``State'' and inserting ``applicable''.
        (5) by striking paragraph (10);
        (6) in paragraph (13)--
            (A) by inserting ``or'' after ``Samoa,''; and
            (B) by striking ``, and the Trust Territory of the Pacific 
        Islands'';
        (7) in paragraph (14)--
            (A) by striking ``The term'' and inserting the following:
            ``(A) In general.--The term''; and
            (B) by adding at the end thereof the following new 
        subparagraph:
            ``(B) Other organizations.--Such term includes a Native 
        Hawaiian Organization, as defined in section 4009(4) of the 
        Augustus F. Hawkins-Robert T. Stafford Elementary and Secondary 
        School Improvement Amendments of 1988 (20 U.S.C. 4909(4)) and a 
        private nonprofit organization established for the purpose of 
        serving youth who are Indians or Native Hawaiians.''.

SEC. 615. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title 
and the amendments made by this title shall take effect on October 1, 
1996.
    (b) Exception.--The amendment made by section 603(a) shall take 
effect on the date of enactment of this Act.

                  TITLE VII--CHILD NUTRITION PROGRAMS
                 Subtitle A--National School Lunch Act

SEC. 701. STATE DISBURSEMENT TO SCHOOLS.

    (a) In General.--Section 8 of the National School Lunch Act (42 
U.S.C. 1757) is amended--
        (1) in the third sentence, by striking ``Nothing'' and all that 
    follows through ``educational agency to'' and inserting ``The State 
    educational agency may'';
        (2) by striking the fourth and fifth sentences;
        (3) by redesignating the first through seventh sentences, as 
    amended by paragraph (2), as subsections (a) through (g), 
    respectively;
        (4) in subsection (b), as redesignated by paragraph (3), by 
    striking ``the preceding sentence'' and inserting ``subsection 
    (a)''; and
        (5) in subsection (d), as redesignated by paragraph (3), by 
    striking ``Such food costs'' and inserting ``Use of funds paid to 
    States''.
    (b) Definition of Child.--Section 12(d) of the National School 
Lunch Act (42 U.S.C. 1760(d)) is amended by adding at the end the 
following:
        ``(9) Child.--
            ``(A) In general.--The term `child' includes an indi- 
        vidual, regardless of age, who--
                ``(i) is determined by a State educational agency, in 
            accordance with regulations prescribed by the Secretary, to 
            have one or more mental or physical disabilities; and
                ``(ii) is attending any institution, as defined in 
            section 17(a), or any nonresidential public or nonprofit 
            private school of high school grade or under, for the 
            purpose of participating in a school program established 
            for individuals with mental or physical dis- abilities.
            ``(B) Relationship to child and adult care food program.--
        No institution that is not otherwise eligible to participate in 
        the program under section 17 shall be considered eligible 
        because of this paragraph.''.

SEC. 702. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

    (a) Nutritional Standards.--Section 9(a) of the National School 
Lunch Act (42 U.S.C. 1758(a)) is amended--
        (1) in paragraph (2)--
            (A) by striking ``(2)(A) Lunches'' and inserting ``(2) 
        Lunches'';
            (B) by striking subparagraph (B); and
            (C) by redesignating clauses (i) and (ii) as subparagraphs 
        (A) and (B), respectively;
        (2) by striking paragraph (3); and
        (3) by redesignating paragraph (4) as paragraph (3).
    (b) Utilization of Agricultural Commodities.--Section 9(c) of the 
National School Lunch Act (42 U.S.C. 1758(c)) is amended--
        (1) in the fifth sentence, by striking ``of the provisions of 
    law referred to in the preceding sentence'' and inserting 
    ``provision of law''; and
        (2) by striking the second, fourth, and sixth sentences.
    (c) Nutritional Information.--Section 9(f) of the National School 
Lunch Act (42 U.S.C. 1758(f)) is amended--
        (1) by striking paragraph (1);
        (2) by striking ``(2)'';
        (3) by redesignating subparagraphs (A) through (D) as 
    paragraphs (1) through (4), respectively;
        (4) by striking paragraph (1), as redesignated by paragraph 
    (3), and inserting the following:
        ``(1) Nutritional requirements.--Except as provided in 
    paragraph (2), not later than the first day of the 1996-1997 school 
    year, schools that are participating in the school lunch or school 
    breakfast program shall serve lunches and breakfasts under the 
    program that--
            ``(A) are consistent with the goals of the most recent 
        Dietary Guidelines for Americans published under section 301 of 
        the National Nutrition Monitoring and Related Research Act of 
        1990 (7 U.S.C. 5341); and
            ``(B) provide, on the average over each week, at least--
                ``(i) with respect to school lunches, \1/3\ of the 
            daily recommended dietary allowance established by the Food 
            and Nutrition Board of the National Research Council of the 
            National Academy of Sciences; and
                ``(ii) with respect to school breakfasts, \1/4\ of the 
            daily recommended dietary allowance established by the Food 
            and Nutrition Board of the National Research Council of the 
            National Academy of Sciences.'';
        (5) in paragraph (3), as redesignated by paragraph (3)--
            (A) by redesignating clauses (i) and (ii) as subparagraphs 
        (A) and (B), respectively; and
            (B) in subparagraph (A), as so redesignated, by 
        redesignating subclauses (I) and (II) as clauses (i) and (ii), 
        respectively; and
        (6) in paragraph (4), as redesignated by paragraph (3)--
            (A) by redesignating clauses (i) and (ii) as subparagraphs 
        (A) and (B), respectively;
            (B) in subparagraph (A), as redesignated by subparagraph 
        (A), by redesignating subclauses (I) and (II) as clauses (i) 
        and (ii), respectively; and
            (C) in subparagraph (A)(ii), as redesignated by 
        subparagraph (B), by striking ``subparagraph (C)'' and 
        inserting ``paragraph (3)''.
    (d) Use of Resources.--Section 9 of the National School Lunch Act 
(42 U.S.C. 1758) is amended by striking subsection (h).

SEC. 703. FREE AND REDUCED PRICE POLICY STATEMENT.

    Section 9(b)(2) of the National School Lunch Act (42 U.S.C. 
1758(b)(2)) is amended by adding at the end the following:
            ``(D) Free and reduced price policy statement.--After the 
        initial submission, a school food authority shall not be 
        required to submit a free and reduced price policy statement to 
        a State educational agency under this Act unless there is a 
        substantive change in the free and reduced price policy of the 
        school food authority. A routine change in the policy of a 
        school food authority, such as an annual adjustment of the 
        income eligibility guidelines for free and reduced price meals, 
        shall not be sufficient cause for requiring the school food 
        authority to submit a policy statement.''.

SEC. 704. SPECIAL ASSISTANCE.

    (a) Extension of Payment Period.--Section 11(a)(1)(D)(i) of the 
National School Lunch Act (42 U.S.C. 1759a(a)(1)(D)(i)) is amended by 
striking ``, on the date of enactment of this subparagraph,''.
    (b) Rounding Rule for Lunch, Breakfast, and Supplement Rates.--
        (1) In general.--The third sentence of section 11(a)(3)(B) of 
    the National School Lunch Act (42 U.S.C. 1759a(a)(3)(B)) is amended 
    by adding before the period at the end the following: ``, except 
    that adjustments to payment rates for meals and supplements served 
    to individuals not determined to be eligible for free or reduced 
    price meals and supplements shall be computed to the nearest lower 
    cent increment and based on the unrounded amount for the preceding 
    12-month period''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    become effective on July 1, 1997.
    (c) Applicability of Other Provisions.--Section 11 of the National 
School Lunch Act (42 U.S.C. 1759a) is amended--
        (1) by striking subsection (d);
        (2) in subsection (e)(2)--
            (A) by striking ``The'' and inserting ``On request of the 
        Secretary, the''; and
            (B) by striking ``each month''; and
        (3) by redesignating subsections (e) and (f), as so amended, as 
    subsections (d) and (e), respectively.

SEC. 705. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

    (a) Accounts and Records.--The second sentence of section 12(a) of 
the National School Lunch Act (42 U.S.C. 1760(a)) is amended by 
striking ``at all times be available'' and inserting ``be available at 
any reasonable time''.
    (b) Restriction on Requirements.--Section 12(c) of the National 
School Lunch Act (42 U.S.C. 1760(c)) is amended by striking ``neither 
the Secretary nor the State shall'' and inserting ``the Secretary shall 
not''.
    (c) Definitions.--Section 12(d) of the National School Lunch Act 
(42 U.S.C. 1760(d)), as amended by section 701(b), is amended--
        (1) in paragraph (1), by striking ``the Trust Territory of the 
    Pacific Islands'' and inserting ``the Commonwealth of the Northern 
    Mariana Islands'';
        (2) by striking paragraphs (3) and (4); and
        (3) by redesignating paragraphs (1), (2), and (5) through (9) 
    as paragraphs (6), (7), (3), (4), (2), (5), and (1), respectively, 
    and rearranging the paragraphs so as to appear in numerical order.
    (d) Adjustments to National Average Payment Rates.--Section 12(f) 
of the National School Lunch Act (42 U.S.C. 1760(f)) is amended by 
striking ``the Trust Territory of the Pacific Islands,''.
    (e) Expedited Rulemaking.--Section 12(k) of the National School 
Lunch Act (42 U.S.C. 1760(k)) is amended--
        (1) by striking paragraphs (1), (2), and (5);
        (2) by redesignating paragraphs (3) and (4) as paragraphs (1) 
    and (2), respectively; and
        (3) in paragraph (1), as redesignated by paragraph (2), by 
    striking ``Guidelines'' and inserting ``guidelines contained in the 
    most recent `Dietary Guidelines for Americans' that is published 
    under section 301 of the National Nutrition Monitoring and Related 
    Research Act of 1990 (7 U.S.C. 5341)''.
    (f) Waiver.--Section 12(l) of the National School Lunch Act (42 
U.S.C. 1760(l)) is amended--
        (1) in paragraph (2)(A)--
            (A) in clause (iii), by adding ``and'' at the end;
            (B) in clause (iv), by striking the semicolon at the end 
        and inserting a period; and
            (C) by striking clauses (v) through (vii);
        (2) in paragraph (3)--
            (A) in subparagraph (A), by striking ``(A)''; and
            (B) by striking subparagraphs (B) through (D);
        (3) in paragraph (4)--
            (A) in the matter preceding subparagraph (A), by striking 
        ``of any requirement relating'' and inserting ``that increases 
        Federal costs or that relates'';
            (B) by striking subparagraph (D);
            (C) by redesignating subparagraphs (E) through (N) as 
        subparagraphs (D) through (M), respectively; and
            (D) in subparagraph (L), as redesignated by subparagraph 
        (C), by striking ``and'' at the end and inserting ``or''; and
        (4) in paragraph (6)--
            (A) by striking ``(A)(i)'' and all that follows through 
        ``(B)''; and
            (B) by redesignating clauses (i) through (iv) as 
        subparagraphs (A) through (D), respectively.

SEC. 706. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

    (a) Establishment of Program.--Section 13(a) of the National School 
Lunch Act (42 U.S.C. 1761(a)) is amended--
        (1) in paragraph (1)--
            (A) in the first sentence, by striking ``initiate, 
        maintain, and expand'' and inserting ``initiate and maintain''; 
        and
            (B) in subparagraph (E) of the second sentence, by striking 
        ``the Trust Territory of the Pacific Islands,''; and
        (2) in paragraph (7)(A), by striking ``Except as provided in 
    subparagraph (C), private'' and inserting ``Private''.
    (b) Service Institutions.--Section 13(b) of the National School 
Lunch Act (42 U.S.C. 1761(b)) is amended by striking ``(b)(1)'' and all 
that follows through the end of paragraph (1) and inserting the 
following:
    ``(b) Service Institutions.--
        ``(1) Payments.--
            ``(A) In general.--Except as otherwise provided in this 
        paragraph, payments to service institutions shall equal the 
        full cost of food service operations (which cost shall include 
        the costs of obtaining, preparing, and serving food, but shall 
        not include administrative costs).
            ``(B) Maximum amounts.--Subject to subparagraph (C), 
        payments to any institution under subparagraph (A) shall not 
        exceed--
                ``(i) $1.97 for each lunch and supper served;
                ``(ii) $1.13 for each breakfast served; and
                ``(iii) 46 cents for each meal supplement served.
            ``(C) Adjustments.--Amounts specified in subparagraph (B) 
        shall be adjusted on January 1, 1997, and each January 1 
        thereafter, to the nearest lower cent increment to reflect 
        changes for the 12-month period ending the preceding November 
        30 in the series for food away from home of the Consumer Price 
        Index for All Urban Con- sumers published by the Bureau of 
        Labor Statistics of the Department of Labor. Each adjustment 
        shall be based on the unrounded adjustment for the prior 12-
        month period.''.
    (c) Administration of Service Institutions.--Section 13(b)(2) of 
the National School Lunch Act (42 U.S.C. 1761(b)(2)) is amended--
        (1) in the first sentence, by striking ``four meals'' and 
    inserting ``3 meals, or 2 meals and 1 supplement,''; and
        (2) by striking the second sentence.
    (d) Reimbursements.--Section 13(c)(2) of the National School Lunch 
Act (42 U.S.C. 1761(c)(2)) is amended--
        (1) by striking subparagraphs (A), (C), (D), and (E);
        (2) by striking ``(B)'';
        (3) by striking ``, and such higher education institu- 
    tions,''; and
        (4) by striking ``without application'' and inserting ``on 
    showing residence in areas in which poor economic conditions exist 
    or on the basis of income eligibility statements for children 
    enrolled in the program''.
    (e) Advance Program Payments.--Section 13(e)(1) of the National 
School Lunch Act (42 U.S.C. 1761(e)(1)) is amended--
        (1) by striking ``institution: Provided, That (A) the'' and 
    inserting ``institution. The'';
        (2) by inserting ``(excluding a school)'' after ``any service 
    institution''; and
        (3) by striking ``responsibilities, and (B) no'' and inserting 
    ``responsibilities. No''.
    (f) Food Requirements.--Section 13(f) of the National School Lunch 
Act (42 U.S.C. 1761(f)) is amended--
        (1) by redesignating the first through seventh sentences as 
    paragraphs (1) through (7), respectively;
        (2) by striking paragraph (3), as redesignated by para- graph 
    (1);
        (3) in paragraph (4), as redesignated by paragraph (1), by 
    striking ``the first sentence'' and inserting ``paragraph (1)'';
        (4) in subparagraph (B) of paragraph (6), as re- designated by 
    paragraph (1), by striking ``that bacteria levels'' and all that 
    follows through the period at the end and inserting ``conformance 
    with standards set by local health authorities.''; and
        (5) by redesignating paragraphs (4) through (7), as 
    redesignated by paragraph (1), as paragraphs (3) through (6), 
    respectively.
    (g) Permitting Offer Versus Serve.--Section 13(f) of the National 
School Lunch Act (42 U.S.C. 1761(f)), as amended by subsection (f), is 
amended by adding at the end the following:
        ``(7) Offer versus serve.--A school food authority 
    participating as a service institution may permit a child attending 
    a site on school premises operated directly by the authority to 
    refuse one or more items of a meal that the child does not intend 
    to consume, under rules that the school uses for school meals 
    programs. A refusal of an offered food item shall not affect the 
    amount of payments made under this section to a school for the 
    meal.''.
    (h) Records.--The second sentence of section 13(m) of the National 
School Lunch Act (42 U.S.C. 1761(m)) is amended by striking ``at all 
times be available'' and inserting ``be available at any reasonable 
time''.
    (i) Removing Mandatory Notice to Institutions.--Section 13(n)(2) of 
the National School Lunch Act (42 U.S.C. 1761(n)(2)) is amended by 
striking ``, and its plans and schedule for informing service 
institutions of the availability of the program''.
    (j) Plan.--Section 13(n) of the National School Lunch Act (42 
U.S.C. 1761(n)), as amended by subsection (i), is amended--
        (1) in paragraph (2), by striking ``, including the State's 
    methods of assessing need'';
        (2) by striking paragraph (3);
        (3) in paragraph (4), by striking ``and schedule''; and
        (4) by redesignating paragraphs (4) through (7) as paragraphs 
    (3) through (6), respectively.
    (k) Monitoring and Training.--Section 13(q) of the National School 
Lunch Act (42 U.S.C. 1761(q)) is amended--
        (1) by striking paragraphs (2) and (4);
        (2) in paragraph (3), by striking ``paragraphs (1) and (2) of 
    this subsection'' and inserting ``paragraph (1)''; and
        (3) by redesignating paragraph (3) as paragraph (2).
    (l) Expired Program.--Section 13 of the National School Lunch Act 
(42 U.S.C. 1761) is amended--
        (1) by striking subsection (p); and
        (2) by redesignating subsections (q) and (r) as subsections (p) 
    and (q), respectively.
    (m) Effective Date.--The amendments made by subsection (b) shall 
become effective on January 1, 1997.

SEC. 707. COMMODITY DISTRIBUTION.

    (a) Cereal and Shortening in Commodity Donations.--Section 14(b) of 
the National School Lunch Act (42 U.S.C. 1762a(b)) is amended--
        (1) by striking paragraph (1); and
        (2) by redesignating paragraphs (2) and (3) as paragraphs (1) 
    and (2), respectively.
    (b) State Advisory Council.--Section 14(e) of the National School 
Lunch Act (42 U.S.C. 1762a(e)) is amended to read as follows:
    ``(e) Each State agency that receives food assistance payments 
under this section for any school year shall consult with 
representatives of schools in the State that participate in the school 
lunch program with respect to the needs of such schools relating to the 
manner of selection and distribution of commodity assistance for such 
program.''.
    (c) Cash Compensation for Pilot Project Schools.--Section 14(g) of 
the National School Lunch Act (42 U.S.C. 1762a(g)) is amended by 
striking paragraph (3).

SEC. 708. CHILD AND ADULT CARE FOOD PROGRAM.

    (a) Establishment of Program.--Section 17 of the National School 
Lunch Act (42 U.S.C. 1766) is amended in the first sentence of 
subsection (a), by striking ``initiate, maintain, and expand'' and 
inserting ``initiate and maintain''.
    (b) Payments to Sponsor Employees.--Paragraph (2) of the last 
sentence of section 17(a) of the National School Lunch Act (42 U.S.C. 
1766(a)) is amended--
        (1) in subparagraph (B), by striking ``and'' at the end;
        (2) in subparagraph (C), by striking the period at the end and 
    inserting ``; and''; and
        (3) by adding at the end the following:
            ``(D) in the case of a family or group day care home 
        sponsoring organization that employs more than one employee, 
        the organization does not base payments to an employee of the 
        organization on the number of family or group day care homes 
        recruited.''.
    (c) Technical Assistance.--The last sentence of section 17(d)(1) of 
the National School Lunch Act (42 U.S.C. 1766(d)(1)) is amended by 
striking ``, and shall provide technical assistance'' and all that 
follows through ``its application''.
    (d) Reimbursement of Child Care Institutions.--Section 17(f)(2)(B) 
of the National School Lunch Act (42 U.S.C. 1766(f)(2)(B)) is amended 
by striking ``two meals and two supplements or three meals and one 
supplement'' and inserting ``2 meals and 1 supplement''.
    (e) Improved Targeting of Day Care Home Reimbursements.--
        (1) Restructured day care home reimbursements.--Section 
    17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3)) is 
    amended by striking ``(3)(A) Institutions'' and all that follows 
    through the end of subparagraph (A) and inserting the following:
        ``(3) Reimbursement of family or group day care home sponsoring 
    organizations.--
            ``(A) Reimbursement factor.--
                ``(i) In general.--An institution that participates in 
            the program under this section as a family or group day 
            care home sponsoring organization shall be provided, for 
            payment to a home sponsored by the organization, 
            reimbursement factors in accordance with this subparagraph 
            for the cost of obtaining and preparing food and prescribed 
            labor costs involved in providing meals under this section.
                ``(ii) Tier i family or group day care homes.--

                    ``(I) Definition of tier i family or group day care 
                home.--In this paragraph, the term `tier I family or 
                group day care home' means--

                        ``(aa) a family or group day care home that is 
                    located in a geographic area, as defined by the 
                    Secretary based on census data, in which at least 
                    50 percent of the children residing in the area are 
                    members of households whose incomes meet the income 
                    eligibility guidelines for free or reduced price 
                    meals under section 9;
                        ``(bb) a family or group day care home that is 
                    located in an area served by a school enrolling 
                    elementary students in which at least 50 percent of 
                    the total number of children enrolled are certified 
                    eligible to receive free or reduced price school 
                    meals under this Act or the Child Nutrition Act of 
                    1966 (42 U.S.C. 1771 et seq.); or
                        ``(cc) a family or group day care home that is 
                    operated by a provider whose household meets the 
                    income eligibility guidelines for free or reduced 
                    price meals under section 9 and whose income is 
                    verified by the sponsoring organization of the home 
                    under regulations established by the Secretary.

                    ``(II) Reimbursement.--Except as provided in 
                subclause (III), a tier I family or group day care home 
                shall be provided reimbursement factors under this 
                clause without a requirement for documentation of the 
                costs described in clause (i), except that 
                reimbursement shall not be provided under this 
                subclause for meals or supplements served to the 
                children of a person acting as a family or group day 
                care home provider unless the children meet the income 
                eligibility guidelines for free or reduced price meals 
                under section 9.
                    ``(III) Factors.--Except as provided in subclause 
                (IV), the reimbursement factors applied to a home 
                referred to in subclause (II) shall be the factors in 
                effect on July 1, 1996.
                    ``(IV) Adjustments.--The reimbursement factors 
                under this subparagraph shall be adjusted on July 1, 
                1997, and each July 1 thereafter, to reflect changes in 
                the Consumer Price Index for food at home for the most 
                recent 12-month period for which the data are 
                available. The reimbursement factors under this 
                subparagraph shall be rounded to the nearest lower cent 
                increment and based on the unrounded adjustment in 
                effect on June 30 of the preceding school year.

                ``(iii) Tier ii family or group day care homes.--

                    ``(I) In general.--

                        ``(aa) Factors.--Except as provided in 
                    subclause (II), with respect to meals or 
                    supplements served under this clause by a family or 
                    group day care home that does not meet the criteria 
                    set forth in clause (ii)(I), the reimbursement 
                    factors shall be 95 cents for lunches and suppers, 
                    27 cents for breakfasts, and 13 cents for 
                    supplements.
                        ``(bb) Adjustments.--The factors shall be 
                    adjusted on July 1, 1997, and each July 1 
                    thereafter, to reflect changes in the Consumer 
                    Price Index for food at home for the most recent 
                    12-month period for which the data are available. 
                    The reimbursement factors under this item shall be 
                    rounded down to the nearest lower cent increment 
                    and based on the unrounded adjustment for the 
                    preceding 12-month period.
                        ``(cc) Reimbursement.--A family or group day 
                    care home shall be provided reimbursement factors 
                    under this subclause without a requirement for 
                    documentation of the costs described in clause (i), 
                    except that reimbursement shall not be provided 
                    under this subclause for meals or supplements 
                    served to the children of a person acting as a 
                    family or group day care home provider unless the 
                    children meet the income eligibility guidelines for 
                    free or reduced price meals under section 9.

                    ``(II) Other factors.--A family or group day care 
                home that does not meet the criteria set forth in 
                clause (ii)(I) may elect to be provided reimbursement 
                factors determined in accordance with the following 
                requirements:

                        ``(aa) Children eligible for free or reduced 
                    price meals.--In the case of meals or supplements 
                    served under this subsection to children who are 
                    members of households whose incomes meet the income 
                    eligibility guidelines for free or reduced price 
                    meals under section 9, the family or group day care 
                    home shall be provided reimbursement factors set by 
                    the Secretary in accordance with clause (ii)(III).
                        ``(bb) Ineligible children.--In the case of 
                    meals or supplements served under this subsection 
                    to children who are members of households whose 
                    incomes do not meet the income eligibility 
                    guidelines, the family or group day care home shall 
                    be provided reimbursement factors in accordance 
                    with subclause (I).

                    ``(III) Information and determinations.--

                        ``(aa) In general.--If a family or group day 
                    care home elects to claim the factors described in 
                    subclause (II), the family or group day care home 
                    sponsoring organization serving the home shall 
                    collect the necessary income information, as 
                    determined by the Secretary, from any parent or 
                    other caretaker to make the determinations 
                    specified in subclause (II) and shall make the 
                    determinations in accordance with rules prescribed 
                    by the Secretary.
                        ``(bb) Categorical eligibility.--In making a 
                    determination under item (aa), a family or group 
                    day care home sponsoring organization may consider 
                    a child participating in or subsidized under, or a 
                    child with a parent participating in or subsidized 
                    under, a federally or State supported child care or 
                    other benefit program with an income eligibility 
                    limit that does not exceed the eligibility standard 
                    for free or reduced price meals under section 9 to 
                    be a child who is a member of a household whose 
                    income meets the income eligibility guidelines 
                    under section 9.
                        ``(cc) Factors for children only.--A family or 
                    group day care home may elect to receive the 
                    reimbursement factors prescribed under clause 
                    (ii)(III) solely for the children participating in 
                    a program referred to in item (bb) if the home 
                    elects not to have income statements collected from 
                    parents or other caretakers.

                    ``(IV) Simplified meal counting and reporting 
                procedures.--The Secretary shall prescribe simplified 
                meal counting and reporting procedures for use by a 
                family or group day care home that elects to claim the 
                factors under subclause (II) and by a family or group 
                day care home sponsoring organization that sponsors the 
                home. The procedures the Secretary prescribes may 
                include 1 or more of the following:

                        ``(aa) Setting an annual percentage for each 
                    home of the number of meals served that are to be 
                    reimbursed in accordance with the reimbursement 
                    factors prescribed under clause (ii)(III) and an 
                    annual percentage of the number of meals served 
                    that are to be reimbursed in accordance with the 
                    reimbursement factors prescribed under subclause 
                    (I), based on the family income of children 
                    enrolled in the home in a specified month or other 
                    period.
                        ``(bb) Placing a home into 1 of 2 or more 
                    reimbursement categories annually based on the 
                    percentage of children in the home whose households 
                    have incomes that meet the income eligibility 
                    guidelines under section 9, with each such 
                    reimbursement category carrying a set of 
                    reimbursement factors such as the factors 
                    prescribed under clause (ii)(III) or subclause (I) 
                    or factors established within the range of factors 
                    prescribed under clause (ii)(III) and subclause 
                    (I).
                        ``(cc) Such other simplified procedures as the 
                    Secretary may prescribe.

                    ``(V) Minimum verification requirements.--The 
                Secretary may establish any minimum verification 
                requirements that are necessary to carry out this 
                clause.''.

        (2) Grants to states to provide assistance to family or group 
    day care homes.--Section 17(f)(3) of the National School Lunch Act 
    (42 U.S.C. 1766(f)(3)) is amended by adding at the end the 
    following:
            ``(D) Grants to states to provide assistance to family or 
        group day care homes.--
                ``(i) In general.--

                    ``(I) Reservation.--From amounts made available to 
                carry out this section, the Secretary shall reserve 
                $5,000,000 of the amount made available for fiscal year 
                1997.
                    ``(II) Purpose.--The Secretary shall use the funds 
                made available under subclause (I) to provide grants to 
                States for the purpose of providing--

                        ``(aa) assistance, including grants, to family 
                    and day care home sponsoring organizations and 
                    other appropriate organizations, in securing and 
                    providing training, materials, automated data 
                    processing assistance, and other assistance for the 
                    staff of the sponsoring organizations; and
                        ``(bb) training and other assistance to family 
                    and group day care homes in the implementation of 
                    the amendment to subparagraph (A) made by section 
                    708(e)(1) of the Personal Responsibility and Work 
                    Opportunity Reconciliation Act of 1996.
                ``(ii) Allocation.--The Secretary shall allocate from 
            the funds reserved under clause (i)(I)--

                    ``(I) $30,000 in base funding to each State; and
                    ``(II) any remaining amount among the States, based 
                on the number of family day care homes participating in 
                the program in a State during fiscal year 1995 as a 
                percentage of the number of all family day care homes 
                participating in the program during fiscal year 1995.

                ``(iii) Retention of funds.--Of the amount of funds 
            made available to a State for fiscal year 1997 under clause 
            (i), the State may retain not to exceed 30 percent of the 
            amount to carry out this subparagraph.
                ``(iv) Additional payments.--Any payments received 
            under this subparagraph shall be in addition to payments 
            that a State receives under subparagraph (A).''.
        (3) Provision of data.--Section 17(f)(3) of the National School 
    Lunch Act (42 U.S.C. 1766(f)(3)), as amended by paragraph (2), is 
    amended by adding at the end the following:
            ``(E) Provision of data to family or group day care home 
        sponsoring organizations.--
                ``(i) Census data.--The Secretary shall provide to each 
            State agency administering a child and adult care food 
            program under this section data from the most recent 
            decennial census survey or other appropriate census survey 
            for which the data are available showing which areas in the 
            State meet the requirements of subparagraph (A)(ii)(I)(aa). 
            The State agency shall provide the data to family or group 
            day care home sponsoring organizations located in the 
            State.
                ``(ii) School data.--

                    ``(I) In general.--A State agency administering the 
                school lunch program under this Act or the school 
                breakfast program under the Child Nutrition Act of 1966 
                (42 U.S.C. 1771 et seq.) shall provide to approved 
                family or group day care home sponsoring organizations 
                a list of schools serving elementary school children in 
                the State in which not less than \1/2\ of the children 
                enrolled are certified to receive free or reduced price 
                meals. The State agency shall collect the data 
                necessary to create the list annually and provide the 
                list on a timely basis to any approved family or group 
                day care home sponsoring organization that requests the 
                list.
                    ``(II) Use of data from preceding school year.--In 
                determining for a fiscal year or other annual period 
                whether a home qualifies as a tier I family or group 
                day care home under subparagraph (A)(ii)(I), the State 
                agency administering the program under this section, 
                and a family or group day care home sponsoring 
                organization, shall use the most current available data 
                at the time of the determination.

                ``(iii) Duration of determination.--For purposes of 
            this section, a determination that a family or group day 
            care home is located in an area that qualifies the home as 
            a tier I family or group day care home (as the term is 
            defined in subparagraph (A)(ii)(I)), shall be in effect for 
            3 years (unless the determination is made on the basis of 
            census data, in which case the determination shall remain 
            in effect until more recent census data are available) 
            unless the State agency determines that the area in which 
            the home is located no longer qualifies the home as a tier 
            I family or group day care home.''.
        (4) Conforming amendments.--Section 17(c) of the National 
    School Lunch Act (42 U.S.C. 1766(c)) is amended by inserting 
    ``except as provided in subsection (f)(3),'' after ``For purposes 
    of this section,'' each place it appears in paragraphs (1), (2), 
    and (3).
    (f) Reimbursement.--Section 17(f) of the National School Lunch Act 
(42 U.S.C. 1766(f)) is amended--
        (1) in paragraph (3)--
            (A) in subparagraph (B), by striking the third and fourth 
        sentences; and
            (B) in subparagraph (C)(ii), by striking ``conduct 
        outreach'' and all that follows through ``may become'' and 
        inserting ``assist unlicensed family or group day care homes in 
        becoming''; and
        (2) in the first sentence of paragraph (4), by striking 
    ``shall'' and inserting ``may''.
    (g) Nutritional Requirements.--Section 17(g)(1) of the National 
School Lunch Act (42 U.S.C. 1766(g)(1)) is amended--
        (1) in subparagraph (A), by striking the second sentence; and
        (2) in subparagraph (B), by striking the second sentence.
    (h) Elimination of State Paperwork and Outreach Burden.--Section 17 
of the National School Lunch Act (42 U.S.C. 1766) is amended by 
striking subsection (k) and inserting the following:
    ``(k) Training and Technical Assistance.--A State participating in 
the program established under this section shall provide sufficient 
training, technical assistance, and monitoring to facilitate effective 
operation of the program. The Secretary shall assist the State in 
developing plans to fulfill the requirements of this subsection.''.
    (i) Records.--The second sentence of section 17(m) of the National 
School Lunch Act (42 U.S.C. 1766(m)) is amended by striking ``at all 
times'' and inserting ``at any reasonable time''.
    (j) Unneeded Provision.--Section 17 of the National School Lunch 
Act is amended by striking subsection (q).
    (k) Effective Date.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall become effective on the date 
    of enactment of this Act.
        (2) Improved targeting of day care home reimbursements.--The 
    amendments made by paragraphs (1) and (4) of subsection (e) shall 
    become effective on July 1, 1997.
        (3) Regulations.--
            (A) Interim regulations.--Not later than January 1, 1997, 
        the Secretary of Agriculture shall issue interim regulations to 
        implement--
                (i) the amendments made by paragraphs (1), (3), and (4) 
            of subsection (e); and
                (ii) section 17(f)(3)(C) of the National School Lunch 
            Act (42 U.S.C. 1766(f)(3)(C)).
            (B) Final regulations.--Not later than July 1, 1997, the 
        Secretary of Agriculture shall issue final regulations to 
        implement the provisions of law referred to in subparagraph 
        (A).
    (l) Study of Impact of Amendments on Program Participation and 
Family Day Care Licensing.--
        (1) In general.--The Secretary of Agriculture, in conjunction 
    with the Secretary of Health and Human Services, shall study the 
    impact of the amendments made by this section on--
            (A) the number of family day care homes participating in 
        the child and adult care food program established under section 
        17 of the National School Lunch Act (42 U.S.C. 1766);
            (B) the number of day care home sponsoring organizations 
        participating in the program;
            (C) the number of day care homes that are licensed, 
        certified, registered, or approved by each State in accordance 
        with regulations issued by the Secretary;
            (D) the rate of growth of the numbers referred to in 
        subparagraphs (A) through (C);
            (E) the nutritional adequacy and quality of meals served in 
        family day care homes that--
                (i) received reimbursement under the program prior to 
            the amendments made by this section but do not receive 
            reimbursement after the amendments made by this section; or
                (ii) received full reimbursement under the program 
            prior to the amendments made by this section but do not 
            receive full reimbursement after the amendments made by 
            this section; and
            (F) the proportion of low-income children participating in 
        the program prior to the amendments made by this section and 
        the proportion of low-income children participating in the 
        program after the amendments made by this section.
        (2) Required data.--Each State agency participating in the 
    child and adult care food program under section 17 of the National 
    School Lunch Act (42 U.S.C. 1766) shall submit to the Secretary of 
    Agriculture data on--
            (A) the number of family day care homes participating in 
        the program on June 30, 1997, and June 30, 1998;
            (B) the number of family day care homes licensed, 
        certified, registered, or approved for service on June 30, 
        1997, and June 30, 1998; and
            (C) such other data as the Secretary may require to carry 
        out this subsection.
        (3) Submission of report.--Not later than 2 years after the 
    date of enactment of this section, the Secretary of Agriculture 
    shall submit the study required under this subsection to the 
    Committee on Economic and Educational Opportunities of the House of 
    Representatives and the Committee on Agriculture, Nutrition, and 
    Forestry of the Senate.

SEC. 709. PILOT PROJECTS.

    (a) Universal Free Pilot.--Section 18(d) of the National School 
Lunch Act (42 U.S.C. 1769(d)) is amended--
        (1) by striking paragraph (3); and
        (2) by redesignating paragraphs (4) and (5) as paragraphs (3) 
    and (4), respectively.
    (b) Demonstration Project Outside School Hours.--Section 18(e) of 
the National School Lunch Act (42 U.S.C. 1769(e)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A)--
                (i) by striking ``(A)''; and
                (ii) by striking ``shall'' and inserting ``may''; and
            (B) by striking subparagraph (B); and
        (2) by striking paragraph (5) and inserting the following:
        ``(5) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection such sums as are 
    necessary for each of fiscal years 1997 and 1998.''.

SEC. 710. REDUCTION OF PAPERWORK.

    Section 19 of the National School Lunch Act (42 U.S.C. 1769a) is 
repealed.

SEC. 711. INFORMATION ON INCOME ELIGIBILITY.

    Section 23 of the National School Lunch Act (42 U.S.C. 1769d) is 
repealed.

SEC. 712. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS.

    Section 24 of the National School Lunch Act (42 U.S.C. 1769e) is 
repealed.

                Subtitle B--Child Nutrition Act of 1966

SEC. 721. SPECIAL MILK PROGRAM.

    Section 3(a)(3) of the Child Nutrition Act of 1966 (42 U.S.C. 
1772(a)(3)) is amended by striking ``the Trust Territory of the Pacific 
Islands'' and inserting ``the Commonwealth of the Northern Mariana 
Islands''.

SEC. 722. FREE AND REDUCED PRICE POLICY STATEMENT.

    Section 4(b)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 
1773(b)(1)) is amended by adding at the end the following:
            ``(E) Free and reduced price policy statement.--After the 
        initial submission, a school food authority shall not be 
        required to submit a free and reduced price policy statement to 
        a State educational agency under this Act unless there is a 
        substantive change in the free and reduced price policy of the 
        school food authority. A routine change in the policy of a 
        school food authority, such as an annual adjustment of the 
        income eligibility guidelines for free and reduced price meals, 
        shall not be sufficient cause for requiring the school food 
        authority to submit a policy statement.''.

SEC. 723. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

    (a) Training and Technical Assistance in Food Preparation.--Section 
4(e)(1)(B) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(e)(1)(B)) 
is amended by striking the second sentence.
    (b) Expansion of Program; Startup and Expansion Costs.--
        (1) In general.--Section 4 of the Child Nutrition Act of 1966 
    (42 U.S.C. 1773) is amended by striking subsections (f) and (g).
        (2) Effective date.--The amendments made by paragraph (1) shall 
    become effective on October 1, 1996.

SEC. 724. STATE ADMINISTRATIVE EXPENSES.

    (a) Use of Funds for Commodity Distribution Administration; 
Studies.--Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776) 
is amended--
        (1) by striking subsections (e) and (h); and
        (2) by redesignating subsections (f), (g), and (i) as 
    subsections (e), (f), and (g), respectively.
    (b) Approval of Changes.--Section 7(e) of the Child Nutrition Act 
of 1966 (42 U.S.C. 1776(e)), as so redesignated, is amended--
        (1) by striking ``each year an annual plan'' and inserting 
    ``the initial fiscal year a plan''; and
        (2) by adding at the end the following: ``After submitting the 
    initial plan, a State shall be required to submit to the Secretary 
    for approval only a substantive change in the plan.''.

SEC. 725. REGULATIONS.

    Section 10(b) of the Child Nutrition Act of 1966 (42 U.S.C. 
1779(b)) is amended--
        (1) in paragraph (1), by striking ``(1)''; and
        (2) by striking paragraphs (2) through (4).

SEC. 726. PROHIBITIONS.

    Section 11(a) of the Child Nutrition Act of 1966 (42 U.S.C. 
1780(a)) is amended by striking ``neither the Secretary nor the State 
shall'' and inserting ``the Secretary shall not''.

SEC. 727. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

    Section 15 of the Child Nutrition Act of 1966 (42 U.S.C. 1784) is 
amended--
        (1) in paragraph (1), by striking ``the Trust Territory of the 
    Pacific Islands'' and inserting ``the Commonwealth of the Northern 
    Mariana Islands''; and
        (2) in the first sentence of paragraph (3)--
            (A) in subparagraph (A), by inserting ``and'' at the end; 
        and
            (B) by striking ``, and (C)'' and all that follows through 
        ``Governor of Puerto Rico''.

SEC. 728. ACCOUNTS AND RECORDS.

    The second sentence of section 16(a) of the Child Nutrition Act of 
1966 (42 U.S.C. 1785(a)) is amended by striking ``at all times be 
available'' and inserting ``be available at any reasonable time''.

SEC. 729. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, 
              AND CHILDREN.

    (a) Definitions.--Section 17(b) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(b)) is amended--
        (1) in paragraph (15)(B)(iii), by inserting ``of not more than 
    365 days'' after ``accommodation''; and
        (2) in paragraph (16)--
            (A) in subparagraph (A), by adding ``and'' at the end; and
            (B) in subparagraph (B), by striking ``; and'' and 
        inserting a period; and
            (C) by striking subparagraph (C).
    (b) Secretary's Promotion of WIC.--Section 17(c) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786(c)) is amended by striking 
paragraph (5).
    (c) Eligible Participants.--Section 17(d) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(d)) is amended by striking paragraph (4).
    (d) Nutrition Education.--Section 17(e) of the Child Nutrition Act 
of 1966 (42 U.S.C. 1786(e)) is amended--
        (1) in paragraph (2), by striking the third sentence;
        (2) in paragraph (4)--
            (A) in the matter preceding subparagraph (A), by striking 
        ``shall'';
            (B) by striking subparagraph (A);
            (C) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (A) and (B), respectively;
            (D) in subparagraph (A), as so redesignated--
                (i) by inserting ``shall'' before ``provide''; and
                (ii) by striking ``and'' at the end;
            (E) in subparagraph (B), as so redesignated--
                (i) by inserting ``shall'' before ``provide''; and
                (ii) by striking the period at the end and inserting 
            ``; and''; and
            (F) by adding at the end the following:
        ``(C) may provide a local agency with materials describing 
    other programs for which a participant in the program may be 
    eligible.'';
        (3) in paragraph (5), by striking ``The State agency shall 
    ensure that each'' and inserting ``Each''; and
        (4) by striking paragraph (6).
    (e) State Plan.--Section 17(f) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(f)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A)--
                (i) by striking ``annually to the Secretary, by a date 
            specified by the Secretary, a'' and inserting ``to the 
            Secretary, by a date specified by the Secretary, an 
            initial''; and
                (ii) by adding at the end the following: ``After 
            submitting the initial plan, a State shall be required to 
            submit to the Secretary for approval only a substantive 
            change in the plan.'';
            (B) in subparagraph (C)--
                (i) by striking clause (iii) and inserting the 
            following:
        ``(iii) a plan to coordinate operations under the program with 
    other services or programs that may benefit participants in, and 
    applicants for, the program;'';
                (ii) in clause (vi), by inserting after ``in the 
            State'' the following: ``(including a plan to improve 
            access to the program for participants and prospective 
            applicants who are employed, or who reside in rural 
            areas)'';
                (iii) in clause (vii), by striking ``to provide program 
            benefits'' and all that follows through ``emphasis on'' and 
            inserting ``for'';
                (iv) by striking clauses (ix), (x), and (xii);
                (v) in clause (xiii), by striking ``may require'' and 
            inserting ``may reasonably require'';
                (vi) by redesignating clauses (xi) and (xiii), as so 
            amended, as clauses (ix) and (x), respectively; and
                (vii) in clause (ix), as so redesignated, by adding 
            ``and'' at the end;
            (C) by striking subparagraph (D); and
            (D) by redesignating subparagraph (E) as subparagraph (D);
        (2) by striking paragraphs (6) and (22);
        (3) in the second sentence of paragraph (5), by striking ``at 
    all times be available'' and inserting ``be available at any 
    reasonable time'';
        (4) in paragraph (9)(B), by striking the second sentence;
        (5) in the first sentence of paragraph (11), by striking ``, 
    including standards that will ensure sufficient State agency 
    staff'';
        (6) in paragraph (12), by striking the third sentence;
        (7) in paragraph (14), by striking ``shall'' and inserting 
    ``may'';
        (8) in paragraph (17), by striking ``and to accommodate'' and 
    all that follows through ``facilities'';
        (9) in paragraph (19), by striking ``shall'' and inserting 
    ``may''; and
        (10) by redesignating paragraphs (7) through (21) as paragraphs 
    (6) through (20), and paragraphs (23) and (24) as paragraphs (21) 
    and (22), respectively.
    (f) Information.--Section 17(g) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(g)) is amended--
        (1) in paragraph (5), by striking ``the report required under 
    subsection (d)(4)'' and inserting ``reports on program participant 
    characteristics''; and
        (2) by striking paragraph (6).
    (g) Procurement of Infant Formula.--
        (1) In general.--Section 17(h) of the Child Nutrition Act of 
    1966 (42 U.S.C. 1786(h)) is amended--
            (A) in paragraph (4)(E), by striking ``and, on'' and all 
        that follows through ``(d)(4)''; and
            (B) in paragraph (8)--
                (i) by striking subparagraphs (A), (C), and (M);
                (ii) in subparagraph (G)--

                    (I) in clause (i), by striking ``(i)''; and
                    (II) by striking clauses (ii) through (ix);

                (iii) in subparagraph (I), by striking ``Sec- retary--
            '' and all that follows through ``(v) may'' and inserting 
            ``Secretary may'';
                (iv) by redesignating subparagraphs (B) and (D) through 
            (L) as subparagraphs (A) and (B) through (J), respectively;
                (v) in subparagraph (A)(i), as so redesignated, by 
            striking ``subparagraphs (C), (D), and (E)(iii), in 
            carrying out subparagraph (A),'' and inserting 
            ``subparagraphs (B) and (C)(iii),'';
                (vi) in subparagraph (B)(i), as so redesignated, by 
            striking ``subparagraph (B)'' each place it appears and 
            inserting ``subparagraph (A)''; and
                (vii) in subparagraph (C)(iii), as so redesignated, by 
            striking ``subparagraph (B)'' and inserting ``subparagraph 
            (A)''.
        (2) Application.--The amendments made by paragraph (1) shall 
    not apply to a contract for the procurement of infant formula under 
    section 17(h)(8) of the Child Nutrition Act of 1966 (42 U.S.C. 
    1786(h)(8)) that is in effect on the date of enactment of this 
    subsection.
    (h) National Advisory Council on Maternal, Infant, and Fetal 
Nutrition.--Section 17(k)(3) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(k)(3)) is amended by striking ``Secretary shall designate'' 
and inserting ``Council shall elect''.
    (i) Completed Study; Community College Demonstration; Grants for 
Information and Data System.--Section 17 of the Child Nutrition Act of 
1966 (42 U.S.C. 1786) is amended by striking subsections (n), (o), and 
(p).
    (j) Disqualification of Vendors Who Are Disqualified Under the Food 
Stamp Program.--Section 17 of the Child Nutrition Act of 1966 (42 
U.S.C. 1786), as amended by subsection (i), is amended by adding at the 
end the following:
    ``(n) Disqualification of Vendors Who Are Disqualified Under the 
Food Stamp Program.--
        ``(1) In general.--The Secretary shall issue regulations 
    providing criteria for the disqualification under this section of 
    an approved vendor that is disqualified from accepting benefits 
    under the food stamp program established under the Food Stamp Act 
    of 1977 (7 U.S.C. 2011 et seq.).
        ``(2) Terms.--A disqualification under paragraph (1)--
            ``(A) shall be for the same period as the disqualification 
        from the program referred to in paragraph (1);
            ``(B) may begin at a later date than the disqualification 
        from the program referred to in paragraph (1); and
            ``(C) shall not be subject to judicial or administrative 
        review.''.

SEC. 730. CASH GRANTS FOR NUTRITION EDUCATION.

    Section 18 of the Child Nutrition Act of 1966 (42 U.S.C. 1787) is 
repealed.

SEC. 731. NUTRITION EDUCATION AND TRAINING.

    (a) Findings.--Section 19 of the Child Nutrition Act of 1966 (42 
U.S.C. 1788) is amended--
        (1) in subsection (a), by striking ``that--'' and all that 
    follows through the period at the end and inserting ``that 
    effective dissemination of scientifically valid information to 
    children participating or eligible to participate in the school 
    lunch and related child nutrition programs should be encouraged.''; 
    and
        (2) in subsection (b), by striking ``encourage'' and all that 
    follows through ``establishing'' and inserting ``establish''.
    (b) Use of Funds.--Section 19(f) of the Child Nutrition Act of 1966 
(42 U.S.C. 1788(f)) is amended--
        (1) in paragraph (1)--
            (A) by striking subparagraph (B); and
            (B) in subparagraph (A)--
                (i) by striking ``(A)'';
                (ii) by striking clauses (ix) through (xix);
                (iii) by redesignating clauses (i) through (viii) and 
            (xx) as subparagraphs (A) through (H) and (I), 
            respectively;
                (iv) in subparagraph (I), as so redesignated, by 
            striking the period at the end and inserting ``; and''; and
                (v) by adding at the end the following:
        ``(J) other appropriate related activities, as determined by 
    the State.'';
        (2) by striking paragraphs (2) and (4); and
        (3) by redesignating paragraph (3) as paragraph (2).
    (c) Accounts, Records, and Reports.--The second sentence of section 
19(g)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(g)(1)) is 
amended by striking ``at all times be available'' and inserting ``be 
available at any reasonable time''.
    (d) State Coordinators for Nutrition; State Plan.--Section 19(h) of 
the Child Nutrition Act of 1966 (42 U.S.C. 1788(h)) is amended--
        (1) in the second sentence of paragraph (1)--
            (A) by striking ``as provided in paragraph (2) of this 
        subsection''; and
            (B) by striking ``as provided in paragraph (3) of this 
        subsection'';
        (2) in paragraph (2), by striking the second and third 
    sentences; and
        (3) by striking paragraph (3).
    (e) Authorization of Appropriations.--Section 19(i) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1788(i)) is amended--
        (1) in the first sentence of paragraph (2)(A), by striking 
    ``and each succeeding fiscal year'';
        (2) by redesignating paragraphs (3) and (4) as paragraphs (4) 
    and (5), respectively; and
        (3) by inserting after paragraph (2) the following:
        ``(3) Fiscal years 1997 through 2002.--
            ``(A) In general.--There are authorized to be appropriated 
        to carry out this section $10,000,000 for each of fiscal years 
        1997 through 2002.
            ``(B) Grants.--
                ``(i) In general.--Grants to each State from the 
            amounts made available under subparagraph (A) shall be 
            based on a rate of 50 cents for each child enrolled in 
            schools or institutions within the State, except that no 
            State shall receive an amount less than $75,000 per fiscal 
            year.
                ``(ii) Insufficient funds.--If the amount made 
            available for any fiscal year is insufficient to pay the 
            amount to which each State is entitled under clause (i), 
            the amount of each grant shall be ratably reduced.''.
    (f) Assessment.--Section 19 of the Child Nutrition Act of 1966 (42 
U.S.C. 1788) is amended by striking subsection (j).
    (g) Effective Date.--The amendments made by subsection (e) shall 
become effective on October 1, 1996.

                  Subtitle C--Miscellaneous Provisions

SEC. 741. COORDINATION OF SCHOOL LUNCH, SCHOOL BREAKFAST, AND SUMMER 
              FOOD SERVICE PROGRAMS.

    (a) Coordination.--
        (1) In general.--The Secretary of Agriculture shall develop 
    proposed changes to the regulations under the school lunch program 
    under the National School Lunch Act (42 U.S.C. 1751 et seq.), the 
    summer food service program under section 13 of that Act (42 U.S.C. 
    1761), and the school breakfast program under section 4 of the 
    Child Nutrition Act of 1966 (42 U.S.C. 1773), for the purpose of 
    simplifying and coordinating those programs into a comprehensive 
    meal program.
        (2) Consultation.--In developing proposed changes to the 
    regulations under paragraph (1), the Secretary of Agriculture shall 
    consult with local, State, and regional administrators of the 
    programs described in such paragraph.
    (b) Report.--Not later than November 1, 1997, the Secretary of 
Agriculture shall submit to the Committee on Agriculture, Nutrition, 
and Forestry of the Senate and the Committee on Economic and 
Educational Opportunities of the House of Representatives a report 
containing the proposed changes developed under subsection (a).

SEC. 742. REQUIREMENTS RELATING TO PROVISION OF BENEFITS BASED ON 
              CITIZENSHIP, ALIENAGE, OR IMMIGRATION STATUS UNDER THE 
              NATIONAL SCHOOL LUNCH ACT, THE CHILD NUTRITION ACT OF 
              1966, AND CERTAIN OTHER ACTS.

    (a) School Lunch and Breakfast Programs.--Notwithstanding any other 
provision of this Act, an individual who is eligible to receive free 
public education benefits under State or local law shall not be 
ineligible to receive benefits provided under the school lunch program 
under the National School Lunch Act (42 U.S.C. 1751 et seq.) or the 
school breakfast program under section 4 of the Child Nutrition Act of 
1966 (42 U.S.C. 1773) on the basis of citizenship, alienage, or 
immigration status.
    (b) Other Programs.--
        (1) In general.--Nothing in this Act shall prohibit or require 
    a State to provide to an individual who is not a citizen or a 
    qualified alien, as defined in section 431(b), benefits under 
    programs established under the provisions of law described in 
    paragraph (2).
        (2) Provisions of law described.--The provisions of law 
    described in this paragraph are the following:
            (A) Programs (other than the school lunch program and the 
        school breakfast program) under the National School Lunch Act 
        (42 U.S.C. 1751 et seq.) and the Child Nutrition Act of 1966 
        (42 U.S.C. 1771 et seq.).
            (B) Section 4 of the Agriculture and Consumer Protection 
        Act of 1973 (7 U.S.C. 612c note).
            (C) The Emergency Food Assistance Act of 1983 (7 U.S.C 612c 
        note).
            (D) The food distribution program on Indian reservations 
        established under section 4(b) of the Food Stamp Act of 1977 (7 
        U.S.C 2013(b)).

           TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION
                     Subtitle A--Food Stamp Program

SEC. 801. DEFINITION OF CERTIFICATION PERIOD.

    Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is 
amended by striking ``Except as provided'' and all that follows and 
inserting the following: ``The certification period shall not exceed 12 
months, except that the certification period may be up to 24 months if 
all adult household members are elderly or disabled. A State agency 
shall have at least 1 contact with each certified household every 12 
months.''.

SEC. 802. DEFINITION OF COUPON.

    Section 3(d) of the Food Stamp Act of 1977 (7 U.S.C. 2012(d)) is 
amended by striking ``or type of certificate'' and inserting ``type of 
certificate, authorization card, cash or check issued in lieu of a 
coupon, or access device, including an electronic benefit transfer card 
or personal identification number,''.

SEC. 803. TREATMENT OF CHILDREN LIVING AT HOME.

    The second sentence of section 3(i) of the Food Stamp Act of 1977 
(7 U.S.C. 2012(i)) is amended by striking ``(who are not themselves 
parents living with their children or married and living with their 
spouses)''.

SEC. 804. ADJUSTMENT OF THRIFTY FOOD PLAN.

    The second sentence of section 3(o) of the Food Stamp Act of 1977 
(7 U.S.C. 2012(o)) is amended--
        (1) by striking ``shall (1) make'' and inserting the following: 
    ``shall--
        ``(1) make'';
        (2) by striking ``scale, (2) make'' and inserting the 
    following: ``scale;
        ``(2) make'';
        (3) by striking ``Alaska, (3) make'' and inserting the 
    following: ``Alaska;
        ``(3) make''; and
        (4) by striking ``Columbia, (4) through'' and all that follows 
    through the end of the subsection and inserting the following: 
    ``Columbia; and
        ``(4) on October 1, 1996, and each October 1 thereafter, adjust 
    the cost of the diet to reflect the cost of the diet in the 
    preceding June, and round the result to the nearest lower dollar 
    increment for each household size, except that on October 1, 1996, 
    the Secretary may not reduce the cost of the diet in effect on 
    September 30, 1996.''.

SEC. 805. DEFINITION OF HOMELESS INDIVIDUAL.

    Section 3(s)(2)(C) of the Food Stamp Act of 1977 (7 U.S.C. 
2012(s)(2)(C)) is amended by inserting ``for not more than 90 days'' 
after ``temporary accommodation''.

SEC. 806. STATE OPTION FOR ELIGIBILITY STANDARDS.

    Section 5(b) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is 
amended by striking ``(b) The Secretary'' and inserting the following:
    ``(b) Eligibility Standards.--Except as otherwise provided in this 
Act, the Secretary''.

SEC. 807. EARNINGS OF STUDENTS.

    Section 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(7)) 
is amended by striking ``21'' and inserting ``17''.

SEC. 808. ENERGY ASSISTANCE.

    (a) In General.--Section 5(d) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(d)) is amended by striking paragraph (11) and inserting the 
following: ``(11)(A) any payments or allowances made for the purpose of 
providing energy assistance under any Federal law (other than part A of 
title IV of the Social Security Act (42 U.S.C. 601 et seq.)), or (B) a 
1-time payment or allowance made under a Federal or State law for the 
costs of weatherization or emergency repair or replacement of an unsafe 
or inoperative furnace or other heating or cooling device,''.
    (b) Conforming Amendments.--Section 5(k) of the Food Stamp Act of 
1977 (7 U.S.C. 2014(k)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A), by striking ``plan for aid to 
        families with dependent children approved'' and inserting 
        ``program funded''; and
            (B) in subparagraph (B), by striking ``, not including 
        energy or utility-cost assistance,'';
        (2) in paragraph (2), by striking subparagraph (C) and 
    inserting the following:
        ``(C) a payment or allowance described in subsection 
    (d)(11);''; and
        (3) by adding at the end the following:
        ``(4) Third party energy assistance payments.--
            ``(A) Energy assistance payments.--For purposes of 
        subsection (d)(1), a payment made under a State law (other than 
        a law referred to in paragraph (2)(H)) to provide energy 
        assistance to a household shall be considered money payable 
        directly to the household.
            ``(B) Energy assistance expenses.--For purposes of 
        subsection (e)(7), an expense paid on behalf of a household 
        under a State law to provide energy assistance shall be 
        considered an out-of-pocket expense incurred and paid by the 
        household.''.

SEC. 809. DEDUCTIONS FROM INCOME.

    (a) In General.--Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 
2014) is amended by striking subsection (e) and inserting the 
following:
    ``(e) Deductions From Income.--
        ``(1) Standard deduction.--The Secretary shall allow a standard 
    deduction for each household in the 48 contiguous States and the 
    District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands 
    of the United States of $134, $229, $189, $269, and $118, 
    respectively.
        ``(2) Earned income deduction.--
            ``(A) Definition of earned income.--In this paragraph, the 
        term `earned income' does not include--
                ``(i) income excluded by subsection (d); or
                ``(ii) any portion of income earned under a work 
            supplementation or support program, as defined under 
            section 16(b), that is attributable to public assistance.
            ``(B) Deduction.--Except as provided in subparagraph (C), a 
        household with earned income shall be allowed a deduction of 20 
        percent of all earned income to compensate for taxes, other 
        mandatory deductions from salary, and work expenses.
            ``(C) Exception.--The deduction described in subparagraph 
        (B) shall not be allowed with respect to determining an 
        overissuance due to the failure of a household to report earned 
        income in a timely manner.
        ``(3) Dependent care deduction.--
            ``(A) In general.--A household shall be entitled, with 
        respect to expenses (other than excluded expenses described in 
        subparagraph (B)) for dependent care, to a dependent care 
        deduction, the maximum allowable level of which shall be $200 
        per month for each dependent child under 2 years of age and 
        $175 per month for each other dependent, for the actual cost of 
        payments necessary for the care of a dependent if the care 
        enables a household member to accept or continue employment, or 
        training or education that is preparatory for employment.
            ``(B) Excluded expenses.--The excluded expenses referred to 
        in subparagraph (A) are--
                ``(i) expenses paid on behalf of the household by a 
            third party;
                ``(ii) amounts made available and excluded, for the 
            expenses referred to in subparagraph (A), under subsection 
            (d)(3); and
                ``(iii) expenses that are paid under section 6(d)(4).
        ``(4) Deduction for child support payments.--
            ``(A) In general.--A household shall be entitled to a 
        deduction for child support payments made by a household member 
        to or for an individual who is not a member of the household if 
        the household member is legally obligated to make the payments.
            ``(B) Methods for determining amount.--The Secretary may 
        prescribe by regulation the methods, including calculation on a 
        retrospective basis, that a State agency shall use to determine 
        the amount of the deduction for child support payments.
        ``(5) Homeless shelter allowance.--Under rules prescribed by 
    the Secretary, a State agency may develop a standard homeless 
    shelter allowance, which shall not exceed $143 per month, for such 
    expenses as may reasonably be expected to be incurred by households 
    in which all members are homeless individuals but are not receiving 
    free shelter throughout the month. A State agency that develops the 
    allowance may use the allowance in determining eligibility and 
    allotments for the households. The State agency may make a 
    household with extremely low shelter costs ineligible for the 
    allowance.
        ``(6) Excess medical expense deduction.--
            ``(A) In general.--A household containing an elderly or 
        disabled member shall be entitled, with respect to expenses 
        other than expenses paid on behalf of the household by a third 
        party, to an excess medical expense deduction for the portion 
        of the actual costs of allowable medical expenses, incurred by 
        the elderly or disabled member, exclusive of special diets, 
        that exceeds $35 per month.
            ``(B) Method of claiming deduction.--
                ``(i) In general.--A State agency shall offer an 
            eligible household under subparagraph (A) a method of 
            claiming a deduction for recurring medical expenses that 
            are initially verified under the excess medical expense 
            deduction in lieu of submitting information on, or 
            verification of, actual expenses on a monthly basis.
                ``(ii) Method.--The method described in clause (i) 
            shall--

                    ``(I) be designed to minimize the burden for the 
                eligible elderly or disabled household member choosing 
                to deduct the recurrent medical expenses of the member 
                pursuant to the method;
                    ``(II) rely on reasonable estimates of the expected 
                medical expenses of the member for the certification 
                period (including changes that can be reasonably 
                anticipated based on available information about the 
                medical condition of the member, public or private 
                medical insurance coverage, and the current verified 
                medical expenses incurred by the member); and
                    ``(III) not require further reporting or 
                verification of a change in medical expenses if such a 
                change has been anticipated for the certification 
                period.

        ``(7) Excess shelter expense deduction.--
            ``(A) In general.--A household shall be entitled, with 
        respect to expenses other than expenses paid on behalf of the 
        household by a third party, to an excess shelter expense 
        deduction to the extent that the monthly amount expended by a 
        household for shelter exceeds an amount equal to 50 percent of 
        monthly household income after all other applicable deductions 
        have been allowed.
            ``(B) Maximum amount of deduction.--In the case of a 
        household that does not contain an elderly or disabled 
        individual, in the 48 contiguous States and the District of 
        Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the 
        United States, the excess shelter expense deduction shall not 
        exceed--
                ``(i) for the period beginning on the date of enactment 
            of this subparagraph and ending on December 31, 1996, $247, 
            $429, $353, $300, and $182 per month, respectively;
                ``(ii) for the period beginning on January 1, 1997, and 
            ending on September 30, 1998, $250, $434, $357, $304, and 
            $184 per month, respectively;
                ``(iii) for fiscal years 1999 and 2000, $275, $478, 
            $393, $334, and $203 per month, respectively; and
                ``(iv) for fiscal year 2001 and each subsequent fiscal 
            year, $300, $521, $429, $364, and $221 per month, 
            respectively.
            ``(C) Standard utility allowance.--
                ``(i) In general.--In computing the excess shelter 
            expense deduction, a State agency may use a standard 
            utility allowance in accordance with regulations 
            promulgated by the Secretary, except that a State agency 
            may use an allowance that does not fluctuate within a year 
            to reflect seasonal variations.
                ``(ii) Restrictions on heating and cooling expenses.--
            An allowance for a heating or cooling expense may not be 
            used in the case of a household that--

                    ``(I) does not incur a heating or cooling expense, 
                as the case may be;
                    ``(II) does incur a heating or cooling expense but 
                is located in a public housing unit that has central 
                utility meters and charges households, with regard to 
                the expense, only for excess utility costs; or
                    ``(III) shares the expense with, and lives with, 
                another individual not participating in the food stamp 
                program, another household participating in the food 
                stamp program, or both, unless the allowance is 
                prorated between the household and the other 
                individual, household, or both.

                ``(iii) Mandatory allowance.--

                    ``(I) In general.--A State agency may make the use 
                of a standard utility allowance mandatory for all 
                households with qualifying utility costs if--

                        ``(aa) the State agency has developed 1 or more 
                    standards that include the cost of heating and 
                    cooling and 1 or more standards that do not include 
                    the cost of heating and cooling; and
                        ``(bb) the Secretary finds that the standards 
                    will not result in an increased cost to the 
                    Secretary.

                    ``(II) Household election.--A State agency that has 
                not made the use of a standard utility allowance 
                mandatory under subclause (I) shall allow a household 
                to switch, at the end of a certification period, 
                between the standard utility allowance and a deduction 
                based on the actual utility costs of the household.

                ``(iv) Availability of allowance to recipients of 
            energy assistance.--

                    ``(I) In general.--Subject to subclause (II), if a 
                State agency elects to use a standard utility allowance 
                that reflects heating or cooling costs, the standard 
                utility allowance shall be made available to households 
                receiving a payment, or on behalf of which a payment is 
                made, under the Low-Income Home Energy Assistance Act 
                of 1981 (42 U.S.C. 8621 et seq.) or other similar 
                energy assistance program, if the household still 
                incurs out-of-pocket heating or cooling expenses in 
                excess of any assistance paid on behalf of the 
                household to an energy provider.
                    ``(II) Separate allowance.--A State agency may use 
                a separate standard utility allowance for households on 
                behalf of which a payment described in subclause (I) is 
                made, but may not be required to do so.
                    ``(III) States not electing to use separate 
                allowance.--A State agency that does not elect to use a 
                separate allowance but makes a single standard utility 
                allowance available to households incurring heating or 
                cooling expenses (other than a household described in 
                subclause (I) or (II) of clause (ii)) may not be 
                required to reduce the allowance due to the provision 
                (directly or indirectly) of assistance under the Low-
                Income Home Energy Assistance Act of 1981 (42 U.S.C. 
                8621 et seq.).
                    ``(IV) Proration of assistance.--For the purpose of 
                the food stamp program, assistance provided under the 
                Low-Income Home Energy Assistance Act of 1981 (42 
                U.S.C. 8621 et seq.) shall be considered to be prorated 
                over the entire heating or cooling season for which the 
                assistance was provided.''.

    (b) Conforming Amendment.--Section 11(e)(3) of the Food Stamp Act 
of 1977 (7 U.S.C. 2020(e)(3)) is amended by striking ``. Under rules 
prescribed'' and all that follows through ``verifies higher expenses''.

SEC. 810. VEHICLE ALLOWANCE.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is 
amended by striking paragraph (2) and inserting the following:
        ``(2) Included assets.--
            ``(A) In general.--Subject to the other provisions of this 
        paragraph, the Secretary shall, in prescribing inclusions in, 
        and exclusions from, financial resources, follow the 
        regulations in force as of June 1, 1982 (other than those 
        relating to licensed vehicles and inaccessible resources).
            ``(B) Additional included assets.--The Secretary shall 
        include in financial resources--
                ``(i) any boat, snowmobile, or airplane used for 
            recreational purposes;
                ``(ii) any vacation home;
                ``(iii) any mobile home used primarily for vacation 
            purposes;
                ``(iv) subject to subparagraph (C), any licensed 
            vehicle that is used for household transportation or to 
            obtain or continue employment to the extent that the fair 
            market value of the vehicle exceeds $4,600 through 
            September 30, 1996, and $4,650 beginning October 1, 1996; 
            and
                ``(v) any savings or retirement account (including an 
            individual account), regardless of whether there is a 
            penalty for early withdrawal.
            ``(C) Excluded vehicles.--A vehicle (and any other 
        property, real or personal, to the extent the property is 
        directly related to the maintenance or use of the vehicle) 
        shall not be included in financial resources under this 
        paragraph if the vehicle is--
                ``(i) used to produce earned income;
                ``(ii) necessary for the transportation of a physically 
            disabled household member; or
                ``(iii) depended on by a household to carry fuel for 
            heating or water for home use and provides the primary 
            source of fuel or water, respectively, for the 
            household.''.

SEC. 811. VENDOR PAYMENTS FOR TRANSITIONAL HOUSING COUNTED AS INCOME.

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

SEC. 812. SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-EMPLOYED.

    Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014), as amended 
by title I, is amended by adding at the end the following:
    ``(m) Simplified Calculation of Income for the Self-Employed.--
        ``(1) In general.--Not later than 1 year after the date of 
    enactment of this subsection, the Secretary shall establish a 
    procedure by which a State may submit a method, designed to not 
    increase Federal costs, for the approval of the Secretary, that the 
    Secretary determines will produce a reasonable estimate of income 
    excluded under subsection (d)(9) in lieu of calculating the actual 
    cost of producing self-employment income.
        ``(2) Inclusive of all types of income or limited types of 
    income.--The method submitted by a State under paragraph (1) may 
    allow a State to estimate income for all types of self-employment 
    income or may be limited to 1 or more types of self-employment 
    income.
        ``(3) Differences for different types of income.--The method 
    submitted by a State under paragraph (1) may differ for different 
    types of self-employment income.''.

SEC. 813. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PROGRAM 
              REQUIREMENTS.

    Section 6(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(b)(1)) 
is amended--
        (1) in clause (i), by striking ``six months'' and inserting ``1 
    year''; and
        (2) in clause (ii), by striking ``1 year'' and inserting ``2 
    years''.

SEC. 814. DISQUALIFICATION OF CONVICTED INDIVIDUALS.

    Section 6(b)(1)(iii) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(b)(1)(iii)) is amended--
        (1) in subclause (II), by striking ``or'' at the end;
        (2) in subclause (III), by striking the period at the end and 
    inserting ``; or''; and
        (3) by inserting after subclause (III) the following:
            ``(IV) a conviction of an offense under subsection (b) or 
        (c) of section 15 involving an item covered by subsection (b) 
        or (c) of section 15 having a value of $500 or more.''.

SEC. 815. DISQUALIFICATION.

    (a) In General.--Section 6(d) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(d)) is amended by striking ``(d)(1) Unless otherwise 
exempted by the provisions'' and all that follows through the end of 
paragraph (1) and inserting the following:
    ``(d) Conditions of Participation.--
        ``(1) Work requirements.--
            ``(A) In general.--No physically and mentally fit 
        individual over the age of 15 and under the age of 60 shall be 
        eligible to participate in the food stamp program if the 
        individual--
                ``(i) refuses, at the time of application and every 12 
            months thereafter, to register for employment in a manner 
            prescribed by the Secretary;
                ``(ii) refuses without good cause to participate in an 
            employment and training program established under paragraph 
            (4), to the extent required by the State agency;
                ``(iii) refuses without good cause to accept an offer 
            of employment, at a site or plant not subject to a strike 
            or lockout at the time of the refusal, at a wage not less 
            than the higher of--

                    ``(I) the applicable Federal or State minimum wage; 
                or
                    ``(II) 80 percent of the wage that would have 
                governed had the minimum hourly rate under section 
                6(a)(1) of the Fair Labor Standards Act of 1938 (29 
                U.S.C. 206(a)(1)) been applicable to the offer of 
                employment;

                ``(iv) refuses without good cause to provide a State 
            agency with sufficient information to allow the State 
            agency to determine the employment status or the job 
            availability of the individual;
                ``(v) voluntarily and without good cause--

                    ``(I) quits a job; or
                    ``(II) reduces work effort and, after the 
                reduction, the individual is working less than 30 hours 
                per week; or

                ``(vi) fails to comply with section 20.
            ``(B) Household ineligibility.--If an individual who is the 
        head of a household becomes ineligible to participate in the 
        food stamp program under subparagraph (A), the household shall, 
        at the option of the State agency, become ineligible to 
        participate in the food stamp program for a period, determined 
        by the State agency, that does not exceed the lesser of--
                ``(i) the duration of the ineligibility of the 
            individual determined under subparagraph (C); or
                ``(ii) 180 days.
            ``(C) Duration of ineligibility.--
                ``(i) First violation.--The first time that an 
            individual becomes ineligible to participate in the food 
            stamp program under subparagraph (A), the individual shall 
            remain ineligible until the later of--

                    ``(I) the date the individual becomes eligible 
                under subparagraph (A);
                    ``(II) the date that is 1 month after the date the 
                individual became ineligible; or
                    ``(III) a date determined by the State agency that 
                is not later than 3 months after the date the 
                individual became ineligible.

                ``(ii) Second violation.--The second time that an 
            individual becomes ineligible to participate in the food 
            stamp program under subparagraph (A), the individual shall 
            remain ineligible until the later of--

                    ``(I) the date the individual becomes eligible 
                under subparagraph (A);
                    ``(II) the date that is 3 months after the date the 
                individual became ineligible; or
                    ``(III) a date determined by the State agency that 
                is not later than 6 months after the date the 
                individual became ineligible.

                ``(iii) Third or subsequent violation.--The third or 
            subsequent time that an individual becomes ineligible to 
            participate in the food stamp program under subparagraph 
            (A), the individual shall remain ineligible until the later 
            of--

                    ``(I) the date the individual becomes eligible 
                under subparagraph (A);
                    ``(II) the date that is 6 months after the date the 
                individual became ineligible;
                    ``(III) a date determined by the State agency; or
                    ``(IV) at the option of the State agency, 
                permanently.

            ``(D) Administration.--
                ``(i) Good cause.--The Secretary shall determine the 
            meaning of good cause for the purpose of this paragraph.
                ``(ii) Voluntary quit.--The Secretary shall determine 
            the meaning of voluntarily quitting and reducing work 
            effort for the purpose of this paragraph.
                ``(iii) Determination by state agency.--

                    ``(I) In general.--Subject to subclause (II) and 
                clauses (i) and (ii), a State agency shall determine--

                        ``(aa) the meaning of any term used in 
                    subparagraph (A);
                        ``(bb) the procedures for determining whether 
                    an individual is in compliance with a requirement 
                    under subparagraph (A); and
                        ``(cc) whether an individual is in compliance 
                    with a requirement under subpara- graph (A).

                    ``(II) Not less restrictive.--A State agency may 
                not use a meaning, procedure, or determination under 
                subclause (I) that is less restrictive on individuals 
                receiving benefits under this Act than a comparable 
                meaning, procedure, or determination under a State 
                program funded under part A of title IV of the Social 
                Security Act (42 U.S.C. 601 et seq.).

                ``(iv) Strike against the government.--For the purpose 
            of subparagraph (A)(v), an employee of the Federal 
            Government, a State, or a political subdivision of a State, 
            who is dismissed for participating in a strike against the 
            Federal Government, the State, or the political subdivision 
            of the State shall be considered to have voluntarily quit 
            without good cause.
                ``(v) Selecting a head of household.--

                    ``(I) In general.--For purposes of this paragraph, 
                the State agency shall allow the household to select 
                any adult parent of a child in the household as the 
                head of the household if all adult household members 
                making application under the food stamp program agree 
                to the selection.
                    ``(II) Time for making designation.--A household 
                may designate the head of the household under subclause 
                (I) each time the household is certified for 
                participation in the food stamp program, but may not 
                change the designation during a certification period 
                unless there is a change in the composition of the 
                household.

                ``(vi) Change in head of household.--If the head of a 
            household leaves the household during a period in which the 
            household is ineligible to participate in the food stamp 
            program under subparagraph (B)--

                    ``(I) the household shall, if otherwise eligible, 
                become eligible to participate in the food stamp 
                program; and
                    ``(II) if the head of the household becomes the 
                head of another household, the household that becomes 
                headed by the individual shall become ineligible to 
                participate in the food stamp program for the remaining 
                period of ineligibility.''.

    (b) Conforming Amendment.--
        (1) The second sentence of section 17(b)(2) of the Food Stamp 
    Act of 1977 (7 U.S.C. 2026(b)(2)) is amended by striking 
    ``6(d)(1)(i)'' and inserting ``6(d)(1)(A)(i)''.
        (2) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 2029) is 
    amended by striking subsection (f) and inserting the following:
    ``(f) Disqualification.--An individual or a household may become 
ineligible under section 6(d)(1) to participate in the food stamp 
program for failing to comply with this section.''.

SEC. 816. CARETAKER EXEMPTION.

    Section 6(d)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(2)) 
is amended by adding at the end the following: ``A State that requested 
a waiver to lower the age specified in subparagraph (B) and had the 
waiver denied by the Secretary as of August 1, 1996, may, for a period 
of not more than 3 years, lower the age of a dependent child that 
qualifies a parent or other member of a household for an exemption 
under subparagraph (B) to between 1 and 6 years of age.''.

SEC. 817. EMPLOYMENT AND TRAINING.

    (a) In General.--Section 6(d)(4) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(d)(4)) is amended--
        (1) by striking ``(4)(A) Not later than April 1, 1987, each'' 
    and inserting the following:
        ``(4) Employment and training.--
            ``(A) In general.--
                ``(i) Implementation.--Each'';
        (2) in subparagraph (A)--
            (A) by inserting ``work,'' after ``skills, training,''; and
            (B) by adding at the end the following:
                ``(ii) Statewide workforce development system.--Each 
            component of an employment and training program carried out 
            under this paragraph shall be delivered through a statewide 
            workforce development system, unless the component is not 
            available locally through such a system.'';
        (3) in subparagraph (B)--
            (A) in the matter preceding clause (i), by striking the 
        colon at the end and inserting the following: ``, except that 
        the State agency shall retain the option to apply employment 
        requirements prescribed under this subparagraph to a program 
        applicant at the time of application:'';
            (B) in clause (i), by striking ``with terms and 
        conditions'' and all that follows through ``time of 
        application''; and
            (C) in clause (iv)--
                (i) by striking subclauses (I) and (II); and
                (ii) by redesignating subclauses (III) and (IV) as 
            subclauses (I) and (II), respectively;
        (4) in subparagraph (D)--
            (A) in clause (i), by striking ``to which the application'' 
        and all that follows through ``30 days or less'';
            (B) in clause (ii), by striking ``but with respect'' and 
        all that follows through ``child care''; and
            (C) in clause (iii), by striking ``, on the basis of'' and 
        all that follows through ``clause (ii)'' and inserting ``the 
        exemption continues to be valid'';
        (5) in subparagraph (E), by striking the third sentence;
        (6) in subparagraph (G)--
            (A) by striking ``(G)(i) The State'' and inserting ``(G) 
        The State''; and
            (B) by striking clause (ii);
        (7) in subparagraph (H), by striking ``(H)(i) The Secretary'' 
    and all that follows through ``(ii) Federal funds'' and inserting 
    ``(H) Federal funds'';
        (8) in subparagraph (I)(i)(II), by striking ``, or was in 
    operation,'' and all that follows through ``Social Security Act'' 
    and inserting the following: ``), except that no such payment or 
    reimbursement shall exceed the applicable local market rate'';
        (9)(A) by striking subparagraphs (K) and (L) and inserting the 
    following:
            ``(K) Limitation on funding.--Notwithstanding any other 
        provision of this paragraph, the amount of funds a State agency 
        uses to carry out this paragraph (including funds used to carry 
        out subparagraph (I)) for participants who are receiving 
        benefits under a State program funded under part A of title IV 
        of the Social Security Act (42 U.S.C. 601 et seq.) shall not 
        exceed the amount of funds the State agency used in fiscal year 
        1995 to carry out this paragraph for participants who were 
        receiving benefits in fiscal year 1995 under a State program 
        funded under part A of title IV of the Act (42 U.S.C. 601 et 
        seq.).''; and
        (B) by redesignating subparagraphs (M) and (N) as subparagraphs 
    (L) and (M), respectively; and
        (10) in subparagraph (L), as so redesignated--
            (A) by striking ``(L)(i) The Secretary'' and inserting 
        ``(L) The Secretary''; and
            (B) by striking clause (ii).
    (b) Funding.--Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(h)) is amended by striking ``(h)(1)(A) The Secretary'' and all 
that follows through the end of paragraph (1) and inserting the 
following:
    ``(h) Funding of Employment and Training Programs.--
        ``(1) In general.--
            ``(A) Amounts.--To carry out employment and training 
        programs, the Secretary shall reserve for allocation to State 
        agencies from funds made available for each fiscal year under 
        section 18(a)(1) the amount of--
                ``(i) for fiscal year 1996, $75,000,000;
                ``(ii) for fiscal year 1997, $79,000,000;
                ``(iii) for fiscal year 1998, $81,000,000;
                ``(iv) for fiscal year 1999, $84,000,000;
                ``(v) for fiscal year 2000, $86,000,000;
                ``(vi) for fiscal year 2001, $88,000,000; and
                ``(vii) for fiscal year 2002, $90,000,000.
            ``(B) Allocation.--The Secretary shall allocate the amounts 
        reserved under subparagraph (A) among the State agencies using 
        a reasonable formula (as determined by the Secretary) that 
        gives consideration to the population in each State affected by 
        section 6(o).
            ``(C) Reallocation.--
                ``(i) Notification.--A State agency shall promptly 
            notify the Secretary if the State agency determines that 
            the State agency will not expend all of the funds allocated 
            to the State agency under subparagraph (B).
                ``(ii) Reallocation.--On notification under clause (i), 
            the Secretary shall reallocate the funds that the State 
            agency will not expend as the Secretary considers 
            appropriate and equitable.
            ``(D) Minimum allocation.--Notwithstanding subparagraphs 
        (A) through (C), the Secretary shall ensure that each State 
        agency operating an employment and training program shall 
        receive not less than $50,000 for each fiscal year.''.
    (c) Additional Matching Funds.--Section 16(h)(2) of the Food Stamp 
Act of 1977 (7 U.S.C. 2025(h)(2)) is amended by inserting before the 
period at the end the following: ``, including the costs for case 
management and casework to facilitate the transition from economic 
dependency to self-sufficiency through work''.
    (d) Reports.--Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(h)) is amended--
        (1) in paragraph (5)--
            (A) by striking ``(5)(A) The Secretary'' and inserting 
        ``(5) The Secretary''; and
            (B) by striking subparagraph (B); and
        (2) by striking paragraph (6).

SEC. 818. FOOD STAMP ELIGIBILITY.

    The third sentence of section 6(f) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(f)) is amended by inserting ``, at State option,'' after 
``less''.

SEC. 819. COMPARABLE TREATMENT FOR DISQUALIFICATION.

    (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 
2015) is amended by adding at the end the following:
    ``(i) Comparable Treatment for Disqualification.--
        ``(1) In general.--If a disqualification is imposed on a member 
    of a household for a failure of the member to perform an action 
    required under a Federal, State, or local law relating to a means-
    tested public assistance program, the State agency may impose the 
    same disqualification on the member of the household under the food 
    stamp program.
        ``(2) Rules and procedures.--If a disqualification is imposed 
    under paragraph (1) for a failure of an individual to perform an 
    action required under part A of title IV of the Social Security Act 
    (42 U.S.C. 601 et seq.), the State agency may use the rules and 
    procedures that apply under part A of title IV of the Act to impose 
    the same disqualification under the food stamp program.
        ``(3) Application after disqualification period.--A member of a 
    household disqualified under paragraph (1) may, after the 
    disqualification period has expired, apply for benefits under this 
    Act and shall be treated as a new applicant, except that a prior 
    disqualification under subsection (d) shall be considered in 
    determining eligibility.''.
    (b) State Plan Provisions.--Section 11(e) of the Food Stamp Act of 
1977 (7 U.S.C. 2020(e)) is amended--
        (1) in paragraph (24), by striking ``and'' at the end;
        (2) in paragraph (25), by striking the period at the end and 
    inserting a semicolon; and
        (3) by adding at the end the following:
        ``(26) the guidelines the State agency uses in carrying out 
    section 6(i); and''.
    (c) Conforming Amendment.--Section 6(d)(2)(A) of the Food Stamp Act 
of 1977 (7 U.S.C. 2015(d)(2)(A)) is amended by striking ``that is 
comparable to a requirement of paragraph (1)''.

SEC. 820. DISQUALIFICATION FOR RECEIPT OF MULTIPLE FOOD STAMP BENEFITS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 819, is amended by adding at the end the following:
    ``(j) Disqualification for Receipt of Multiple Food Stamp 
Benefits.--An individual shall be ineligible to participate in the food 
stamp program as a member of any household for a 10-year period if the 
individual is found by a State agency to have made, or is convicted in 
a Federal or State court of having made, a fraudulent statement or 
representation with respect to the identity or place of residence of 
the individual in order to receive multiple benefits simultaneously 
under the food stamp program.''.

SEC. 821. DISQUALIFICATION OF FLEEING FELONS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 820, is amended by adding at the end the following:
    ``(k) Disqualification of Fleeing Felons.--No member of a household 
who is otherwise eligible to participate in the food stamp program 
shall be eligible to participate in the program as a member of that or 
any other household during any period during which the individual is--
        ``(1) fleeing to avoid prosecution, or custody or confinement 
    after conviction, under the law of the place from which the 
    individual is fleeing, for a crime, or attempt to commit a crime, 
    that is a felony under the law of the place from which the 
    individual is fleeing or that, in the case of New Jersey, is a high 
    misdemeanor under the law of New Jersey; or
        ``(2) violating a condition of probation or parole imposed 
    under a Federal or State law.''.

SEC. 822. COOPERATION WITH CHILD SUPPORT AGENCIES.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 821, is amended by adding at the end the following:
    ``(l) Custodial Parent's Cooperation With Child Support Agencies.--
        ``(1) In general.--At the option of a State agency, subject to 
    paragraphs (2) and (3), no natural or adoptive parent or other 
    individual (collectively referred to in this subsection as `the 
    individual') who is living with and exercising parental control 
    over a child under the age of 18 who has an absent parent shall be 
    eligible to participate in the food stamp program unless the 
    individual cooperates with the State agency administering the 
    program established under part D of title IV of the Social Security 
    Act (42 U.S.C. 651 et seq.)--
            ``(A) in establishing the paternity of the child (if the 
        child is born out of wedlock); and
            ``(B) in obtaining support for--
                ``(i) the child; or
                ``(ii) the individual and the child.
        ``(2) Good cause for noncooperation.--Paragraph (1) shall not 
    apply to the individual if good cause is found for refusing to 
    cooperate, as determined by the State agency in accordance with 
    standards prescribed by the Secretary in consultation with the 
    Secretary of Health and Human Services. The standards shall take 
    into consideration circumstances under which cooperation may be 
    against the best interests of the child.
        ``(3) Fees.--Paragraph (1) shall not require the payment of a 
    fee or other cost for services provided under part D of title IV of 
    the Social Security Act (42 U.S.C. 651 et seq.).
    ``(m) Noncustodial Parent's Cooperation With Child Support 
Agencies.--
        ``(1) In general.--At the option of a State agency, subject to 
    paragraphs (2) and (3), a putative or identified noncustodial 
    parent of a child under the age of 18 (referred to in this 
    subsection as `the individual') shall not be eligible to 
    participate in the food stamp program if the individual refuses to 
    cooperate with the State agency administering the program 
    established under part D of title IV of the Social Security Act (42 
    U.S.C. 651 et seq.)--
            ``(A) in establishing the paternity of the child (if the 
        child is born out of wedlock); and
            ``(B) in providing support for the child.
        ``(2) Refusal to cooperate.--
            ``(A) Guidelines.--The Secretary, in consultation with the 
        Secretary of Health and Human Services, shall develop 
        guidelines on what constitutes a refusal to cooperate under 
        paragraph (1).
            ``(B) Procedures.--The State agency shall develop 
        procedures, using guidelines developed under subparagraph (A), 
        for determining whether an individual is refusing to cooperate 
        under paragraph (1).
        ``(3) Fees.--Paragraph (1) shall not require the payment of a 
    fee or other cost for services provided under part D of title IV of 
    the Social Security Act (42 U.S.C. 651 et seq.).
        ``(4) Privacy.--The State agency shall provide safeguards to 
    restrict the use of information collected by a State agency 
    administering the program established under part D of title IV of 
    the Social Security Act (42 U.S.C. 651 et seq.) to purposes for 
    which the information is collected.''.

SEC. 823. DISQUALIFICATION RELATING TO CHILD SUPPORT ARREARS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 822, is amended by adding at the end the following:
    ``(n) Disqualification for Child Support Arrears.--
        ``(1) In general.--At the option of a State agency, no 
    individual shall be eligible to participate in the food stamp 
    program as a member of any household during any month that the 
    individual is delinquent in any payment due under a court order for 
    the support of a child of the individual.
        ``(2) Exceptions.--Paragraph (1) shall not apply if--
            ``(A) a court is allowing the individual to delay payment; 
        or
            ``(B) the individual is complying with a payment plan 
        approved by a court or the State agency designated under part D 
        of title IV of the Social Security Act (42 U.S.C. 651 et seq.) 
        to provide support for the child of the individual.''.

SEC. 824. WORK REQUIREMENT.

    (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 
2015), as amended by section 823, is amended by adding at the end the 
following:
    ``(o) Work Requirement.--
        ``(1) Definition of work program.--In this subsection, the term 
    `work program' means--
            ``(A) a program under the Job Training Partnership Act (29 
        U.S.C. 1501 et seq.);
            ``(B) a program under section 236 of the Trade Act of 1974 
        (19 U.S.C. 2296); and
            ``(C) a program of employment and training operated or 
        supervised by a State or political subdivision of a State that 
        meets standards approved by the Governor of the State, 
        including a program under subsection (d)(4), other than a job 
        search program or a job search training program.
        ``(2) Work requirement.--Subject to the other provisions of 
    this subsection, no individual shall be eligible to participate in 
    the food stamp program as a member of any household if, during the 
    preceding 36-month period, the individual received food stamp 
    benefits for not less than 3 months (consecutive or otherwise) 
    during which the individual did not--
            ``(A) work 20 hours or more per week, averaged monthly;
            ``(B) participate in and comply with the requirements of a 
        work program for 20 hours or more per week, as determined by 
        the State agency;
            ``(C) participate in and comply with the requirements of a 
        program under section 20 or a comparable program established by 
        a State or political subdivision of a State; or
            ``(D) receive benefits pursuant to paragraph (3), (4), or 
        (5).
        ``(3) Exception.--Paragraph (2) shall not apply to an 
    individual if the individual is--
            ``(A) under 18 or over 50 years of age;
            ``(B) medically certified as physically or mentally unfit 
        for employment;
            ``(C) a parent or other member of a household with 
        responsibility for a dependent child;
            ``(D) otherwise exempt under subsection (d)(2); or
            ``(E) a pregnant woman.
        ``(4) Waiver.--
            ``(A) In general.--On the request of a State agency, the 
        Secretary may waive the applicability of paragraph (2) to any 
        group of individuals in the State if the Secretary makes a 
        determination that the area in which the indi- viduals reside--
                ``(i) has an unemployment rate of over 10 per- cent; or
                ``(ii) does not have a sufficient number of jobs to 
            provide employment for the individuals.
            ``(B) Report.--The Secretary shall report the basis for a 
        waiver under subparagraph (A) to the Committee on Agriculture 
        of the House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate.
        ``(5) Subsequent eligibility.--
            ``(A) Regaining eligibility.--An individual denied 
        eligibility under paragraph (2) shall regain eligibility to 
        participate in the food stamp program if, during a 30-day 
        period, the individual--
                ``(i) works 80 or more hours;
                ``(ii) participates in and complies with the 
            requirements of a work program for 80 or more hours, as 
            determined by a State agency; or
                ``(iii) participates in and complies with the 
            requirements of a program under section 20 or a comparable 
            program established by a State or political subdivision of 
            a State.
            ``(B) Maintaining eligibility.--An individual who regains 
        eligibility under subparagraph (A) shall remain eligible as 
        long as the individual meets the requirements of subparagraph 
        (A), (B), or (C) of paragraph (2).
            ``(C) Loss of employment.--
                ``(i) In general.--An individual who regained 
            eligibility under subparagraph (A) and who no longer meets 
            the requirements of subparagraph (A), (B), or (C) of 
            paragraph (2) shall remain eligible for a consecutive 3-
            month period, beginning on the date the individual first 
            notifies the State agency that the individual no longer 
            meets the requirements of subparagraph (A), (B), or (C) of 
            paragraph (2).
                ``(ii) Limitation.--An individual shall not receive any 
            benefits pursuant to clause (i) for more than a single 3-
            month period in any 36-month period.
        ``(6) Other program rules.--Nothing in this subsection shall 
    make an individual eligible for benefits under this Act if the 
    individual is not otherwise eligible for benefits under the other 
    provisions of this Act.''.
    (b) Transition Provision.--The term ``preceding 36-month period'' 
in section 6(o) of the Food Stamp Act of 1977, as added by subsection 
(a), does not include, with respect to a State, any period before the 
earlier of--
        (1) the date the State notifies recipients of food stamp 
    benefits of the application of section 6(o); or
        (2) the date that is 3 months after the date of enactment of 
    this Act.

SEC. 825. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) In General.--Section 7(i) of the Food Stamp Act of 1977 (7 
U.S.C. 2016(i)) is amended--
        (1) by striking ``(i)(1)(A) Any State'' and all that follows 
    through the end of paragraph (1) and inserting the following:
    ``(i) Electronic Benefit Transfers.--
        ``(1) In general.--
            ``(A) Implementation.--Not later than October 1, 2002, each 
        State agency shall implement an electronic benefit transfer 
        system under which household benefits determined under section 
        8(a) or 26 are issued from and stored in a central databank, 
        unless the Secretary provides a waiver for a State agency that 
        faces unusual barriers to implementing an electronic benefit 
        transfer system.
            ``(B) Timely implementation.--Each State agency is 
        encouraged to implement an electronic benefit transfer system 
        under subparagraph (A) as soon as practicable.
            ``(C) State flexibility.--Subject to paragraph (2), a State 
        agency may procure and implement an electronic benefit transfer 
        system under the terms, conditions, and design that the State 
        agency considers appropriate.
            ``(D) Operation.--An electronic benefit transfer system 
        should take into account generally accepted standard operating 
        rules based on--
                ``(i) commercial electronic funds transfer technology;
                ``(ii) the need to permit interstate operation and law 
            enforcement monitoring; and
                ``(iii) the need to permit monitoring and 
            investigations by authorized law enforcement agencies.'';
        (2) in paragraph (2)--
            (A) by striking ``effective no later than April 1, 1992,'';
            (B) in subparagraph (A)--
                (i) by striking ``, in any 1 year,''; and
                (ii) by striking ``on-line'';
            (C) by striking subparagraph (D) and inserting the 
        following:
            ``(D)(i) measures to maximize the security of a system 
        using the most recent technology available that the State 
        agency considers appropriate and cost effective and which may 
        include personal identification numbers, photographic 
        identification on electronic benefit transfer cards, and other 
        measures to protect against fraud and abuse; and
            ``(ii) effective not later than 2 years after the date of 
        enactment of this clause, to the extent practicable, measures 
        that permit a system to differentiate items of food that may be 
        acquired with an allotment from items of food that may not be 
        acquired with an allotment;'';
            (D) in subparagraph (G), by striking ``and'' at the end;
            (E) in subparagraph (H), by striking the period at the end 
        and inserting ``; and''; and
            (F) by adding at the end the following:
        ``(I) procurement standards.''; and
        (3) by adding at the end the following:
        ``(7) Replacement of benefits.--Regulations issued by the 
    Secretary regarding the replacement of benefits and liability for 
    replacement of benefits under an electronic benefit transfer system 
    shall be similar to the regulations in effect for a paper-based 
    food stamp issuance system.
        ``(8) Replacement card fee.--A State agency may collect a 
    charge for replacement of an electronic benefit transfer card by 
    reducing the monthly allotment of the household receiving the 
    replacement card.
        ``(9) Optional photographic identification.--
            ``(A) In general.--A State agency may require that an 
        electronic benefit card contain a photograph of 1 or more 
        members of a household.
            ``(B) Other authorized users.--If a State agency requires a 
        photograph on an electronic benefit card under subparagraph 
        (A), the State agency shall establish procedures to ensure that 
        any other appropriate member of the household or any authorized 
        representative of the household may utilize the card.
        ``(10) Applicable law.--Disclosures, protections, 
    responsibilities, and remedies established by the Federal Reserve 
    Board under section 904 of the Electronic Fund Transfer Act (15 
    U.S.C. 1693b) shall not apply to benefits under this Act delivered 
    through any electronic benefit transfer system.
        ``(11) Application of anti-tying restrictions to electronic 
    benefit transfer systems.--
            ``(A) Definitions.--In this paragraph:
                ``(i) Affiliate.--The term `affiliate' has the meaning 
            provided the term in section 2(k) of the Bank Holding 
            Company Act of 1956 (12 U.S.C. 1841(k)).
                ``(ii) Company.--The term `company' has the meaning 
            provided the term in section 106(a) of the Bank Holding 
            Company Act Amendments of 1970 (12 U.S.C. 1971), but shall 
            not include a bank, a bank holding company, or any 
            subsidiary of a bank holding company.
                ``(iii) Electronic benefit transfer service.--The term 
            `electronic benefit transfer service' means the processing 
            of electronic transfers of household benefits, determined 
            under section 8(a) or 26, if the benefits are--

                    ``(I) issued from and stored in a central databank;
                    ``(II) electronically accessed by household members 
                at the point of sale; and
                    ``(III) provided by a Federal or State government.

                ``(iv) Point-of-sale service.--The term `point-of-sale 
            service' means any product or service related to the 
            electronic authorization and processing of payments for 
            merchandise at a retail food store, including credit or 
            debit card services, automated teller machines, point-of-
            sale terminals, or access to on-line systems.
            ``(B) Restrictions.--A company may not sell or provide 
        electronic benefit transfer services, or fix or vary the 
        consideration for electronic benefit transfer services, on the 
        condition or requirement that the customer--
                ``(i) obtain some additional point-of-sale service from 
            the company or an affiliate of the company; or
                ``(ii) not obtain some additional point-of-sale service 
            from a competitor of the company or competitor of any 
            affiliate of the company.
            ``(C) Consultation with the federal reserve board.--Before 
        promulgating regulations or interpretations of regulations to 
        carry out this paragraph, the Secretary shall consult with the 
        Board of Governors of the Federal Reserve System.''.
    (b) Sense of Congress.--It is the sense of Congress that a State 
that operates an electronic benefit transfer system under the Food 
Stamp Act of 1977 (7 U.S.C. 2011 et seq.) should operate the system in 
a manner that is compatible with electronic benefit transfer systems 
operated by other States.

SEC. 826. VALUE OF MINIMUM ALLOTMENT.

    The proviso in section 8(a) of the Food Stamp Act of 1977 (7 U.S.C. 
2017(a)) is amended by striking ``, and shall be adjusted'' and all 
that follows through ``$5''.

SEC. 827. BENEFITS ON RECERTIFICATION.

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

SEC. 828. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED HOUSEHOLDS.

    Section 8(c) of the Food Stamp Act of 1977 (7 U.S.C. 2017(c)) is 
amended by striking paragraph (3) and inserting the following:
        ``(3) Optional combined allotment for expedited households.--A 
    State agency may provide to an eligible household applying after 
    the 15th day of a month, in lieu of the initial allotment of the 
    household and the regular allotment of the household for the 
    following month, an allotment that is equal to the total amount of 
    the initial allotment and the first regular allotment. The 
    allotment shall be provided in accordance with section 11(e)(3) in 
    the case of a household that is not entitled to expedited service 
    and in accordance with paragraphs (3) and (9) of section 11(e) in 
    the case of a household that is entitled to expedited service.''.

SEC. 829. FAILURE TO COMPLY WITH OTHER MEANS-TESTED PUBLIC ASSISTANCE 
              PROGRAMS.

    Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended 
by striking subsection (d) and inserting the following:
    ``(d) Reduction of Public Assistance Benefits.--
        ``(1) In general.--If the benefits of a household are reduced 
    under a Federal, State, or local law relating to a means-tested 
    public assistance program for the failure of a member of the 
    household to perform an action required under the law or program, 
    for the duration of the reduction--
            ``(A) the household may not receive an increased allotment 
        as the result of a decrease in the income of the household to 
        the extent that the decrease is the result of the reduction; 
        and
            ``(B) the State agency may reduce the allotment of the 
        household by not more than 25 percent.
        ``(2) Rules and procedures.--If the allotment of a household is 
    reduced under this subsection for a failure to perform an action 
    required under part A of title IV of the Social Security Act (42 
    U.S.C. 601 et seq.), the State agency may use the rules and 
    procedures that apply under part A of title IV of the Act to reduce 
    the allotment under the food stamp program.''.

SEC. 830. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS.

    Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended 
by adding at the end the following:
    ``(f) Allotments for Households Residing in Centers.--
        ``(1) In general.--In the case of an individual who resides in 
    a center for the purpose of a drug or alcoholic treatment program 
    described in the last sentence of section 3(i), a State agency may 
    provide an allotment for the individual to--
            ``(A) the center as an authorized representative of the 
        individual for a period that is less than 1 month; and
            ``(B) the individual, if the individual leaves the center.
        ``(2) Direct payment.--A State agency may require an individual 
    referred to in paragraph (1) to designate the center in which the 
    individual resides as the authorized representative of the 
    individual for the purpose of receiving an allotment.''.

SEC. 831. CONDITION PRECEDENT FOR APPROVAL OF RETAIL FOOD STORES AND 
              WHOLESALE FOOD CONCERNS.

    Section 9(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)(1)) 
is amended by adding at the end the following: ``No retail food store 
or wholesale food concern of a type determined by the Secretary, based 
on factors that include size, location, and type of items sold, shall 
be approved to be authorized or reauthorized for participation in the 
food stamp program unless an authorized employee of the Department of 
Agriculture, a designee of the Secretary, or, if practicable, an 
official of the State or local government designated by the Secretary 
has visited the store or concern for the purpose of determining whether 
the store or concern should be approved or reauthorized, as 
appropriate.''.

SEC. 832. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

    Section 9(a) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)) is 
amended by adding at the end the following:
        ``(3) Authorization periods.--The Secretary shall establish 
    specific time periods during which authorization to accept and 
    redeem coupons, or to redeem benefits through an electronic benefit 
    transfer system, shall be valid under the food stamp program.''.

SEC. 833. INFORMATION FOR VERIFYING ELIGIBILITY FOR AUTHORIZATION.

    Section 9(c) of the Food Stamp Act of 1977 (7 U.S.C. 2018(c)) is 
amended--
        (1) in the first sentence, by inserting ``, which may include 
    relevant income and sales tax filing documents,'' after ``submit 
    information''; and
        (2) by inserting after the first sentence the following: ``The 
    regulations may require retail food stores and wholesale food 
    concerns to provide written authorization for the Secretary to 
    verify all relevant tax filings with appropriate agencies and to 
    obtain corroborating documentation from other sources so that the 
    accuracy of information provided by the stores and concerns may be 
    verified.''.

SEC. 834. WAITING PERIOD FOR STORES THAT FAIL TO MEET AUTHORIZATION 
              CRITERIA.

    Section 9(d) of the Food Stamp Act of 1977 (7 U.S.C. 2018(d)) is 
amended by adding at the end the following: ``A retail food store or 
wholesale food concern that is denied approval to accept and redeem 
coupons because the store or concern does not meet criteria for 
approval established by the Secretary may not, for at least 6 months, 
submit a new application to participate in the program. The Secretary 
may establish a longer time period under the preceding sentence, 
including permanent disqualification, that reflects the severity of the 
basis of the denial.''.

SEC. 835. OPERATION OF FOOD STAMP OFFICES.

    Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020), as 
amended by sections 809(b) and 819(b), is amended--
        (1) in subsection (e)--
            (A) by striking paragraph (2) and inserting the following:
        ``(2)(A) that the State agency shall establish procedures 
    governing the operation of food stamp offices that the State agency 
    determines best serve households in the State, including households 
    with special needs, such as households with elderly or disabled 
    members, households in rural areas with low-income members, 
    homeless individuals, households residing on reservations, and 
    households in areas in which a substantial number of members of 
    low-income households speak a language other than English.
        ``(B) In carrying out subparagraph (A), a State agency--
            ``(i) shall provide timely, accurate, and fair service to 
        applicants for, and participants in, the food stamp program;
            ``(ii) shall develop an application containing the 
        information necessary to comply with this Act;
            ``(iii) shall permit an applicant household to apply to 
        participate in the program on the same day that the household 
        first contacts a food stamp office in person during office 
        hours;
            ``(iv) shall consider an application that contains the 
        name, address, and signature of the applicant to be filed on 
        the date the applicant submits the application;
            ``(v) shall require that an adult representative of each 
        applicant household certify in writing, under penalty of 
        perjury, that--
                ``(I) the information contained in the application is 
            true; and
                ``(II) all members of the household are citizens or are 
            aliens eligible to receive food stamps under section 6(f);
            ``(vi) shall provide a method of certifying and issuing 
        coupons to eligible homeless individuals, to ensure that 
        participation in the food stamp program is limited to eligible 
        households; and
            ``(vii) may establish operating procedures that vary for 
        local food stamp offices to reflect regional and local 
        differences within the State.
        ``(C) Nothing in this Act shall prohibit the use of signatures 
    provided and maintained electronically, storage of records using 
    automated retrieval systems only, or any other feature of a State 
    agency's application system that does not rely exclusively on the 
    collection and retention of paper applications or other records.
        ``(D) The signature of any adult under this paragraph shall be 
    considered sufficient to comply with any provision of Federal law 
    requiring a household member to sign an application or 
    statement;'';
            (B) in paragraph (3)--
                (i) by striking ``shall--'' and all that follows 
            through ``provide each'' and inserting ``shall provide 
            each''; and
                (ii) by striking ``(B) assist'' and all that follows 
            through ``representative of the State agency;'';
            (C) by striking paragraphs (14) and (25);
            (D)(i) by redesignating paragraphs (15) through (24) as 
        paragraphs (14) through (23), respectively; and
            (ii) by redesignating paragraph (26), as paragraph (24); 
        and
        (2) in subsection (i)--
            (A) by striking ``(i) Notwithstanding'' and all that 
        follows through ``(2)'' and inserting the following:
    ``(i) Application and Denial Procedures.--
        ``(1) Application procedures.--Notwithstanding any other 
    provision of law,''; and
            (B) by striking ``; (3) households'' and all that follows 
        through ``title IV of the Social Security Act. No'' and 
        inserting a period and the following:
        ``(2) Denial and termination.--Except in a case of 
    disqualification as a penalty for failure to comply with a public 
    assistance program rule or regulation, no''.

SEC. 836. STATE EMPLOYEE AND TRAINING STANDARDS.

    Section 11(e)(6) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(6)) is amended--
        (1) by striking ``that (A) the'' and inserting ``that--
            ``(A) the'';
        (2) by striking ``Act; (B) the'' and inserting ``Act; and
            ``(B) the'';
        (3) in subparagraph (B), by striking ``United States Civil 
    Service Commission'' and inserting ``Office of Personnel 
    Management''; and
        (4) by striking subparagraphs (C) through (E).

SEC. 837. EXCHANGE OF LAW ENFORCEMENT INFORMATION.

    Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(8)) is amended--
        (1) by striking ``that (A) such'' and inserting the follow- 
    ing: ``that--
            ``(A) the'';
        (2) by striking ``law, (B) notwithstanding'' and inserting the 
    following: ``law;
            ``(B) notwithstanding'';
        (3) by striking ``Act, and (C) such'' and inserting the 
    following: ``Act;
            ``(C) the''; and
        (4) by adding at the end the following:
            ``(D) notwithstanding any other provision of law, the 
        address, social security number, and, if available, photograph 
        of any member of a household shall be made available, on 
        request, to any Federal, State, or local law enforcement 
        officer if the officer furnishes the State agency with the name 
        of the member and notifies the agency that--
                ``(i) the member--

                    ``(I) is fleeing to avoid prosecution, or custody 
                or confinement after conviction, for a crime (or 
                attempt to commit a crime) that, under the law of the 
                place the member is fleeing, is a felony (or, in the 
                case of New Jersey, a high misdemeanor), or is 
                violating a condition of probation or parole imposed 
                under Federal or State law; or
                    ``(II) has information that is necessary for the 
                officer to conduct an official duty related to 
                subclause (I);

                ``(ii) locating or apprehending the member is an 
            official duty; and
                ``(iii) the request is being made in the proper 
            exercise of an official duty; and
            ``(E) the safeguards shall not prevent compliance with 
        paragraph (16);''.

SEC. 838. EXPEDITED COUPON SERVICE.

    Section 11(e)(9) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(9)) is amended--
        (1) in subparagraph (A), by striking ``five days'' and 
    inserting ``7 days'';
        (2) by striking subparagraph (B);
        (3) by redesignating subparagraphs (C) and (D) as subparagraphs 
    (B) and (C);
        (4) in subparagraph (B), as redesignated by paragraph (3), by 
    striking ``five days'' and inserting ``7 days''; and
        (5) in subparagraph (C), as redesignated by paragraph (3), by 
    striking ``, (B), or (C)'' and inserting ``or (B)''.

SEC. 839. WITHDRAWING FAIR HEARING REQUESTS.

    Section 11(e)(10) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(10)) is amended by inserting before the semicolon at the end a 
period and the following: ``At the option of a State, at any time prior 
to a fair hearing determination under this paragraph, a household may 
withdraw, orally or in writing, a request by the household for the fair 
hearing. If the withdrawal request is an oral request, the State agency 
shall provide a written notice to the household confirming the 
withdrawal request and providing the household with an opportunity to 
request a hearing''.

SEC. 840. INCOME, ELIGIBILITY, AND IMMIGRATION STATUS VERIFICATION 
              SYSTEMS.

    Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is 
amended--
        (1) in subsection (e)(18), as redesignated by section 
    835(1)(D)--
            (A) by striking ``that information is'' and inserting ``at 
        the option of the State agency, that information may be''; and
            (B) by striking ``shall be requested'' and inserting ``may 
        be requested''; and
        (2) by adding at the end the following:
    ``(p) State Verification Option.--Notwithstanding any other 
provision of law, in carrying out the food stamp program, a State 
agency shall not be required to use an income and eligibility or an 
immigration status verification system established under section 1137 
of the Social Security Act (42 U.S.C. 1320b-7).''.

SEC. 841. INVESTIGATIONS.

    Section 12(a) of the Food Stamp Act of 1977 (7 U.S.C. 2021(a)) is 
amended by adding at the end the following: ``Regulations issued 
pursuant to this Act shall provide criteria for the finding of a 
violation and the suspension or disqualification of a retail food store 
or wholesale food concern on the basis of evidence that may include 
facts established through on-site investigations, inconsistent 
redemption data, or evidence obtained through a transaction report 
under an electronic benefit transfer system.''.

SEC. 842. DISQUALIFICATION OF RETAILERS WHO INTENTIONALLY SUBMIT 
              FALSIFIED APPLICATIONS.

    Section 12(b) of the Food Stamp Act of 1977 (7 U.S.C. 2021(b)) is 
amended--
        (1) in paragraph (2), by striking ``and'' at the end;
        (2) in paragraph (3), by striking the period at the end and 
    inserting ``; and''; and
        (3) by adding at the end the following:
        ``(4) for a reasonable period of time to be determined by the 
    Secretary, including permanent disqualification, on the knowing 
    submission of an application for the approval or reauthorization to 
    accept and redeem coupons that contains false information about a 
    substantive matter that was a part of the application.''.

SEC. 843. DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED UNDER THE 
              WIC PROGRAM.

    Section 12 of the Food Stamp Act of 1977 (7 U.S.C. 2021) is amended 
by adding at the end the following:
    ``(g) Disqualification of Retailers Who Are Disqualified Under the 
WIC Program.--
        ``(1) In general.--The Secretary shall issue regulations 
    providing criteria for the disqualification under this Act of an 
    approved retail food store or a wholesale food concern that is 
    disqualified from accepting benefits under the special supplemental 
    nutrition program for women, infants, and children established 
    under section 17 of the Child Nutrition Act of 1966 (7 U.S.C. 
    1786).
        ``(2) Terms.--A disqualification under paragraph (1)--
            ``(A) shall be for the same length of time as the 
        disqualification from the program referred to in paragraph (1);
            ``(B) may begin at a later date than the disqualification 
        from the program referred to in paragraph (1); and
            ``(C) notwithstanding section 14, shall not be subject to 
        judicial or administrative review.''.

SEC. 844. COLLECTION OF OVERISSUANCES.

    (a) Collection of Overissuances.--Section 13 of the Food Stamp Act 
of 1977 (7 U.S.C. 2022) is amended--
        (1) by striking subsection (b) and inserting the following:
    ``(b) Collection of Overissuances.--
        ``(1) In general.--Except as otherwise provided in this 
    subsection, a State agency shall collect any overissuance of 
    coupons issued to a household by--
            ``(A) reducing the allotment of the household;
            ``(B) withholding amounts from unemployment compensation 
        from a member of the household under subsection (c);
            ``(C) recovering from Federal pay or a Federal income tax 
        refund under subsection (d); or
            ``(D) any other means.
        ``(2) Cost effectiveness.--Paragraph (1) shall not apply if the 
    State agency demonstrates to the satisfaction of the Secretary that 
    all of the means referred to in paragraph (1) are not cost 
    effective.
        ``(3) Maximum reduction absent fraud.--If a household received 
    an overissuance of coupons without any member of the household 
    being found ineligible to participate in the program under section 
    6(b)(1) and a State agency elects to reduce the allotment of the 
    household under paragraph (1)(A), the State agency shall not reduce 
    the monthly allotment of the household under paragraph (1)(A) by an 
    amount in excess of the greater of--
            ``(A) 10 percent of the monthly allotment of the household; 
        or
            ``(B) $10.
        ``(4) Procedures.--A State agency shall collect an overissuance 
    of coupons issued to a household under paragraph (1) in accordance 
    with the requirements established by the State agency for providing 
    notice, electing a means of payment, and establishing a time 
    schedule for payment.''; and
        (2) in subsection (d)--
            (A) by striking ``as determined under subsection (b) and 
        except for claims arising from an error of the State agency,'' 
        and inserting ``, as determined under subsection (b)(1),''; and
            (B) by inserting before the period at the end the 
        following: ``or a Federal income tax refund as authorized by 
        section 3720A of title 31, United States Code''.
    (b) Conforming Amendments.--Section 11(e)(8)(C) of the Food Stamp 
Act of 1977 (7 U.S.C. 2020(e)(8)(C)) is amended--
        (1) by striking ``and excluding claims'' and all that follows 
    through ``such section''; and
        (2) by inserting before the semicolon at the end the following: 
    ``or a Federal income tax refund as authorized by section 3720A of 
    title 31, United States Code''.
    (c) Retention Rate.--The proviso of the first sentence of section 
16(a) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)) is amended by 
striking ``25 percent during the period beginning October 1, 1990'' and 
all that follows through ``section 13(b)(2) which arise'' and inserting 
``35 percent of the value of all funds or allotments recovered or 
collected pursuant to sections 6(b) and 13(c) and 20 percent of the 
value of any other funds or allotments recovered or collected, except 
the value of funds or allotments recovered or collected that arise''.

SEC. 845. AUTHORITY TO SUSPEND STORES VIOLATING PROGRAM REQUIREMENTS 
              PENDING ADMINISTRATIVE AND JUDICIAL REVIEW.

    Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is 
amended--
        (1) by redesignating the first through seventeenth sentences as 
    paragraphs (1) through (17), respectively; and
        (2) by adding at the end the following:
        ``(18) Suspension of stores pending review.--Notwithstanding 
    any other provision of this subsection, any permanent 
    disqualification of a retail food store or wholesale food concern 
    under paragraph (3) or (4) of section 12(b) shall be effective from 
    the date of receipt of the notice of disqualification. If the 
    disqualification is reversed through administrative or judicial 
    review, the Secretary shall not be liable for the value of any 
    sales lost during the disqualification period.''.

SEC. 846. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS.

    (a) Forfeiture of Items Exchanged in Food Stamp Trafficking.--The 
first sentence of section 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 
2024(g)) is amended by striking ``or intended to be furnished''.
    (b) Criminal Forfeiture.--Section 15 of the Food Stamp Act of 1977 
(7 U.S.C. 2024) is amended by adding at the end the following:
    ``(h) Criminal Forfeiture.--
        ``(1) In general.--In imposing a sentence on a person convicted 
    of an offense in violation of subsection (b) or (c), a court shall 
    order, in addition to any other sentence imposed under this 
    section, that the person forfeit to the United States all property 
    described in paragraph (2).
        ``(2) Property subject to forfeiture.--All property, real and 
    personal, used in a transaction or attempted transaction, to 
    commit, or to facilitate the commission of, a violation (other than 
    a misdemeanor) of subsection (b) or (c), or proceeds traceable to a 
    violation of subsection (b) or (c), shall be subject to forfeiture 
    to the United States under paragraph (1).
        ``(3) Interest of owner.--No interest in property shall be 
    forfeited under this subsection as the result of any act or 
    omission established by the owner of the interest to have been 
    committed or omitted without the knowledge or consent of the owner.
        ``(4) Proceeds.--The proceeds from any sale of forfeited 
    property and any monies forfeited under this subsection shall be 
    used--
            ``(A) first, to reimburse the Department of Justice for the 
        costs incurred by the Department to initiate and complete the 
        forfeiture proceeding;
            ``(B) second, to reimburse the Department of Agriculture 
        Office of Inspector General for any costs the Office incurred 
        in the law enforcement effort resulting in the forfeiture;
            ``(C) third, to reimburse any Federal or State law 
        enforcement agency for any costs incurred in the law 
        enforcement effort resulting in the forfeiture; and
            ``(D) fourth, by the Secretary to carry out the approval, 
        reauthorization, and compliance investigations of retail stores 
        and wholesale food concerns under section 9.''.

SEC. 847. LIMITATION ON FEDERAL MATCH.

    Section 16(a)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(a)(4)) is amended by inserting after the comma at the end the 
following: ``but not including recruitment activities,''.

SEC. 848. STANDARDS FOR ADMINISTRATION.

    (a) In General.--Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 
2025) is amended by striking subsection (b).
    (b) Conforming Amendments.--
        (1) The first sentence of section 11(g) of the Food Stamp Act 
    of 1977 (7 U.S.C. 2020(g)) is amended by striking ``the Secretary's 
    standards for the efficient and effective administration of the 
    program established under section 16(b)(1) or''.
        (2) Section 16(c)(1)(B) of the Food Stamp Act of 1977 (7 U.S.C. 
    2025(c)(1)(B)) is amended by striking ``pursuant to subsection 
    (b)''.

SEC. 849. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

    Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), as 
amended by section 848(a), is amended by inserting after subsection (a) 
the following:
    ``(b) Work Supplementation or Support Program.--
        ``(1) Definition of work supplementation or support program.--
    In this subsection, the term `work supplementation or support 
    program' means a program under which, as determined by the 
    Secretary, public assistance (including any benefits provided under 
    a program established by the State and the food stamp program) is 
    provided to an employer to be used for hiring and employing a 
    public assistance recipient who was not employed by the employer at 
    the time the public assistance recipient entered the program.
        ``(2) Program.--A State agency may elect to use an amount equal 
    to the allotment that would otherwise be issued to a household 
    under the food stamp program, but for the operation of this 
    subsection, for the purpose of subsidizing or supporting a job 
    under a work supplementation or support program established by the 
    State.
        ``(3) Procedure.--If a State agency makes an election under 
    paragraph (2) and identifies each household that participates in 
    the food stamp program that contains an individual who is 
    participating in the work supplementation or support program--
            ``(A) the Secretary shall pay to the State agency an amount 
        equal to the value of the allotment that the household would be 
        eligible to receive but for the operation of this subsection;
            ``(B) the State agency shall expend the amount received 
        under subparagraph (A) in accordance with the work 
        supplementation or support program in lieu of providing the 
        allotment that the household would receive but for the 
        operation of this subsection;
            ``(C) for purposes of--
                ``(i) sections 5 and 8(a), the amount received under 
            this subsection shall be excluded from household income and 
            resources; and
                ``(ii) section 8(b), the amount received under this 
            subsection shall be considered to be the value of an 
            allotment provided to the household; and
            ``(D) the household shall not receive an allotment from the 
        State agency for the period during which the member continues 
        to participate in the work supplementation or support program.
        ``(4) Other work requirements.--No individual shall be excused, 
    by reason of the fact that a State has a work supplementation or 
    support program, from any work requirement under section 6(d), 
    except during the periods in which the individual is employed under 
    the work supplementation or support program.
        ``(5) Length of participation.--A State agency shall provide a 
    description of how the public assistance recipients in the program 
    shall, within a specific period of time, be moved from supplemented 
    or supported employment to employment that is not supplemented or 
    supported.
        ``(6) Displacement.--A work supplementation or support program 
    shall not displace the employment of individuals who are not 
    supplemented or supported.''.

SEC. 850. WAIVER AUTHORITY.

    Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2026(b)(1)) is amended--
        (1) by redesignating subparagraph (B) as subparagraph (C); and
        (2) in subparagraph (A)--
            (A) in the first sentence, by striking ``benefits to 
        eligible households, including'' and inserting the following: 
        ``benefits to eligible households, and may waive any 
        requirement of this Act to the extent necessary for the project 
        to be conducted.
            ``(B) Project requirements.--
                ``(i) Program goal.--The Secretary may not conduct a 
            project under subparagraph (A) unless--

                    ``(I) the project is consistent with the goal of 
                the food stamp program of providing food assistance to 
                raise levels of nutrition among low-income individuals; 
                and
                    ``(II) the project includes an evaluation to 
                determine the effects of the project.

                ``(ii) Permissible projects.--The Secretary may conduct 
            a project under subparagraph (A) to--

                    ``(I) improve program administration;
                    ``(II) increase the self-sufficiency of food stamp 
                recipients;
                    ``(III) test innovative welfare reform strate- 
                gies; or
                    ``(IV) allow greater conformity with the rules of 
                other programs than would be allowed but for this 
                paragraph.

                ``(iii) Restrictions on permissible projects.--If the 
            Secretary finds that a project under subparagraph (A) would 
            reduce benefits by more than 20 percent for more than 5 
            percent of households in the area subject to the project 
            (not including any household whose benefits are reduced due 
            to a failure to comply with work or other conduct 
            requirements), the project--

                    ``(I) may not include more than 15 percent of the 
                State's food stamp households; and
                    ``(II) shall continue for not more than 5 years 
                after the date of implementation, unless the Secretary 
                approves an extension requested by the State agency at 
                any time.

                ``(iv) Impermissible projects.--The Secretary may not 
            conduct a project under subparagraph (A) that--

                    ``(I) involves the payment of the value of an 
                allotment in the form of cash, unless the project was 
                approved prior to the date of enactment of this 
                subparagraph;
                    ``(II) has the effect of substantially transferring 
                funds made available under this Act to services or 
                benefits provided primarily through another public 
                assistance program, or using the funds for any purpose 
                other than the purchase of food, program 
                administration, or an employment or training program;
                    ``(III) is inconsistent with--

                        ``(aa) the last 2 sentences of section 3(i);
                        ``(bb) the last sentence of section 5(a), 
                    insofar as a waiver denies assistance to an 
                    otherwise eligible household or individual if the 
                    household or individual has not failed to comply 
                    with any work, behavioral, or other conduct 
                    requirement under this or another program;
                        ``(cc) section 5(c)(2);
                        ``(dd) paragraph (2)(B), (4)(F)(i), or (4)(K) 
                    of section 6(d);
                        ``(ee) section 8(b);
                        ``(ff) section 11(e)(2)(B);
                        ``(gg) the time standard under section 
                    11(e)(3);
                        ``(hh) subsection (a), (c), (g), (h)(2), or 
                    (h)(3) of section 16;
                        ``(ii) this paragraph; or
                        ``(jj) subsection (a)(1) or (g)(1) of sec- tion 
                    20;

                    ``(IV) modifies the operation of section 5 so as to 
                have the effect of--

                        ``(aa) increasing the shelter deduction to 
                    households with no out-of-pocket housing costs or 
                    housing costs that consume a low percentage of the 
                    household's income; or
                        ``(bb) absolving a State from acting with 
                    reasonable promptness on substantial reported 
                    changes in income or household size (except that 
                    this subclause shall not apply with regard to 
                    changes related to food stamp deductions);

                    ``(V) is not limited to a specific time period; or
                    ``(VI) waives a provision of section 26.

                ``(v) Additional included projects.--A pilot or 
            experimental project may include'';
            (B) by striking ``to aid to families with dependent 
        children under part A of title IV of the Social Security Act'' 
        and inserting ``are receiving assistance under a State program 
        funded under part A of title IV of the Social Security Act (42 
        U.S.C. 601 et seq.)''; and
            (C) by striking ``coupons. The Secretary'' and all that 
        follows through ``Any pilot'' and inserting the following: 
        ``coupons.
                ``(vi) Cash payment pilot projects.--Any pilot''.

SEC. 851. RESPONSE TO WAIVERS.

    Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2026(b)(1)), as amended by section 850, is amended by adding at the end 
the following:
            ``(D) Response to waivers.--
                ``(i) Response.--Not later than 60 days after the date 
            of receiving a request for a waiver under subparagraph (A), 
            the Secretary shall provide a response that--

                    ``(I) approves the waiver request;
                    ``(II) denies the waiver request and describes any 
                modification needed for approval of the waiver request;
                    ``(III) denies the waiver request and describes the 
                grounds for the denial; or
                    ``(IV) requests clarification of the waiver 
                request.

                ``(ii) Failure to respond.--If the Secretary does not 
            provide a response in accordance with clause (i), the 
            waiver shall be considered approved, unless the approval is 
            specifically prohibited by this Act.
                ``(iii) Notice of denial.--On denial of a waiver 
            request under clause (i)(III), the Secretary shall provide 
            a copy of the waiver request and a description of the 
            reasons for the denial to the Committee on Agriculture of 
            the House of Representatives and the Committee on 
            Agriculture, Nutrition, and Forestry of the Senate.''.

SEC. 852. EMPLOYMENT INITIATIVES PROGRAM.

    Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended 
by striking subsection (d) and inserting the following:
    ``(d) Employment Initiatives Program.--
        ``(1) Election to participate.--
            ``(A) In general.--Subject to the other provisions of this 
        subsection, a State may elect to carry out an employment 
        initiatives program under this subsection.
            ``(B) Requirement.--A State shall be eligible to carry out 
        an employment initiatives program under this subsection only if 
        not less than 50 percent of the households in the State that 
        received food stamp benefits during the summer of 1993 also 
        received benefits under a State program funded under part A of 
        title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
        during the summer of 1993.
        ``(2) Procedure.--
            ``(A) In general.--A State that has elected to carry out an 
        employment initiatives program under paragraph (1) may use 
        amounts equal to the food stamp allotments that would otherwise 
        be issued to a household under the food stamp program, but for 
        the operation of this subsection, to provide cash benefits in 
        lieu of the food stamp allotments to the household if the 
        household is eligible under paragraph (3).
            ``(B) Payment.--The Secretary shall pay to each State that 
        has elected to carry out an employment initiatives program 
        under paragraph (1) an amount equal to the value of the 
        allotment that each household participating in the program in 
        the State would be eligible to receive under this Act but for 
        the operation of this subsection.
            ``(C) Other provisions.--For purposes of the food stamp 
        program (other than this subsection)--
                ``(i) cash assistance under this subsection shall be 
            considered to be an allotment; and
                ``(ii) each household receiving cash benefits under 
            this subsection shall not receive any other food stamp 
            benefit during the period for which the cash assistance is 
            provided.
            ``(D) Additional payments.--Each State that has elected to 
        carry out an employment initiatives program under paragraph (1) 
        shall--
                ``(i) increase the cash benefits provided to each 
            household participating in the program in the State under 
            this subsection to compensate for any State or local sales 
            tax that may be collected on purchases of food by the 
            household, unless the Secretary determines on the basis of 
            information provided by the State that the increase is 
            unnecessary on the basis of the limited nature of the items 
            subject to the State or local sales tax; and
                ``(ii) pay the cost of any increase in cash benefits 
            required by clause (i).
        ``(3) Eligibility.--A household shall be eligible to receive 
    cash benefits under paragraph (2) if an adult member of the 
    household--
            ``(A) has worked in unsubsidized employment for not less 
        than the preceding 90 days;
            ``(B) has earned not less than $350 per month from the 
        employment referred to in subparagraph (A) for not less than 
        the preceding 90 days;
            ``(C)(i) is receiving benefits under a State program funded 
        under part A of title IV of the Social Security Act (42 U.S.C. 
        601 et seq.); or
            ``(ii) was receiving benefits under a State program funded 
        under part A of title IV of the Social Security Act (42 U.S.C. 
        601 et seq.) at the time the member first received cash 
        benefits under this subsection and is no longer eligible for 
        the State program because of earned income;
            ``(D) is continuing to earn not less than $350 per month 
        from the employment referred to in subparagraph (A); and
            ``(E) elects to receive cash benefits in lieu of food stamp 
        benefits under this subsection.
        ``(4) Evaluation.--A State that operates a program under this 
    subsection for 2 years shall provide to the Secretary a written 
    evaluation of the impact of cash assistance under this subsection. 
    The State agency, with the concurrence of the Secretary, shall 
    determine the content of the evaluation.''.

SEC. 853. REAUTHORIZATION.

    The first sentence of section 18(a)(1) of the Food Stamp Act of 
1977 (7 U.S.C. 2027(a)(1)) is amended by striking ``1991 through 1997'' 
and inserting ``1996 through 2002''.

SEC. 854. SIMPLIFIED FOOD STAMP PROGRAM.

    (a) In General.--The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) 
is amended by adding at the end the following:

``SEC. 26. SIMPLIFIED FOOD STAMP PROGRAM.

    ``(a) Definition of Federal Costs.--In this section, the term 
`Federal costs' does not include any Federal costs incurred under 
section 17.
    ``(b) Election.--Subject to subsection (d), a State may elect to 
carry out a Simplified Food Stamp Program (referred to in this section 
as a `Program'), statewide or in a political subdivision of the State, 
in accordance with this section.
    ``(c) Operation of Program.--If a State elects to carry out a 
Program, within the State or a political subdivision of the State--
        ``(1) a household in which no members receive assistance under 
    a State program funded under part A of title IV of the Social 
    Security Act (42 U.S.C. 601 et seq.) may not participate in the 
    Program;
        ``(2) a household in which all members receive assistance under 
    a State program funded under part A of title IV of the Social 
    Security Act (42 U.S.C. 601 et seq.) shall automatically be 
    eligible to participate in the Program;
        ``(3) if approved by the Secretary, a household in which 1 or 
    more members but not all members receive assistance under a State 
    program funded under part A of title IV of the Social Security Act 
    (42 U.S.C. 601 et seq.) may be eligible to participate in the 
    Program; and
        ``(4) subject to subsection (f), benefits under the Program 
    shall be determined under rules and procedures established by the 
    State under--
            ``(A) a State program funded under part A of title IV of 
        the Social Security Act (42 U.S.C. 601 et seq.);
            ``(B) the food stamp program; or
            ``(C) a combination of a State program funded under part A 
        of title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
        and the food stamp program.
    ``(d) Approval of Program.--
        ``(1) State plan.--A State agency may not operate a Program 
    unless the Secretary approves a State plan for the operation of the 
    Program under paragraph (2).
        ``(2) Approval of plan.--The Secretary shall approve any State 
    plan to carry out a Program if the Secretary determines that the 
    plan--
            ``(A) complies with this section; and
            ``(B) contains sufficient documentation that the plan will 
        not increase Federal costs for any fiscal year.
    ``(e) Increased Federal Costs.--
        ``(1) Determination.--
            ``(A) In general.--The Secretary shall determine whether a 
        Program being carried out by a State agency is increasing 
        Federal costs under this Act.
            ``(B) No excluded households.--In making a determination 
        under subparagraph (A), the Secretary shall not require the 
        State agency to collect or report any information on households 
        not included in the Program.
            ``(C) Alternative accounting periods.--The Secretary may 
        approve the request of a State agency to apply alternative 
        accounting periods to determine if Federal costs do not exceed 
        the Federal costs had the State agency not elected to carry out 
        the Program.
        ``(2) Notification.--If the Secretary determines that the 
    Program has increased Federal costs under this Act for any fiscal 
    year or any portion of any fiscal year, the Secretary shall notify 
    the State not later than 30 days after the Secretary makes the 
    determination under paragraph (1).
        ``(3) Enforcement.--
            ``(A) Corrective action.--Not later than 90 days after the 
        date of a notification under paragraph (2), the State shall 
        submit a plan for approval by the Secretary for prompt 
        corrective action that is designed to prevent the Program from 
        increasing Federal costs under this Act.
            ``(B) Termination.--If the State does not submit a plan 
        under subparagraph (A) or carry out a plan approved by the 
        Secretary, the Secretary shall terminate the approval of the 
        State agency operating the Program and the State agency shall 
        be ineligible to operate a future Program.
    ``(f) Rules and Procedures.--
        ``(1) In general.--In operating a Program, a State or political 
    subdivision of a State may follow the rules and procedures 
    established by the State or political subdivision under a State 
    program funded under part A of title IV of the Social Security Act 
    (42 U.S.C. 601 et seq.) or under the food stamp program.
        ``(2) Standardized deductions.--In operating a Program, a State 
    or political subdivision of a State may standardize the deductions 
    provided under section 5(e). In developing the standardized 
    deduction, the State shall consider the work expenses, dependent 
    care costs, and shelter costs of participating households.
        ``(3) Requirements.--In operating a Program, a State or 
    political subdivision shall comply with the requirements of--
            ``(A) subsections (a) through (g) of section 7;
            ``(B) section 8(a) (except that the income of a household 
        may be determined under a State program funded under part A of 
        title IV of the Social Security Act (42 U.S.C. 601 et seq.));
            ``(C) subsection (b) and (d) of section 8;
            ``(D) subsections (a), (c), (d), and (n) of section 11;
            ``(E) paragraphs (8), (12), (16), (18), (20), (24), and 
        (25) of section 11(e);
            ``(F) section 11(e)(10) (or a comparable requirement 
        established by the State under a State program funded under 
        part A of title IV of the Social Security Act (42 U.S.C. 601 et 
        seq.)); and
            ``(G) section 16.
        ``(4) Limitation on eligibility.--Notwithstanding any other 
    provision of this section, a household may not receive benefits 
    under this section as a result of the eligibility of the household 
    under a State program funded under part A of title IV of the Social 
    Security Act (42 U.S.C. 601 et seq.), unless the Secretary 
    determines that any household with income above 130 percent of the 
    poverty guidelines is not eligible for the program.''.
    (b) State Plan Provisions.--Section 11(e) of the Food Stamp Act of 
1977 (7 U.S.C. 2020(e)), as amended by sections 819(b) and 835, is 
amended by adding at the end the following:
        ``(25) if a State elects to carry out a Simplified Food Stamp 
    Program under section 26, the plans of the State agency for 
    operating the program, including--
            ``(A) the rules and procedures to be followed by the State 
        agency to determine food stamp benefits;
            ``(B) how the State agency will address the needs of 
        households that experience high shelter costs in relation to 
        the incomes of the households; and
            ``(C) a description of the method by which the State agency 
        will carry out a quality control system under section 16(c).''.
    (c) Conforming Amendments.--
        (1) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017), as 
    amended by section 830, is amended--
            (A) by striking subsection (e); and
            (B) by redesignating subsection (f) as subsection (e).
        (2) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is 
    amended--
            (A) by striking subsection (i); and
            (B) by redesignating subsections (j) through (l) as 
        subsections (i) through (k), respectively.

SEC. 855. STUDY OF THE USE OF FOOD STAMPS TO PURCHASE VITAMINS AND 
              MINERALS.

    (a) In General.--The Secretary of Agriculture, in consultation with 
the National Academy of Sciences and the Center for Disease Control and 
Prevention, shall conduct a study on the use of food stamps provided 
under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to purchase 
vitamins and minerals.
    (b) Analysis.--The study shall include--
        (1) an analysis of scientific findings on the efficacy of and 
    need for vitamins and minerals, including--
            (A) the adequacy of vitamin and mineral intakes in low-
        income populations, as shown by research and surveys conducted 
        prior to the study; and
            (B) the potential value of nutritional supplements in 
        filling nutrient gaps that may exist in the United States 
        population as a whole or in vulnerable subgroups in the 
        population;
        (2) the impact of nutritional improvements (including vitamin 
    or mineral supplementation) on the health status and health care 
    costs of women of childbearing age, pregnant or lactating women, 
    and the elderly;
        (3) the cost of commercially available vitamin and mineral 
    supplements;
        (4) the purchasing habits of low-income populations with regard 
    to vitamins and minerals;
        (5) the impact of using food stamps to purchase vitamins and 
    minerals on the food purchases of low-income house- holds; and
        (6) the economic impact on the production of agricultural 
    commodities of using food stamps to purchase vitamins and minerals.
    (c) Report.--Not later than December 15, 1998, the Secretary shall 
report the results of the study to the Committee on Agriculture of the 
House of Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate.

SEC. 856. DEFICIT REDUCTION.

    It is the sense of the Committee on Agriculture of the House of 
Representatives that reductions in outlays resulting from this title 
shall not be taken into account for purposes of section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
902).

              Subtitle B--Commodity Distribution Programs

SEC. 871. EMERGENCY FOOD ASSISTANCE PROGRAM.

    (a) Definitions.--Section 201A of the Emergency Food Assistance Act 
of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended to read as 
follows:

``SEC. 201A. DEFINITIONS.

    ``In this Act:
        ``(1) Additional commodities.--The term `additional 
    commodities' means commodities made available under section 214 in 
    addition to the commodities made available under sections 202 and 
    203D.
        ``(2) Average monthly number of unemployed persons.--The term 
    `average monthly number of unemployed persons' means the average 
    monthly number of unemployed persons in each State during the most 
    recent fiscal year for which information concerning the number of 
    unemployed persons is available, as determined by the Bureau of 
    Labor Statistics of the Department of Labor.
        ``(3) Eligible recipient agency.--The term `eligible recipient 
    agency' means a public or nonprofit organiza- tion that--
            ``(A) administers--
                ``(i) an emergency feeding organization;
                ``(ii) a charitable institution (including a hospital 
            and a retirement home, but excluding a penal institution) 
            to the extent that the institution serves needy persons;
                ``(iii) a summer camp for children, or a child 
            nutrition program providing food service;
                ``(iv) a nutrition project operating under the Older 
            Americans Act of 1965 (42 U.S.C. 3001 et seq.), including a 
            project that operates a congregate nutrition site and a 
            project that provides home-delivered meals; or
                ``(v) a disaster relief program;
            ``(B) has been designated by the appropriate State agency, 
        or by the Secretary; and
            ``(C) has been approved by the Secretary for participation 
        in the program established under this Act.
        ``(4) Emergency feeding organization.--The term `emergency 
    feeding organization' means a public or nonprofit organization that 
    administers activities and projects (including the activities and 
    projects of a charitable institution, a food bank, a food pantry, a 
    hunger relief center, a soup kitchen, or a similar public or 
    private nonprofit eligible recipient agency) providing nutrition 
    assistance to relieve situations of emergency and distress through 
    the provision of food to needy persons, including low-income and 
    unemployed persons.
        ``(5) Food bank.--The term `food bank' means a public or 
    charitable institution that maintains an established operation 
    involving the provision of food or edible commodities, or the 
    products of food or edible commodities, to food pantries, soup 
    kitchens, hunger relief centers, or other food or feeding centers 
    that, as an integral part of their normal activities, provide meals 
    or food to feed needy persons on a regular basis.
        ``(6) Food pantry.--The term `food pantry' means a public or 
    private nonprofit organization that distributes food to low-income 
    and unemployed households, including food from sources other than 
    the Department of Agriculture, to relieve situations of emergency 
    and distress.
        ``(7) Poverty line.--The term `poverty line' has the meaning 
    provided in section 673(2) of the Community Services Block Grant 
    Act (42 U.S.C. 9902(2)).
        ``(8) Soup kitchen.--The term `soup kitchen' means a public or 
    charitable institution that, as an integral part of the normal 
    activities of the institution, maintains an established feeding 
    operation to provide food to needy homeless persons on a regular 
    basis.
        ``(9) Total value of additional commodities.--The term `total 
    value of additional commodities' means the actual cost of all 
    additional commodities that are paid by the Secretary (including 
    the distribution and processing costs incurred by the Secretary).
        ``(10) Value of additional commodities allocated to each 
    state.--The term `value of additional commodities allocated to each 
    State' means the actual cost of additional commodities allocated to 
    each State that are paid by the Secretary (including the 
    distribution and processing costs incurred by the Secretary).''.
    (b) State Plan.--Section 202A of the Emergency Food Assistance Act 
of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended to read as 
follows:

``SEC. 202A. STATE PLAN.

    ``(a) In General.--To receive commodities under this Act, a State 
shall submit a plan of operation and administration every 4 years to 
the Secretary for approval. The plan may be amended at any time, with 
the approval of the Secretary.
    ``(b) Requirements.--Each plan shall--
        ``(1) designate the State agency responsible for distributing 
    the commodities received under this Act;
        ``(2) set forth a plan of operation and administration to 
    expeditiously distribute commodities under this Act;
        ``(3) set forth the standards of eligibility for recipient 
    agencies; and
        ``(4) set forth the standards of eligibility for individual or 
    household recipients of commodities, which shall require--
            ``(A) individuals or households to be comprised of needy 
        persons; and
            ``(B) individual or household members to be residing in the 
        geographic location served by the distributing agency at the 
        time of applying for assistance.
    ``(c) State Advisory Board.--The Secretary shall encourage each 
State receiving commodities under this Act to establish a State 
advisory board consisting of representatives of all entities in the 
State, both public and private, interested in the distribution of 
commodities received under this Act.''.
    (c) Authorization of Appropriations for Administrative Funds.--
Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (Public 
Law 98-8; 7 U.S.C. 612c note) is amended--
        (1) in the first sentence, by striking ``for State and local'' 
    and all that follows through ``under this title'' and inserting 
    ``to pay for the direct and indirect administrative costs of the 
    States related to the processing, transporting, and distributing to 
    eligible recipient agencies of commodities provided by the 
    Secretary under this Act and commodities secured from other 
    sources''; and
        (2) by striking the fourth sentence.
    (d) Delivery of Commodities.--Section 214 of the Emergency Food 
Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is 
amended--
        (1) by striking subsections (a) through (e) and (j);
        (2) by redesignating subsections (f) through (i) as subsections 
    (a) through (d), respectively;
        (3) in subsection (b), as redesignated by paragraph (2)--
            (A) in the first sentence, by striking ``subsection (f) or 
        subsection (j) if applicable,'' and inserting ``subsection 
        (a),''; and
            (B) in the second sentence, by striking ``subsection (f)'' 
        and inserting ``subsection (a)'';
        (4) by striking subsection (c), as redesignated by paragraph 
    (2), and inserting the following:
    ``(c) Administration.--
        ``(1) In general.--Commodities made available for each fiscal 
    year under this section shall be delivered at reasonable intervals 
    to States based on the grants calculated under subsection (a), or 
    reallocated under subsection (b), before December 31 of the 
    following fiscal year.
        ``(2) Entitlement.--Each State shall be entitled to receive the 
    value of additional commodities determined under subsection (a).''; 
    and
        (5) in subsection (d), as redesignated by paragraph (2), by 
    striking ``or reduce'' and all that follows through ``each fiscal 
    year''.
    (e) Technical Amendments.--The Emergency Food Assistance Act of 
1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended--
        (1) in the first sentence of section 203B(a), by striking ``203 
    and 203A of this Act'' and inserting ``203A'';
        (2) in section 204(a), by striking ``title'' each place it 
    appears and inserting ``Act'';
        (3) in the first sentence of section 210(e), by striking 
    ``(except as otherwise provided for in section 214(j))''; and
        (4) by striking section 212.
    (f) Report on EFAP.--Section 1571 of the Food Security Act of 1985 
(Public Law 99-198; 7 U.S.C. 612c note) is repealed.
    (g) Availability of Commodities Under the Food Stamp Program.--The 
Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), as amended by section 
854(a), is amended by adding at the end the following:

``SEC. 27. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD 
              ASSISTANCE PROGRAM.

    ``(a) Purchase of Commodities.--From amounts made available to 
carry out this Act, for each of fiscal years 1997 through 2002, the 
Secretary shall purchase $100,000,000 of a variety of nutritious and 
useful commodities of the types that the Secretary has the authority to 
acquire through the Commodity Credit Corporation or under section 32 of 
the Act entitled `An Act to amend the Agricultural Adjustment Act, and 
for other purposes', approved August 24, 1935 (7 U.S.C. 612c), and 
distribute the commodities to States for distribution in accordance 
with section 214 of the Emergency Food Assistance Act of 1983 (Public 
Law 98-8; 7 U.S.C. 612c note).
    ``(b) Basis for Commodity Purchases.--In purchasing commodities 
under subsection (a), the Secretary shall, to the extent practicable 
and appropriate, make purchases based on--
        ``(1) agricultural market conditions;
        ``(2) preferences and needs of States and distributing 
    agencies; and
        ``(3) preferences of recipients.''.
    (h) Effective Date.--The amendments made by subsection (d) shall 
become effective on October 1, 1996.

SEC. 872. FOOD BANK DEMONSTRATION PROJECT.

    Section 3 of the Charitable Assistance and Food Bank Act of 1987 
(Public Law 100-232; 7 U.S.C. 612c note) is repealed.

SEC. 873. HUNGER PREVENTION PROGRAMS.

    The Hunger Prevention Act of 1988 (Public Law 100-435; 7 U.S.C. 
612c note) is amended--
        (1) by striking section 110;
        (2) by striking subtitle C of title II; and
        (3) by striking section 502.

SEC. 874. REPORT ON ENTITLEMENT COMMODITY PROCESSING.

    Section 1773 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (Public Law 101-624; 7 U.S.C. 612c note) is amended by striking 
subsection (f).

            Subtitle C--Electronic Benefit Transfer Systems

SEC. 891. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) 
is amended--
        (1) by striking ``(d) In the event that'' and inserting ``(d) 
    Applicability to Service Providers Other Than Certain Financial 
    Institutions.--
        ``(1) In general.--If''; and
        (2) by adding at the end the following:
        ``(2) State and local government electronic benefit transfer 
    systems.--
            ``(A) Definition of electronic benefit transfer system.--In 
        this paragraph, the term `electronic benefit transfer system'--
                ``(i) means a system under which a government agency 
            distributes needs-tested benefits by establishing accounts 
            that may be accessed by recipients electronically, such as 
            through automated teller machines or point-of-sale 
            terminals; and
                ``(ii) does not include employment-related payments, 
            including salaries and pension, retirement, or unemployment 
            benefits established by a Federal, State, or local 
            government agency.
            ``(B) Exemption generally.--The disclosures, protections, 
        responsibilities, and remedies established under this title, 
        and any regulation prescribed or order issued by the Board in 
        accordance with this title, shall not apply to any electronic 
        benefit transfer system established under State or local law or 
        administered by a State or local government.
            ``(C) Exception for direct deposit into recipient's 
        account.--Subparagraph (B) shall not apply with respect to any 
        electronic funds transfer under an electronic benefit transfer 
        system for a deposit directly into a consumer account held by 
        the recipient of the benefit.
            ``(D) Rule of construction.--No provision of this 
        paragraph--
                ``(i) affects or alters the protections otherwise 
            applicable with respect to benefits established by any 
            other provision Federal, State, or local law; or
                ``(ii) otherwise supersedes the application of any 
            State or local law.''.

                        TITLE IX--MISCELLANEOUS

SEC. 901. APPROPRIATION BY STATE LEGISLATURES.

    (a) In General.--Any funds received by a State under the provisions 
of law specified in subsection (b) shall be subject to appropriation by 
the State legislature, consistent with the terms and conditions 
required under such provisions of law.
    (b) Provisions of Law.--The provisions of law specified in this 
subsection are the following:
        (1) Part A of title IV of the Social Security Act (relating to 
    block grants for temporary assistance for needy families).
        (2) The Child Care and Development Block Grant Act of 1990 
    (relating to block grants for child care).

SEC. 902. SANCTIONING FOR TESTING POSITIVE FOR CONTROLLED SUBSTANCES.

    Notwithstanding any other provision of law, States shall not be 
prohibited by the Federal Government from testing welfare recipients 
for use of controlled substances nor from sanctioning welfare 
recipients who test positive for use of controlled substances.

SEC. 903. ELIMINATION OF HOUSING ASSISTANCE WITH RESPECT TO FUGITIVE 
              FELONS AND PROBATION AND PAROLE VIOLATORS.

    (a) Eligibility for Assistance.--The United States Housing Act of 
1937 (42 U.S.C. 1437 et seq.) is amended--
        (1) in section 6(l)--
            (A) in paragraph (5), by striking ``and'' at the end;
            (B) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (C) by inserting immediately after paragraph (6) the 
        following new paragraph:
        ``(7) provide that it shall be cause for immediate termination 
    of the tenancy of a public housing tenant if such tenant--
            ``(A) is fleeing to avoid prosecution, or custody or 
        confinement after conviction, under the laws of the place from 
        which the individual flees, for a crime, or attempt to commit a 
        crime, which is a felony under the laws of the place from which 
        the individual flees, or which, in the case of the State of New 
        Jersey, is a high misdemeanor under the laws of such State; or
        ``(2) is violating a condition of probation or parole imposed 
    under Federal or State law.''; and
        (2) in section 8(d)(1)(B)--
            (A) in clause (iii), by striking ``and'' at the end;
            (B) in clause (iv), by striking the period at the end and 
        inserting ``; and''; and
            (C) by adding after clause (iv) the following new clause:
                ``(v) it shall be cause for termination of the tenancy 
            of a tenant if such tenant--

                    ``(I) is fleeing to avoid prosecution, or custody 
                or confinement after conviction, under the laws of the 
                place from which the individual flees, for a crime, or 
                attempt to commit a crime, which is a felony under the 
                laws of the place from which the individual flees, or 
                which, in the case of the State of New Jersey, is a 
                high misdemeanor under the laws of such State; or
                    ``(II) is violating a condition of probation or 
                parole imposed under Federal or State law;''.

    (b) Provision of Information to Law Enforcement Agencies.--Title I 
of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is 
amended by adding at the end the following:

``SEC. 27. EXCHANGE OF INFORMATION WITH LAW ENFORCEMENT AGENCIES.

    ``Notwithstanding any other provision of law, each public housing 
agency that enters into a contract for assistance under section 6 or 8 
of this Act with the Secretary shall furnish any Federal, State, or 
local law enforcement officer, upon the request of the officer, with 
the current address, Social Security number, and photograph (if 
applicable) of any recipient of assistance under this Act, if the 
officer--
        ``(1) furnishes the public housing agency with the name of the 
    recipient; and
        ``(2) notifies the agency that--
            ``(A) such recipient--
                ``(i) is fleeing to avoid prosecution, or custody or 
            confinement after conviction, under the laws of the place 
            from which the individual flees, for a crime, or attempt to 
            commit a crime, which is a felony under the laws of the 
            place from which the individual flees, or which, in the 
            case of the State of New Jersey, is a high misdemeanor 
            under the laws of such State; or
                ``(ii) is violating a condition of probation or parole 
            imposed under Federal or State law; or
                ``(iii) has information that is necessary for the 
            officer to conduct the officer's official duties;
            ``(B) the location or apprehension of the recipient is 
        within such officer's official duties; and
            ``(C) the request is made in the proper exercise of the 
        officer's official duties.''.

SEC. 904. SENSE OF THE SENATE REGARDING THE INABILITY OF THE 
              NONCUSTODIAL PARENT TO PAY CHILD SUPPORT.

    It is the sense of the Senate that--
        (a) States should diligently continue their efforts to enforce 
    child support payments by the non-custodial parent to the custodial 
    parent, regardless of the employment status or location of the non-
    custodial parent; and
        (b) States are encouraged to pursue pilot programs in which the 
    parents of a non-adult, non-custodial parent who refuses to or is 
    unable to pay child support must--
            (1) pay or contribute to the child support owed by the non-
        custodial parent; or
            (2) otherwise fulfill all financial obligations and meet 
        all conditions imposed on the non-custodial parent, such as 
        participation in a work program or other related activity.

SEC. 905. ESTABLISHING NATIONAL GOALS TO PREVENT TEENAGE PREGNANCIES.

    (a) In General.--Not later than January 1, 1997, the Secretary of 
Health and Human Services shall establish and implement a strategy 
for--
        (1) preventing out-of-wedlock teenage pregnancies, and
        (2) assuring that at least 25 percent of the communities in the 
    United States have teenage pregnancy prevention programs in place.
    (b) Report.--Not later than June 30, 1998, and annually thereafter, 
the Secretary shall report to the Congress with respect to the progress 
that has been made in meeting the goals described in paragraphs (1) and 
(2) of subsection (a).

SEC. 906. SENSE OF THE SENATE REGARDING ENFORCEMENT OF STATUTORY RAPE 
              LAWS.

    (a) Sense of the Senate.--It is the sense of the Senate that States 
and local jurisdictions should aggressively enforce statutory rape 
laws.
    (b) Justice Department Program On Statutory Rape.--Not later than 
January 1, 1997, the Attorney General shall establish and implement a 
program that--
        (1) studies the linkage between statutory rape and teenage 
    pregnancy, particularly by predatory older men committing repeat 
    offenses; and
        (2) educates State and local criminal law enforcement officials 
    on the prevention and prosecution of statutory rape, focusing in 
    particular on the commission of statutory rape by predatory older 
    men committing repeat offenses, and any links to teenage pregnancy.
    (c) Violence Against Women Initiative.--The Attorney General shall 
ensure that the Department of Justice's Violence Against Women 
initiative addresses the issue of statutory rape, particularly the 
commission of statutory rape by predatory older men committing repeat 
offenses.

SEC. 907. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) 
is amended--
        (1) by striking ``(d) In the event'' and inserting ``(d) 
    Applicability to Service Providers Other Than Certain Financial 
    Institutions.--
        ``(1) In general.--In the event''; and
        (2) by adding at the end the following new paragraph:
        ``(2) State and local government electronic benefit transfer 
    programs.--
            ``(A) Exemption generally.--The disclosures, protections, 
        responsibilities, and remedies established under this title, 
        and any regulation prescribed or order issued by the Board in 
        accordance with this title, shall not apply to any electronic 
        benefit transfer program established under State or local law 
        or administered by a State or local government.
            ``(B) Exception for direct deposit into recipient's 
        account.--Subparagraph (A) shall not apply with respect to any 
        electronic funds transfer under an electronic benefit transfer 
        program for deposits directly into a consumer account held by 
        the recipient of the benefit.
            ``(C) Rule of construction.--No provision of this paragraph 
        may be construed as--
                ``(i) affecting or altering the protections otherwise 
            applicable with respect to benefits established by Federal, 
            State, or local law; or
                ``(ii) otherwise superseding the application of any 
            State or local law.
            ``(D) Electronic benefit transfer program defined.--For 
        purposes of this paragraph, the term `electronic benefit 
        transfer program'--
                ``(i) means a program under which a government agency 
            distributes needs-tested benefits by establishing accounts 
            to be accessed by recipients electronically, such as 
            through automated teller machines, or point-of-sale 
            terminals; and
                ``(ii) does not include employment-related payments, 
            including salaries and pension, retirement, or unemployment 
            benefits established by Federal, State, or local 
            governments.''.

SEC. 908. REDUCTION OF BLOCK GRANTS TO STATES FOR SOCIAL SERVICES; USE 
              OF VOUCHERS.

    (a) Reduction of Grants.--Section 2003(c) of the Social Security 
Act (42 U.S.C. 1397b(c)) is amended--
        (1) by striking ``and'' at the end of paragraph (4); and
        (2) by striking paragraph (5) and inserting the following:
        ``(5) $2,800,000,000 for each of the fiscal years 1990 through 
    1995;
        ``(6) $2,381,000,000 for the fiscal year 1996;
        ``(7) $2,380,000,000 for each of the fiscal years 1997 through 
    2002; and
        ``(8) $2,800,000,000 for the fiscal year 2003 and each 
    succeeding fiscal year.''.
    (b) Authority to Use Vouchers.--Section 2002 of such Act (42 U.S.C. 
1937a) is amended by adding at the end the following:
    ``(f) A State may use funds provided under this title to provide 
vouchers, for services directed at the goals set forth in section 2001, 
to families, including--
        ``(1) families who have become ineligible for assistance under 
    a State program funded under part A of title IV by reason of a 
    durational limit on the provision of such assistance; and
        ``(2) families denied cash assistance under the State program 
    funded under part A of title IV for a child who is born to a member 
    of the family who is--
            ``(A) a recipient of assistance under the program; or
            ``(B) a person who received such assistance at any time 
        during the 10-month period ending with the birth of the 
        child.''.

SEC. 909. RULES RELATING TO DENIAL OF EARNED INCOME CREDIT ON BASIS OF 
              DISQUALIFIED INCOME.

    (a) Reduction in Disqualified Income Threshold.--
        (1) In general.--Paragraph (1) of section 32(i) of the Internal 
    Revenue Code of 1986 (relating to denial of credit for individuals 
    having excessive investment income) is amended by striking 
    ``$2,350'' and inserting ``$2,200''.
        (2) Adjustment for inflation.--Subsection (j) of section 32 of 
    such Code is amended to read as follows:
    ``(j) Inflation Adjustments.--
        ``(1) In general.--In the case of any taxable year beginning 
    after 1996, each of the dollar amounts in subsections (b)(2) and 
    (i)(1) shall be increased by an amount equal to--
            ``(A) such dollar amount, multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 1995' for 
        `calendar year 1992' in subparagraph (B) thereof.
        ``(2) Rounding.--
            ``(A) In general.--If any dollar amount in subsection 
        (b)(2), after being increased under paragraph (1), is not a 
        multiple of $10, such dollar amount shall be rounded to the 
        nearest multiple of $10.
            ``(B) Disqualified income threshold amount.--If the dollar 
        amount in subsection (i)(1), after being increased under 
        paragraph (1), is not a multiple of $50, such amount shall be 
        rounded to the next lowest multiple of $50.''.
        (3) Conforming amendment.--Paragraph (2) of section 32(b) of 
    such Code is amended to read as follows:
        ``(2) Amounts.--The earned income amount and the phaseout 
    amount shall be determined as follows:

  

                                                                                                                
    In the case of an eligible                                                                                  
         individual with:                The earned income amount is:             The phaseout amount is:       
                                                                                                                
1 qualifying child................                  $6,330                                $11,610               
2 or more qualifying children.....                  $8,890                                $11,610               
No qualifying children............                  $4,220                               $ 5,280''.             
                                                                                                                

    (b) Definition of Disqualified Income.--Paragraph (2) of section 
32(i) of such Code (defining disqualified income) is amended by 
striking ``and'' at the end of subparagraph (B), by striking the period 
at the end of subparagraph (C) and inserting a comma, and by adding at 
the end the following new subparagraphs:
            ``(D) the capital gain net income (as defined in section 
        1222) of the taxpayer for such taxable year, and
            ``(E) the excess (if any) of--
                ``(i) the aggregate income from all passive activities 
            for the taxable year (determined without regard to any 
            amount included in earned income under subsection (c)(2) or 
            described in a preceding subparagraph), over
                ``(ii) the aggregate losses from all passive activities 
            for the taxable year (as so determined).
    For purposes of subparagraph (E), the term `passive activity' has 
    the meaning given such term by section 469.''.
    (c) Effective Dates.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall apply to taxable years 
    beginning after December 31, 1995.
        (2) Advance payment individuals.--In the case of any individual 
    who on or before June 26, 1996, has in effect an earned income 
    eligibility certificate for the individual's taxable year beginning 
    in 1996, the amendments made by this section shall apply to taxable 
    years beginning after December 31, 1996.

SEC. 910. MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED 
              INCOME CREDIT.

    (a) In General.--Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of 
section 32 of the Internal Revenue Code of 1986 are each amended by 
striking ``adjusted gross income'' each place it appears and inserting 
``modified adjusted gross income''.
    (b) Modified Adjusted Gross Income Defined.--Section 32(c) of such 
Code (relating to definitions and special rules) is amended by adding 
at the end the following new paragraph:
        ``(5) Modified adjusted gross income.--
            ``(A) In general.--The term `modified adjusted gross 
        income' means adjusted gross income determined without regard 
        to the amounts described in subparagraph (B).
            ``(B) Certain amounts disregarded.--An amount is described 
        in this subparagraph if it is--
                ``(i) the amount of losses from sales or exchanges of 
            capital assets in excess of gains from such sales or 
            exchanges to the extent such amount does not exceed the 
            amount under section 1211(b)(1),
                ``(ii) the net loss from estates and trusts,
                ``(iii) the excess (if any) of amounts described in 
            subsection (i)(2)(C)(ii) over the amounts described in 
            subsection (i)(2)(C)(i) (relating to nonbusiness rents and 
            royalties), and
                ``(iv) 50 percent of the net loss from the carrying on 
            of trades or businesses, computed separately with respect 
            to--

                    ``(I) trades or businesses (other than farming) 
                conducted as sole proprietorships,
                    ``(II) trades or businesses of farming conducted as 
                sole proprietorships, and
                    ``(III) other trades or businesses.

        For purposes of clause (iv), there shall not be taken into 
        account items which are attributable to a trade or business 
        which consists of the performance of services by the taxpayer 
        as an employee.''.
    (c) Effective Dates.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall apply to taxable years 
    beginning after December 31, 1995.
        (2) Advance payment individuals.--In the case of any individual 
    who on or before June 26, 1996, has in effect an earned income 
    eligibility certificate for the individual's taxable year beginning 
    in 1996, the amendments made by this section shall apply to taxable 
    years beginning after December 31, 1996.

SEC. 911. FRAUD UNDER MEANS-TESTED WELFARE AND PUBLIC ASSISTANCE 
              PROGRAMS.

    (a) In General.--If an individual's benefits under a Federal, 
State, or local law relating to a means-tested welfare or a public 
assistance program are reduced because of an act of fraud by the 
individual under the law or program, the individual may not, for the 
duration of the reduction, receive an increased benefit under any other 
means-tested welfare or public assistance program for which Federal 
funds are appropriated as a result of a decrease in the income of the 
individual (determined under the applicable program) attributable to 
such reduction.
    (b) Welfare or Public Assistance Programs for Which Federal Funds 
Are Appropriated.--For purposes of subsection (a), the term ``means-
tested welfare or public assistance program for which Federal funds are 
appropriated'' includes the food stamp program under the Food Stamp Act 
of 1977 (7 U.S.C. 2011 et seq.), any program of public or assisted 
housing under title I of the United States Housing Act of 1937 (42 
U.S.C. 1437 et seq.), and any State program funded under part A of 
title IV of the Social Security Act (42 U.S.C. 601 et seq.).

SEC. 912. ABSTINENCE EDUCATION.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.) is 
amended by adding at the end the following section:

               ``separate program for abstinence education

    ``Sec. 510. (a) For the purpose described in subsection (b), the 
Secretary shall, for fiscal year 1998 and each subsequent fiscal year, 
allot to each State which has transmitted an application for the fiscal 
year under section 505(a) an amount equal to the product of--
        ``(1) the amount appropriated in subsection (d) for the fiscal 
    year; and
        ``(2) the percentage determined for the State under section 
    502(c)(1)(B)(ii).
    ``(b)(1) The purpose of an allotment under subsection (a) to a 
State is to enable the State to provide abstinence education, and at 
the option of the State, where appropriate, mentoring, counseling, and 
adult supervision to promote abstinence from sexual activity, with a 
focus on those groups which are most likely to bear children out-of-
wedlock.
    ``(2) For purposes of this section, the term `abstinence education' 
means an educational or motivational program which--
            ``(A) has as its exclusive purpose, teaching the social, 
        psychological, and health gains to be realized by abstaining 
        from sexual activity;
            ``(B) teaches abstinence from sexual activity outside 
        marriage as the expected standard for all school age children;
            ``(C) teaches that abstinence from sexual activity is the 
        only certain way to avoid out-of-wedlock pregnancy, sexually 
        transmitted diseases, and other associated health problems;
            ``(D) teaches that a mutually faithful monogamous 
        relationship in context of marriage is the expected standard of 
        human sexual activity;
            ``(E) teaches that sexual activity outside of the context 
        of marriage is likely to have harmful psychological and 
        physical effects;
            ``(F) teaches that bearing children out-of-wedlock is 
        likely to have harmful consequences for the child, the child's 
        parents, and society;
            ``(G) teaches young people how to reject sexual advances 
        and how alcohol and drug use increases vulnerability to sexual 
        advances; and
            ``(H) teaches the importance of attaining self-sufficiency 
        before engaging in sexual activity.
    ``(c)(1) Sections 503, 507, and 508 apply to allotments under 
subsection (a) to the same extent and in the same manner as such 
sections apply to allotments under section 502(c).
    ``(2) Sections 505 and 506 apply to allotments under subsection (a) 
to the extent determined by the Secretary to be appropriate.
    ``(d) For the purpose of allotments under subsection (a), there is 
appropriated, out of any money in the Treasury not otherwise 
appropriated, an additional $50,000,000 for each of the fiscal years 
1998 through 2002. The appropriation under the preceding sentence for a 
fiscal year is made on October 1 of the fiscal year.''.

SEC. 913. CHANGE IN REFERENCE.

    Effective January 1, 1997, the third sentence of section 1902(a) 
and section 1908(e)(1) of the Social Security Act (42 U.S.C. 1396a(a), 
1396g-1(e)(1)) are each amended by striking ``The First Church of 
Christ, Scientist, Boston, Massachusetts'' and inserting ``The 
Commission for Accreditation of Christian Science Nursing 
Organizations/Facilities, Inc.'' each place it appears.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
```