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ter, the Secretary shall reduce the grant pay-
able to the State under section 403(a)(1) for
the immediately succeeding fiscal year by an
amount equal to 4 percent of the State family
assistance grant.
‘‘(B) RESCISSION OF PENALTY.—The Sec-
retary shall rescind a penalty imposed on a
State under subparagraph (A) with respect to a
report if the State submits the report before the
end of the fiscal quarter that immediately suc-
ceeds the fiscal quarter for which the report
was required.
‘‘(3) FAILURE TO SATISFY MINIMUM PARTICIPA-
TION RATES.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
under section 403 for a fiscal year has failed to
comply with section 407(a) for the fiscal year,
the Secretary shall reduce the grant payable to
the State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
equal to not more than 5 percent of the State
family assistance grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
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tions under subparagraph (A) based on the de-
gree of noncompliance, and may reduce the
penalty if the State experiences an economic
downturn that leads to significantly greater un-
employment.
‘‘(4) FAILURE TO PARTICIPATE IN THE INCOME
AND
ELIGIBILITY
VERIFICATION
SYSTEM.—If the
Secretary determines that a State program funded
under this part is not participating during a fiscal
year in the income and eligibility verification system
required by section 1137, the Secretary shall reduce
the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year
by an amount equal to not more than 2 percent of
the State family assistance grant.
‘‘(5) FAILURE TO COMPLY WITH PATERNITY ES-
TABLISHMENT AND CHILD SUPPORT ENFORCEMENT
REQUIREMENTS UNDER PART D.—Notwithstanding
any other provision of this Act, if the Secretary de-
termines that the State agency that administers a
program funded under this part does not enforce the
penalties requested by the agency administering part
D against recipients of assistance under the State
program who fail to cooperate in establishing pater-
nity or in establishing, modifying, or enforcing a
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child support order in accordance with such part and
who do not qualify for any good cause or other ex-
ception established by the State under section
454(29), the Secretary shall reduce the grant pay-
able to the State under section 403(a)(1) for the im-
mediately succeeding fiscal year (without regard to
this section) by not more than 5 percent.
‘‘(6) FAILURE TO TIMELY REPAY A FEDERAL
LOAN FUND FOR STATE WELFARE PROGRAMS.—If
the Secretary determines that a State has failed to
repay any amount borrowed from the Federal Loan
Fund for State Welfare Programs established under
section 406 within the period of maturity applicable
to the loan, plus any interest owed on the loan, the
Secretary shall reduce the grant payable to the State
under section 403(a)(1) for the immediately succeed-
ing fiscal year quarter (without regard to this sec-
tion) by the outstanding loan amount, plus the inter-
est owed on the outstanding amount. The Secretary
shall not forgive any outstanding loan amount or in-
terest owed on the outstanding amount.
‘‘(7) FAILURE
OF
ANY
STATE
TO
MAINTAIN
CERTAIN LEVEL OF HISTORIC EFFORT.—
‘‘(A) IN
GENERAL.—The Secretary shall
reduce the grant payable to the State under
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section 403(a)(1) for fiscal year 1998, 1999,
2000, 2001, or 2002 by the amount (if any) by
which qualified State expenditures for the then
immediately preceding fiscal year are less than
the applicable percentage of historic State ex-
penditures with respect to such preceding fiscal
year.
‘‘(B) DEFINITIONS.—As used in this para-
graph:
‘‘(i) 
QUALIFIED
STATE
EXPENDI-
TURES.—
‘‘(I) IN
GENERAL.—The term
‘qualified State expenditures’ means,
with respect to a State and a fiscal
year, the total expenditures by the
State during the fiscal year, under all
State programs, for any of the follow-
ing with respect to eligible families:
‘‘(aa) Cash assistance.
‘‘(bb) Child care assistance.
‘‘(cc) Educational activities
designed to increase self-suffi-
ciency, job training, and work,
excluding any expenditure for
public education in the State ex-
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cept expenditures which involve
the provision of services or assist-
ance to a member of an eligible
family which is not generally
available to persons who are not
members of an eligible family.
‘‘(dd) Administrative costs
in connection with the matters
described in items (aa), (bb),
(cc), and (ee), but only to the ex-
tent that such costs do not ex-
ceed 15 percent of the total
amount of qualified State ex-
penditures for the fiscal year.
‘‘(ee) Any other use of funds
allowable 
under 
section
404(a)(1).
‘‘(II) EXCLUSION OF TRANSFERS
FROM OTHER STATE AND LOCAL PRO-
GRAMS.—Such term does not include
expenditures under any State or local
program during a fiscal year, except
to the extent that—
‘‘(aa) the expenditures ex-
ceed the amount expended under
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the State or local program in the
fiscal year most recently ending
before the date of the enactment
of this part; or
‘‘(bb) the State is entitled to
a payment under former section
403 (as in effect immediately be-
fore such date of enactment) with
respect to the expenditures.
‘‘(III) ELIGIBLE
FAMILIES.—As
used in subclause (I), the term ‘eligi-
ble families’ means families eligible
for assistance under the State pro-
gram funded under this part, and
families that would be eligible for such
assistance but for the application of
section 408(a)(8) of this Act or sec-
tion 4402 of the Personal Responsibil-
ity and Work Opportunity Act of
1996.
‘‘(ii) APPLICABLE PERCENTAGE.—The
term ‘applicable percentage’ means for fis-
cal years 1997 through 2001, 80 percent
(or, if the State meets the requirements of
section 407(a) for the fiscal year, 75 per-
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cent) reduced (if appropriate) in accord-
ance with subparagraph (C)(ii).
‘‘(iii) 
HISTORIC
STATE
EXPENDI-
TURES.—The term ‘historic State expendi-
tures’ means, with respect to a State, the
lesser of—
‘‘(I) the expenditures by the
State under parts A and F (as in ef-
fect during fiscal year 1994) for fiscal
year 1994; or
‘‘(II) the amount which bears the
same ratio to the amount described in
subclause (I) as—
‘‘(aa) the State family as-
sistance grant, plus the total
amount required to be paid to
the State under former section
403 for fiscal year 1994 with re-
spect to amounts expended by
the State for child care under
subsection (g) or (i) of section
402 (as in effect during fiscal
year 1994); bears to
‘‘(bb) the total amount re-
quired to be paid to the State
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under former section 403 (as in
effect during fiscal year 1994)
for fiscal year 1994.
Such term does not include any expendi-
tures under the State plan approved under
part A (as so in effect) on behalf of indi-
viduals covered by a tribal family assist-
ance plan approved under section 412, as
determined by the Secretary.
‘‘(iv) 
EXPENDITURES
BY
THE
STATE.—The term ‘expenditures by the
State’ does not include—
‘‘(I) 
any 
expenditures 
from
amounts made available by the Fed-
eral Government;
‘‘(II) State funds expended for
the medicaid program under title
XIX; or
‘‘(III) any State funds which are
used to match Federal funds or are
expended as a condition of receiving
Federal funds under Federal pro-
grams other than under this part.
‘‘(C) APPLICABLE PERCENTAGE REDUCED
FOR HIGH PERFORMANCE STATES.—
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‘‘(i) DETERMINATION OF HIGH PER-
FORMANCE STATES.—The Secretary shall
use the formula developed under section
403(a)(4)(C) to assign a score to each eli-
gible State that represents the perform-
ance of the State program funded under
this part for each fiscal year, and shall
prescribe a performance threshold which
the Secretary shall use to determine
whether to reduce the applicable percent-
age with respect to any eligible State for a
fiscal year.
‘‘(ii) REDUCTION
PROPORTIONAL
TO
PERFORMANCE.—The Secretary shall re-
duce the applicable percentage for a fiscal
year with respect to each eligible State by
an amount which is directly proportional to
the amount (if any) by which the score as-
signed to the State under clause (i) for the
immediately preceding fiscal year exceeds
the 
performance 
threshold 
prescribed
under clause (i) for such preceding fiscal
year, subject to clause (iii).
‘‘(iii) LIMITATION ON REDUCTION.—
The applicable percentage for a fiscal year
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with respect to a State may not be reduced
by more than 8 percentage points under
this subparagraph.
‘‘(8) SUBSTANTIAL NONCOMPLIANCE OF STATE
CHILD SUPPORT ENFORCEMENT PROGRAM WITH RE-
QUIREMENTS OF PART D.—
‘‘(A) IN
GENERAL.—If a State program
operated under part D is found as a result of
a review conducted under section 452(a)(4) not
to have complied substantially with the require-
ments of such part for any quarter, and the
Secretary determines that the program is not
complying substantially with such requirements
at the time the finding is made, the Secretary
shall reduce the grant payable to the State
under section 403(a)(1) for the quarter and
each subsequent quarter that ends before the
1st quarter throughout which the program is
found to be in substantial compliance with such
requirements by—
‘‘(i) not less than 1 nor more than 2
percent;
‘‘(ii) not less than 2 nor more than 3
percent, if the finding is the 2nd consecu-
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tive such finding made as a result of such
a review; or
‘‘(iii) not less than 3 nor more than 5
percent, if the finding is the 3rd or a sub-
sequent consecutive such finding made as a
result of such a review.
‘‘(B) DISREGARD
OF
NONCOMPLIANCE
WHICH IS OF A TECHNICAL NATURE.—For pur-
poses 
of 
subparagraph 
(A) 
and 
section
452(a)(4), a State which is not in full compli-
ance with the requirements of this part shall be
determined to be in substantial compliance with
such requirements only if the Secretary deter-
mines that any noncompliance with such re-
quirements is of a technical nature which does
not adversely affect the performance of the
State’s program operated under part D.
‘‘(9) FAILURE OF STATE RECEIVING AMOUNTS
FROM CONTINGENCY FUND TO MAINTAIN 100 PER-
CENT OF HISTORIC EFFORT.—If, at the end of any
fiscal year during which amounts from the Contin-
gency Fund for State Welfare Programs have been
paid to a State, the Secretary finds that the expendi-
tures under the State program funded under this
part for the fiscal year are less than 100 percent of
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historic State expenditures (as defined in paragraph
(8)(B)(iii) of this subsection), the Secretary shall re-
duce the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year
by the total of the amounts so paid to the State.
‘‘(10) FAILURE TO EXPEND ADDITIONAL STATE
FUNDS
TO
REPLACE
GRANT
REDUCTIONS.—If the
grant payable to a State under section 403(a)(1) for
a fiscal year is reduced by reason of this subsection,
the State shall, during the immediately succeeding
fiscal year, expend under the State program funded
under this part an amount equal to the total amount
of such reductions.
‘‘(11) FAILURE TO PROVIDE MEDICAL ASSIST-
ANCE
TO
FAMILIES
BECOMING
INELIGIBLE
FOR
CASH ASSISTANCE UNDER THIS PART DUE TO IN-
CREASED EARNINGS FROM EMPLOYMENT OR COL-
LECTION OF CHILD SUPPORT.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State program funded under this
part is not in compliance with paragraph (13)
or (14) of section 408(a) for a quarter, the Sec-
retary shall reduce the grant payable to the
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
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equal to not more than 5 percent of the State
family assistance grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) based on the de-
gree of noncompliance.
‘‘(b) REASONABLE CAUSE EXCEPTION.—
‘‘(1) IN GENERAL.—The Secretary may not im-
pose a penalty on a State under subsection (a) with
respect to a requirement if the Secretary determines
that the State has reasonable cause for failing to
comply with the requirement.
‘‘(2) EXCEPTION.—Paragraph (1) of this sub-
section shall not apply to any penalty under para-
graph (7), (8), or (11) of subsection (a).
‘‘(c) CORRECTIVE COMPLIANCE PLAN.—
‘‘(1) IN GENERAL.—
‘‘(A) NOTIFICATION
OF
VIOLATION.—Be-
fore imposing a penalty against a State under
subsection (a) with respect to a violation of this
part, the Secretary shall notify the State of the
violation and allow the State the opportunity to
enter into a corrective compliance plan in ac-
cordance with this subsection which outlines
how the State will correct the violation and how
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the State will insure continuing compliance with
this part.
‘‘(B) 60-DAY PERIOD TO PROPOSE A COR-
RECTIVE COMPLIANCE PLAN.—During the 60-
day period that begins on the date the State re-
ceives a notice provided under subparagraph
(A) with respect to a violation, the State may
submit to the Federal Government a corrective
compliance plan to correct the violation.
‘‘(C) CONSULTATION
ABOUT
MODIFICA-
TIONS.—During the 60-day period that begins
with the date the Secretary receives a corrective
compliance plan submitted by a State in accord-
ance with subparagraph (B), the Secretary may
consult with the State on modifications to the
plan.
‘‘(D) ACCEPTANCE OF PLAN.— A correc-
tive compliance plan submitted by a State in ac-
cordance with subparagraph (B) is deemed to
be accepted by the Secretary if the Secretary
does not accept or reject the plan during 60-day
period that begins on the date the plan is sub-
mitted.
‘‘(2) EFFECT
OF
CORRECTING
VIOLATION.—
The Secretary may not impose any penalty under
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subsection (a) with respect to any violation covered
by a State corrective compliance plan accepted by
the Secretary if the State corrects the violation pur-
suant to the plan.
‘‘(3) EFFECT OF FAILING TO CORRECT VIOLA-
TION.—The Secretary shall assess some or all of a
penalty imposed on a State under subsection (a)
with respect to a violation if the State does not, in
a timely manner, correct the violation pursuant to a
State corrective compliance plan accepted by the
Secretary.
‘‘(4) INAPPLICABILITY TO FAILURE TO TIMELY
REPAY A FEDERAL LOAN FUND FOR A STATE WEL-
FARE PROGRAM.—This subsection shall not apply to
the imposition of a penalty against a State under
subsection (a)(6).
‘‘(d) LIMITATION ON AMOUNT OF PENALTY.—
‘‘(1) IN GENERAL.—In imposing the penalties
described in subsection (a), the Secretary shall not
reduce any quarterly payment to a State by more
than 25 percent.
‘‘(2) CARRYFORWARD OF UNRECOVERED PEN-
ALTIES.—To the extent that paragraph (1) of this
subsection prevents the Secretary from recovering
during a fiscal year the full amount of penalties im-
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posed on a State under subsection (a) of this section
for a prior fiscal year, the Secretary shall apply any
remaining amount of such penalties to the grant
payable to the State under section 403(a)(1) for the
immediately succeeding fiscal year.
‘‘SEC. 410. APPEAL OF ADVERSE DECISION.
‘‘(a) IN GENERAL.—Within 5 days after the date the
Secretary takes any adverse action under this part with
respect to a State, the Secretary shall notify the chief ex-
ecutive officer of the State of the adverse action, including
any action with respect to the State plan submitted under
section 402 or the imposition of a penalty under section
409.
‘‘(b) ADMINISTRATIVE REVIEW.—
‘‘(1) IN GENERAL.—Within 60 days after the
date a State receives notice under subsection (a) of
an adverse action, the State may appeal the action,
in whole or in part, to the Departmental Appeals
Board established in the Department of Health and
Human Services (in this section referred to as the
‘Board’) by filing an appeal with the Board.
‘‘(2) PROCEDURAL
RULES.—The Board shall
consider an appeal filed by a State under paragraph
(1) on the basis of such documentation as the State
may submit and as the Board may require to sup-
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port the final decision of the Board. In deciding
whether to uphold an adverse action or any portion
of such an action, the Board shall conduct a thor-
ough review of the issues and take into account all
relevant evidence. The Board shall make a final de-
termination with respect to an appeal filed under
paragraph (1) not less than 60 days after the date
the appeal is filed.
‘‘(c) JUDICIAL REVIEW OF ADVERSE DECISION.—
‘‘(1) IN GENERAL.—Within 90 days after the
date of a final decision by the Board under this sec-
tion with respect to an adverse action taken against
a State, the State may obtain judicial review of the
final decision (and the findings incorporated into the
final decision) by filing an action in—
‘‘(A) the district court of the United States
for the judicial district in which the principal or
headquarters office of the State agency is lo-
cated; or
‘‘(B) the United States District Court for
the District of Columbia.
‘‘(2) PROCEDURAL RULES.—The district court
in which an action is filed under paragraph (1) shall
review the final decision of the Board on the record
established in the administrative proceeding, in ac-
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cordance with the standards of review prescribed by
subparagraphs (A) through (E) of section 706(2) of
title 5, United States Code. The review shall be on
the basis of the documents and supporting data sub-
mitted to the Board.
‘‘SEC. 411. DATA COLLECTION AND REPORTING.
‘‘(a) QUARTERLY REPORTS BY STATES.—
‘‘(1) GENERAL REPORTING REQUIREMENT.—
‘‘(A) CONTENTS OF REPORT.—Each eligi-
ble State shall collect on a monthly basis, and
report to the Secretary on a quarterly basis, the
following disaggregated case record information
on the families receiving assistance under the
State program funded under this part:
‘‘(i) The county of residence of the
family.
‘‘(ii) Whether a child receiving such
assistance or an adult in the family is dis-
abled.
‘‘(iii) The ages of the members of
such families.
‘‘(iv) The number of individuals in the
family, and the relation of each family
member to the youngest child in the fam-
ily.
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‘‘(v) The employment status and earn-
ings of the employed adult in the family.
‘‘(vi) The marital status of the adults
in the family, including whether such
adults have never married, are widowed, or
are divorced.
‘‘(vii) The race and educational status
of each adult in the family.
‘‘(viii) The race and educational sta-
tus of each child in the family.
‘‘(ix) Whether the family received sub-
sidized housing, medical assistance under
the State plan approved under title XIX,
food stamps, or subsidized child care, and
if the latter 2, the amount received.
‘‘(x) The number of months that the
family has received each type of assistance
under the program.
‘‘(xi) If the adults participated in, and
the number of hours per week of participa-
tion in, the following activities:
‘‘(I) Education.
‘‘(II) Subsidized private sector
employment.
‘‘(III) Unsubsidized employment.
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‘‘(IV) Public sector employment,
work experience, or community serv-
ice.
‘‘(V) Job search.
‘‘(VI) Job skills training or on-
the-job training.
‘‘(VII) Vocational education.
‘‘(xii) Information necessary to cal-
culate participation rates under section
407.
‘‘(xiii) The type and amount of assist-
ance received under the program, including
the amount of and reason for any reduc-
tion of assistance (including sanctions).
‘‘(xiv) Any amount of unearned in-
come received by any member of the fam-
ily.
‘‘(xv) The citizenship of the members
of the family.
‘‘(xvi) From a sample of closed cases,
whether the family left the program, and if
so, whether the family left due to—
‘‘(I) employment;
‘‘(II) marriage;
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‘‘(III) the prohibition set forth in
section 408(a)(8);
‘‘(IV) sanction; or
‘‘(V) State policy.
‘‘(B) USE OF ESTIMATES.—
‘‘(i) AUTHORITY.—A State may com-
ply with subparagraph (A) by submitting
an estimate which is obtained through the
use of scientifically acceptable sampling
methods approved by the Secretary.
‘‘(ii) SAMPLING
AND
OTHER
METH-
ODS.—The Secretary shall provide the
States with such case sampling plans and
data collection procedures as the Secretary
deems necessary to produce statistically
valid estimates of the performance of State
programs funded under this part. The Sec-
retary may develop and implement proce-
dures for verifying the quality of data sub-
mitted by the States.
‘‘(2) REPORT ON USE OF FEDERAL FUNDS TO
COVER ADMINISTRATIVE COSTS AND OVERHEAD.—
The report required by paragraph (1) for a fiscal
quarter shall include a statement of the percentage
of the funds paid to the State under this part for
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the quarter that are used to cover administrative
costs or overhead.
‘‘(3) REPORT
ON
STATE
EXPENDITURES
ON
PROGRAMS FOR NEEDY FAMILIES.—The report re-
quired by paragraph (1) for a fiscal quarter shall in-
clude a statement of the total amount expended by
the State during the quarter on programs for needy
families.
‘‘(4) REPORT ON NONCUSTODIAL PARENTS PAR-
TICIPATING IN WORK ACTIVITIES.—The report re-
quired by paragraph (1) for a fiscal quarter shall in-
clude the number of noncustodial parents in the
State who participated in work activities (as defined
in section 407(d)) during the quarter.
‘‘(5) REPORT
ON
TRANSITIONAL
SERVICES.—
The report required by paragraph (1) for a fiscal
quarter shall include the total amount expended by
the State during the quarter to provide transitional
services to a family that has ceased to receive assist-
ance under this part because of employment, along
with a description of such services.
‘‘(6) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary to de-
fine the data elements with respect to which reports
are required by this subsection.
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‘‘(b) ANNUAL REPORTS TO THE CONGRESS BY THE
SECRETARY.—Not later than 6 months after the end of
fiscal year 1997, and each fiscal year thereafter, the Sec-
retary shall transmit to the Congress a report describ-
ing—
‘‘(1) whether the States are meeting—
‘‘(A) the participation rates described in
section 407(a); and
‘‘(B) the objectives of—
‘‘(i) increasing employment and earn-
ings of needy families, and child support
collections; and
‘‘(ii) decreasing out-of-wedlock preg-
nancies and child poverty;
‘‘(2) the demographic and financial characteris-
tics of families applying for assistance, families re-
ceiving assistance, and families that become ineli-
gible to receive assistance;
‘‘(3) the characteristics of each State program
funded under this part; and
‘‘(4) the trends in employment and earnings of
needy families with minor children living at home.
‘‘SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY IN-
DIAN TRIBES.
‘‘(a) GRANTS FOR INDIAN TRIBES.—
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‘‘(1) TRIBAL FAMILY ASSISTANCE GRANT.—
‘‘(A) IN
GENERAL.—For each of fiscal
years 1997, 1998, 1999, and 2000, the Sec-
retary shall pay to each Indian tribe that has
an approved tribal family assistance plan a trib-
al family assistance grant for the fiscal year in
an amount equal to the amount determined
under subparagraph (B), and shall reduce the
grant payable under section 403(a)(1) to any
State in which lies the service area or areas of
the Indian tribe by that portion of the amount
so determined that is attributable to expendi-
tures by the State.
‘‘(B) AMOUNT DETERMINED.—
‘‘(i) IN GENERAL.—The amount de-
termined under this subparagraph is an
amount equal to the total amount of the
Federal payments to a State or States
under section 403 (as in effect during such
fiscal year) for fiscal year 1994 attrib-
utable to expenditures (other than child
care expenditures) by the State or States
under parts A and F (as so in effect) for
fiscal year 1994 for Indian families resid-
ing in the service area or areas identified
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by the Indian tribe pursuant to subsection
(b)(1)(C) of this section.
‘‘(ii) USE
OF
STATE
SUBMITTED
DATA.—
‘‘(I) IN
GENERAL.—The Sec-
retary shall use State submitted data
to make each determination under
clause (i).
‘‘(II) DISAGREEMENT WITH DE-
TERMINATION.—If an Indian tribe or
tribal organization disagrees with
State submitted data described under
subclause (I), the Indian tribe or trib-
al organization may submit to the
Secretary such additional information
as may be relevant to making the de-
termination under clause (i) and the
Secretary may consider such informa-
tion before making such determina-
tion.
‘‘(2) GRANTS FOR INDIAN TRIBES THAT RE-
CEIVED JOBS FUNDS.—
‘‘(A) IN
GENERAL.—The Secretary shall
pay to each eligible Indian tribe for each of fis-
cal years 1996, 1997, 1998, 1999, 2000, and
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2001 a grant in an amount equal to the amount
received by the Indian tribe in fiscal year 1994
under section 482(i) (as in effect during fiscal
year 1994).
‘‘(B) ELIGIBLE INDIAN TRIBE.—For pur-
poses of subparagraph (A), the term ‘eligible
Indian tribe’ means an Indian tribe or Alaska
Native organization that conducted a job oppor-
tunities and basic skills training program in fis-
cal year 1995 under section 482(i) (as in effect
during fiscal year 1995).
‘‘(C) USE OF GRANT.—Each Indian tribe
to which a grant is made under this paragraph
shall use the grant for the purpose of operating
a program to make work activities available to
members of the Indian tribe.
‘‘(D) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated
$7,638,474 for each fiscal year specified in sub-
paragraph (A) for grants under subparagraph
(A).
‘‘(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.—
‘‘(1) IN GENERAL.—Any Indian tribe that de-
sires to receive a tribal family assistance grant shall
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submit to the Secretary a 3-year tribal family assist-
ance plan that—
‘‘(A) outlines the Indian tribe’s approach
to providing welfare-related services for the 3-
year period, consistent with this section;
‘‘(B) specifies whether the welfare-related
services provided under the plan will be pro-
vided by the Indian tribe or through agree-
ments, contracts, or compacts with intertribal
consortia, States, or other entities;
‘‘(C) identifies the population and service
area or areas to be served by such plan;
‘‘(D) provides that a family receiving as-
sistance under the plan may not receive duplica-
tive assistance from other State or tribal pro-
grams funded under this part;
‘‘(E) identifies the employment opportuni-
ties in or near the service area or areas of the
Indian tribe and the manner in which the In-
dian tribe will cooperate and participate in en-
hancing such opportunities for recipients of as-
sistance under the plan consistent with any ap-
plicable State standards; and
‘‘(F) applies the fiscal accountability provi-
sions of section 5(f)(1) of the Indian Self-De-
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termination and Education Assistance Act (25
U.S.C. 450c(f)(1)), relating to the submission
of a single-agency audit report required by
chapter 75 of title 31, United States Code.
‘‘(2) APPROVAL.—The Secretary shall approve
each tribal family assistance plan submitted in ac-
cordance with paragraph (1).
‘‘(3) CONSORTIUM OF TRIBES.—Nothing in this
section shall preclude the development and submis-
sion of a single tribal family assistance plan by the
participating Indian tribes of an intertribal consor-
tium.
‘‘(c) MINIMUM
WORK
PARTICIPATION
REQUIRE-
MENTS AND TIME LIMITS.—The Secretary, with the par-
ticipation of Indian tribes, shall establish for each Indian
tribe receiving a grant under this section minimum work
participation requirements, appropriate time limits for re-
ceipt of welfare-related services under the grant, and pen-
alties against individuals—
‘‘(1) consistent with the purposes of this sec-
tion;
‘‘(2) consistent with the economic conditions
and resources available to each tribe; and
‘‘(3) similar to comparable provisions in section
407(d).
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‘‘(d) EMERGENCY ASSISTANCE.—Nothing in this sec-
tion shall preclude an Indian tribe from seeking emergency
assistance from any Federal loan program or emergency
fund.
‘‘(e) ACCOUNTABILITY.—Nothing in this section shall
be construed to limit the ability of the Secretary to main-
tain program funding accountability consistent with—
‘‘(1) generally accepted accounting principles;
and
‘‘(2) the requirements of the Indian Self-Deter-
mination and Education Assistance Act (25 U.S.C.
450 et seq.).
‘‘(f) PENALTIES.—
‘‘(1) Subsections (a)(1), (a)(6), and (b) of sec-
tion 409, shall apply to an Indian tribe with an ap-
proved tribal assistance plan in the same manner as
such subsections apply to a State.
‘‘(2) Section 409(a)(3) shall apply to an Indian
tribe with an approved tribal assistance plan by sub-
stituting ‘meet minimum work participation require-
ments established under section 412(c)’ for ‘comply
with section 407(a)’.
‘‘(g) DATA COLLECTION AND REPORTING.—Section
411 shall apply to an Indian tribe with an approved tribal
family assistance plan.
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‘‘(h) SPECIAL RULE FOR INDIAN TRIBES IN ALAS-
KA.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section, and except as provided in
paragraph (2), an Indian tribe in the State of Alas-
ka that receives a tribal family assistance grant
under this section shall use the grant to operate a
program in accordance with requirements com-
parable to the requirements applicable to the pro-
gram of the State of Alaska funded under this part.
Comparability of programs shall be established on
the basis of program criteria developed by the Sec-
retary in consultation with the State of Alaska and
such Indian tribes.
‘‘(2) WAIVER.—An Indian tribe described in
paragraph (1) may apply to the appropriate State
authority to receive a waiver of the requirement of
paragraph (1).
‘‘SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUD-
IES.
‘‘(a) RESEARCH.—The Secretary shall conduct re-
search on the benefits, effects, and costs of operating dif-
ferent State programs funded under this part, including
time limits relating to eligibility for assistance. The re-
search shall include studies on the effects of different pro-
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grams and the operation of such programs on welfare de-
pendency, illegitimacy, teen pregnancy, employment rates,
child well-being, and any other area the Secretary deems
appropriate. The Secretary shall also conduct research on
the costs and benefits of State activities under section
409.
‘‘(b) DEVELOPMENT AND EVALUATION OF INNOVA-
TIVE APPROACHES TO REDUCING WELFARE DEPEND-
ENCY AND INCREASING CHILD WELL-BEING.—
‘‘(1) IN GENERAL.—The Secretary may assist
States in developing, and shall evaluate, innovative
approaches for reducing welfare dependency and in-
creasing the well-being of minor children living at
home with respect to recipients of assistance under
programs funded under this part. The Secretary
may provide funds for training and technical assist-
ance to carry out the approaches developed pursuant
to this paragraph.
‘‘(2) EVALUATIONS.—In performing the evalua-
tions under paragraph (1), the Secretary shall, to
the maximum extent feasible, use random assign-
ment as an evaluation methodology.
‘‘(c) DISSEMINATION OF INFORMATION.—The Sec-
retary shall develop innovative methods of disseminating
information on any research, evaluations, and studies con-
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ducted under this section, including the facilitation of the
sharing of information and best practices among States
and localities through the use of computers and other
technologies.
‘‘(d) ANNUAL RANKING OF STATES AND REVIEW OF
MOST AND LEAST SUCCESSFUL WORK PROGRAMS.—
‘‘(1) ANNUAL RANKING OF STATES.—The Sec-
retary shall rank annually the States to which
grants are paid under section 403 in the order of
their success in placing recipients of assistance
under the State program funded under this part into
long-term private sector jobs, reducing the overall
welfare caseload, and, when a practicable method for
calculating this information becomes available, di-
verting individuals from formally applying to the
State program and receiving assistance. In ranking
States under this subsection, the Secretary shall
take into account the average number of minor chil-
dren living at home in families in the State that
have incomes below the poverty line and the amount
of funding provided each State for such families.
‘‘(2) ANNUAL
REVIEW
OF
MOST
AND
LEAST
SUCCESSFUL WORK PROGRAMS.—The Secretary shall
review the programs of the 3 States most recently
ranked highest under paragraph (1) and the 3
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States most recently ranked lowest under paragraph
(1) that provide parents with work experience, as-
sistance in finding employment, and other work
preparation activities and support services to enable
the families of such parents to leave the program
and become self-sufficient.
‘‘(e) ANNUAL RANKING OF STATES AND REVIEW OF
ISSUES RELATING TO OUT-OF-WEDLOCK BIRTHS.—
‘‘(1) ANNUAL RANKING OF STATES.—
‘‘(A) IN
GENERAL.—The Secretary shall
annually rank States to which grants are made
under section 403 based on the following rank-
ing factors:
‘‘(i) ABSOLUTE OUT-OF-WEDLOCK RA-
TIOS.—The ratio represented by—
‘‘(I) the total number of out-of-
wedlock births in families receiving as-
sistance under the State program
under this part in the State for the
most recent fiscal year for which in-
formation is available; over
‘‘(II) the total number of births
in families receiving assistance under
the State program under this part in
the State for such year.
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‘‘(ii) NET CHANGES IN THE OUT-OF-
WEDLOCK RATIO.—The difference between
the ratio described in subparagraph (A)(i)
with respect to a State for the most recent
fiscal year for which such information is
available and the ratio with respect to the
State for the immediately preceding year.
‘‘(2) ANNUAL REVIEW.—The Secretary shall re-
view the programs of the 5 States most recently
ranked highest under paragraph (1) and the 5
States most recently ranked the lowest under para-
graph (1).
‘‘(f) STATE-INITIATED EVALUATIONS.—A State shall
be eligible to receive funding to evaluate the State pro-
gram funded under this part if—
‘‘(1) the State submits a proposal to the Sec-
retary for the evaluation;
‘‘(2) the Secretary determines that the design
and approach of the evaluation is rigorous and is
likely to yield information that is credible and will
be useful to other States, and
‘‘(3) unless otherwise waived by the Secretary,
the State contributes to the cost of the evaluation,
from non-Federal sources, an amount equal to at
least 10 percent of the cost of the evaluation.
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‘‘(g) REPORT
ON
CIRCUMSTANCES
OF CERTAIN
CHILDREN AND FAMILIES.—
‘‘(1) IN GENERAL.—Beginning 3 years after the
date of the enactment of this Act, the Secretary of
Health and Human Services shall prepare and sub-
mit to the Committees on Ways and Means and on
Economic and Educational Opportunities of the
House of Representatives and to the Committees on
Finance and on Labor and Resources of the Senate
annual reports that examine in detail the matters
described in paragraph (2) with respect to each of
the following groups for the period after such enact-
ment:
‘‘(A) Individuals who were children in fam-
ilies that have become ineligible for assistance
under a State program funded under this part
by reason of having reached a time limit on the
provision of such assistance.
‘‘(B) Families that include a child who is
ineligible for assistance under a State program
funded under this part by reason of section
408(a)(2).
‘‘(C) Children born after such date of en-
actment to parents who, at the time of such
birth, had not attained 20 years of age.
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‘‘(D) Individuals who, after such date of
enactment, became parents before attaining 20
years of age.
‘‘(2) MATTERS DESCRIBED.—The matters de-
scribed in this paragraph are the following:
‘‘(A) The percentage of each group that
has dropped out of secondary school (or the
equivalent), and the percentage of each group
at each level of educational attainment.
‘‘(B) The percentage of each group that is
employed.
‘‘(C) The percentage of each group that
has been convicted of a crime or has been adju-
dicated as a delinquent.
‘‘(D) The rate at which the members of
each group are born, or have children, out-of-
wedlock, and the percentage of each group that
is married.
‘‘(E) The percentage of each group that
continues to participate in State programs
funded under this part.
‘‘(F) The percentage of each group that
has health insurance provided by a private en-
tity (broken down by whether the insurance is
provided through an employer or otherwise), the
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percentage that has health insurance provided
by an agency of government, and the percent-
age that does not have health insurance.
‘‘(G) The average income of the families of
the members of each group.
‘‘(H) Such other matters as the Secretary
deems appropriate.
‘‘(h) FUNDING
OF
STUDIES
AND
DEMONSTRA-
TIONS.—
‘‘(1) IN GENERAL.—Out of any money in the
Treasury of the United States not otherwise appro-
priated, there are appropriated $15,000,000 for each
fiscal year specified in section 403(a)(1) for the pur-
pose of paying—
‘‘(A) the cost of conducting the research
described in subsection (a);
‘‘(B) the cost of developing and evaluating
innovative approaches for reducing welfare de-
pendency and increasing the well-being of minor
children under subsection (b);
‘‘(C) the Federal share of any State-initi-
ated study approved under subsection (f); and
‘‘(D) an amount determined by the Sec-
retary to be necessary to operate and evaluate
demonstration projects, relating to this part,
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that are in effect or approved under section
1115 as of September 30, 1995, and are contin-
ued after such date.
‘‘(2) ALLOCATION.—Of the amount appro-
priated under paragraph (1) for a fiscal year—
‘‘(A) 50 percent shall be allocated for the
purposes described in subparagraphs (A) and
(B) of paragraph (1), and
‘‘(B) 50 percent shall be allocated for the
purposes described in subparagraphs (C) and
(D) of paragraph (1).
‘‘(3) DEMONSTRATIONS OF INNOVATIVE STRAT-
EGIES.—The Secretary may implement and evaluate
demonstrations of innovative and promising strate-
gies which—
‘‘(A) provide one-time capital funds to es-
tablish, expand, or replicate programs;
‘‘(B) test performance-based grant-to-loan
financing in which programs meeting perform-
ance targets receive grants while programs not
meeting such targets repay funding on a pro-
rated basis; and
‘‘(C) test strategies in multiple States and
types of communities.
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‘‘SEC. 414. STUDY BY THE CENSUS BUREAU.
‘‘(a) IN GENERAL.—The Bureau of the Census shall
expand the Survey of Income and Program Participation
as necessary to obtain such information as will enable in-
terested persons to evaluate the impact of the amendments
made by subtitle A of the Personal Responsibility and
Work Opportunity Act of 1996 on a random national sam-
ple of recipients of assistance under State programs fund-
ed under this part and (as appropriate) other low income
families, and in doing so, shall pay particular attention
to the issues of out-of-wedlock birth, welfare dependency,
the beginning and end of welfare spells, and the causes
of repeat welfare spells.
‘‘(b) APPROPRIATION.—Out of any money in the
Treasury of the United States not otherwise appropriated,
there are appropriated $10,000,000 for each of fiscal
years 1996, 1997, 1998, 1999, 2000, 2001, and 2002 for
payment to the Bureau of the Census to carry out sub-
section (a).
‘‘SEC. 415. WAIVERS.
‘‘(a) CONTINUATION OF WAIVERS.—
‘‘(1) WAIVERS IN EFFECT ON DATE OF ENACT-
MENT OF WELFARE REFORM.—Except as provided
in paragraph (3), if any waiver granted to a State
under section 1115 or otherwise which relates to the
provision of assistance under a State plan under this
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part (as in effect on September 30, 1995) is in ef-
fect as of the date of the enactment of the Personal
Responsibility and Work Opportunity Act of 1996,
the amendments made by such Act (other than by
section 4103(d) of such Act) shall not apply with re-
spect to the State before the expiration (determined
without regard to any extensions) of the waiver to
the extent such amendments are inconsistent with
the waiver.
‘‘(2) WAIVERS GRANTED SUBSEQUENTLY.—Ex-
cept as provided in paragraph (3), if any waiver
granted to a State under section 1115 or otherwise
which relates to the provision of assistance under a
State plan under this part (as in effect on Septem-
ber 30, 1995) is submitted to the Secretary before
the date of the enactment of the Personal Respon-
sibility and Work Opportunity Act of 1996 and ap-
proved by the Secretary on or before July 1, 1997,
and the State demonstrates to the satisfaction of the
Secretary that the waiver will not result in Federal
expenditures under title IV of this Act (as in effect
without regard to the amendments made by the Per-
sonal Responsibility and Work Opportunity Act of
1996) that are greater than would occur in the ab-
sence of the waiver, the amendments made by the
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Personal Responsibility and Work Opportunity Act
of 1996 (other than by section 4103(d) of such Act)
shall not apply with respect to the State before the
expiration (determined without regard to any exten-
sions) of the waiver to the extent the amendments
made by the Personal Responsibility and Work Op-
portunity Act of 1996 are inconsistent with the
waiver.
‘‘(3) FINANCING
LIMITATION.—Notwithstand-
ing any other provision of law, beginning with fiscal
year 1996, a State operating under a waiver de-
scribed in paragraph (1) shall be entitled to payment
under section 403 for the fiscal year, in lieu of any
other payment provided for in the waiver.
‘‘(b) STATE OPTION TO TERMINATE WAIVER.—
‘‘(1) IN GENERAL.—A State may terminate a
waiver described in subsection (a) before the expira-
tion of the waiver.
‘‘(2) REPORT.—A State which terminates a
waiver under paragraph (1) shall submit a report to
the Secretary summarizing the waiver and any avail-
able information concerning the result or effect of
the waiver.
‘‘(3) HOLD HARMLESS PROVISION.—
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‘‘(A) IN GENERAL.—Notwithstanding any
other provision of law, a State that, not later
than the date described in subparagraph (B),
submits a written request to terminate a waiver
described in subsection (a) shall be held harm-
less for accrued cost neutrality liabilities in-
curred under the waiver.
‘‘(B) DATE
DESCRIBED.—The date de-
scribed in this subparagraph is 90 days follow-
ing the adjournment of the first regular session
of the State legislature that begins after the
date of the enactment of the Personal Respon-
sibility and Work Opportunity Act of 1996.
‘‘(c) SECRETARIAL ENCOURAGEMENT OF CURRENT
WAIVERS.—The Secretary shall encourage any State oper-
ating a waiver described in subsection (a) to continue the
waiver and to evaluate, using random sampling and other
characteristics of accepted scientific evaluations, the result
or effect of the waiver.
‘‘(d) CONTINUATION OF INDIVIDUAL WAIVERS.—A
State may elect to continue 1 or more individual waivers
described in subsection (a).
‘‘SEC. 416. ASSISTANT SECRETARY FOR FAMILY SUPPORT.
‘‘The programs under this part and part D shall be
administered by an Assistant Secretary for Family Sup-
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port within the Department of Health and Human Serv-
ices, who shall be appointed by the President, by and with
the advice and consent of the Senate, and who shall be
in addition to any other Assistant Secretary of Health and
Human Services provided for by law.
‘‘SEC. 417. LIMITATION ON FEDERAL AUTHORITY.
‘‘No officer or employee of the Federal Government
may regulate the conduct of States under this part or en-
force any provision of this part, except to the extent ex-
pressly provided in this part.’’; and
(2) by inserting after such section 418 the fol-
lowing:
‘‘SEC. 419. DEFINITIONS.
‘‘As used in this part:
‘‘(1) ADULT.—The term ‘adult’ means an indi-
vidual who is not a minor child.
‘‘(2) MINOR
CHILD.—The term ‘minor child’
means an individual who—
‘‘(A) has not attained 18 years of age; or
‘‘(B) has not attained 19 years of age and
is a full-time student in a secondary school (or
in the equivalent level of vocational or technical
training).
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‘‘(3) FISCAL
YEAR.—The term ‘fiscal year’
means any 12-month period ending on September 30
of a calendar year.
‘‘(4) INDIAN, INDIAN TRIBE, AND TRIBAL ORGA-
NIZATION.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the terms ‘Indian’, ‘Indian
tribe’, and ‘tribal organization’ have the mean-
ing given such terms by section 4 of the Indian
Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
‘‘(B) SPECIAL RULE FOR INDIAN TRIBES
IN
ALASKA.—The term ‘Indian tribe’ means,
with respect to the State of Alaska, only the
Metlakatla Indian Community of the Annette
Islands Reserve and the following Alaska Native
regional nonprofit corporations:
‘‘(i) Arctic Slope Native Association.
‘‘(ii) Kawerak, Inc.
‘‘(iii) Maniilaq Association.
‘‘(iv) Association of Village Council
Presidents.
‘‘(v) Tanana Chiefs Conference.
‘‘(vi) Cook Inlet Tribal Council.
‘‘(vii) Bristol Bay Native Association.
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‘‘(viii) Aleutian and Pribilof Island
Association.
‘‘(ix) Chugachmuit.
‘‘(x) Tlingit Haida Central Council.
‘‘(xi) Kodiak Area Native Association.
‘‘(xii) Copper River Native Associa-
tion.
‘‘(5) STATE.—Except as otherwise specifically
provided, the term ‘State’ means the 50 States of
the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States
Virgin Islands, Guam, and American Samoa.’’.
(b) GRANTS TO OUTLYING AREAS.—Section 1108
(42 U.S.C. 1308) is amended—
(1) by redesignating subsection (c) as sub-
section (g);
(2) by striking all that precedes subsection (c)
and inserting the following:
‘‘SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE
VIRGIN 
ISLANDS, 
GUAM, 
AND 
AMERICAN
SAMOA; LIMITATION ON TOTAL PAYMENTS.
‘‘(a) LIMITATION ON TOTAL PAYMENTS TO EACH
TERRITORY.—Notwithstanding any other provision of this
Act, the total amount certified by the Secretary of Health
and Human Services under titles I, X, XIV, and XVI,
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under parts A, B, and E of title IV, and under subsection
(b) of this section, for payment to any territory for a fiscal
year shall not exceed the ceiling amount for the territory
for the fiscal year.
‘‘(b) ENTITLEMENT TO MATCHING GRANT.—
‘‘(1) IN GENERAL.—Each territory shall be en-
titled to receive from the Secretary for each fiscal
year a grant in an amount equal to 75 percent of
the amount (if any) by which—
‘‘(A) the total expenditures of the territory
during the fiscal year under the territory pro-
grams funded under parts A, B, and E of title
IV; exceeds
‘‘(B) the sum of—
‘‘(i) the total amount required to be
paid to the territory (other than with re-
spect to child care) under former section
403 (as in effect on September 30, 1995)
for fiscal year 1995, which shall be deter-
mined by applying subparagraphs (C) and
(D) of section 403(a)(1) to the territory;
‘‘(ii) the total amount required to be
paid to the territory under former section
434 (as so in effect) for fiscal year 1995;
and
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‘‘(iii) the total amount expended by
the territory during fiscal year 1995 pur-
suant to parts A, B, and F of title IV (as
so in effect), other than for child care.
‘‘(2) USE OF GRANT.—Any territory to which a
grant is made under paragraph (1) may expend the
amount under any program operated or funded
under any provision of law specified in subsection
(a).
‘‘(c) DEFINITIONS.—As used in this section:
‘‘(1) TERRITORY.—The term ‘territory’ means
Puerto Rico, the Virgin Islands, Guam, and Amer-
ican Samoa.
‘‘(2) CEILING
AMOUNT.—The term ‘ceiling
amount’ means, with respect to a territory and a fis-
cal year, the mandatory ceiling amount with respect
to the territory plus the discretionary ceiling amount
with respect to the territory, reduced for the fiscal
year in accordance with subsection (f).
‘‘(3) MANDATORY CEILING AMOUNT.—The term
‘mandatory ceiling amount’ means—
‘‘(A) $105,538,000 with respect to for
Puerto Rico;
‘‘(B) $4,902,000 with respect to Guam;
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‘‘(C) $3,742,000 with respect to the Virgin
Islands; and
‘‘(D) $1,122,000 with respect to American
Samoa.
‘‘(4) DISCRETIONARY CEILING AMOUNT.—The
term ‘discretionary ceiling amount’ means, with re-
spect to a territory and a fiscal year, the total
amount appropriated pursuant to subsection (d)(3)
for the fiscal year for payment to the territory.
‘‘(5) TOTAL AMOUNT EXPENDED BY THE TER-
RITORY.—The term ‘total amount expended by the
territory’—
‘‘(A) does not include expenditures during
the fiscal year from amounts made available by
the Federal Government; and
‘‘(B) when used with respect to fiscal year
1995, also does not include—
‘‘(i) expenditures during fiscal year
1995 under subsection (g) or (i) of section
402 (as in effect on September 30, 1995);
or
‘‘(ii) any expenditures during fiscal
year 1995 for which the territory (but for
section 1108, as in effect on September 30,
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1995) would have received reimbursement
from the Federal Government.
‘‘(d) DISCRETIONARY GRANTS.—
‘‘(1) IN GENERAL.—The Secretary shall make a
grant to each territory for any fiscal year in the
amount appropriated pursuant to paragraph (3) for
the fiscal year for payment to the territory.
‘‘(2) USE OF GRANT.—Any territory to which a
grant is made under paragraph (1) may expend the
amount under any program operated or funded
under any provision of law specified in subsection
(a).
‘‘(3) LIMITATION ON AUTHORIZATION OF AP-
PROPRIATIONS.—For grants under paragraph (1),
there are authorized to be appropriated to the Sec-
retary for each fiscal year—
‘‘(A) $7,951,000 for payment to Puerto
Rico;
‘‘(B) $345,000 for payment to Guam;
‘‘(C) $275,000 for payment to the Virgin
Islands; and
‘‘(D) $190,000 for payment to American
Samoa.
‘‘(e) AUTHORITY TO TRANSFER FUNDS AMONG PRO-
GRAMS.—Notwithstanding any other provision of this Act,
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any territory to which an amount is paid under any provi-
sion of law specified in subsection (a) may use part or
all of the amount to carry out any program operated by
the territory, or funded, under any other such provision
of law.
‘‘(f) 
MAINTENANCE
OF
EFFORT.—The 
ceiling
amount with respect to a territory shall be reduced for
a fiscal year by an amount equal to the amount (if any)
by which—
‘‘(1) the total amount expended by the territory
under all programs of the territory operated pursu-
ant to the provisions of law specified in subsection
(a) (as such provisions were in effect for fiscal year
1995) for fiscal year 1995; exceeds
‘‘(2) the total amount expended by the territory
under all programs of the territory that are funded
under the provisions of law specified in subsection
(a) for the fiscal year that immediately precedes the
fiscal year referred to in the matter preceding para-
graph (1).’’; and
(3) by striking subsections (d) and (e).
(c) REPEAL OF PROVISIONS REQUIRING REDUCTION
OF MEDICAID PAYMENTS
TO STATES THAT REDUCE
WELFARE PAYMENT LEVELS.—
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(1) Section 1903(i) (42 U.S.C. 1396b(i)) is
amended by striking paragraph (9).
(2) Section 1902 (42 U.S.C. 1396a) is amended
by striking subsection (c).
(d) ELIMINATION
OF
CHILD
CARE
PROGRAMS
UNDER THE SOCIAL SECURITY ACT.—
(1) AFDC AND
TRANSITIONAL
CHILD
CARE
PROGRAMS.—Section 402 (42 U.S.C. 602) is amend-
ed by striking subsection (g).
(2) AT-RISK CHILD CARE PROGRAM.—
(A) AUTHORIZATION.—Section 402 (42
U.S.C. 602) is amended by striking subsection
(i).
(B) FUNDING
PROVISIONS.—Section 403
(42 U.S.C. 603) is amended by striking sub-
section (n).
SEC. 4104. SERVICES PROVIDED BY CHARITABLE, RELI-
GIOUS, OR PRIVATE ORGANIZATIONS.
(a) IN GENERAL.—
(1) STATE OPTIONS.—A State may—
(A) administer and provide services under
the programs described in subparagraphs (A)
and (B)(i) of paragraph (2) through contracts
with charitable, religious, or private organiza-
tions; and
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(B) provide beneficiaries of assistance
under the programs described in subparagraphs
(A) and (B)(ii) of paragraph (2) with certifi-
cates, vouchers, or other forms of disbursement
which are redeemable with such organizations.
(2) PROGRAMS DESCRIBED.—The programs de-
scribed in this paragraph are the following pro-
grams:
(A) A State program funded under part A
of title IV of the Social Security Act (as amend-
ed by section 4103(a) of this Act).
(B) Any other program established or
modified under subtitle A, B, or F of this title,
that—
(i) permits contracts with organiza-
tions; or
(ii) permits certificates, vouchers, or
other forms of disbursement to be provided
to beneficiaries, as a means of providing
assistance.
(b) RELIGIOUS ORGANIZATIONS.—The purpose of
this section is to allow States to contract with religious
organizations, or to allow religious organizations to accept
certificates, vouchers, or other forms of disbursement
under any program described in subsection (a)(2), on the
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same basis as any other nongovernmental provider without
impairing the religious character of such organizations,
and without diminishing the religious freedom of bene-
ficiaries of assistance funded under such program.
(c) NONDISCRIMINATION AGAINST RELIGIOUS ORGA-
NIZATIONS.—In the event a State exercises its authority
under subsection (a), religious organizations are eligible,
on the same basis as any other private organization, as
contractors to provide assistance, or to accept certificates,
vouchers, or other forms of disbursement, under any pro-
gram described in subsection (a)(2) so long as the pro-
grams are implemented consistent with the Establishment
Clause of the United States Constitution. Except as pro-
vided in subsection (k), neither the Federal Government
nor a State receiving funds under such programs shall dis-
criminate against an organization which is or applies to
be a contractor to provide assistance, or which accepts cer-
tificates, vouchers, or other forms of disbursement, on the
basis that the organization has a religious character.
(d) RELIGIOUS CHARACTER AND FREEDOM.—
(1) RELIGIOUS
ORGANIZATIONS.—A religious
organization with a contract described in subsection
(a)(1)(A), or which accepts certificates, vouchers, or
other forms of disbursement under subsection
(a)(1)(B), shall retain its independence from Fed-
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eral, State, and local governments, including such
organization’s control over the definition, develop-
ment, practice, and expression of its religious beliefs.
(2) ADDITIONAL
SAFEGUARDS.—Neither the
Federal Government nor a State shall require a reli-
gious organization to—
(A) alter its form of internal governance;
or
(B) remove religious art, icons, scripture,
or other symbols;
in order to be eligible to contract to provide assist-
ance, or to accept certificates, vouchers, or other
forms of disbursement, funded under a program de-
scribed in subsection (a)(2).
(e) RIGHTS OF BENEFICIARIES OF ASSISTANCE.—
(1) IN GENERAL.—If an individual described in
paragraph (2) has an objection to the religious char-
acter of the organization or institution from which
the individual receives, or would receive, assistance
funded under any program described in subsection
(a)(2), the State in which the individual resides shall
provide such individual (if otherwise eligible for such
assistance) within a reasonable period of time after
the date of such objection with assistance from an
alternative provider that is accessible to the individ-
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ual and the value of which is not less than the value
of the assistance which the individual would have re-
ceived from such organization.
(2) INDIVIDUAL DESCRIBED.—An individual de-
scribed in this paragraph is an individual who re-
ceives, applies for, or requests to apply for, assist-
ance under a program described in subsection (a)(2).
(f) EMPLOYMENT PRACTICES.—A religious organiza-
tion’s exemption provided under section 702 of the Civil
Rights Act of 1964 (42 U.S.C. 2000e–1a) regarding em-
ployment practices shall not be affected by its participa-
tion in, or receipt of funds from, programs described in
subsection (a)(2).
(g) 
NONDISCRIMINATION
AGAINST
BENE-
FICIARIES.—Except as otherwise provided in law, a reli-
gious organization shall not discriminate against an indi-
vidual in regard to rendering assistance funded under any
program described in subsection (a)(2) on the basis of reli-
gion, a religious belief, or refusal to actively participate
in a religious practice.
(h) FISCAL ACCOUNTABILITY.—
(1) IN GENERAL.—Except as provided in para-
graph (2), any religious organization contracting to
provide assistance funded under any program de-
scribed in subsection (a)(2) shall be subject to the
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same regulations as other contractors to account in
accord with generally accepted auditing principles
for the use of such funds provided under such pro-
grams.
(2) LIMITED AUDIT.—If such organization seg-
regates Federal funds provided under such programs
into separate accounts, then only the financial as-
sistance provided with such funds shall be subject to
audit.
(i) COMPLIANCE.—Any party which seeks to enforce
its rights under this section may assert a civil action for
injunctive relief exclusively in an appropriate State court
against the entity or agency that allegedly commits such
violation.
(j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN
PURPOSES.—No funds provided directly to institutions or
organizations to provide services and administer programs
under subsection (a)(1)(A) shall be expended for sectarian
worship, instruction, or proselytization.
(k) PREEMPTION.—Nothing in this section shall be
construed to preempt any provision of a State constitution
or State statute that prohibits or restricts the expenditure
of State funds in or by religious organizations.
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SEC. 4105. CENSUS DATA ON GRANDPARENTS AS PRIMARY
CAREGIVERS FOR THEIR GRANDCHILDREN.
(a) IN GENERAL.—Not later than 90 days after the
date of the enactment of this Act, the Secretary of Com-
merce, in carrying out section 141 of title 13, United
States Code, shall expand the data collection efforts of the
Bureau of the Census (in this section referred to as the
‘‘Bureau’’) to enable the Bureau to collect statistically sig-
nificant data, in connection with its decennial census and
its mid-decade census, concerning the growing trend of
grandparents who are the primary caregivers for their
grandchildren.
(b) EXPANDED CENSUS QUESTION.—In carrying out
subsection (a), the Secretary of Commerce shall expand
the Bureau’s census question that details households
which include both grandparents and their grandchildren.
The expanded question shall be formulated to distinguish
between the following households:
(1) A household in which a grandparent tempo-
rarily provides a home for a grandchild for a period
of weeks or months during periods of parental dis-
tress.
(2) A household in which a grandparent pro-
vides a home for a grandchild and serves as the pri-
mary caregiver for the grandchild.
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SEC. 4106. REPORT ON DATA PROCESSING.
(a) IN GENERAL.—Within 6 months after the date
of the enactment of this Act, the Secretary of Health and
Human Services shall prepare and submit to the Congress
a report on—
(1) the status of the automated data processing
systems operated by the States to assist manage-
ment in the administration of State programs under
part A of title IV of the Social Security Act (wheth-
er in effect before or after October 1, 1995); and
(2) what would be required to establish a sys-
tem capable of—
(A) tracking participants in public pro-
grams over time; and
(B) checking case records of the States to
determine whether individuals are participating
in public programs of 2 or more States.
(b) PREFERRED CONTENTS.—The report required by
subsection (a) should include—
(1) a plan for building on the automated data
processing systems of the States to establish a sys-
tem with the capabilities described in subsection
(a)(2); and
(2) an estimate of the amount of time required
to establish such a system and of the cost of estab-
lishing such a system.
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SEC. 4107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.
(a) STUDY.—The Secretary shall, in cooperation with
the States, study and analyze outcomes measures for eval-
uating the success of the States in moving individuals out
of the welfare system through employment as an alter-
native to the minimum participation rates described in
section 407 of the Social Security Act. The study shall
include a determination as to whether such alternative
outcomes measures should be applied on a national or a
State-by-State basis and a preliminary assessment of the
effects of section 409(a)(7)(C) of such Act.
(b) REPORT.—Not later than September 30, 1998,
the Secretary shall submit to the Committee on Finance
of the Senate and the Committee on Ways and Means of
the House of Representatives a report containing the find-
ings of the study required by subsection (a).
SEC. 4108. CONFORMING AMENDMENTS TO THE SOCIAL SE-
CURITY ACT.
(a) AMENDMENTS TO TITLE II.—
(1) 
Section 
205(c)(2)(C)(vi) 
(42 
U.S.C.
405(c)(2)(C)(vi)), as so redesignated by section
321(a)(9)(B) of the Social Security Independence
and Program Improvements Act of 1994, is amend-
ed—
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(A) by inserting ‘‘an agency administering
a program funded under part A of title IV or’’
before ‘‘an agency operating’’; and
(B) by striking ‘‘A or D of title IV of this
Act’’ and inserting ‘‘D of such title’’.
(2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is
amended by inserting ‘‘under a State program fund-
ed under’’ before ‘‘part A of title IV’’.
(b) AMENDMENTS TO PART D OF TITLE IV.—
(1) Section 451 (42 U.S.C. 651) is amended by
striking ‘‘aid’’ and inserting ‘‘assistance under a
State program funded’’.
(2) 
Section 
452(a)(10)(C) 
(42 
U.S.C.
652(a)(10)(C)) is amended—
(A) by striking ‘‘aid to families with de-
pendent children’’ and inserting ‘‘assistance
under a State program funded under part A’’;
(B) by striking ‘‘such aid’’ and inserting
‘‘such assistance’’; and
(C) by striking ‘‘under section 402(a)(26)
or’’ 
and 
inserting 
‘‘pursuant 
to 
section
408(a)(4) or under section’’.
(3) 
Section 
452(a)(10)(F) 
(42 
U.S.C.
652(a)(10)(F)) is amended—
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(A) by striking ‘‘aid under a State plan ap-
proved’’ and inserting ‘‘assistance under a State
program funded’’; and
(B) by striking ‘‘in accordance with the
standards 
referred 
to 
in 
section
402(a)(26)(B)(ii)’’ 
and 
inserting 
‘‘by 
the
State’’.
(4) Section 452(b) (42 U.S.C. 652(b)) is
amended in the first sentence by striking ‘‘aid under
the State plan approved under part A’’ and inserting
‘‘assistance under the State program funded under
part A’’.
(5) 
Section 
452(d)(3)(B)(i) 
(42 
U.S.C.
652(d)(3)(B)(i)) is amended by striking ‘‘1115(c)’’
and inserting ‘‘1115(b)’’.
(6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C.
652(g)(2)(A)(ii)(I)) is amended by striking ‘‘aid is
being paid under the State’s plan approved under
part A or E’’ and inserting ‘‘assistance is being pro-
vided under the State program funded under part
A’’.
(7) 
Section 
452(g)(2)(A) 
(42 
U.S.C.
652(g)(2)(A)) is amended in the matter following
clause (iii) by striking ‘‘aid was being paid under the
State’s plan approved under part A or E’’ and in-
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serting ‘‘assistance was being provided under the
State program funded under part A’’.
(8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is
amended in the matter following subparagraph
(B)—
(A) by striking ‘‘who is a dependent child’’
and inserting ‘‘with respect to whom assistance
is being provided under the State program
funded under part A’’;
(B) by inserting ‘‘by the State’’ after
‘‘found’’; and
(C) by striking ‘‘to have good cause for re-
fusing to cooperate under section 402(a)(26)’’
and inserting ‘‘to qualify for a good cause or
other exception to cooperation pursuant to sec-
tion 454(29)’’.
(9) Section 452(h) (42 U.S.C. 652(h)) is
amended by striking ‘‘under section 402(a)(26)’’ and
inserting ‘‘pursuant to section 408(a)(4)’’.
(10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is
amended by striking ‘‘aid under part A of this title’’
and inserting ‘‘assistance under a State program
funded under part A’’.
(11) Section 454(5)(A) (42 U.S.C. 654(5)(A)))
is amended—
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(A) by striking ‘‘under section 402(a)(26)’’
and inserting ‘‘pursuant to section 408(a)(4)’’;
and
(B) by striking ‘‘; except that this para-
graph shall not apply to such payments for any
month following the first month in which the
amount collected is sufficient to make such
family ineligible for assistance under the State
plan approved under part A;’’ and inserting a
comma.
(12) Section 454(6)(D) (42 U.S.C. 654(6)(D))
is amended by striking ‘‘aid under a State plan ap-
proved’’ and inserting ‘‘assistance under a State pro-
gram funded’’.
(13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is
amended by striking ‘‘under section 402(a)(26)’’.
(14) 
Section 
466(a)(3)(B) 
(42 
U.S.C.
666(a)(3)(B)) is amended by striking ‘‘402(a)(26)’’
and inserting ‘‘408(a)(3)’’.
(15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is
amended by striking ‘‘aid’’ and inserting ‘‘assistance
under a State program funded’’.
(16) Section 469(a) (42 U.S.C. 669(a)) is
amended—
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(A) by striking ‘‘aid under plans approved’’
and inserting ‘‘assistance under State programs
funded’’; and
(B) by striking ‘‘such aid’’ and inserting
‘‘such assistance’’.
(c) REPEAL OF PART F OF TITLE IV.—Part F of
title IV (42 U.S.C. 681–687) is repealed.
(d) AMENDMENT TO TITLE X.—Section 1002(a)(7)
(42 U.S.C. 1202(a)(7)) is amended by striking ‘‘aid to
families with dependent children under the State plan ap-
proved under section 402 of this Act’’ and inserting ‘‘as-
sistance under a State program funded under part A of
title IV’’.
(e) AMENDMENTS TO TITLE XI.—
(1) Section 1109 (42 U.S.C. 1309) is amended
by striking ‘‘or part A of title IV,’’.
(2) Section 1115 (42 U.S.C. 1315) is amend-
ed—
(A) in subsection (a)(2)—
(i) by inserting ‘‘(A)’’ after ‘‘(2)’’;
(ii) by striking ‘‘403,’’;
(iii) by striking the period at the end
and inserting ‘‘, and’’; and
(iv) by adding at the end the following
new subparagraph:
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‘‘(B) costs of such project which would not oth-
erwise be a permissible use of funds under part A
of title IV and which are not included as part of the
costs of projects under section 1110, shall to the ex-
tent and for the period prescribed by the Secretary,
be regarded as a permissible use of funds under
such part.’’; and
(B) in subsection (c)(3), by striking ‘‘the
program of aid to families with dependent chil-
dren’’ and inserting ‘‘part A of such title’’.
(3) Section 1116 (42 U.S.C. 1316) is amend-
ed—
(A) in each of subsections (a)(1), (b), and
(d), by striking ‘‘or part A of title IV,’’; and
(B) in subsection (a)(3), by striking
‘‘404,’’.
(4) Section 1118 (42 U.S.C. 1318) is amend-
ed—
(A) by striking ‘‘403(a),’’;
(B) by striking ‘‘and part A of title IV,’’;
and
(C) by striking ‘‘, and shall, in the case of
American Samoa, mean 75 per centum with re-
spect to part A of title IV’’.
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(5) Section 1119 (42 U.S.C. 1319) is amend-
ed—
(A) by striking ‘‘or part A of title IV’’; and
(B) by striking ‘‘403(a),’’.
(6) Section 1133(a) (42 U.S.C. 1320b–3(a)) is
amended by striking ‘‘or part A of title IV,’’.
(7) Section 1136 (42 U.S.C. 1320b–6) is re-
pealed.
(8) Section 1137 (42 U.S.C. 1320b–7) is
amended—
(A) in subsection (b), by striking para-
graph (1) and inserting the following:
‘‘(1) any State program funded under part A of
title IV of this Act;’’; and
(B) in subsection (d)(1)(B)—
(i) by striking ‘‘In this subsection—’’
and all that follows through ‘‘(ii) in’’ and
inserting ‘‘In this subsection, in’’;
(ii) by redesignating subclauses (I),
(II), and (III) as clauses (i), (ii), and (iii);
and
(iii) by moving such redesignated ma-
terial 2 ems to the left.
(f) 
AMENDMENT
TO
TITLE
XIV.—Section
1402(a)(7) (42 U.S.C. 1352(a)(7)) is amended by striking
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‘‘aid to families with dependent children under the State
plan approved under section 402 of this Act’’ and insert-
ing ‘‘assistance under a State program funded under part
A of title IV’’.
(g) AMENDMENT TO TITLE XVI AS IN EFFECT WITH
RESPECT TO THE TERRITORIES.—Section 1602(a)(11),
as in effect without regard to the amendment made by
section 301 of the Social Security Amendments of 1972
(42 U.S.C. 1382 note), is amended by striking ‘‘aid under
the State plan approved’’ and inserting ‘‘assistance under
a State program funded’’.
(h) AMENDMENT TO TITLE XVI AS IN EFFECT WITH
RESPECT TO THE STATES.—Section 1611(c)(5)(A) (42
U.S.C. 1382(c)(5)(A)) is amended to read as follows: ‘‘(A)
a State program funded under part A of title IV,’’.
(i) AMENDMENT TO TITLE XIX.—Section 1902(j)
(42 U.S.C. 1396a(j)) is amended by striking ‘‘1108(c)’’
and inserting ‘‘1108(g)’’.
SEC. 4109. CONFORMING AMENDMENTS TO THE FOOD
STAMP ACT OF 1977 AND RELATED PROVI-
SIONS.
(a) Section 5 of the Food Stamp Act of 1977 (7
U.S.C. 2014) is amended—
(1) in the second sentence of subsection (a), by
striking ‘‘plan approved’’ and all that follows
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through ‘‘title IV of the Social Security Act’’ and in-
serting ‘‘program funded under part A of title IV of
the Social Security Act (42 U.S.C. 601 et seq.)’’;
(2) in subsection (d)—
(A) in paragraph (5), by striking ‘‘assist-
ance to families with dependent children’’ and
inserting ‘‘assistance under a State program
funded’’; and
(B) by striking paragraph (13) and redes-
ignating paragraphs (14), (15), and (16) as
paragraphs (13), (14), and (15), respectively;
(3) in subsection (j), by striking ‘‘plan approved
under part A of title IV of such Act (42 U.S.C. 601
et seq.)’’ and inserting ‘‘program funded under part
A of title IV of the Act (42 U.S.C. 601 et seq.)’’;
and
(4) by striking subsection (m).
(b) Section 6 of such Act (7 U.S.C. 2015) is amend-
ed—
(1) in subsection (c)(5), by striking ‘‘the State
plan approved’’ and inserting ‘‘the State program
funded’’; and
(2) in subsection (e)(6), by striking ‘‘aid to
families with dependent children’’ and inserting
‘‘benefits under a State program funded’’.
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(c) Section 16(g)(4) of such Act (7 U.S.C.
2025(g)(4)) is amended by striking ‘‘State plans under the
Aid to Families with Dependent Children Program under’’
and inserting ‘‘State programs funded under part A of’’.
(d) Section 17 of such Act (7 U.S.C. 2026) is amend-
ed—
(1) in the first sentence of subsection (b)(1)(A),
by striking ‘‘to aid to families with dependent chil-
dren under part A of title IV of the Social Security
Act’’ and inserting ‘‘or are receiving assistance
under a State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et
seq.)’’; and
(2) in subsection (b)(3), by adding at the end
the following new subparagraph:
‘‘(I) The Secretary may not grant a waiver under this
paragraph on or after October 1, 1995. Any reference in
this paragraph to a provision of title IV of the Social Secu-
rity Act shall be deemed to be a reference to such provision
as in effect on September 30, 1995.’’;
(e) Section 20 of such Act (7 U.S.C. 2029) is amend-
ed—
(1) in subsection (a)(2)(B) by striking ‘‘operat-
ing—’’ and all that follows through ‘‘(ii) any other’’
and inserting ‘‘operating any’’; and
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(2) in subsection (b)—
(A) in paragraph (1)—
(i) by striking ‘‘(b)(1) A household’’
and inserting ‘‘(b) A household’’; and
(ii) in subparagraph (B), by striking
‘‘training program’’ and inserting ‘‘activ-
ity’’;
(B) by striking paragraph (2); and
(C) by redesignating subparagraphs (A)
through (F) as paragraphs (1) through (6), re-
spectively.
(f) Section 5(h)(1) of the Agriculture and Consumer
Protection Act of 1973 (Public Law 93–186; 7 U.S.C.
612c note) is amended by striking ‘‘the program for aid
to families with dependent children’’ and inserting ‘‘the
State program funded’’.
(g) Section 9 of the National School Lunch Act (42
U.S.C. 1758) is amended—
(1) in subsection (b)—
(A) in paragraph (2)(C)(ii)(II)—
(i) by striking ‘‘program for aid to
families with dependent children’’ and in-
serting ‘‘State program funded’’; and
(ii) by inserting before the period at
the end the following: ‘‘that the Secretary
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determines complies with standards estab-
lished by the Secretary that ensure that
the standards under the State program are
comparable to or more restrictive than
those in effect on June 1, 1995’’; and
(B) in paragraph (6)—
(i) in subparagraph (A)(ii)—
(I) by striking ‘‘an AFDC assist-
ance unit (under the aid to families
with dependent children program au-
thorized’’ and inserting ‘‘a family
(under the State program funded’’;
and
(II) by striking ‘‘, in a State’’
and 
all 
that 
follows 
through
‘‘9902(2)))’’ and inserting ‘‘that the
Secretary determines complies with
standards established by the Secretary
that ensure that the standards under
the State program are comparable to
or more restrictive than those in effect
on June 1, 1995’’; and
(ii) in subparagraph (B), by striking
‘‘aid to families with dependent children’’
and inserting ‘‘assistance under the State
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program funded under part A of title IV of
the Social Security Act (42 U.S.C. 601 et
seq.) that the Secretary determines com-
plies with standards established by the
Secretary that ensure that the standards
under the State program are comparable
to or more restrictive than those in effect
on June 1, 1995’’; and
(2) in subsection (d)(2)(C)—
(A) by striking ‘‘program for aid to fami-
lies with dependent children’’ and inserting
‘‘State program funded’’; and
(B) by inserting before the period at the
end the following: ‘‘that the Secretary deter-
mines complies with standards established by
the Secretary that ensure that the standards
under the State program are comparable to or
more restrictive than those in effect on June 1,
1995’’.
(h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition
Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amend-
ed—
(1) by striking ‘‘program for aid to families
with dependent children established’’ and inserting
‘‘State program funded’’; and
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(2) by inserting before the semicolon the follow-
ing: ‘‘that the Secretary determines complies with
standards established by the Secretary that ensure
that the standards under the State program are
comparable to or more restrictive than those in ef-
fect on June 1, 1995’’.
SEC. 4110. CONFORMING AMENDMENTS TO OTHER LAWS.
(a) Subsection (b) of section 508 of the Unemploy-
ment Compensation Amendments of 1976 (42 U.S.C.
603a; Public Law 94–566; 90 Stat. 2689) is amended to
read as follows:
‘‘(b) PROVISION
FOR
REIMBURSEMENT
OF
EX-
PENSES.—For purposes of section 455 of the Social Secu-
rity Act, expenses incurred to reimburse State employment
offices for furnishing information requested of such of-
fices—
‘‘(1) pursuant to the third sentence of section
3(a) of the Act entitled ‘An Act to provide for the
establishment of a national employment system and
for cooperation with the States in the promotion of
such system, and for other purposes’, approved June
6, 1933 (29 U.S.C. 49b(a)), or
‘‘(2) by a State or local agency charged with
the duty of carrying a State plan for child support
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approved under part D of title IV of the Social Se-
curity Act,
shall be considered to constitute expenses incurred in the
administration of such State plan.’’.
(b) Section 9121 of the Omnibus Budget Reconcili-
ation Act of 1987 (42 U.S.C. 602 note) is repealed.
(c) Section 9122 of the Omnibus Budget Reconcili-
ation Act of 1987 (42 U.S.C. 602 note) is repealed.
(d) Section 221 of the Housing and Urban-Rural Re-
covery Act of 1983 (42 U.S.C. 602 note), relating to treat-
ment under AFDC of certain rental payments for federally
assisted housing, is repealed.
(e) Section 159 of the Tax Equity and Fiscal Respon-
sibility Act of 1982 (42 U.S.C. 602 note) is repealed.
(f) Section 202(d) of the Social Security Amendments
of 1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed.
(g) Section 903 of the Stewart B. McKinney Home-
less Assistance Amendments Act of 1988 (42 U.S.C.
11381 note), relating to demonstration projects to reduce
number of AFDC families in welfare hotels, is amended—
(1) in subsection (a), by striking ‘‘aid to fami-
lies with dependent children under a State plan ap-
proved’’ and inserting ‘‘assistance under a State pro-
gram funded’’; and
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(2) in subsection (c), by striking ‘‘aid to fami-
lies with dependent children in the State under a
State plan approved’’ and inserting ‘‘assistance in
the State under a State program funded’’.
(h) The Higher Education Act of 1965 (20 U.S.C.
1001 et seq.) is amended—
(1) in section 404C(c)(3) (20 U.S.C. 1070a–
23(c)(3)), by striking ‘‘(Aid to Families with De-
pendent Children)’’; and
(2) 
in 
section 
480(b)(2) 
(20 
U.S.C.
1087vv(b)(2)), by striking ‘‘aid to families with de-
pendent children under a State plan approved’’ and
inserting ‘‘assistance under a State program fund-
ed’’.
(i) The Carl D. Perkins Vocational and Applied Tech-
nology Education Act (20 U.S.C. 2301 et seq.) is amend-
ed—
(1) in section 231(d)(3)(A)(ii) (20 U.S.C.
2341(d)(3)(A)(ii)), by striking ‘‘The program for aid
to dependent children’’ and inserting ‘‘The State
program funded’’;
(2) 
in 
section 
232(b)(2)(B) 
(20 
U.S.C.
2341a(b)(2)(B)), by striking ‘‘the program for aid to
families with dependent children’’ and inserting ‘‘the
State program funded’’; and
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(3) in section 521(14)(B)(iii) (20 U.S.C.
2471(14)(B)(iii)), by striking ‘‘the program for aid
to families with dependent children’’ and inserting
‘‘the State program funded’’.
(j) The Elementary and Secondary Education Act of
1965 (20 U.S.C. 2701 et seq.) is amended—
(1) 
in 
section 
1113(a)(5) 
(20 
U.S.C.
6313(a)(5)), by striking ‘‘Aid to Families with De-
pendent Children program’’ and inserting ‘‘State
program funded under part A of title IV of the So-
cial Security Act’’;
(2) 
in 
section 
1124(c)(5) 
(20 
U.S.C.
6333(c)(5)), by striking ‘‘the program of aid to fam-
ilies with dependent children under a State plan ap-
proved under’’ and inserting ‘‘a State program fund-
ed under part A of’’; and
(3) 
in 
section 
5203(b)(2) 
(20 
U.S.C.
7233(b)(2))—
(A) in subparagraph (A)(xi), by striking
‘‘Aid to Families with Dependent Children ben-
efits’’ and inserting ‘‘assistance under a State
program funded under part A of title IV of the
Social Security Act’’; and
(B) in subparagraph (B)(viii), by striking
‘‘Aid to Families with Dependent Children’’ and
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inserting ‘‘assistance under the State program
funded under part A of title IV of the Social
Security Act’’.
(k) The 4th proviso of chapter VII of title I of Public
Law 99–88 (25 U.S.C. 13d–1) is amended to read as fol-
lows: ‘‘Provided further, That general assistance payments
made by the Bureau of Indian Affairs shall be made—
‘‘(1) after April 29, 1985, and before October
1, 1995, on the basis of Aid to Families with De-
pendent Children (AFDC) standards of need; and
‘‘(2) on and after October 1, 1995, on the basis
of standards of need established under the State
program funded under part A of title IV of the So-
cial Security Act,
except that where a State ratably reduces its AFDC or
State program payments, the Bureau shall reduce general
assistance payments in such State by the same percentage
as the State has reduced the AFDC or State program pay-
ment.’’.
(l) The Internal Revenue Code of 1986 (26 U.S.C.
1 et seq.) is amended—
(1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by
striking all that follows ‘‘agency as’’ and inserting
‘‘being eligible for financial assistance under part A
of title IV of the Social Security Act and as having
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continually received such financial assistance during
the 90-day period which immediately precedes the
date on which such individual is hired by the em-
ployer.’’;
(2) 
in 
section 
3304(a)(16) 
(26 
U.S.C.
3304(a)(16)), by striking ‘‘eligibility for aid or serv-
ices,’’ and all that follows through ‘‘children ap-
proved’’ and inserting ‘‘eligibility for assistance, or
the amount of such assistance, under a State pro-
gram funded’’;
(3) in section 6103(l)(7)(D)(i) (26 U.S.C.
6103(l)(7)(D)(i)), by striking ‘‘aid to families with
dependent children provided under a State plan ap-
proved’’ and inserting ‘‘a State program funded’’;
(4) 
in 
section 
6103(l)(10) 
(26 
U.S.C.
6103(l)(10))—
(A) by striking ‘‘(c) or (d)’’ each place it
appears and inserting ‘‘(c), (d), or (e)’’; and
(B) by adding at the end of subparagraph
(B) the following new sentence: ‘‘Any return in-
formation disclosed with respect to section
6402(e) shall only be disclosed to officers and
employees of the State agency requesting such
information.’’;
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(5) 
in 
section 
6103(p)(4) 
(26 
U.S.C.
6103(p)(4)), in the matter preceding subparagraph
(A)—
(A) by striking ‘‘(5), (10)’’ and inserting
‘‘(5)’’; and
(B) by striking ‘‘(9), or (12)’’ and insert-
ing ‘‘(9), (10), or (12)’’;
(6) in section 6334(a)(11)(A) (26 U.S.C.
6334(a)(11)(A)), by striking ‘‘(relating to aid to
families with dependent children)’’;
(7) in section 6402 (26 U.S.C. 6402)—
(A) in subsection (a), by striking ‘‘(c) and
(d)’’ and inserting ‘‘(c), (d), and (e)’’;
(B) 
by 
redesignating 
subsections 
(e)
through (i) as subsections (f) through (j), re-
spectively; and
(C) by inserting after subsection (d) the
following:
‘‘(e) COLLECTION OF OVERPAYMENTS UNDER TITLE
IV–A OF THE SOCIAL SECURITY ACT.—The amount of
any overpayment to be refunded to the person making the
overpayment shall be reduced (after reductions pursuant
to subsections (c) and (d), but before a credit against fu-
ture liability for an internal revenue tax) in accordance
with section 405(e) of the Social Security Act (concerning
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recovery of overpayments to individuals under State plans
approved under part A of title IV of such Act).’’; and
(8) in section 7523(b)(3)(C) (26 U.S.C.
7523(b)(3)(C)), by striking ‘‘aid to families with de-
pendent children’’ and inserting ‘‘assistance under a
State program funded under part A of title IV of the
Social Security Act’’.
(m) Section 3(b) of the Wagner-Peyser Act (29
U.S.C. 49b(b)) is amended by striking ‘‘State plan ap-
proved under part A of title IV’’ and inserting ‘‘State pro-
gram funded under part A of title IV’’.
(n) The Job Training Partnership Act (29 U.S.C.
1501 et seq.) is amended—
(1) 
in 
section 
4(29)(A)(i) 
(29 
U.S.C.
1503(29)(A)(i)), by striking ‘‘(42 U.S.C. 601 et
seq.)’’;
(2) 
in 
section 
106(b)(6)(C) 
(29 
U.S.C.
1516(b)(6)(C)), by striking ‘‘State aid to families
with dependent children records,’’ and inserting
‘‘records collected under the State program funded
under part A of title IV of the Social Security Act,’’;
(3) 
in 
section 
121(b)(2) 
(29 
U.S.C.
1531(b)(2))—
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(A) by striking ‘‘the JOBS program’’ and
inserting ‘‘the work activities required under
title IV of the Social Security Act’’; and
(B) by striking the second sentence;
(4) in section 123(c) (29 U.S.C. 1533(c))—
(A) in paragraph (1)(E), by repealing
clause (vi); and
(B) in paragraph (2)(D), by repealing
clause (v);
(5) 
in 
section 
203(b)(3) 
(29 
U.S.C.
1603(b)(3)), by striking ‘‘, including recipients
under the JOBS program’’;
(6) in subparagraphs (A) and (B) of section
204(a)(1) (29 U.S.C. 1604(a)(1) (A) and (B)), by
striking ‘‘(such as the JOBS program)’’ each place
it appears;
(7) in section 205(a) (29 U.S.C. 1605(a)), by
striking paragraph (4) and inserting the following:
‘‘(4) the portions of title IV of the Social Secu-
rity Act relating to work activities;’’;
(8) in section 253 (29 U.S.C. 1632)—
(A) in subsection (b)(2), by repealing sub-
paragraph (C); and
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(B) in paragraphs (1)(B) and (2)(B) of
subsection (c), by striking ‘‘the JOBS program
or’’ each place it appears;
(9) in section 264 (29 U.S.C. 1644)—
(A) in subparagraphs (A) and (B) of sub-
section (b)(1), by striking ‘‘(such as the JOBS
program)’’ each place it appears; and
(B) in subparagraphs (A) and (B) of sub-
section (d)(3), by striking ‘‘and the JOBS pro-
gram’’ each place it appears;
(10) in section 265(b) (29 U.S.C. 1645(b)), by
striking paragraph (6) and inserting the following:
‘‘(6) the portion of title IV of the Social Secu-
rity Act relating to work activities;’’;
(11) in the second sentence of section 429(e)
(29 U.S.C. 1699(e)), by striking ‘‘and shall be in an
amount that does not exceed the maximum amount
that may be provided by the State pursuant to sec-
tion 402(g)(1)(C) of the Social Security Act (42
U.S.C. 602(g)(1)(C))’’;
(12) in section 454(c) (29 U.S.C. 1734(c)), by
striking ‘‘JOBS and’’;
(13) in section 455(b) (29 U.S.C. 1735(b)), by
striking ‘‘the JOBS program,’’;
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(14) in section 501(1) (29 U.S.C. 1791(1)), by
striking ‘‘aid to families with dependent children
under part A of title IV of the Social Security Act
(42 U.S.C. 601 et seq.)’’ and inserting ‘‘assistance
under the State program funded under part A of
title IV of the Social Security Act’’;
(15) 
in 
section 
506(1)(A) 
(29 
U.S.C.
1791e(1)(A)), by striking ‘‘aid to families with de-
pendent children’’ and inserting ‘‘assistance under
the State program funded’’;
(16) in section 508(a)(2)(A) (29 U.S.C.
1791g(a)(2)(A)), by striking ‘‘aid to families with
dependent children’’ and inserting ‘‘assistance under
the State program funded’’; and
(17) in section 701(b)(2)(A) (29 U.S.C.
1792(b)(2)(A))—
(A) in clause (v), by striking the semicolon
and inserting ‘‘; and’’; and
(B) by striking clause (vi).
(o) Section 3803(c)(2)(C)(iv) of title 31, United
States Code, is amended to read as follows:
‘‘(iv) assistance under a State program funded
under part A of title IV of the Social Security Act;’’.
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(p) Section 2605(b)(2)(A)(i) of the Low-Income
Home Energy Assistance Act of 1981 (42 U.S.C.
8624(b)(2)(A)(i)) is amended to read as follows:
‘‘(i) assistance under the State pro-
gram funded under part A of title IV of
the Social Security Act;’’.
(q) Section 303(f)(2) of the Family Support Act of
1988 (42 U.S.C. 602 note) is amended—
(1) by striking ‘‘(A)’’; and
(2) by striking subparagraphs (B) and (C).
(r) The Balanced Budget and Emergency Deficit
Control Act of 1985 (2 U.S.C. 900 et seq.) is amended—
(1) in the first section 255(h) (2 U.S.C.
905(h)), by striking ‘‘Aid to families with dependent
children (75–0412–0–1–609);’’ and inserting ‘‘Block
grants to States for temporary assistance for needy
families;’’; and
(2) in section 256 (2 U.S.C. 906)—
(A) by striking subsection (k); and
(B) by redesignating subsection (l) as sub-
section (k).
(s) The Immigration and Nationality Act (8 U.S.C.
1101 et seq.) is amended—
(1) in section 210(f) (8 U.S.C. 1160(f)), by
striking ‘‘aid under a State plan approved under’’
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‘‘(E) part A of title IV of the Social Secu-
rity Act (42 U.S.C. 601 et seq.) relating to
work activities;’’.
(w) Section 552a(a)(8)(B)(iv)(III) of title 5, United
States Code, is amended by striking ‘‘section 464 or 1137
of the Social Security Act’’ and inserting ‘‘section 404(e),
464, or 1137 of the Social Security Act’’.
SEC. 4111. DEVELOPMENT OF PROTOTYPE OF COUNTER-
FEIT-RESISTANT SOCIAL SECURITY CARD RE-
QUIRED.
(a) DEVELOPMENT.—
(1) IN GENERAL.—The Commissioner of Social
Security (in this section referred to as the ‘‘Commis-
sioner’’) shall, in accordance with this section, de-
velop a prototype of a counterfeit-resistant social se-
curity card. Such prototype card shall—
(A) be made of a durable, tamper-resistant
material such as plastic or polyester,
(B) employ technologies that provide secu-
rity 
features, 
such 
as 
magnetic 
stripes,
holograms, and integrated circuits, and
(C) be developed so as to provide individ-
uals with reliable proof of citizenship or legal
resident alien status.
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(2) ASSISTANCE BY ATTORNEY GENERAL.—The
Attorney General of the United States shall provide
such information and assistance as the Commis-
sioner deems necessary to enable the Commissioner
to comply with this section.
(b) STUDY AND REPORT.—
(1) IN GENERAL.—The Commissioner shall con-
duct a study and issue a report to Congress which
examines different methods of improving the social
security card application process.
(2) ELEMENTS OF STUDY.—The study shall in-
clude an evaluation of the cost and work load impli-
cations of issuing a counterfeit-resistant social secu-
rity card for all individuals over a 3-, 5-, and 10-
year period. The study shall also evaluate the fea-
sibility and cost implications of imposing a user fee
for replacement cards and cards issued to individ-
uals who apply for such a card prior to the sched-
uled 3-, 5-, and 10-year phase-in options.
(3) DISTRIBUTION OF REPORT.—The Commis-
sioner shall submit copies of the report described in
this subsection along with a facsimile of the proto-
type card as described in subsection (a) to the Com-
mittees on Ways and Means and Judiciary of the
House of Representatives and the Committees on Fi-
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nance and Judiciary of the Senate within 1 year
after the date of the enactment of this Act.
SEC. 4112. DISCLOSURE OF RECEIPT OF FEDERAL FUNDS.
(a) IN GENERAL.—Whenever an organization that
accepts Federal funds under this title or the amendments
made by this title (other than funds provided under title
IV, XVI, or XX of the Social Security Act) makes any
communication that in any way intends to promote public
support or opposition to any policy of a Federal, State,
or local government through any broadcasting station,
newspaper, magazine, outdoor advertising facility, direct
mailing, or any other type of general public advertising,
such communication shall state the following: ‘‘This was
prepared and paid for by an organization that accepts tax-
payer dollars.’’.
(b) FAILURE TO COMPLY.—If an organization makes
any communication described in subsection (a) and fails
to provide the statement required by that subsection, such
organization shall be ineligible to receive Federal funds
under this title or the amendments made by this title.
(c) DEFINITION.—For purposes of this section, the
term ‘‘organization’’ means an organization described in
section 501(c) of the Internal Revenue Code of 1986.
(d) EFFECTIVE DATES.—This section shall take ef-
fect—
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(1) with respect to printed communications 1
year after the date of enactment of this Act; and
(2) with respect to any other communication on
the date of enactment of this Act.
SEC. 4113. MODIFICATIONS TO THE JOB OPPORTUNITIES
FOR 
CERTAIN 
LOW-INCOME 
INDIVIDUALS
PROGRAM.
Section 505 of the Family Support Act of 1988 (42
U.S.C. 1315 note) is amended—
(1) in the heading, by striking ‘‘DEMONSTRA-
TION’’;
(2) by striking ‘‘demonstration’’ each place such
term appears;
(3) in subsection (a), by striking ‘‘in each of
fiscal years’’ and all that follows through ‘‘10’’ and
inserting ‘‘shall enter into agreements with’’;
(4) in subsection (b)(3), by striking ‘‘aid to
families with dependent children under part A of
title IV of the Social Security Act’’ and inserting
‘‘assistance under the program funded part A of title
IV of the Social Security Act of the State in which
the individual resides’’;
(5) in subsection (c)—
(A) in paragraph (1)(C), by striking ‘‘aid
to families with dependent children under title
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IV of the Social Security Act’’ and inserting
‘‘assistance under a State program funded part
A of title IV of the Social Security Act’’;
(B) in paragraph (2), by striking ‘‘aid to
families with dependent children under title IV
of such Act’’ and inserting ‘‘assistance under a
State program funded part A of title IV of the
Social Security Act’’;
(6) in subsection (d), by striking ‘‘job opportu-
nities and basic skills training program (as provided
for under title IV of the Social Security Act)’’ and
inserting ‘‘the State program funded under part A
of title IV of the Social Security Act’’; and
(7) by striking subsections (e) through (g) and
inserting the following:
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of conducting projects under this section, there
is authorized to be appropriated an amount not to exceed
$25,000,000 for any fiscal year.’’.
SEC. 4114. SECRETARIAL SUBMISSION OF LEGISLATIVE
PROPOSAL FOR TECHNICAL AND CONFORM-
ING AMENDMENTS.
Not later than 90 days after the date of the enact-
ment of this Act, the Secretary of Health and Human
Services and the Commissioner of Social Security, in con-
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sultation, as appropriate, with the heads of other Federal
agencies, shall submit to the appropriate committees of
Congress a legislative proposal proposing such technical
and conforming amendments as are necessary to bring the
law into conformity with the policy embodied in this sub-
title.
SEC. 4115. CONFORMING AMENDMENTS TO MEDICAID PRO-
GRAM.
(a) IN GENERAL.—Title XIX is amended—
(1) in section 1931, by inserting ‘‘subject to
section 1931(a),’’ in subsection (a) after ‘‘under this
title,’’ and by redesignating such section as section
1932; and
(2) by inserting after section 1930 the following
new section:
‘‘CONTINUED APPLICATION OF STANDARDS AND METH-
ODOLOGIES UNDER PART A OF TITLE IV FOR CER-
TAIN INDIVIDUALS
‘‘SEC. 1931. (a) For purposes of applying this title
with respect to a State, notwithstanding any other provi-
sion of this title—
‘‘(1) except as provided in paragraphs (2)
through (5), any reference in this title (or other pro-
vision of law in relation to the operation of this title)
to a provision of part A of title IV, or a State plan
under such part, shall be considered a reference to
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such provision or plan as in effect as of July 16,
1996, with respect to the State and eligibility for
medical assistance under this title shall be deter-
mined as if such provision or plan (as in effect as
of such date) remained in effect;
‘‘(2) any reference in section 1902(a)(5) or
1902(a)(55) to a State plan approved under part A
of title IV shall be deemed a reference to a State
program funded under such part;
‘‘(3) a State may provide that any income
standard under the State plan referred to in para-
graph (1) may be increased over a period (beginning
after July 16, 1996) by a percentage that does not
exceed the percentage increase in the consumer price
index for all urban consumers (all items; U.S. city
average) over such period;
‘‘(4) in applying section 1925, medical assist-
ance is required to be provided under such section
only if it is required to be provided under section
408(a)(13); and
‘‘(5) a State may terminate medical assistance
under this title for an individual because the individ-
ual fails to meet any requirement imposed pursuant
to section 407 if the individual was eligible for the
medical assistance—
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‘‘(A) on the basis of receipt of assistance
under a State program funded under part A of
title IV, or
‘‘(B) pursuant to paragraph (1), on the
basis that the individual meets the requirements
for receipt of aid or assistance under the State
plan under part A of title IV (as in effect on
July 16, 1996).
‘‘(b) In the case of a waiver of a provision of part
A of title IV in effect with respect to a State as of July
16, 1996, if the waiver affects eligibility of individuals for
medical assistance under this title, such waiver may con-
tinue to be applied, at the option of the State, in relation
to this title after the date the waiver would otherwise ex-
pire.’’.
(b) PLAN AMENDMENT.—Section 1902(a) (42 U.S.C.
1396a(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(61),
(2) by striking the period at the end of para-
graph (62) and inserting ‘‘; and’’, and
(3) by inserting after paragraph (62) the fol-
lowing new paragraph:
‘‘(63) provide for continuing to administer eligi-
bility standards with respect to individuals who are
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(or seek to be) eligible for medical assistance based
on the application of section 1931.’’.
(c) 
CONFORMING
AMENDMENTS.—(1) 
Section
1902(c) (42 U.S.C. 1396a(c)) is amended by striking
‘‘if—’’ and all that follows and inserting the following: ‘‘if
the State requires individuals described in subsection
(l)(1) to apply for assistance under the State program
funded under part A of title IV as a condition of applying
for or receiving medical assistance under this title.’’.
(2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended
by striking paragraph (9).
SEC. 4116. EFFECTIVE DATE; TRANSITION RULE.
(a) EFFECTIVE DATES.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subtitle, this subtitle and the amend-
ments made by this subtitle shall take effect on July
1, 1997.
(2) DELAYED EFFECTIVE DATE FOR CERTAIN
PROVISIONS.—Notwithstanding any other provision
of this section, paragraphs (2), (3), (4), (5), (8), and
(10) of section 409(a) and section 411(a) of the So-
cial Security Act (as added by the amendments
made by section 4103(a) of this Act) shall not take
effect with respect to a State until, and shall apply
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only with respect to conduct that occurs on or after,
the later of—
(A) July 1, 1997; or
(B) the date that is 6 months after the
date the Secretary of Health and Human Serv-
ices receives from the State a plan described in
section 402(a) of the Social Security Act (as
added by such amendment).
(3) ELIMINATION OF CHILD CARE PROGRAMS.—
The amendments made by section 4103(d) shall take
effect on October 1, 1996.
(4) DEFINITIONS APPLICABLE TO NEW CHILD
CARE
ENTITLEMENT.—Sections 
403(a)(1)(C),
403(a)(1)(D), and 419(4) of the Social Security Act,
as added by the amendments made by section
4103(a) of this Act, shall take effect on October 1,
1996.
(b) TRANSITION RULES.—Effective on the date of
the enactment of this Act:
(1) STATE OPTION TO ACCELERATE EFFECTIVE
DATE.—
(A) IN
GENERAL.—If the Secretary of
Health and Human Services receives from a
State a plan described in section 402(a) of the
Social Security Act (as added by the amend-
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ment made by section 4103(a)(1) of this Act),
then—
(i) on and after the date of such re-
ceipt—
(I) except as provided in clause
(ii), this subtitle and the amendments
made by this subtitle (other than by
section 4103(d) of this Act) shall
apply with respect to the State; and
(II) the State shall be considered
an eligible State for purposes of part
A of title IV of the Social Security
Act (as in effect pursuant to the
amendments made by such section
4103(a)); and
(ii) during the period that begins on
the date of such receipt and ends on June
30, 1997, there shall remain in effect with
respect to the State—
(I) section 403(h) of the Social
Security Act (as in effect on Septem-
ber 30, 1995); and
(II) all State reporting require-
ments under parts A and F of title IV
of the Social Security Act (as in effect
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on September 30, 1995), modified by
the Secretary as appropriate, taking
into account the State program under
part A of title IV of the Social Secu-
rity Act (as in effect pursuant to the
amendments made by such section
4103(a)).
(B) LIMITATIONS
ON
FEDERAL
OBLIGA-
TIONS.—
(i) UNDER
AFDC
PROGRAM.—The
total obligations of the Federal Govern-
ment to a State under part A of title IV
of the Social Security Act (as in effect on
September 30, 1995) with respect to ex-
penditures in fiscal year 1997 shall not ex-
ceed an amount equal to the State family
assistance grant.
(ii) UNDER TEMPORARY FAMILY AS-
SISTANCE
PROGRAM.—Notwithstanding
section 403(a)(1) of the Social Security
Act (as in effect pursuant to the amend-
ments made by section 4103(a) of this
Act), the total obligations of the Federal
Government to a State under such section
403(a)(1)—
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(I) for fiscal year 1996, shall be
an amount equal to—
(aa) the State family assist-
ance grant; multiplied by
(bb) 1⁄366 of the number of
days during the period that be-
gins on the date the Secretary of
Health and Human Services first
receives from the State a plan
described in section 402(a) of the
Social Security Act (as added by
the amendment made by section
4103(a)(1) of this Act) and ends
on September 30, 1996; and
(II) for fiscal year 1997, shall be
an amount equal to the lesser of—
(aa) the amount (if any) by
which the State family assistance
grant exceeds the total obliga-
tions of the Federal Government
to the State under part A of title
IV of the Social Security Act (as
in effect on September 30, 1995)
with respect to expenditures in
fiscal year 1997; or
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(bb) the State family assist-
ance grant, multiplied by 1⁄365 of
the number of days during the
period that begins on October 1,
1996, or the date the Secretary
of Health and Human Services
first receives from the State a
plan described in section 402(a)
of the Social Security Act (as
added by the amendment made
by section 4103(a)(1) of this
Act), whichever is later, and ends
on September 30, 1997.
(iii) CHILD
CARE
OBLIGATIONS
EX-
CLUDED IN DETERMINING FEDERAL AFDC
OBLIGATIONS.—As used in this subpara-
graph, the term ‘‘obligations of the Federal
Government to the State under part A of
title IV of the Social Security Act’’ does
not include any obligation of the Federal
Government with respect to child care ex-
penditures by the State.
(C) SUBMISSION OF STATE PLAN FOR FIS-
CAL YEAR 1996 OR 1997 DEEMED ACCEPTANCE
OF
GRANT
LIMITATIONS
AND
FORMULA
AND
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TERMINATION
OF
AFDC
ENTITLEMENT.—The
submission of a plan by a State pursuant to
subparagraph (A) is deemed to constitute—
(i) the State’s acceptance of the grant
reductions under subparagraph (B) (in-
cluding the formula for computing the
amount of the reduction); and
(ii) the termination of any entitlement
of any individual or family to benefits or
services under the State AFDC program.
(D) DEFINITIONS.—As used in this para-
graph:
(i) STATE AFDC PROGRAM.—The term
‘‘State AFDC program’’ means the State
program under parts A and F of title IV
of the Social Security Act (as in effect on
September 30, 1995).
(ii) STATE.—The term ‘‘State’’ means
the 50 States and the District of Colum-
bia.
(iii) 
STATE
FAMILY
ASSISTANCE
GRANT.—The term ‘‘State family assist-
ance grant’’ means the State family assist-
ance 
grant 
(as 
defined 
in 
section
403(a)(1)(B) of the Social Security Act, as
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added by the amendment made by section
4103(a)(1) of this Act).
(2) CLAIMS, ACTIONS, AND
PROCEEDINGS.—
The amendments made by this subtitle shall not
apply with respect to—
(A) powers, duties, functions, rights,
claims, penalties, or obligations applicable to
aid, assistance, or services provided before the
effective date of this subtitle under the provi-
sions amended; and
(B) administrative actions and proceedings
commenced before such date, or authorized be-
fore such date to be commenced, under such
provisions.
(3) CLOSING OUT ACCOUNT FOR THOSE PRO-
GRAMS TERMINATED OR SUBSTANTIALLY MODIFIED
BY THIS SUBTITLE.—In closing out accounts, Fed-
eral and State officials may use scientifically accept-
able statistical sampling techniques. Claims made
with respect to State expenditures under a State
plan approved under part A of title IV of the Social
Security Act (as in effect on September 30, 1995)
with respect to assistance or services provided on or
before September 30, 1995, shall be treated as
claims with respect to expenditures during fiscal
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year 1995 for purposes of reimbursement even if
payment was made by a State on or after October
1, 1995. Each State shall complete the filing of all
claims under the State plan (as so in effect) within
2 years after the date of the enactment of this Act.
The head of each Federal department shall—
(A) use the single audit procedure to re-
view and resolve any claims in connection with
the close out of programs under such State
plans; and
(B) reimburse States for any payments
made for assistance or services provided during
a prior fiscal year from funds for fiscal year
1995, rather than from funds authorized by
this subtitle.
(4) CONTINUANCE
IN
OFFICE
OF
ASSISTANT
SECRETARY FOR FAMILY SUPPORT.—The individual
who, on the day before the effective date of this sub-
title, is serving as Assistant Secretary for Family
Support within the Department of Health and
Human Services shall, until a successor is appointed
to such position—
(A) continue to serve in such position; and
(B) except as otherwise provided by law—
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(i) continue to perform the functions
of the Assistant Secretary for Family Sup-
port under section 417 of the Social Secu-
rity Act (as in effect before such effective
date); and
(ii) have the powers and duties of the
Assistant Secretary for Family Support
under section 416 of the Social Security
Act (as in effect pursuant to the amend-
ment made by section 4103(a)(1) of this
Act).
(c) TERMINATION OF ENTITLEMENT UNDER AFDC
PROGRAM.—Effective October 1, 1996, no individual or
family shall be entitled to any benefits or services under
any State plan approved under part A or F of title IV
of the Social Security Act (as in effect on September 30,
1995).
Subtitle B—Supplemental Security
Income
SEC. 4200. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in
this subtitle an amendment is expressed in terms of an
amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that sec-
tion or other provision of the Social Security Act.
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CHAPTER 1—ELIGIBILITY RESTRICTIONS
SEC. 4201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDI-
VIDUALS FOUND TO HAVE FRAUDULENTLY
MISREPRESENTED RESIDENCE IN ORDER TO
OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR
MORE STATES.
(a) IN
GENERAL.—Section 1611(e) (42 U.S.C.
1382(e)), as amended by section 105(b)(4) of the Contract
with America Advancement Act of 1996, is amended by
redesignating paragraph (5) as paragraph (3) and by add-
ing at the end the following new paragraph:
‘‘(4)(A) No person shall be considered an eligible in-
dividual or eligible spouse for purposes of this title during
the 10-year period that begins on the date the person is
convicted in Federal or State court of having made a
fraudulent statement or representation with respect to the
place of residence of the person in order to receive assist-
ance simultaneously from 2 or more States under pro-
grams that are funded under title IV, title XIX, or the
Food Stamp Act of 1977, or benefits in 2 or more States
under the supplemental security income program under
this title.
‘‘(B) As soon as practicable after the conviction of
a person in a Federal or State court as described in sub-
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paragraph (A), an official of such court shall notify the
Commissioner of such conviction.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 4202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS
AND PROBATION AND PAROLE VIOLATORS.
(a) IN
GENERAL.—Section 1611(e) (42 U.S.C.
1382(e)), as amended by section 4201(a) of this Act, is
amended by adding at the end the following new para-
graph:
‘‘(5) No person shall be considered an eligible individ-
ual or eligible spouse for purposes of this title with respect
to any month if during such month the person is—
‘‘(A) fleeing to avoid prosecution, or custody or
confinement after conviction, under the laws of the
place from which the person flees, for a crime, or an
attempt to commit a crime, which is a felony under
the laws of the place from which the person flees, or
which, in the case of the State of New Jersey, is a
high misdemeanor under the laws of such State; or
‘‘(B) violating a condition of probation or pa-
role imposed under Federal or State law.’’.
(b) EXCHANGE OF INFORMATION.—Section 1611(e)
(42 U.S.C. 1382(e)), as amended by section 4201(a) of
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this Act and subsection (a) of this section, is amended by
adding at the end the following new paragraph:
‘‘(6) Notwithstanding any other provision of law
(other than section 6103 of the Internal Revenue Code
of 1986), the Commissioner shall furnish any Federal,
State, or local law enforcement officer, upon the written
request of the officer, with the current address, Social Se-
curity number, and photograph (if applicable) of any re-
cipient of benefits under this title, if the officer furnishes
the Commissioner with the name of the recipient, and
other identifying information as reasonably required by
the Commissioner to establish the unique identity of the
recipient, and notifies the Commissioner that—
‘‘(A) the recipient—
‘‘(i) is described in subparagraph (A) or
(B) of paragraph (5); or
‘‘(ii) has information that is necessary for
the officer to conduct the officer’s official du-
ties; and
‘‘(B) the location or apprehension of the recipi-
ent is within the officer’s official duties.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
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SEC. 4203. TREATMENT OF PRISONERS.
(a) IMPLEMENTATION
OF PROHIBITION AGAINST
PAYMENT OF BENEFITS TO PRISONERS.—
(1) IN
GENERAL.—Section 1611(e)(1) (42
U.S.C. 1382(e)(1)) is amended by adding at the end
the following new subparagraph:
‘‘(I)(i) The Commissioner shall enter into an agree-
ment, with any interested State or local institution de-
scribed in clause (i) or (ii) of section 202(x)(1)(A) the pri-
mary purpose of which is to confine individuals as de-
scribed in section 202(x)(1)(A), under which—
‘‘(I) the institution shall provide to the Com-
missioner, on a monthly basis and in a manner spec-
ified by the Commissioner, the names, social security
account numbers, dates of birth, confinement com-
mencement dates, and, to the extent available to the
institution, such other identifying information con-
cerning the inmates of the institution as the Com-
missioner may require for the purpose of carrying
out paragraph (1); and
‘‘(II) the Commissioner shall pay to any such
institution, with respect to each inmate of the insti-
tution who is eligible for a benefit under this title for
the month preceding the first month throughout
which such inmate is in such institution and be-
comes ineligible for such benefit as a result of the
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application of this subparagraph, $400 if the institu-
tion furnishes the information described in subclause
(I) to the Commissioner within 30 days after the
date such individual becomes an inmate of such in-
stitution, or $200 if the institution furnishes such
information after 30 days after such date but within
90 days after such date.
‘‘(ii)(I) The provisions of section 552a of title 5,
United States Code, shall not apply to any agreement en-
tered into under clause (i) or to information exchanged
pursuant to such agreement.
‘‘(II) The Commissioner is authorized to provide, on
a reimbursable basis, information obtained pursuant to
agreements entered into under clause (i) to any Federal
or federally-assisted cash, food, or medical assistance pro-
gram for eligibility purposes.
‘‘(iii) The dollar amounts specified in clause (i)(II)
shall be reduced by 50 percent if the Commissioner is also
required to make a payment to the institution with respect
to the same individual under an agreement entered into
under section 202(x)(3)(B).
‘‘(iv) Payments to institutions required by clause
(i)(II) shall be made from funds otherwise available for
the payment of benefits under this title and shall be treat-
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ed as direct spending for purposes of the Balanced Budget
and Emergency Deficit Control Act of 1985.’’.
(2) CONFORMING
OASDI
AMENDMENTS.—Sec-
tion 202(x)(3) (42 U.S.C. 402(x)(3)) is amended—
(A) by inserting ‘‘(A)’’ after ‘‘(3)’’; and
(B) by adding at the end the following new
subparagraph:
‘‘(B)(i) The Commissioner shall enter into an agree-
ment, with any interested State or local institution de-
scribed in clause (i) or (ii) of paragraph (1)(A) the pri-
mary purpose of which is to confine individuals as de-
scribed in paragraph (1)(A), under which—
‘‘(I) the institution shall provide to the Com-
missioner, on a monthly basis and in a manner spec-
ified by the Commissioner, the names, social security
account numbers, dates of birth, confinement com-
mencement dates, and, to the extent available to the
institution, such other identifying information con-
cerning the individuals confined in the institution as
the Commissioner may require for the purpose of
carrying out paragraph (1); and
‘‘(II) the Commissioner shall pay to any such
institution, with respect to each individual who is en-
titled to a benefit under this title for the month pre-
ceding the first month throughout which such indi-
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vidual is confined in such institution as described in
paragraph (1)(A), $400 if the institution furnishes
the information described in subclause (I) to the
Commissioner within 30 days after the date such in-
dividual’s confinement in such institution begins, or
$200 if the institution furnishes such information
after 30 days after such date but within 90 days
after such date.
‘‘(ii)(I) The provisions of section 552a of title 5,
United States Code, shall not apply to any agreement en-
tered into under clause (i) or to information exchanged
pursuant to such agreement.
‘‘(II) The Commissioner is authorized to provide, on
a reimbursable basis, information obtained pursuant to
agreements entered into under clause (i) to any Federal
or federally-assisted cash, food, or medical assistance pro-
gram for eligibility purposes.
‘‘(iii) The dollar amounts specified in clause (i)(II)
shall be reduced by 50 percent if the Commissioner is also
required to make a payment to the institution with respect
to the same individual under an agreement entered into
under section 1611(e)(1)(I).
‘‘(iv) There shall be transferred from the Federal
Old-Age and Survivors Insurance Trust Fund and the
Federal Disability Insurance Trust Fund, as appropriate,
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such sums as may be necessary to enable the Commis-
sioner to make payments to institutions required by clause
(i)(II). Sums so transferred shall be treated as direct
spending for purposes of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 and excluded from
budget totals in accordance with section 13301 of the
Budget Enforcement Act of 1990.’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to individuals whose
period of confinement in an institution commences
on or after the first day of the seventh month begin-
ning after the month in which this Act is enacted.
(b) ELIMINATION OF OASDI REQUIREMENT THAT
CONFINEMENT STEM FROM CRIME PUNISHABLE BY IM-
PRISONMENT FOR MORE THAN 1 YEAR.—
(1) IN
GENERAL.—Section 202(x)(1)(A) (42
U.S.C. 402(x)(1)(A)) is amended—
(A) in the matter preceding clause (i), by
striking ‘‘during’’ and inserting ‘‘throughout’’;
(B) in clause (i), by striking ‘‘pursuant’’
and all that follows through ‘‘imposed)’’; and
(C) in clause (ii)(I), by striking ‘‘an of-
fense punishable by imprisonment for more
than 1 year’’ and inserting ‘‘a criminal of-
fense’’.
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(2) EFFECTIVE DATE.—The amendments made
by this subsection shall be effective with respect to
benefits payable for months beginning more than
180 days after the date of the enactment of this Act.
(c) STUDY OF OTHER POTENTIAL IMPROVEMENTS IN
THE COLLECTION OF INFORMATION RESPECTING PUBLIC
INMATES.—
(1) STUDY.—The Commissioner of Social Secu-
rity shall conduct a study of the desirability, feasibil-
ity, and cost of—
(A) establishing a system under which
Federal, State, and local courts would furnish
to the Commissioner such information respect-
ing court orders by which individuals are con-
fined in jails, prisons, or other public penal,
correctional, or medical facilities as the Com-
missioner may require for the purpose of carry-
ing out sections 202(x) and 1611(e)(1) of the
Social Security Act; and
(B) requiring that State and local jails,
prisons, and other institutions that enter into
agreements with the Commissioner under sec-
tion 202(x)(3)(B) or 1611(e)(1)(I) of the Social
Security Act furnish the information required
by such agreements to the Commissioner by
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means of an electronic or other sophisticated
data exchange system.
(2) REPORT.—Not later than 1 year after the
date of the enactment of this Act, the Commissioner
of Social Security shall submit a report on the re-
sults of the study conducted pursuant to this sub-
section to the Committee on Finance of the Senate
and the Committee on Ways and Means of the
House of Representatives.
(d) ADDITIONAL REPORT TO CONGRESS.—Not later
than October 1, 1998, the Commissioner of Social Secu-
rity shall provide to the Committee on Finance of the Sen-
ate and the Committee on Ways and Means of the House
of Representatives a list of the institutions that are and
are not providing information to the Commissioner under
sections 202(x)(3)(B) and 1611(e)(1)(I) of the Social Se-
curity Act (as added by this section).
SEC. 4204. EFFECTIVE DATE OF APPLICATION FOR BENE-
FITS.
(a) IN GENERAL.—Subparagraphs (A) and (B) of
section 1611(c)(7) (42 U.S.C. 1382(c)(7)) are amended
to read as follows:
‘‘(A) the first day of the month following the
date such application is filed, or
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‘‘(B) the first day of the month following the
date such individual becomes eligible for such bene-
fits with respect to such application.’’.
(b) SPECIAL RULE RELATING TO EMERGENCY AD-
VANCE PAYMENTS.—Section 1631(a)(4)(A) (42 U.S.C.
1383(a)(4)(A)) is amended—
(1) by inserting ‘‘for the month following the
date the application is filed’’ after ‘‘is presumptively
eligible for such benefits’’; and
(2) by inserting ‘‘, which shall be repaid
through proportionate reductions in such benefits
over a period of not more than 6 months’’ before the
semicolon.
(c) CONFORMING AMENDMENTS.—
(1) Section 1614(b) (42 U.S.C. 1382c(b)) is
amended by striking ‘‘at the time the application or
request is filed’’ and inserting ‘‘on the first day of
the month following the date the application or re-
quest is filed’’.
(2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3))
is amended by inserting ‘‘following the month’’ after
‘‘beginning with the month’’.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to applications for benefits
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under title XVI of the Social Security Act filed on
or after the date of the enactment of this Act, with-
out regard to whether regulations have been issued
to implement such amendments.
(2) BENEFITS
UNDER
TITLE
XVI.—For pur-
poses of this subsection, the term ‘‘benefits under
title XVI of the Social Security Act’’ includes sup-
plementary payments pursuant to an agreement for
Federal administration under section 1616(a) of the
Social Security Act, and payments pursuant to an
agreement entered into under section 212(b) of Pub-
lic Law 93–66.
CHAPTER 2—BENEFITS FOR DISABLED
CHILDREN
SEC. 4211. DEFINITION AND ELIGIBILITY RULES.
(a) DEFINITION OF CHILDHOOD DISABILITY.—Sec-
tion 1614(a)(3) (42 U.S.C. 1382c(a)(3)), as amended by
section 105(b)(1) of the Contract with America Advance-
ment Act of 1996, is amended—
(1) in subparagraph (A), by striking ‘‘An indi-
vidual’’ and inserting ‘‘Except as provided in sub-
paragraph (C), an individual’’;
(2) in subparagraph (A), by striking ‘‘(or, in
the case of an individual under the age of 18, if he
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suffers from any medically determinable physical or
mental impairment of comparable severity)’’;
(3) by redesignating subparagraphs (C) through
(I) as subparagraphs (D) through (J), respectively;
(4) by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C)(i) An individual under the age of 18 shall be
considered disabled for the purposes of this title if that
individual has a medically determinable physical or mental
impairment, which results in marked and severe functional
limitations, and which can be expected to result in death
or which has lasted or can be expected to last for a contin-
uous period of not less than 12 months.
‘‘(ii) The Commissioner shall ensure that the com-
bined effects of all physical or mental impairments of an
individual are taken into account in determining whether
an individual is disabled in accordance with clause (i).
‘‘(iii) The Commissioner shall ensure that the regula-
tions prescribed under this subparagraph provide for the
evaluation of children who cannot be tested because of
their young age.
‘‘(iv) Notwithstanding the preceding provisions of
this subparagraph, no individual under the age of 18 who
engages in substantial gainful activity (determined in ac-
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cordance with regulations prescribed pursuant to subpara-
graph (E)) may be considered to be disabled.’’; and
(5) in subparagraph (F), as redesignated by
paragraph (3), by striking ‘‘(D)’’ and inserting
‘‘(E)’’.
(b) CHANGES TO CHILDHOOD SSI REGULATIONS.—
(1) MODIFICATION TO MEDICAL CRITERIA FOR
EVALUATION
OF
MENTAL
AND
EMOTIONAL
DIS-
ORDERS.—The Commissioner of Social Security
shall 
modify 
sections 
112.00C.2. 
and
112.02B.2.c.(2) of appendix 1 to subpart P of part
404 of title 20, Code of Federal Regulations, to
eliminate references to maladaptive behavior in the
domain of personal/behavorial function.
(2) 
DISCONTINUANCE
OF
INDIVIDUALIZED
FUNCTIONAL
ASSESSMENT.—The Commissioner of
Social Security shall discontinue the individualized
functional assessment for children set forth in sec-
tions 416.924d and 416.924e of title 20, Code of
Federal Regulations.
(c) MEDICAL IMPROVEMENT REVIEW STANDARD AS
IT APPLIES TO INDIVIDUALS UNDER THE AGE OF 18.—
Section 1614(a)(4) (42 U.S.C. 1382(a)(4)) is amended—
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(1) by redesignating subclauses (I) and (II) of
clauses (i) and (ii) of subparagraph (B) as items
(aa) and (bb), respectively;
(2) by redesignating clauses (i) and (ii) of sub-
paragraphs (A) and (B) as subclauses (I) and (II),
respectively;
(3) by redesignating subparagraphs (A) through
(C) as clauses (i) through (iii), respectively;
(4) by inserting before clause (i) (as redesig-
nated by paragraph (3)) the following new subpara-
graph:
‘‘(A) in the case of an individual who is age 18
or older—’’;
(5) by inserting after and below subparagraph
(A)(iii) (as so redesignated) the following new sub-
paragraph:
‘‘(B) in the case of an individual who is under
the age of 18—
‘‘(i) 
substantial 
evidence 
which 
dem-
onstrates that there has been medical improve-
ment in the individual’s impairment or com-
bination of impairments, and that such impair-
ment or combination of impairments no longer
results in marked and severe functional limita-
tions; or
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‘‘(ii) substantial evidence which dem-
onstrates that, as determined on the basis of
new or improved diagnostic techniques or eval-
uations, the individual’s impairment or com-
bination of impairments, is not as disabling as
it was considered to be at the time of the most
recent prior decision that the individual was
under a disability or continued to be under a
disability, and such impairment or combination
of impairments does not result in marked and
severe functional limitations; or’’;
(6) by redesignating subparagraph (D) as sub-
paragraph (C) and by inserting in such subpara-
graph ‘‘in the case of any individual,’’ before ‘‘sub-
stantial evidence’’; and
(7) in the first sentence following subparagraph
(C) (as redesignated by paragraph (6)), by—
(A) inserting ‘‘(i)’’ before ‘‘to restore’’; and
(B) inserting ‘‘, or (ii) in the case of an in-
dividual under the age of 18, to eliminate or
improve the individual’s impairment or com-
bination of impairments so that it no longer re-
sults in marked and severe functional limita-
tions’’ immediately before the period.
(d) EFFECTIVE DATES, ETC.—
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(1) EFFECTIVE DATES.—
(A) SUBSECTIONS (a) AND (b).—
(i) IN GENERAL.—The provisions of,
and amendments made by, subsections (a)
and (b) shall apply to any individual who
applies for, or whose claim is finally adju-
dicated with respect to, benefits under title
XVI of the Social Security Act on or after
the date of the enactment of this Act,
without regard to whether regulations have
been issued to implement such provisions
and amendments.
(ii) DETERMINATION OF FINAL ADJU-
DICATION.—For purposes of clause (i), no
individual’s claim with respect to such ben-
efits may be considered to be finally adju-
dicated before such date of enactment if,
on or after such date, there is pending a
request for either administrative or judicial
review with respect to such claim that has
been denied in whole, or there is pending,
with respect to such claim, readjudication
by the Commissioner of Social Security
pursuant to relief in a class action or im-
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plementation by the Commissioner of a
court remand order.
(B) SUBSECTION
(c).—The amendments
made by subsection (c) shall apply with respect
to benefits under title XVI of the Social Secu-
rity Act for months beginning on or after the
date of the enactment of this Act, without re-
gard to whether regulations have been issued to
implement such amendments.
(2) APPLICATION TO CURRENT RECIPIENTS.—
(A) ELIGIBILITY
REDETERMINATIONS.—
During the period beginning on the date of the
enactment of this Act and ending on the date
which is 1 year after such date of enactment,
the Commissioner of Social Security shall rede-
termine the eligibility of any individual under
age 18 who is eligible for supplemental security
income benefits by reason of disability under
title XVI of the Social Security Act as of the
date of the enactment of this Act and whose
eligibility for such benefits may terminate by
reason of the provisions of, or amendments
made by, subsections (a) and (b). With respect
to any redetermination under this subpara-
graph—
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(i) section 1614(a)(4) of the Social
Security Act (42 U.S.C. 1382c(a)(4)) shall
not apply;
(ii) the Commissioner of Social Secu-
rity shall apply the eligibility criteria for
new applicants for benefits under title XVI
of such Act;
(iii) the Commissioner shall give such
redetermination priority over all continuing
eligibility reviews and other reviews under
such title; and
(iv) such redetermination shall be
counted as a review or redetermination
otherwise required to be made under sec-
tion 208 of the Social Security Independ-
ence and Program Improvements Act of
1994 or any other provision of title XVI of
the Social Security Act.
(B) GRANDFATHER PROVISION.—The pro-
visions of, and amendments made by, sub-
sections (a) and (b), and the redetermination
under subparagraph (A), shall only apply with
respect to the benefits of an individual de-
scribed in subparagraph (A) for months begin-
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ning on or after the date of the redetermination
with respect to such individual.
(C) NOTICE.—Not later than January 1,
1997, the Commissioner of Social Security shall
notify an individual described in subparagraph
(A) of the provisions of this paragraph.
(3) REPORT.—The Commissioner of Social Se-
curity shall report to the Congress regarding the
progress made in implementing the provisions of,
and amendments made by, this section on child dis-
ability evaluations not later than 180 days after the
date of the enactment of this Act.
(4) REGULATIONS.—Notwithstanding any other
provision of law, the Commissioner of Social Secu-
rity shall submit for review to the committees of ju-
risdiction in the Congress any final regulation per-
taining to the eligibility of individuals under age 18
for benefits under title XVI of the Social Security
Act at least 45 days before the effective date of such
regulation. The submission under this paragraph
shall include supporting documentation providing a
cost analysis, workload impact, and projections as to
how the regulation will effect the future number of
recipients under such title.
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(5) BENEFITS
UNDER
TITLE
XVI.—For pur-
poses of this subsection, the term ‘‘benefits under
title XVI of the Social Security Act’’ includes sup-
plementary payments pursuant to an agreement for
Federal administration under section 1616(a) of the
Social Security Act, and payments pursuant to an
agreement entered into under section 212(b) of Pub-
lic Law 93–66.
SEC. 4212. ELIGIBILITY REDETERMINATIONS AND CON-
TINUING DISABILITY REVIEWS.
(a) CONTINUING DISABILITY REVIEWS RELATING TO
CERTAIN CHILDREN.—Section 1614(a)(3)(H) (42 U.S.C.
1382c(a)(3)(H)), as redesignated by section 4211(a)(3) of
this Act, is amended—
(1) by inserting ‘‘(i)’’ after ‘‘(H)’’; and
(2) by adding at the end the following new
clause:
‘‘(ii)(I) Not less frequently than once every 3 years,
the Commissioner shall review in accordance with para-
graph (4) the continued eligibility for benefits under this
title of each individual who has not attained 18 years of
age and is eligible for such benefits by reason of an im-
pairment (or combination of impairments) which is likely
to improve (or, at the option of the Commissioner, which
is unlikely to improve).
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‘‘(II) A representative payee of a recipient whose case
is reviewed under this clause shall present, at the time
of review, evidence demonstrating that the recipient is,
and has been, receiving treatment, to the extent consid-
ered medically necessary and available, of the condition
which was the basis for providing benefits under this title.
‘‘(III) If the representative payee refuses to comply
without good cause with the requirements of subclause
(II), the Commissioner of Social Security shall, if the
Commissioner determines it is in the best interest of the
individual, promptly suspend payment of benefits to the
representative payee, and provide for payment of benefits
to an alternative representative payee of the individual or,
if the interest of the individual under this title would be
served thereby, to the individual.
‘‘(IV) Subclause (II) shall not apply to the represent-
ative payee of any individual with respect to whom the
Commissioner determines such application would be inap-
propriate or unnecessary. In making such determination,
the Commissioner shall take into consideration the nature
of the individual’s impairment (or combination of impair-
ments). Section 1631(c) shall not apply to a finding by
the Commissioner that the requirements of subclause (II)
should not apply to an individual’s representative payee.’’.
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(b) DISABILITY ELIGIBILITY REDETERMINATIONS
REQUIRED FOR SSI RECIPIENTS WHO ATTAIN 18 YEARS
OF AGE.—
(1) IN GENERAL.—Section 1614(a)(3)(H) (42
U.S.C. 1382c(a)(3)(H)), as amended by subsection
(a) of this section, is amended by adding at the end
the following new clause:
‘‘(iii) If an individual is eligible for benefits under this
title by reason of disability for the month preceding the
month in which the individual attains the age of 18 years,
the Commissioner shall redetermine such eligibility—
‘‘(I) during the 1-year period beginning on the
individual’s 18th birthday; and
‘‘(II) by applying the criteria used in determin-
ing the initial eligibility for applicants who are age
18 or older.
With respect to a redetermination under this clause, para-
graph (4) shall not apply and such redetermination shall
be considered a substitute for a review or redetermination
otherwise required under any other provision of this sub-
paragraph during that 1-year period.’’.
(2) CONFORMING REPEAL.—Section 207 of the
Social Security Independence and Program Improve-
ments Act of 1994 (42 U.S.C. 1382 note; 108 Stat.
1516) is hereby repealed.
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(c) CONTINUING DISABILITY REVIEW REQUIRED FOR
LOW BIRTH WEIGHT BABIES.—Section 1614(a)(3)(H)
(42 U.S.C. 1382c(a)(3)(H)), as amended by subsections
(a) and (b) of this section, is amended by adding at the
end the following new clause:
‘‘(iv)(I) Not later than 12 months after the birth of
an individual, the Commissioner shall review in accordance
with paragraph (4) the continuing eligibility for benefits
under this title by reason of disability of such individual
whose low birth weight is a contributing factor material
to the Commissioner’s determination that the individual
is disabled.
‘‘(II) A review under subclause (I) shall be considered
a substitute for a review otherwise required under any
other provision of this subparagraph during that 12-
month period.
‘‘(III) A representative payee of a recipient whose
case is reviewed under this clause shall present, at the
time of review, evidence demonstrating that the recipient
is, and has been, receiving treatment, to the extent consid-
ered medically necessary and available, of the condition
which was the basis for providing benefits under this title.
‘‘(IV) If the representative payee refuses to comply
without good cause with the requirements of subclause
(III), the Commissioner of Social Security shall, if the
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Commissioner determines it is in the best interest of the
individual, promptly suspend payment of benefits to the
representative payee, and provide for payment of benefits
to an alternative representative payee of the individual or,
if the interest of the individual under this title would be
served thereby, to the individual.
‘‘(V) Subclause (III) shall not apply to the represent-
ative payee of any individual with respect to whom the
Commissioner determines such application would be inap-
propriate or unnecessary. In making such determination,
the Commissioner shall take into consideration the nature
of the individual’s impairment (or combination of impair-
ments). Section 1631(c) shall not apply to a finding by
the Commissioner that the requirements of subclause (III)
should not apply to an individual’s representative payee.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to benefits for months beginning
on or after the date of the enactment of this Act, without
regard to whether regulations have been issued to imple-
ment such amendments.
SEC. 4213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.
(a) DISPOSAL OF RESOURCES FOR LESS THAN FAIR
MARKET VALUE.—
(1) IN GENERAL.—Section 1613(c) (42 U.S.C.
1382b(c)) is amended to read as follows:
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‘‘Disposal of Resources for Less Than Fair Market Value
‘‘(c)(1)(A)(i) If an individual who has not attained
18 years of age (or any person acting on such individual’s
behalf) disposes of resources of the individual for less than
fair market value on or after the look-back date specified
in clause (ii)(I), the individual is ineligible for benefits
under this title for months during the period beginning
on the date specified in clause (iii) and equal to the num-
ber of months specified in clause (iv).
‘‘(ii)(I) The look-back date specified in this subclause
is a date that is 36 months before the date specified in
subclause (II).
‘‘(II) The date specified in this subclause is the date
on which the individual applies for benefits under this title
or, if later, the date on which the disposal of the individ-
ual’s resources for less than fair market value occurs.
‘‘(iii) The date specified in this clause is the first day
of the first month that follows the month in which the
individual’s resources were disposed of for less than fair
market value and that does not occur in any other period
of ineligibility under this paragraph.
‘‘(iv) The number of months of ineligibility under this
clause for an individual shall be equal to—
‘‘(I) the total, cumulative uncompensated value
of all the individual’s resources so disposed of on or
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after the look-back date specified in clause (ii)(I), di-
vided by
‘‘(II) the amount of the maximum monthly ben-
efit payable under section 1611(b) to an eligible in-
dividual for the month in which the date specified in
clause (ii)(II) occurs.
‘‘(B) An individual shall not be ineligible for benefits
under this title by reason of subparagraph (A) if the Com-
missioner determines that—
‘‘(i) the individual intended to dispose of the re-
sources at fair market value;
‘‘(ii) the resources were transferred exclusively
for a purpose other than to qualify for benefits
under this title;
‘‘(iii) all resources transferred for less than fair
market value have been returned to the individual;
or
‘‘(iv) the denial of eligibility would work an
undue hardship on the individual (as determined on
the basis of criteria established by the Commissioner
in regulations).
‘‘(C) For purposes of this paragraph, in the case of
a resource held by an individual in common with another
person or persons in a joint tenancy, tenancy in common,
or similar arrangement, the resource (or the affected por-
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tion of such resource) shall be considered to be disposed
of by such individual when any action is taken, either by
such individual or by any other person, that reduces or
eliminates such individual’s ownership or control of such
resource.
‘‘(D)(i) Notwithstanding subparagraph (A), this sub-
section shall not apply to a transfer of a resource to a
trust if the portion of the trust attributable to such re-
source is considered a resource available to the individual
pursuant to subsection (e)(3) (or would be so considered,
but for the application of subsection (e)(4)).
‘‘(ii) In the case of a trust established by an individ-
ual (within the meaning of subsection (e)(2)(A)), if from
such portion of the trust (if any) that is considered a re-
source available to the individual pursuant to subsection
(e)(3) (or would be so considered but for the application
of subsection (e)(2)) or the residue of such portion upon
the termination of the trust—
‘‘(I) there is made a payment other than to or
for the benefit of the individual, or
‘‘(II) no payment could under any circumstance
be made to the individual,
then the payment described in subclause (I) or the fore-
closure of payment described in subclause (II) shall be
considered a disposal of resources by the individual subject
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to this subsection, as of the date of such payment or fore-
closure, respectively.
‘‘(2)(A) At the time an individual (and the individ-
ual’s eligible spouse, if any) applies for benefits under this
title, and at the time the eligibility of an individual (and
such spouse, if any) for such benefits is redetermined, the
Commissioner of Social Security shall—
‘‘(i) inform such individual of the provisions of
paragraph (1) providing for a period of ineligibility
for benefits under this title for individuals who make
certain dispositions of resources for less than fair
market value, and inform such individual that infor-
mation obtained pursuant to clause (ii) will be made
available to the State agency administering a State
plan approved under title XIX (as provided in sub-
paragraph (B)); and
‘‘(ii) obtain from such individual information
which may be used in determining whether or not a
period of ineligibility for such benefits would be re-
quired by reason of paragraph (1).
‘‘(B) The Commissioner of Social Security shall make
the information obtained under subparagraph (A)(ii)
available, on request, to any State agency administering
a State plan approved under title XIX.
‘‘(3) For purposes of this subsection—
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‘‘(A) the term ‘trust’ includes any legal instru-
ment or device that is similar to a trust; and
‘‘(B) the term ‘benefits under this title’ includes
supplementary payments pursuant to an agreement
for Federal administration under section 1616(a),
and payments pursuant to an agreement entered
into under section 212(b) of Public Law 93–66.’’.
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall be effective with respect to
transfers that occur at least 90 days after the date
of the enactment of this Act.
(b) TREATMENT OF ASSETS HELD IN TRUST.—
(1) TREATMENT AS RESOURCE.—Section 1613
(42 U.S.C. 1382) is amended by adding at the end
the following new subsection:
‘‘Trusts
‘‘(e)(1) In determining the resources of an individual
who has not attained 18 years of age, the provisions of
paragraph (3) shall apply to a trust established by such
individual.
‘‘(2)(A) For purposes of this subsection, an individual
shall be considered to have established a trust if any assets
of the individual were transferred to the trust.
‘‘(B) In the case of an irrevocable trust to which the
assets of an individual and the assets of any other person
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or persons were transferred, the provisions of this sub-
section shall apply to the portion of the trust attributable
to the assets of the individual.
‘‘(C) This subsection shall apply without regard to—
‘‘(i) the purposes for which the trust is estab-
lished;
‘‘(ii) whether the trustees have or exercise any
discretion under the trust;
‘‘(iii) any restrictions on when or whether dis-
tributions may be made from the trust; or
‘‘(iv) any restrictions on the use of distributions
from the trust.
‘‘(3)(A) In the case of a revocable trust, the corpus
of the trust shall be considered a resource available to the
individual.
‘‘(B) In the case of an irrevocable trust, if there are
any circumstances under which payment from the trust
could be made to or for the benefit of the individual, the
portion of the corpus from which payment to or for the
benefit of the individual could be made shall be considered
a resource available to the individual.
‘‘(4) The Commissioner may waive the application of
this subsection with respect to any individual if the Com-
missioner determines, on the basis of criteria prescribed
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in regulations, that such application would work an undue
hardship on such individual.
‘‘(5) For purposes of this subsection—
‘‘(A) the term ‘trust’ includes any legal instru-
ment or device that is similar to a trust;
‘‘(B) the term ‘corpus’ means all property and
other interests held by the trust, including accumu-
lated earnings and any other addition to such trust
after its establishment (except that such term does
not include any such earnings or addition in the
month in which such earnings or addition is credited
or otherwise transferred to the trust);
‘‘(C) the term ‘asset’ includes any income or re-
source of the individual, including—
‘‘(i) any income otherwise excluded by sec-
tion 1612(b);
‘‘(ii) any resource otherwise excluded by
this section; and
‘‘(iii) any other payment or property that
the individual is entitled to but does not receive
or have access to because of action by—
‘‘(I) such individual;
‘‘(II) a person or entity (including a
court) with legal authority to act in place
of, or on behalf of, such individual; or
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‘‘(III) a person or entity (including a
court) acting at the direction of, or upon
the request of, such individual; and
‘‘(D) the term ‘benefits under this title’ in-
cludes supplementary payments pursuant to an
agreement for Federal administration under section
1616(a), and payments pursuant to an agreement
entered into under section 212(b) of Public Law 93–
66.’’.
(2) 
TREATMENT
AS
INCOME.—Section
1612(a)(2) (42 U.S.C. 1382a(a)(2)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (E);
(B) by striking the period at the end of
subparagraph (F) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(G) any earnings of, and additions to, the
corpus of a trust (as defined in section 1613(f))
established by an individual (within the mean-
ing of section 1613(e)(2)(A)) and of which such
individual is a beneficiary (other than a trust to
which section 1613(e)(4) applies), except that
in the case of an irrevocable trust, there shall
exist circumstances under which payment from
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such earnings or additions could be made to, or
for the benefit of, such individual.’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect on the date which
is 90 days after the date of the enactment of this
Act, and shall apply to trusts established on or after
such date.
(c) REQUIREMENT TO ESTABLISH ACCOUNT.—
(1) IN
GENERAL.—Section 1631(a)(2) (42
U.S.C. 1383(a)(2)) is amended—
(A) by redesignating subparagraphs (F)
and (G) as subparagraphs (G) and (H), respec-
tively; and
(B) by inserting after subparagraph (E)
the following new subparagraph:
‘‘(F)(i)(I) Each representative payee of an eligible in-
dividual under the age of 18 who is eligible for the pay-
ment of benefits described in subclause (II) shall establish
on behalf of such individual an account in a financial insti-
tution into which such benefits shall be paid, and shall
thereafter maintain such account for use in accordance
with clause (ii).
‘‘(II) Benefits described in this subclause are past-
due monthly benefits under this title (which, for purposes
of this subclause, include State supplementary payments
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made by the Commissioner pursuant to an agreement
under section 1616 or section 212(b) of Public Law 93–
66) in an amount (after any withholding by the Commis-
sioner for reimbursement to a State for interim assistance
under subsection (g)) that exceeds the product of—
‘‘(aa) 6, and
‘‘(bb) the maximum monthly benefit payable
under this title to an eligible individual.
‘‘(ii)(I) A representative payee shall use funds in the
account established under clause (i) to pay for allowable
expenses described in subclause (II).
‘‘(II) An allowable expense described in this subclause
is an expense for—
‘‘(aa) education or job skills training;
‘‘(bb) personal needs assistance;
‘‘(cc) special equipment;
‘‘(dd) housing modification;
‘‘(ee) medical treatment;
‘‘(ff) therapy or rehabilitation; or
‘‘(gg) any other item or service that the Com-
missioner determines to be appropriate;
provided that such expense benefits such individual and,
in the case of an expense described in item (bb), (cc), (dd),
(ff), or (gg), is related to the impairment (or combination
of impairments) of such individual.
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‘‘(III) The use of funds from an account established
under clause (i) in any manner not authorized by this
clause—
‘‘(aa) by a representative payee shall be consid-
ered a misapplication of benefits for all purposes of
this paragraph, and any representative payee who
knowingly misapplies benefits from such an account
shall be liable to the Commissioner in an amount
equal to the total amount of such benefits; and
‘‘(bb) by an eligible individual who is his or her
own payee shall be considered a misapplication of
benefits for all purposes of this paragraph and the
total amount of such benefits so used shall be con-
sidered to be the uncompensated value of a disposed
resource and shall be subject to the provisions of
section 1613(c).
‘‘(IV) This clause shall continue to apply to funds in
the account after the child has reached age 18, regardless
of whether benefits are paid directly to the beneficiary or
through a representative payee.
‘‘(iii) The representative payee may deposit into the
account established pursuant to clause (i)—
‘‘(I) past-due benefits payable to the eligible in-
dividual in an amount less than that specified in
clause (i)(II), and
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‘‘(II) any other funds representing an under-
payment under this title to such individual, provided
that the amount of such underpayment is equal to
or exceeds the maximum monthly benefit payable
under this title to an eligible individual.
‘‘(iv) The Commissioner of Social Security shall es-
tablish a system for accountability monitoring whereby
such representative payee shall report, at such time and
in such manner as the Commissioner shall require, on ac-
tivity respecting funds in the account established pursuant
to clause (i).’’.
(2) EXCLUSION
FROM
RESOURCES.—Section
1613(a) (42 U.S.C. 1382b(a)) is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (10);
(B) by striking the period at the end of
paragraph (11) and inserting ‘‘; and’’; and
(C) by inserting after paragraph (11) the
following new paragraph:
‘‘(12) any account, including accrued interest or
other earnings thereon, established and maintained
in accordance with section 1631(a)(2)(F).’’.
(3) 
EXCLUSION
FROM
INCOME.—Section
1612(b) (42 U.S.C. 1382a(b)) is amended—
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(A) by striking ‘‘and’’ at the end of para-
graph (19);
(B) by striking the period at the end of
paragraph (20) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
paragraph:
‘‘(21) the interest or other earnings on any ac-
count established and maintained in accordance with
section 1631(a)(2)(F).’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to payments made
after the date of the enactment of this Act.
SEC. 4214. REDUCTION IN CASH BENEFITS PAYABLE TO IN-
STITUTIONALIZED INDIVIDUALS WHOSE MED-
ICAL COSTS ARE COVERED BY PRIVATE IN-
SURANCE.
(a) IN GENERAL.—Section 1611(e)(1)(B) (42 U.S.C.
1382(e)(1)(B)) is amended—
(1) by striking ‘‘title XIX, or’’ and inserting
‘‘title XIX,’’; and
(2) by inserting ‘‘or, in the case of an eligible
individual under the age of 18, receiving payments
(with respect to such individual) under any health
insurance policy issued by a private provider of such
insurance’’ after ‘‘section 1614(f)(2)(B),’’.
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(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to benefits for months beginning
90 or more days after the date of the enactment of this
Act, without regard to whether regulations have been is-
sued to implement such amendments.
SEC. 4215. REGULATIONS.
Within 3 months after the date of the enactment of
this Act, the Commissioner of Social Security shall pre-
scribe such regulations as may be necessary to implement
the amendments made by this chapter.
CHAPTER 3—ADDITIONAL ENFORCEMENT
PROVISIONS
SEC. 4221. INSTALLMENT PAYMENT OF LARGE PAST-DUE
SUPPLEMENTAL SECURITY INCOME BENE-
FITS.
(a) IN GENERAL.—Section 1631(a) (42 U.S.C. 1383)
is amended by adding at the end the following new para-
graph:
‘‘(10)(A) If an individual is eligible for past-due
monthly benefits under this title in an amount that (after
any withholding for reimbursement to a State for interim
assistance under subsection (g)) equals or exceeds the
product of—
‘‘(i) 12, and
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‘‘(ii) the maximum monthly benefit payable
under this title to an eligible individual (or, if appro-
priate, to an eligible individual and eligible spouse),
then the payment of such past-due benefits (after any such
reimbursement to a State) shall be made in installments
as provided in subparagraph (B).
‘‘(B)(i) The payment of past-due benefits subject to
this subparagraph shall be made in not to exceed 3 install-
ments that are made at 6-month intervals.
‘‘(ii) Except as provided in clause (iii), the amount
of each of the first and second installments may not exceed
an amount equal to the product of clauses (i) and (ii) of
subparagraph (A).
‘‘(iii) In the case of an individual who has—
‘‘(I) outstanding debt attributable to—
‘‘(aa) food,
‘‘(bb) clothing,
‘‘(cc) shelter, or
‘‘(dd) medically necessary services, supplies
or equipment, or medicine; or
‘‘(II) current expenses or expenses anticipated
in the near term attributable to—
‘‘(aa) medically necessary services, supplies
or equipment, or medicine, or
‘‘(bb) the purchase of a home, and
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such debt or expenses are not subject to reimbursement
by a public assistance program, the Secretary under title
XVIII, a State plan approved under title XIX, or any pri-
vate entity legally liable to provide payment pursuant to
an insurance policy, pre-paid plan, or other arrangement,
the limitation specified in clause (ii) may be exceeded by
an amount equal to the total of such debt and expenses.
‘‘(C) This paragraph shall not apply to any individual
who, at the time of the Commissioner’s determination that
such individual is eligible for the payment of past-due
monthly benefits under this title—
‘‘(i) is afflicted with a medically determinable
impairment that is expected to result in death within
12 months; or
‘‘(ii) is ineligible for benefits under this title
and the Commissioner determines that such individ-
ual is likely to remain ineligible for the next 12
months.
‘‘(D) For purposes of this paragraph, the term ‘bene-
fits under this title’ includes supplementary payments pur-
suant to an agreement for Federal administration under
section 1616(a), and payments pursuant to an agreement
entered into under section 212(b) of Public Law 93–66.’’.
(b) CONFORMING AMENDMENT.—Section 1631(a)(1)
(42 U.S.C. 1383(a)(1)) is amended by inserting ‘‘(subject
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to paragraph (10))’’ immediately before ‘‘in such install-
ments’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section are effective with respect to past-due
benefits payable under title XVI of the Social Secu-
rity Act after the third month following the month
in which this Act is enacted.
(2) BENEFITS PAYABLE UNDER TITLE XVI.—
For purposes of this subsection, the term ‘‘benefits
payable under title XVI of the Social Security Act’’
includes supplementary payments pursuant to an
agreement for Federal administration under section
1616(a) of the Social Security Act, and payments
pursuant to an agreement entered into under section
212(b) of Public Law 93–66.
SEC. 4222. RECOVERY OF SUPPLEMENTAL SECURITY IN-
COME OVERPAYMENTS FROM SOCIAL SECU-
RITY BENEFITS.
(a) IN GENERAL.—Part A of title XI is amended by
adding at the end the following new section:
‘‘RECOVERY OF SSI OVERPAYMENTS FROM SOCIAL
SECURITY BENEFITS
‘‘SEC. 1146. (a) IN GENERAL.—Whenever the Com-
missioner of Social Security determines that more than
the correct amount of any payment has been made to any
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person under the supplemental security income program
authorized by title XVI, and the Commissioner is unable
to make proper adjustment or recovery of the amount so
incorrectly paid as provided in section 1631(b), the Com-
missioner (notwithstanding section 207) may recover the
amount incorrectly paid by decreasing any amount which
is payable under the Federal Old-Age and Survivors Insur-
ance program or the Federal Disability Insurance pro-
gram authorized by title II to that person or that person’s
estate.
‘‘(b) NO EFFECT ON SSI BENEFIT ELIGIBILITY OR
AMOUNT.—Notwithstanding subsections (a) and (b) of
section 1611, in any case in which the Commissioner takes
action in accordance with subsection (a) to recover an
overpayment from any person, neither that person, nor
any individual whose eligibility or benefit amount is deter-
mined by considering any part of that person’s income,
shall, as a result of such action—
‘‘(1) become eligible under the program of sup-
plemental security income benefits under title XVI,
or
‘‘(2) if such person or individual is already so
eligible, become eligible for increased benefits there-
under.
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‘‘(c) PROGRAM UNDER TITLE XVI.—For purposes of
this section, the term ‘supplemental security income pro-
gram authorized by title XVI’ includes supplementary pay-
ments pursuant to an agreement for Federal administra-
tion under section 1616(a), and payments pursuant to an
agreement entered into under section 212(b) of Public
Law 93–66.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 204 (42 U.S.C. 404) is amended by
adding at the end the following new subsection:
‘‘(g) For payments which are adjusted or withheld
to recover an overpayment of supplemental security in-
come benefits paid under title XVI (including State sup-
plementary payments which were paid under an agreement
pursuant to section 1616(a) or section 212(b) of Public
Law 93-66), see section 1146.’’.
(2) Section 1631(b) is amended by adding at
the end the following new paragraph:
‘‘(5) For the recovery of overpayments of benefits
under this title from benefits payable under title II, see
section 1146.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act and shall apply to overpayments outstanding
on or after such date.
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SEC. 4223. REGULATIONS.
Within 3 months after the date of the enactment of
this Act, the Commissioner of Social Security shall pre-
scribe such regulations as may be necessary to implement
the amendments made by this chapter.
CHAPTER 4—STATE SUPPLEMENTATION
PROGRAMS
SEC. 4225. REPEAL OF MAINTENANCE OF EFFORT RE-
QUIREMENTS 
APPLICABLE 
TO 
OPTIONAL
STATE PROGRAMS FOR SUPPLEMENTATION
OF SSI BENEFITS.
Section 1618 (42 U.S.C. 1382g) is hereby repealed.
CHAPTER 5—STUDIES REGARDING SUP-
PLEMENTAL SECURITY INCOME PRO-
GRAM
SEC. 4231. ANNUAL REPORT ON THE SUPPLEMENTAL SECU-
RITY INCOME PROGRAM.
Title XVI (42 U.S.C. 1381 et seq.), as amended by
section 4201(c) of this Act, is amended by adding at the
end the following new section:
‘‘ANNUAL REPORT ON PROGRAM
‘‘SEC. 1637. (a) Not later than May 30 of each year,
the Commissioner of Social Security shall prepare and de-
liver a report annually to the President and the Congress
regarding the program under this title, including—
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‘‘(1) a comprehensive description of the pro-
gram;
‘‘(2) historical and current data on allowances
and denials, including number of applications and
allowance rates for initial determinations, reconsid-
eration determinations, administrative law judge
hearings, appeals council reviews, and Federal court
decisions;
‘‘(3) historical and current data on characteris-
tics of recipients and program costs, by recipient
group (aged, blind, disabled adults, and disabled
children);
‘‘(4) projections of future number of recipients
and program costs, through at least 25 years;
‘‘(5) number of redeterminations and continu-
ing disability reviews, and the outcomes of such re-
determinations and reviews;
‘‘(6) data on the utilization of work incentives;
‘‘(7) detailed information on administrative and
other program operation costs;
‘‘(8) summaries of relevant research undertaken
by the Social Security Administration, or by other
researchers;
‘‘(9) State supplementation program operations;
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‘‘(10) a historical summary of statutory
changes to this title; and
‘‘(11) such other information as the Commis-
sioner deems useful.
‘‘(b) Each member of the Social Security Advisory
Board shall be permitted to provide an individual report,
or a joint report if agreed, of views of the program under
this title, to be included in the annual report required
under this section.’’.
SEC. 4232. STUDY OF DISABILITY DETERMINATION PROC-
ESS.
(a) IN GENERAL.—Not later than 90 days after the
date of the enactment of this Act, and from funds other-
wise appropriated, the Commissioner of Social Security
shall make arrangements with the National Academy of
Sciences, or other independent entity, to conduct a study
of the disability determination process under titles II and
XVI of the Social Security Act. This study shall be under-
taken in consultation with professionals representing ap-
propriate disciplines.
(b) STUDY COMPONENTS.—The study described in
subsection (a) shall include—
(1) an initial phase examining the appropriate-
ness of, and making recommendations regarding—
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(A) the definitions of disability in effect on
the date of the enactment of this Act and the
advantages and disadvantages of alternative
definitions; and
(B) the operation of the disability deter-
mination process, including the appropriate
method of performing comprehensive assess-
ments of individuals under age 18 with physical
and mental impairments;
(2) a second phase, which may be concurrent
with the initial phase, examining the validity, reli-
ability, and consistency with current scientific knowl-
edge of the standards and individual listings in the
Listing of Impairments set forth in appendix 1 of
subpart P of part 404 of title 20, Code of Federal
Regulations, and of related evaluation procedures as
promulgated by the Commissioner of Social Security;
and
(3) such other issues as the applicable entity
considers appropriate.
(c) REPORTS AND REGULATIONS.—
(1) REPORTS.—The Commissioner of Social Se-
curity shall request the applicable entity, to submit
an interim report and a final report of the findings
and recommendations resulting from the study de-
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scribed in this section to the President and the Con-
gress not later than 18 months and 24 months, re-
spectively, from the date of the contract for such
study, and such additional reports as the Commis-
sioner deems appropriate after consultation with the
applicable entity.
(2) REGULATIONS.—The Commissioner of So-
cial Security shall review both the interim and final
reports, and shall issue regulations implementing
any necessary changes following each report.
SEC. 4233. STUDY BY GENERAL ACCOUNTING OFFICE.
Not later than January 1, 1999, the Comptroller
General of the United States shall study and report on—
(1) the impact of the amendments made by,
and the provisions of, this subtitle on the supple-
mental security income program under title XVI of
the Social Security Act; and
(2) extra expenses incurred by families of chil-
dren receiving benefits under such title that are not
covered by other Federal, State, or local programs.
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CHAPTER 6—NATIONAL COMMISSION ON
THE FUTURE OF DISABILITY
SEC. 4241. ESTABLISHMENT.
There is established a commission to be known as the
National Commission on the Future of Disability (referred
to in this chapter as the ‘‘Commission’’).
SEC. 4242. DUTIES OF THE COMMISSION.
(a) IN GENERAL.—The Commission shall develop
and carry out a comprehensive study of all matters related
to the nature, purpose, and adequacy of all Federal pro-
grams serving individuals with disabilities. In particular,
the Commission shall study the disability insurance pro-
gram under title II of the Social Security Act and the sup-
plemental security income disability program under title
XVI of such Act.
(b) MATTERS STUDIED.—The Commission shall pre-
pare an inventory of Federal programs serving individuals
with disabilities, and shall examine—
(1) trends and projections regarding the size
and characteristics of the population of individuals
with disabilities, and the implications of such analy-
ses for program planning;
(2) the feasibility and design of performance
standards for the Nation’s disability programs;
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(3) the adequacy of Federal efforts in rehabili-
tation research and training, and opportunities to
improve the lives of individuals with disabilities
through all manners of scientific and engineering re-
search; and
(4) the adequacy of policy research available to
the Federal Government, and what actions might be
undertaken to improve the quality and scope of such
research.
(c) RECOMMENDATIONS.—The Commission shall
submit to the appropriate committees of the Congress and
to the President recommendations and, as appropriate,
proposals for legislation, regarding—
(1) which (if any) Federal disability programs
should be eliminated or augmented;
(2) what new Federal disability programs (if
any) should be established;
(3) the suitability of the organization and loca-
tion of disability programs within the Federal Gov-
ernment;
(4) other actions the Federal Government
should take to prevent disabilities and disadvantages
associated with disabilities; and
(5) such other matters as the Commission con-
siders appropriate.
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SEC. 4243. MEMBERSHIP.
(a) NUMBER AND APPOINTMENT.—
(1) IN
GENERAL.—The Commission shall be
composed of 15 members, of whom—
(A) five shall be appointed by the Presi-
dent, of whom not more than 3 shall be of the
same major political party;
(B) three shall be appointed by the Major-
ity Leader of the Senate;
(C) two shall be appointed by the Minority
Leader of the Senate;
(D) three shall be appointed by the Speak-
er of the House of Representatives; and
(E) two shall be appointed by the Minority
Leader of the House of Representatives.
(2) REPRESENTATION.—The Commission mem-
bers shall be chosen based on their education, train-
ing, or experience. In appointing individuals as
members of the Commission, the President and the
Majority and Minority Leaders of the Senate and
the Speaker and Minority Leader of the House of
Representatives shall seek to ensure that the mem-
bership of the Commission reflects the general inter-
ests of the business and taxpaying community and
the diversity of individuals with disabilities in the
United States.
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(b) COMPTROLLER
GENERAL.—The Comptroller
General of the United States shall advise the Commission
on the methodology and approach of the study of the Com-
mission.
(c) TERM OF APPOINTMENT.—The members shall
serve on the Commission for the life of the Commission.
(d) MEETINGS.—The Commission shall locate its
headquarters in the District of Columbia, and shall meet
at the call of the Chairperson, but not less than 4 times
each year during the life of the Commission.
(e) QUORUM.—Ten members of the Commission shall
constitute a quorum, but a lesser number may hold hear-
ings.
(f) CHAIRPERSON
AND VICE CHAIRPERSON.—Not
later than 15 days after the members of the Commission
are appointed, such members shall designate a Chair-
person and Vice Chairperson from among the members of
the Commission.
(g) CONTINUATION OF MEMBERSHIP.—If a member
of the Commission becomes an officer or employee of any
government after appointment to the Commission, the in-
dividual may continue as a member until a successor mem-
ber is appointed.
(h) VACANCIES.—A vacancy on the Commission shall
be filled in the manner in which the original appointment
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was made not later than 30 days after the Commission
is given notice of the vacancy.
(i) COMPENSATION.—Members of the Commission
shall receive no additional pay, allowances, or benefits by
reason of their service on the Commission.
(j) TRAVEL EXPENSES.—Each member of the Com-
mission shall receive travel expenses, including per diem
in lieu of subsistence, in accordance with sections 5702
and 5703 of title 5, United States Code.
SEC. 4244. STAFF AND SUPPORT SERVICES.
(a) DIRECTOR.—
(1) APPOINTMENT.—Upon consultation with
the members of the Commission, the Chairperson
shall appoint a Director of the Commission.
(2) COMPENSATION.—The Director shall be
paid the rate of basic pay for level V of the Execu-
tive Schedule.
(b) STAFF.—With the approval of the Commission,
the Director may appoint such personnel as the Director
considers appropriate.
(c) APPLICABILITY OF CIVIL SERVICE LAWS.—The
staff of the Commission shall be appointed without regard
to the provisions of title 5, United States Code, governing
appointments in the competitive service, and shall be paid
without regard to the provisions of chapter 51 and sub-
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chapter III of chapter 53 of such title relating to classi-
fication and General Schedule pay rates.
(d) EXPERTS
AND CONSULTANTS.—With the ap-
proval of the Commission, the Director may procure tem-
porary and intermittent services under section 3109(b) of
title 5, United States Code.
(e) STAFF OF FEDERAL AGENCIES.—Upon the re-
quest of the Commission, the head of any Federal agency
may detail, on a reimbursable basis, any of the personnel
of such agency to the Commission to assist in carrying
out the duties of the Commission under this chapter.
(f) OTHER RESOURCES.—The Commission shall have
reasonable access to materials, resources, statistical data,
and other information from the Library of Congress and
agencies and elected representatives of the executive and
legislative branches of the Federal Government. The
Chairperson of the Commission shall make requests for
such access in writing when necessary.
(g) PHYSICAL FACILITIES.—The Administrator of
the General Services Administration shall locate suitable
office space for the operation of the Commission. The fa-
cilities shall serve as the headquarters of the Commission
and shall include all necessary equipment and incidentals
required for proper functioning of the Commission.
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SEC. 4245. POWERS OF COMMISSION.
(a) HEARINGS.—The Commission may conduct pub-
lic hearings or forums at the discretion of the Commission,
at any time and place the Commission is able to secure
facilities and witnesses, for the purpose of carrying out
the duties of the Commission under this chapter.
(b) DELEGATION OF AUTHORITY.—Any member or
agent of the Commission may, if authorized by the Com-
mission, take any action the Commission is authorized to
take by this section.
(c) INFORMATION.—The Commission may secure di-
rectly from any Federal agency information necessary to
enable the Commission to carry out its duties under this
chapter. Upon request of the Chairperson or Vice Chair-
person of the Commission, the head of a Federal agency
shall furnish the information to the Commission to the ex-
tent permitted by law.
(d) GIFTS, BEQUESTS, AND DEVISES.—The Commis-
sion may accept, use, and dispose of gifts, bequests, or
devises of services or property, both real and personal, for
the purpose of aiding or facilitating the work of the Com-
mission. Gifts, bequests, or devises of money and proceeds
from sales of other property received as gifts, bequests,
or devises shall be deposited in the Treasury and shall be
available for disbursement upon order of the Commission.
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(e) MAILS.—The Commission may use the United
States mails in the same manner and under the same con-
ditions as other Federal agencies.
SEC. 4246. REPORTS.
(a) INTERIM REPORT.—Not later than 1 year prior
to the date on which the Commission terminates pursuant
to section 4247, the Commission shall submit an interim
report to the President and to the Congress. The interim
report shall contain a detailed statement of the findings
and conclusions of the Commission, together with the
Commission’s recommendations for legislative and admin-
istrative action, based on the activities of the Commission.
(b) FINAL REPORT.—Not later than the date on
which the Commission terminates, the Commission shall
submit to the Congress and to the President a final report
containing—
(1) a detailed statement of final findings, con-
clusions, and recommendations; and
(2) an assessment of the extent to which rec-
ommendations of the Commission included in the in-
terim report under subsection (a) have been imple-
mented.
(c) PRINTING AND PUBLIC DISTRIBUTION.—Upon
receipt of each report of the Commission under this sec-
tion, the President shall—
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(1) order the report to be printed; and
(2) make the report available to the public upon
request.
SEC. 4247. TERMINATION.
The Commission shall terminate on the date that is
2 years after the date on which the members of the Com-
mission have met and designated a Chairperson and Vice
Chairperson.
SEC. 4248. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums
as are necessary to carry out the purposes of the Commis-
sion.
Subtitle C—Child Support
SEC. 4300. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in
this subtitle an amendment is expressed in terms of an
amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that sec-
tion or other provision of the Social Security Act.
CHAPTER 1—ELIGIBILITY FOR SERVICES;
DISTRIBUTION OF PAYMENTS
SEC. 4301. STATE OBLIGATION TO PROVIDE CHILD SUP-
PORT ENFORCEMENT SERVICES.
(a) STATE PLAN REQUIREMENTS.—Section 454 (42
U.S.C. 654) is amended—
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(1) by striking paragraph (4) and inserting the
following new paragraph:
‘‘(4) provide that the State will—
‘‘(A) provide services relating to the estab-
lishment of paternity or the establishment,
modification, or enforcement of child support
obligations, as appropriate, under the plan with
respect to—
‘‘(i) each child for whom (I) assist-
ance is provided under the State program
funded under part A of this title, (II) ben-
efits or services for foster care mainte-
nance are provided under the State pro-
gram funded under part E of this title, or
(III) medical assistance is provided under
the State plan under title XIX, unless, in
accordance with paragraph (29), good
cause or other exceptions exist;
‘‘(ii) any other child, if an individual
applies for such services with respect to
the child; and
‘‘(B) enforce any support obligation estab-
lished with respect to—
‘‘(i) a child with respect to whom the
State provides services under the plan; or
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‘‘(ii) the custodial parent of such a
child;’’; and
(2) in paragraph (6)—
(A) by striking ‘‘provide that’’ and insert-
ing ‘‘provide that—’’;
(B) by striking subparagraph (A) and in-
serting the following new subparagraph:
‘‘(A) services under the plan shall be made
available to residents of other States on the
same terms as to residents of the State submit-
ting the plan;’’;
(C) in subparagraph (B), by inserting ‘‘on
individuals not receiving assistance under any
State program funded under part A’’ after
‘‘such services shall be imposed’’;
(D) in each of subparagraphs (B), (C),
(D), and (E)—
(i) by indenting the subparagraph in
the same manner as, and aligning the left
margin of the subparagraph with the left
margin of, the matter inserted by subpara-
graph (B) of this paragraph; and
(ii) by striking the final comma and
inserting a semicolon; and
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(E) in subparagraph (E), by indenting
each of clauses (i) and (ii) 2 additional ems.
(b) CONTINUATION
OF SERVICES
FOR FAMILIES
CEASING TO RECEIVE ASSISTANCE UNDER THE STATE
PROGRAM FUNDED UNDER PART A.—Section 454 (42
U.S.C. 654) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(23);
(2) by striking the period at the end of para-
graph (24) and inserting ‘‘; and’’; and
(3) by adding after paragraph (24) the follow-
ing new paragraph:
‘‘(25) provide that if a family with respect to
which services are provided under the plan ceases to
receive assistance under the State program funded
under part A, the State shall provide appropriate no-
tice to the family and continue to provide such serv-
ices, subject to the same conditions and on the same
basis as in the case of other individuals to whom
services are furnished under the plan, except that an
application or other request to continue services
shall not be required of such a family and paragraph
(6)(B) shall not apply to the family.’’.
(c) CONFORMING AMENDMENTS.—
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(1) Section 452(b) (42 U.S.C. 652(b)) is
amended by 
striking 
‘‘454(6)’’ 
and 
inserting
‘‘454(4)’’.
(2) 
Section 
452(g)(2)(A) 
(42 
U.S.C.
652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each
place it appears and inserting ‘‘454(4)(A)(ii)’’.
(3) 
Section 
466(a)(3)(B) 
(42 
U.S.C.
666(a)(3)(B)) is amended by striking ‘‘in the case of
overdue support which a State has agreed to collect
under section 454(6)’’ and inserting ‘‘in any other
case’’.
(4) Section 466(e) (42 U.S.C. 666(e)) is
amended by striking ‘‘paragraph (4) or (6) of sec-
tion 454’’ and inserting ‘‘section 454(4)’’.
SEC. 4302. DISTRIBUTION OF CHILD SUPPORT COLLEC-
TIONS.
(a) IN GENERAL.—Section 457 (42 U.S.C. 657) is
amended to read as follows:
‘‘SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.
‘‘(a) IN GENERAL.—Subject to subsection (e), an
amount collected on behalf of a family as support by a
State pursuant to a plan approved under this part shall
be distributed as follows:
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‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the
case of a family receiving assistance from the State,
the State shall—
‘‘(A) pay to the Federal Government the
Federal share of the amount so collected; and
‘‘(B) retain, or distribute to the family, the
State share of the amount so collected.
‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS-
SISTANCE.—In the case of a family that formerly re-
ceived assistance from the State:
‘‘(A) CURRENT SUPPORT PAYMENTS.—To
the extent that the amount so collected does not
exceed the amount required to be paid to the
family for the month in which collected, the
State shall distribute the amount so collected to
the family.
‘‘(B) PAYMENTS OF ARREARAGES.—To the
extent that the amount so collected exceeds the
amount required to be paid to the family for
the month in which collected, the State shall
distribute the amount so collected as follows:
‘‘(i) DISTRIBUTION
OF
ARREARAGES
THAT
ACCRUED
AFTER
THE
FAMILY
CEASED TO RECEIVE ASSISTANCE.—
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‘‘(I) PRE-OCTOBER 1997.—Except
as provided in subclause (II), the pro-
visions of this section (other than sub-
section (b)(1)) as in effect and applied
on the day before the date of the en-
actment of section 4302 of the Per-
sonal Responsibility and Work Oppor-
tunity Act of 1996 shall apply with
respect to the distribution of support
arrearages that—
‘‘(aa) accrued after the fam-
ily ceased to receive assistance,
and
‘‘(bb) are collected before
October 1, 1997.
‘‘(II) POST-SEPTEMBER
1997.—
With respect to the amount so col-
lected on or after October 1, 1997 (or
before such date, at the option of the
State)—
‘‘(aa) IN
GENERAL.—The
State shall first distribute the
amount so collected (other than
any amount described in clause
(iv)) to the family to the extent
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necessary to satisfy any support
arrearages with respect to the
family that accrued after the
family ceased to receive assist-
ance from the State.
‘‘(bb) REIMBURSEMENT
OF
GOVERNMENTS
FOR
ASSISTANCE
PROVIDED
TO
THE
FAMILY.—
After the application of division
(aa) and clause (ii)(II)(aa) with
respect to the amount so col-
lected, the State shall retain the
State share of the amount so col-
lected, and pay to the Federal
Government the Federal share
(as defined in subsection (c)(2))
of the amount so collected, but
only to the extent necessary to
reimburse amounts paid to the
family as assistance by the State.
‘‘(cc) DISTRIBUTION OF THE
REMAINDER
TO
THE
FAMILY.—
To the extent that neither divi-
sion (aa) nor division (bb) applies
to the amount so collected, the
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State shall distribute the amount
to the family.
‘‘(ii) DISTRIBUTION OF ARREARAGES
THAT ACCRUED BEFORE THE FAMILY RE-
CEIVED ASSISTANCE.—
‘‘(I) PRE-OCTOBER 2000.—Except
as provided in subclause (II), the pro-
visions of this section (other than sub-
section (b)(1)) as in effect and applied
on the day before the date of the en-
actment of section 4302 of the Per-
sonal Responsibility and Work Oppor-
tunity Act of 1996 shall apply with
respect to the distribution of support
arrearages that—
‘‘(aa) accrued before the
family received assistance, and
‘‘(bb) are collected before
October 1, 2000.
‘‘(II) POST-SEPTEMBER
2000.—
Unless, based on the report required
by paragraph (4), the Congress deter-
mines otherwise, with respect to the
amount so collected on or after Octo-
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ber 1, 2000 (or before such date, at
the option of the State)—
‘‘(aa) IN
GENERAL.—The
State shall first distribute the
amount so collected (other than
any amount described in clause
(iv)) to the family to the extent
necessary to satisfy any support
arrearages with respect to the
family that accrued before the
family received assistance from
the State.
‘‘(bb) REIMBURSEMENT
OF
GOVERNMENTS
FOR
ASSISTANCE
PROVIDED
TO
THE
FAMILY.—
After the application of clause
(i)(II)(aa) and division (aa) with
respect to the amount so col-
lected, the State shall retain the
State share of the amount so col-
lected, and pay to the Federal
Government the Federal share
(as defined in subsection (c)(2))
of the amount so collected, but
only to the extent necessary to
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reimburse amounts paid to the
family as assistance by the State.
‘‘(cc) DISTRIBUTION OF THE
REMAINDER
TO
THE
FAMILY.—
To the extent that neither divi-
sion (aa) nor division (bb) applies
to the amount so collected, the
State shall distribute the amount
to the family.
‘‘(iii) DISTRIBUTION OF ARREARAGES
THAT ACCRUED WHILE THE FAMILY RE-
CEIVED
ASSISTANCE.—In the case of a
family described in this subparagraph, the
provisions of paragraph (1) shall apply
with respect to the distribution of support
arrearages that accrued while the family
received assistance.
‘‘(iv) AMOUNTS
COLLECTED
PURSU-
ANT
TO
SECTION 464.—Notwithstanding
any other provision of this section, any
amount of support collected pursuant to
section 464 shall be retained by the State
to the extent past-due support has been as-
signed to the State as a condition of re-
ceiving assistance from the State, up to the
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amount necessary to reimburse the State
for amounts paid to the family as assist-
ance by the State. The State shall pay to
the Federal Government the Federal share
of the amounts so retained. To the extent
the amount collected pursuant to section
464 exceeds the amount so retained, the
State shall distribute the excess to the
family.
‘‘(v) ORDERING RULES FOR DISTRIBU-
TIONS.—For purposes of this subpara-
graph, unless an earlier effective date is re-
quired by this section, effective October 1,
2000, the State shall treat any support ar-
rearages collected, except for amounts col-
lected pursuant to section 464, as accruing
in the following order:
‘‘(I) To the period after the fam-
ily ceased to receive assistance.
‘‘(II) To the period before the
family received assistance.
‘‘(III) To the period while the
family was receiving assistance.
‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST-
ANCE.—In the case of any other family, the State
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shall distribute the amount so collected to the fam-
ily.
‘‘(4) STUDY AND REPORT.—Not later than Oc-
tober 1, 1998, the Secretary shall report to the Con-
gress the Secretary’s findings with respect to—
‘‘(A) whether the distribution of post-as-
sistance arrearages to families has been effec-
tive in moving people off of welfare and keeping
them off of welfare;
‘‘(B) whether early implementation of a
pre-assistance arrearage program by some
States has been effective in moving people off
of welfare and keeping them off of welfare;
‘‘(C) what the overall impact has been of
the amendments made by the Personal Respon-
sibility and Work Opportunity Act of 1996 with
respect to child support enforcement in moving
people off of welfare and keeping them off of
welfare; and
‘‘(D) based on the information and data
the Secretary has obtained, what changes, if
any, should be made in the policies related to
the distribution of child support arrearages.
‘‘(b) CONTINUATION OF ASSIGNMENTS.—Any rights
to support obligations, which were assigned to a State as
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a condition of receiving assistance from the State under
part A and which were in effect on the day before the
date of the enactment of the Personal Responsibility and
Work Opportunity Act of 1996, shall remain assigned
after such date.
‘‘(c) DEFINITIONS.—As used in subsection (a):
‘‘(1) ASSISTANCE.—The term ‘assistance from
the State’ means—
‘‘(A) assistance under the State program
funded under part A or under the State plan
approved under part A of this title (as in effect
on the day before the date of the enactment of
the Personal Responsibility and Work Oppor-
tunity Act of 1996); and
‘‘(B) foster care maintenance payments
under the State plan approved under part E of
this title.
‘‘(2) FEDERAL
SHARE.—The term ‘Federal
share’ means that portion of the amount collected
resulting from the application of the Federal medical
assistance percentage in effect for the fiscal year in
which the amount is collected.
‘‘(3) FEDERAL MEDICAL ASSISTANCE PERCENT-
AGE.—The term ‘Federal medical assistance per-
centage’ means—
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‘‘(A) the Federal medical assistance per-
centage (as defined in section 1118), in the case
of Puerto Rico, the Virgin Islands, Guam, and
American Samoa; or
‘‘(B) the Federal medical assistance per-
centage (as defined in section 1905(b), as in ef-
fect on September 30, 1996) in the case of any
other State.
‘‘(4) STATE
SHARE.—The term ‘State share’
means 100 percent minus the Federal share.
‘‘(d) HOLD HARMLESS PROVISION.—If the amounts
collected which could be retained by the State in the fiscal
year (to the extent necessary to reimburse the State for
amounts paid to families as assistance by the State) are
less than the State share of the amounts collected in fiscal
year 1995 (determined in accordance with section 457 as
in effect on the day before the date of the enactment of
the Personal Responsibility and Work Opportunity Act of
1996), the State share for the fiscal year shall be an
amount equal to the State share in fiscal year 1995.
‘‘(e) GAP PAYMENTS NOT SUBJECT TO DISTRIBU-
TION UNDER THIS SECTION.—At State option, this sec-
tion shall not apply to any amount collected on behalf of
a family as support by the State (and paid to the family
in addition to the amount of assistance otherwise payable
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to the family) pursuant to a plan approved under this part
if such amount would have been paid to the family by the
State under section 402(a)(28), as in effect and applied
on the day before the date of the enactment of section
4302 of the Personal Responsibility and Work Oppor-
tunity Act of 1996. For purposes of subsection (d), the
State share of such amount paid to the family shall be
considered amounts which could be retained by the State
if such payments were reported by the State as part of
the State share of amounts collected in fiscal year 1995.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is
amended by striking ‘‘section 457(b)(4) or (d)(3)’’
and inserting ‘‘section 457’’.
(2) Section 454 (42 U.S.C. 654) is amended—
(A) in paragraph (11)—
(i) by striking ‘‘(11)’’ and inserting
‘‘(11)(A)’’; and
(ii) by inserting after the semicolon
‘‘and’’; and
(B) by redesignating paragraph (12) as
subparagraph (B) of paragraph (11).
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
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shall be effective on October 1, 1996, or earlier at
the State’s option.
(2) CONFORMING AMENDMENTS.—The amend-
ments made by subsection (b)(2) shall become effec-
tive on the date of the enactment of this Act.
SEC. 4303. PRIVACY SAFEGUARDS.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by section 4301(b) of this Act,
is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(24);
(2) by striking the period at the end of para-
graph (25) and inserting ‘‘; and’’; and
(3) by adding after paragraph (25) the follow-
ing new paragraph:
‘‘(26) will have in effect safeguards, applicable
to all confidential information handled by the State
agency, that are designed to protect the privacy
rights of the parties, including—
‘‘(A) safeguards against unauthorized use
or disclosure of information relating to proceed-
ings or actions to establish paternity, or to es-
tablish or enforce support;
‘‘(B) prohibitions against the release of in-
formation on the whereabouts of 1 party to an-
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other party against whom a protective order
with respect to the former party has been en-
tered; and
‘‘(C) prohibitions against the release of in-
formation on the whereabouts of 1 party to an-
other party if the State has reason to believe
that the release of the information may result
in physical or emotional harm to the former
party.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on October 1, 1997.
SEC. 4304. RIGHTS TO NOTIFICATION OF HEARINGS.
(a) IN GENERAL.—Section 454 (42 U.S.C. 654), as
amended by section 4302(b)(2) of this Act, is amended
by inserting after paragraph (11) the following new para-
graph:
‘‘(12) provide for the establishment of proce-
dures to require the State to provide individuals who
are applying for or receiving services under the State
plan, or who are parties to cases in which services
are being provided under the State plan—
‘‘(A) with notice of all proceedings in
which support obligations might be established
or modified; and
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‘‘(B) with a copy of any order establishing
or modifying a child support obligation, or (in
the case of a petition for modification) a notice
of determination that there should be no change
in the amount of the child support award, with-
in 14 days after issuance of such order or de-
termination;’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on October 1, 1997.
CHAPTER 2—LOCATE AND CASE
TRACKING
SEC. 4311. STATE CASE REGISTRY.
Section 454A, as added by section 4344(a)(2) of this
Act, is amended by adding at the end the following new
subsections:
‘‘(e) STATE CASE REGISTRY.—
‘‘(1) CONTENTS.—The automated system re-
quired by this section shall include a registry (which
shall be known as the ‘State case registry’) that con-
tains records with respect to—
‘‘(A) each case in which services are being
provided by the State agency under the State
plan approved under this part; and
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‘‘(B) each support order established or
modified in the State on or after October 1,
1998.
‘‘(2) LINKING
OF
LOCAL
REGISTRIES.—The
State case registry may be established by linking
local case registries of support orders through an
automated information network, subject to this sec-
tion.
‘‘(3) USE
OF
STANDARDIZED
DATA
ELE-
MENTS.—Such records shall use standardized data
elements for both parents (such as names, social se-
curity numbers and other uniform identification
numbers, dates of birth, and case identification
numbers), and contain such other information (such
as on case status) as the Secretary may require.
‘‘(4) PAYMENT RECORDS.—Each case record in
the State case registry with respect to which services
are being provided under the State plan approved
under this part and with respect to which a support
order has been established shall include a record
of—
‘‘(A) the amount of monthly (or other peri-
odic) support owed under the order, and other
amounts (including arrearages, interest or late
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payment penalties, and fees) due or overdue
under the order;
‘‘(B) any amount described in subpara-
graph (A) that has been collected;
‘‘(C) the distribution of such collected
amounts;
‘‘(D) the birth date of any child for whom
the order requires the provision of support; and
‘‘(E) the amount of any lien imposed with
respect to the order pursuant to section
466(a)(4).
‘‘(5) UPDATING AND MONITORING.—The State
agency operating the automated system required by
this section shall promptly establish and update,
maintain, and regularly monitor, case records in the
State case registry with respect to which services are
being provided under the State plan approved under
this part, on the basis of—
‘‘(A) information on administrative actions
and administrative and judicial proceedings and
orders relating to paternity and support;
‘‘(B) information obtained from compari-
son with Federal, State, or local sources of in-
formation;
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‘‘(C) information on support collections
and distributions; and
‘‘(D) any other relevant information.
‘‘(f) INFORMATION COMPARISONS AND OTHER DIS-
CLOSURES OF INFORMATION.—The State shall use the
automated system required by this section to extract infor-
mation from (at such times, and in such standardized for-
mat or formats, as may be required by the Secretary), to
share and compare information with, and to receive infor-
mation from, other data bases and information compari-
son services, in order to obtain (or provide) information
necessary to enable the State agency (or the Secretary or
other State or Federal agencies) to carry out this part,
subject to section 6103 of the Internal Revenue Code of
1986. Such information comparison activities shall include
the following:
‘‘(1) FEDERAL CASE REGISTRY OF CHILD SUP-
PORT
ORDERS.—Furnishing to the Federal Case
Registry of Child Support Orders established under
section 453(h) (and update as necessary, with infor-
mation including notice of expiration of orders) the
minimum amount of information on child support
cases recorded in the State case registry that is nec-
essary to operate the registry (as specified by the
Secretary in regulations).
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‘‘(2) FEDERAL
PARENT
LOCATOR
SERVICE.—
Exchanging information with the Federal Parent
Locator Service for the purposes specified in section
453.
‘‘(3) TEMPORARY
FAMILY
ASSISTANCE
AND
MEDICAID AGENCIES.—Exchanging information with
State agencies (of the State and of other States) ad-
ministering programs funded under part A, pro-
grams operated under a State plan approved under
title XIX, and other programs designated by the
Secretary, as necessary to perform State agency re-
sponsibilities under this part and under such pro-
grams.
‘‘(4) INTRASTATE AND INTERSTATE INFORMA-
TION COMPARISONS.—Exchanging information with
other agencies of the State, agencies of other States,
and interstate information networks, as necessary
and appropriate to carry out (or assist other States
to carry out) the purposes of this part.’’.
SEC. 4312. COLLECTION AND DISBURSEMENT OF SUPPORT
PAYMENTS.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by sections 4301(b) and 4303(a)
of this Act, is amended—
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(1) by striking ‘‘and’’ at the end of paragraph
(25);
(2) by striking the period at the end of para-
graph (26) and inserting ‘‘; and’’; and
(3) by adding after paragraph (26) the follow-
ing new paragraph:
‘‘(27) provide that, on and after October 1,
1998, the State agency will—
‘‘(A) operate a State disbursement unit in
accordance with section 454B; and
‘‘(B) have sufficient State staff (consisting
of State employees) and (at State option) con-
tractors reporting directly to the State agency
to—
‘‘(i) monitor and enforce support col-
lections through the unit in cases being en-
forced by the State pursuant to section
454(4) (including carrying out the auto-
mated data processing responsibilities de-
scribed in section 454A(g)); and
‘‘(ii) take the actions described in sec-
tion 466(c)(1) in appropriate cases.’’.
(b) ESTABLISHMENT
OF
STATE
DISBURSEMENT
UNIT.—Part D of title IV (42 U.S.C. 651–669), as
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amended by section 4344(a)(2) of this Act, is amended
by inserting after section 454A the following new section:
‘‘SEC. 454B. COLLECTION AND DISBURSEMENT OF SUP-
PORT PAYMENTS.
‘‘(a) STATE DISBURSEMENT UNIT.—
‘‘(1) IN
GENERAL.—In order for a State to
meet the requirements of this section, the State
agency must establish and operate a unit (which
shall be known as the ‘State disbursement unit’) for
the collection and disbursement of payments under
support orders—
‘‘(A) in all cases being enforced by the
State pursuant to section 454(4); and
‘‘(B) in all cases not being enforced by the
State under this part in which the support
order is initially issued in the State on or after
January 1, 1994, and in which the income of
the noncustodial parent are subject to withhold-
ing pursuant to section 466(a)(8)(B).
‘‘(2) OPERATION.—The State disbursement
unit shall be operated—
‘‘(A) directly by the State agency (or 2 or
more State agencies under a regional coopera-
tive agreement), or (to the extent appropriate)
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by a contractor responsible directly to the State
agency; and
‘‘(B) except in cases described in para-
graph (1)(B), in coordination with the auto-
mated system established by the State pursuant
to section 454A.
‘‘(3) 
LINKING
OF
LOCAL
DISBURSEMENT
UNITS.—The State disbursement unit may be estab-
lished by linking local disbursement units through
an automated information network, subject to this
section, if the Secretary agrees that the system will
not cost more nor take more time to establish or op-
erate than a centralized system. In addition, employ-
ers shall be given 1 location to which income with-
holding is sent.
‘‘(b) REQUIRED PROCEDURES.—The State disburse-
ment unit shall use automated procedures, electronic proc-
esses, and computer-driven technology to the maximum
extent feasible, efficient, and economical, for the collection
and disbursement of support payments, including proce-
dures—
‘‘(1) for receipt of payments from parents, em-
ployers, and other States, and for disbursements to
custodial parents and other obligees, the State agen-
cy, and the agencies of other States;
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‘‘(2) for accurate identification of payments;
‘‘(3) to ensure prompt disbursement of the cus-
todial parent’s share of any payment; and
‘‘(4) to furnish to any parent, upon request,
timely information on the current status of support
payments under an order requiring payments to be
made by or to the parent, except that, with respect
to a case described in subsection (a)(1)(B), the
State disbursement unit shall not be required to
maintain records of payments which, after the effec-
tive date of this section, are made to, and distrib-
uted by, the unit.
‘‘(c) TIMING OF DISBURSEMENTS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the State disbursement unit shall distrib-
ute all amounts payable under section 457(a) within
2 business days after receipt from the employer or
other source of periodic income, if sufficient infor-
mation identifying the payee is provided.
‘‘(2) PERMISSIVE
RETENTION
OF
ARREAR-
AGES.—The State disbursement unit may delay the
distribution of collections toward arrearages until
the resolution of any timely appeal with respect to
such arrearages.
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‘‘(d) BUSINESS DAY DEFINED.—As used in this sec-
tion, the term ‘business day’ means a day on which State
offices are open for regular business.’’.
(c) USE OF AUTOMATED SYSTEM.—Section 454A, as
added by section 4344(a)(2) and as amended by section
4311 of this Act, is amended by adding at the end the
following new subsection:
‘‘(g) COLLECTION AND DISTRIBUTION OF SUPPORT
PAYMENTS.—
‘‘(1) IN
GENERAL.—The State shall use the
automated system required by this section, to the
maximum extent feasible, to assist and facilitate the
collection and disbursement of support payments
through the State disbursement unit operated under
section 454B, through the performance of functions,
including, at a minimum—
‘‘(A) transmission of orders and notices to
employers (and other debtors) for the withhold-
ing of income—
‘‘(i) within 2 business days after re-
ceipt of notice of, and the income source
subject to, such withholding from a court,
another State, an employer, the Federal
Parent Locator Service, or another source
recognized by the State; and
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‘‘(ii) using uniform formats prescribed
by the Secretary;
‘‘(B) ongoing monitoring to promptly iden-
tify failures to make timely payment of support;
and
‘‘(C) automatic use of enforcement proce-
dures (including procedures authorized pursu-
ant to section 466(c)) if payments are not time-
ly made.
‘‘(2) BUSINESS
DAY
DEFINED.—As used in
paragraph (1), the term ‘business day’ means a day
on which State offices are open for regular busi-
ness.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall become effective on October 1, 1998.
(2) LIMITED EXCEPTION TO UNIT HANDLING
PAYMENTS.—Notwithstanding section 454B(b)(1) of
the Social Security Act, as added by this section,
any State which, as of the date of the enactment of
this Act, processes the receipt of child support pay-
ments through local courts may, at the option of the
State, continue to process through September 30,
1999, such payments through such courts as proc-