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SEC. 105. ALLOCATION OF COMMODITIES TO STATES.
(a) In each fiscal year, except for those commodities
purchased under section 110, the Secretary shall allocate
as follows:
(1) 60 percent of the such total value of com-
modities shall be allocated in a manner such that the
value of commodities allocated to each State bears
the same ratio to 60 percent of such total value as
the number of persons in households within the
State having incomes below the poverty line bears to
the total number of persons in households within all
States having incomes below such poverty line. Each
State shall receive the value of commodities allocated
under this paragraph.
(2) 40 percent of such total value of commod-
ities shall be allocated in a manner such that the
value of commodities allocated to each State bears
the same ratio to 40 percent of such total value as
the average monthly number of unemployed persons
within the State bears to the average monthly num-
ber of unemployed persons within all States during
the same fiscal year. Each State shall receive the
value of commodities allocated to the State under
this paragraph.
(b)(1) The Secretary shall notify each State of the
amount of commodities that such State is allotted to re-
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ceive under subsection (a) or this subsection, if applicable.
Each State shall promptly notify the Secretary if such
State determines that it will not accept any or all of the
commodities made available under such allocation. On
such a notification by a State, the Secretary shall reallo-
cate and distribute such commodities as the Secretary
deems appropriate and equitable. The Secretary shall fur-
ther establish procedures to permit States to decline to
receive portions of such allocation during each fiscal year
as the State determines is appropriate and the Secretary
shall reallocate and distribute such allocation as the Sec-
retary deems appropriate and equitable.
(2) In the event of any drought, flood, hurricane, or
other natural disaster affecting substantial numbers of
persons in a State, county, or parish, the Secretary may
request that States unaffected by such a disaster consider
assisting affected States by allowing the Secretary to re-
allocate commodities from such unaffected State to States
containing areas adversely affected by the disaster.
(c) Purchases and distributions of commodities under
this title shall be made by the Secretary at such times
and under such conditions as the Secretary determines ap-
propriate within each fiscal year. All commodities so pur-
chased and distributed for each such fiscal year shall be
delivered at reasonable intervals to States based on the
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allocations and reallocations made under subsections (a)
and (b), and purchases made to carry out section 110,
before the end of such fiscal year.
SEC. 106. PRIORITY SYSTEM FOR STATE DISTRIBUTION OF
COMMODITIES.
(a) In distributing commodities under this title, ex-
cluding those commodities distributed in accordance with
section 110, the State agency, under procedures deter-
mined by the State agency, shall offer, or otherwise make
available, its full allocation of commodities for distribution
to emergency feeding organizations.
(b) If the State agency determines that the State will
not exhaust its allocation of commodities under this title
through distribution to organizations referred to in sub-
section (a), its remaining allocation of commodities under
this title shall be distributed to charitable institutions de-
scribed in section 113(3) not receiving commodities under
subsection (a).
(c) If the State agency determines that the State will
not exhaust its allocation of commodities under this title
through distribution to organizations referred to in sub-
sections (a) and (b), its remaining allocation of commod-
ities under this title shall be distributed to any eligible
recipient agency not receiving commodities under sub-
sections (a) and (b).
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SEC. 107. INITIAL PROCESSING COSTS.
The Secretary may use funds of the Commodity
Credit Corporation or funds available under section 32 of
the Act of August 24, 1935 (7 U.S.C. 612c), to pay the
costs of initial processing and packaging of commodities
to be distributed under the program established under this
title into forms and in quantities suitable, as determined
by the Secretary, for use by the individual households or
eligible recipient agencies, as applicable. The Secretary
may pay such costs in the form of Corporation-owned com-
modities equal in value to such costs. The Secretary shall
ensure that any such payments in kind will not displace
commercial sales of such commodities.
SEC. 108. ASSURANCES; ANTICIPATED USE.
(a) The Secretary shall take such precautions as the
Secretary deems necessary to ensure that commodities
made available under this title will not displace commer-
cial sales of such commodities or the products thereof. The
Secretary shall submit to Congress by December 31, 1997,
and not less than every two years thereafter, a report as
to whether and to what extent such displacements or sub-
stitutions are occurring.
(b) The Secretary shall determine that commodities
provided under this title shall be purchased and distrib-
uted only in quantities that can be consumed without
waste. No eligible recipient agency may receive commod-
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ities under this title in excess of anticipated use, based
on inventory records and controls, or in excess of its ability
to accept and store such commodities.
SEC. 109. AUTHORIZATION OF APPROPRIATIONS.
(a) PURCHASE OF COMMODITIES.—To carry out this
title, 
there 
are 
authorized 
to 
be 
appropriated
$260,000,000 for each of the fiscal years 1996 through
2000 to purchase, process and distribute commodities to
the States in accordance with this title.
(b) ADMINISTRATIVE FUNDS.—(1) There are author-
ized to be appropriated $40,000,000 for each of the fiscal
years 1996 through 2000 for the Secretary to make avail-
able to the States for State and local payments for costs
associated with the distribution of commodities by eligible
recipient agencies under this title, excluding costs associ-
ated with the distribution of those commodities distributed
under section 110(b). Funds appropriated under this
paragraph for any fiscal year shall be allocated to the
States on an advance basis dividing such funds among the
States in the same proportions as the commodities distrib-
uted under this title for such fiscal year are allocated
among the States. If a State agency is unable to use all
of the funds so allocated to it, the Secretary shall reallo-
cate such unused funds among the other States.
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(2)(A) Each State shall make available in each fiscal
year to eligible recipient agencies in the State not less than
40 percent of the funds received by the State under para-
graph (1) for such fiscal year, as necessary to pay for,
or provide advance payments to cover, the direct expenses
of eligible recipient agencies for distributing commodities
to needy persons, but only to the extent such expenses are
actually so incurred by such recipient agencies.
(B) As used in this paragraph, the term ‘‘direct ex-
penses’’ includes—
(i) costs of transporting, storing, handling, re-
packaging, processing, and distributing commodities
incurred after such commodities are received by eli-
gible recipient agencies;
(ii) costs associated with determinations of eli-
gibility, verification, and documentation;
(iii) costs of providing information to persons
receiving commodities under this title concerning the
appropriate storage and preparation of such com-
modities; and
(iv) costs of recordkeeping, auditing, and other
administrative procedures required for participation
in the program under this title.
(C) If a State makes a payment, using State funds,
to cover direct expenses of eligible recipient agencies, the
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amount of such payment shall be counted toward the
amount a State must make available for direct expenses
of recipient agencies under this paragraph.
(3) States to which funds are allocated for a fiscal
year under this subsection shall submit financial reports
to the Secretary, on a regular basis, as to the use of such
funds. No such funds may be used by States or eligible
recipient agencies for costs other than those involved in
covering the expenses related to the distribution of com-
modities by eligible recipient agencies.
(4)(A) Except as provided in subparagraph (B), to
be eligible to receive funds under this subsection, a State
shall provide in cash or in kind (according to procedures
approved by the Secretary for certifying these in-kind con-
tributions) from non-Federal sources a contribution equal
to the difference between—
(i) the amount of such funds so received; and
(ii) any part of the amount allocated to the
State and paid by the State—
(I) to eligible recipient agencies; or
(II) for the direct expenses of such recipi-
ent agencies;
for use in carrying out this title.
(B) Funds allocated to a State under this section
may, upon State request, be allocated before States satisfy
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the matching requirement specified in subparagraph (A),
based on the estimated contribution required. The Sec-
retary shall periodically reconcile estimated and actual
contributions and adjust allocations to the State to correct
for overpayments and underpayments.
(C) Any funds distributed for administrative costs
under section 110(b) shall not be covered by this para-
graph.
(5) States may not charge for commodities made
available to eligible recipient agencies, and may not pass
on to such recipient agencies the cost of any matching re-
quirements, under this title.
(c) The value of the commodities made available
under subsection (c) and (d) of section 102, and the funds
of the Corporation used to pay the costs of initial process-
ing, packaging (including forms suitable for home use),
and delivering commodities to the States shall not be
charged against appropriations authorized by this section.
SEC. 110. COMMODITY SUPPLEMENTAL FOOD PROGRAM.
(a) From the funds appropriated under section
109(a), $94,500,000 shall be used for each fiscal year to
purchase and distribute commodities to supplemental feed-
ing programs serving women, infants, and children or el-
derly individuals (hereinafter in this section referred to as
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the ‘‘commodity supplemental food program’’), or serving
both groups wherever located.
(b) Not more than 20 percent of the funds made
available under subsection (a) shall be made available to
the States for State and local payments of administrative
costs associated with the distribution of commodities by
eligible recipient agencies under this section. Administra-
tive costs for the purposes of the commodity supplemental
food program shall include, but not be limited to, expenses
for information and referral, operation, monitoring, nutri-
tion education, start-up costs, and general administration,
including staff, warehouse and transportation personnel,
insurance, and administration of the State or local office.
(c)(1) During each fiscal year the commodity supple-
mental food program is in operation, the types, varieties,
and amounts of commodities to be purchased under this
section shall be determined by the Secretary, but, if the
Secretary proposes to make any significant changes in the
types, varieties or amounts from those that were available
or were planned at the beginning of the fiscal year the
Secretary shall report such changes before implementation
to the Committee on Agriculture of the House of Rep-
resentatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate.
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(2) Notwithstanding any other provision of law, the
Commodity Credit Corporation shall, to the extent that
the Commodity Credit Corporation inventory levels per-
mit, provide not less than 9,000,000 pounds of cheese and
not less than 4,000,000 pounds of nonfat dry milk in each
of the fiscal years 1996 through 2000 to the Secretary.
The Secretary shall use such amounts of cheese and non-
fat dry milk to carry out the commodity supplemental food
program before the end of the fiscal year in which such
amounts are provided.
(d) The Secretary shall, in each fiscal year, approve
applications of additional sites for the program, including
sites that serve only elderly persons, in areas in which the
program currently does not operate, to the full extent that
applications can be approved within the appropriations
available for the program for the fiscal year and without
reducing actual participation levels (including participa-
tion of elderly persons under subsection (e)) in areas in
which the program is in effect.
(e) If a local agency that administers the commodity
supplemental food program determines that the amount
of funds made available to the agency to carry out this
section exceeds the amount of funds necessary to provide
assistance under such program to women, infants, and
children, the agency, with the approval of the Secretary,
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may permit low-income elderly persons (as defined by the
Secretary) to participate in and be served by such pro-
gram.
(f)(1) If it is necessary for the Secretary to pay a
significantly higher than expected price for one or more
types of commodities purchased under this section, the
Secretary shall promptly determine whether the price is
likely to cause the number of persons that can be served
in the program in a fiscal year to decline.
(2) If the Secretary determines that such a decline
would occur, the Secretary shall promptly notify the State
agencies charged with operating the program of the de-
cline and shall ensure that a State agency notify all local
agencies operating the program in the State of the decline.
(g) Commodities distributed to States pursuant to
this section shall not be considered in determining the
commodity allocation to each State or priority of distribu-
tion under sections 105 and 106.
SEC. 111. COMMODITIES NOT INCOME.
Notwithstanding any other provision of law, commod-
ities distributed under this title shall not be considered
income or resources for any purposes under any Federal,
State, or local law.
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SEC. 
112. 
PROHIBITION 
AGAINST 
CERTAIN 
STATE
CHARGES.
Whenever a commodity is made available without
charge or credit under any nutrition program adminis-
tered by the Secretary for distribution within the States
to eligible recipient agencies, the State may not charge re-
cipient agencies any amount that is in excess of the State’s
direct costs of storing, and transporting to recipient agen-
cies the commodities minus any amount the Secretary pro-
vides the State for the costs of storing and transporting
such commodities.
SEC. 113. DEFINITIONS.
As used in this title:
(1) The term ‘‘average monthly number of un-
employed persons’’ means the average monthly num-
ber of unemployed persons within a State in the
most recent fiscal year for which such information is
available as determined by the Bureau of Labor Sta-
tistics of the Department of Labor.
(2) The term ‘‘elderly persons’’ means individ-
uals sixty years of age or older.
(3) The term ‘‘eligible recipient agency’’ means
a public or nonprofit organization that admin-
isters—
(A) an institution providing commodities to
supplemental feeding programs serving women,
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infants, and children or serving elderly persons,
or serving both groups;
(B) an emergency feeding organization;
(C) a charitable institution (including hos-
pitals and retirement homes and excluding
penal institutions) to the extent that such insti-
tution serves needy persons;
(D) a summer camp for children, or a
child nutrition program providing food service;
(E) a nutrition project operating under the
Older Americans Act of 1965, including such
projects that operate a congregate nutrition site
and project that provides home-delivered meals;
or
(F) a disaster relief program;
and that have been designated by the appropriate
State agency, or by the Secretary, and approved by
the Secretary for participation in the program estab-
lished under this title.
(4) The term ‘‘emergency feeding organization’’
means a public or nonprofit organization that administers
activities and projects (including the activities and
projects of a charitable institution, a food bank, a food
pantry, a hunger relief center, a soup kitchen, or a similar
public or private nonprofit eligible recipient agency) pro-
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viding nutrition assistance to relieve situations of emer-
gency and distress through the provision of food to needy
persons, including low-income and unemployed persons.
(5) The term ‘‘food bank’’ means a public and
charitable institution that maintains an established
operation involving the provision of food or edible
commodities, or the products thereof, to food pan-
tries, 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
persons on a regular basis.
(6) The term ‘‘food pantry’’ means a public or
private nonprofit organization that distributes food
to low-income and unemployed households, including
food from sources other than the Department of Ag-
riculture, to relieve situations of emergency and dis-
tress.
(7) The term ‘‘needy persons’’ means—
(A) individuals who have low incomes or
who are unemployed, as determined by the
State (in no event shall the income of such indi-
vidual or household exceed 185 percent of the
poverty line);
(B) households certified as eligible to par-
ticipate in the food stamp program under the
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Food Stamp Act of 1977 (7 U.S.C. 2011 et
seq.); or
(C) individuals or households participating
in any other Federal, or federally assisted,
means-tested program.
(8) The term ‘‘poverty line’’ has the same
meaning given such term in section 673(2) of the
Community Services Block Grant Act (42 U.S.C.
9902(2)).
(9) The term ‘‘soup kitchen’’ means a public
and charitable institution that, as integral part of its
normal activities, maintains an established feeding
operation to provide food to needy homeless persons
on a regular basis.
SEC. 114. REGULATIONS.
(a) The Secretary shall issue regulations with one
hundred and twenty days to implement this title.
(b) In administering this subtitle, the Secretary shall
minimize, to the maximum extent practicable, the regu-
latory, recordkeeping, and paperwork requirements im-
posed on eligible recipient agencies.
(c) The Secretary shall as early as feasible but not
later than the beginning of each fiscal year, publish in the
Federal Register a nonbinding estimate of the types and
quantities of commodities that the Secretary anticipates
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are likely to be made available under the commodity dis-
tribution program under this title during the fiscal year.
(d) The regulations issued by the Secretary under
this section shall include provisions that set standards
with respect to liability for commodity losses for the com-
modities distributed under this title in situations in which
there is no evidence of negligence or fraud, and conditions
for payment to cover such losses. Such provisions shall
take into consideration the special needs and cir-
cumstances of eligible recipient agencies.
SEC. 115. FINALITY OF DETERMINATIONS.
Determinations made by the Secretary under this
title and the facts constituting the basis for any donation
of commodities under this title, or the amount thereof,
when officially determined in conformity with the applica-
ble regulations prescribed by the Secretary, shall be final
and conclusive and shall not be reviewable by any other
officer or agency of the Government.
SEC. 116. RELATIONSHIP TO OTHER PROGRAMS.
(a) Section 4(b) of the Food Stamp Act of 1977 (7
U.S.C. 2013(b)) shall not apply with respect to the dis-
tribution of commodities under this title.
(b) Except as otherwise provided in section 107, none
of the commodities distributed under this title shall be sold
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or otherwise disposed of in commercial channels in any
form.
SEC. 117. SETTLEMENT AND ADJUSTMENT OF CLAIMS.
(a) The Secretary, or a designee of the Secretary,
shall have the authority to—
(1) determine the amount of, settle, and adjust
any claim arising under this title; and
(2) waive such a claim if the Secretary deter-
mines that to do so will serve the purposes of this
title.
(b) Nothing contained in this section shall be con-
strued to diminish the authority of the Attorney General
of the United States under section 516 of title 28, United
States Code, to conduct litigation on behalf of the United
States.
SEC. 118. REPEALERS; AMENDMENTS.
(a) The Emergency Food Assistance Act of 1983 (7
U.S.C. 612c note) is repealed.
(b) AMENDMENTS.—
(1) The Hunger Prevention Act of 1988 (7
U.S.C. 612c note) is amended—
(A) by striking section 110; and
(B) by striking section 502.
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(2) The Commodity Distribution Reform Act
and WIC Amendments of 1987 (7 U.S.C. 612c note)
is amended by striking section 4.
(3) The Charitable Assistance and Food Bank
Act of 1987 (7 U.S.C. 612c note) is amended by
striking section 3.
(4) The Food Security Act of 1985 (7 U.S.C.
612c note) is amended—
(A) by striking section 1562(a) and section
1571; and
(B) in section 1562(d), by striking ‘‘sec-
tion 4 of the Agricultural and Consumer Pro-
tection Act of 1973’’ and inserting ‘‘section 110
of the American Commodity Distribution Act of
1995’’.
(5) The Agricultural and Consumer Protection
Act of 1973 (7 U.S.C. 612c note) is amended—
(A) in section 4(a), by striking ‘‘institu-
tions (including hospitals and facilities caring
for needy infants and children), supplemental
feeding programs serving women, infants and
children or elderly persons, or both, wherever
located, disaster areas, summer camps for chil-
dren,’’;
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(B) in subsection 4(c), by striking ‘‘the
Emergency Food Assistance Act of 1983’’ and
inserting ‘‘the Commodity Distribution Act of
1995’’; and
(C) by striking section 5.
(6) The Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 612c note) is amended
by striking section 1773(f).
TITLE II—SIMPLIFICATION AND
REFORM 
OF 
FOOD 
STAMP
PROGRAM
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Food Stamp Sim-
plification and Reform Act of 1995’’.
Subtitle A—Simplified Food Stamp
Program and State Assistance
for Needy Families
SEC. 202. ESTABLISHMENT OF SIMPLIFIED FOOD STAMP
PROGRAM 
AND 
STATE 
ASSISTANCE 
FOR
NEEDY FAMILIES PROGRAM.
Section 4(a) of the Food Stamp Act of 1977 (7
U.S.C. 2013(a)) is amended—
(1) in the first sentence, by striking, by striking
‘‘Act,’’ and inserting ‘‘Act—’’;
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and benefits shall be determined under the rules and pro-
cedures established by the State or political subdivision
under the Temporary Assistance for Needy Families block
grant or this Act, subject to subsection (h).
‘‘(b) In approving a State plan to carry out such pro-
gram, the Secretary shall certify that the average food
stamp benefit level per household participating in the pro-
gram under this section for the State or political subdivi-
sion in which such program is in operation is not expected
to exceed the average level of food stamp benefits per
household that received benefits under part A of title IV
of the Social Security Act (42 U.S.C. 601 et seq.) in such
area in the preceding fiscal year, adjusted for any changes
in the thrifty food plan under section 3(o). The Secretary
shall compute the permissible average level of benefits per
household each year for each State or political subdivision
in which such program is in operation and may require
a State to report any information necessary to make such
computation.
‘‘(c) Where average allotments provided by the State
under such program exceed the permissible level of bene-
fits per household for the State or political subdivision in
which the program is in operation, the State or political
subdivision shall repay the Secretary the value of the allot-
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ments in excess of the average level of benefits per house-
hold in the State or political subdivision.
‘‘(d) The administrative costs for households in such
program shall be shared in accordance with section 16,
except that the Secretary shall pay an amount equal to
60 percent of all these administrative costs.
‘‘(e)(1) A household against which a penalty is im-
posed (including disqualification) for noncompliance with
the program established by the State under the Tem-
porary Assistance for Needy Families block grant, except
as provided in paragraph (2), shall have the same penalty
imposed against it (including disqualification) in the pro-
gram administered under this section.
‘‘(2) Where the penalty for noncompliance with the
program established by the State under the Temporary
Assistance for Needy Families block grant is a reduction
in benefits in such program, the household shall not re-
ceive an increased allotment as a result of a decrease in
the household’s income (as determined by the State under
this section) to the extent that the decrease is the result
of such penalty.
‘‘(3) Any household disqualified from this program
under this subsection may, after such disqualification pe-
riod has expired, reapply for food stamp benefits under
this Act and shall be treated as a new applicant.
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‘‘(f) Where a State or political subdivision, at its op-
tion, operates a program under this section for households
that include any members who do not participate in the
program established by the State under the Temporary
Assistance for Needy Families block grant, the Secretary
shall ensure that the State plan provides that household
eligibility shall be determined under this Act and benefits
may be determined under the rules and procedures estab-
lished by the State under the Temporary Assistance for
Needy Families block grant or this Act, and provides that
an equitable distribution of benefits among all household
members.
‘‘(g)(1) At the election of the State, the State may
use the sums that would otherwise be allotted to house-
holds participating under this section for the purposes of
paying such households cash assistance where a member
of such household is employed as provided by paragraph
(2).
‘‘(2) The State, in electing to provide cash assistance
under paragraph (1), at a minimum shall require—
‘‘(A) the household has earned income of at
least $350 per month;
‘‘(B) the source of such earned income is a pri-
vate sector employer, as determined by the State;
and
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‘‘(C) the household has received such earned in-
come from the same employer for three consecutive
months.
‘‘(3) If a State that makes the election described in
paragraph (1) informs the Secretary of the households re-
ceiving cash assistance under this subsection that partici-
pate in the program under this subsection—
‘‘(A) the Secretary shall pay to the State an
amount equal to the value of the allotment that the
household is eligible to receive under this subsection;
‘‘(B) the State shall provide such amount to the
household as cash assistance in lieu of the allotment
that the household would receive but for the oper-
ation of this subsection;
‘‘(C) the amount of cash assistance received
under this subsection shall be considered as the
value of an allotment provided to the household; and
‘‘(D) the household shall not receive an allot-
ment from the State agency for the period during
which the member continues to receive cash assist-
ance under this subsection.
‘‘(4)(A) A State that makes the election in paragraph
(1) shall increase the cash benefits provided to households
under this subsection to compensate for any State or local
sales tax that may be collected on purchases of food by
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any household receiving cash benefits under this sub-
section, or the Secretary determines on the basis of infor-
mation provided by the State agency that the increase is
unnecessary on the basis of the limited nature of the items
subject to the State or local sales tax; and
‘‘(B) the State pays the cost of any increased allot-
ment.
‘‘(5) After the operation of the program under this
subsection for two years, the State shall conduct and pro-
vide the Committee on Agriculture of the House of Rep-
resentatives, the Committee on Agriculture, Nutrition, and
Forestry of the Senate, and the Secretary a written eval-
uation on the impact of cash assistance under this sub-
section.
‘‘(h) Notwithstanding the provisions of this Act, in
operating such program, the State or political subdivisions
may follow the rules and procedures established by the
State or political subdivisions under the Temporary As-
sistance for Needy Families block grant or this Act, except
that the State or political subdivisions shall follow—
‘‘(1) section 7 (a)–(g), issuance and use of cou-
pons;
‘‘(2) section 8(a), value of allotment, except
that the household’s income may be determined
under the program established by the State under
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the Temporary Assistance for Needy Families block
grant;
‘‘(3) section 8(b), allotment not considered in-
come or resources;
‘‘(4) section 11 (a), (c)–(d), and (n), adminis-
tration;
‘‘(5) under section 11(e), the State shall follow
paragraphs (8), (12), (17), (19), (21), (26)–(27);
‘‘(6) section 11(e)(10) or a comparable provi-
sion established by the State under the Temporary
Assistance for Needy Families block grant; and
‘‘(7) section 16, administrative cost-sharing and
quality control, except as provided in subsection
(c).’’.
(b) Section 11(e) of the Act (7 U.S.C. 2020(e)) is
amended inserting at the end the following new para-
graph:
‘‘(26) the plans of the State agency, at the elec-
tion of the State, for operating a program under sec-
tion (4)(a)(2), including—
‘‘(A) the rules and procedures to be fol-
lowed by the State to determine benefits;
‘‘(B) whether the program operated by the
State under section 4(a)(2) will include house-
holds including members who do not participate
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in the program established by the State under
the Temporary Assistance for Needy Families
block grant; and
‘‘(C) the method by which the State or po-
litical subdivision will carry out a quality con-
trol system under section 16(c).’’.
SEC. 204. CONFORMING AMENDMENTS.
(a) Section 8 of the Act (7 U.S.C. 2017) is amended
by striking subsection (e).
(b) Section 17 of the Act (7 U.S.C. 2026) is amend-
ed—
(1) by striking subsection (i);
(2) by redesignating subsections (j), (k), and (l)
as subsections (i), (j), and (k), respectively.
Subtitle B—Food Stamp Program
SEC. 205. INCOME DEDUCTIONS AND ENERGY ASSISTANCE.
(a) Section 5(d)(11) of the Act (7 U.S.C.
2014(d)(11)) is amended—
(1) by striking ‘‘(A)’’; and
(2) by striking ‘‘or (B) under any State or local
laws,’’ and all that follows through ‘‘or impracticable
to do so,’’.
(b) Section 5(e) of the Act (7 U.S.C. 2014(e)) is
amended to read as follows:
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‘‘(e)(1) STANDARD AND EARNED INCOME DEDUC-
TIONS.—
‘‘(A) In computing household income, the Sec-
retary shall allow a standard deduction of $134 a
month for each household, except that households in
Alaska, Hawaii, Guam, and the Virgin Islands of the
United States shall be allowed a standard deduction
of $229, $189, $269, and $118, respectively.
‘‘(B) All households with earned income shall
also be allowed an additional deduction of 20 per-
cent of all earned income (other than that excluded
by subsection (d) of this section and that earned
under section 16(j)), to compensate for taxes, other
mandatory deductions from salary, and work ex-
penses, except that such additional deduction shall
not be allowed with respect to earned income that a
household willfully or fraudulently fails (as proven
in a proceeding provided for in section 6(b)) to re-
port in a timely manner.
‘‘(2) DEPENDENT CARE DEDUCTION.—The Sec-
retary shall allow households, a deduction with respect to
expenses other than expenses paid on behalf of the house-
hold by a third party or benefits paid to the household,
directly or indirectly, under the Temporary Assistance for
Needy Families block grant, amounts made available and
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excluded for the expenses under subsection (d)(3), the
maximum allowable level of which shall be $200 a month
for each dependent child under two years of age and $175
a month for each other dependent, for the actual cost of
payments necessary for the care of a dependent when such
care enables a household member to accept or continue
employment, or training or education which is preparatory
for employment.
‘‘(3) EXCESS SHELTER EXPENSE DEDUCTION.—
‘‘(A) The Secretary shall allow households,
other than those households containing an elderly or
disabled member, with respect to expenses other
than expenses paid on behalf of the household by a
third party, 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) Such excess shelter expense deduction
shall not exceed $231 a month in the forty-eight
contiguous States and the District of Columbia, and
shall not exceed, in Alaska, Hawaii, Guam, and the
Virgin Islands of the United States, $402, $330,
$280, and $171 a month, respectively.
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‘‘(C) Notwithstanding section 2605(f) of the
Low-Income Home Energy Assistance Act of 1981
(42 U.S.C. 8624(f)), a State agency may allow a de-
duction for heating and cooling expenses only to the
extent that the household still incurs out-of-pocket
heating or cooling expenses in addition to any pay-
ment received under, or costs paid on its behalf, the
Low-Income Home Energy Assistance Act of 1981
(42 U.S.C. 8621 et seq.). For purposes of the food
stamp program, assistance provided under the Low-
Income Home Energy Assistance Act of 1981 shall
be considered to be prorated over the entire heating
or cooling season for which it was provided. A State
agency shall allow a household to switch between
any standard utility allowance and a deduction based
on its actual utility costs at the end of any certifi-
cation period and up to one additional time during
each twelve-month period.
‘‘(D) In computing the excess shelter expense
deduction, a State agency may use a standard utility
allowance in accordance with regulations promul-
gated by the Secretary, except that a State agency
may use an allowance which does not fluctuate with-
in a year to reflect seasonal variations.
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‘‘(i) An allowance for a heating or cooling
expense may not be used for a household that
does not incur a heating or cooling expense, as
the case may be, or does incur a heating or
cooling expense but is located in a public hous-
ing unit which has central utility meters and
charges households, with regard to such ex-
pense, only for excess utility costs.
‘‘(ii) No such allowance may be used for a
household that shares such 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, house-
hold, or both.
‘‘(4) HOMELESS SHELTER DEDUCTION.—The Sec-
retary shall allow households in which all members are
homeless but are not receiving free shelter throughout the
month a shelter expense deduction for the expenses that
may reasonably be expected to be incurred by such house-
holds, but such deduction shall not exceed $139 a month.
‘‘(5) ELDERLY AND DISABLED.—The Secretary shall
allow households containing an elderly or disabled mem-
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ber, with respect to expenses other than expenses paid on
behalf of the household by a third party, to—
‘‘(A) an excess medical expense deduction for
that portion of the actual cost of allowable medical
expenses, incurred by elderly or disabled members,
exclusive of special diets, that exceed $35 a month;
and
‘‘(B) 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.
State agencies shall offer eligible households a method of
claiming a deduction for recurring medical expenses that
are initially verified under the excess medical expense de-
duction provided for in subparagraph (A), in lieu of sub-
mitting information or verification on actual expenses on
a monthly basis. The method described in the preceding
sentence shall be designed to minimize the administrative
burden for eligible elderly and disabled household mem-
bers choosing to deduct their recurrent medical expenses
pursuant to such method, shall rely on reasonable esti-
mates of the member’s expected medical expenses for the
certification period (including changes that can be reason-
ably anticipated based on available information about the
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member’s medical condition, public or private medical in-
surance coverage, and the current verified medical ex-
penses incurred by the member), and shall not require fur-
ther reporting or verification of a change in medical ex-
penses if such a change has been anticipated for the cer-
tification period.
‘‘(6) CHILD SUPPORT DEDUCTION.—Before deter-
mining the excess shelter expense deduction, the Secretary
shall allow all households a deduction for child support
payments made by a household member to or for an indi-
vidual who is not a member of the household if such house-
hold member was legally obligated to make such payments,
except that the Secretary is authorized to prescribe by reg-
ulation the methods, including calculation on a retrospec-
tive basis, that State agencies shall use to determine the
amount of the deduction for child support payments.’’.
(c) Section 11(e)(3) of the Act (7 U.S.C. 2020(e)(3))
is amended by striking ‘‘Under the rules prescribed by the
Secretary, a State agency shall develop standard esti-
mates’’ and all that follows through the second period.
SEC. 206. VEHICLE ALLOWANCE.
Section 5(g)(2) of the Act (7 U.S.C. 2014(f)(2)) is
amended by striking ‘‘a level set by the Secretary, which
shall be $4,500 through August 31, 1994,’’ and all that
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follows through the end of subsection, and inserting
‘‘$4,550.’’.
SEC. 207. ELIGIBILITY OF ALIENS.
(a) Section 5 of the Act (7 U.S.C. 2014) is amend-
ed—
(1) by striking subsection (i);
(2) by redesignating subsections (j) through
(m) as subsections (i) through (l), respectively; and
(3) by changing all references in the Act to re-
flect the amendment in paragraph (2) wherever they
occur.
(b) Section 6(f)(2) (7 U.S.C. 2015(f)(2)) is amend-
ed—
(1) in subparagraph (B), by inserting ‘‘, and
such alien has fulfilled the residence requirements,
and has an application pending, for naturalization
under the Immigration and Nationality Act, or is a
veteran (as defined in section 101 of title 38, United
States Code) with a discharge characterized as an
honorable discharge (or is spouse of such alien), or
is on active duty (other than active duty for train-
ing) in the Armed Forces of the United States (or
is the spouse or dependent child of such alien)’’ be-
fore the semicolon;
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(2) in subparagraph (D), by inserting ‘‘for five
years after such entry’’ before the semicolon.
SEC. 208. WORK REQUIREMENTS.
(a) Section 6(d) of the Act (42 U.S.C. 2015(d)) is
amended—
(1) in paragraph (1)(A)(i), by inserting ‘‘or re-
fuses to participate in any State job search pro-
gram’’ after ‘‘by the Secretary’’;
(2) in paragraph (2)—
(A) in subparagraph (A)—
(i) by inserting ‘‘part A of’’ after
‘‘work registration requirement under’’;
(ii) by striking ‘‘that is comparable to
a requirement of paragraph (1)’’;
(B) by inserting ‘‘or’’ before ‘‘(E)’’; and
(C) by striking ‘‘; or (F) a person between
the ages of sixteen and eighteen who is not a
head of a household or who is attending school,
or enrolled in an employment training program,
on at least a half-time basis’’; and
(3) in paragraph (4), to read as follows:
‘‘(4)(A) Except as provided in subparagraphs
(B), (C), and (D), an individual shall not be denied
initial eligibility but shall be disqualified from the
food stamp program if the individual has not been
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employed a minimum of twenty hours per week, or
did not participate in a workfare program estab-
lished under section 20, within 90 days of certifi-
cation of eligibility.
‘‘(B) The provisions of subparagraph (A) shall
not apply in the case of an individual who—
‘‘(i) is under eighteen or over fifty years of
age;
‘‘(ii) is certified by a physician as phys-
ically or mentally unfit for employment;
‘‘(iii) is a parent or other member of a
household with responsibility for the care of a
dependent;
‘‘(iv) is participating a minimum of 20
hours per week and is in compliance with the
requirements of—
‘‘(I) a program under the Job Train-
ing Partnership Act (29 U.S.C. 1501 et
seq.);
‘‘(II) a program under section 236 of
the Trade Act of 1974 (19 U.S.C. 2296);
or
‘‘(III) another program for the pur-
pose of employment and training operated
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by a State or local government, as deter-
mined appropriate by the Secretary; or
‘‘(v) or would otherwise be exempt under
subsection (d)(2).
‘‘(C) The Secretary may waive the requirements
of subparagraph (A) in the case of some or all indi-
viduals within all or part of State if the Secretary
finds that such area—
‘‘(i) has an unemployment rate of over 10
percent; or
‘‘(ii) does not have a sufficient number of
jobs to provide employment for individuals sub-
ject to this paragraph. The Secretary shall re-
port to the Committee on Agriculture of the
House of Representatives and the Committee
on Agriculture, Nutrition, and Forestry of the
Senate on the basis in which the Secretary
made this decision.
‘‘(D) An individual who has been disqualified
from the food stamp program by reason of subpara-
graph (A) may reestablish eligibility for assistance
by—
‘‘(i) becoming employed for a minimum of
twenty hours per week during any consecutive
thirty-day period; or
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‘‘(ii) participating in a workfare program
established under section 20 or a comparable
workfare program established by the State or
local government during any consecutive thirty-
day period.’’.
(b) Section 16 of the Act (7 U.S.C. 2025) is amend-
ed—
(1) by striking subsection (h);
(2) by redesignating subsections (i) and (j) and
subsections (h) and (i), respectively; and
(3) by changing all references.
(c) Section 17 of the Act (7 U.S.C. 2026), as pre-
viously amended, is amended—
(1) by striking subsection (d);
(2) by redesignating subsections (e) through (k)
as subsections (d) through (j), respectively; and
(3) by changing all references in the Act to re-
flect the amendment in paragraph (2) whenever they
occur.
SEC. 209. COMPARABLE TREATMENT OF DISQUALIFIED IN-
DIVIDUALS.
Section 6 of the Act (7 U.S.C. 2015) is amended by
adding at the end the following new subsection:
‘‘(i) An individual who is a member of
a household who would otherwise be eligi-
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ble to participate in the food stamp pro-
gram under this section who has been dis-
qualified from the program established by
the State under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.)
shall not be eligible to participate in the
food stamp program during the period
such disqualification is in effect.’’.
SEC. 210. ENCOURAGE ELECTRONIC BENEFIT TRANSFER
SYSTEMS.
(a) Section 7(i) of the Act (7 U.S.C. 2016(i)(1)) is
amended—
(1) in paragraph (1), to read as follows:
‘‘(A) State agencies are encouraged to im-
plement an on-line electronic benefit transfer
system in which household benefits determined
under section 8(a) or section 24 are issued from
and stored in a central data bank and electroni-
cally accessed by household members at the
point-of-sale.
‘‘(B) Subject to paragraph (2), a State is
authorized to procure and implement an elec-
tronic benefit transfer system under the terms,
conditions, and design that the state deems ap-
propriate.
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‘‘(C) The Secretary shall, upon request of
a State, waive any provision of this Act prohib-
iting the effective implementation of an elec-
tronic benefit transfer system under this sub-
section.’’;
(2) in paragraph (2), by striking ‘‘for the ap-
proval’’; and
(3) in paragraph (3), by striking ‘‘, the Sec-
retary shall not approve such a system unless’’.
(b) The Act (7 U.S.C. 2011 et seq.), as previously
amended by this Act, is amended by adding at the end
the following new section:
‘‘SEC. 25. ENCOURAGEMENT OF ELECTRONIC BENEFIT
TRANSFER SYSTEMS.
‘‘(a) Upon fully implementing an electronic benefit
transfer system which operates in the entire State, a State
may, subject to the provisions of this section, elect to oper-
ate a low-income nutrition assistance program in lieu of
the food stamp program established under this Act.
‘‘(b)(1) Each State that meets the requirements of
this section and elects to receive such grants, shall receive
each fiscal year under this section the sum of—
‘‘(A)(i) the total dollar value of all benefits is-
sued under the food stamp program by the State
during fiscal year 1994; or
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‘‘(3) assess the food and nutrition needs of
needy persons residing in the State;
‘‘(4) limit the assistance to be provided to the
purchase of food and describe the persons to whom
such assistance will be provided;
‘‘(5) assure the Secretary that assistance will be
provided to the most needy persons in the State and
that applicants for assistance shall have adequate
notice and fair hearings comparable to those re-
quired under section 11 of this Act;
‘‘(6) provide that, in the operation of the nutri-
tion assistance program, there shall be no discrimi-
nation on the basis of race, sex, religious creed, na-
tional origin, or political beliefs; and
‘‘(7) include other information as may be re-
quired by the Secretary.
‘‘(d) Payments made under this section to the State
may be expended only in the fiscal year for which such
payments are distributed, except that the State may re-
serve up to five percent of the grant received each fiscal
year to provide assistance under this section in subsequent
years: Provided, That such reserved funds may not total
more than 20 percent of the total grant received under
this section in any fiscal year.
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‘‘(e) The State agency shall keep records concerning
the operation of the program carried out under this sec-
tion and shall make such records available to the Secretary
and the Comptroller General of the United States.
‘‘(f) If the Secretary finds that there is substantial
failure by a State to comply with the requirements of this
section, regulations issued pursuant to this section, or the
plan approved under subsection (c), then the Secretary
shall take one or more of the following actions:
‘‘(1) Suspend all or part of such payment au-
thorized by subsection (b)(2) to be made available to
such State, until the Secretary determines the State
to be in substantial compliance with such require-
ments.
‘‘(2) Withhold all or part of such payments
until the Secretary determines that there is no
longer failure to comply with such requirements, at
which time the withheld payment may be paid.
‘‘(3) Terminate the authority of the State to
operate the low-income nutrition assistance program.
‘‘(g)(1) States which receive grants under this section
shall provide for—
‘‘(A) a biennial audit, conducted in accordance
with the standards of the Comptroller General, of
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expenditures for the provision of assistance under
this section; and
‘‘(B) not later than 120 days of the end of each
fiscal year in which an audit is conducted, a report
to the Secretary containing the findings of such
audit.
States shall make the report of such audit available for
public inspection.
‘‘(2) Not later than 120 days after the end of each
fiscal year, each such State shall prepare an activities re-
port comparing actual expenditures for such fiscal year
for assistance under this section with the expenditures for
such fiscal year predicted in the plan submitted in accord-
ance with subsection (c)(1) of this section. Such State
shall make the activities report available for public inspec-
tion.
‘‘(h) Whoever knowingly and willfully embezzles,
misapplies, steals, or obtains by fraud, false statement, or
forgery, any funds, assets, or property provided or fi-
nanced under this section shall be fined not more than
$10,000 or imprisoned for not more than five years, or
both.
SEC. 211. VALUE OF MINIMUM ALLOTMENT.
Section 8(a) of Act (7 U.S.C. 2017(a)) is amended
by striking ‘‘, and shall be adjusted on each October 1’’
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and all that follows through the end of the subsection, and
inserting a period.
SEC. 212. INITIAL MONTH BENEFIT DETERMINATION.
Section 
8(c)(2)(B) 
of 
the 
Act 
(7 
U.S.C.
2017(c)(2)(B)) is amended by striking ‘‘of more than one
month’’ after ‘‘following any period’’.
SEC. 213. IMPROVING FOOD STAMP PROGRAM MANAGE-
MENT.
(a) Section 13(a)(1) of the Act (7 U.S.C. 2022(a)(1))
is amended—
(1) in the fifth sentence, by inserting ‘‘(after a
determination on any request for a waiver for good
cause related to the claim has been made by the Sec-
retary)’’ after ‘‘bill for collection’’;
(2) in the sixth sentence, by striking ‘‘1 year’’
and inserting ‘‘2 years’’.
(b) Section 14(a) of the Act (7 U.S.C. 2023(a)) is
amended—
(1) in the sixth sentence, by striking ‘‘(includ-
ing determinations as to whether there is good cause
for not imposing all or a portion of the penalty)’’;
(2) by adding at the end the following new sen-
tence: ‘‘Notwithstanding the administrative or judi-
cial review procedures set forth in this subsection,
determinations by the Secretary concerning whether
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a State agency had good cause for its failure to meet
error rate tolerance levels established under section
16(c) are final.’’.
(c) Section 16(c) of the Act (7 U.S.C. 2025(c)) is
amended—
(1) in paragraph (1)(C)—
(A) by striking ‘‘national performance
measure’’ and inserting ‘‘payment error toler-
ance level’’; and
(B) by striking ‘‘equal to—’’ and all that
follows through the first period and inserting
the following: ‘‘equal to its payment error rate
less such tolerance level times the total value of
allotments issued in such a fiscal year by such
State agency. The amount of liability shall not
be affected by corrective action under subpara-
graph (B).’’;
(2) in paragraph (3)(A), by striking ‘‘120 days’’
and inserting ‘‘60 days (or 90 days at the discretion
of the Secretary)’’;
(3) in the third sentence of paragraph (6), by
inserting ‘‘shall be used to establish a payment-error
tolerance level. Such tolerance level for any fiscal
year will be one percentage point added to the lowest
national performance measure ever announced up to
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and including such fiscal year under this section.
The payment-error tolerance level’’ after ‘‘The an-
nounced national performance measure’’; and
(4) by striking paragraphs (8) and (9).
SEC. 214. WORK SUPPLEMENTATION OF SUPPORT PRO-
GRAM.
(a) Section 11(e) of the Act (7 U.S.C. 2020(e)), as
previously amended by this Act, is amended by adding at
the end the following new paragraph:
‘‘(27) the plans of the State agency for includ-
ing eligible food stamp recipients in a work
supplementation or support program under section
16(i).’’.
(b) Section 16 of the Act (7 U.S.C. 2025), as pre-
viously amended by this Act, is amended by adding at the
end the following new subsection:
‘‘(i) WORK SUPPLEMENTATION OR SUPPORT PRO-
GRAM.—(1) At the election of the State, the State may
use the sums that would otherwise be allotted to partici-
pants under this Act for the purposes of providing and
subsidizing 
or 
supporting 
jobs 
under 
a 
work
supplementation or support program established by the
State under the Temporary Assistance for Needy Families
block grant.
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‘‘(2) If a State agency of a State that makes the elec-
tion described in paragraph (1) informs the Secretary that
an individual who is participating in such work
supplementation or support program is a member of a
household that participates in the food stamp program—
‘‘(A) the Secretary shall pay to the State an
amount equal to the value of the allotment that the
household is eligible to receive under this Act;
‘‘(B) the State shall expend such amount in ac-
cordance with its work supplementation or support
program in lieu of the allotment that the household
would receive but for the operation of this sub-
section;
‘‘(C) for purposes of—
‘‘(i) sections 5 and 8(a) of this Act, the
amount received under this subsection shall be
excluded from household income and resources;
and
‘‘(ii) section 8(b) of this Act, the amount
received under this subsection shall be consid-
ered as the value of an allotment provided to
the household; and
‘‘(D) the household shall not receive an allot-
ment from the State agency for the period during
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