264
‘‘(D) otherwise exempt under section
6(d)(2).
‘‘(4) WAIVER.—
‘‘(A) IN GENERAL.—On the request of a
State agency, the Secretary may waive the ap-
plicability of paragraph (2) to any group of in-
dividuals in the State if the Secretary makes a
determination that the area in which the indi-
viduals reside—
‘‘(i) has an unemployment rate of over
8 percent; or
‘‘(ii) does not have a sufficient num-
ber of jobs to provide employment for the
individuals.
‘‘(B) REPORT.—The Secretary shall report
the basis for a waiver under subparagraph (A)
to the Committee on Agriculture of the House
of Representatives and the Committee on Agri-
culture, Nutrition, and Forestry of the Sen-
ate.’’.
(b) TRANSITION PROVISION.—Prior to October 1,
1996, the term ‘‘preceding 12-month period’’ in section
6(n)(2) of the Food Stamp Act of 1977 (as amended by
subsection (a)) means the preceding period that begins on
October 1, 1995.
265
SEC. 319A. DISQUALIFICATION OF FLEEING FELONS.
Section 6 of the Food Stamp Act of 1977 (7 U.S.C.
2015), as amended by section 319(a), is further amended
by adding at the end the following new subsection:
‘‘(o) No member of a household who is otherwise eli-
gible to participate in the food stamp program shall be
eligible to participate in the program as a member of that
or any other household during any period during which
the individual is—
‘‘(1) fleeing to avoid prosecution, or custody or
confinement after conviction, under the laws of the
place from which the individual flees, for a crime, or
attempt to commit a crime, which is a felony under
the laws of the place from which the individual flees,
or which, in the case of the State of New Jersey, is
a high misdemeanor under the laws of such State;
or
‘‘(2) violating a condition of probation or parole
imposed under Federal or State law.’’.
SEC. 320. ELECTRONIC BENEFIT TRANSFERS.
(a) IN GENERAL.—Section 7 of the Food Stamp Act
of 1977 (7 U.S.C. 2016) is amended by adding at the end
the following:
‘‘(j) ELECTRONIC BENEFIT TRANSFERS.—
‘‘(1) APPLICABLE LAW.—
266
‘‘(A) IN
GENERAL.—Disclosures, protec-
tions, responsibilities, and remedies established
by the Federal Reserve Board under section
904 of the Electronic Fund Transfer Act (15
U.S.C. 1693b) shall not apply to benefits under
this Act delivered through any electronic benefit
transfer system.
‘‘(B) DEFINITION OF ELECTRONIC BENE-
FIT
TRANSFER
SYSTEM.—In this paragraph,
the term ‘electronic benefit transfer system’
means a system under which a governmental
entity distributes benefits under this Act or
other benefits or payments by establishing ac-
counts to be accessed by recipients of the bene-
fits electronically, including through the use of
an automated teller machine, a point-of-sale
terminal, or an intelligent benefit card.
‘‘(2) CHARGING
FOR
ELECTRONIC
BENEFIT
TRANSFER CARD REPLACEMENT.—
‘‘(A) IN GENERAL.—A State agency may
charge an individual for the cost of replacing a
lost or stolen electronic benefit transfer card.
‘‘(B) REDUCING
ALLOTMENT.—A State
agency may collect a charge imposed under sub-
paragraph (A) by reducing the monthly allot-
267
ment of the household of which the individual
is a member.
‘‘(3) OPTIONAL
PHOTOGRAPHIC
IDENTIFICA-
TION.—
‘‘(A) IN GENERAL.—A State agency may
require that an electronic benefit card contain
a photograph of 1 or more members of a house-
hold.
‘‘(B) OTHER
AUTHORIZED
USERS.—If a
State agency requires a photograph on an elec-
tronic benefit card under subparagraph (A), the
State agency shall establish procedures to en-
sure that any other appropriate member of the
household or any authorized representative of
the household may utilize the card.
‘‘(4) STATE ELECTRONIC BENEFITS TRANSFER
OPTIONS IN GENERAL.—States may implement elec-
tronic benefit transfer systems under the authorities
and conditions set forth in section 7(i) and related
provisions, or the authorities and conditions set
forth in paragraph (5).
‘‘(5) ELECTRONIC BENEFITS TRANSFER CARD
SYSTEMS ASSISTANCE OPTION.—If a State notifies
the Secretary of its intention to convert to a state-
wide electronic benefits transfer card system, or a
268
multiple-State regional electronic benefits transfer
card system with other state-wide systems, within
three years of the date of enactment of this para-
graph, the Secretary shall allow the establishment of
an electronic benefits transfer card system within
the State under the following terms—
‘‘(A) COORDINATION AND LAW ENFORCE-
MENT.—
‘‘(i) 
CONVERSION.—The 
Secretary
shall coordinate with, and assist, the State
or States in a regional system in eliminat-
ing the use of food stamp coupons and the
full conversion to an electronic benefits
transfer card system within three years
after the decision of the State to convert to
the system set forth in this paragraph.
‘‘(ii) OPERATIONS.—States shall take
into account generally accepted standard
operating rules for carrying out this para-
graph, based on—
‘‘(I) commercial electronic funds
transfer technology;
‘‘(II) the need to permit inter-
state operation and law enforcement
monitoring; and
269
‘‘(III) the need to permit mon-
itoring and investigations by author-
ized law enforcement agencies.
‘‘(iii) LAW ENFORCEMENT.—The Sec-
retary, in consultation with the Inspector
General of the United States Department
of Agriculture and the United States Se-
cret Service, shall inform the State of
proper security features, good management
techniques, and methods of deterring coun-
terfeiting.
‘‘(B) PAPER
AND
OTHER
ALTERNATIVE
BENEFIT
TRANSFER
SYSTEMS.—Beginning on
the date of the implementation of the electronic
benefits transfer card system in a State under
authority of this paragraph, the Secretary shall
also permit the use of paper-based and other
benefit transfer approaches for providing bene-
fits to food stamp households in the case of spe-
cial-need retail food stores.
‘‘(C) STATE-PROVIDED EQUIPMENT.—
‘‘(i) ELECTRONIC
BENEFITS
TRANS-
FER CARD SYSTEM.—
‘‘(I) IN GENERAL.—A retail food
store that does not have point-of-sale
270
electronic benefits transfer equipment,
and does not intend to obtain point-
of-sale electronic benefits transfer
equipment in the near future, shall be
provided by a State agency with, or
reimbursed for, the costs of purchas-
ing and installing single-function,
point-of-sale equipment, and related
telephone equipment, which shall be
used only for Federal and State as-
sistance programs.
‘‘(II) 
EQUIPMENT
REQUIRE-
MENTS.—Equipment provided under
this subparagraph shall be capable of
interstate operations and based on
generally accepted commercial elec-
tronic 
benefits 
transfer 
operating
principles that permit interstate law
enforcement monitoring and shall be
capable of providing a recipient with
access to multiple Federal and State
benefit programs.
‘‘(ii) PAPER
AND
OTHER
ALTER-
NATIVE
BENEFIT
SYSTEMS.—A special-
need retail store that does not obtain, and
271
does not intend to obtain in the near fu-
ture, point-of-sale paper-based or other al-
ternative benefits transfer equipment shall
be provided by the State agency or com-
pensated for the costs of purchasing such
equipment which shall be used only for
Federal and State assistance programs.
Such paper systems includes using the
electronic benefit transfer card to make an
impression on a point-of-sale paper docu-
ment.
‘‘(iii) RETURN OF ELECTRONIC BENE-
FITS
TRANSFER
EQUIPMENT.—A retail
food store may at any time return the
equipment to the State and obtain equip-
ment with funds of the store.
‘‘(iv) COST TO STORES.—The cost of
documents or systems that may be re-
quired pursuant to this paragraph may not
be imposed upon a retail food store partici-
pating in the program.
‘‘(D) CHARGING FOR ELECTRONIC BENE-
FITS TRANSFER CARD REPLACEMENT.—
‘‘(i) IN GENERAL.—Under this para-
graph, the Secretary shall reimburse State
272
agencies for the costs of purchasing and is-
suing electronic benefits transfer cards;
and
‘‘(ii) REPLACEMENT
CARDS.—Under
this paragraph, the Secretary may charge
a household through allotment reduction or
otherwise for the cost of replacing a lost or
stolen electronic benefit transfer card, un-
less the card was stolen by force or threat
of force.
‘‘(E) TRANSITION
FUND.—At the begin-
ning of each fiscal year during the 10-year pe-
riod beginning with the first full fiscal year fol-
lowing the date of enactment of this paragraph,
the Secretary shall place the amount of the
funds generated by the transaction fees pro-
vided in subparagraph (F) into an account, to
be known as the Transition Conversion Ac-
count, to remain available until expended.
‘‘(F) TRANSACTION FEE.—
(i) During the 10-year period begin-
ning on the date of enactment of this para-
graph, the Secretary shall, to the extent
necessary to not increase costs to the Sec-
retary under this paragraph, impose a
273
transaction fee of not more than 2 cents
for each transaction made at a retail food
store using an electronic benefits transfer
card authorized by this paragraph, to be
taken from the benefits of the household
using the card, except that no household
shall be assessed more than 16 cents under
this paragraph per month. The Secretary
may reduce the fee on a household receiv-
ing the maximum benefits available under
the program.
‘‘(ii) FEES LIMITED TO USES.—A fee
imposed under clause (i) shall be in an
amount not greater than is necessary to
carry out the uses of the Transition Con-
version Account in subparagraph (G).
‘‘(G)(i) DUTY
OF
SECRETARY.—Out of
funds in the Transition Conversion Account,
and, only to the extent necessary, out of funds
provided to carry out this Act, the Secretary
shall provide funds to provide transition assist-
ance and funds to States participating under
this paragraph for—
‘‘(I) the reasonable cost of purchasing
and installing, or for the cost of reimburs-
274
ing a retail food store for the cost of pur-
chasing 
and 
installing 
single-function,
point-of-sale equipment described in sub-
paragraph (C), to be used only for Federal
and State assistance programs;
‘‘(II) the reasonable start-up cost of
purchasing and installing telephone equip-
ment or connections for single-function,
point-of-sale equipment, to be used only for
Federal and State assistance programs;
and
‘‘(III) assistance to modify an elec-
tronic benefits transfer system imple-
mented by a State prior to the date of en-
actment of this paragraph to the extent
necessary to operate statewide or multi-
statewide under this paragraph.
‘‘(ii) USE
OF
ACCOUNT.—The Secretary
shall use funds in the Transition Conversion
Account in implementing this paragraph and
to—
‘‘(I) provide start-up training for
State agencies, employees and recipients
based on a plan approved by Secretary;
275
‘‘(II) pay for other one-time reason-
able costs of converting to an electronic
benefits transfer system that is capable of
interstate functions and is capable of being
monitored by law enforcement agencies;
‘‘(III) pay for liabilities assumed by
the Secretary under subparagraph (I);
‘‘(IV) pay other liabilities related to
the electronic benefits transfer system es-
tablished under this paragraph that are in-
curred by the Secretary; and
‘‘(V) expand and implement a nation-
wide program to monitor compliance with
program rules related to retail food stores
and the electronic delivery of benefits
under this Act.
‘‘(H) COMPETITIVE BIDDING.—In purchas-
ing point-of-sale equipment described in sub-
paragraph (C), electronic benefits transfer
cards, and telephone equipment or connections
referred to in subparagraph (G), States shall
use competitive bidding systems to ensure that
they obtain the lowest prices for the equipment
and cards that meet specifications. States shall
not enter into purchase agreements which con-
276
dition the purchase of additional services or
equipment from suppliers of equipment or cards
under this paragraph. The Secretary shall mon-
itor the sale prices for such equipment and
cards and the Inspector General shall inves-
tigate possible wrongdoing or fraud as appro-
priate.
‘‘(I) LIABILITY OR REPLACEMENT BENE-
FITS
FOR
UNAUTHORIZED
USE
OF
EBT
CARDS.—
‘‘(i) IN
GENERAL.—The Secretary
shall require State agencies that choose to
implement an electronic benefits transfer
system under this paragraph to advise any
household participating in the food stamp
program how to promptly report a lost, de-
stroyed, damaged, improperly manufac-
tured, dysfunctional, or stolen electronic
benefits transfer card.
‘‘(ii) 
REGULATIONS.—Under 
this
paragraph, the Secretary shall issue regu-
lations providing that—
‘‘(I) a household shall not receive
any replacement for benefits lost due
277
to the unauthorized use of an elec-
tronic benefits transfer card; and
‘‘(II) a household shall not be lia-
ble for any amounts in excess of the
benefits available to the household at
the time of the unauthorized use.
‘‘(iii) 
SPECIAL
LOSSES.—Notwith-
standing clause (ii), under this paragraph
a household shall receive a replacement for
any benefits lost if the loss was caused
by—
‘‘(I) force or the threat of force;
‘‘(II) unauthorized use of the
card after the State agency receives
notice that the card was lost or stolen;
or
‘‘(III) a system error or malfunc-
tion, fraud, abuse, negligence, or mis-
take by the service provider, the card
issuing agency, or the State agency,
or an inaccurate execution of a trans-
action by the service provider:
Provided, That with respect to losses described in
subclause (II) and (III), the State shall reimburse
the Secretary. Nothing in subclause (III) shall pre-
278
vent a State from obtaining reimbursement from the
service provider or the card issuing agency for sys-
tem error or malfunction, fraud, abuse, negligence,
or mistake by such service provider or card issuing
agency.
‘‘(J) ELIMINATION OF FOOD STAMP COU-
PONS.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (ii) and (iii) and notwith-
standing any other provision of this Act,
effective beginning on the date 3 years
after the date a chief executive officer of a
State informs the Secretary that the State
intends to implement an electronic benefits
transfer system authorized by this para-
graph, the Secretary shall not provide any
food stamp coupons to the State.
‘‘(ii) EXCEPTIONS.—
‘‘(I) 
EXTENSION.—Clause 
(i)
shall not apply to the extent that the
chief executive officer of a State de-
termines that an extension is nec-
essary and so notifies the Secretary in
writing, except that the extension
shall not extend beyond 5 years after
279
the date that a chief executive officer
of a State informs the secretary of the
decision to implement an electronic
benefits transfer system under this
paragraph.
‘‘(II) WAIVER.—In addition to
any extension under subclause (I), the
Secretary may grant a waiver to a
State to phase-in or delay, implemen-
tation of electronic benefits transfer
for good cause shown by the State,
except that the waiver shall not ex-
tend for more than 6 months.
‘‘(iii) DISASTER
RELIEF.—The Sec-
retary may provide food stamp coupons for
disaster relief under section 5(h).
‘‘(K) SPECIAL RULE.—A State agency may
require a household to explain the cir-
cumstances regarding each occasion that—
‘‘(i) the household reports a lost or
stolen electronic benefits transfer card; and
‘‘(ii) the card was used for an unau-
thorized transaction.
In the appropriate circumstances, the State
agency shall investigate and ensure that appro-
280
priate cases are acted upon either through ad-
ministrative disqualification or referral to
courts of appropriate jurisdiction, or referral
for prosecution.
‘‘(L) ESTABLISHMENT.—In carrying out
this paragraph, the States shall—
‘‘(i) take into account the needs of law
enforcement personnel and the need to per-
mit and encourage further technological
developments and scientific advances;
‘‘(ii) ensure that security is protected
by appropriate means such as requiring
that a personal identification number be is-
sued with each electronic benefits transfer
card to help protect the integrity of the
program;
‘‘(iii) provide for—
‘‘(I) recipient protection regard-
ing privacy, ease of use, and access to
and service in retail food stores;
‘‘(II) financial accountability and
the capability of the system to handle
interstate operations and interstate
monitoring by law enforcement agen-
281
cies including the Inspector General of
the Department of Agriculture;
‘‘(III) rules prohibiting store par-
ticipation 
unless 
any 
appropriate
equipment necessary to permit house-
holds to purchase food with the bene-
fits issued under the Food Stamp Act
of 1977 is operational and reasonably
available; and
‘‘(IV) rules providing for mon-
itoring and investigation by an au-
thorized law enforcement agency in-
cluding the Inspector General of the
Department of Agriculture.
‘‘(M) ADDITIONAL EMPLOYEES.—The Sec-
retary shall assign additional employees to in-
vestigate and adequately monitor compliance
with program rules related to electronic benefits
transfer systems and retail food store participa-
tion.
‘‘(N) REQUEST FOR STATEMENTS.—Under
this paragraph on the request of a household,
the State, through a person issuing benefits to
the household, shall provide once per month a
statement of benefit transfers and balances for
282
such household for the month preceding the re-
quest.
‘‘(O) ERRORS.—Under this paragraph:
‘‘(i) IN GENERAL.—States shall design
systems to timely resolve disputes over al-
leged errors.
‘‘(ii) CORRECTED
ERRORS.—House-
holds able to obtain corrections of errors
under this subparagraph shall not be enti-
tled to a fair hearing regarding the re-
solved dispute.
‘‘(P) APPLICABLE LAW.—For purposes of
this Act, fraud and related activities related to
electronic benefits transfer shall be governed by
section 15 of this Act (U.S.C. 2024) and sec-
tion 1029 of title 18, United States Code, in
addition to any other applicable law.
‘‘(Q) DEFINITIONS.—For the purpose of
this paragraph:
‘‘(i) ELECTRONIC
BENEFITS
TRANS-
FER CARD SYSTEM.—The term ‘electronic
benefits transfer card system’ means a sys-
tem to support transactions conducted with
electronic benefits transfer cards, paper, or
other alternative benefits transfer systems
283
approved by the Secretary for the provision
of program benefits in accordance with this
paragraph.
‘‘(ii) RETAIL FOOD STORE.—The term
‘retail food store’ means a retail food store,
a farmer’s market, or a house-to-house
trade route authorized to participate in the
food stamp program.
‘‘(iii) SPECIAL-NEED
RETAIL
FOOD
STORE.—The term ‘special-need retail food
store’ means—
‘‘(I) a retail food store located in
a very rural area;
‘‘(II) a retail food store without
access to dependable electricity or reg-
ular telephone service; or
‘‘(III) a farmers’ market or
house-to-house trade route that is au-
thorized to participate in the food
stamp program.
‘‘(R) LEAD
ROLE
OF
INDUSTRY
AND
STATES.—The Secretary shall consult with the
Secretary of the Treasury, the Secretary of
Health and Human Services, the Inspector
General of the United States Department of
284
Agriculture, the United States Secret Service,
the National Governor’s Association, the Food
Marketing Institute, the National Association of
Convenience Stores, the American Public Wel-
fare Association, the National Conference of
State Legislatures, the American Bankers Asso-
ciation, the financial services community, State
agencies, and food advocates to obtain informa-
tion helpful to retail stores, the financial serv-
ices industry, and States in the conversion to
electronic benefits transfer, including informa-
tion regarding—
‘‘(i) the degree to which an electronic
benefits transfer system could be easily in-
tegrated with commercial networks;
‘‘(ii) the usefulness of appropriate
electronic benefits transfer security fea-
tures and local management controls, in-
cluding features in an electronic benefits
transfer card to deter counterfeiting of the
card;
‘‘(iii) the use of laser scanner tech-
nology with electronic benefits transfer
technology so that only eligible food items
285
can be purchased by food stamp partici-
pants in stores that use scanners;
‘‘(iv) how to maximize technology that
uses data available from an electronic ben-
efits transfer system to identify fraud and
allow law enforcement personnel to quickly
identify or target a suspected or actual
program violator;
‘‘(v) means of ensuring the confiden-
tiality of personal information in electronic
benefits transfer systems and the applica-
bility of section 552a of title 5, United
States Code, to electronic benefits transfer
systems;
‘‘(vi) the best approaches for maximiz-
ing the use of then current point-of-sale
terminals and systems to reduce costs; and
‘‘(vii) the best approaches for maxi-
mizing the use of electronic benefits trans-
fer systems for multiple Federal and State
benefit programs so as to achieve the high-
est cost savings possible through the imple-
mentation of electronic benefits transfer
systems.’’.
(b) CONFORMING AMENDMENTS.—
286
(1) Section 3 of the Food Stamp Act of 1977
(42 U.S.C. 2012) is amended—
(A) in subsection (a), by striking ‘‘cou-
pons’’ and inserting ‘‘benefits’’;
(B) in the first sentence of subsection (c),
by striking ‘‘authorization cards’’ and inserting
‘‘allotments’’;
(C) in subsection (d), by striking ‘‘the pro-
visions of this Act’’ and inserting ‘‘sections 5(h)
and 7’’;
(D) in subsection (e)—
(i) by striking ‘‘Coupon issuer’’ and
inserting ‘‘Benefit issuer’’; and
(ii) by striking ‘‘coupons’’ and insert-
ing ‘‘benefits’’;
(E) in the last sentence of subsection (i),
by striking ‘‘coupons’’ and inserting ‘‘allot-
ments’’; and
(F) by adding at the end the following new
subsection:
‘‘(v) ‘Electronic benefits transfer card’
means a card issued to a household partici-
pating in the program that is used to pur-
chase food.
287
(2) Section 4(a) of such Act (7 U.S.C. 2013(a))
is amended—
(A) in the first sentence by inserting ‘‘and
to funds made available under section 7’’ after
‘‘this Act’’.
(B) in the first and second sentences, by
striking ‘‘coupons’’ each place it appears and
inserting ‘‘electronic benefits transfer cards or
coupons’’; and
(C) by striking the third sentence and in-
serting the following new sentence: ‘‘The Sec-
retary, through the facilities of the Treasury of
the United States, shall reimburse the stores
for food purchases made with electronic benefits
transfer cards or coupons provided under this
Act.’’.
(3) The first sentence of section 6(b)(1) of such
Act (7 U.S.C. 2015(b)(1)) is amended—
(A) by striking ‘‘coupons or authorization
cards’’ and inserting ‘‘electronic benefits trans-
fer cards, coupons, or authorization cards’’; and
(B) in clauses (ii) and (iii), by inserting
‘‘or electronic benefits transfer cards’’ after
‘‘coupons’’ each place it appears.
288
(4) Section 7 of such Act (7 U.S.C. 2016) is
amended—
(A) by striking the section heading and in-
serting the following new section heading: ‘‘IS-
SUANCE AND USE OF ELECTRONIC BENE-
FITS TRANSFER CARDS OR COUPONS’’;
(B) in subsection (a), by striking ‘‘Cou-
pons’’ and all that follows through ‘‘necessary,
and’’ and inserting ‘‘Electronic benefits transfer
cards or coupons’’;
(C) in subsection (b), by striking ‘‘Cou-
pons’’ and inserting ‘‘Electronic benefits trans-
fer cards or coupons’’;
(D) in subsection (e), by striking ‘‘coupons
to coupon issuers’’ and replace with ‘‘benefits to
benefits issuers’’; and by striking ‘‘by coupon
issuers’’ and inserting ‘‘by benefits issuers’’.
(E) in subsection (f)—
(i) by striking ‘‘issuance of coupons’’
and inserting ‘‘issuance of electronic bene-
fits transfer cards or coupons’’;
(ii) by striking ‘‘coupon issuer’’ and
inserting ‘‘electronic benefits transfer or
coupon issuer’’; and
289
(iii) by striking ‘‘coupons and allot-
ments’’ and inserting ‘‘electronic benefits
transfer cards, coupons, and allotments’’;
(F) by deleting ‘‘(1) The’’ in subsections
(g) and (h) and inserting the following: ‘‘(1)
Except with respect to electronic benefit trans-
fer care systems operated under section 7(j)(5),
the’’; and
(G) by striking subparagraph (i)(2)(A);
and by relettering (B) through (H) as (A)
through (G).
(5) Section 8(b) of such Act (7 U.S.C. 2017(b))
is amended by striking ‘‘coupons’’ and inserting
‘‘electronic benefits transfer cards or coupons’’.
(6) Section 9 of such Act (7 U.S.C. 2018) is
amended—
(A) in subsections (a) and (b), by striking
‘‘coupons’’ each place it appears and inserting
‘‘coupons, or accept electronic benefits transfer
cards,’’; and
(B) in subsection (a)(1)(B), by striking
‘‘coupon business’’ and inserting ‘‘electronic
benefits transfer cards and coupon business’’.
(7) Section 10 of such Act (7 U.S.C. 2019) is
amended—
290
(A) by striking the section heading and in-
serting the following: ‘‘REDEMPTION OF COU-
PONS OR ELECTRONIC BENEFITS TRANS-
FER CARDS’’; and
(B) in the first sentence—
(i) by inserting after ‘‘provide for’’ the
following: ‘‘reimbursing stores for program
benefits provided and for’’;
(ii) by inserting after ‘‘food coupons’’
the following: ‘‘or use their members’ elec-
tronic benefits transfer cards’’; and
(iii) by striking the period at the end
and inserting the following: ‘‘, unless the
center, organization, institution, shelter,
group living arrangement, or establishment
is equipped with a point-of-sale device for
the purpose of participating in the elec-
tronic benefits transfer system.’’.
(8) Section 11 of such Act (7 U.S.C. 2020) is
amended—
(A) in the first sentence of subsection (a),
by striking ‘‘coupons’’ and inserting ‘‘electronic
benefits transfer cards or coupons,’’;
(B) in subsection (e)—
(i) in paragraph (2)—
291
(I) by striking ‘‘a coupon allot-
ment’’ and inserting ‘‘an allotment’’;
and
(II) by striking ‘‘issuing cou-
pons’’ and inserting ‘‘issuing elec-
tronic benefits transfer cards or cou-
pons’’;
(ii) in paragraph (7), by striking
‘‘coupon issuance’’ and inserting ‘‘elec-
tronic benefits transfer card or coupon is-
suance’’;
(iii) in paragraph (8)(C), by striking
‘‘coupons’’ and inserting ‘‘benefits’’;
(iv) in paragraph (9), by striking
‘‘coupons’’ each place it appears and in-
serting ‘‘electronic benefits transfer cards
or coupons’’;
(v) in paragraph (11), by striking ‘‘in
the form of coupons’’;
(vi) in paragraph (16), by striking
‘‘coupons’’ and inserting ‘‘electronic bene-
fits transfer card or coupons’’;
(vii) in paragraph (17), by striking
‘‘food stamps’’ and replacing with ‘‘bene-
fits’’;
292
(viii) in paragraph (21), by striking
‘‘coupons’’ and inserting ‘‘electronic bene-
fits transfer cards or coupons’’;
(ix) in paragraph (24), by striking
‘‘coupons’’ and inserting ‘‘benefits’’; and
(x) in paragraph (25), by striking
‘‘coupons’’ each place it appears and in-
serting ‘‘electronic benefits transfer cards
or coupons’’; and
(C) in subsection (h), by striking ‘‘face
value of any coupon or coupons’’ and inserting
‘‘value of any benefits’’; and
(D) in subsection (n)—
(i) by striking ‘‘both coupons’’ each
place it appears and inserting ‘‘benefits
under this Act’’; and
(ii) by striking ‘‘of coupons’’ and in-
serting ‘‘of benefits’’.
(9) Section 12 of such Act (7 U.S.C. 2021) is
amended—
(A) in subsection (b)(3), by striking ‘‘cou-
pons’’ each place it appears and inserting ‘‘elec-
tronic benefits transfer cards or coupons’’;
(B) in subsection (d)—
(i) in the first sentence—
293
(I) by inserting after ‘‘redeem
coupons’’ the following: ‘‘and to ac-
cept 
electronic 
benefits 
transfer
cards’’; and
(II) by striking ‘‘value of cou-
pons’’ and inserting ‘‘value of benefits
and coupons’’; and
(ii) in the third sentence, by striking
‘‘coupons’’ each place it appears and in-
serting ‘‘benefits’’; and
(C) in the first sentence of subsection (f)—
(i) by inserting after ‘‘to accept and
redeem food coupons’’ the following: ‘‘elec-
tronic benefits transfer cards, or to accept
and redeem food coupons,’’; and
(ii) by inserting before the period at
the end the following: ‘‘or program bene-
fits’’.
(10) Section 13 of such Act (7 U.S.C. 2022) is
amended by striking ‘‘coupons’’ each place it ap-
pears and inserting ‘‘benefits’’.
(11) Section 15 of such Act (7 U.S.C. 2024) is
amended—
(A) in subsection (a), by striking ‘‘issuance
or presentment for redemption’’ and inserting
294
‘‘issuance, presentment for redemption, or use
of electronic benefits transfer cards or’’;
(B) in the first sentence of subsection
(b)(1)—
(i) by inserting after ‘‘coupons, au-
thorization cards,’’ each place it appears
the following: ‘‘electronic benefits transfer
cards,’’; and
(ii) by striking ‘‘coupons or authoriza-
tion cards’’ each place it appears and in-
serting the following: ‘‘coupons, authoriza-
tion cards, or electronic benefits transfer
cards’’;
(C) in the first sentence of subsection
(c)—
(i) by striking ‘‘coupons’’ and insert-
ing ‘‘a coupon or electronic benefits trans-
fer card’’; and
(ii) strike ‘‘such coupons are’’ and in-
serting ‘‘the payment or redemption is’’;
(D) in subsection (d) striking ‘‘coupons’’
and replacing with ‘‘Benefits’’;
(E) in subsection (e) after ‘‘coupons’’ in-
serting ‘‘or electronic benefits transfer cards’’;
295
(F) in subsection (f) after ‘‘coupon’’ insert-
ing ‘‘or electronic benefits transfer card’’; and
(G) in the first sentence of subsection (g),
by inserting after ‘‘coupons, authorization
cards,’’ the following: ‘‘electronic benefits trans-
fer cards,’’.
(12) Section 16 (7 U.S.C. 2025) is amended—
(A) in subsection (a)—
(i) in paragraph (2) after ‘‘coupons’’
by inserting ‘‘electronic benefits transfer
cards’’;
(ii) in paragraph (3) by inserting after
‘‘households’’ the following: ‘‘, including
the cost of providing equipment necessary
for retail food stores to participate in an
electronic benefits transfer system’’;
(B) by deleting subsection (d);
(C) 
by 
redesignating 
subsections 
(e)
through (j) as subsections (d) through (i), re-
spectively;
(D) in subsection (g)(5) (as redesignated
by paragraph (3))—
(i) in subparagraph (A), by striking
‘‘(A)’’; and
(ii) by striking subparagraph (B);
296
(E) in subsection (h) (as redesignated by
paragraph (3)), by striking paragraph (3); and
(F) by striking subsection (i) (as redesig-
nated by paragraph (3)).
(13) Section 17 of such Act (7 U.S.C. 2026) is
amended—
(A) in the last sentence of subsection
(a)(2), by striking ‘‘coupon’’ and inserting
‘‘benefit’’;
(B) by deleting the last sentence of para-
graph (b)(2);
(C) by deleting the last sentence of sub-
section (c);
(D) in subsection (d)(1)(B), by striking
‘‘coupons’’ each place it appears and inserting
‘‘benefits’’;
(E) by deleting the last sentence of sub-
section (e);
(F) by striking subsection (f); and
(G) 
by 
redesignating 
subsections 
(g)
through (k) as subsections (f) through (j), re-
spectively.
(14) Section 21 of such Act (7 U.S.C. 2030) is
amended—
297
(A) by striking ‘‘coupons’’ each place it ap-
pears (other than in subsections (b)(2)(A)(ii)
and (d)) and inserting ‘‘benefits’’;
(B) in subsection (b)(2)(A)(ii), by striking
‘‘coupons’’ and inserting ‘‘electronic benefits
transfer cards or coupons’’; and
(C) in subsection (d)—
(i) in paragraph (2), by striking
‘‘Coupons’’ and inserting ‘‘Benefits’’; and
(ii) in paragraph (3), by striking ‘‘in
food coupons’’.
(15) Section 22 of such Act (7 U.S.C. 2031) is
amended—
(A) in subsection (b)—
(i) in paragraph (3)(D)—
(I) in clause (ii), by striking
‘‘coupons’’ and inserting ‘‘benefits’’;
and
(II) in clause (iii), by striking
‘‘coupons’’ and inserting ‘‘electronic
benefits transfer benefits’’;
(ii) in paragraph (9), by striking
‘‘coupons’’ and inserting ‘‘benefits’’;
(iii) in paragraph (10)(B)—
298
(I) in the second sentence of
clause (I), by striking ‘‘Food cou-
pons’’ and inserting ‘‘Program bene-
fits’’; and
(II) in clause (ii)—
(aa) in the second sentence,
by striking ‘‘Food coupons’’ and
inserting ‘‘Benefits’’; and
(bb) in the third sentence,
by striking ‘‘food coupons’’ each
place it appears and inserting
‘‘benefits’’;
(B) in subsection (d), by striking ‘‘cou-
pons’’ each place it appears and inserting ‘‘ben-
efits’’;
(C) in subsection (g)(l)(A), by striking
‘‘coupon’’; and
(D) in subsection (h), by striking ‘‘food
coupons’’ and inserting ‘‘benefits’’.
(16) Section 1956(c)(7)(D) of title 18, United
States Code, is amended by inserting ‘‘electronic
benefits transfer cards or’’ before ‘‘coupons having’’.
299
SEC. 321. MINIMUM BENEFIT.
The proviso in section 8(a) of the Food Stamp Act
of 1977 (7 U.S.C. 2017(a)) is amended by striking ‘‘, and
shall be adjusted’’ and all that follows through ‘‘$5’’.
SEC. 322. BENEFITS ON RECERTIFICATION.
Section 8(c)(2)(B) of the Food Stamp Act of 1977
(7 U.S.C. 2017(c)(2)(B)) is amended by striking ‘‘of more
than one month’’.
SEC. 323. OPTIONAL COMBINED ALLOTMENT FOR EXPE-
DITED HOUSEHOLDS.
Section 8(c) of the Food Stamp Act of 1977 (7
U.S.C. 2017(c)) is amended by striking paragraph (3) and
inserting the following:
‘‘(3) OPTIONAL
COMBINED
ALLOTMENT
FOR
EXPEDITED
HOUSEHOLDS.—A State agency may
provide to an eligible household applying after the
15th day of a month, in lieu of the initial allotment
of the household and the regular allotment of the
household for the following month, an allotment that
is the aggregate of the initial allotment and the first
regular allotment, which shall be provided in accord-
ance with section 11(e)(3) in the case of a household
that is not entitled to expedited service or in accord-
ance with paragraphs (3) and (9) of section 11(e) in
the case of a household that is entitled to expedited
service.’’.
300
SEC. 324. FAILURE TO COMPLY WITH OTHER WELFARE AND
PUBLIC ASSISTANCE PROGRAMS.
Section 8 of the Food Stamp Act of 1977 (7 U.S.C.
2017) is amended by striking subsection (d) and inserting
the following:
‘‘(d) REDUCTION
OF PUBLIC ASSISTANCE BENE-
FITS.—
‘‘(1) IN GENERAL.—If the benefits of a house-
hold are reduced under a Federal, State, or local law
relating to a welfare or public assistance program
for the failure to perform an action required under
the law or program, for the duration of the reduc-
tion—
‘‘(A) the household may not receive an in-
creased allotment as the result of a decrease in
the income of the household to the extent that
the decrease is the result of the reduction; and
‘‘(B) the State agency may reduce the al-
lotment of the household by not more than 25
percent.
‘‘(2) OPTIONAL
METHOD.—In carrying out
paragraph (1), a State agency may consider, for the
duration of a reduction referred to under paragraph
(1), the benefits of the household under a welfare or
public assistance program before the reduction as in-
come of the household after the reduction.
301
‘‘(3) RULES AND PROCEDURES.—If the allot-
ment of a household is reduced under this subsection
for a failure to perform an action required under
part A of title IV of the Social Security Act (42
U.S.C. 601 et seq.), the State agency may use the
rules and procedures that apply under part A of title
IV of the Act to reduce the allotment under the food
stamp program.’’.
SEC. 325. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN IN-
STITUTIONS.
Section 8 of the Food Stamp Act of 1977 (7 U.S.C.
2017) is amended by adding at the end the following:
‘‘(f) ALLOTMENTS FOR HOUSEHOLDS RESIDING IN
INSTITUTIONS.—
‘‘(1) IN GENERAL.—In the case of an individual
who resides in a homeless shelter, or in an institu-
tion or center for the purpose of a drug or alcoholic
treatment program, described in the last sentence of
section 3(i), a State agency may provide an allot-
ment for the individual to—
‘‘(A) the institution as an authorized rep-
resentative for the individual for a period that
is less than 1 month; and
‘‘(B) the individual, if the individual leaves
the institution.
302
‘‘(2) DIRECT PAYMENT.—A State agency may
require an individual referred to in paragraph (1) to
designate the shelter, institution, or center in which
the individual resides as the authorized representa-
tive of the individual for the purpose of receiving an
allotment.’’.
SEC. 326. OPERATION OF FOOD STAMP OFFICES.
Section 11 of the Food Stamp Act of 1977 (7 U.S.C.
2020) is amended—
(1) in subsection (e)—
(A) by striking paragraph (2) and insert-
ing the following:
‘‘(2)(A) that the State agency shall establish
procedures governing the operation of food stamp of-
fices that the State agency determines best serve
households in the State, including households with
special needs, such as households with elderly or dis-
abled members, households in rural areas with low-
income members, homeless individuals, households
residing on reservations, and households in which a
substantial number of members speak a language
other than English.
‘‘(B) In carrying out subparagraph (A), a State
agency—
303
‘‘(i) shall provide timely, accurate, and fair
service to applicants for, and participants in,
the food stamp program;
‘‘(ii) shall permit an applicant household to
apply to participate in the program on the same
day that the household first contacts a food
stamp office in person during office hours;
‘‘(iii) shall consider an application filed on
the date the applicant submits an application
that contains the name, address, and signature
of the applicant; and
‘‘(iv) may establish operating procedures
that vary for local food stamp offices to reflect
regional and local differences within the
State;’’;
(B) in paragraph (3) (as amended by sec-
tion 309(b))—
(i) by striking ‘‘shall—’’ and all that
follows through ‘‘provide each’’ and insert-
ing ‘‘shall provide each’’; and
(ii) by striking ‘‘(B) assist’’ and all
that follows through ‘‘representative of the
State agency;’’;
(C) by striking paragraph (14) and insert-
ing the following:
304
‘‘(14) the standards and procedures used by the
State agency under section 6(d)(1)(D) to determine
whether an individual is eligible to participate under
section 6(d)(1)(A);’’; and
(D) by striking paragraph (25) and insert-
ing the following:
‘‘(25) a description of the work supplementation
or support program, if any, carried out by the State
agency under section 16(b);’’; and
(2) in subsection (i)—
(A) by striking ‘‘(i) Notwithstanding’’ and
all that follows through ‘‘(2)’’ and inserting the
following:
‘‘(i) APPLICATION AND DENIAL PROCEDURES.—
‘‘(1) 
APPLICATION
PROCEDURES.—Notwith-
standing any other provision of law,’’; and
(B) by striking ‘‘; (3) households’’ and all
that follows through ‘‘title IV of the Social Se-
curity Act. No’’ and inserting a period and the
following:
‘‘(2) DENIAL AND TERMINATION.—Other than
in a case of disqualification as a penalty for failure
to comply with a public assistance program rule or
regulation, no’’.
305
SEC. 327. STATE EMPLOYEE AND TRAINING STANDARDS.
Section 11(e)(6) of the Food Stamp Act of 1977 (7
U.S.C. 2020(e)(6)) is amended—
(1) by striking ‘‘(A)’’; and
(2) by striking subparagraphs (B) through (E).
SEC. 328. EXCHANGE OF LAW ENFORCEMENT INFORMA-
TION.
Section 11(e) of the Food Stamp Act of 1977 (7
U.S.C. 2020(e)) (as amended by section 315(b)) is further
amended—
(1) in paragraph (8)—
(A) by striking ‘‘that (A) such’’ and insert-
ing the following: ‘‘that—
‘‘(A) the’’;
(B) by striking ‘‘law, (B) notwithstanding’’
and inserting the following: ‘‘law;
‘‘(B) notwithstanding’’;
(C) by striking ‘‘Act, and (C) such’’ and
inserting the following: ‘‘Act;
‘‘(C) the’’; and
(D) by adding at the end the following:
‘‘(D) notwithstanding any other provision
of law, the address, social security number, and,
when available, photograph of any member of a
household shall be made available, on request,
to any Federal, State, or local law enforcement
306
officer if the officer furnishes the State agency
with the name of the member and notifies the
agency that—
‘‘(i) the member—
‘‘(I) is fleeing to avoid prosecu-
tion, or custody or confinement after
conviction, for a crime (or attempt to
commit a crime) that, under the law
of the place the member is fleeing, is
a felony (or, in the case of New Jer-
sey, a high misdemeanor), or is violat-
ing a condition of probation or parole
imposed under Federal or State law;
or
‘‘(II) has information that is nec-
essary for the officer to conduct the
official duties of the officer;
‘‘(ii) the location or apprehension of
the member is an official duty of the offi-
cer; and
‘‘(iii) the request is being made in the
proper exercise of the official duties of the
officer; and
‘‘(E) the safeguards shall not prevent com-
pliance with paragraph (27);’’; and
307
(3) by adding at the end the following:
‘‘(27) that the State agency shall furnish the
Immigration and Naturalization Service with the
name of, address of, and identifying information on
any individual the State agency knows is unlawfully
in the United States; and’’.
SEC. 329. EXPEDITED COUPON SERVICE.
Section 11(e)(9) of the Food Stamp Act of 1977 (7
U.S.C. 2020(e)(9)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘five days’’ and inserting
‘‘7 business days’’; and
(B) by inserting ‘‘and’’ at the end;
(2) by striking subparagraphs (B) and (C);
(3) by redesignating subparagraph (D) as sub-
paragraph (B); and
(4) in subparagraph (B) (as redesignated by
paragraph (3)), by striking ‘‘, (B), or (C)’’.
SEC. 330. FAIR HEARINGS.
Section 11 of the Food Stamp Act of 1977 (7 U.S.C.
2020) is amended by adding at the end the following:
‘‘(p) WITHDRAWING FAIR HEARING REQUESTS.—A
household may withdraw, orally or in writing, a request
by the household for a fair hearing under subsection
(e)(10). If the withdrawal request is an oral request, the
308
State agency shall provide a written notice to the house-
hold confirming the request and providing the household
with an opportunity to request a hearing.’’.
SEC. 331. INCOME AND ELIGIBILITY VERIFICATION SYS-
TEM.
Section 11 of the Food Stamp Act of 1977 (7 U.S.C.
2020) (as amended by section 330) is further amended
by adding at the end the following:
‘‘(q) STATE VERIFICATION OPTION.—Notwithstand-
ing any other provision of law, a State agency shall not
be required to use an income and eligibility verification
system established under section 1137 of the Social Secu-
rity Act (42 U.S.C. 1320b–7).’’.
SEC. 332. COLLECTION OF OVERISSUANCES.
(a) IN GENERAL.—Section 13 of the Food Stamp Act
of 1977 (7 U.S.C. 2022) is amended—
(1) by striking subsection (b) and inserting the
following:
‘‘(b) COLLECTION OF OVERISSUANCES.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, a State agency shall collect
any overissuance of coupons issued to a household
by—
‘‘(A) reducing the allotment of the house-
hold;
309
‘‘(B) withholding unemployment compensa-
tion from a member of the household under
subsection (c);
‘‘(C) recovering from Federal pay or a
Federal income tax refund under subsection
(d); or
‘‘(D) any other means.
‘‘(2) COST
EFFECTIVENESS.—Paragraph (1)
shall not apply if the State agency demonstrates to
the satisfaction of the Secretary that all of the
means referred to in paragraph (1) are not cost ef-
fective.
‘‘(3) HARDSHIPS.—A State agency may not use
an allotment reduction under paragraph (1)(A) as a
means of collecting an overissuance from a house-
hold if the allotment reduction would cause a hard-
ship on the household, as determined by the State
agency.
‘‘(4) MAXIMUM REDUCTION ABSENT FRAUD.—
If a household received an overissuance of coupons
without any member of the household being found
ineligible to participate in the program under section
6(b)(1) and a State agency elects to reduce the allot-
ment of the household under paragraph (1)(A), the
State agency shall reduce the monthly allotment of
310
the household under paragraph (1)(A) by the great-
er of—
‘‘(A) 10 percent of the monthly allotment
of the household; or
‘‘(B) $10.
‘‘(5) PROCEDURES.—A State agency shall col-
lect an overissuance of coupons issued to a house-
hold under paragraph (1) in accordance with re-
quirements established by the State agency for pro-
viding notice, electing a means of payment, and es-
tablishing a time schedule for payment.’’; and
(2) in subsection (d)—
(A) by striking ‘‘as determined under sub-
section (b) and except for claims arising from
an error of the State agency,’’ and inserting
‘‘, as determined under subsection (b)(1),’’; and
(B) by inserting before the period at the
end the following: ‘‘or a Federal income tax re-
fund as authorized by section 3720A of title 31,
United States Code’’.
(b) CONFORMING AMENDMENT.—Section 11(e)(8) of
the Act (7 U.S.C. 2020(e)(8)) is amended—
(1) by striking ‘‘and excluding claims’’ and all
that follows through ‘‘such section’’; and
312
administration of the program established under sec-
tion 16(b)(1) or’’.
(2) Section 16(c)(1)(B) of the Act (7 U.S.C.
2025(c)(1)(B)) is amended by striking ‘‘pursuant to
subsection (b)’’.
SEC. 335. WORK SUPPLEMENTATION OR SUPPORT PRO-
GRAM.
Section 16 of the Food Stamp Act of 1977 (7 U.S.C.
2025) (as amended by section 334(a)) is further amended
by inserting after subsection (a) the following:
‘‘(b) WORK SUPPLEMENTATION OR SUPPORT PRO-
GRAM.—
‘‘(1) DEFINITION.—In this subsection, the term
‘work supplementation or support program’ means a
program in which, as determined by the Secretary,
public assistance (including any benefits provided
under a program established by the State and the
food stamp program) is provided to an employer to
be used for hiring and employing a new employee
who is a public assistance recipient.
‘‘(2) PROGRAM.—A State agency may elect to
use amounts equal to the allotment that would oth-
erwise be allotted to a household under the food
stamp program, but for the operation of this sub-
section, for the purpose of subsidizing or supporting
313
jobs under a work supplementation or support pro-
gram established by the State.
‘‘(3) PROCEDURE.—If a State agency makes an
election under paragraph (2) and identifies each
household that participates in the food stamp pro-
gram that contains an individual who is participat-
ing in the work supplementation or support pro-
gram—
‘‘(A) the Secretary shall pay to the State
agency an amount equal to the value of the al-
lotment that the household would be eligible to
receive but for the operation of this subsection;
‘‘(B) the State agency shall expend the
amount paid under subparagraph (A) in accord-
ance with the work supplementation or support
program in lieu of providing the allotment that
the household would receive but for the oper-
ation of this subsection;
‘‘(C) for purposes of—
‘‘(i) sections 5 and 8(a), the amount
received under this subsection shall be ex-
cluded from household income and re-
sources; and
‘‘(ii) section 8(b), the amount received
under this subsection shall be considered to
314
be the value of an allotment provided to
the household; and
‘‘(D) the household shall not receive an al-
lotment from the State agency for the period
during which the member continues to partici-
pate in the work supplementation or support
program.
‘‘(4) OTHER WORK REQUIREMENTS.—No indi-
vidual shall be excused, by reason of the fact that
a State has a work supplementation or support pro-
gram, from any work requirement under section
6(d), except during the periods in which the individ-
ual is employed under the work supplementation or
support program.
‘‘(5) MAXIMUM LENGTH OF PARTICIPATION.—A
work supplementation or support program may not
allow the participation of any individual for longer
than 1 year, unless the Secretary approves a longer
period.’’.
SEC. 336. WAIVER AUTHORITY.
Section 17(b)(1)(A) of the Food Stamp Act of 1977
(7 U.S.C. 2026(b)(1)(A)) is amended—
(1) by striking ‘‘benefits to eligible households,
including’’ and inserting the following: ‘‘benefits to
eligible households. The Secretary may waive the re-
315
quirements of this Act to the extent necessary to
conduct a pilot or experimental project, including a
project designed to test innovative welfare reform,
promote work, and allow conformity with other Fed-
eral, State, and local government assistance pro-
grams, except that a project involving the payment
of benefits in the form of cash shall maintain the av-
erage value of allotments for affected households as
a group. Pilot or experimental projects may in-
clude’’; and
(2) by striking ‘‘The Secretary may waive’’ and
all that follows through ‘‘sections 5 and 8 of this
Act.’’.
SEC. 337. AUTHORIZATION OF PILOT PROJECTS.
The last sentence of section 17(b)(1)(A) of the Food
Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(A)) is amended
by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 338. RESPONSE TO WAIVERS.
Section 17(b)(1) of the Food Stamp Act of 1977 (7
U.S.C. 2026(b)(1)) is amended by adding at the end the
following:
‘‘(C) RESPONSE TO WAIVERS.—
‘‘(i) RESPONSE.—Not later than 60
days after the date of receiving a request
316
for a waiver under subparagraph (A), the
Secretary shall provide a response that—
‘‘(I) approves the waiver request;
‘‘(II) denies the waiver request
and explains any modification needed
for approval of the waiver request;
‘‘(III) denies the waiver request
and explains the grounds for the de-
nial; or
‘‘(IV) requests clarification of the
waiver request.
‘‘(ii) FAILURE TO RESPOND.—If the
Secretary does not provide a response
under clause (i) not later than 60 days
after receiving a request for a waiver, the
waiver shall be considered approved.
‘‘(iii) NOTICE OF DENIAL.—On denial
of a waiver request under clause (i)(III),
the Secretary shall provide a copy of the
waiver request and the grounds for the de-
nial to the Committee on Agriculture of
the House of Representatives and the
Committee on Agriculture, Nutrition, and
Forestry of the Senate.’’.
317
SEC. 339. PRIVATE SECTOR EMPLOYMENT INITIATIVES.
Section 17 of the Food Stamp Act of 1977 (7 U.S.C.
2026) is amended by adding at the end the following:
‘‘(m) 
PRIVATE
SECTOR
EMPLOYMENT
INITIA-
TIVES.—
‘‘(1) ELECTION TO PARTICIPATE.—
‘‘(A) IN GENERAL.—Subject to the other
provisions of this subsection, a State may elect
to carry out a private sector employment initia-
tive program under this subsection.
‘‘(B) REQUIREMENT.—A State shall be eli-
gible to carry out a private sector employment
initiative under this subsection only if not less
than 50 percent of the households that received
food stamp benefits during the summer of 1993
also received benefits under a State program
funded under part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.) during the
summer of 1993.
‘‘(2) PROCEDURE.—A State that has elected to
carry out a private sector employment initiative
under paragraph (1) may use amounts equal to the
food stamp allotments that would otherwise be allot-
ted to a household under the food stamp program,
but for the operation of this subsection, to provide
cash benefits in lieu of the food stamp allotments to
318
the household if the household is eligible under para-
graph (3).
‘‘(3) ELIGIBILITY.—A household shall be eligi-
ble to receive cash benefits under paragraph (2) if
an adult member of the household—
‘‘(A) has worked in unsubsidized employ-
ment in the private sector for not less than the
preceding 90 days;
‘‘(B) has earned not less than $350 per
month from the employment referred to in sub-
paragraph (A) for not less than the preceding
90 days;
‘‘(C)(i) is eligible to receive benefits under
a State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et
seq.); or
‘‘(ii) was eligible to receive benefits under
a State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et
seq.) at the time the member first received cash
benefits under this subsection and is no longer
eligible for the State program because of earned
income;
319
‘‘(D) is continuing to earn not less than
$350 per month from the employment referred
to in subparagraph (A); and
‘‘(E) elects to receive cash benefits in lieu
of food stamp benefits under this subsection.
‘‘(4) EVALUATION.—A State that operates a
program under this subsection for 2 years shall pro-
vide to the Secretary a written evaluation of the im-
pact of cash assistance under this subsection. The
State agency shall determine the content of the eval-
uation.’’.
SEC. 340. REAUTHORIZATION OF APPROPRIATIONS.
The first sentence of section 18(a)(1) of the Food
Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended by
striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 341. REAUTHORIZATION OF PUERTO RICO NUTRITION
ASSISTANCE PROGRAM.
The first sentence of section 19(a)(1)(A) of the Food
Stamp Act of 1977 (7 U.S.C. 2028(a)(1)(A)) is amended
by striking ‘‘$974,000,000’’ and all that follows through
‘‘fiscal 
year 
1995’’ 
and 
inserting 
the 
following:
‘‘$1,143,000,000 for each of fiscal years 1995 and 1996,
$1,182,000,000 for fiscal year 1997, $1,223,000,000 for
fiscal year 1998, $1,266,000,000 for fiscal year 1999,
$1,310,000,000 for fiscal year 2000, $1,343,000,000 for
320
fiscal year 2001, and $1,376,000,000 for fiscal year
2002’’
SEC. 342. SIMPLIFIED FOOD STAMP PROGRAM.
(a) IN GENERAL.—The Food Stamp Act of 1977 (7
U.S.C. 2011 et seq.) is amended by adding at the end
the following:
‘‘SEC. 24. SIMPLIFIED FOOD STAMP PROGRAM.
‘‘(a) ELECTION.—Subject to subsection (c), a State
agency may elect to carry out a Simplified Food Stamp
Program (referred to in this section as a ‘Program’) under
this section.
‘‘(b) OPERATION OF PROGRAM.—
‘‘(1) IN GENERAL.—If a State agency elects to
carry out a Program, within the State or a political
subdivision of the State—
‘‘(A) a household in which all members re-
ceive assistance under a State program funded
under part A of title IV of the Social Security
Act (42 U.S.C. 601 et seq.) shall automatically
be eligible to participate in the Program; and
‘‘(B) subject to subsection (e), benefits
under the Program shall be determined under
rules and procedures established by the State
under—
321
‘‘(i) a State program funded under
part A of title IV of the Social Security
Act (42 U.S.C. 601 et seq.);
‘‘(ii) the food stamp program (other
than section 25); or
‘‘(iii) a combination of a State pro-
gram funded under part A of title IV of
the Social Security Act (42 U.S.C. 601 et
seq.) and the food stamp program.
‘‘(2) SHELTER STANDARD.—The State agency
may elect to apply 1 shelter standard to a household
that receives a housing subsidy and another shelter
standard to a household that does not receive the
subsidy.
‘‘(c) APPROVAL OF PROGRAM.—
‘‘(1) STATE PLAN.—A State agency may not
operate a Program unless the Secretary approves a
State plan for the operation of the Program under
paragraph (2).
‘‘(2) APPROVAL OF PLAN.—
‘‘(A) IN
GENERAL.—The Secretary shall
approve any State plan to carry out a Program
if the Secretary determines that the plan—
‘‘(i) complies with this section; and
322
‘‘(ii) would not increase Federal costs
incurred under this Act.
‘‘(B) DEFINITION OF FEDERAL COSTS.—In
this section, the term ‘Federal costs’ does not
include any Federal costs incurred under sec-
tion 17.
‘‘(d) INCREASED FEDERAL COSTS.—
‘‘(1) DETERMINATION.—
‘‘(A) IN
GENERAL.—The Secretary shall
determine whether a Program being carried out
by a State agency is increasing Federal costs
under this Act.
‘‘(B) NO
EXCLUDED
HOUSEHOLDS.—In
making a determination under subparagraph
(A), the Secretary shall not require the State
agency to collect or report any information on
households not included in the Program.
‘‘(C) ALTERNATIVE
ACCOUNTING
PERI-
ODS.—The Secretary may approve the request
of a State agency to apply alternative account-
ing periods to determine if Federal costs do not
exceed the Federal costs had the State agency
not elected to carry out the Program.
‘‘(2) NOTIFICATION.—If the Secretary deter-
mines that the Program has increased Federal costs
323
under this Act for any fiscal year, the Secretary
shall notify the State agency not later than January
1 of the immediately succeeding fiscal year.
‘‘(3) RETURN OF FUNDS.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that the Program has increased Federal
costs under this Act for a 2-year period, includ-
ing a fiscal year for which notice was given
under paragraph (2) and an immediately suc-
ceeding fiscal year, the State agency shall pay
to the Treasury of the United States the
amount of the increased costs.
‘‘(B) ENFORCEMENT.—If the State agency
does not pay an amount due under subpara-
graph (A) on a date that is not later than 90
days after the date of the determination, the
Secretary shall reduce amounts otherwise due
to the State agency for administrative costs
under section 16(a).
‘‘(e) RULES AND PROCEDURES.—
‘‘(1) IN
GENERAL.—Except as provided by
paragraph (2), a State may apply—
‘‘(A) the rules and procedures established
by the State under—
324
‘‘(i) the State program funded under
part A of title IV of the Social Security
Act (42 U.S.C. 601 et seq.); or
‘‘(ii) the food stamp program; or
‘‘(B) the rules and procedures of 1 of the
programs to certain matters and the rules and
procedures of the other program to all remain-
ing matters.
‘‘(2) STANDARDIZED DEDUCTIONS.—The State
may standardize the deductions provided under sec-
tion 5(e). In developing the standardized deduction,
the State shall give consideration to the work ex-
penses, dependent care costs, and shelter costs of
participating households.
‘‘(3) REQUIREMENTS.—In operating a Pro-
gram, the State shall comply with—
‘‘(A) subsections (a) through (g) of section
7;
‘‘(B) section 8(a), except that the income
of a household may be determined under a
State program funded under part A of title IV
of the Social Security Act (42 U.S.C. 601 et
seq.);
‘‘(C) subsections (b) and (d) of section 8;
325
‘‘(D) subsections (a), (c), (d), and (n) of
section 11;
‘‘(E) paragraph (3) of section 11(e), to the
extent that the paragraph requires that an eli-
gible household be certified and receive an allot-
ment for the period of application not later
than 30 days after filing an application;
‘‘(F) paragraphs (8), (9), (12), (17), (19),
(21), and (27) of section 11(e);
‘‘(G) section 11(e)(10) or a comparable re-
quirement established by the State under a
State program funded under part A of title IV
of the Social Security Act (42 U.S.C. 601 et
seq.); and
‘‘(H) section 16.’’.
(b) STATE PLAN PROVISIONS.—Section 11(e) of the
Act (7 U.S.C. 2020(e)) (as amended by sections 315(b)
and 328) is further amended by adding at the end the
following:
‘‘(28) the plans of the State agency for operat-
ing, at the election of the State, a program under
section 24, including—
‘‘(A) the rules and procedures to be fol-
lowed by the State to determine food stamp
benefits;
326
‘‘(B) how the State will address the needs
of households that experience high shelter costs
in relation to the incomes of the households;
and
‘‘(C) a description of the method by which
the State will carry out a quality control system
under section 16(c).’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 8 of the Act (7 U.S.C. 2017) (as
amended by section 325) is further amended—
(A) by striking subsection (e); and
(B) by redesignating subsection (f) as sub-
section (e).
(2) Section 17 of the Act (7 U.S.C. 2026) (as
amended by section 339) is further amended—
(A) by striking subsection (i); and
(B) 
by 
redesignating 
subsections 
(j)
through (m) as subsections (i) through (l), re-
spectively.
SEC. 343. OPTIONAL STATE FOOD ASSISTANCE BLOCK
GRANT.
(a) IN GENERAL.—The Food Stamp Act of 1977 (7
U.S.C. 2011 et seq.) (as amended by section 342) is fur-
ther amended by adding at the end the following:
327
‘‘SEC. 25. OPTIONAL STATE FOOD ASSISTANCE BLOCK
GRANT.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish a program to make grants to States in accordance
with this section to provide—
‘‘(1) food assistance to needy individuals and
families residing in the State;
‘‘(2) at the option of a State, wage subsidies
and payments in return for work for needy individ-
uals under the program;
‘‘(3) funds to operate an employment and train-
ing program under section (g)(2) for needy individ-
uals under the program; and
‘‘(4) funds for administrative costs incurred in
providing the assistance.
‘‘(b) ELECTION.—
‘‘(1) IN GENERAL.—A State may elect to par-
ticipate in the program established under subsection
(a).
‘‘(2) ELECTION
REVOCABLE.—A State that
elects to participate in the program established
under subsection (a) may subsequently reverse its
election only once thereafter. Following such rever-
sal, the State shall only be eligible to participate in
the food stamp program in accordance with the
328
other sections of this Act and shall not receive a
block grant under this section.
‘‘(3) PROGRAM
EXCLUSIVE.—A State that is
participating in the program established under sub-
section (a) shall not be subject to, or receive any
benefit under, this Act except as provided in this
section.
‘‘(4) SUNSET OF ELECTION UPON INCREASE IN
NUMBER OF HUNGRY CHILDREN.—
‘‘(A) 
FINDINGS.—The 
Congress 
finds
that—
‘‘(i) on March 29, 1995 the Senate
adopted a resolution stating that Congress
should not enact or adopt any legislation
that will increase the number of children
who are hungry;
‘‘(ii) it is not the intent of this bill to
cause more children to be hungry;
‘‘(iii) the Food Stamp Program serves
to prevent child hunger; and
‘‘(iv) a State’s election to participate
in the optional State food assistance block
grant program should not serve to increase
the number of hungry children in that
State.
329
‘‘(B) SUNSET.—If the Secretary of Health
and Human Services makes two successive find-
ings that the hunger rate among children in a
State is significantly higher in a State that has
elected to participate in a program established
under subsection (a) than it would have been
had there been no such election, 180 days after
the second such finding such election shall be
permanently and irreversibly revoked and the
provisions of paragraphs (1) and (2) shall not
be applicable to that State.
‘‘(C) PROCEDURE FOR FINDING BY SEC-
RETARY.—In making the finding described in
subparagraph (B), the Secretary shall adhere to
the following procedure:
‘‘(i) Every three years, the Secretary
shall develop data and report to Congress
with respect to each State that has elected
to participate in a program established
under subsection (a) whether the child
hunger rate in such State is significantly
higher than it would have been had the
State not made such election.
‘‘(ii) The Secretary shall provide the
report required under clause (i) to all
330
States that have elected to participate in a
program established under subsection (a),
and the Secretary shall provide each State
for which the Secretary determined that
the child hunger rate is significantly higher
than it would have been had the State not
made such election with an opportunity to
respond to such determination.
‘‘(iii) If the response by a State under
clause (ii) does not result in the Secretary
reversing the determination that the child
hunger rate in that State is significantly
higher than it would have been had the
State not made such election, then the Sec-
retary shall publish a finding as described
in subparagraph (B).
‘‘(c) LEAD AGENCY.—
‘‘(1) DESIGNATION.—A State desiring to re-
ceive a grant under this section shall designate, in
an application submitted to the Secretary under sub-
section (d)(1), an appropriate State agency that
complies with paragraph (2) to act as the lead agen-
cy for the State.
‘‘(2) DUTIES.—
331
‘‘(A) IN
GENERAL.—The lead agency
shall—
‘‘(i) 
administer, 
either 
directly,
through other State agencies, or through
local agencies, the assistance received
under this section by the State;
‘‘(ii) develop the State plan to be sub-
mitted to the Secretary under subsection
(d)(1);
‘‘(iii) in conjunction with the develop-
ment of the State plan, hold at least 1
hearing in the State to provide to the pub-
lic an opportunity to comment on the pro-
gram under the State plan; and
‘‘(iv) coordinate the provision of food
assistance under this section with other
Federal, State, and local programs.
‘‘(B) DEVELOPMENT OF PLAN.—In the de-
velopment of the State plan described in sub-
paragraph (A)(ii), the lead agency shall consult
with local governments and private sector orga-
nizations regarding the plan and design of the
State plan so that services are provided in a
manner appropriate to local populations.
‘‘(d) APPLICATION AND PLAN.—
332
‘‘(1) APPLICATION.—To be eligible to receive
assistance under this section, a State shall prepare
and submit to the Secretary an application at such
time, in such manner, and containing such informa-
tion as the Secretary shall by regulation require, in-
cluding—
‘‘(A) an assurance that the State will com-
ply with the requirements of this section;
‘‘(B) a State plan that meets the require-
ments of paragraph (3); and
‘‘(C) an assurance that the State will com-
ply with the requirements of the State plan
under paragraph (3).
‘‘(2) ANNUAL PLAN.—The State plan contained
in the application under paragraph (1) shall be sub-
mitted for approval annually.
‘‘(3) REQUIREMENTS OF PLAN.—
‘‘(A) LEAD AGENCY.—The State plan shall
identify the lead agency.
‘‘(B) USE OF BLOCK GRANT FUNDS.—The
State plan shall provide that the State shall use
the amounts provided to the State for each fis-
cal year under this section—
‘‘(i) to provide food assistance to
needy individuals and families residing in
333
the State, other than residents of institu-
tions who are ineligible for food stamps
under section 3(i);
‘‘(ii) at the option of a State, to pro-
vide wage subsidies and workfare under
section 20(a) (except that any reference in
section 20(a) to an allotment shall be con-
sidered a reference to the food assistance
or benefits in lieu of food assistance re-
ceived by an individual or family during a
month under this section) for needy indi-
viduals and families participating in the
program;
‘‘(iii) to administer an employment
and training program under section (g)(2)
for needy individuals under the program
and to provide reimbursements to needy
individuals and families as would be al-
lowed under section 16(h)(3); and
‘‘(iv) to pay administrative costs in-
curred in providing the assistance.
‘‘(C) GROUPS
SERVED.—The State plan
shall describe how the program will serve spe-
cific groups of individuals and families and how
the treatment will differ from treatment under
334
the food stamp program under the other sec-
tions of this Act of the individuals and families,
including—
‘‘(i) elderly individuals and families;
‘‘(ii) migrants or seasonal farm-
workers;
‘‘(iii) homeless individuals and fami-
lies;
‘‘(iv) individuals and families who live
under the supervision of institutions (other
than incarcerated individuals);
‘‘(v) individuals and families with
earnings; and
‘‘(vi) members of Indian tribes or trib-
al organizations.
‘‘(D) ASSISTANCE FOR ENTIRE STATE.—
The State plan shall provide that benefits under
this section shall be available throughout the
entire State.
‘‘(E) NOTICE AND HEARINGS.—The State
plan shall provide that an individual or family
who applies for, or receives, assistance under
this section shall be provided with notice of, and
an opportunity for a hearing on, any action
335
under this section that adversely affects the in-
dividual or family.
‘‘(F) OTHER ASSISTANCE.—
‘‘(i) COORDINATION.—The State plan
may coordinate assistance received under
this section with assistance provided under
the State program funded under part A of
title IV of the Social Security Act (42
U.S.C. 601 et seq.).
‘‘(ii) PENALTIES.—If an individual or
family is penalized for violating part A of
title IV of the Act, the State plan may re-
duce the amount of assistance provided
under this section or otherwise penalize the
individual or family.
‘‘(G) ASSESSMENT OF NEEDS.—The State
plan shall assess the food and nutrition needs
of needy persons residing in the State.
‘‘(H) 
ELIGIBILITY
LIMITATIONS.—The
State plan shall describe the income and re-
source eligibility limitations that are established
for the receipt of assistance under this section.
‘‘(I) RECEIVING BENEFITS IN MORE THAN
1 JURISDICTION.—The State plan shall estab-
lish a system to verify and otherwise ensure
336
that no individual or family shall receive bene-
fits under this section in more than 1 jurisdic-
tion within the State.
‘‘(J) PRIVACY.—The State plan shall pro-
vide for safeguarding and restricting the use
and disclosure of information about any individ-
ual or family receiving assistance under this
section.
‘‘(K) OTHER
INFORMATION.—The State
plan shall contain such other information as
may be required by the Secretary.
‘‘(4) APPROVAL OF APPLICATION AND PLAN.—
The Secretary shall approve an application and
State plan that satisfies the requirements of this
section.
‘‘(e) LIMITATIONS ON STATE ALLOTMENTS.—
‘‘(1) NO INDIVIDUAL OR FAMILY ENTITLEMENT
TO ASSISTANCE.—Nothing in this section—
‘‘(A) entitles any individual or family to
assistance under this section; or
‘‘(B) limits the right of a State to impose
additional limitations or conditions on assist-
ance under this section.
‘‘(2) CONSTRUCTION OF FACILITIES.—No funds
made available under this section shall be expended
337
for the purchase or improvement of land, or for the
purchase, construction, or permanent improvement
of any building or facility.
‘‘(f) BENEFITS FOR ALIENS.—
‘‘(1) ELIGIBILITY.—No individual shall be eligi-
ble to receive benefits under a State plan approved
under subsection (d)(4) if the individual is not eligi-
ble to participate in the food stamp program under
section 6(f).
‘‘(2) INCOME.—The State plan shall provide
that the income of an alien shall be determined in
accordance with section 5(i).
‘‘(g) EMPLOYMENT AND TRAINING.—
‘‘(1) WORK REQUIREMENTS.—No individual or
member of a family shall be eligible to receive bene-
fits under a State plan funded under this section if
the individual is not eligible to participate in the
food stamp program under subsection (d) or (n) of
section 6.
‘‘(2) WORK PROGRAMS.—Each State shall im-
plement an employment and training program under
section 6(d)(4) for needy individuals under the pro-
gram.
‘‘(h) ENFORCEMENT.—
338
‘‘(1) REVIEW
OF
COMPLIANCE
WITH
STATE
PLAN.—The Secretary shall review and monitor
State compliance with this section and the State
plan approved under subsection (d)(4).
‘‘(2) NONCOMPLIANCE.—
‘‘(A) IN GENERAL.—If the Secretary, after
reasonable notice to a State and opportunity for
a hearing, finds that—
‘‘(i) there has been a failure by the
State to comply substantially with any pro-
vision or requirement set forth in the State
plan approved under subsection (d)(4); or
‘‘(ii) in the operation of any program
or activity for which assistance is provided
under this section, there is a failure by the
State to comply substantially with any pro-
vision of this section;
the Secretary shall notify the State of the find-
ing and that no further payments will be made
to the State under this section (or, in the case
of noncompliance in the operation of a program
or activity, that no further payments to the
State will be made with respect to the program
or activity) until the Secretary is satisfied that
339
there is no longer any failure to comply or that
the noncompliance will be promptly corrected.
‘‘(B) OTHER SANCTIONS.—In the case of a
finding of noncompliance made pursuant to
subparagraph (A), the Secretary may, in addi-
tion to, or in lieu of, imposing the sanctions de-
scribed in subparagraph (A), impose other ap-
propriate sanctions, including recoupment of
money improperly expended for purposes pro-
hibited or not authorized by this section and
disqualification from the receipt of financial as-
sistance under this section.
‘‘(C) NOTICE.—The notice required under
subparagraph (A) shall include a specific identi-
fication of any additional sanction being im-
posed under subparagraph (B).
‘‘(3) ISSUANCE
OF
REGULATIONS.—The Sec-
retary shall establish by regulation procedures for—
‘‘(A) receiving, processing, and determin-
ing the validity of complaints concerning any
failure of a State to comply with the State plan
or any requirement of this section; and
‘‘(B) imposing sanctions under this sec-
tion.
340
‘‘(4) INCOME AND ELIGIBILITY VERIFICATION
SYSTEM.—The Secretary may withhold not more
than 5 percent of the amount allotted to a State
under subsection (l)(2) if the State does not use an
income and eligibility verification system established
under section 1137 of the Social Security Act (42
U.S.C. 1320b–7).
‘‘(i) PAYMENTS.—
‘‘(1) IN GENERAL.—For each fiscal year, the
Secretary shall pay to a State that has an applica-
tion approved by the Secretary under subsection
(d)(4) an amount that is equal to the allotment of
the State under subsection (l)(2) for the fiscal year.
‘‘(2) METHOD
OF
PAYMENT.—The Secretary
shall make payments to a State for a fiscal year
under this section by issuing 1 or more letters of
credit for the fiscal year, with necessary adjustments
on account of overpayments or underpayments, as
determined by the Secretary.
‘‘(3) SPENDING OF FUNDS BY STATE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), payments to a State from an
allotment under subsection (l)(2) for a fiscal
year may be expended by the State only in the
fiscal year.
341
‘‘(B) CARRYOVER.—The State may reserve
up to 10 percent of an allotment under sub-
section (l)(2) for a fiscal year to provide assist-
ance under this section in subsequent fiscal
years, except that the reserved funds may not
exceed 30 percent of the total allotment re-
ceived under this section for a fiscal year.
‘‘(4) FOOD ASSISTANCE AND ADMINISTRATIVE
EXPENDITURES.—In each fiscal year, of the Federal
funds expended by a State under this section—
‘‘(A) not less than 80 percent shall be for
food assistance; and
‘‘(B) not more than 6 percent shall be for
administrative expenses.
‘‘(5) PROVISION
OF
FOOD
ASSISTANCE.—A
State may provide food assistance under this section
in any manner determined appropriate by the State
to provide food assistance to needy individuals and
families in the State, such as electronic benefits
transfer limited to food purchases, coupons limited
to food purchases, or direct provision of commod-
ities.
‘‘(6) DEFINITION
OF
FOOD
ASSISTANCE.—In
this section, the term ‘food assistance’ means assist-
342
ance that may be used only to obtain food, as de-
fined in section 3(g).
‘‘(j) AUDITS.—
‘‘(1) REQUIREMENT.—After the close of each
fiscal year, a State shall arrange for an audit of the
expenditures of the State during the program period
from amounts received under this section.
‘‘(2) INDEPENDENT AUDITOR.—An audit under
this section shall be conducted by an entity that is
independent of any agency administering activities
that receive assistance under this section and be in
accordance with generally accepted auditing prin-
ciples.
‘‘(3) PAYMENT ACCURACY.—Each annual audit
under this section shall include an audit of payment
accuracy under this section that shall be based on a
statistically valid sample of the caseload in the
State.
‘‘(4) SUBMISSION.—Not later than 30 days
after the completion of an audit under this section,
the State shall submit a copy of the audit to the leg-
islature of the State and to the Secretary.
‘‘(5) REPAYMENT
OF
AMOUNTS.—Each State
shall repay to the United States any amounts deter-
mined through an audit under this section to have
343
not been expended in accordance with this section or
to have not been expended in accordance with the
State plan, or the Secretary may offset the amounts
against any other amount paid to the State under
this section.
‘‘(k) NONDISCRIMINATION.—
‘‘(1) IN
GENERAL.—The Secretary shall not
provide financial assistance for any program,
project, or activity under this section if any person
with responsibilities for the operation of the pro-
gram, project, or activity discriminates with respect
to the program, project, or activity because of race,
religion, color, national origin, sex, or disability.
‘‘(2) ENFORCEMENT.—The powers, remedies,
and procedures set forth in title VI of the Civil
Rights Act of 1964 (42 U.S.C. 2000d et seq.) may
be used by the Secretary to enforce paragraph (1).
‘‘(l) ALLOTMENTS.—
‘‘(1) DEFINITION OF STATE.—In this section,
the term ‘State’ means each of the 50 States, the
District of Columbia, Guam, and the Virgin Islands
of the United States.
‘‘(2) STATE ALLOTMENT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), from the amounts made
344
available under section 18 of this Act for each
fiscal year, the Secretary shall allot to each
State participating in the program established
under this section an amount that is equal to
the sum of—
‘‘(i) the greater of, as determined by
the Secretary—
‘‘(I) the total dollar value of all
benefits issued under the food stamp
program established under this Act by
the State during fiscal year 1994; or
‘‘(II) the average per fiscal year
of the total dollar value of all benefits
issued under the food stamp program
by the State during each of fiscal
years 1992 through 1994; and
‘‘(ii) the greater of, as determined by
the Secretary—
‘‘(I) the total amount received by
the State for administrative costs and
the employment and training program
under subsections (a) and (h), respec-
tively, of section 16 of this Act for fis-
cal year 1994; or
345
‘‘(II) the average per fiscal year
of the total amount received by the
State for administrative costs and the
employment and training program
under subsections (a) and (h), respec-
tively, of section 16 of this Act for
each of fiscal years 1992 through
1994.
‘‘(B) INSUFFICIENT FUNDS.—If the Sec-
retary finds that the total amount of allotments
to which States would otherwise be entitled for
a fiscal year under subparagraph (A) will ex-
ceed the amount of funds that will be made
available to provide the allotments for the fiscal
year, the Secretary shall reduce the allotments
made to States under this subsection, on a pro
rata basis, to the extent necessary to allot
under this subsection a total amount that is
equal to the funds that will be made available.’’.
(b) RESEARCH ON OPTIONAL STATE FOOD ASSIST-
ANCE BLOCK GRANT.—Section 17 of the Food Stamp Act
of 1977 (7 U.S.C. 2026) (as amended by section 339 and
342(c)(2)) is further amended by adding at the end the
following:
346
‘‘(m) RESEARCH ON OPTIONAL STATE FOOD ASSIST-
ANCE BLOCK GRANT.—The Secretary may conduct re-
search on the effects and costs of a State program carried
out under section 25.’’.
SEC. 344. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, this
subtitle and the amendments made by this subtitle shall
become effective on October 1, 1995.
Subtitle B—Anti-Fraud and
Trafficking
SEC. 351. EXPANDED DEFINITION OF COUPON.
Section 3(d) of the Food Stamp Act of 1977 (7
U.S.C. 2012(d)) is amended by striking ‘‘or type of certifi-
cate’’ and inserting ‘‘type of certificate, authorization
card, cash or check issued as a coupon, or access device,
including an electronic benefits transfer card or a personal
identification number,’’.
SEC. 352. DOUBLED PENALTIES FOR VIOLATING FOOD
STAMP PROGRAM REQUIREMENTS.
Section 6(b)(1) of the Food Stamp Act of 1977 (7
U.S.C. 2015(b)(1)) is amended—
(1) in clause (i), by striking ‘‘six months upon’’
and inserting ‘‘1 year on’’; and
(2) in clause (ii), by striking ‘‘1 year upon’’ and
inserting ‘‘2 years on’’.
347
SEC. 353. AUTHORITY TO ESTABLISH AUTHORIZATION PE-
RIODS.
Section 9(a) of the Food Stamp Act of 1977 (7
U.S.C. 2018(a)) is amended by adding at the end the fol-
lowing:
‘‘(3) AUTHORIZATION PERIODS.—The Secretary
is authorized to issue regulations establishing spe-
cific time periods during which authorization to ac-
cept and redeem coupons under the food stamp pro-
gram shall be valid.’’.
SEC. 354. SPECIFIC PERIOD FOR PROHIBITING PARTICIPA-
TION OF STORES BASED ON LACK OF BUSI-
NESS INTEGRITY.
Section 9(a) of the Food Stamp Act of 1977 (7
U.S.C. 2018(a)) (as amended by section 353) is further
amended by adding at the end the following:
‘‘(4) PERIODS FOR PARTICIPATION OF STORES
AND CONCERNS.—The Secretary may issue regula-
tions establishing specific time periods during which
a retail food store or wholesale food concern that has
an application for approval to accept and redeem
coupons denied, or that has an approval withdrawn,
on the basis of business integrity and reputation
cannot submit a new application for approval. The
periods shall reflect the severity of business integrity
348
infractions that are the basis of the denials or with-
drawals.’’.
SEC. 355. INFORMATION FOR VERIFYING ELIGIBILITY FOR
AUTHORIZATION.
Section 9(c) of the Food Stamp Act of 1977 (7
U.S.C. 2018(c)) is amended—
(1) in the first sentence, by inserting ‘‘, which
may include relevant income and sales tax filing doc-
uments,’’ after ‘‘submit information’’ ; and
(2) by inserting after the first sentence the fol-
lowing: ‘‘The regulations may require retail food
stores and wholesale food concerns to provide writ-
ten authorization for the Secretary to verify all rel-
evant tax filings with appropriate agencies and to
obtain corroborating documentation from other
sources so that the accuracy of information provided
by the stores and concerns may be verified.’’.
SEC. 356. WAITING PERIOD FOR STORES THAT INITIALLY
FAIL TO MEET AUTHORIZATION CRITERIA.
Section 9(d) of the Food Stamp Act of 1977 (7
U.S.C. 2018(d)) is amended by adding at the end the fol-
lowing: ‘‘A retail food store or wholesale food concern that
has an application for approval to accept and redeem cou-
pons denied because the store or concern does not meet
criteria for approval established by the Secretary by regu-
349
lation may not submit a new application for 6 months
after the date of the denial.’’.
SEC. 357. BASES FOR SUSPENSIONS AND DISQUALIFICA-
TIONS.
Section 12 of the Food Stamp Act of 1977 (7 U.S.C.
2021) is amended—
(1) by striking the section heading;
(2) by striking ‘‘SEC. 12 (a) Any’’ and inserting
the following:
‘‘SEC. 12. CIVIL MONEY PENALTIES AND DISQUALIFICATION
OF RETAIL FOOD STORES AND WHOLESALE
FOOD CONCERNS.
‘‘(a) DISQUALIFICATION.—
‘‘(1) IN GENERAL.—Any’’; and
(3) in subsection (a), by adding at the end the
following:
‘‘(2) BASIS.—Regulations issued pursuant to
this Act shall provide criteria for the finding of a
violation, and the suspension or disqualification of a
retail food store or wholesale food concern, on the
basis of evidence that may include facts established
through on-site investigations, inconsistent redemp-
tion data, or evidence obtained through transaction
reports under electronic benefits transfer systems.’’.
350
SEC. 358. DISQUALIFICATION OF STORES PENDING JUDI-
CIAL AND ADMINISTRATIVE REVIEW.
(a) AUTHORITY.—Section 12(a) of the Food Stamp
Act of 1977 (7 U.S.C. 2021(a)) (as amended by section
357) is further amended by adding at the end the follow-
ing:
‘‘(3) DISQUALIFICATION
PENDING
REVIEW.—
The regulations may establish criteria under which
the authorization of a retail food store or wholesale
food concern to accept and redeem coupons may be
suspended at the time the store or concern is ini-
tially found to have committed a violation of a re-
quirement of the food stamp program that would re-
sult in a permanent disqualification. The suspension
may coincide with the period of a review under sec-
tion 14. The Secretary shall not be liable for the
value of any sales lost during a suspension or dis-
qualification period.’’.
(b) REVIEW.—Section 14(a) of the Act (7 U.S.C.
2023(a)) is amended—
(1) in the first sentence, by striking ‘‘disquali-
fied or subjected’’ and inserting ‘‘suspended, dis-
qualified, or subjected’’;
(2) in the fifth sentence, by inserting before the
period at the end the following: ‘‘, except that, in the
case of the suspension of a retail food store or
351
wholesale food concern under section 12(a)(3), the
suspension shall remain in effect pending any judi-
cial or administrative review of the proposed dis-
qualification action, and the period of suspension
shall be considered a part of any period of disquali-
fication that is imposed’’; and
(3) by striking the last sentence.
SEC. 359. DISQUALIFICATION OF RETAILERS WHO ARE DIS-
QUALIFIED UNDER THE WIC PROGRAM.
Section 12 of the Food Stamp Act of 1977 (7 U.S.C.
2021) is amended by adding at the end the following:
‘‘(g) DISQUALIFICATION OF RETAILERS WHO ARE
DISQUALIFIED UNDER THE WIC PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary shall issue
regulations providing criteria for the disqualification
of an approved retail food store and a wholesale food
concern that is disqualified from accepting benefits
under the special supplemental nutrition program
for women, infants, and children established under
section 17 of the Child Nutrition Act of 1966 (7
U.S.C. 1786).
‘‘(2) TERMS.—A disqualification under para-
graph (1)—
352
‘‘(A) shall be for the same period as the
disqualification from the program referred to in
paragraph (1);
‘‘(B) may begin at a later date than the
disqualification from the program referred to in
paragraph (1); and
‘‘(C) notwithstanding section 14, shall not
be subject to judicial or administrative review.’’.
SEC. 360. PERMANENT DEBARMENT OF RETAILERS WHO IN-
TENTIONALLY SUBMIT FALSIFIED APPLICA-
TIONS.
Section 12 of the Food Stamp Act of 1977 (7 U.S.C.
2021) (as amended by section 359) is further amended
by adding at the end the following:
‘‘(h) FALSIFIED APPLICATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall issue
regulations providing for the permanent disqualifica-
tion of a retail food store, or wholesale food concern,
that knowingly submits an application for approval
to accept and redeem coupons that contains false in-
formation about a substantive matter that was, or
could have been, a basis for approving the applica-
tion.
‘‘(2) REVIEW.—A disqualification under para-
graph (1) shall be subject to judicial and administra-
353
tive review under section 14, except that the dis-
qualification shall remain in effect pending the re-
view.’’.
SEC. 361. EXPANDED CRIMINAL FORFEITURE FOR VIOLA-
TIONS.
(a) FORFEITURE OF ITEMS EXCHANGED IN FOOD
STAMP TRAFFICKING.—The first sentence of section
15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g))
is amended by striking ‘‘or intended to be furnished’’.
(b) CRIMINAL FORFEITURE.—Section 15 of the Act
(7 U.S.C. 2024)) is amended by adding at the end the
following:
‘‘(h) CRIMINAL FORFEITURE.—
‘‘(A) IN GENERAL.—Any person convicted
of violating subsection (b) or (c) involving food
stamp benefits having an aggregate value of not
less than $5,000, shall forfeit to the United
States—
‘‘(i) any food stamp benefits and any
property constituting, or derived from, or
traceable to any proceeds the person ob-
tained directly or indirectly as a result of
the violation; and
‘‘(ii) any food stamp benefits and any
property of the person used, or intended to
354
be used, in any manner or part, to commit,
or to facilitate the commission of the viola-
tion.
‘‘(B) SENTENCE.—In imposing a sentence
on a person under subparagraph (A), a court
shall order that the person forfeit to the United
States all property described in this subsection.
‘‘(C) PROCEDURES.—Any food stamp ben-
efits or property subject to forfeiture under this
subsection, any seizure or disposition of the
benefits or property, and any administrative or
judicial proceeding relating to the benefits or
property, shall be governed by subsections (b),
(c), (e), and (g) through (p) of section 413 of
the Comprehensive Drug Abuse Prevention and
Control Act of 1970 (21 U.S.C. 853), if not in-
consistent with this subsection.
‘‘(3) EXCLUDED
PROPERTY.—This subsection
shall not apply to property referred to in subsection
(g).’’.
SEC. 362. EFFECTIVE DATE.
This subtitle and the amendments made by this sub-
title shall become effective on October 1, 1995.
355
TITLE IV—CHILD NUTRITION
PROGRAMS
Subtitle A—Reimbursement Rates
SEC. 401. TERMINATION OF ADDITIONAL PAYMENT FOR
LUNCHES SERVED IN HIGH FREE AND RE-
DUCED PRICE PARTICIPATION SCHOOLS.
(a) IN GENERAL.—Section 4(b)(2) of the National
School Lunch Act (42 U.S.C. 1753(b)(2)) is amended by
striking ‘‘except that’’ and all that follows through ‘‘2
cents more’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on July 1, 1996.
SEC. 402. VALUE OF FOOD ASSISTANCE.
(a) IN GENERAL.—Section 6(e)(1) of the National
School Lunch Act (42 U.S.C. 1755(e)(1)) is amended by
striking subparagraph (B) and inserting the following:
‘‘(B) ADJUSTMENTS.—
‘‘(i) IN GENERAL.—The value of food
assistance for each meal shall be adjusted
each July 1 by the annual percentage
change in a 3-month average value of the
Price Index for Foods Used in Schools and
Institutions for March, April, and May
each year.
356
‘‘(ii) ADJUSTMENTS.—Except as oth-
erwise provided in this subparagraph, in
the case of each school year, the Secretary
shall—
‘‘(I) base the adjustment made
under clause (i) on the amount of the
unrounded adjustment for the preced-
ing school year;
‘‘(II) adjust the resulting amount
in accordance with clause (i); and
‘‘(III) round the result to the
nearest lower cent increment.
‘‘(iii) ADJUSTMENT
ON
JANUARY
1,
1996.—On January 1, 1996, the Secretary
shall adjust the value of food assistance for
the remainder of the school year by round-
ing the previously established value of food
assistance to the nearest lower cent incre-
ment.
‘‘(iv) 
ADJUSTMENT
FOR
1996–97
SCHOOL YEAR.—In the case of the school
year beginning July 1, 1996, the value of
food assistance shall be the same as the
value of food assistance in effect on June
30, 1996.
357
‘‘(v) 
ADJUSTMENT
FOR
1997–98
SCHOOL YEAR.—In the case of the school
year beginning July 1, 1997, the Secretary
shall—
‘‘(I) base the adjustment made
under clause (i) on the amount of the
unrounded adjustment for the value of
food assistance for the school year be-
ginning July 1, 1995;
‘‘(II) adjust the resulting amount
to reflect the annual percentage
change in a 3-month average value of
the Price Index for Foods Used in
Schools and Institutions for March,
April, and May for the most recent
12-month period for which the data
are available; and
‘‘(III) round the result to the
nearest lower cent increment.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall become effective on January 1, 1996.
SEC. 403. LUNCHES, BREAKFASTS, AND SUPPLEMENTS.
(a) IN GENERAL.—Section 11(a)(3)(B) of the Na-
tional School Lunch Act (42 U.S.C. 1759a(a)(3)(B)) is
amended—
358
(1) by designating the second and third sen-
tences as subparagraphs (C) and (D), respectively;
and
(2) by striking subparagraph (D) (as so des-
ignated) and inserting the following:
‘‘(D) ROUNDING.—Except as otherwise
provided in this paragraph, in the case of each
school year, the Secretary shall—
‘‘(i) base the adjustment made under
this paragraph on the amount of the
unrounded adjustment for the preceding
school year;
‘‘(ii) adjust the resulting amount in
accordance with subparagraphs (B) and
(C); and
‘‘(iii) round the result to the nearest
lower cent increment.
‘‘(E) ADJUSTMENT ON JANUARY 1, 1996.—
On January 1, 1996, the Secretary shall adjust
the rates and factor for the remainder of the
school year by rounding the previously estab-
lished rates and factor to the nearest lower cent
increment.
‘‘(F) ADJUSTMENT FOR 24-MONTH PERIOD
BEGINNING JULY 1, 1996.—In the case of the
359
24-month period beginning July 1, 1996, the
national average payment rates for paid
lunches, paid breakfasts, and paid supplements
shall be the same as the national average pay-
ment rate for paid lunches, paid breakfasts, and
paid supplements, respectively, for the school
year beginning July 1, 1995, rounded to the
nearest lower cent increment.
‘‘(G) ADJUSTMENT FOR SCHOOL YEAR BE-
GINNING
JULY
1, 1998.—In the case of the
school year beginning July 1, 1998, the Sec-
retary shall—
‘‘(i) base the adjustments made under
this paragraph for—
‘‘(I) paid lunches and paid break-
fasts on the amount of the unrounded
adjustment for paid lunches for the
school year beginning July 1, 1995;
and
‘‘(II) paid supplements on the
amount of the unrounded adjustment
for paid supplements for the school
year beginning July 1, 1995;
‘‘(ii) adjust each resulting amount in
accordance with subparagraph (C); and
360
‘‘(iii) round each result to the nearest
lower cent increment.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall become effective on January 1, 1996.
SEC. 404. SUMMER FOOD SERVICE PROGRAM FOR CHIL-
DREN.
(a) IN GENERAL.—Section 13(b) of the National
School Lunch Act (42 U.S.C. 1761(b)) is amended—
(1) by striking ‘‘(b)(1)’’ and all that follows
through the end of paragraph (1) and inserting the
following:
‘‘(b) SERVICE INSTITUTIONS.—
‘‘(1) PAYMENTS.—
‘‘(A) IN GENERAL.—Except as otherwise
provided in this paragraph, payments to service
institutions shall equal the full cost of food
service operations (which cost shall include the
costs of obtaining, preparing, and serving food,
but shall not include administrative costs).
‘‘(B) MAXIMUM
AMOUNTS.—Subject to
subparagraph (C), payments to any institution
under subparagraph (A) shall not exceed—
‘‘(i) $2 for each lunch and supper
served;
361
‘‘(ii) $1.20 for each breakfast served;
and
‘‘(iii) 50 cents for each meal supple-
ment served.
‘‘(C) ADJUSTMENTS.—Amounts specified
in subparagraph (B) shall be adjusted each
January 1 to the nearest lower cent increment
in accordance with the changes for the 12-
month period ending the preceding November
30 in the series for food away from home of the
Consumer Price Index for All Urban Consum-
ers published by the Bureau of Labor Statistics
of the Department of Labor. Each adjustment
shall be based on the unrounded adjustment for
the prior 12-month period.’’;
(2) in the second sentence of paragraph (3), by
striking ‘‘levels determined’’ and all that follows
through ‘‘this subsection’’ and inserting ‘‘level deter-
mined by the Secretary’’; and
(3) by striking paragraph (4).
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall become effective on January 1, 1996.
362
SEC. 405. SPECIAL MILK PROGRAM.
(a) IN GENERAL.—Section 3(a) of the Child Nutri-
tion Act of 1966 (42 U.S.C. 1772(a)) is amended by strik-
ing paragraph (8) and inserting the following:
‘‘(8) ADJUSTMENTS.—
‘‘(A) IN GENERAL.—Except as otherwise
provided in this paragraph, in the case of each
school year, the Secretary shall—
‘‘(i) base the adjustment made under
paragraph (7) on the amount of the
unrounded adjustment for the preceding
school year;
‘‘(ii) adjust the resulting amount in
accordance with paragraph (7); and
‘‘(iii) round the result to the nearest
lower cent increment.
‘‘(B) ADJUSTMENT ON JANUARY 1, 1996.—
On January 1, 1996, the Secretary shall adjust
the minimum rate for the remainder of the
school year by rounding the previously estab-
lished minimum rate to the nearest lower cent
increment.
‘‘(C) ADJUSTMENT
FOR
1996–97
SCHOOL
YEAR.—In the case of the school year beginning
July 1, 1996, the minimum rate shall be the
363
same as the minimum rate in effect on June
30, 1996.
‘‘(D) ADJUSTMENT
FOR
1997–98
SCHOOL
YEAR.—In the case of the school year beginning
July 1, 1997, the Secretary shall—
‘‘(i) base the adjustment made under
paragraph (7) on the amount of the
unrounded adjustment for the minimum
rate for the school year beginning July 1,
1995;
‘‘(ii) adjust the resulting amount to
reflect changes in the Producer Price
Index for Fresh Processed Milk published
by the Bureau of Labor Statistics of the
Department of Labor for the most recent
12-month period for which the data are
available; and
‘‘(iii) round the result to the nearest
lower cent increment.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on January 1, 1996.
SEC. 406. FREE AND REDUCED PRICE BREAKFASTS.
(a) IN GENERAL.—Section 4(b) of the Child Nutri-
tion Act of 1966 (42 U.S.C. 1773(b)) is amended—
364
(1) in the second sentence of paragraph (1)(B),
by striking ‘‘, adjusted to the nearest one-fourth
cent’’ and inserting ‘‘(as adjusted pursuant to sec-
tion 11(a) of the National School Lunch Act (42
U.S.C. 1759a(a))’’; and
(2) in paragraph (2)(B)(ii)—
(A) by striking ‘‘nearest one-fourth cent’’
and inserting ‘‘nearest lower cent increment for
the applicable school year’’; and
(B) by inserting before the period at the
end the following: ‘‘, and the adjustment re-
quired by this clause shall be based on the
unrounded adjustment for the preceding school
year’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall become effective on July 1, 1996.
SEC. 
407. 
CONFORMING 
REIMBURSEMENT 
FOR 
PAID
BREAKFASTS AND LUNCHES.
(a) IN GENERAL.—The last sentence of section
4(b)(1)(B) of the Child Nutrition Act of 1966 (42 U.S.C.
1773(b)(1)(B)) is amended by striking ‘‘8.25 cents’’ and
all that follows through ‘‘Act)’’ and inserting ‘‘the same
as the national average lunch payment for paid meals es-
tablished under section 4(b) of the National School Lunch
Act (42 U.S.C. 1753(b))’’.
365
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on January 1, 1996.
Subtitle B—Grant Programs
SEC. 411. SCHOOL BREAKFAST STARTUP GRANTS.
Section 4 of the Child Nutrition Act of 1966 (42
U.S.C. 1773) is amended by striking subsection (g).
SEC. 412. NUTRITION EDUCATION AND TRAINING PRO-
GRAMS.
Section 19(i)(2)(A) of the Child Nutrition Act of
1966 (42 U.S.C. 1788(i)(2)(A)) is amended by striking
‘‘$10,000,000’’ and inserting ‘‘$7,000,000’’.
SEC. 413. EFFECTIVE DATE.
The amendments made by this subtitle shall become
effective on October 1, 1996.
Subtitle C—Other Amendments
SEC. 421. FREE AND REDUCED PRICE POLICY STATEMENT.
(a) SCHOOL LUNCH PROGRAM.—Section 9(b)(2) of
the National School Lunch Act (42 U.S.C. 1758(b)(2))
is amended by adding at the end the following:
‘‘(D) FREE AND REDUCED PRICE POLICY
STATEMENT.—After the initial submission, a
school shall not be required to submit a free
and reduced price policy statement to a State
educational agency under this Act unless there
is a substantive change in the free and reduced
366
price policy of the school. A routine change in
the policy of a school, such as an annual adjust-
ment of the income eligibility guidelines for free
and reduced price meals, shall not be sufficient
cause for requiring the school to submit a policy
statement.’’.
(b) SCHOOL BREAKFAST PROGRAM.—Section 4(b)(1)
of the Child Nutrition Act of 1966 (42 U.S.C. 1773(b)(1))
is amended by adding at the end the following:
‘‘(E) FREE AND REDUCED PRICE POLICY
STATEMENT.—After the initial submission, a
school shall not be required to submit a free
and reduced price policy statement to a State
educational agency under this Act unless there
is a substantive change in the free and reduced
price policy of the school. A routine change in
the policy of a school, such as an annual adjust-
ment of the income eligibility guidelines for free
and reduced price meals, shall not be sufficient
cause for requiring the school to submit a policy
statement.’’.
367
SEC. 422. SUMMER FOOD SERVICE PROGRAM FOR CHIL-
DREN.
(a) PERMITTING OFFER VERSUS SERVE.—Section
13(f) of the National School Lunch Act (42 U.S.C.
1761(f)) is amended—
(1) by striking ‘‘(f) Service’’ and inserting the
following:
‘‘(f) NUTRITIONAL STANDARDS.—
‘‘(1) IN GENERAL.—Service’’; and
(2) by adding at the end the following:
‘‘(2) OFFER VERSUS SERVE.—A school food au-
thority participating as a service institution may
permit a child attending a site on school premises
operated directly by the authority to refuse not more
than 1 item of a meal that the child does not intend
to consume. A refusal of an offered food item shall
not affect the amount of payments made under this
section to a school for the meal.’’.
(b) REMOVING MANDATORY NOTICE
TO INSTITU-
TIONS.—Section 13(n)(2) of the Act is amended by strik-
ing ‘‘and its plans and schedule’’ and inserting ‘‘except
that the Secretary may not require a State to submit a
plan or schedule’’.
SEC. 423. CHILD AND ADULT CARE FOOD PROGRAM.
(a) PAYMENTS
TO SPONSOR EMPLOYEES.—Para-
graph (2) of the last sentence of section 17(a) of the Na-
368
tional School Lunch Act (42 U.S.C. 1766(a)) is amend-
ed—
(1) by striking ‘‘and’’ at the end of subpara-
graph (B);
(2) by striking the period at the end of sub-
paragraph (C) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(D) in the case of a family or group day
care home sponsoring organization that employs
more than 1 employee, the organization does
not base payments to an employee of the orga-
nization on the number of family or group day
care homes recruited, managed, or monitored.’’.
(b) IMPROVED TARGETING OF DAY CARE HOME RE-
IMBURSEMENTS.—
(1) RESTRUCTURED
DAY
CARE
HOME
REIM-
BURSEMENTS.—Section 17(f)(3) of the Act is
amended by striking ‘‘(3)(A) Institutions’’ and all
that follows through the end of subparagraph (A)
and inserting the following:
‘‘(3) REIMBURSEMENT OF FAMILY OR GROUP
DAY CARE HOME SPONSORING ORGANIZATIONS.—
‘‘(A) REIMBURSEMENT FACTOR.—
‘‘(i) IN
GENERAL.—An institution
that participates in the program under this
369
section as a family or group day care home
sponsoring organization shall be provided,
for payment to a home sponsored by the
organization, reimbursement factors in ac-
cordance with this subparagraph for the
cost of obtaining and preparing food and
prescribed labor costs involved in providing
meals under this section.
‘‘(ii) TIER I FAMILY OR GROUP DAY
CARE HOMES.—
‘‘(I) DEFINITION.—In this para-
graph, the term ‘tier I family or group
day care home’ means—
‘‘(aa) a family or group day
care home that is located in a ge-
ographic area, as defined by the
Secretary based on census data,
in which at least 50 percent of
the children residing in the area
are members of households whose
incomes meet the income eligi-
bility guidelines for free or re-
duced price meals under section
9;
370
‘‘(bb) a family or group day
care home that is located in an
area served by a school enrolling
elementary students in which at
least 50 percent of the total num-
ber of children enrolled are cer-
tified eligible to receive free or
reduced price school meals under
this Act or the Child Nutrition
Act of 1966 (42 U.S.C. 1771 et
seq.); or
‘‘(cc) a family or group day
care home that is operated by a
provider whose household meets
the income eligibility guidelines
for free or reduced price meals
under section 9 and whose in-
come is verified by the sponsor-
ing organization of the home
under regulations established by
the Secretary.
‘‘(II) REIMBURSEMENT.—Except
as provided in subclause (III), a tier
I family or group day care home shall
be provided reimbursement factors
371
under this clause without a require-
ment for documentation of the costs
described in clause (i), except that re-
imbursement shall not be provided
under this subclause for meals or sup-
plements served to the children of a
person acting as a family or group
day care home provider unless the
children meet the income eligibility
guidelines for free or reduced price
meals under section 9.
‘‘(III) FACTORS.—Except as pro-
vided in subclause (IV), the reim-
bursement factors applied to a home
referred to in subclause (II) shall be
the factors in effect on the date of en-
actment of this subclause.
‘‘(IV) ADJUSTMENTS.—The re-
imbursement factors under this sub-
paragraph shall be adjusted on Au-
gust 1, 1996, July 1, 1997, and each
July 1 thereafter, to reflect changes in
the Consumer Price Index for food at
home for the most recent 12-month
period for which the data are avail-
372
able. 
The 
reimbursement 
factors
under this subparagraph shall be
rounded to the nearest lower cent in-
crement and based on the unrounded
adjustment in effect on June 30 of
the preceding school year.
‘‘(iii) TIER II FAMILY OR GROUP DAY
CARE HOMES.—
‘‘(I) IN GENERAL.—
‘‘(aa) FACTORS.—Except as
provided in subclause (II), with
respect to meals or supplements
served under this clause by a
family or group day care home
that does not meet the criteria
set forth in clause (ii)(I), the re-
imbursement factors shall be $1
for lunches and suppers, 30 cents
for breakfasts, and 15 cents for
supplements.
‘‘(bb) ADJUSTMENTS.—The
factors shall be adjusted on July
1, 1997, and each July 1 there-
after, to reflect changes in the
Consumer Price Index for food at
373
home for the most recent 12-
month period for which the data
are available. The reimbursement
factors under this item shall be
rounded down to the nearest
lower cent increment and based
on the unrounded adjustment for
the preceding 12-month period.
‘‘(cc) REIMBURSEMENT.—A
family or group day care home
shall be provided reimbursement
factors under this subclause with-
out a requirement for docu-
mentation of the costs described
in clause (i), except that reim-
bursement shall not be provided
under this subclause for meals or
supplements served to the chil-
dren of a person acting as a fam-
ily or group day care home pro-
vider unless the children meet the
income eligibility guidelines for
free or reduced price meals under
section 9.
374
‘‘(II) OTHER FACTORS.—A fam-
ily or group day care home that does
not meet the criteria set forth in
clause (ii)(I) may elect to be provided
reimbursement factors determined in
accordance with the following require-
ments:
‘‘(aa) CHILDREN
ELIGIBLE
FOR
FREE
OR
REDUCED
PRICE
MEALS.—In the case of meals or
supplements served under this
subsection to children who are
members of households whose in-
comes meet the income eligibility
guidelines for free or reduced
price meals under section 9, the
family or group day care home
shall be provided reimbursement
factors set by the Secretary in
accordance with clause (ii)(III).
‘‘(bb) 
INELIGIBLE
CHIL-
DREN.—In the case of meals or
supplements served under this
subsection to children who are
members of households whose in-
375
comes do not meet the income
eligibility guidelines, the family
or group day care home shall be
provided reimbursement factors
in accordance with subclause (I).
‘‘(III) INFORMATION
AND
DE-
TERMINATIONS.—
‘‘(aa) IN
GENERAL.—If a
family or group day care home
elects to claim the factors de-
scribed in subclause (II), the
family or group day care home
sponsoring organization serving
the home shall collect the nec-
essary income information, as de-
termined by the Secretary, from
any parent or other caretaker to
make the determinations speci-
fied in subclause (II) and shall
make the determinations in ac-
cordance with rules prescribed by
the Secretary.
‘‘(bb) CATEGORICAL
ELIGI-
BILITY.—In making a determina-
tion under item (aa), a family or
376
group day care home sponsoring
organization may consider a child
participating in or subsidized
under, or a child with a parent
participating in or subsidized
under, a federally or State sup-
ported child care or other benefit
program with an income eligi-
bility limit that does not exceed
the eligibility standard for free or
reduced price meals under section
9 to be a child who is a member
of a household whose income
meets 
the 
income 
eligibility
guidelines under section 9.
‘‘(cc) FACTORS
FOR
CHIL-
DREN ONLY.—A family or group
day care home may elect to re-
ceive the reimbursement factors
prescribed under clause (ii)(III)
solely for the children participat-
ing in a program referred to in
item (bb) if the home elects not
to have income statements col-
377
lected from parents or other care-
takers.
‘‘(IV) SIMPLIFIED MEAL COUNT-
ING AND REPORTING PROCEDURES.—
The Secretary shall prescribe sim-
plified meal counting and reporting
procedures for use by a family or
group day care home that elects to
claim the factors under subclause (II)
and by a family or group day care
home sponsoring organization that
sponsors the home. The procedures
the Secretary prescribes may include
1 or more of the following:
‘‘(aa) Setting an annual per-
centage for each home of the
number of meals served that are
to be reimbursed in accordance
with the reimbursement factors
prescribed under clause (ii)(III)
and an annual percentage of the
number of meals served that are
to be reimbursed in accordance
with the reimbursement factors
prescribed under subclause (I),
378
based on the family income of
children enrolled in the home in a
specified month or other period.
‘‘(bb) Placing a home into 1
of 2 or more reimbursement cat-
egories annually based on the
percentage of children in the
home whose households have in-
comes that meet the income eligi-
bility guidelines under section 9,
with each such reimbursement
category carrying a set of reim-
bursement factors such as the
factors prescribed under clause
(ii)(III) or subclause (I) or fac-
tors established within the range
of factors prescribed under clause
(ii)(III) and subclause (I).
‘‘(cc) Such other simplified
procedures as the Secretary may
prescribe.
‘‘(V) 
MINIMUM
VERIFICATION
REQUIREMENTS.—The Secretary may
establish any necessary minimum ver-
ification requirements.’’.
379
(2) GRANTS TO STATES TO PROVIDE ASSIST-
ANCE TO FAMILY OR GROUP DAY CARE HOMES.—
Section 17(f)(3) of the Act is amended by adding at
the end the following:
‘‘(D) GRANTS TO STATES TO PROVIDE AS-
SISTANCE
TO
FAMILY
OR
GROUP
DAY
CARE
HOMES.—
‘‘(i) IN GENERAL.—
‘‘(I) 
RESERVATION.—From
amounts made available to carry out
this section, the Secretary shall re-
serve $5,000,000 of the amount made
available for fiscal year 1996.
‘‘(II) PURPOSE.—The Secretary
shall use the funds made available
under subclause (I) to provide grants
to States for the purpose of provid-
ing—
‘‘(aa) assistance, including
grants, to family and day care
home sponsoring organizations
and other appropriate organiza-
tions, in securing and providing
training, materials, automated
data processing assistance, and
380
other assistance for the staff of
the sponsoring organizations; and
‘‘(bb) training and other as-
sistance to family and group day
care homes in the implementation
of the amendments to subpara-
graph 
(A) 
made 
by 
section
423(b)(1) of the Work Oppor-
tunity Act of 1995.
‘‘(ii) 
ALLOCATION.—The 
Secretary
shall allocate from the funds reserved
under clause (i)(I)—
‘‘(I) $30,000 in base funding to
each State; and
‘‘(II) 
any 
remaining 
amount
among the States, based on the num-
ber of family day care homes partici-
pating in the program in a State dur-
ing fiscal year 1994 as a percentage
of the number of all family day care
homes participating in the program
during fiscal year 1994.
‘‘(iii) RETENTION OF FUNDS.—Of the
amount of funds made available to a State
for fiscal year 1996 under clause (i), the
381
State may retain not to exceed 30 percent
of the amount to carry out this subpara-
graph.
‘‘(iv) ADDITIONAL
PAYMENTS.—Any
payments received under this subpara-
graph shall be in addition to payments
that a State receives under subparagraph
(A) (as amended by section 423(b)(1) of
the Work Opportunity Act of 1995).’’.
(3) PROVISION OF DATA.—Section 17(f)(3) of
the Act (as amended by paragraph (2)) is further
amended by adding at the end the following:
‘‘(E) PROVISION OF DATA TO FAMILY OR
GROUP DAY CARE HOME SPONSORING ORGANI-
ZATIONS.—
‘‘(i) CENSUS
DATA.—The Secretary
shall provide to each State agency admin-
istering a child and adult care food pro-
gram under this section data from the
most recent decennial census survey or
other appropriate census survey for which
the data are available showing which areas
in the State meet the requirements of sub-
paragraph (A)(ii)(I)(aa). The State agency
shall provide the data to family or group
382
day care home sponsoring organizations lo-
cated in the State.
‘‘(ii) SCHOOL DATA.—
‘‘(I) 
IN
GENERAL.—A 
State
agency administering the school lunch
program under this Act or the school
breakfast program under the Child
Nutrition Act of 1966 (42 U.S.C.
1771 et seq.) shall provide to ap-
proved family or group day care home
sponsoring organizations a list of
schools serving elementary school chil-
dren in the State in which not less
than 1⁄2 of the children enrolled are
certified to receive free or reduced
price meals. The State agency shall
collect the data necessary to create
the list annually and provide the list
on a timely basis to any approved
family or group day care home spon-
soring organization that requests the
list.
‘‘(II) USE OF DATA FROM PRE-
CEDING SCHOOL YEAR.—In determin-
ing for a fiscal year or other annual
383
period whether a home qualifies as a
tier I family or group day care home
under subparagraph (A)(ii)(I), the
State agency administering the pro-
gram under this section, and a family
or group day care home sponsoring
organization, shall use the most cur-
rent available data at the time of the
determination.
‘‘(iii) 
DURATION
OF
DETERMINA-
TION.—For purposes of this section, a de-
termination that a family or group day
care home is located in an area that quali-
fies the home as a tier I family or group
day care home (as the term is defined in
subparagraph (A)(ii)(I)), shall be in effect
for 3 years (unless the determination is
made on the basis of census data, in which
case the determination shall remain in ef-
fect until more recent census data are
available) unless the State agency deter-
mines that the area in which the home is
located no longer qualifies the home as a
tier I family or group day care home.’’.
384
(4) CONFORMING AMENDMENTS.—Section 17(c)
of the Act is amended by inserting ‘‘except as pro-
vided in subsection (f)(3),’’ after ‘‘For purposes of
this section,’’ each place it appears in paragraphs
(1), (2), and (3).
(c) DISALLOWING MEAL CLAIMS.—The fourth sen-
tence of section 17(f)(4) of the Act is amended by insert-
ing ‘‘(including institutions that are not family or group
day care home sponsoring organizations)’’ after ‘‘institu-
tions’’.
(d) ELIMINATION OF STATE PAPERWORK AND OUT-
REACH BURDEN.—Section 17 of the Act is amended by
striking subsection (k) and inserting the following:
‘‘(k) TRAINING
AND TECHNICAL ASSISTANCE.—A
State participating in the program established under this
section shall provide sufficient training, technical assist-
ance, and monitoring to facilitate effective operation of the
program. The Secretary shall assist the State in develop-
ing plans to fulfill the requirements of this subsection.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall become effective on the date of enactment of
this Act.
385
(2) IMPROVED TARGETING OF DAY CARE HOME
REIMBURSEMENTS.—The 
amendments 
made 
by
paragraphs (1), (3), and (4) of subsection (b) shall
become effective on August 1, 1996.
(3) REGULATIONS.—
(A) INTERIM
REGULATIONS.—Not later
than February 1, 1996, the Secretary shall
issue interim regulations to implement—
(i) the amendments made by para-
graphs (1), (3), and (4) of subsection (b);
and
(ii) section 17(f)(3)(C) of the National
School 
Lunch 
Act 
(42 
U.S.C.
1766(f)(3)(C)).
(B) FINAL REGULATIONS.—Not later than
August 1, 1996, the Secretary shall issue final
regulations to implement the provisions of law
referred to in subparagraph (A).
(f) STUDY OF IMPACT OF AMENDMENTS ON PRO-
GRAM PARTICIPATION AND FAMILY DAY CARE LICENS-
ING.—
(1) IN
GENERAL.—The Secretary of Agri-
culture, in conjunction with the Secretary of Health
and Human Services, shall study the impact of the
amendments made by this section on—
386
(A) the number of family day care homes
participating in the child and adult care food
program established under section 17 of the
National School Lunch Act (42 U.S.C. 1766);
(B) the number of day care home sponsor-
ing organizations participating in the program;
(C) the number of day care homes that are
licensed, certified, registered, or approved by
each State in accordance with regulations is-
sued by the Secretary;
(D) the rate of growth of the numbers re-
ferred to in subparagraphs (A) through (C);
(E) the nutritional adequacy and quality of
meals served in family day care homes that—
(i) received reimbursement under the
program prior to the amendments made by
this section but do not receive reimburse-
ment after the amendments made by this
section; or
(ii) received full reimbursement under
the program prior to the amendments
made by this section but do not receive full
reimbursement 
after 
the 
amendments
made by this section; and
387
(F) the proportion of low-income children
participating in the program prior to the
amendments made by this section and the pro-
portion of low-income children participating in
the program after the amendments made by
this section.
(2) REQUIRED DATA.—Each State agency par-
ticipating in the child and adult care food program
under section 17 of the National School Lunch Act
(42 U.S.C. 1766) shall submit to the Secretary data
on—
(A) the number of family day care homes
participating in the program on July 31, 1996,
and July 31, 1997;
(B) the number of family day care homes
licensed, certified, registered, or approved for
service on July 31, 1996, and July 31, 1997;
and
(C) such other data as the Secretary may
require to carry out this subsection.
(3) SUBMISSION OF REPORT.—Not later than 2
years after the effective date of section 423 of this
Act, the Secretary shall submit the study required
under this subsection to the Committee on Economic
and Educational Opportunities of the House of Rep-
388
resentatives and the Committee on Agriculture, Nu-
trition, and Forestry of the Senate.
SEC. 424. REDUCING REQUIRED REPORTS TO STATE AGEN-
CIES AND SCHOOLS.
Section 19 of the National School Lunch Act (42
U.S.C. 1769a) is amended by striking subsection (c) and
inserting the following:
‘‘(c) REPORT.—Not later than 1 year after the date
of enactment of the Work Opportunity Act of 1995, the
Secretary shall—
‘‘(1) review all reporting requirements under
this Act and the Child Nutrition Act of 1966 (42
U.S.C. 1771 et seq.) that are in effect, as of the
date of enactment of the Work Opportunity Act of
1995, for agencies and schools referred to in sub-
section (a); and
‘‘(2) provide a report to the Committee on Eco-
nomic and Educational Opportunities of the House
of Representatives and the Committee on Agri-
culture, Nutrition, and Forestry of the Senate
that—
‘‘(A) describes the reporting requirements
described in paragraph (1) that are required by
law;
389
‘‘(B) makes recommendations concerning
the elimination of any requirement described in
subparagraph (A) because the contribution of
the requirement to program effectiveness is not
sufficient to warrant the paperwork burden that
is placed on agencies and schools referred to in
subsection (a); and
‘‘(C) provides a justification for reporting
requirements described in paragraph (1) that
are required solely by regulation.’’.
Subtitle D—Reauthorization
SEC. 431. COMMODITY DISTRIBUTION PROGRAM; COMMOD-
ITY SUPPLEMENTAL FOOD PROGRAM.
(a) REAUTHORIZATION.—The first sentence of sec-
tion 4(a) of the Agriculture and Consumer Protection Act
of 1973 (Public Law 93–86; 7 U.S.C. 612c note) is
amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
(b) ADMINISTRATIVE FUNDING.—Section 5(a)(2) of
the Act (Public Law 93–86; 7 U.S.C. 612c note) is amend-
ed by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 432. EMERGENCY FOOD ASSISTANCE PROGRAM.
(a) REAUTHORIZATION.—The first sentence of sec-
tion 204(a)(1) of the Emergency Food Assistance Act of
1983 (Public Law 98–8; 7 U.S.C. 612c note) is amended
by striking ‘‘1995’’ and inserting ‘‘2002’’.
390
(b) PROGRAM TERMINATION.—Section 212 of the
Act (Public Law 98–8; 7 U.S.C. 612c note) is amended
by striking ‘‘1995’’ and inserting ‘‘2002’’.
(c) REQUIRED PURCHASES OF COMMODITIES.—Sec-
tion 214 of the Act (Public Law 98–8; 7 U.S.C. 612c note)
is amended—
(1) in the first sentence of subsection (a), by
striking ‘‘1995’’ and inserting ‘‘2002’’; and
(2) in subsection (e), by striking ‘‘1995’’ each
place it appears and inserting ‘‘2002’’.
(d) EXTENSION.—Section 13962 of the Omnibus
Budget Reconciliation Act of 1993 (Public Law 103–66;
107 Stat. 680) is amended by striking ‘‘1994, 1995, and
1996’’ each place it appears and inserting ‘‘1994 through
2002’’.
SEC. 433. SOUP KITCHENS PROGRAM.
Section 110 of the Hunger Prevention Act of 1988
(Public Law 100–435; 7 U.S.C. 612c note) is amended—
(1) in the first sentence of subsection (a), by
striking ‘‘1995’’ and inserting ‘‘2002’’; and
(2) in subsection (c)(2)—
(A) in the paragraph heading, by striking
‘‘1995’’ and inserting ‘‘2002’’; and
(B) by striking ‘‘1995’’ each place it ap-
pears and inserting ‘‘2002’’.
391
SEC. 434. NATIONAL COMMODITY PROCESSING.
The first sentence of section 1114(a)(2)(A) of the Ag-
riculture and Food Act of 1981 (7 U.S.C. 1431e(2)(A))
is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 435. COMMODITY SUPPLEMENTAL FOOD PROGRAM.
Section 
5(d)(2) 
of 
the 
Agriculture 
and
Consumer Protection Act of 1973 (Public Law 93–
86; 7 U.S.C. 612c note) is amended by striking
‘‘1995’’ and inserting ‘‘2002’’.
TITLE V—NONCITIZENS
SEC. 501. STATE OPTION TO PROHIBIT ASSISTANCE FOR
CERTAIN ALIENS.
(a) IN GENERAL.—A State may, at its option, pro-
hibit the use of any Federal funds received for the provi-
sion of assistance under any means-tested public assist-
ance program for any individual who is a noncitizen of
the United States.
(b) EXCEPTIONS.—Subsection (a) shall not apply
to—
(1) any individual who is described in subclause
(II), (III), or (IV) of section 1614(a)(1)(B)(i) of the
Social Security Act (42 U.S.C. 1382c(a)(1)(B)(i));
and
(2) any program described in section 502(f)(2).
392
SEC. 502. DEEMED INCOME REQUIREMENT FOR FEDERAL
AND FEDERALLY FUNDED PROGRAMS.
(a) DEEMING REQUIREMENT
FOR FEDERAL
AND
FEDERALLY FUNDED PROGRAMS.—Subject to subsection
(d), for purposes of determining the eligibility of an indi-
vidual (whether a citizen or national of the United States
or an alien) for assistance and the amount of assistance,
under any Federal program of assistance provided or
funded, in whole or in part, by the Federal Government
for which eligibility is based on need, the income and re-
sources described in subsection (b) shall, notwithstanding
any other provision of law, be deemed to be the income
and resources of such individual.
(b) DEEMED INCOME AND RESOURCES.—The income
and resources described in this subsection include the fol-
lowing:
(1) The income and resources of any person
who, as a sponsor of such individual’s entry into the
United States, or in order to enable such individual
lawfully to remain in the United States, executed an
affidavit of support or similar agreement with re-
spect to such individual.
(2) The income and resources of the sponsor’s
spouse.
(c) LENGTH OF DEEMING PERIOD.—The require-
ment of subsection (a) shall apply for the period for which
393
the sponsor has agreed, in such affidavit or agreement,
to provide support for such individual, or for a period of
5 years beginning on the date such individual was first
lawfully in the United States after the execution of such
affidavit or agreement, whichever period is longer.
(d) LIMITATION ON MEASUREMENT OF DEEMED IN-
COME AND RESOURCES.—
(1) IN GENERAL.—If a determination described
in paragraph (2) is made, the amount of income and
resources of the sponsor or the sponsor’s spouse
which shall be attributed to the sponsored individual
shall not exceed the amount actually provided, for a
period beginning on the date of such determination
and lasting 12 months or, if the address of the spon-
sor is unknown to the sponsored individual on the
date of such determination, for 12 months after the
address becomes known to the sponsored individual
or to the agency (which shall inform such individual
within 7 days).
(2) DETERMINATION.—The determination de-
scribed in this paragraph is a determination by an
agency that a sponsored individual would, in the ab-
sence of the assistance provided by the agency, be
unable to obtain food and shelter, taking into ac-
count the individual’s own income, plus any cash,
394
food, housing, or other assistance provided by other
individuals, including the sponsor.
(e) DEEMING AUTHORITY TO STATE AND LOCAL
AGENCIES.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, but subject to an exception equiva-
lent to that in subsection (d), the State or local gov-
ernment may, for purposes of determining the eligi-
bility of an individual (whether a citizen or national
of the United States or an alien) for assistance, and
the amount of assistance, under any State or local
program of assistance for which eligibility is based
on need, or any need-based program of assistance
administered by a State or local government other
than a program described in subsection (a), require
that the income and resources described in para-
graph (2) be deemed to be the income and resources
of such individual.
(2) DEEMED
INCOME
AND
RESOURCES.—The
income and resources described in this paragraph in-
clude the following:
(A) The income and resources of any per-
son who, as a sponsor of such individual’s entry
into the United States, or in order to enable
such individual lawfully to remain in the United
395
States, executed an affidavit of support or simi-
lar agreement with respect to such individual.
(B) The income and resources of the spon-
sor’s spouse.
(3) LENGTH OF DEEMED INCOME PERIOD.—
Subject to an exception equivalent to subsection (d),
a State or local government may impose a require-
ment described in paragraph (1) for the period for
which the sponsor has agreed, in such affidavit or
agreement, to provide support for such individual, or
for a period of 5 years beginning on the date such
individual was first lawfully in the United States
after the execution of such affidavit or agreement,
whichever period is longer.
(f) APPLICABILITY OF SECTION.—
(1) INDIVIDUALS.—The provisions of this sec-
tion shall not apply to the eligibility of any individ-
ual who is described in subclause (II), (III), or (IV)
of section 1614(a)(1)(B)(i) of the Social Security
Act (42 U.S.C. 1382c(a)(1)(B)(i)).
(2) PROGRAMS.—The provisions of this section
shall not apply to eligibility for—
(A) emergency medical services under title
XIX of the Social Security Act (42 U.S.C. 1396
et seq.);
396
(B) short-term emergency disaster relief;
(C) assistance or benefits under the Na-
tional School Lunch Act;
(D) assistance or benefits under the Child
Nutrition Act of 1966;
(E) public health assistance for immuniza-
tions with respect to immunizable diseases and
for testing and treatment for communicable dis-
eases if the Secretary of Health and Human
Services determines that such testing and treat-
ment is necessary;
(F) the Head Start program (42 U.S.C.
9801); and
(G) programs specified by the Attorney
General, in the Attorney General’s sole and
unreviewable discretion after consultation with
appropriate Federal agencies and departments,
which (i) deliver services at the community
level, including through public or private non-
profit agencies; (ii) do not condition the provi-
sion of assistance, the amount of assistance
provided, or the cost of assistance provided on
the individual recipient’s income or resources;
and (iii) are necessary for the protection of life,
safety, or public health.
397
(g) CONFORMING AMENDMENTS.—
(1) Section 1621 of the Social Security Act (42
U.S.C. 1382j) is repealed.
(2) Section 1614(f)(3) of such Act (42 U.S.C.
1382c(f)(3)) is amended by striking ‘‘section 1621’’
and inserting ‘‘section 502 of the Work Opportunity
Act of 1995’’.
SEC. 503. REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF
SUPPORT.
(a) ENFORCEABILITY.—No affidavit of support may
be relied upon by the Attorney General or by any consular
officer to establish that an alien is not excludable as a
public charge under section 212(a)(4) of the Immigration
and Nationality Act unless such affidavit is executed as
a contract—
(1) which is legally enforceable against the
sponsor by the sponsored individual, by the Federal
Government, and by any State, district, territory, or
possession of the United States (or any subdivision
of such State, district, territory, or possession of the
United States) which provides any benefit under a
program described in subsection (d)(2), but not later
than 10 years after the sponsored individual last re-
ceives any such benefit;
398
(2) in which the sponsor agrees to financially
support the sponsored individual, so that he or she
will not become a public charge, until the sponsored
individual has worked in the United States for 40
qualifying quarters; and
(3) in which the sponsor agrees to submit to
the jurisdiction of any Federal or State court for the
purpose of actions brought under subsection (d)(4).
(b) FORMS.—Not later than 90 days after the date
of the enactment of this Act, the Secretary of State, the
Attorney General, and the Secretary of Health and
Human Services shall jointly formulate the affidavit of
support described in this section.
(c) NOTIFICATION OF CHANGE OF ADDRESS.—
(1) IN GENERAL.—The sponsor shall notify the
Attorney General and the State, district, territory,
or possession in which the sponsored individual is
currently resident within 30 days of any change of
address of the sponsor during the period specified in
subsection (a)(1).
(2) PENALTY.—Any person subject to the re-
quirement of paragraph (1) who fails to satisfy such
requirement shall be subject to a civil penalty of—
(A) not less than $250 or more than
$2,000, or
399
(B) if such failure occurs with knowledge
that the sponsored individual has received any
benefit described in section 241(a)(5)(C) of the
Immigration and Nationality Act, not less than
$2,000 or more than $5,000.
(d) 
REIMBURSEMENT
OF
GOVERNMENT
EX-
PENSES.—
(1) IN
GENERAL.—Upon notification that a
sponsored individual has received any benefit under
a program described in paragraph (2), the appro-
priate Federal, State, or local official shall request
reimbursement by the sponsor in the amount of such
assistance.
(2) PROGRAMS DESCRIBED.—The programs de-
scribed in this paragraph include the following:
(A) Assistance under a State program
funded under part A of title IV of the Social
Security Act.
(B) The medicaid program under title XIX
of the Social Security Act.
(C) The food stamp program under the
Food Stamp Act of 1977.
(D) The supplemental security income pro-
gram under title XVI of the Social Security
Act.
400
(E) Any State general assistance program.
(F) Any other program of assistance fund-
ed, in whole or in part, by the Federal Govern-
ment or any State or local government entity,
for which eligibility for benefits is based on
need, except the programs specified in section
502(f)(2).
(3) REGULATIONS.—The Commissioner of So-
cial Security shall prescribe such regulations as may
be necessary to carry out paragraph (1). Such regu-
lations shall provide for notification to the sponsor
by certified mail to the sponsor’s last known ad-
dress.
(4) REIMBURSEMENT.—If within 45 days after
requesting reimbursement, the appropriate Federal,
State, or local agency has not received a response
from the sponsor indicating a willingness to com-
mence payments, an action may be brought against
the sponsor pursuant to the affidavit of support.
(5) ACTION IN CASE OF FAILURE.—If the spon-
sor fails to abide by the repayment terms established
by such agency, the agency may, within 60 days of
such failure, bring an action against the sponsor
pursuant to the affidavit of support.
401
(6) STATUTE OF LIMITATIONS.—No cause of
action may be brought under this subsection later
than 10 years after the sponsored individual last re-
ceived any benefit under a program described in
paragraph (2).
(e) JURISDICTION.—For purposes of this section, no
State court shall decline for lack of jurisdiction to hear
any action brought against a sponsor for reimbursement
of the cost of any benefit under a program described in
subsection (d)(2) if the sponsored individual received pub-
lic assistance while residing in the State.
(f) DEFINITIONS.—For the purposes of this section—
(1) the term ‘‘sponsor’’ means an individual
who—
(A) is a United States citizen or national
or an alien who is lawfully admitted to the
United States for permanent residence;
(B) is 18 years of age or over;
(C) is domiciled in any of the several
States of the United States, the District of Co-
lumbia, or any territory or possession of the
United States; and
(D) demonstrates the means to maintain
an annual income equal to at least 200 percent
of the poverty line for the individual and the in-
402
dividual’s family (including the sponsored indi-
vidual), through evidence that shall include a
copy of the individual’s Federal income tax re-
turns for his or her most recent two taxable
years and a written statement, executed under
oath or as permitted under penalty of perjury
under section 1746 of title 28, United States
Code, that the copies are true copies of such re-
turns;
(2) the term ‘‘poverty line’’ has the same mean-
ing given such term in section 673(2) of the Com-
munity Services Block Grant Act (42 U.S.C.
9902(2)); and
(3) the term ‘‘qualifying quarter’’ means a
three-month period in which the sponsored individ-
ual has—
(A) earned at least the minimum necessary
for the period to count as one of the 40 cal-
endar quarters required to qualify for social se-
curity retirement benefits;
(B) not received need-based public assist-
ance; and
(C) had income tax liability for the tax
year of which the period was part.
403
SEC. 504. LIMITED ELIGIBILITY OF NONCITIZENS FOR SSI
BENEFITS.
(a) IN GENERAL.—Paragraph (1) of section 1614(a)
of the Social Security Act (42 U.S.C. 1382c(a)) is amend-
ed—
(1) in subparagraph (B)(i), by striking ‘‘either’’
and all that follows through ‘‘, or’’ and inserting
‘‘(I) a citizen; (II) a noncitizen who is granted asy-
lum under section 208 of the Immigration and Na-
tionality Act or whose deportation has been withheld
under section 243(h) of such Act for a period of not
more than 5 years after the date of arrival into the
United States; (III) a noncitizen who is admitted to
the United States as a refugee under section 207 of
such Act for not more than such 5-year period; (IV)
a noncitizen, lawfully present in any State (or any
territory or possession of the United States), who is
a veteran (as defined in section 101 of title 38,
United States Code) with a discharge characterized
as an honorable discharge and not on account of
alienage or who is the spouse or unmarried depend-
ent child of such veteran; or (V) a noncitizen who
has worked sufficient calendar quarters of coverage
to be a fully insured individual for benefits under
title II, or’’; and
404
(2) by adding at the end the following new
flush sentence:
‘‘For purposes of subparagraph (B)(i)(IV), the determina-
tion of whether a noncitizen is lawfully present in the
United States shall be made in accordance with regula-
tions of the Attorney General. A noncitizen shall not be
considered to be lawfully present in the United States for
purposes of this title merely because the noncitizen may
be considered to be permanently residing in the United
States under color of law for purposes of any particular
program.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by subsection (a)
shall apply to applicants for benefits for months be-
ginning on or after the date of the enactment of this
Act, without regard to whether regulations have
been issued to implement such amendments.
(2) APPLICATION TO CURRENT RECIPIENTS.—
(A) APPLICATION AND NOTICE.—Notwith-
standing any other provision of law, in the case
of an individual who is receiving supplemental
security income benefits under title XVI of the
Social Security Act as of the date of the enact-
ment of this Act and whose eligibility for such
405
benefits would terminate by reason of the
amendments made by subsection (a), such
amendments shall apply with respect to the
benefits of such individual for months beginning
on or after January 1, 1997, and the Commis-
sioner of Social Security shall so notify the indi-
vidual not later than 90 days after the date of
the enactment of this Act.
(B) REAPPLICATION.—
(i) IN GENERAL.—Not later than 120
days after the date of the enactment of
this Act, each individual notified pursuant
to subparagraph (A) who desires to re-
apply for benefits under title XVI of the
Social Security Act shall reapply to the
Commissioner of Social Security.
(ii) 
DETERMINATION
OF
ELIGI-
BILITY.—Not later than 1 year after the
date of the enactment of this Act, the
Commissioner of Social Security shall de-
termine the eligibility of each individual
who reapplies for benefits under clause (i)
pursuant to the procedures of such title
XVI.
406
SEC. 505. TREATMENT OF NONCITIZENS.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, a noncitizen who has entered into the United
States on or after the date of the enactment of this Act
shall not, during the 5-year period beginning on the date
of such noncitizen’s entry into the United States, be eligi-
ble to receive any benefits under any program of assist-
ance provided, or funded, in whole or in part, by the Fed-
eral Government, for which eligibility for benefits is based
on need.
(b) EXCEPTIONS.—Subsection (a) shall not apply
to—
(1) any individual who is described in subclause
(II), (III), (IV), or (V) of section 1614(a)(1)(B)(i)
of 
the 
Social 
Security 
Act 
(42 
U.S.C.
1382c(a)(1)(B)(i)); and
(2) any program described in section 502(f)(2);
and
(3) payments for foster care and adoption as-
sistance under part E of title IV of the Social Secu-
rity Act for a child who would, in the absence of this
section, be eligible to have such payments made on
the child’s behalf under such part, but only if the
foster or adoptive parent or parents of such child are
not noncitizens described in subsection (a).
407
SEC. 506. INFORMATION REPORTING.
(a) TITLE IV OF THE SOCIAL SECURITY ACT.—Sec-
tion 405 of the Social Security Act, as added by section
101(b), is amended by adding at the end the following new
subsection:
‘‘(g) STATE REQUIRED TO PROVIDE CERTAIN IN-
FORMATION.—Each State to which a grant is made under
section 403 shall, at least 4 times annually and upon re-
quest of the Immigration and Naturalization Service, fur-
nish the Immigration and Naturalization Service with the
name and address of, and other identifying information
on, any individual who the State knows is unlawfully in
the United States.’’.
(b) SSI.—Section 1631(e) of such Act (42 U.S.C.
1383(e)) is amended—
(1) by redesignating the paragraphs (6) and (7)
inserted by sections 206(d)(2) and 206(f)(1) of the
Social Security Independence and Programs Im-
provement Act of 1994 (Public Law 103–296; 108
Stat. 1514, 1515) as paragraphs (7) and (8), re-
spectively; and
(2) by adding at the end the following new
paragraph:
‘‘(9) Notwithstanding any other provision of
law, the Commissioner shall, at least 4 times annu-
ally and upon request of the Immigration and Natu-
408
ralization Service (hereafter in this paragraph re-
ferred to as the ‘Service’), furnish the Service with
the name and address of, and other identifying in-
formation on, any individual who the Commissioner
knows is unlawfully in the United States, and shall
ensure that each agreement entered into under sec-
tion 1616(a) with a State provides that the State
shall furnish such information at such times with re-
spect to any individual who the State knows is un-
lawfully in the United States.’’.
(c) HOUSING PROGRAMS.—Title I of the United
States Housing Act of 1937 (42 U.S.C. 1437 et seq.), as
amended by section 1003, is further amended by adding
at the end the following new section:
‘‘SEC. 28. PROVISION OF INFORMATION TO LAW ENFORCE-
MENT AND OTHER AGENCIES.
‘‘(a) NOTICE TO IMMIGRATION AND NATURALIZA-
TION SERVICE
OF ILLEGAL ALIENS.—Notwithstanding
any other provision of law, the Secretary shall, at least
4 times annually and upon request of the Immigration and
Naturalization Service (hereafter in this subsection re-
ferred to as the ‘Service’), furnish the Service with the
name and address of, and other identifying information
on, any individual who the Secretary knows is unlawfully
in the United States, and shall ensure that each contract
409
for assistance entered into under section 6 or 8 of this
Act with a public housing agency provides that the public
housing agency shall furnish such information at such
times with respect to any individual who the public hous-
ing agency knows is unlawfully in the United States.’’.
SEC. 507. PROHIBITION ON PAYMENT OF FEDERAL BENE-
FITS TO CERTAIN PERSONS.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law and except as provided in subsection (b), Fed-
eral benefits shall not be paid or provided to any person
who is not a person lawfully present within the United
States.
(b) EXCEPTIONS.—Subsection (a) shall not apply
with respect to the following benefits:
(1) Emergency medical services under title XIX
of the Social Security Act.
(2) Short-term emergency disaster relief.
(3) Assistance or benefits under the National
School Lunch Act.
(4) Assistance or benefits under the Child Nu-
trition Act of 1966.
(5) Public health assistance for immunizations
and, if the Secretary of Health and Human Services
determines that it is necessary to prevent the spread
410
of a serious communicable disease, for testing and
treatment of such disease.
(c) DEFINITIONS.—For purposes of this section:
(1) FEDERAL
BENEFIT.—The term ‘‘Federal
benefit’’ means—
(A) the issuance of any grant, contract,
loan, professional license, or commercial license
provided by an agency of the United States or
by appropriated funds of the United States; and
(B) any retirement, welfare, Social Secu-
rity, health, disability, public housing, post-sec-
ondary education, food stamps, unemployment
benefit, or any other similar benefit for which
payments or assistance are provided by an
agency of the United States or by appropriated
funds of the United States.
(2) PERSON LAWFULLY PRESENT WITHIN THE
UNITED
STATES.—The 
term 
‘‘person 
lawfully
present within the United States’’ means a person
who, at the time the person applies for, receives, or
attempts to receive a Federal benefit, is a United
States citizen, a permanent resident alien, an alien
whose deportation has been withheld under section
243(h) of the Immigration and Nationality Act (8
U.S.C. 1253(h)), an asylee, a refugee, a parolee who
411
has been paroled for a period of at least 1 year, a
national, or a national of the United States for pur-
poses of the immigration laws of the United States
(as defined in section 101(a)(17) of the Immigration
and Nationality Act (8 U.S.C. 1101(a)(17)).
(d) STATE OBLIGATION.—Notwithstanding any other
provision of law, a State that administers a program that
provides a Federal benefit (described in section 507(c)(1))
or provides State benefits pursuant to such a program
shall not be required to provide such benefit to a person
who is not a person lawfully present within the United
States (as defined in section 507(c)(2)) through a State
agency or with appropriated funds of such State.
(e) VERIFICATION OF ELIGIBILITY.—(1) IN GEN-
ERAL.—Not later than 18 months after the date of the
enactment of this Act, the Attorney General of the United
States, after consultation with the Secretary of Health and
Human Services, shall promulgate regulations requiring
verification that a person applying for a Federal benefit,
including a benefit described in section 507(b), is a person
lawfully present within the United States and is eligible
to receive such benefit. Such regulations shall, to the ex-
tent feasible, require that information requested and ex-
changed be similar in form and manner to information re-
412
quested and exchanged under section 1137 of the Social
Security Act.
(2) STATE COMPLIANCE.—Not later than 24 months
after the date the regulations described in paragraph (1)
are adopted, a State that administers a program that pro-
vides a Federal benefit described in such paragraph shall
have in effect a verification system that complies with the
regulations.
(3) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as may be
necessary to carry out the purpose of this section.
(f) SEVERABILITY.—If any provision of this title or
the application of such provision to any person or cir-
cumstance is held to be unconstitutional, the remainder
of this title and the application of the provisions of such
to any person or circumstance shall not be affected there-
by.
TITLE VI—CHILD CARE
SEC. 601. SHORT TITLE.
This title may be cited as the ‘‘Child Care and Devel-
opment Block Grant Amendments Act of 1995’’.
413
SEC. 602. AMENDMENTS TO THE CHILD CARE AND DEVEL-
OPMENT BLOCK GRANT ACT OF 1990.
(a) AUTHORIZATION OF APPROPRIATIONS.—Section
658B of the Child Care and Development Block Grant Act
of 1990 (42 U.S.C. 9858) is amended to read as follows:
‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this subchapter $1,000,000,000 for fiscal year 1996, and
such sums as may be necessary for each of the fiscal years
1997 through 2000.’’.
(b) LEAD AGENCY.—Section 658D(b) of the Child
Care and Development Block Grant Act of 1990 (42
U.S.C. 9858b(b)) is amended—
(1) in paragraph (1)—
(A) in subparagraph (A), by striking
‘‘State’’ and inserting ‘‘governmental or non-
governmental’’; and
(B) in subparagraph (C), by inserting
‘‘with sufficient time and Statewide distribution
of the notice of such hearing,’’ after ‘‘hearing in
the State’’; and
(2) in paragraph (2), by striking the second
sentence.
(c) APPLICATION AND PLAN.—Section 658E of the
Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858c) is amended—
414
(1) in subsection (b), by striking ‘‘imple-
mented—’’ and all that follows through ‘‘plans.’’ and
inserting ‘‘implemented during a 2-year period.’’;
and
(2) in subsection (c)—
(A) in paragraph (2)—
(i) in subparagraph (A)—
(I) in clause (iii) by striking the
semicolon and inserting a period; and
(II) by striking ‘‘except’’ and all
that follows through ‘‘1992.’’; and
(ii) in subparagraph (E)—
(I) by striking clause (ii) and in-
serting the following new clause:
‘‘(ii) the State will implement mecha-
nisms to ensure that appropriate payment
mechanisms exist so that proper payments
under this subchapter will be made to pro-
viders within the State and to permit the
State to furnish information to such pro-
viders.’’; and
(II) by adding at the end thereof
the following new sentence: ‘‘In lieu of
any licensing and regulatory require-
ments applicable under State and
415
local law, the Secretary, in consulta-
tion with Indian tribes and tribal or-
ganizations, shall develop minimum
child care standards (that appro-
priately reflect tribal needs and avail-
able resources) that shall be applica-
ble to Indian tribes and tribal organi-
zation receiving assistance under this
subchapter.’’; and
(iii) by striking subparagraphs (H)
and (I);
(B) in paragraph (3)—
(i) in subparagraph (C)—
(I) in the subparagraph heading,
by striking ‘‘AND TO INCREASE’’ and
all that follows through ‘‘CARE SERV-
ICES’’;
(II) by striking ‘‘25 percent’’ and
inserting ‘‘15 percent’’; and
(III) by striking ‘‘and to provide
before-’’ and all that follows through
‘‘658H)’’; and
(ii) by adding at the end thereof the
following new subparagraph:
416
‘‘(D) LIMITATION
ON
ADMINISTRATIVE
COSTS.—Not more than 5 percent of the aggre-
gate amount of payments received under this
subchapter by a State in each fiscal year may
be expended for administrative costs, not in-
cluding direct service costs, incurred by such
State to carry out all its functions and duties
under this subchapter.’’; and
(C) by adding at the end thereof the fol-
lowing new paragraph:
‘‘(6) SERVICES FOR THE WORKING POOR.—The
State plan shall described the manner in which serv-
ices will be provided to the working poor.’’.
(d) CLARIFICATION OF ELIGIBLE CHILD.—Section
658P(4)(B) of the Child care and Development Block
Grant Act of 1990 (42 U.S.C. 9858n(4)(B)) is amended
by striking ‘‘75 percent’’ and inserting ‘‘100 percent’’.
(e) QUALITY.—Section 658G of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858e)
is amended—
(1) in the matter preceding paragraph (1)—
(A) by striking ‘‘A State’’ and inserting
‘‘(a) IN GENERAL.—A State’’;
(B) by striking ‘‘not less than 20 percent
of’’; and
417
(C) by striking ‘‘one or more of the follow-
ing’’ and inserting ‘‘carrying out the resource
and referral activities described in subsection
(b), and for one or more of the activities de-
scribed in subsection (c).’’;
(2) in paragraph (1), by inserting before the pe-
riod the following: ‘‘, including providing comprehen-
sive consumer education to parents and the public,
referrals that honor parental choice, and activities
designed to improve the quality and availability of
child care’’;
(3) by striking ‘‘(1) RESOURCE AND REFERRAL
PROGRAMS.—Operating’’ and inserting the follow-
ing:
‘‘(b) RESOURCE AND REFERRAL PROGRAMS.—The
activities described in this subsection are operating’’;
(4) by redesignating paragraphs (2) through
(5) as paragraphs (1) through (4), respectively;
(5) by inserting before paragraph (1) (as so re-
designated) the following:
‘‘(c) OTHER ACTIVITIES.—The activities described in
this section are the following:’’; and
(6) by adding at the end thereof the following:
418
‘‘(5) BEFORE- AND
AFTER-SCHOOL
ACTIVI-
TIES.—Increasing the availability of before- and
after-school care.
‘‘(6) INFANT CARE.—Increasing the availability
of child care for infants under the age of 18 months.
‘‘(7) NONTRADITIONAL WORK HOURS.—Increas-
ing the availability of child care between the hours
of 5:00 p.m. and 8:00 a.m.
‘‘(d) NONDISCRIMINATION.—With respect to child
care providers that comply with applicable State law but
which are otherwise not required to be licensed by the
State, the State, in carrying out this section, may not dis-
criminate against such a provider if such provider desires
to participate in resource and referral activities carried out
under subsection (b).’’.
(f) REPEAL.—Section 658H of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858f)
is repealed.
(g) ENFORCEMENT.—Section 658I(b)(2) of the Child
Care and Development Block Grant Act of 1990 (42
U.S.C. 9858g(b)(2)) is amended—
(1) in the matter following clause (ii) of sub-
paragraph (A), by striking ‘‘finding and that’’ and
all that follows through the period and inserting
‘‘finding and may impose additional program re-
419
quirements on the State, including a requirement
that the State reimburse the Secretary for any funds
that were improperly expended for purposes prohib-
ited or not authorized by this subchapter, that the
Secretary deduct from the administrative portion of
the State allotment for the following fiscal year an
amount that is less than or equal to any improperly
expended funds, or a combination of such options.’’;
and
(2) by striking subparagraphs (B) and (C).
(h) REPORTS.—Section 658K of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858i)
is amended—
(1) in the section heading, by striking ‘‘AN-
NUAL REPORT’’ and inserting ‘‘REPORTS’’; and
(2) in subsection (a)—
(A) in the subsection heading, by striking
‘‘ANNUAL REPORT’’ and inserting ‘‘REPORTS’’;
(B) by striking ‘‘December 31, 1992, and
annually thereafter’’ and inserting ‘‘December
31, 1996, and every 2 years thereafter’’;
(C) in paragraph (2)—
(i) in subparagraph (A), by inserting
before the semicolon ‘‘and the types of
420
child care programs under which such as-
sistance is provided’’;
(ii) by striking subparagraph (B); and
(iii) by redesignating subparagraphs
(C) and (D) as subparagraphs (B) and
(C), respectively;
(D) by striking paragraph (4);
(E) by redesignating paragraphs (5) and
(6) as paragraphs (4) and (5), respectively;
(F) in paragraph (4), as so redesignated,
by striking ‘‘and’’ at the end thereof;
(G) in paragraph (5), as so redesignated,
by adding ‘‘and’’ at the end thereof; and
(H) by inserting after paragraph (5), as so
redesignated, the following new paragraph:
‘‘(6) describing the extent and manner to which
the resource and referral activities are being carried
out by the State;’’.
(i) REPORT BY SECRETARY.—Section 658L of the
Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858j) is amended—
(1) by striking ‘‘1993’’ and inserting ‘‘1997’’;
(2) by striking ‘‘annually’’ and inserting ‘‘bi-an-
nually’’; and
421
(3) by striking ‘‘Education and Labor’’ and in-
serting ‘‘Economic and Educational Opportunities’’.
(j) ALLOTMENTS.—Section 658O of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C.
9858m) is amended—
(1) in subsection (c), by adding at the end
thereof the following new paragraph:
‘‘(6) CONSTRUCTION OR RENOVATION OF FA-
CILITIES.—
‘‘(A) REQUEST FOR USE OF FUNDS.—An
Indian tribe or tribal organization may submit
to the Secretary a request to use amounts pro-
vided under this subsection for construction or
renovation purposes.
‘‘(B) DETERMINATION.—With respect to a
request submitted under subparagraph (A), and
except as provided in subparagraph (C), upon a
determination by the Secretary that adequate
facilities are not otherwise available to an In-
dian tribe or tribal organization to enable such
tribe or organization to carry out child care
programs in accordance with this subchapter,
and that the lack of such facilities will inhibit
the operation of such programs in the future,
the Secretary may permit the tribe or organiza-
422
tion to use assistance provided under this sub-
section to make payments for the construction
or renovation of facilities that will be used to
carry out such programs.
‘‘(C) LIMITATION.—The Secretary may not
permit an Indian tribe or tribal organization to
use amounts provided under this subsection for
construction or renovation if such use will re-
sult in a decrease in the level of child care serv-
ices provided by the tribe or organization as
compared to the level of such services provided
by the tribe or organization in the fiscal year
preceding the year for which the determination
under subparagraph (A) is being made.
‘‘(D) UNIFORM
PROCEDURES.—The Sec-
retary shall develop and implement uniform
procedures for the solicitation and consideration
of requests under this paragraph.’’; and
(2) in subsection (e)—
(A) in paragraph (1), by striking ‘‘Any’’
and inserting ‘‘Except as provided in paragraph
(4), any’’; and
(B) by adding at the end thereof the fol-
lowing new paragraph:
423
‘‘(4) INDIAN
TRIBES
OR
TRIBAL
ORGANIZA-
TIONS.—Any portion of a grant or contract made to
an Indian tribe or tribal organization under sub-
section (c) that the Secretary determines is not
being used in a manner consistent with the provision
of this subchapter in the period for which the grant
or contract is made available, shall be reallocated by
the Secretary to other tribes or organization that
have submitted applications under subsection (c) in
proportion to the original allocations to such tribes
or organization.’’.
(k) DEFINITIONS.—Section 658P of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C.
9858n) is amended—
(1) in paragraph (2), in the first sentence by
inserting ‘‘or as a deposit for child care services if
such a deposit is required of other children being
cared for by the provider’’ after ‘‘child care serv-
ices’’; and
(2) in paragraph (5)(B)—
(A) by inserting ‘‘great grandchild, sibling
(if the provider lives in a separate residence),’’
after ‘‘grandchild,’’;
(B) by striking ‘‘is registered and’’; and
424
(C) by striking ‘‘State’’ and inserting ‘‘ap-
plicable’’.
(l) APPLICATION OF SUBCHAPTER.—The Child Care
and Development Block Grant Act of 1990 (42 U.S.C.
9858 et seq.) is amended by adding at the end thereof
the following new section:
‘‘SEC. 658T. APPLICATION TO OTHER PROGRAMS.
‘‘Notwithstanding any other provision of law, a State
that uses funding for child care services under any Federal
program shall ensure that activities carried out using such
funds meet the requirements, standards, and criteria of
this subchapter, except for the quality set-aside provisions
of section 658G, and the regulations promulgated under
this subchapter. Such sums shall be administered through
a uniform State plan. To the maximum extent practicable,
amounts provided to a State under such programs shall
be transferred to the lead agency and integrated into the
program established under this subchapter by the State.’’.
SEC. 603. REPEALS AND TECHNICAL AND CONFORMING
AMENDMENTS.
(a) STATE
DEPENDENT
CARE
DEVELOPMENT
GRANTS ACT.—The State Dependent Care Development
Grants Act (42 U.S.C. 9871 et seq.) is repealed.
(b) CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP
ASSISTANCE ACT OF 1985.—The Child Development As-
425
sociate Scholarship Assistance Act of 1985 (42 U.S.C.
10901 et seq.) is repealed.
(c) ADDITIONAL CONFORMING AMENDMENTS.—
(1) RECOMMENDED LEGISLATION.—After con-
sultation with the appropriate committees of the
Congress and the Director of the Office of Manage-
ment and Budget, the Secretary of Health and
Human Services shall prepare and submit to the
Congress a legislative proposal in the form of an im-
plementing bill containing technical and conforming
amendments to reflect the amendments and repeals
made by this title.
(2) SUBMISSION TO CONGRESS.—Not later than
6 months after the date of enactment of this title,
the Secretary of Health and Human Services shall
submit the implementing bill referred to under para-
graph (1).
TITLE VII—PROTECTION OF
BATTERED INDIVIDUALS
SEC. 701. EXEMPTION OF BATTERED INDIVIDUALS FROM
CERTAIN REQUIREMENTS.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of, or amendment made by, this Act, the applicable
administering authority of any specified provision may ex-
empt from (or modify) the application of such provision
426
to any individual who was battered or subjected to extreme
cruelty if the physical, mental, or emotional well-being of
the individual would be endangered by the application of
such provision to such individual. The applicable admin-
istering authority may take into consideration the family
circumstances and the counseling and other supportive
service needs of the individual.
(b) SPECIFIED PROVISIONS.—For purposes of this
section, the term ‘‘specified provision’’ means any require-
ment, limitation, or penalty under any of the following:
(1) Sections 404, 405 (a) and (b), 406 (b), (c),
and (d), 414(d), 453(c), 469A, and 1614(a)(1) of
the Social Security Act.
(2) Sections 5(i) and 6 (d), (j), and (n) of the
Food Stamp Act of 1977.
(3) Sections 501(a) and 502 of this Act.
(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
(1) BATTERED
OR
SUBJECTED
TO
EXTREME
CRUELTY.—The term ‘‘battered or subjected to ex-
treme cruelty’’ includes, but is not limited to—
(A) physical acts resulting in, or threaten-
ing to result in, physical injury;
(B) sexual abuse, sexual activity involving
a dependent child, forcing the caretaker relative
427
of a dependent child to engage in nonconsensual
sexual acts or activities, or threats of or at-
tempts at physical or sexual abuse;
(C) mental abuse; and
(D) neglect or deprivation of medical care.
(2) CALCULATION OF PARTICIPATION RATES.—
An individual exempted from the work requirements
under section 404 of the Social Security Act by rea-
son of subsection (a) shall not be included for pur-
poses of calculating the State’s participation rate
under such section.
TITLE VIII—ADOPTION
EXPENSES
SEC. 801. REFUNDABLE CREDIT FOR ADOPTION EXPENSES.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. ADOPTION EXPENSES.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year the amount
of the qualified adoption expenses paid or incurred by the
taxpayer during such taxable year.
428
‘‘(b) LIMITATIONS.—
‘‘(1) DOLLAR
LIMITATION.—The aggregate
amount of qualified adoption expenses which may be
taken into account under subsection (a) with respect
to the adoption of a child shall not exceed $5,000.
‘‘(2) INCOME LIMITATION.—The amount allow-
able as a credit under subsection (a) for any taxable
year shall be reduced (but not below zero) by an
amount which bears the same ratio to the amount
so allowable (determined without regard to this
paragraph but with regard to paragraph (1)) as—
‘‘(A) the amount (if any) by which the tax-
payer’s adjusted gross income exceeds $60,000,
bears to
‘‘(B) $40,000.
‘‘(3) DENIAL OF DOUBLE BENEFIT.—
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under subsection (a) for any expense for
which a deduction or credit is allowable under
any other provision of this chapter.
‘‘(B) GRANTS.—No credit shall be allowed
under subsection (a) for any expense to the ex-
tent that funds for such expense are received
under any Federal, State, or local program.
429
‘‘(c) QUALIFIED ADOPTION EXPENSES.—For pur-
poses of this section, the term ‘qualified adoption ex-
penses’ means reasonable and necessary adoption fees,
court costs, attorney fees, and other expenses which are
directly related to the legal and finalized adoption of a
child by the taxpayer and which are not incurred in viola-
tion of State or Federal law or in carrying out any surro-
gate parenting arrangement. The term ‘qualified adoption
expenses’ shall not include any expenses in connection
with the adoption by an individual of a child who is the
child of such individual’s spouse.
‘‘(d) MARRIED COUPLES MUST FILE JOINT RE-
TURNS.—Rules similar to the rules of paragraphs (2), (3),
and (4) of section 21(e) shall apply for purposes of this
section.’’
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 35 of such Code’’.
(2) The table of sections for subpart C of part
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the last
item and inserting the following:
‘‘Sec. 35. Adoption expenses.
‘‘Sec. 36. Overpayments of tax.’’.
430
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995.
SEC. 802. EXCLUSION OF ADOPTION ASSISTANCE.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended
by redesignating section 137 as section 138 and by insert-
ing after section 136 the following new section:
‘‘SEC. 137. ADOPTION ASSISTANCE.
‘‘(a) IN GENERAL.—Gross income of an employee
does not include employee adoption assistance benefits, or
military adoption assistance benefits, received by the em-
ployee with respect to the employee’s adoption of a child.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) EMPLOYEE ADOPTION ASSISTANCE BENE-
FITS.—The term ‘employee adoption assistance ben-
efits’ means payment by an employer of qualified
adoption expenses with respect to an employee’s
adoption of a child, or reimbursement by the em-
ployer of such qualified adoption expenses paid or
incurred by the employee in the taxable year.
‘‘(2) EMPLOYER AND EMPLOYEE.—The terms
‘employer’ and ‘employee’ have the respective mean-
ings given such terms by section 127(c).
431
‘‘(3) MILITARY ADOPTION ASSISTANCE BENE-
FITS.—The term ‘military adoption assistance bene-
fits’ means benefits provided under section 1052 of
title 10, United States Code, or section 514 of title
14, United States Code.
‘‘(4) QUALIFIED ADOPTION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
adoption expenses’ means reasonable and nec-
essary adoption fees, court costs, attorney fees,
and other expenses—
‘‘(i) which are directly related to, and
the principal purpose of which is for, the
legal and finalized adoption of an eligible
child by the taxpayer, and
‘‘(ii) which are not incurred in viola-
tion of State or Federal law or in carrying
out any surrogate parenting arrangement.
‘‘(B) ELIGIBLE CHILD.—The term ‘eligible
child’ means any individual—
‘‘(i) who has not attained age 18 as of
the time of the adoption, or
‘‘(ii) who is physically or mentally in-
capable of caring for himself.
‘‘(c) COORDINATION WITH OTHER PROVISIONS.—
The Secretary shall issue regulations to coordinate the ap-
432
plication of this section with the application of any other
provision of this title which allows a credit or deduction
with respect to qualified adoption expenses.’’
(b) CLERICAL AMENDMENT.—The table of sections
for part III of subchapter B of chapter 1 of such Code
is amended by striking the item relating to section 137
and inserting the following new items:
‘‘Sec. 137. Adoption assistance.
‘‘Sec. 138. Cross references to other Acts.’’
(c) EFFECTIVE DATE.—The amendments made this
section shall apply to taxable years beginning after De-
cember 31, 1995.
SEC. 803. WITHDRAWAL FROM IRA FOR ADOPTION EX-
PENSES.
(a) IN GENERAL.—Subsection (d) of section 408 of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new paragraph:
‘‘(8) QUALIFIED ADOPTION EXPENSES.—
‘‘(A) IN GENERAL.—Any amount which is
paid or distributed out of an individual retire-
ment plan of the taxpayer, and which would
(but for this paragraph) be includible in gross
income, shall be excluded from gross income to
the extent that—
‘‘(i) such amount exceeds the sum
of—
433
‘‘(I) the amount excludable under
section 137, and
‘‘(II) any amount allowable as a
credit under this title with respect to
qualified adoption expenses; and
‘‘(ii) such amount does not exceed the
qualified adoption expenses paid or in-
curred by the taxpayer during the taxable
year.
‘‘(B) QUALIFIED ADOPTION EXPENSES.—
For purposes of this paragraph, the term
‘qualified adoption expenses’ has the meaning
given such term by section 137, except that
such term shall not include any expense in con-
nection with the adoption by an individual of a
child who is the child of such individual’s
spouse.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1995.
TITLE IX—CHILD SUPPORT
SEC. 900. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, whenever in
this title an amendment is expressed in terms of an
amendment to or repeal of a section or other provision,
434
the reference shall be considered to be made to that sec-
tion or other provision of the Social Security Act.
Subtitle A—Eligibility for Services;
Distribution of Payments
SEC. 901. STATE OBLIGATION TO PROVIDE CHILD SUPPORT
ENFORCEMENT SERVICES.
(a) STATE PLAN REQUIREMENTS.—Section 454 (42
U.S.C. 654) is amended—
(1) by striking paragraph (4) and inserting the
following new paragraph:
‘‘(4) provide that the State will—
‘‘(A) provide services relating to the 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 are provided under the
State program funded under part E of this
title, or (III) medical assistance is provided
under the State plan approved under title
XIX, unless the State agency administer-
ing the plan determines (in accordance
435
with paragraph (29)) that it is against the
best interests of the child to do so; and
‘‘(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
‘‘(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 nonresidents on the same terms as
to residents;’’;
(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)—
436
(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
(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 when a family with respect
to which services are provided under the plan ceases
to receive assistance under the State program fund-
ed under part A, the State shall provide appropriate
notice to the family and continue to provide such
services, subject to the same conditions and on the
437
same basis as in the case of individuals to whom
services are furnished under this section, except that
an application or other request to continue services
shall not be required of such a family and paragraph
(6)(B) shall not apply to the family.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 452(b) (42 U.S.C. 652(b)) is
amended by 
striking 
‘‘454(6)’’ 
and 
inserting
‘‘454(4)’’.
(2) 
Section 
452(g)(2)(A) 
(42 
U.S.C.
652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each
place it appears and inserting ‘‘454(4)(A)(ii)’’.
(3) 
Section 
466(a)(3)(B) 
(42 
U.S.C.
666(a)(3)(B)) is amended by striking ‘‘in the case of
overdue support which a State has agreed to collect
under section 454(6)’’ and inserting ‘‘in any other
case’’.
(4) Section 466(e) (42 U.S.C. 666(e)) is
amended by striking ‘‘paragraph (4) or (6) of sec-
tion 454’’ and inserting ‘‘section 454(4)’’.
SEC. 902. DISTRIBUTION OF CHILD SUPPORT COLLEC-
TIONS.
(a) IN GENERAL.—Section 457 (42 U.S.C. 657) is
amended to read as follows:
438
‘‘SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.
‘‘(a) IN GENERAL.—An amount collected on behalf
of a family as support by a State pursuant to a plan ap-
proved under this part shall be distributed as follows:
‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the
case of a family receiving assistance from the State,
the State shall—
‘‘(A) retain, or distribute to the family, the
State share of the amount so collected; and
‘‘(B) pay to the Federal Government the
Federal 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.—The
State shall, with regard to amounts collected
which represent amounts owed for the current
month, distribute the amounts so collected to
the family.
‘‘(B) PAYMENT
OF
ARREARAGES.—The
State shall, with regard to amounts collected
which exceed amounts owed for the current
month, distribute the amounts so collected as
follows:
‘‘(i) DISTRIBUTION
TO
THE
FAMILY
TO SATISFY ARREARAGES THAT ACCRUED
439
AFTER
THE
FAMILY
RECEIVED
ASSIST-
ANCE.—The State shall distribute the
amount so collected to the family to the ex-
tent necessary to satisfy any support ar-
rearages with respect to the family that ac-
crued after the family stopped receiving as-
sistance from the State.
‘‘(ii) DISTRIBUTION TO THE FAMILY
TO SATISFY ARREARAGES THAT ACCRUED
BEFORE OR WHILE THE FAMILY RECEIVED
ASSISTANCE
TO
THE
EXTENT
PAYMENTS
EXCEED
ASSISTANCE
RECEIVED.—In the
case of arrearages of support obligations
with respect to the family that were as-
signed to the State making or receiving the
collection, as a condition of receiving as-
sistance from the State, and which accrued
before or while the family received such as-
sistance, the State may retain all or a part
of the State share and if the State does so
retain, shall retain and pay to the Federal
Government the Federal share of amounts
so collected, to the extent the amount so
retained does not exceed the amount of as-
440
sistance provided to the family by the
State.
‘‘(iii) DISTRIBUTION OF THE REMAIN-
DER TO THE FAMILY.—To the extent that
neither clause (i) nor clause (ii) applies to
the amount so collected, the State shall
distribute the amount to the family.
‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST-
ANCE.—In the case of any other family, the State
shall distribute the amount so collected to the fam-
ily.
‘‘(4) 
FAMILIES
UNDER
CERTAIN
AGREE-
MENTS.—In the case of a family receiving assistance
from an Indian tribe, distribute the amount so col-
lected pursuant to an agreement entered into pursu-
ant to a State plan under section 454(32).
‘‘(b) TRANSITION RULE.—Any rights to support obli-
gations which were assigned to a State as a condition of
receiving assistance from the State under part A before
the effective date of the Work Opportunity Act of 1995
shall remain assigned after such date.
‘‘(c) DEFINITIONS.—As used in subsection (a):
‘‘(1) ASSISTANCE.—The term ‘assistance from
the State’ means—
441
‘‘(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
before October 1, 1995); or
‘‘(B) benefits under the State plan ap-
proved under part E of this title.
‘‘(2) FEDERAL
SHARE.—The term ‘Federal
share’ means, with respect to an amount collected by
the State to satisfy a support obligation owed to a
family for a time period—
‘‘(A) the greatest Federal medical assist-
ance percentage in effect for the State for fiscal
year 1995 or any succeeding fiscal year; or
‘‘(B) if support is not owed to the family
for any month for which the family received aid
to families with dependent children under the
State plan approved under part A of this title
(as in effect before October 1, 1995), the Fed-
eral reimbursement percentage for the fiscal
year in which the time period occurs.
‘‘(3) FEDERAL MEDICAL ASSISTANCE PERCENT-
AGE.—The term ‘Federal medical assistance per-
centage’ means—
‘‘(A) the Federal medical assistance per-
centage (as defined in section 1905(b)) in the
442
case of any State for which subparagraph (B)
does not apply; or
‘‘(B) the Federal medical assistance per-
centage (as defined in section 1118), in the case
of Puerto Rico, the Virgin Islands, Guam, and
American Samoa.
‘‘(4) FEDERAL
REIMBURSEMENT
PERCENT-
AGE.—The term ‘Federal reimbursement percentage’
means, with respect to a fiscal year—
‘‘(A) the total amount paid to the State
under section 403 for the fiscal year; divided by
‘‘(B) the total amount expended by the
State to carry out the State program under
part A during the fiscal year.
‘‘(5) STATE
SHARE.—The term ‘State share’
means 100 percent minus the Federal share.’’.
(b) CONFORMING AMENDMENT.—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’’.
(c) CLERICAL
AMENDMENTS.—Section 454 (42
U.S.C. 654) is amended—
(1) in paragraph (11)—
(A) by striking ‘‘(11)’’ and inserting
‘‘(11)(A)’’; and
443
(B) by inserting after the semicolon ‘‘and’’;
and
(2) by redesignating paragraph (12) as sub-
paragraph (B) of paragraph (11).
(d) EFFECTIVE DATE.—
(1) GENERAL
RULE.—Except as provided in
paragraphs (2) and (3), the amendment made by
subsection (a) shall become effective on October 1,
1999.
(2) EARLIER EFFECTIVE DATE FOR RULES RE-
LATING TO DISTRIBUTION OF SUPPORT COLLECTED
FOR
FAMILIES
RECEIVING
ASSISTANCE.—Section
457(a)(1) of the Social Security Act, as added by
the amendment made by subsection (a), shall be-
come effective on October 1, 1995.
(3) SPECIAL RULE.—A State may elect to have
the amendment made by subsection (a) become ef-
fective on a date earlier than October 1, 1999, which
date shall coincide with the operation of the single
statewide automated data processing and informa-
tion retrieval system required by section 454A of the
Social Security Act (as added by section 944(a)(2))
and the State disbursement unit required by section
454B of the Social Security Act (as added by section
912(b)), and the existence of State requirements for
444
assignment of support as a condition of eligibility for
assistance under part A of the Social Security Act
(as added by title I).
(4) CLERICAL
AMENDMENTS.—The amend-
ments made by subsection (b) shall become effective
on October 1, 1995.
SEC. 903. RIGHTS TO NOTIFICATION AND HEARINGS.
(a) IN GENERAL.—Section 454 (42 U.S.C. 654), as
amended by section 902(b), is amended by inserting after
paragraph (11) the following new paragraph:
‘‘(12) establish procedures to provide that—
‘‘(A) individuals who are applying for or
receiving services under this part, or are parties
to cases in which services are being provided
under this part—
‘‘(i) receive notice of all proceedings in
which support obligations might be estab-
lished or modified; and
‘‘(ii) receive a copy of any order estab-
lishing or modifying a child support obliga-
tion, or (in the case of a petition for modi-
fication) a notice of determination that
there should be no change in the amount
of the child support award, within 14 days
445
after issuance of such order or determina-
tion; and
‘‘(B) individuals applying for or receiving
services under this part have access to a fair
hearing or other formal complaint procedure
that meets standards established by the Sec-
retary and ensures prompt consideration and
resolution of complaints (but the resort to such
procedure shall not stay the enforcement of any
support order);’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on October 1, 1997.
SEC. 904. PRIVACY SAFEGUARDS.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by section 901(b), 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—
446
‘‘(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-
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.
Subtitle B—Locate and Case
Tracking
SEC. 911. STATE CASE REGISTRY.
Section 454A, as added by section 944(a)(2), is
amended by adding at the end the following new sub-
sections:
‘‘(e) STATE CASE REGISTRY.—
447
‘‘(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
‘‘(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
448
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
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 maintain,
and regularly monitor, case records in the State case
registry with respect to which services are being pro-
vided under the State plan approved under this part,
on the basis of—
449
‘‘(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;
‘‘(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
450
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).
‘‘(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 State plans under title XIX,
and other programs designated by the Secretary, as
necessary to perform State agency responsibilities
under this part and under such programs.
‘‘(4) INTRASTATE AND INTERSTATE 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.’’.
451
SEC. 912. COLLECTION AND DISBURSEMENT OF SUPPORT
PAYMENTS.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by sections 901(b) and 904(a),
is amended—
(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) pri-
vate or governmental contractors reporting di-
rectly to the State agency, to—
‘‘(i) provide automated monitoring
and enforcement of support collections
through the unit (including carrying out
the automated data processing responsibil-
ities described in section 454A(g)); and
‘‘(ii) take the actions described in sec-
tion 466(c)(1) in appropriate cases.’’.
452
(b) ESTABLISHMENT
OF
STATE
DISBURSEMENT
UNIT.—Part D of title IV (42 U.S.C. 651–669), as
amended by section 944(a)(2), 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 in all cases being enforced by the
State pursuant to section 454(4).
‘‘(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)
by a contractor responsible directly to the State
agency; and
‘‘(B) in coordination with the automated
system established by the State pursuant to
section 454A.
453
‘‘(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. The Secretary must agree that the system
will not cost more nor take more time to establish
or operate than a centralized system. In addition,
employers shall be given 1 location to which income
withholding is sent.
‘‘(b) REQUIRED PROCEDURES.—The State 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;
‘‘(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
454
payments under an order requiring payments to be
made by or to the parent.
‘‘(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.
‘‘(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 944(a)(2) and as amended by section
911, 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
455
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 wages and other income—
‘‘(i) within 2 business days after re-
ceipt from a court, another State, an em-
ployer, the Federal Parent Locator Service,
or another source recognized by the State
of notice of, and the income source subject
to, such withholding; and
‘‘(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)) where payments are not
timely made.
‘‘(2) BUSINESS
DAY
DEFINED.—As used in
paragraph (1), the term ‘business day’ means a day
456
on which State offices are open for regular busi-
ness.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall become effective on October 1, 1998.
SEC. 913. STATE DIRECTORY OF NEW HIRES.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by sections 901(b), 904(a) and
912(a), is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(26);
(2) by striking the period at the end of para-
graph (27) and inserting ‘‘; and’’; and
(3) by adding after paragraph (27) the follow-
ing new paragraph:
‘‘(28) provide that, on and after October 1,
1997, the State will operate a State Directory of
New Hires in accordance with section 453A.’’.
(b) STATE DIRECTORY OF NEW HIRES.—Part D of
title IV (42 U.S.C. 651–669) is amended by inserting
after section 453 the following new section:
‘‘SEC. 453A. STATE DIRECTORY OF NEW HIRES.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—Not later than October 1,
1997, each State shall establish an automated direc-
tory (to be known as the ‘State Directory of New
457
Hires’) which shall contain information supplied in
accordance with subsection (b) by employers on each
newly hired employee.
‘‘(2) DEFINITIONS.—As used in this section:
‘‘(A) EMPLOYEE.—The term ‘employee’—
‘‘(i) means an individual who is an
employee within the meaning of chapter 24
of the Internal Revenue Code of 1986; and
‘‘(ii) does not include an employee of
a Federal or State agency performing in-
telligence or counterintelligence functions,
if the head of such agency has determined
that reporting pursuant to paragraph (1)
with respect to the employee could endan-
ger the safety of the employee or com-
promise an ongoing investigation or intel-
ligence mission.
‘‘(B) EMPLOYER.—The term ‘employer’ in-
cludes—
‘‘(i) any governmental entity, and
‘‘(ii) any labor organization.
‘‘(C) LABOR
ORGANIZATION.—The term
‘labor organization’ shall have the meaning
given such term in section 2(5) of the National
Labor Relations Act, and includes any entity
458
(also known as a ‘hiring hall’) which is used by
the organization and an employer to carry out
requirements described in section 8(f)(3) of
such Act of an agreement between the organiza-
tion and the employer.
‘‘(b) EMPLOYER INFORMATION.—
‘‘(1) REPORTING REQUIREMENT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) and (C), each employer shall
furnish to the Directory of New Hires of the
State in which a newly hired employee works, a
report that contains the name, address, and so-
cial security number of the employee, and the
name of, and identifying number assigned
under section 6109 of the Internal Revenue
Code of 1986 to, the employer.
‘‘(B) MULTISTATE EMPLOYERS.—An em-
ployer that has employees who are employed in
2 or more States and that transmits reports
magnetically or electronically may comply with
subparagraph (A) by designating 1 State in
which such employer has employees to which it
will transmit the report described in subpara-
graph (A), and transmitting such report to such
State. Any employer that transmits reports pur-
459
suant to this subparagraph shall notify the Sec-
retary in writing as to which State such em-
ployer designates for the purpose of sending re-
ports.
‘‘(C) FEDERAL
GOVERNMENT
EMPLOY-
ERS.—Any department, agency, or instrumen-
tality of the United States shall comply with
subparagraph (A) by transmitting the report
described in subparagraph (A) to the National
Directory of New Hires established pursuant to
section 453.
‘‘(2) TIMING OF REPORT.—The report required
by paragraph (1) with respect to an employee shall
be made not later than the later of—
‘‘(A) 30 days after the date the employer
hires the employee; or
‘‘(B) in the case of an employer that re-
ports by magnetic or electronic means, the 1st
business day of the week following the date on
which the employee 1st receives wages or other
compensation from the employer.
‘‘(c) REPORTING FORMAT AND METHOD.—Each re-
port required by subsection (b) shall be made on a
W–4 form and may be transmitted by 1st class mail, mag-
netically, or electronically.
460
‘‘(d) CIVIL MONEY PENALTIES ON NONCOMPLYING
EMPLOYERS.—The State shall have the option to set a
State civil money penalty which shall be less than—
‘‘(1) $25; or
‘‘(2) $500 if, under State law, the failure is the
result of a conspiracy between the employer and the
employee to not supply the required report or to
supply a false or incomplete report.
‘‘(e) ENTRY OF EMPLOYER INFORMATION.—Infor-
mation shall be entered into the data base maintained by
the State Directory of New Hires within 5 business days
of receipt from an employer pursuant to subsection (b).
‘‘(f) INFORMATION COMPARISONS.—
‘‘(1) IN GENERAL.—Not later than October 1,
1998, an agency designated by the State shall, di-
rectly or by contract, conduct automated compari-
sons of the social security numbers reported by em-
ployers pursuant to subsection (b) and the social se-
curity numbers appearing in the records of the State
case registry for cases being enforced under the
State plan.
‘‘(2) NOTICE OF MATCH.—When an information
comparison conducted under paragraph (1) reveals a
match with respect to the social security number of
an individual required to provide support under a
461
support order, the State Directory of New Hires
shall provide the agency administering the State
plan approved under this part of the appropriate
State with the name, address, and social security
number of the employee to whom the social security
number is assigned, and the name of, and identify-
ing number assigned under section 6109 of the In-
ternal Revenue Code of 1986 to, the employer.
‘‘(g) TRANSMISSION OF INFORMATION.—
‘‘(1) TRANSMISSION
OF
WAGE
WITHHOLDING
NOTICES TO EMPLOYERS.—Within 2 business days
after the date information regarding a newly hired
employee is entered into the State Directory of New
Hires, the State agency enforcing the employee’s
child support obligation shall transmit a notice to
the employer of the employee directing the employer
to withhold from the wages of the employee an
amount equal to the monthly (or other periodic)
child support obligation of the employee, unless the
employee’s wages are not subject to withholding pur-
suant to section 466(b)(3).
‘‘(2) TRANSMISSIONS TO THE NATIONAL DIREC-
TORY OF NEW HIRES.—
‘‘(A) NEW HIRE INFORMATION.—Within 2
business days after the date information re-
462
garding a newly hired employee is entered into
the State Directory of New Hires, the State Di-
rectory of New Hires shall furnish the informa-
tion to the National Directory of New Hires.
‘‘(B) WAGE
AND
UNEMPLOYMENT
COM-
PENSATION
INFORMATION.—The State Direc-
tory of New Hires shall, on a quarterly basis,
furnish to the National Directory of New Hires
extracts of the reports required under section
303(a)(6) to be made to the Secretary of Labor
concerning the wages and unemployment com-
pensation paid to individuals, by such dates, in
such format, and containing such information
as the Secretary of Health and Human Services
shall specify in regulations.
‘‘(3) BUSINESS DAY DEFINED.—As used in this
subsection, the term ‘business day’ means a day on
which State offices are open for regular business.
‘‘(h) OTHER USES OF NEW HIRE INFORMATION.—
‘‘(1) LOCATION
OF
CHILD
SUPPORT
OBLI-
GORS.—The agency administering the State plan ap-
proved under this part shall use information received
pursuant to subsection (f)(2) to locate individuals
for purposes of establishing paternity and establish-
463
ing, modifying, and enforcing child support obliga-
tions.
‘‘(2) VERIFICATION OF ELIGIBILITY FOR CER-
TAIN
PROGRAMS.—A State agency responsible for
administering a program specified in section 1137(b)
shall have access to information reported by employ-
ers pursuant to subsection (b) of this section for
purposes of verifying eligibility for the program.
‘‘(3) ADMINISTRATION OF EMPLOYMENT SECU-
RITY AND WORKERS’ COMPENSATION.—State agen-
cies operating employment security and workers’
compensation programs shall have access to informa-
tion reported by employers pursuant to subsection
(b) for the purposes of administering such pro-
grams.’’.
(c) 
QUARTERLY
WAGE
REPORTING.—Section
1137(a)(3) (42 U.S.C. 1320b–7(a)(3)) is amended—
(1) by inserting ‘‘(including State and local gov-
ernmental entities)’’ after ‘‘employers’’; and
(2) by inserting ‘‘, and except that no report
shall be filed with respect to an employee of a State
agency performing intelligence or counterintelligence
functions, if the head of such agency has determined
that filing such a report could endanger the safety
464
of the employee or compromise an ongoing investiga-
tion or intelligence mission’’ after ‘‘paragraph (2)’’.
SEC. 914. AMENDMENTS CONCERNING INCOME WITHHOLD-
ING.
(a) MANDATORY INCOME WITHHOLDING.—
(1) 
IN
GENERAL.—Section 
466(a)(1) 
(42
U.S.C. 666(a)(1)) is amended to read as follows:
‘‘(1)(A) Procedures described in subsection (b)
for the withholding from income of amounts payable
as support in cases subject to enforcement under the
State plan.
‘‘(B) Procedures under which the wages of a
person with a support obligation imposed by a sup-
port order issued (or modified) in the State before
October 1, 1996, if not otherwise subject to with-
holding under subsection (b), shall become subject to
withholding as provided in subsection (b) if arrear-
ages occur, without the need for a judicial or admin-
istrative hearing.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 466(b) (42 U.S.C. 666(b)) is
amended in the matter preceding paragraph
(1), by striking ‘‘subsection (a)(1)’’ and insert-
ing ‘‘subsection (a)(1)(A)’’.
465
(B) 
Section 
466(b)(4) 
(42 
U.S.C.
666(b)(4)) is amended to read as follows:
‘‘(4)(A) Such withholding must be carried out
in full compliance with all procedural due process re-
quirements of the State, and the State must send
notice to each absent parent to whom paragraph (1)
applies—
‘‘(i) that the withholding has commenced;
and
‘‘(ii) of the procedures to follow if the ab-
sent parent desires to contest such withholding
on the grounds that the withholding or the
amount withheld is improper due to a mistake
of fact.
‘‘(B) The notice under subparagraph (A) shall
include the information provided to the employer
under paragraph (6)(A).’’.
(C) 
Section 
466(b)(5) 
(42 
U.S.C.
666(b)(5)) is amended by striking all that fol-
lows ‘‘administered by’’ and inserting ‘‘the
State through the State disbursement unit es-
tablished pursuant to section 454B, in accord-
ance with the requirements of section 454B.’’.
(D) Section 466(b)(6)(A) (42 U.S.C.
666(b)(6)(A)) is amended—