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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 327 Engrossed in House (EH)]

                 In the House of Representatives, U.S.,

                                                     November 13, 1997.
    Resolved, That, upon the adoption of this resolution, the House shall be 
considered to have taken from the Speaker's table the bill H.R. 867 and an 
amendment of the Senate thereto and to have concurred in the amendment of the 
Senate with an amendment as follows: in lieu of the matter proposed to be 
inserted by the Senate, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Adoption and Safe Families 
Act of 1997''.
    (b) Table of Contents.--The table of contents of this Act is as follows:

    Sec. 1. Short title; table of contents.
    TITLE I--REASONABLE EFFORTS AND SAFETY REQUIREMENTS FOR FOSTER 
                      CARE AND ADOPTION PLACEMENTS

    Sec. 101. Clarification of the reasonable efforts requirement.
    Sec. 102. Including safety in case plan and case review system 
                                requirements.
    Sec. 103. States required to initiate or join proceedings to 
                                terminate parental rights for 
                                certain children in foster care.
    Sec. 104. Notice of reviews and hearings; opportunity to be 
                                heard.
    Sec. 105. Use of the Federal Parent Locator Service for child 
                                welfare services.
    Sec. 106. Criminal records checks for prospective foster and 
                                adoptive parents.
    Sec. 107. Documentation of efforts for adoption or location of 
                                a permanent home.
       TITLE II--INCENTIVES FOR PROVIDING PERMANENT FAMILIES FOR 
                                CHILDREN

    Sec. 201. Adoption incentive payments.
    Sec. 202. Adoptions across State and county jurisdictions.
    Sec. 203. Performance of States in protecting children.
             TITLE III--ADDITIONAL IMPROVEMENTS AND REFORMS

    Sec. 301. Authority to approve more child protection 
                                demonstration projects.
    Sec. 302. Permanency hearings.
    Sec. 303. Kinship care.
    Sec. 304. Clarification of eligible population for independent 
                                living services.
    Sec. 305. Reauthorization and expansion of family preservation 
                                and support services.
    Sec. 306. Health insurance coverage for children with special 
                                needs.
    Sec. 307. Continuation of eligibility for adoption assistance 
                                payments on behalf of children with 
                                special needs whose initial 
                                adoption has been dissolved.
    Sec. 308. State standards to ensure quality services for 
                                children in foster care.
                        TITLE IV--MISCELLANEOUS

    Sec. 401. Preservation of reasonable parenting.
    Sec. 402. Reporting requirements.
    Sec. 403. Sense of Congress regarding standby guardianship.
    Sec. 404. Temporary adjustment of Contingency Fund for State 
                                Welfare Programs.
    Sec. 405. Coordination of substance abuse and child protection 
                                services.
    Sec. 406. Purchase of American-made equipment and products.
                        TITLE V--EFFECTIVE DATE

    Sec. 501. Effective date.

TITLE I--REASONABLE EFFORTS AND SAFETY REQUIREMENTS FOR FOSTER CARE AND ADOPTION 
                                   PLACEMENTS

SEC. 101. CLARIFICATION OF THE REASONABLE EFFORTS REQUIREMENT.

    (a) In General.--Section 471(a)(15) of the Social Security Act (42 U.S.C. 
671(a)(15)) is amended to read as follows:
            ``(15) provides that--
                    ``(A) in determining reasonable efforts to be made with 
                respect to a child, as described in this paragraph, and in 
                making such reasonable efforts, the child's health and safety 
                shall be the paramount concern;
                    ``(B) except as provided in subparagraph (D), reasonable 
                efforts shall be made to preserve and reunify families--
                            ``(i) prior to the placement of a child in foster 
                        care, to prevent or eliminate the need for removing the 
                        child from the child's home; and
                            ``(ii) to make it possible for a child to safely 
                        return to the child's home;
                    ``(C) if continuation of reasonable efforts of the type 
                described in subparagraph (B) is determined to be inconsistent 
                with the permanency plan for the child, reasonable efforts shall 
                be made to place the child in a timely manner in accordance with 
                the permanency plan, and to complete whatever steps are 
                necessary to finalize the permanent placement of the child;
                    ``(D) reasonable efforts of the type described in 
                subparagraph (B) shall not be required to be made with respect 
                to a parent of a child if a court of competent jurisdiction has 
                determined that--
                            ``(i) the parent has subjected the child to 
                        aggravated circumstances (as defined in State law, which 
                        definition may include but need not be limited to 
                        abandonment, torture, chronic abuse, and sexual abuse);
                            ``(ii) the parent has--
                                    ``(I) committed murder (which would have 
                                been an offense under section 1111(a) of title 
                                18, United States Code, if the offense had 
                                occurred in the special maritime or territorial 
                                jurisdiction of the United States) of another 
                                child of the parent;
                                    ``(II) committed voluntary manslaughter 
                                (which would have been an offense under section 
                                1112(a) of title 18, United States Code, if the 
                                offense had occurred in the special maritime or 
                                territorial jurisdiction of the United States) 
                                of another child of the parent;
                                    ``(III) aided or abetted, attempted, 
                                conspired, or solicited to commit such a murder 
                                or such a voluntary manslaughter; or
                                    ``(IV) committed a felony assault that 
                                results in serious bodily injury to the child or 
                                another child of the parent; or
                            ``(iii) the parental rights of the parent to a 
                        sibling have been terminated involuntarily;
                    ``(E) if reasonable efforts of the type described in 
                subparagraph (B) are not made with respect to a child as a 
                result of a determination made by a court of competent 
                jurisdiction in accordance with subparagraph (D)--
                            ``(i) a permanency hearing (as described in section 
                        475(5)(C)) shall be held for the child within 30 days 
                        after the determination; and
                            ``(ii) reasonable efforts shall be made to place the 
                        child in a timely manner in accordance with the 
                        permanency plan, and to complete whatever steps are 
                        necessary to finalize the permanent placement of the 
                        child; and
                    ``(F) reasonable efforts to place a child for adoption or 
                with a legal guardian may be made concurrently with reasonable 
                efforts of the type described in subparagraph (B);''.
    (b) Definition of Legal Guardianship.--Section 475 of such Act (42 U.S.C. 
675) is amended by adding at the end the following:
            ``(7) The term `legal guardianship' means a judicially created 
        relationship between child and caretaker which is intended to be 
        permanent and self-sustaining as evidenced by the transfer to the 
        caretaker of the following parental rights with respect to the child: 
        protection, education, care and control of the person, custody of the 
        person, and decisionmaking. The term `legal guardian' means the 
        caretaker in such a relationship.''.
    (c) Conforming Amendment.--Section 472(a)(1) of such Act (42 U.S.C. 
672(a)(1)) is amended by inserting ``for a child'' before ``have been made''.
    (d) Rule of Construction.--Part E of title IV of such Act (42 U.S.C. 670-
679) is amended by inserting after section 477 the following:

``SEC. 478. RULE OF CONSTRUCTION.

    ``Nothing in this part shall be construed as precluding State courts from 
exercising their discretion to protect the health and safety of children in 
individual cases, including cases other than those described in section 
471(a)(15)(D).''.

SEC. 102. INCLUDING SAFETY IN CASE PLAN AND CASE REVIEW SYSTEM REQUIREMENTS.

    Title IV of the Social Security Act (42 U.S.C. 601 et seq.) is amended--
            (1) in section 422(b)(10)(B)--
                    (A) in clause (iii)(I), by inserting ``safe and'' after 
                ``where''; and
                    (B) in clause (iv), by inserting ``safely'' after 
                ``remain''; and
            (2) in section 475--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by inserting ``safety and'' 
                        after ``discussion of the''; and
                            (ii) in subparagraph (B)--
                                    (I) by inserting ``safe and'' after ``child 
                                receives''; and
                                    (II) by inserting ``safe'' after ``return of 
                                the child to his own''; and
                    (B) in paragraph (5)--
                            (i) in subparagraph (A), in the matter preceding 
                        clause (i), by inserting ``a safe setting that is'' 
                        after ``placement in''; and
                            (ii) in subparagraph (B)--
                                    (I) by inserting ``the safety of the 
                                child,'' after ``determine''; and
                                    (II) by inserting ``and safely maintained 
                                in'' after ``returned to''.

SEC. 103. STATES REQUIRED TO INITIATE OR JOIN PROCEEDINGS TO TERMINATE PARENTAL 
              RIGHTS FOR CERTAIN CHILDREN IN FOSTER CARE.

    (a) Requirement for Proceedings.--Section 475(5) of the Social Security Act 
(42 U.S.C. 675(5)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by striking the period at the end of subparagraph (D) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(E) in the case of a child who has been in foster care 
                under the responsibility of the State for 15 of the most recent 
                22 months, or, if a court of competent jurisdiction has 
                determined a child to be an abandoned infant (as defined under 
                State law) or has made a determination that the parent has 
                committed murder of another child of the parent, committed 
                voluntary manslaughter of another child of the parent, aided or 
                abetted, attempted, conspired, or solicited to commit such a 
                murder or such a voluntary manslaughter, or committed a felony 
                assault that has resulted in serious bodily injury to the child 
                or to another child of the parent, the State shall file a 
                petition to terminate the parental rights of the child's parents 
                (or, if such a petition has been filed by another party, seek to 
                be joined as a party to the petition), and, concurrently, to 
                identify, recruit, process, and approve a qualified family for 
                an adoption, unless--
                            ``(i) at the option of the State, the child is being 
                        cared for by a relative;
                            ``(ii) a State agency has documented in the case 
                        plan (which shall be available for court review) a 
                        compelling reason for determining that filing such a 
                        petition would not be in the best interests of the 
                        child; or
                            ``(iii) the State has not provided to the family of 
                        the child, consistent with the time period in the State 
                        case plan, such services as the State deems necessary 
                        for the safe return of the child to the child's home, if 
                        reasonable efforts of the type described in section 
                        471(a)(15)(B)(ii) are required to be made with respect 
                        to the child.''.
    (b) Determination of Beginning of Foster Care.--Section 475(5) of the Social 
Security Act (42 U.S.C. 675(5)), as amended by subsection (a), is amended--
            (1) by striking ``and'' at the end of subparagraph (D);
            (2) by striking the period at the end of subparagraph (E) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(F) a child shall be considered to have entered foster 
                care on the earlier of--
                            ``(i) the date of the first judicial finding that 
                        the child has been subjected to child abuse or neglect; 
                        or
                            ``(ii) the date that is 60 days after the date on 
                        which the child is removed from the home.''.
    (c) Transition Rules.--
            (1) New foster children.--In the case of a child who enters foster 
        care (within the meaning of section 475(5)(F) of the Social Security 
        Act) under the responsibility of a State after the date of the enactment 
        of this Act--
                    (A) if the State comes into compliance with the amendments 
                made by subsection (a) of this section before the child has been 
                in such foster care for 15 of the most recent 22 months, the 
                State shall comply with section 475(5)(E) of the Social Security 
                Act with respect to the child when the child has been in such 
                foster care for 15 of the most recent 22 months; and
                    (B) if the State comes into such compliance after the child 
                has been in such foster care for 15 of the most recent 22 
                months, the State shall comply with such section 475(5)(E) with 
                respect to the child not later than 3 months after the end of 
                the first regular session of the State legislature that begins 
                after such date of enactment.
            (2) Current foster children.--In the case of children in foster care 
        under the responsibility of the State on the date of the enactment of 
        this Act, the State shall--
                    (A) not later than 6 months after the end of the first 
                regular session of the State legislature that begins after such 
                date of enactment, comply with section 475(5)(E) of the Social 
                Security Act with respect to not less than \1/3\ of such 
                children as the State shall select, giving priority to children 
                for whom the permanency plan (within the meaning of part E of 
                title IV of the Social Security Act) is adoption and children 
                who have been in foster care for the greatest length of time;
                    (B) not later than 12 months after the end of such first 
                regular session, comply with such section 475(5)(E) with respect 
                to not less than \2/3\ of such children as the State shall 
                select; and
                    (C) not later than 18 months after the end of such first 
                regular session, comply with such section 475(5)(E) with respect 
                to all of such children.
            (3) Treatment of 2-year legislative sessions.--For purposes of this 
        subsection, in the case of a State that has a 2-year legislative 
        session, each year of the session is deemed to be a separate regular 
        session of the State legislature.
            (4) Requirements treated as state plan requirements.--For purposes 
        of part E of title IV of the Social Security Act, the requirements of 
        this subsection shall be treated as State plan requirements imposed by 
        section 471(a) of such Act.
    (d) Rule of Construction.--Nothing in this section or in part E of title IV 
of the Social Security Act (42 U.S.C. 670 et seq.), as amended by this Act, 
shall be construed as precluding State courts or State agencies from initiating 
the termination of parental rights for reasons other than, or for timelines 
earlier than, those specified in part E of title IV of such Act, when such 
actions are determined to be in the best interests of the child, including cases 
where the child has experienced multiple foster care placements of varying 
durations.

SEC. 104. NOTICE OF REVIEWS AND HEARINGS; OPPORTUNITY TO BE HEARD.

    Section 475(5) of the Social Security Act (42 U.S.C. 675(5)), as amended by 
section 103, is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) the foster parents (if any) of a child and any 
                preadoptive parent or relative providing care for the child are 
                provided with notice of, and an opportunity to be heard in, any 
                review or hearing to be held with respect to the child, except 
                that this subparagraph shall not be construed to require that 
                any foster parent, preadoptive parent, or relative providing 
                care for the child be made a party to such a review or hearing 
                solely on the basis of such notice and opportunity to be 
                heard.''.

SEC. 105. USE OF THE FEDERAL PARENT LOCATOR SERVICE FOR CHILD WELFARE SERVICES.

    Section 453 of the Social Security Act (42 U.S.C. 653) is amended--
            (1) in subsection (a)(2)--
                    (A) in the matter preceding subparagraph (A), by inserting 
                ``or making or enforcing child custody or visitation orders,'' 
                after ``obligations,''; and
                    (B) in subparagraph (A)--
                            (i) by striking ``or'' at the end of clause (ii);
                            (ii) by striking the comma at the end of clause 
                        (iii) and inserting ``; or''; and
                            (iii) by inserting after clause (iii) the following:
                            ``(iv) who has or may have parental rights with 
                        respect to a child,''; and
            (2) in subsection (c)--
                    (A) by striking the period at the end of paragraph (3) and 
                inserting ``; and''; and
                    (B) by adding at the end the following:
            ``(4) a State agency that is administering a program operated under 
        a State plan under subpart 1 of part B, or a State plan approved under 
        subpart 2 of part B or under part E.''.

SEC. 106. CRIMINAL RECORDS CHECKS FOR PROSPECTIVE FOSTER AND ADOPTIVE PARENTS.

    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 (18);
            (2) by striking the period at the end of paragraph (19) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(20)(A) unless an election provided for in subparagraph (B) is 
        made with respect to the State, provides procedures for criminal records 
        checks for any prospective foster or adoptive parent before the foster 
        or adoptive parent may be finally approved for placement of a child on 
        whose behalf foster care maintenance payments or adoption assistance 
        payments are to be made under the State plan under this part, including 
        procedures requiring that--
                    ``(i) in any case in which a record check reveals a felony 
                conviction for child abuse or neglect, for spousal abuse, for a 
                crime against children (including child pornography), or for a 
                crime involving violence, including rape, sexual assault, or 
                homicide, but not including other physical assault or battery, 
                if a State finds that a court of competent jurisdiction has 
                determined that the felony was committed at any time, such final 
                approval shall not be granted; and
                    ``(ii) in any case in which a record check reveals a felony 
                conviction for physical assault, battery, or a drug-related 
                offense, if a State finds that a court of competent jurisdiction 
                has determined that the felony was committed within the past 5 
                years, such final approval shall not be granted; and
            ``(B) subparagraph (A) shall not apply to a State plan if the 
        Governor of the State has notified the Secretary in writing that the 
        State has elected to make subparagraph (A) inapplicable to the State, or 
        if the State legislature, by law, has elected to make subparagraph (A) 
        inapplicable to the State.''.

SEC. 107. DOCUMENTATION OF EFFORTS FOR ADOPTION OR LOCATION OF A PERMANENT HOME.

    Section 475(1) of the Social Security Act (42 U.S.C. 675(1)) is amended--
            (1) in the last sentence--
                    (A) by striking ``the case plan must also include''; and
                    (B) by redesignating such sentence as subparagraph (D) and 
                indenting appropriately; and
            (2) by adding at the end the following:
                    ``(E) In the case of a child with respect to whom the 
                permanency plan is adoption or placement in another permanent 
                home, documentation of the steps the agency is taking to find an 
                adoptive family or other permanent living arrangement for the 
                child, to place the child with an adoptive family, a fit and 
                willing relative, a legal guardian, or in another planned 
                permanent living arrangement, and to finalize the adoption or 
                legal guardianship. At a minimum, such documentation shall 
                include child specific recruitment efforts such as the use of 
                State, regional, and national adoption exchanges including 
                electronic exchange systems.''.

       TITLE II--INCENTIVES FOR PROVIDING PERMANENT FAMILIES FOR CHILDREN

SEC. 201. ADOPTION INCENTIVE PAYMENTS.

    (a) In General.--Part E of title IV of the Social Security Act (42 U.S.C. 
670-679) is amended by inserting after section 473 the following:

``SEC. 473A. ADOPTION INCENTIVE PAYMENTS.

    ``(a) Grant Authority.--Subject to the availability of such amounts as may 
be provided in advance in appropriations Acts for this purpose, the Secretary 
shall make a grant to each State that is an incentive-eligible State for a 
fiscal year in an amount equal to the adoption incentive payment payable to the 
State under this section for the fiscal year, which shall be payable in the 
immediately succeeding fiscal year.
    ``(b) Incentive-Eligible State.--A State is an incentive-eligible State for 
a fiscal year if--
            ``(1) the State has a plan approved under this part for the fiscal 
        year;
            ``(2) the number of foster child adoptions in the State during the 
        fiscal year exceeds the base number of foster child adoptions for the 
        State for the fiscal year;
            ``(3) the State is in compliance with subsection (c) for the fiscal 
        year;
            ``(4) in the case of fiscal years 2001 and 2002, the State provides 
        health insurance coverage to any child with special needs (as determined 
        under section 473(c)) for whom there is in effect an adoption assistance 
        agreement between a State and an adoptive parent or parents; and
            ``(5) the fiscal year is any of fiscal years 1998 through 2002.
    ``(c) Data Requirements.--
            ``(1) In general.--A State is in compliance with this subsection for 
        a fiscal year if the State has provided to the Secretary the data 
        described in paragraph (2)--
                    ``(A) for fiscal years 1995 through 1997 (or, if the 1st 
                fiscal year for which the State seeks a grant under this section 
                is after fiscal year 1998, the fiscal year that precedes such 
                1st fiscal year); and
                    ``(B) for each succeeding fiscal year that precedes the 
                fiscal year.
            ``(2) Determination of numbers of adoptions.--
                    ``(A) Determinations based on afcars data.--Except as 
                provided in subparagraph (B), the Secretary shall determine the 
                numbers of foster child adoptions and of special needs adoptions 
                in a State during each of fiscal years 1995 through 2002, for 
                purposes of this section, on the basis of data meeting the 
                requirements of the system established pursuant to section 479, 
                as reported by the State and approved by the Secretary by August 
                1 of the succeeding fiscal year.
                    ``(B) Alternative data sources permitted for fiscal years 
                1995 through 1997.--For purposes of the determination described 
                in subparagraph (A) for fiscal years 1995 through 1997, the 
                Secretary may use data from a source or sources other than that 
                specified in subparagraph (A) that the Secretary finds to be of 
                equivalent completeness and reliability, as reported by a State 
                by November 30, 1997, and approved by the Secretary by March 1, 
                1998.
            ``(3) No waiver of afcars requirements.--This section shall not be 
        construed to alter or affect any requirement of section 479 or of any 
        regulation prescribed under such section with respect to reporting of 
        data by States, or to waive any penalty for failure to comply with such 
        a requirement.
    ``(d) Adoption Incentive Payment.--
            ``(1) In general.--Except as provided in paragraph (2), the adoption 
        incentive payment payable to a State for a fiscal year under this 
        section shall be equal to the sum of--
                    ``(A) $4,000, multiplied by the amount (if any) by which the 
                number of foster child adoptions in the State during the fiscal 
                year exceeds the base number of foster child adoptions for the 
                State for the fiscal year; and
                    ``(B) $2,000, multiplied by the amount (if any) by which the 
                number of special needs adoptions in the State during the fiscal 
                year exceeds the base number of special needs adoptions for the 
                State for the fiscal year.
            ``(2) Pro rata adjustment if insufficient funds available.--For any 
        fiscal year, if the total amount of adoption incentive payments 
        otherwise payable under this section for a fiscal year exceeds the 
        amount appropriated pursuant to subsection (h) for the fiscal year, the 
        amount of the adoption incentive payment payable to each State under 
        this section for the fiscal year shall be--
                    ``(A) the amount of the adoption incentive payment that 
                would otherwise be payable to the State under this section for 
                the fiscal year; multiplied by
                    ``(B) the percentage represented by the amount so 
                appropriated for the fiscal year, divided by the total amount of 
                adoption incentive payments otherwise payable under this section 
                for the fiscal year.
    ``(e) 2-Year Availability of Incentive Payments.--Payments to a State under 
this section in a fiscal year shall remain available for use by the State 
through the end of the succeeding fiscal year.
    ``(f) Limitations on Use of Incentive Payments.--A State shall not expend an 
amount paid to the State under this section except to provide to children or 
families any service (including post-adoption services) that may be provided 
under part B or E. Amounts expended by a State in accordance with the preceding 
sentence shall be disregarded in determining State expenditures for purposes of 
Federal matching payments under sections 423, 434, and 474.
    ``(g) Definitions.--As used in this section:
            ``(1) Foster child adoption.--The term `foster child adoption' means 
        the final adoption of a child who, at the time of adoptive placement, 
        was in foster care under the supervision of the State.
            ``(2) Special needs adoption.--The term `special needs adoption' 
        means the final adoption of a child for whom an adoption assistance 
        agreement is in effect under section 473.
            ``(3) Base number of foster child adoptions.--The term `base number 
        of foster child adoptions for a State' means--
                    ``(A) with respect to fiscal year 1998, the average number 
                of foster child adoptions in the State in fiscal years 1995, 
                1996, and 1997; and
                    ``(B) with respect to any subsequent fiscal year, the number 
                of foster child adoptions in the State in the fiscal year for 
                which the number is the greatest in the period that begins with 
                fiscal year 1997 and ends with the fiscal year preceding such 
                subsequent fiscal year.
            ``(4) Base number of special needs adoptions.--The term `base number 
        of special needs adoptions for a State' means--
                    ``(A) with respect to fiscal year 1998, the average number 
                of special needs adoptions in the State in fiscal years 1995, 
                1996, and 1997; and
                    ``(B) with respect to any subsequent fiscal year, the number 
                of special needs adoptions in the State in the fiscal year for 
                which the number is the greatest in the period that begins with 
                fiscal year 1997 and ends with the fiscal year preceding such 
                subsequent fiscal year.
    ``(h) Limitations on Authorization of Appropriations.--
            ``(1) In general.--For grants under subsection (a), there are 
        authorized to be appropriated to the Secretary $20,000,000 for each of 
        fiscal years 1999 through 2003.
            ``(2) Availability.--Amounts appropriated under paragraph (1) are 
        authorized to remain available until expended, but not after fiscal year 
        2003.
    ``(i) Technical Assistance.--
            ``(1) In general.--The Secretary may, directly or through grants or 
        contracts, provide technical assistance to assist States and local 
        communities to reach their targets for increased numbers of adoptions 
        and, to the extent that adoption is not possible, alternative permanent 
        placements, for children in foster care.
            ``(2) Description of the character of the technical assistance.--The 
        technical assistance provided under paragraph (1) may support the goal 
        of encouraging more adoptions out of the foster care system, when 
        adoptions promote the best interests of children, and may include the 
        following:
                    ``(A) The development of best practice guidelines for 
                expediting termination of parental rights.
                    ``(B) Models to encourage the use of concurrent planning.
                    ``(C) The development of specialized units and expertise in 
                moving children toward adoption as a permanency goal.
                    ``(D) The development of risk assessment tools to facilitate 
                early identification of the children who will be at risk of harm 
                if returned home.
                    ``(E) Models to encourage the fast tracking of children who 
                have not attained 1 year of age into pre-adoptive placements.
                    ``(F) Development of programs that place children into pre-
                adoptive families without waiting for termination of parental 
                rights.
            ``(3) Targeting of technical assistance to the courts.--Not less 
        than 50 percent of any amount appropriated pursuant to paragraph (4) 
        shall be used to provide technical assistance to the courts.
            ``(4) Limitations on authorization of appropriations.--To carry out 
        this subsection, there are authorized to be appropriated to the 
        Secretary of Health and Human Services not to exceed $10,000,000 for 
        each of fiscal years 1998 through 2000.''.
    (b) Discretionary Cap Adjustment for Adoption Incentive Payments.--
            (1) Section 251 amendment.--Section 251(b)(2) of the Balanced Budget 
        and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(b)(2)), as 
        amended by section 10203(a)(4) of the Balanced Budget Act of 1997, is 
        amended by adding at the end the following new subparagraph:
                    ``(G) Adoption incentive payments.--Whenever a bill or joint 
                resolution making appropriations for fiscal year 1999, 2000, 
                2001, 2002, or 2003 is enacted that specifies an amount for 
                adoption incentive payments pursuant to this part for the 
                Department of Health and Human Services--
                            ``(i) the adjustments for new budget authority shall 
                        be the amounts of new budget authority provided in that 
                        measure for adoption incentive payments, but not to 
                        exceed $20,000,000; and
                            ``(ii) the adjustment for outlays shall be the 
                        additional outlays flowing from such amount.''.
            (2) Section 314 amendment.--Section 314(b) of the Congressional 
        Budget Act of 1974, as amended by section 10114(a) of the Balanced 
        Budget Act of 1997, is amended--
                    (A) by striking ``or'' at the end of paragraph (4);
                    (B) by striking the period at the end of paragraph (5) and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(6) in the case of an amount for adoption incentive payments (as 
        defined in section 251(b)(2)(G) of the Balanced Budget and Emergency 
        Deficit Control Act of 1985) for fiscal year 1999, 2000, 2001, 2002, or 
        2003 for the Department of Health and Human Services, an amount not to 
        exceed $20,000,000.''.

SEC. 202. ADOPTIONS ACROSS STATE AND COUNTY JURISDICTIONS.

    (a) State Plan for Child Welfare Services Requirement.--Section 422(b) of 
the Social Security Act (42 U.S.C. 622(b)) is amended--
            (1) in paragraph (10), by striking ``and'' at the end;
            (2) in paragraph (11), by striking the period and inserting ``; 
        and''; and
            (3) by adding at the end the following:
            ``(12) contain assurances that the State shall develop plans for the 
        effective use of cross-jurisdictional resources to facilitate timely 
        adoptive or permanent placements for waiting children.''.
    (b) Condition of Assistance.--Section 474 of such Act (42 U.S.C. 674) is 
amended by adding at the end the following:
    ``(e) Notwithstanding subsection (a), a State shall not be eligible for any 
payment under this section if the Secretary finds that, after the date of the 
enactment of this subsection, the State has--
            ``(1) denied or delayed the placement of a child for adoption when 
        an approved family is available outside of the jurisdiction with 
        responsibility for handling the case of the child; or
            ``(2) failed to grant an opportunity for a fair hearing, as 
        described in section 471(a)(12), to an individual whose allegation of a 
        violation of paragraph (1) of this subsection is denied by the State or 
        not acted upon by the State with reasonable promptness.''.
    (c) Study of Interjurisdictional Adoption Issues.--
            (1) In general.--The Comptroller General of the United States 
        shall--
                    (A) study and consider how to improve procedures and 
                policies to facilitate the timely and permanent adoptions of 
                children across State and county jurisdictions; and
                    (B) examine, at a minimum, interjurisdictional adoption 
                issues--
                            (i) concerning the recruitment of prospective 
                        adoptive families from other States and counties;
                            (ii) concerning the procedures to grant reciprocity 
                        to prospective adoptive family home studies from other 
                        States and counties;
                            (iii) arising from a review of the comity and full 
                        faith and credit provided to adoption decrees and 
                        termination of parental rights orders from other States; 
                        and
                            (iv) concerning the procedures related to the 
                        administration and implementation of the Interstate 
                        Compact on the Placement of Children.
            (2) Report to the congress.--Not later than 1 year after the date of 
        the enactment of this Act, the Comptroller General shall submit to the 
        appropriate committees of the Congress a report that includes--
                    (A) the results of the study conducted under paragraph (1); 
                and
                    (B) recommendations on how to improve procedures to 
                facilitate the interjurisdictional adoption of children, 
                including interstate and intercounty adoptions, so that children 
                will be assured timely and permanent placements.

SEC. 203. PERFORMANCE OF STATES IN PROTECTING CHILDREN.

    (a) Annual Report on State Performance.--Part E of title IV of the Social 
Security Act (42 U.S.C. 670 et seq.) is amended by adding at the end the 
following:

``SEC. 479A. ANNUAL REPORT.

    ``The Secretary, in consultation with Governors, State legislatures, State 
and local public officials responsible for administering child welfare programs, 
and child welfare advocates, shall--
            ``(1) develop a set of outcome measures (including length of stay in 
        foster care, number of foster care placements, and number of adoptions) 
        that can be used to assess the performance of States in operating child 
        protection and child welfare programs pursuant to parts B and E to 
        ensure the safety of children;
            ``(2) to the maximum extent possible, the outcome measures should be 
        developed from data available from the Adoption and Foster Care Analysis 
        and Reporting System;
            ``(3) develop a system for rating the performance of States with 
        respect to the outcome measures, and provide to the States an 
        explanation of the rating system and how scores are determined under the 
        rating system;
            ``(4) prescribe such regulations as may be necessary to ensure that 
        States provide to the Secretary the data necessary to determine State 
        performance with respect to each outcome measure, as a condition of the 
        State receiving funds under this part; and
            ``(5) on May 1, 1999, and annually thereafter, prepare and submit to 
        the Congress a report on the performance of each State on each outcome 
        measure, which shall examine the reasons for high performance and low 
        performance and, where possible, make recommendations as to how State 
        performance could be improved.''.
    (b) Development of Performance-Based Incentive System.--The Secretary of 
Health and Human Services, in consultation with State and local public officials 
responsible for administering child welfare programs and child welfare 
advocates, shall study, develop, and recommend to Congress an incentive system 
to provide payments under parts B and E of title IV of the Social Security Act 
(42 U.S.C. 620 et seq., 670 et seq.) to any State based on the State's 
performance under such a system. Such a system shall, to the extent the 
Secretary determines feasible and appropriate, be based on the annual report 
required by section 479A of the Social Security Act (as added by subsection (a) 
of this section) or on any proposed modifications of the annual report. Not 
later than 6 months after the date of the enactment of this Act, the Secretary 
shall submit to the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate a progress report on the feasibility, 
timetable, and consultation process for conducting such a study. Not later than 
15 months after such date of enactment, the Secretary shall submit to the 
Committee on Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate the final report on a performance-based incentive system. 
The report may include other recommendations for restructuring the program and 
payments under parts B and E of title IV of the Social Security Act.

                 TITLE III--ADDITIONAL IMPROVEMENTS AND REFORMS

SEC. 301. EXPANSION OF CHILD WELFARE DEMONSTRATION PROJECTS.

    (a) In General.--Section 1130(a) of the Social Security Act (42 U.S.C. 
1320a-9) is amended to read as follows:
    ``(a) Authority To Approve Demonstration Projects.--
            ``(1) In general.--The Secretary may authorize States to conduct 
        demonstration projects pursuant to this section which the Secretary 
        finds are likely to promote the objectives of part B or E of title IV.
            ``(2) Limitation.--The Secretary may authorize not more than 10 
        demonstration projects under paragraph (1) in each of fiscal years 1998 
        through 2002.
            ``(3) Certain types of proposals required to be considered.--
                    ``(A) If an appropriate application therefor is submitted, 
                the Secretary shall consider authorizing a demonstration project 
                which is designed to identify and address barriers that result 
                in delays to adoptive placements for children in foster care.
                    ``(B) If an appropriate application therefor is submitted, 
                the Secretary shall consider authorizing a demonstration project 
                which is designed to identify and address parental substance 
                abuse problems that endanger children and result in the 
                placement of children in foster care, including through the 
                placement of children with their parents in residential 
                treatment facilities (including residential treatment facilities 
                for post-partum depression) that are specifically designed to 
                serve parents and children together in order to promote family 
                reunification and that can ensure the health and safety of the 
                children in such placements.
                    ``(C) If an appropriate application therefor is submitted, 
                the Secretary shall consider authorizing a demonstration project 
                which is designed to address kinship care.
            ``(4) Limitation on eligibility.--The Secretary may not authorize a 
        State to conduct a demonstration project under this section if the State 
        fails to provide health insurance coverage to any child with special 
        needs (as determined under section 473(c)) for whom there is in effect 
        an adoption assistance agreement between a State and an adoptive parent 
        or parents.
            ``(5) Requirement to consider effect of project on terms and 
        conditions of certain court orders.--In considering an application to 
        conduct a demonstration project under this section that has been 
        submitted by a State in which there is in effect a court order 
        determining that the State's child welfare program has failed to comply 
        with the provisions of part B or E of title IV, or with the Constitution 
        of the United States, the Secretary shall take into consideration the 
        effect of approving the proposed project on the terms and conditions of 
        the court order related to the failure to comply.''.
    (b) Rule of Construction.--Nothing in the amendment made by subsection (a) 
shall be construed as affecting the terms and conditions of any demonstration 
project approved under section 1130 of the Social Security Act (42 U.S.C. 1320a-
9) before the date of the enactment of this Act.
    (c) Authority To Extend Duration of Demonstrations.--Section 1130(d) of such 
Act (42 U.S.C. 1320a-9(d)) is amended by inserting ``, unless in the judgment of 
the Secretary, the demonstration project should be allowed to continue'' before 
the period.

SEC. 302. PERMANENCY HEARINGS.

    Section 475(5)(C) of the Social Security Act (42 U.S.C. 675(5)(C)) is 
amended--
            (1) by striking ``dispositional'' and inserting ``permanency'';
            (2) by striking ``eighteen'' and inserting ``12'';
            (3) by striking ``original placement'' and inserting ``date the 
        child is considered to have entered foster care (as determined under 
        subparagraph (F))''; and
            (4) by striking ``future status of'' and all that follows through 
        ``long term basis)'' and inserting ``permanency plan for the child that 
        includes whether, and if applicable when, the child will be returned to 
        the parent, placed for adoption and the State will file a petition for 
        termination of parental rights, or referred for legal guardianship, or 
        (in cases where the State agency has documented to the State court a 
        compelling reason for determining that it would not be in the best 
        interests of the child to return home, be referred for termination of 
        parental rights, or be placed for adoption, with a fit and willing 
        relative, or with a legal guardian) placed in another planned permanent 
        living arrangement''.

SEC. 303. KINSHIP CARE.

    (a) Report.--
            (1) In general.--The Secretary of Health and Human Services shall--
                    (A) not later than June 1, 1998, convene the advisory panel 
                provided for in subsection (b)(1) and prepare and submit to the 
                advisory panel an initial report on the extent to which children 
                in foster care are placed in the care of a relative (in this 
                section referred to as ``kinship care''); and
                    (B) not later than June 1, 1999, submit to the Committee on 
                Ways and Means of the House of Representatives and the Committee 
                on Finance of the Senate a final report on the matter described 
                in subparagraph (A), which shall--
                            (i) be based on the comments submitted by the 
                        advisory panel pursuant to subsection (b)(2) and other 
                        information and considerations; and
                            (ii) include the policy recommendations of the 
                        Secretary with respect to the matter.
            (2) Required contents.--Each report required by paragraph (1) 
        shall--
                    (A) include, to the extent available for each State, 
                information on--
                            (i) the policy of the State regarding kinship care;
                            (ii) the characteristics of the kinship care 
                        providers (including age, income, ethnicity, and race, 
                        and the relationship of the kinship care providers to 
                        the children);
                            (iii) the characteristics of the household of such 
                        providers (such as number of other persons in the 
                        household and family composition);
                            (iv) how much access to the child is afforded to the 
                        parent from whom the child has been removed;
                            (v) the cost of, and source of funds for, kinship 
                        care (including any subsidies such as medicaid and cash 
                        assistance);
                            (vi) the permanency plan for the child and the 
                        actions being taken by the State to achieve the plan;
                            (vii) the services being provided to the parent from 
                        whom the child has been removed; and
                            (viii) the services being provided to the kinship 
                        care provider; and
                    (B) specifically note the circumstances or conditions under 
                which children enter kinship care.
    (b) Advisory Panel.--
            (1) Establishment.--The Secretary of Health and Human Services, in 
        consultation with the Chairman of the Committee on Ways and Means of the 
        House of Representatives and the Chairman of the Committee on Finance of 
        the Senate, shall convene an advisory panel which shall include parents, 
        foster parents, relative caregivers, former foster children, State and 
        local public officials responsible for administering child welfare 
        programs, private persons involved in the delivery of child welfare 
        services, representatives of tribal governments and tribal courts, 
        judges, and academic experts.
            (2) Duties.--The advisory panel convened pursuant to paragraph (1) 
        shall review the report prepared pursuant to subsection (a), and, not 
        later than October 1, 1998, submit to the Secretary comments on the 
        report.

SEC. 304. CLARIFICATION OF ELIGIBLE POPULATION FOR INDEPENDENT LIVING SERVICES.

    Section 477(a)(2)(A) of the Social Security Act (42 U.S.C. 677(a)(2)(A)) is 
amended by inserting ``(including children with respect to whom such payments 
are no longer being made because the child has accumulated assets, not to exceed 
$5,000, which are otherwise regarded as resources for purposes of determining 
eligibility for benefits under this part)'' before the comma.

SEC. 305. REAUTHORIZATION AND EXPANSION OF FAMILY PRESERVATION AND SUPPORT 
              SERVICES.

    (a) Reauthorization of Family Preservation and Support Services.--
            (1) In general.--Section 430(b) of the Social Security Act (42 
        U.S.C. 629(b)) is amended--
                    (A) in paragraph (4), by striking ``or'' at the end;
                    (B) in paragraph (5), by striking the period and inserting a 
                semicolon; and
                    (C) by adding at the end the following:
            ``(6) for fiscal year 1999, $275,000,000;
            ``(7) for fiscal year 2000, $295,000,000; and
            ``(8) for fiscal year 2001, $305,000,000.''.
            (2) Continuation of reservation of certain amounts.--Paragraphs (1) 
        and (2) of section 430(d) of the Social Security Act (42 U.S.C. 
        629(d)(1) and (2)) are each amended by striking ``and 1998'' and 
        inserting ``1998, 1999, 2000, and 2001''.
            (3) Conforming amendments.--Section 13712 of the Omnibus Budget 
        Reconciliation Act of 1993 (42 U.S.C. 670 note) is amended--
                    (A) in subsection (c), by striking ``1998'' each place it 
                appears and inserting ``2001''; and
                    (B) in subsection (d)(2), by striking ``and 1998'' and 
                inserting ``1998, 1999, 2000, and 2001''.
    (b) Expansion for Time-Limited Family Reunification Services and Adoption 
Promotion and Support Services.--
            (1) Additions to state plan.--Section 432 of the Social Security Act 
        (42 U.S.C. 629b) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (4), by striking ``and community-
                        based family support services'' and inserting ``, 
                        community-based family support services, time-limited 
                        family reunification services, and adoption promotion 
                        and support services,''; and
                            (ii) in paragraph (5)(A), by striking ``and 
                        community-based family support services'' and inserting 
                        ``, community-based family support services, time-
                        limited family reunification services, and adoption 
                        promotion and support services''; and
                    (B) in subsection (b)(1), by striking ``and family support'' 
                and inserting ``, family support, time-limited family 
                reunification, and adoption promotion and support''.
            (2) Definitions of time-limited family reunification services and 
        adoption promotion and support services.--Section 431(a) of the Social 
        Security Act (42 U.S.C. 629a(a)) is amended by adding at the end the 
        following:
            ``(7) Time-limited family reunification services.--
                    ``(A) In general.--The term `time-limited family 
                reunification services' means the services and activities 
                described in subparagraph (B) that are provided to a child that 
                is removed from the child's home and placed in a foster family 
                home or a child care institution and to the parents or primary 
                caregiver of such a child, in order to facilitate the 
                reunification of the child safely and appropriately within a 
                timely fashion, but only during the 15-month period that begins 
                on the date that the child, pursuant to section 475(5)(F), is 
                considered to have entered foster care.
                    ``(B) Services and activities described.--The services and 
                activities described in this subparagraph are the following:
                            ``(i) Individual, group, and family counseling.
                            ``(ii) Inpatient, residential, or outpatient 
                        substance abuse treatment services.
                            ``(iii) Mental health services.
                            ``(iv) Assistance to address domestic violence.
                            ``(v) Services designed to provide temporary child 
                        care and therapeutic services for families, including 
                        crisis nurseries.
                            ``(vi) Transportation to or from any of the services 
                        and activities described in this subparagraph.
            ``(8) Adoption promotion and support services.--The term `adoption 
        promotion and support services' means services and activities designed 
        to encourage more adoptions out of the foster care system, when 
        adoptions promote the best interests of children, including such 
        activities as pre-and post-adoptive services and activities designed to 
        expedite the adoption process and support adoptive families.''.
            (3) Additional conforming amendments.--
                    (A) Purposes.--Section 430(a) of the Social Security Act (42 
                U.S.C. 629(a)) is amended by striking ``and community-based 
                family support services'' and inserting ``, community-based 
                family support services, time-limited family reunification 
                services, and adoption promotion and support services''.
                    (B) Program title.--The heading of subpart 2 of part B of 
                title IV of the Social Security Act (42 U.S.C. 629 et seq.) is 
                amended to read as follows:

               ``Subpart 2--Promoting Safe and Stable Families''.

    (c) Emphasizing the Safety of the Child.--
            (1) Requiring assurances that the safety of children shall be of 
        paramount concern.--Section 432(a) of the Social Security Act (42 U.S.C. 
        629b(a)) is amended--
                    (A) by striking ``and'' at the end of paragraph (7);
                    (B) by striking the period at the end of paragraph (8); and
                    (C) by adding at the end the following:
            ``(9) contains assurances that in administering and conducting 
        service programs under the plan, the safety of the children to be served 
        shall be of paramount concern.''.
            (2) Definitions of family preservation and family support 
        services.--Section 431(a) of the Social Security Act (42 U.S.C. 629a(a)) 
        is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by inserting ``safe and'' 
                        before ``appropriate'' each place it appears; and
                            (ii) in subparagraph (B), by inserting ``safely'' 
                        after ``remain''; and
                    (B) in paragraph (2)--
                            (i) by inserting ``safety and'' before ``well-
                        being''; and
                            (ii) by striking ``stable'' and inserting ``safe, 
                        stable,''.
    (d) Clarification of Maintenance of Effort Requirement.--
            (1) Definition of non-federal funds.--Section 431(a) of the Social 
        Security Act (42 U.S.C. 629a(a)), as amended by subsection (b)(2), is 
        amended by adding at the end the following:
            ``(9) Non-federal funds.--The term `non-Federal funds' means State 
        funds, or at the option of a State, State and local funds.''.
            (2) Effective date.--The amendment made by paragraph (1) takes 
        effect as if included in the enactment of section 13711 of the Omnibus 
        Budget Reconciliation Act of 1993 (Public Law 103-33; 107 Stat. 649).

SEC. 306. HEALTH INSURANCE COVERAGE FOR CHILDREN WITH SPECIAL NEEDS.

    Section 471(a) of the Social Security Act (42 U.S.C. 671(a)), as amended by 
section 106, is amended--
            (1) in paragraph (19), by striking ``and'' at the end;
            (2) in paragraph (20), by striking the period and inserting ``; 
        and''; and
            (3) by adding at the end the following:
            ``(21) provides for health insurance coverage (including, at State 
        option, through the program under the State plan approved under title 
        XIX) for any child who has been determined to be a child with special 
        needs, for whom there is in effect an adoption assistance agreement 
        (other than an agreement under this part) between the State and an 
        adoptive parent or parents, and who the State has determined cannot be 
        placed with an adoptive parent or parents without medical assistance 
        because such child has special needs for medical, mental health, or 
        rehabilitative care, and that with respect to the provision of such 
        health insurance coverage--
                    ``(A) such coverage may be provided through 1 or more State 
                medical assistance programs;
                    ``(B) the State, in providing such coverage, shall ensure 
                that the medical benefits, including mental health benefits, 
                provided are of the same type and kind as those that would be 
                provided for children by the State under title XIX;
                    ``(C) in the event that the State provides such coverage 
                through a State medical assistance program other than the 
                program under title XIX, and the State exceeds its funding for 
                services under such other program, any such child shall be 
                deemed to be receiving aid or assistance under the State plan 
                under this part for purposes of section 1902(a)(10)(A)(i)(I); 
                and
                    ``(D) in determining cost-sharing requirements, the State 
                shall take into consideration the circumstances of the adopting 
                parent or parents and the needs of the child being adopted 
                consistent, to the extent coverage is provided through a State 
                medical assistance program, with the rules under such 
                program.''.

SEC. 307. CONTINUATION OF ELIGIBILITY FOR ADOPTION ASSISTANCE PAYMENTS ON BEHALF 
              OF CHILDREN WITH SPECIAL NEEDS WHOSE INITIAL ADOPTION HAS BEEN 
              DISSOLVED.

    (a) Continuation of Eligibility.--Section 473(a)(2) of the Social Security 
Act (42 U.S.C. 673(a)(2)) is amended by adding at the end the following: ``Any 
child who meets the requirements of subparagraph (C), who was determined 
eligible for adoption assistance payments under this part with respect to a 
prior adoption, who is available for adoption because the prior adoption has 
been dissolved and the parental rights of the adoptive parents have been 
terminated or because the child's adoptive parents have died, and who fails to 
meet the requirements of subparagraphs (A) and (B) but would meet such 
requirements if the child were treated as if the child were in the same 
financial and other circumstances the child was in the last time the child was 
determined eligible for adoption assistance payments under this part and the 
prior adoption were treated as never having occurred, shall be treated as 
meeting the requirements of this paragraph for purposes of paragraph 
(1)(B)(ii).''.
    (b) Applicability.--The amendment made by subsection (a) shall only apply to 
children who are adopted on or after October 1, 1997.

SEC. 308. STATE STANDARDS TO ENSURE QUALITY SERVICES FOR CHILDREN IN FOSTER 
              CARE.

    Section 471(a) of the Social Security Act (42 U.S.C. 671(a)), as amended by 
sections 106 and 306, is amended--
            (1) in paragraph (20), by striking ``and'' at the end;
            (2) in paragraph (21), by striking the period and inserting ``; 
        and''; and
            (3) by adding at the end the following:
            ``(22) provides that, not later than January 1, 1999, the State 
        shall develop and implement standards to ensure that children in foster 
        care placements in public or private agencies are provided quality 
        services that protect the safety and health of the children.''.

                             TITLE IV--MISCELLANEOUS

SEC. 401. PRESERVATION OF REASONABLE PARENTING.

    Nothing in this Act is intended to disrupt the family unnecessarily or to 
intrude inappropriately into family life, to prohibit the use of reasonable 
methods of parental discipline, or to prescribe a particular method of 
parenting.

SEC. 402. REPORTING REQUIREMENTS.

    Any information required to be reported under this Act shall be supplied to 
the Secretary of Health and Human Services through data meeting the requirements 
of the Adoption and Foster Care Analysis and Reporting System established 
pursuant to section 479 of the Social Security Act (42 U.S.C. 679), to the 
extent such data is available under that system. The Secretary shall make such 
modifications to regulations issued under section 479 of such Act with respect 
to the Adoption and Foster Care Analysis and Reporting System as may be 
necessary to allow States to obtain data that meets the requirements of such 
system in order to satisfy the reporting requirements of this Act.

SEC. 403. SENSE OF CONGRESS REGARDING STANDBY GUARDIANSHIP.

    It is the sense of Congress that the States should have in effect laws and 
procedures that permit any parent who is chronically ill or near death, without 
surrendering parental rights, to designate a standby guardian for the parent's 
minor children, whose authority would take effect upon--
            (1) the death of the parent;
            (2) the mental incapacity of the parent; or
            (3) the physical debilitation and consent of the parent.

SEC. 404. TEMPORARY ADJUSTMENT OF CONTINGENCY FUND FOR STATE WELFARE PROGRAMS.

    (a) Reduction of Appropriation.--Section 403(b)(2) of the Social Security 
Act (42 U.S.C. 603(b)(2)) is amended by inserting ``, reduced by the sum of the 
dollar amounts specified in paragraph (6)(C)(ii)'' before the period.
    (b) Increase in State Remittances.--Section 403(b)(6) of such Act (42 U.S.C. 
603(b)(6)) is amended by adding at the end the following:
                    ``(C) Adjustment of state remittances.--
                            ``(i) In general.--The amount otherwise required by 
                        subparagraph (A) to be remitted by a State for a fiscal 
                        year shall be increased by the lesser of--
                                    ``(I) the total adjustment for the fiscal 
                                year, multiplied by the adjustment percentage 
                                for the State for the fiscal year; or
                                    ``(II) the unadjusted net payment to the 
                                State for the fiscal year.
                            ``(ii) Total adjustment.--As used in clause (i), the 
                        term `total adjustment' means--
                                    ``(I) in the case of fiscal year 1998, 
                                $2,000,000;
                                    ``(II) in the case of fiscal year 1999, 
                                $9,000,000;
                                    ``(III) in the case of fiscal year 2000, 
                                $16,000,000; and
                                    ``(IV) in the case of fiscal year 2001, 
                                $13,000,000.
                            ``(iii) Adjustment percentage.--As used in clause 
                        (i), the term `adjustment percentage' means, with 
                        respect to a State and a fiscal year--
                                    ``(I) the unadjusted net payment to the 
                                State for the fiscal year; divided by
                                    ``(II) the sum of the unadjusted net 
                                payments to all States for the fiscal year.
                            ``(iv) Unadjusted net payment.--As used in this 
                        subparagraph, the term, `unadjusted net payment' means 
                        with respect to a State and a fiscal year--
                                    ``(I) the total amount paid to the State 
                                under paragraph (3) in the fiscal year; minus
                                    ``(II) the amount that, in the absence of 
                                this subparagraph, would be required by 
                                subparagraph (A) or by section 409(a)(10) to be 
                                remitted by the State in respect of the 
                                payment.''.
    (c) Recommendations for Improving the Operation of the Contingency Fund.--
Not later than March 1, 1998, the Secretary of Health and Human Services shall 
make recommendations to the Congress for improving the operation of the 
Contingency Fund for State Welfare Programs.

SEC. 405. COORDINATION OF SUBSTANCE ABUSE AND CHILD PROTECTION SERVICES.

    Within 1 year after the date of the enactment of this Act, the Secretary of 
Health and Human Services, based on information from the Substance Abuse and 
Mental Health Services Administration and the Administration for Children and 
Families in the Department of Health of Human Services, shall prepare and submit 
to the Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report which describes the extent and scope 
of the problem of substance abuse in the child welfare population, the types of 
services provided to such population, and the outcomes resulting from the 
provision of such services to such population. The report shall include 
recommendations for any legislation that may be needed to improve coordination 
in providing such services to such population.

SEC. 406. PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS.

    (a) In General.--It is the sense of the Congress that, to the greatest 
extent practicable, all equipment and products purchased with funds made 
available under this Act should be American-made.
    (b) Notice Requirement.--In providing financial assistance to, or entering 
into any contract with, any entity using funds made available under this Act, 
the head of each Federal agency, to the greatest extent practicable, shall 
provide to such entity a notice describing the statement made in subsection (a) 
by the Congress.

                             TITLE V--EFFECTIVE DATE

SEC. 501. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, the amendments 
made by this Act take effect on the date of enactment of this Act.
    (b) Delay Permitted if State Legislation Required.--In the case of a State 
plan under part B or E of title IV of the Social Security Act which the 
Secretary of Health and Human Services determines requires State legislation 
(other than legislation appropriating funds) in order for the plan to meet the 
additional requirements imposed by the amendments made by this Act, the State 
plan shall not be regarded as failing to comply with the requirements of such 
part solely on the basis of the failure of the plan to meet such additional 
requirements before the first day of the first calendar quarter beginning after 
the close of the first regular session of the State legislature that begins 
after the date of enactment of this Act. For purposes of the previous sentence, 
in the case of a State that has a 2-year legislative session, each year of such 
session shall be deemed to be a separate regular session of the State 
legislature.
            Attest:

                                                                          Clerk.
```