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.
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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.
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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.
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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.
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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.
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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
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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 femaleheaded 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.
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(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:
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‘‘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 selfsufficient.

‘‘(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
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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—
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‘‘(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.—
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‘‘(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;
H. R. 3734—13

‘‘(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
H. R. 3734—14

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 outof-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 outof-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.
H. R. 3734—15

‘‘(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
H. R. 3734—16

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
H. R. 3734—17

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
H. R. 3734—18

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
H. R. 3734—19

(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:
H. R. 3734—20

‘‘(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
H. R. 3734—21

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.
H. R. 3734—22

‘‘(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.
H. R. 3734—23

‘‘(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
H. R. 3734—24

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.—
H. R. 3734—25

‘‘(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.
H. R. 3734—26

‘‘(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.
H. R. 3734—27

‘‘(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
H. R. 3734—28

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 subsection (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
H. R. 3734—29

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
H. R. 3734—30

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 singleparent 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
H. R. 3734—31

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
H. R. 3734—32

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
H. R. 3734—33

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
H. R. 3734—34

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 pro-
H. R. 3734—35

grams 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
H. R. 3734—36

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—
H. R. 3734—37

‘‘(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.
H. R. 3734—38

‘‘(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.
H. R. 3734—39

‘‘(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.—
H. R. 3734—40

‘‘(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
H. R. 3734—41

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
H. R. 3734—42

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.
H. R. 3734—43

‘‘(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 subparagraph (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
H. R. 3734—44

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.
H. R. 3734—45

‘‘(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
H. R. 3734—46

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
H. R. 3734—47

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—
H. R. 3734—48

‘‘(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)’.
H. R. 3734—49

‘‘(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.
H. R. 3734—50

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
H. R. 3734—51

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—
H. R. 3734—52

‘‘(A) 50 percent shall be allocated for the purposes 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
H. R. 3734—53

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
H. R. 3734—54

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 subsection (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
H. R. 3734—55

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 provision 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 fulltime 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.
H. R. 3734—56

‘‘(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;
H. R. 3734—57

‘‘(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 subsection (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.
H. R. 3734—58

(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
H. R. 3734—59

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:
H. R. 3734—60

(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 administration 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 capable 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-byState 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 Representatives 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’’.
H. R. 3734—61

(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)’’.
H. R. 3734—62

(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
H. R. 3734—63

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.
H. R. 3734—64

(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. R. 3734—65

(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
H. R. 3734—66

(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
H. R. 3734—67

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—
H. R. 3734—68

(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 pay-
H. R. 3734—69

ments 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’’.
H. R. 3734—70

(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’’;
H. R. 3734—71

(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-ToWork 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
H. R. 3734—72

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 counterfeitresistant 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)—
H. R. 3734—73

(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—
H. R. 3734—74

‘‘(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.
H. R. 3734—75

‘‘(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.
H. R. 3734—76

‘‘(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 DRUGRELATED 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
H. R. 3734—77

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
H. R. 3734—78

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
H. R. 3734—79

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).
H. R. 3734—80

(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
H. R. 3734—81

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
H. R. 3734—82

‘‘(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.
H. R. 3734—83

‘‘(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.’’.
H. R. 3734—84

(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 individual’’;

(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.
H. R. 3734—85

‘‘(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
H. R. 3734—86

(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
H. R. 3734—87

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
H. R. 3734—88

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 pay-
H. R. 3734—89

ment 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
H. R. 3734—90

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—
H. R. 3734—91

‘‘(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
H. R. 3734—92

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 individual 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
H. R. 3734—93

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
H. R. 3734—94

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 disability 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.
H. R. 3734—95

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
H. R. 3734—96

(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
H. R. 3734—97

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
H. R. 3734—98

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).
H. R. 3734—99

‘‘(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
H. R. 3734—100

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.’’.
H. R. 3734—101

(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;
H. R. 3734—102

‘‘(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.’’.
H. R. 3734—103

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
H. R. 3734—104

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 computerdriven 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
H. R. 3734—105

‘‘(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 DIREC- TORY.—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 EXIST- ENCE.—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
H. R. 3734—106

‘‘(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
H. R. 3734—107

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
H. R. 3734—108

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
H. R. 3734—109

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:
H. R. 3734—110

‘‘(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
H. R. 3734—111

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 individual.’’; and

(2) in subsection (b)—

(A) in the matter preceding paragraph (1), by striking

‘‘social security’’ and all that follows through ‘‘absent parent’’ and inserting ‘‘information 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.—
H. R. 3734—112

(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.
H. R. 3734—113

‘‘(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 PUR- POSES.—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).
H. R. 3734—114

‘‘(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
H. R. 3734—115

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.—
H. R. 3734—116

(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;
H. R. 3734—117

‘‘(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,
H. R. 3734—118

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—
H. R. 3734—119

‘‘(A)(i) the State shall respond within 5 business days

to a request made by another State to enforce a support

order; and

‘‘(ii) the term ‘business day’ means a day on which

State offices are open for regular business;

‘‘(B) the State may, by electronic or other means, transmit to another State a request for assistance in a case

involving the enforcement of a support order, which

request—

‘‘(i) shall include such information as will enable

the State to which the request is transmitted to compare the information about the case to the information

in the data bases of the State; and

‘‘(ii) shall constitute a certification by the requesting State—

‘‘(I) of the amount of support under the order

the payment of which is in arrears; and

‘‘(II) that the requesting State has complied

with all procedural due process requirements

applicable to the case;

‘‘(C) if the State provides assistance to another State

pursuant to this paragraph with respect to a case, neither

State shall consider the case to be transferred to the caseload of such other State; and

‘‘(D) the State shall maintain records of—

‘‘(i) the number of such requests for assistance

received by the State;

‘‘(ii) the number of cases for which the State collected support in response to such a request; and

‘‘(iii) the amount of such collected support.’’.

SEC. 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;’’.
H. R. 3734—120

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;
H. R. 3734—121

‘‘(VI) records of agencies administering public

assistance programs;

‘‘(VII) records of the motor vehicle department; and

‘‘(VIII) corrections records.

‘‘(ii) Certain records held by private entities 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 individuals 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
H. R. 3734—122

proceedings to establish paternity or to establish, modify, or

enforce support orders:

‘‘(A) LOCATOR INFORMATION; PRESUMPTIONS CONCERNING 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
H. R. 3734—123

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 ESTABLISHMENT.—

‘‘(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.
H. R. 3734—124

‘‘(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 ACKNOWLEDGMENT.—

‘‘(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
H. R. 3734—125

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 PROCEEDINGS.—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.
H. R. 3734—126

‘‘(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
H. R. 3734—127

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)—
H. R. 3734—128

(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/nonAFDC 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’’.
H. R. 3734—129

(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—
H. R. 3734—130

‘‘(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.
H. R. 3734—131

(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 completeness and reliability of, and ready access to, the data

described in paragraph (1)(A), and the accuracy of the calculations described in paragraph (1)(B).

‘‘(d) INFORMATION INTEGRITY AND SECURITY.—The State agency

shall have in effect safeguards on the integrity, accuracy, and

completeness of, access to, and use of data in the automated system

required 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
H. R. 3734—132

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 requirements of this part which were enacted on or before the

date of enactment of the Family Support Act of 1988,

and

‘‘(B) by October 1, 2000, which meets all requirements 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 aggre-
H. R. 3734—133

gate 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
H. R. 3734—134

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).’’.
H. R. 3734—135

(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 ADJUST- MENT.—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.
H. R. 3734—136

‘‘(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 enforce-
H. R. 3734—137

ment 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).’’.
H. R. 3734—138

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.
H. R. 3734—139

‘‘(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
H. R. 3734—140

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
H. R. 3734—141

‘‘(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.
H. R. 3734—142

‘‘(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—
H. R. 3734—143

(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
H. R. 3734—144

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.
H. R. 3734—145

(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
H. R. 3734—146

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 PASTDUE 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,
H. R. 3734—147

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.—
H. R. 3734—148

(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—
H. R. 3734—149

‘‘(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.
H. R. 3734—150

‘‘(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.
H. R. 3734—151

‘‘(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.’’.
H. R. 3734—152

(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
H. R. 3734—153

(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
H. R. 3734—154

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 dropoff 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
H. R. 3734—155

‘‘(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’’:
H. R. 3734—156

(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.
H. R. 3734—157

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 following 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,
H. R. 3734—158

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 paragraph (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
H. R. 3734—159

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
H. R. 3734—160

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
H. R. 3734—161

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—
H. R. 3734—162

(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,
H. R. 3734—163

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.’’.
H. R. 3734—164

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—
H. R. 3734—165

(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 withholding.

(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—
H. R. 3734—166

(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 BENE- FITS.—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 RE- APPLICATION.—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
H. R. 3734—167

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
H. R. 3734—168

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.
H. R. 3734—169

‘‘(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 individual 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
H. R. 3734—170

(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.
H. R. 3734—171

(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
H. R. 3734—172

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
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‘‘(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.
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‘‘(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-ofhome 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 paragraph (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 section 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’’.
H. R. 3734—175

(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
H. R. 3734—176

‘‘(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
H. R. 3734—177

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)—
H. R. 3734—178

(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 REQUIRE- MENTS.—

‘‘(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
H. R. 3734—179

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:
H. R. 3734—180

‘‘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 BEFOREAND 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;
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‘‘(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 submitted.’’; 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
H. R. 3734—182

(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
H. R. 3734—183

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;
H. R. 3734—184

(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 individual, 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 disabilities.

‘‘(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
H. R. 3734—185

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:
H. R. 3734—186

‘‘, 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)—
H. R. 3734—187

(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 Consumers 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.’’.
H. R. 3734—188

(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 institutions,’’; 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 paragraph (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 redesignated 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))
H. R. 3734—189

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
H. R. 3734—190

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.
H. R. 3734—191

‘‘(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.
H. R. 3734—192

‘‘(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
H. R. 3734—193

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
H. R. 3734—194

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
H. R. 3734—195

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.
H. R. 3734—196

(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
H. R. 3734—197

(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
H. R. 3734—198

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 PREPARA- TION.—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 ADMINISTRA- TION; 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’’.
H. R. 3734—199

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:
H. R. 3734—200

‘‘(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);
H. R. 3734—201

(iii) in subparagraph (I), by striking ‘‘Secretary—’’ 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
H. R. 3734—202

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
H. R. 3734—203

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.).
H. R. 3734—204

(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.’’.
H. R. 3734—205

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
H. R. 3734—206

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
H. R. 3734—207

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;
H. R. 3734—208

‘‘(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
H. R. 3734—209

(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
H. R. 3734—210

‘‘(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 SELFEMPLOYED.

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 SELFEMPLOYED.—

‘‘(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’’.
H. R. 3734—211

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—
H. R. 3734—212

‘‘(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
H. R. 3734—213

‘‘(cc) whether an individual is in compliance with a requirement under subparagraph (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.’’.
H. R. 3734—214

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
H. R. 3734—215

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 train-
H. R. 3734—216

ing 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)’’.
H. R. 3734—217

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.
H. R. 3734—218

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.’’.
H. R. 3734—219

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 individuals reside—

‘‘(i) has an unemployment rate of over 10 percent; 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.
H. R. 3734—220

‘‘(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.
H. R. 3734—221

‘‘(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 paperbased 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
H. R. 3734—222

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-ofsale 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.
H. R. 3734—223

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
H. R. 3734—224

‘‘(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.’’.
H. R. 3734—225

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;’’;
H. R. 3734—226

(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 following: ‘‘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
H. R. 3734—227

‘‘(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
H. R. 3734—228

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
H. R. 3734—229

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
H. R. 3734—230

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’’.
H. R. 3734—231

(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
H. R. 3734—232

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 strategies; 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;
H. R. 3734—233

‘‘(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 section 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’’.
H. R. 3734—234

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
H. R. 3734—235

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’’.
H. R. 3734—236

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
H. R. 3734—237

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.’’.
H. R. 3734—238

(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 households; and

(6) the economic impact on the production of agricultural

commodities of using food stamps to purchase vitamins and

minerals.
H. R. 3734—239

(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 organization 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
H. R. 3734—240

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 lowincome 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
H. R. 3734—241

‘‘(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.
H. R. 3734—242

(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:
H. R. 3734—243

‘‘(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.
H. R. 3734—244

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—
H. R. 3734—245

‘‘(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
H. R. 3734—246

(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 pointof-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—
H. R. 3734—247

(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:
H. R. 3734—248

‘‘(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),
H. R. 3734—249

‘‘(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
H. R. 3734—250

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
H. R. 3734—251

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.