I
103D CONGRESS
2D SESSION
H. R. 4414
To reconnect welfare families to the world of work, make work pay, strengthen
families, require personal responsibility, and support State flexibility.
IN THE HOUSE OF REPRESENTATIVES
MAY 12, 1994
Mr. MCCURDY (for himself, Mr. WHEAT, Mr. CLEMENT, Mr. DARDEN, Mr.
DEAL, Ms. LONG, Mr. SWETT, Mr. TANNER, Mr. JOHNSON of Georgia,
Ms. LAMBERT, Mr. PAYNE of Virginia, Mr. BARLOW, Mr. SKELTON, Mr.
GORDON, Mr. MINGE, Mr. LIPINSKI, Mr. ORTON, Mr. BREWSTER, Mr.
MANN, Mr. KLINK, Mr. PETERSON of Minnesota, Mr. LAUGHLIN, Mr.
ROWLAND, Mr. PETE GEREN of Texas, Ms. KAPTUR, Mr. MONTGOMERY,
Mr. HAYES, and Mr. TAYLOR of Mississippi) introduced the following bill;
which was referred jointly to the Committees on Ways and Means, Agri-
culture, Energy and Commerce, Education and Labor, and the Judiciary
A BILL
To reconnect welfare families to the world of work, make
work pay, strengthen families, require personal respon-
sibility, and support State flexibility.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Independence for Fam-
ilies Act of 1994’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—TIME-LIMITED TRANSITIONAL ASSISTANCE
Sec. 101. Limitation on duration of AFDC benefits.
Sec. 102. Job search requirement.
Sec. 103. Transitional child care benefits for persons who exhaust AFDC.
Sec. 104. Establishment of Federal data base.
TITLE II—MAKE WORK PAY
Subtitle A—Health Care
Sec. 201. Transitional medicaid benefits.
Subtitle B—Earned Income Tax Credit
Sec. 211. Notice of availability required to be provided to applicants and former
recipients of AFDC, food stamps, and medicaid.
Sec. 212. Notice of availability of earned income tax credit and dependent care
tax credit to be included on W–4 form.
Subtitle C—Child Care
Sec. 221. Dependent care credit to be refundable; high-income taxpayers ineli-
gible for credit.
Sec. 222. Increased Federal matching rate for child care costs of the 50 States
and the District of Columbia.
Sec. 223. Maintenance of effort.
Sec. 224. Notice of eligibility for transitional child care benefits required to be
provided to applicants for, and upon termination of, AFDC.
Sec. 225. Extension of eligibility for transitional child care benefits.
Sec. 226. Increased funding for at-risk child care.
Sec. 227. Authority to use certain child care funds for training.
Sec. 228. Transitional child care for 2-parent families.
Sec. 229. Sense of the Congress regarding the Child Care Development and
Block Grant Act.
Sec. 230. Use of child care funds to create child care jobs for welfare recipients.
Sec. 230A. Sense of the Congress regarding child care vouchers.
Subtitle D—AFDC Work Disregards
Sec. 231. Option to increase disregard of earned income.
Sec. 232. State option to establish voluntary diversion program.
Sec. 233. Elimination of quarters of coverage requirement for married teens
under AFDC-UP program.
Subtitle E—AFDC Asset Limitations
Sec. 241. Increase in resource thresholds; separate threshold for vehicles.
Sec. 242. Limited disregard of amounts saved for postsecondary education, the
purchase of a first car or a first home, or the establishment
or operation of a microenterprise.
Sec. 243. Treatment of microenterprises.
TITLE III—THE WORK FIRST PROGRAM
Subtitle A—AFDC
Sec. 301. Work first program.
Sec. 302. Regulations.
Sec. 303. Applicability to States.
Subtitle B—Targeted Jobs Tax Credit
Sec. 311. Increase in minimum period of employment required to receive credit.
TITLE IV—FAMILY RESPONSIBILITY AND IMPROVED CHILD
SUPPORT ENFORCEMENT
Subtitle A—Enhancement of Ability to Identify and Locate Noncustodial
Parents
Sec. 401. Expansion of functions of Federal parent locator service.
Sec. 402. Expansion of data bases accessed by parent locator systems.
Sec. 403. National parent locator network.
Sec. 404. Private access to locate and enforcement services.
Subtitle B—Paternity Establishment
Sec. 411. Sense of the Congress.
Sec. 412. Availability of parenting social services for new fathers.
Sec. 413. AFDC benefits conditioned on cooperation in identifying noncustodial
parent.
Sec. 414. Increase in pass-through of collected child support to AFDC recipi-
ents.
Subtitle C—Improvement of Child Support Order Establishment Process
Sec. 421. National Child Support Guidelines Commission.
Subtitle D—Child Support Enforcement
Sec. 431. National reporting of new hires and child support information.
Sec. 432. Certain benefits subject to garnishment.
Sec. 433. Seizure of lottery winnings, settlements, payouts, awards, and be-
quests, and sale of forfeited property, to pay child support ar-
rearages.
Sec. 434. Reporting of child support arrearages to credit bureaus.
Sec. 435. Liability of grandparents for financial support of children of their
minor children.
Sec. 436. Sense of the Congress regarding programs for noncustodial parents
unable to meet child support obligations.
TITLE V—TEEN PREGNANCY AND FAMILY STABILITY
Subtitle A—Federal Role
Sec. 501. State option not to deny AFDC for additional children.
Sec. 502. Minors receiving AFDC required to live under responsible adult su-
pervision.
Sec. 503. Task force to reduce teenage pregnancy.
Sec. 504. Incentive for teen parents to attend school.
Sec. 505. State option to disregard 100-hour rule under AFDC-UP program.
Sec. 506. State option to disregard 6-month limitation on AFDC-UP benefits.
Sec. 507. Elimination of quarters of coverage requirement under AFDC-UP
program for families in which both parents are teens.
Subtitle B—State Role
Sec. 511. Teenage pregnancy prevention and family stability.
Sec. 512. Availability of family planning services.
TITLE VI—PROGRAM SIMPLIFICATION
Subtitle A—Increased State Flexibility
Sec. 601. State option to provide AFDC through electronic benefit transfer sys-
tems.
Sec. 602. Deadline for action on application for waiver of requirement applica-
ble to program of aid to families with dependent children.
Subtitle B—Coordination of AFDC and Food Stamp Programs
Sec. 611. Amendments to part A of title IV of the Social Security Act.
Sec. 612. Amendments to the Food Stamp Act of 1977.
Subtitle C—Fraud Reduction
Sec. 631. Sense of the Congress in support of the efforts of the administration
to address the problems of fraud and abuse in the supple-
mental security income program.
Sec. 632. Study on feasibility of single tamper-proof identification card to serve
programs under both the Social Security Act and health reform
legislation.
TITLE VII—FINANCING
Subtitle A—Ineligibility of Certain Aliens for Certain Social Services
Sec. 701. Certain aliens ineligible for aid to families with dependent children.
Sec. 702. Certain aliens ineligible for supplemental security income benefits.
Sec. 703. Illegal aliens not eligible for earned income tax credit.
Sec. 704. Disqualification of certain aliens to receive food stamp benefits.
Sec. 705. Certain aliens ineligible for medical assistance under medicaid.
Subtitle B—Other Provisions Relating to Aliens
Sec. 711. Sponsor responsibility for costs of general cash public assistance pro-
vided to an alien.
Sec. 712. Enforcement of affidavits of support or financial responsibility by
State and local governments providing assistance.
Sec. 713. Authority to States and localities to limit assistance to aliens and to
distinguish among classes of aliens in providing general public
assistance.
Sec. 714. Federal financial assistance to States for assistance to immigrants.
Subtitle C—Limitation on Emergency Assistance Expenditures
Sec. 721. Limitation on expenditures for emergency assistance.
Subtitle D—Family Day Care Homes Program Improvements
Sec. 731. Improvement of operation of family or group day care homes located
in low- and moderate-income areas under the child and adult
care food program under the National School Lunch Act.
Subtitle E—Collection of Certain State and Local Taxes on Out-of-State
Sales
Sec. 741. Short title.
Sec. 742. Findings.
Sec. 743. Sense of Congress.
Sec. 744. Authority for collection of sales tax.
Sec. 745. Treatment of local sales taxes.
Sec. 746. Return and remittance requirements.
Sec. 747. Nondiscrimination and exemptions.
Sec. 748. Application of State law.
Sec. 749. Toll-free information service.
Sec. 750. Definitions.
Sec. 751. Effective date.
TITLE VIII—EFFECTIVE DATE
Sec. 801. Effective date.
TITLE I—TIME-LIMITED
TRANSITIONAL ASSISTANCE
SEC. 101. LIMITATION ON DURATION OF AFDC BENEFITS.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(44);
(2) by striking the period at the end of para-
graph (45) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (45) the fol-
lowing:
‘‘(46) in the case of a State that has exercised
the option provided for in paragraph (52), provide
that a family shall not be eligible for aid under the
State plan if a member of the family is prohibited
from participating in the State program established
under part F by reason of section 487(c).’’.
SEC. 102. JOB SEARCH REQUIREMENT.
(a) IN GENERAL.—Section 402(a) of the Social Secu-
rity Act (42 U.S.C. 602(a)), as amended by section 101
of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(45);
(2) by striking the period at the end of para-
graph (46) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (46) the fol-
lowing:
‘‘(47) provide that participation in job search
activities shall be a condition of eligibility for aid
under the State plan, except during any period of
unsubsidized full-time employment in the private
sector.’’.
SEC. 103. TRANSITIONAL CHILD CARE BENEFITS FOR PER-
SONS WHO EXHAUST AFDC.
Section 402(g)(1)(A)(ii) of the Social Security Act
(42 U.S.C. 602(g)(1)(A)(ii)) is amended by inserting ‘‘or
subsection (a)(46)’’ before the period.
SEC. 104. ESTABLISHMENT OF FEDERAL DATA BASE.
Section 402 of the Social Security Act (42 U.S.C.
602) is amended by inserting after subsection (c) the fol-
lowing:
‘‘(d) The Secretary shall establish and maintain a
data base of participants in State programs established
under parts F and G which shall be made available to the
States for use in administering subsection (a)(46).’’.
TITLE II—MAKE WORK PAY
Subtitle A—Health Care
SEC. 201. TRANSITIONAL MEDICAID BENEFITS.
(a) EXTENSION
OF MEDICAID ENROLLMENT
FOR
FORMER AFDC RECIPIENTS FOR 1 ADDITIONAL YEAR.—
(1) IN GENERAL.—Section 1925(b)(1) of the
Social Security Act (42 U.S.C. 1396r–6(b)(1)) is
amended by striking the period at the end and in-
serting the following: ‘‘, and that the State shall
offer to each such family the option of extending
coverage under this subsection for any of the first 2
succeeding 6-month periods, in the same manner
and under the same conditions as the option of ex-
tending coverage under this subsection for the first
succeeding 6-month period.’’.
(2) 
CONFORMING
AMENDMENTS.—Section
1925(b) of such Act (42 U.S.C. 1396r–6(b)) is
amended—
(A) in the heading, by striking ‘‘EXTEN-
SION’’ and inserting ‘‘EXTENSIONS’’;
(B) in the heading of paragraph (1), by
striking ‘‘REQUIREMENT’’ and inserting ‘‘IN
GENERAL’’;
(C) in paragraph (2)(B)(ii)—
(i) in the heading, by striking ‘‘PE-
RIOD’’ and inserting ‘‘PERIODS’’, and
(ii) by striking ‘‘in the period’’ and in-
serting ‘‘in each of the 6-month periods’’;
(D) in paragraph (3)(A), by striking ‘‘the
6-month period’’ and inserting ‘‘any 6-month
period’’;
(E) in paragraph (4)(A), by striking ‘‘the
extension period’’ and inserting ‘‘any extension
period’’; and
(F) in paragraph (5)(D)(i), by striking ‘‘is
a 3-month period’’ and all that follows and in-
serting the following: ‘‘is, with respect to a par-
ticular 6-month additional extension period pro-
vided under this subsection, a 3-month period
beginning with the 1st or 4th month of such ex-
tension period.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to calendar quarters beginning
on or after October 1, 1996, without regard to whether
or not final regulations to carry out such amendments
have been promulgated by such date.
Subtitle B—Earned Income Tax
Credit
SEC. 211. NOTICE OF AVAILABILITY REQUIRED TO BE PRO-
VIDED TO APPLICANTS AND FORMER RECIPI-
ENTS OF AFDC, FOOD STAMPS, AND MEDIC-
AID.
(a) AFDC.—Section 402(a) of the Social Security
Act (42 U.S.C. 602(a)), as amended by sections 101 and
102(a) of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(46);
(2) by striking the period at the end of para-
graph (47) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (47) the fol-
lowing:
‘‘(48) provide that the State agency must pro-
vide written notice of the existence and availability
of the earned income credit under section 32 of the
Internal Revenue Code of 1986 to—
‘‘(A) any individual who applies for aid
under the State plan, upon receipt of the appli-
cation; and
‘‘(B) any individual whose aid under the
State plan is terminated, in the notice of termi-
nation of benefits.’’.
(b) FOOD STAMPS.—Section 11(e) of the Food
Stamp Act of 1977 (7 U.S.C. 2020(e)) is amended—
(1) in paragraph (24) by striking ‘‘and’’ at the
end;
(2) in paragraph (25) by striking the period at
the end and inserting ‘‘; and’’; and
(3) by inserting after paragraph (25) the fol-
lowing:
‘‘(26) that whenever a household applies for
food stamp benefits, and whenever such benefits are
terminated with respect to a household, the State
agency shall provide to each member of such house-
hold notice of—
‘‘(A) the existence of the earned income
tax credit under section 32 of the Internal Rev-
enue Code of 1986; and
‘‘(B) the fact that such credit may be ap-
plicable to such member.’’.
(c) MEDICAID.—Section 1902(a) of the Social Secu-
rity Act (42 U.S.C. 1396a(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(61);
(2) by striking the period at the end of para-
graph (62) and inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(63) provide that the State shall provide notice
of the existence and availability of the earned income
tax credit under section 32 of the Internal Revenue
Code of 1986 to each individual applying for medical
assistance under the State plan and to each individ-
ual whose eligibility for medical assistance under the
State plan is terminated.’’.
SEC. 212. NOTICE OF AVAILABILITY OF EARNED INCOME
TAX CREDIT AND DEPENDENT CARE TAX
CREDIT TO BE INCLUDED ON W–4 FORM.
Section 11114 of the Omnibus Budget Reconciliation
Act of 1990 (relating to program to increase public aware-
ness) is amended by adding at the end the following new
sentence: ‘‘Such means shall include printing a notice of
the availability of such credits on the forms used by em-
ployees to determine the proper number of withholding ex-
emptions under chapter 24 of the Internal Revenue Code
of 1986.’’.
Subtitle C—Child Care
SEC. 221. DEPENDENT CARE CREDIT TO BE REFUNDABLE;
HIGH-INCOME TAXPAYERS INELIGIBLE FOR
CREDIT.
(a) CREDIT TO BE REFUNDABLE.—
(1) IN GENERAL.—Section 21 of the Internal
Revenue Code of 1986 (relating to expenses for
household and dependent care services necessary for
gainful employment) is hereby moved to subpart C
of part IV of subchapter A of chapter 1 of such
Code (relating to refundable credits) and inserted
after section 34.
(2) TECHNICAL AMENDMENTS.—
(A) Section 35 of such Code is redesig-
nated as section 36.
(B) Section 21 of such Code is redesig-
nated as section 35.
(C) Paragraph (1) of section 35(a) of such
Code (as redesignated by subparagraph (B)) is
amended by striking ‘‘this chapter’’ and insert-
ing ‘‘this subtitle’’.
(D) Subparagraph (C) of section 129(a)(2)
of such Code is amended by striking ‘‘section
21(e)’’ and inserting ‘‘section 35(e)’’.
(E) Paragraph (2) of section 129(b) of
such Code is amended by striking ‘‘section
21(d)(2)’’ and inserting ‘‘section 35(d)(2)’’.
(F) Paragraph (1) of section 129(e) of
such Code is amended by striking ‘‘section
21(b)(2)’’ and inserting ‘‘section 35(b)(2)’’.
(G) Subsection (e) of section 213 of such
Code is amended by striking ‘‘section 21’’ and
inserting ‘‘section 35’’.
(H) Paragraph (2) of section 1324(b) of
title 31, United States Code, is amended by in-
serting before the period ‘‘or from section 35 of
such Code’’.
(I) The table of sections for subpart C of
part IV of subchapter A of chapter 1 of such
Code is amended by striking the item relating
to section 35 and inserting the following:
‘‘Sec. 35. Expenses for household and dependent care services
necessary for gainful employment.
‘‘Sec. 36. Overpayments of tax.’’.
(J) The table of sections for subpart A of
such part IV is amended by striking the item
relating to section 21.
(b) HIGHER-INCOME TAXPAYERS INELIGIBLE FOR
CREDIT.—Subsection (a) of section 35 of such Code, as
redesignated by subsection (a), is amended by adding at
the end the following new paragraph:
‘‘(3) PHASEOUT
OF
CREDIT
FOR
HIGHER-IN-
COME TAXPAYERS.—The amount of the credit which
would (but for this paragraph) be allowed by this
section shall be reduced (but not below zero) by an
amount which bears the same ratio to such amount
of credit as the excess of the taxpayer’s adjusted
gross income for the taxable year over $110,000
bears to $10,000. Any reduction determined under
the preceding sentence which is not a multiple of
$10 shall be rounded to the nearest multiple of
$10.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995.
SEC. 222. INCREASED FEDERAL MATCHING RATE FOR
CHILD CARE COSTS OF THE 50 STATES AND
THE DISTRICT OF COLUMBIA.
Section 402(g)(3)(A)(i) of the Social Security Act (42
U.S.C. 602(g)(3)(A)(i)) is amended by striking ‘‘the Fed-
eral medical assistance percentage (as defined in section
1118)’’ and inserting ‘‘80 percent’’.
SEC. 223. MAINTENANCE OF EFFORT.
Section 403 of the Social Security Act (42 U.S.C.
603) is amended by adding at the end the following:
‘‘(o) Notwithstanding any other provision of this
part, the amount otherwise payable to a State under this
part for a fiscal year shall be reduced by the percentage
(if any) by which the total expenditures by the State under
this part for the fiscal year does not exceed the average
annual expenditures by the State under this part during
fiscal years 1994, 1995, and 1996.’’.
SEC. 224. NOTICE OF ELIGIBILITY FOR TRANSITIONAL
CHILD CARE BENEFITS REQUIRED TO BE
PROVIDED TO APPLICANTS FOR, AND UPON
TERMINATION OF, AFDC.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)), as amended by sections 101, 102(a), and 211(a)
of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(47);
(2) by striking the period at the end of para-
graph (48);
(3) by inserting after paragraph (48) the fol-
lowing:
‘‘(49) provide that the State agency must pro-
vide written notice that, upon termination of aid
under the State plan, a family may be eligible for
child care benefits under section 402(g)(1)(A)(ii),
to—
‘‘(A) any individual who applies for aid
under the State plan, upon receipt of the appli-
cation; and
‘‘(B) any individual whose aid under the
State plan is terminated, in the notice of termi-
nation of benefits.’’.
SEC. 225. EXTENSION OF ELIGIBILITY FOR TRANSITIONAL
CHILD CARE BENEFITS.
Section 402(g)(1)(A) of the Social Security Act (42
U.S.C. 602(g)(1)(A)) is amended—
(1) in clause (iii), by striking ‘‘12’’ and insert-
ing ‘‘24’’; and
(2) in clause (iv), by striking ‘‘3 of the 6’’ and
inserting ‘‘1 of the ‘‘24’’.
SEC. 226. INCREASED FUNDING FOR AT-RISK CHILD CARE.
Section 403(n) of the Social Security Act (42 U.S.C.
603(n)) is amended—
(1) in paragraph (1)(A), by striking ‘‘the Fed-
eral medical assistance percentage (as defined in sec-
tion 1905(b))’’ and inserting ‘‘80 percent’’; and
(2) in paragraph (2)(B)—
(A) by striking ‘‘and’’ at the end of clause
(iv); and
(B) by striking clause (v) and inserting the
following:
‘‘(v) $300,000,000 for each of fiscal years
1995, 1996, and 1997;
‘‘(vi) $500,000,000 for fiscal year 1998;
‘‘(vii) $1,000,000,000 for fiscal year 1999;
‘‘(viii) $1,500,000,000 for fiscal year 2000; and
‘‘(vi) $2,000,000,000 for fiscal year 2001.’’.
SEC. 227. AUTHORITY TO USE CERTAIN CHILD CARE FUNDS
FOR TRAINING.
(a) TRANSITIONAL CHILD CARE FUNDS.—Section
402(g)(1)(A)(ii) of the Social Security Act (42 U.S.C.
602(g)(1)(A)(ii)) is amended by inserting ‘‘training or’’
before ‘‘employment’’ the first place such term appears.
(b) 
AT-RISK
CHILD
CARE
FUNDS.—Section
402(i)(1)(B) of such Act (42 U.S.C. 602(i)(1)(B)) is
amended by inserting ‘‘or receive training for work’’ before
the semicolon.
SEC. 228. TRANSITIONAL CHILD CARE FOR 2–PARENT FAMI-
LIES.
Section 402(g)(1)(A)(i) of the Social Security Act (42
U.S.C. 602(g)(1)(A)(i)) is amended—
(1) by striking ‘‘and’’ at the end of subclause
(I);
(2) by striking the period at the end of
subclause (II) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(III) for each 2-parent family with a depend-
ent child requiring such care, if 1 parent in the fam-
ily is employed and the other parent in the family
is not available to provide such care because such
other parent is employed or receiving training, to the
extent that such care is determined by the State
agency to be necessary for either parent to accept
employment, remain employed, or receive such train-
ing;’’.
SEC. 229. SENSE OF THE CONGRESS REGARDING THE
CHILD CARE DEVELOPMENT AND BLOCK
GRANT ACT.
It is the sense of the Congress that the Child Care
Development and Block Grant Act should be reauthorized
to allow States greater flexibility in the use of their funds
to strengthen child care quality and to increase supply.
SEC. 230. USE OF CHILD CARE FUNDS TO CREATE CHILD
CARE JOBS FOR WELFARE RECIPIENTS.
Section 402(g)(3) of the Social Security Act (42
U.S.C. 602(g)(3)) is amended by adding at the end the
following:
‘‘(C) Amounts expended by a State with a plan ap-
proved under part G for the creation of employment in
the field of child care (in accordance with State licensing
requirements) for recipients of aid under the State plan
approved under this part shall be considered amounts ex-
pended for child care pursuant to paragraph (1), and sub-
paragraph (B) of this paragraph shall not apply to such
amounts.’’.
SEC. 230A. SENSE OF THE CONGRESS REGARDING CHILD
CARE VOUCHERS.
It is the sense of the Congress that—
(1) the States should institute a system under
which—
(A) vouchers are provided to each family
eligible for child care services under subsections
(g) and (i) of section 402 of the Social Security
Act, under programs operated with funds pro-
vided under title XX of the Social Security Act,
or under the Child Care Development and
Block Grant Act, which may be used by the
family to purchase child care services;
(B) 1 voucher is provided to the family for
each child in the family with respect to whom
child care services may be provided;
(C) the dollar value of each voucher is set
at a level that is greater than the dollar value
of the dependent care disregard under section
402(a)(8)(A)(iii) of the Social Security Act, and
is adjusted to reflect regional differences in the
kinds and costs of such services;
(D) a board consisting of child care provid-
ers and representatives from the State agency
referred to in section 402(a)(3) of the Social
Security Act annually negotiates and deter-
mines the dollar value of the child care vouchers
to be issued by the State; and
(E) the State agency referred to in section
402(a)(3) of the Social Security Act monitors
the performance of private providers of child
care services in the State and the compliance of
such providers with the system;
(2) the States should create a Consumer Infor-
mation Center responsible for maintaining an up-
dated roster of eligible providers of child care serv-
ices, and a record of the performance of such provid-
ers as evaluated by recipients of such services, which
should be published in a brochure that is available
to all persons who are eligible to receive such serv-
ices; and
(3) the States should loosen their regulations to
allow for the reimbursement of the child costs of li-
censed child care providers and unsolicited or home
care child care providers.
Subtitle D—AFDC Work Disregards
SEC. 231. OPTION TO INCREASE DISREGARD OF EARNED IN-
COME.
Section 402(a)(8)(A) of the Social Security Act (42
U.S.C. 602(a)(8)(A)) is amended—
(1) by striking ‘‘and’’ at the end of clause (vii);
and
(2) by adding at the end the following:
‘‘(ix) if electing to disregard clauses (ii)
and (iv), shall disregard from the earned in-
come of any child, relative, or other individual
specified in clause (ii) an amount equal to not
less than the first $120 and not more than the
first $225 of the total of such earned income
not disregarded under any other clause of this
subparagraph, plus not more than 1⁄3 of the re-
mainder of such earned income; and’’.
SEC. 232. STATE OPTION TO ESTABLISH VOLUNTARY DI-
VERSION PROGRAM.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)), as amended by sections 101, 102(a), 211(a), and
224 of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(48);
(2) by striking the period at the end of para-
graph (49) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (49) the fol-
lowing:
‘‘(50) at the option of the State, and in such
part or parts of the State as the State may select,
provide that—
‘‘(A) upon the recommendation of the case-
worker who is handling the case of a family eli-
gible for aid under the State plan, the State
shall, in lieu of any other payment under the
State plan to a family during a 3-month period,
make a lump-sum payment to the family for the
3-month period in an amount equal to 3 times
the amount of the monthly benefit to which the
family is entitled under the State plan;
‘‘(B) a lump-sum payment pursuant to
subparagraph (A) shall not be made more than
once to any family; and
‘‘(C) if, during a 3-month period for which
the State has made a lump-sum payment to a
family pursuant to subparagraph (A), the fam-
ily applies for and (but for the lump-sum pay-
ment) would be eligible for aid under the State
plan for a greater monthly benefit than the
monthly benefit to which the family was entitled
under the State plan at the time of the calcula-
tion of the lump sum payment, then, notwith-
standing subparagraph (A), the State shall, for
that part of the 3-month period that remains
after the family becomes eligible for the greater
monthly benefit, provide monthly benefits to the
family in an amount equal to—
‘‘(i) 3 times the amount by which the
greater monthly benefit exceeds the former
monthly benefit; divided by
‘‘(ii) the whole number of months re-
maining in the 3-month period.’’.
SEC. 233. ELIMINATION OF QUARTERS OF COVERAGE RE-
QUIREMENT FOR MARRIED TEENS UNDER
AFDC–UP PROGRAM.
Section 407(b)(1)(A)(iii)(I) of the Social Security Act
(42 U.S.C. 607(b)(1)(A)(iii)(I)) is amended by inserting
‘‘except in the case of a family in which the parents are
married and neither parent has attained 20 years of age,’’
after ‘‘(I)’’.
Subtitle E—AFDC Asset
Limitations
SEC. 241. INCREASE IN RESOURCE THRESHOLDS; SEPA-
RATE THRESHOLD FOR VEHICLES.
Section 402(a)(7)(B) of the Social Security Act (42
U.S.C. 602(a)(7)(B)) is amended—
(1) by striking ‘‘$1,000 or such lower amount
as the State may determine’’ and inserting
‘‘$2,000’’; and
(2) in clause (i), by striking ‘‘such amount as
the Secretary may prescribe’’ and inserting ‘‘the dol-
lar amount prescribed by the Secretary of Agri-
culture under section 5(g) of the Food Stamp Act of
1977’’.
SEC. 242. LIMITED DISREGARD OF AMOUNTS SAVED FOR
POST-SECONDARY 
EDUCATION, 
THE 
PUR-
CHASE OF A FIRST CAR OR A FIRST HOME, OR
THE ESTABLISHMENT OR OPERATION OF A
MICROENTERPRISE.
(a) 
DISREGARD
FROM
RESOURCES.—Section
402(a)(7)(B) of the Social Security Act (42 U.S.C.
602(a)(7)(B)) is amended—
(1) by striking ‘‘or’’ before ‘‘(iv)’’; and
(2) by inserting ‘‘, or (v) any amount not ex-
ceeding $8,000 in 1 qualified asset account (as de-
fined in section 406(i)) of 1 member of such family’’
before ‘‘; and’’.
(b) DISREGARD FROM INCOME.—
(1) IN GENERAL.—Section 402(a)(8)(A) of such
Act (42 U.S.C. 602(a)(8)(A)), as amended by sec-
tion 231 of this Act, is amended—
(A) by striking ‘‘and’’ at the end of clause
(viii); and
(B) by inserting after clause (ix) the fol-
lowing new clause:
‘‘(x) shall disregard any interest or in-
come earned on a qualified asset account
(as defined in section 406(i)) and paid into
the account, to the extent that the total
amount in the account, after such pay-
ment, does not exceed $8,000; and’’.
(2) NONRECURRING LUMP SUM EXEMPT FROM
LUMP SUM RULE.—Section 402(a)(17) of such Act
(42 U.S.C. 602(a)(17)) is amended by adding at the
end the following: ‘‘; and that this paragraph shall
not apply to earned or unearned income received in
a month on a nonrecurring basis to the extent that
such income is placed in a qualified asset account
(as defined in section 406(i)) the total amount in
which, after such placement, does not exceed
$8,000;’’.
(3) 
TREATMENT
AS
INCOME.—Section
402(a)(7) of such Act (42 U.S.C. 602(a)(7)) is
amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B);
(B) by striking the semicolon at the end of
subparagraph (C) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(D) shall treat as income any distribution
from a qualified asset account (as defined in
section 406(i)(1)) that is not a qualified dis-
tribution (as defined in section 406(i)(2));’’.
(c) DEFINITIONS.—Section 406 of such Act (42
U.S.C. 606) is amended by adding at the end the follow-
ing:
‘‘(i)(1) The term ‘qualified asset account’ means a
mechanism approved by the State (such as individual re-
tirement accounts, escrow accounts, or savings bonds) that
allows savings of an individual receiving aid to families
with dependent children to be used for a purpose described
in paragraph (2).
‘‘(2) The term ‘qualified distribution’ means a dis-
tribution for expenses directly related to 1 or more of the
following purposes:
‘‘(A) The attendance of a member of the family
at any postsecondary education program.
‘‘(B) The purchase of residential real property
for the family that the family intends to occupy, if
no member of the family has an ownership interest
in such a property.
‘‘(C) The purchase of an automobile if no mem-
ber of the family has an ownership interest in an
automobile.
‘‘(D) The establishment or operation of a
microenterprise owned by a member of the family.
‘‘(j) The term ‘microenterprise’ means a commercial
enterprise which has 5 or fewer employees, 1 or more of
whom owns the enterprise.’’.
SEC. 243. TREATMENT OF MICROENTERPRISES.
(a) IN GENERAL.—Section 402(a) of the Social Secu-
rity Act (42 U.S.C. 602(a)), as amended by sections 101,
102(a), 211(a), 224, and 232 of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(49);
(2) by striking the period at the end of para-
graph (50) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (50) the fol-
lowing:
‘‘(51) provide that the State agency—
‘‘(A) shall not include as a resource of the
family of which a child referred to in paragraph
(7)(A) is a member, for purposes of paragraph
(7)(B), the first $8,000 of the net worth (assets
reduced by liabilities with respect thereto) of 1
microenterprise (as defined in section 406(j)(1))
owned, in whole or in part, by the child or by
a relative or other individual referred to in
paragraph (7)(A), for a period not to exceed 2
years; and
‘‘(B) shall take into consideration as
earned income of the family of which the child
is a member, only the net profits (as defined in
section 406(j)(2)) of 1 such microenterprise, for
a period not to exceed 2 years.’’.
(b) DEFINITIONS.—Section 406(j) of such Act (42
U.S.C. 606(j)), as added by section 242(c) of this Act,
is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(j)’’; and
(2) by adding at the end the following:
‘‘(2) The term ‘net profits’ means, with respect to
a 
microenterprise, 
the 
gross 
receipts 
of 
the
microenterprise, minus—
‘‘(A) payments of principal or interest on a loan
to the microenterprise;
‘‘(B) transportation expenses incurred in oper-
ating the microenterprise;
‘‘(C) expenses incurred in maintaining inven-
tory for the microenterprise;
‘‘(D) expenditures for the purchase of capital
equipment for the microenterprise;
‘‘(E) cash retained by the microenterprise for
future use;
‘‘(F) taxes paid by the microenterprise;
‘‘(G) if the microenterprise is covered under a
policy of insurance against loss—
‘‘(i) the premiums paid for such insurance;
and
‘‘(ii) 
the 
losses 
incurred 
by 
the
microenterprise that are not reimbursed by the
insurer solely by reason of the existence of a de-
ductible with respect to the insurance policy;
‘‘(H) the reasonable costs of obtaining and op-
erating 1 motor vehicle necessary for the conduct of
the microenterprise; and
‘‘(I) 
the 
other 
expenses 
of 
the
microenterprise.’’.
TITLE III—THE WORK FIRST
PROGRAM
Subtitle A—AFDC
SEC. 301. WORK FIRST PROGRAM.
(a) STATE PLAN REQUIREMENT.—Section 402(a) of
the Social Security Act (42 U.S.C. 602(a)), as amended
by sections 101, 102(a), 211(a), 224, 232, and 243(a) of
this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(50);
(2) by striking the period at the end of para-
graph (51) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (51) the fol-
lowing:
‘‘(52) at the option of the State, provide that
the State has in effect and operation a work first
program that meets the requirements of part F and
a community service program that meets the re-
quirements of part G, and must provide to partici-
pants in such programs such case management serv-
ices as are necessary to ensure the integrated provi-
sion of benefits and services under such programs.’’.
(b) ESTABLISHMENT
AND
OPERATION
OF
PRO-
GRAM.—Title IV of such Act (42 U.S.C. 601 et seq.) is
amended by striking part F and inserting the following:
‘‘PART F—WORK FIRST PROGRAM
‘‘SEC. 481. ESTABLISHMENT AND OPERATION OF STATE
PROGRAMS.
‘‘A work first program meets the requirements of this
part if the program meets the following requirements:
‘‘(1) OBJECTIVE.—The objective of the pro-
gram is for each program participant to find and
hold a full-time unsubsidized paid job, and for this
goal to be achieved in a cost-effective fashion.
‘‘(2) METHOD.—The method of the program is
to connect recipients of aid to families with depend-
ent children with the private sector labor market as
soon as possible and offer them the support and
skills necessary to remain in the labor market. Each
component of the program should be permeated with
an emphasis on employment and with an under-
standing that minimum wage jobs are a stepping
stone to more highly paid employment.
‘‘(3) JOB
CREATION.—The creation of jobs,
with an emphasis on private sector jobs, shall be a
component of the program and shall be a priority for
each State office with responsibilities under the pro-
gram.
‘‘(4) USE OF INCENTIVES.—The State shall use
incentives to change the culture of each State office
with responsibilities under the State plan approved
under part A, improve the performance of employ-
ees, and ensure that the objective of each employee
of each such State office is to find an unsubsidized
paid job for each program participant.
‘‘(5) CASEWORKER TRAINING.—The State shall
provide such training to caseworkers and related
personnel (including through the use of incentives)
as may be necessary to ensure successful job place-
ments that result in full-time public or private em-
ployment (outside the State agencies with respon-
sibilities under part A) for program participants.
The State shall reward any caseworker who enters
a participation agreement with a program partici-
pant that provides for education or training activi-
ties as well as work.
‘‘(6) REPORTS.—Each office with responsibility
for operating the program shall make monthly sta-
tistical reports to the governing body of the State,
county, and city in which located, of job placements
and the number of program participants who are no
longer receiving aid under the State plan approved
under part A as a result of participation in the pro-
gram.
‘‘(7) PLAN REQUIRED.—The program is estab-
lished and operated in accordance with a plan ap-
proved by the Secretary as meeting the requirements
of this part.
‘‘(8) CASE MANAGEMENT TEAMS.—
‘‘(A) DUTIES.—The program requires the
State to assign to each individual required or
allowed to participate in the program a case
management team that shall meet with the pro-
gram participant and develop a participation
agreement for the individual.
‘‘(B) DEADLINE.—
‘‘(i) IN GENERAL.—The case manage-
ment team shall comply with subparagraph
(A) with respect to a program participant
within 30 days (or, at the option of the
State, within a period not exceeding 90
days) after the later of—
‘‘(I) the date the application of
the program participant for aid under
the State plan approved under part A
was approved; or
‘‘(II) the date this part first ap-
plies to the State.
‘‘(ii) REPEAT PARTICIPANTS.—Within
30 days after the State makes a deter-
mination under section 487(c)(2) to allow
an individual to participate in the pro-
gram, the case management team shall
meet with the individual and develop a par-
ticipation agreement for the individual.
‘‘(9) PARTICIPATION AGREEMENTS.—The par-
ticipation agreement for a participant shall—
‘‘(A) contain an individualized comprehen-
sive plan, developed by the team and the partic-
ipant, to move the participant into a full-time
unsubsidized job, through activities under sec-
tion 482, 483, 484, 485, or 486;
‘‘(B) to the greatest extent possible, be de-
signed to move the participant as quickly as
possible into whatever type and amount of work
as the participant is capable of handling, and
increases the responsibility and amount of work
over time until the participant is able to work
full-time;
‘‘(C) where necessary, provide for edu-
cation or training of the participant;
‘‘(D) provide that aid under the State plan
is to be paid to the participant based on the
number of hours that the participant spends in
activities provided for in the agreement;
‘‘(E) provide that the participant shall
spend at least 20 hours per week in activities
provided for in the agreement;
‘‘(F) provide that the participant shall ac-
cept any bona fide offer of unsubsidized full-
time employment, unless the participant has
good cause for not doing so; and
‘‘(G) at the option of the State, require the
participant to undergo appropriate substance
abuse treatment.
‘‘(10) OPTIONS FOR PARTICIPANTS.—The case
manager for a program participant shall present the
participant with each option offered under the State
program through which the participant will, over
time, be moved into full-time unsubsidized employ-
ment.
‘‘(11) ONE-STOP EMPLOYMENT SHOPS.—
‘‘(A) IN GENERAL.—In carrying out the
program, the State shall utilize and make avail-
able to each program participant, through the
establishment and operation or utilization of
appropriate Federal or State one-stop employ-
ment shops, services under programs carried
out under the following provisions of law:
‘‘(i) Part A of title II of the Job
Training Partnership Act (29 U.S.C. 1601
et seq.) (relating to the adult training pro-
gram).
‘‘(ii) Part B of title II of such Act (29
U.S.C. 1630 et seq.) (relating to the sum-
mer youth employment and training pro-
grams).
‘‘(iii) Part C of title II of such Act
(29 U.S.C. 1641 et seq.) (relating to the
youth training program).
‘‘(iv) Title III of such Act (29 U.S.C.
1651 et seq.) (relating to employment and
training assistance for dislocated workers).
‘‘(v) Part B of title IV of such Act
(29 U.S.C. 1691 et seq.) (relating to the
Job Corps).
‘‘(vi) The Carl D. Perkins Vocational
and Applied Technology Education Act (20
U.S.C. 2301 et seq.).
‘‘(vii) The Adult Education Act (20
U.S.C. 1201 et seq.).
‘‘(viii) Part B of chapter 1 of title I
of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 2741 et
seq.) (relating to Even Start family lit-
eracy programs).
‘‘(ix) Subtitle A of title VII of the
Stewart B. Mckinney Homeless Assistance
Act (42 U.S.C. 11421) (relating to adult
education for the homeless).
‘‘(x) Subtitle B of title VII of such
Act (42 U.S.C. 11431 et seq.) (relating to
education 
for 
homeless 
children 
and
youth).
‘‘(xi) Subtitle C of title VII of such
Act (42 U.S.C. 11441) (relating to job
training for the homeless).
‘‘(xii) The School-to-Work Opportuni-
ties Act of 1994.
‘‘(xiii) The National and Community
Service Act of 1990 (42 U.S.C. 12501 et
seq.).
‘‘(xiv) The National Skill Standards
Act of 1994.
‘‘(B) COORDINATION.—In utilizing appro-
priate Federal or State one-stop employment
shops described in subparagraph (A), the State
shall ensure coordination between the case-
worker of each program participant and the ad-
ministrators of the programs carried out under
the provisions of law described in such subpara-
graph.
‘‘(12) PENALTIES FOR REFUSAL TO WORK.—
The amount of aid otherwise payable under the
State plan approved under part A to a family that
includes an individual who fails without good cause
to comply with a participation agreement signed by
the individual shall be reduced for 1 month by 25
percent for each act of noncompliance.
‘‘(13) PERFORMANCE STANDARDS.—The State
shall (in accordance with regulations prescribed by
the Secretary) develop standards to be used to meas-
ure the effectiveness of the programs established
under this part and part G in moving recipients of
aid under the State plan approved under part A into
full-time unsubsidized employment.
‘‘SEC. 482. REVAMPED JOBS PROGRAM.
‘‘A State that establishes a program under this part
may operate a program similar to the program known as
the ‘GAIN Program’ that has been operated by Riverside
County, California, under Federal law in effect imme-
diately before the date this part first applies to the State
of California.
‘‘SEC. 483. USE OF PLACEMENT COMPANIES.
‘‘(a) IN GENERAL.—A State that establishes a pro-
gram under this part may enter into contracts with private
companies (whether operated for profit or not for profit)
for the placement of participants in the program in posi-
tions of full-time employment, preferably in the private
sector, for wages sufficient to eliminate the need of such
participants for cash assistance.
‘‘(b) REQUIRED CONTRACT TERMS.—Each contract
entered into under this section with a company shall meet
the following requirements:
‘‘(1) PROVISION OF JOB READINESS AND SUP-
PORT
SERVICES.—The contract shall require the
company to provide, to any program participant who
presents to the company a voucher issued under sub-
section (d) intensive personalized support and job
readiness services designed to prepare the individual
for employment and ensure the continued success of
the individual in employment.
‘‘(2) PAYMENTS.—
‘‘(A) IN
GENERAL.—The contract shall
provide for payments to be made to the com-
pany with respect to each program participant
who presents to the company a voucher issued
under subsection (d).
‘‘(B) STRUCTURE.—The contract shall
provide for the majority of the amounts to be
paid under the contract with respect to a pro-
gram participant, to be paid after the company
has placed the participant in a position of full-
time employment and the participant has been
employed in the position for such period of not
less than 5 months as the State deems appro-
priate.
‘‘(c) COMPETITIVE BIDDING REQUIRED.—Contracts
under this section shall be awarded only after competitive
bidding.
‘‘(d) VOUCHERS.—The State shall issue a voucher to
each program participant whose participation agreement
provides for the use of placement companies under this
section, indicating that the participant is eligible for the
services of such a company.
‘‘SEC. 484. TEMPORARY SUBSIDIZED JOB CREATION.
‘‘A State that establishes a program under this part
may establish a program similar to the program known
as ‘JOBS Plus’ that has been operated by the State of
Oregon under Federal law in effect immediately before the
date this part first applies to the State of Oregon.
‘‘SEC. 485. MICROENTERPRISE.
‘‘(a) GRANTS AND LOANS TO NONPROFIT ORGANIZA-
TIONS FOR THE PROVISION OF TECHNICAL ASSISTANCE,
TRAINING, AND
CREDIT
TO
LOW
INCOME
ENTRE-
PRENEURS.—A State that establishes a program under
this part may make grants and loans to nonprofit organi-
zations to provide technical assistance, training, and credit
to low income entrepreneurs for the purpose of establish-
ing microenterprises.
‘‘(b) MICROENTERPRISE DEFINED.—For purposes of
this subsection, the term ‘microenterprise’ means a com-
mercial enterprise which has 5 or fewer employees, 1 or
more of whom owns the enterprise.
‘‘SEC. 486. WORK SUPPLEMENTATION PROGRAM.
‘‘(a) IN GENERAL.—A State that establishes a pro-
gram 
under 
this 
part 
may 
institute 
a 
work
supplementation program under which the State, to the
extent it considers appropriate, may reserve the sums that
would otherwise be payable to participants in the program
as aid to families with dependent children and use the
sums instead for the purpose of providing and subsidizing
jobs for the participants (as described in subsection
(c)(3)(A) and (B)), as an alternative to the aid to families
with dependent children that would otherwise be so pay-
able to the participants.
‘‘(b) STATE FLEXIBILITY.—
‘‘(1) Nothing in this part, or in any State plan
approved under part A, shall be construed to prevent
a State from operating (on such terms and condi-
tions and in such cases as the State may find to be
necessary or appropriate) a work supplementation
program in accordance with this section and section
484 (as in effect immediately before the date this
part first applies to the State).
‘‘(2) Notwithstanding section 402(a)(23) or any
other provision of law, a State may adjust the levels
of the standards of need under the State plan as the
State determines to be necessary and appropriate for
carrying out a work supplementation program under
this section.
‘‘(3) Notwithstanding section 402(a)(1) or any
other provision of law, a State operating a work
supplementation program under this section may
provide that the need standards in effect in those
areas of the State in which the program is in oper-
ation may be different from the need standards in
effect in the areas in which the program is not in
operation, and the State may provide that the need
standards for categories of recipients may vary
among such categories to the extent the State deter-
mines to be appropriate on the basis of ability to
participate in the work supplementation program.
‘‘(4) Notwithstanding any other provision of
law, a State may make such further adjustments in
the amounts of the aid to families with dependent
children paid under the plan to different categories
of recipients (as determined under paragraph (3)) in
order to offset increases in benefits from needs-relat-
ed programs (other than the State plan approved
under part A) as the State determines to be nec-
essary and appropriate to further the purposes of
the work supplementation program.
‘‘(5) In determining the amounts to be reserved
and used for providing and subsidizing jobs under
this section as described in subsection (a), the State
may use a sampling methodology.
‘‘(6) Notwithstanding section 402(a)(8) or any
other provision of law, a State operating a work
supplementation program under this section—
‘‘(A) may reduce or eliminate the amount
of earned income to be disregarded under the
State plan as the State determines to be nec-
essary and appropriate to further the purposes
of the work supplementation program; and
‘‘(B) during 1 or more of the first 9
months of an individual’s employment pursuant
to a program under this part, may apply to the
wages of the individual the provisions of sub-
paragraph (A)(iv) of section 402(a)(8) without
regard to the provisions of subparagraph
(B)(ii)(II) of such section.
‘‘(c) RULES RELATING TO SUPPLEMENTED JOBS.—
‘‘(1) A work supplementation program operated
by a State under this section may provide that any
individual who is an eligible individual (as deter-
mined under paragraph (2)) shall take a supple-
mented job (as defined in paragraph (3)) to the ex-
tent that supplemented jobs are available under the
program. Payments by the State to individuals or to
employers under the work supplementation program
shall be treated as expenditures incurred by the
State for aid to families with dependent children ex-
cept as limited by subsection (d).
‘‘(2) For purposes of this section, an eligible in-
dividual is an individual who is in a category which
the State determines should be eligible to participate
in the work supplementation program, and who
would, at the time of placement in the job involved,
be eligible for aid to families with dependent chil-
dren under an approved State plan if the State did
not have a work supplementation program in effect.
‘‘(3) For purposes of this subsection, a supple-
mented job is—
‘‘(A) a job provided to an eligible individ-
ual by the State or local agency administering
the State plan under part A; or
‘‘(B) a job provided to an eligible individ-
ual by any other employer for which all or part
of the wages are paid by the State or local
agency.
A State may provide or subsidize under the program
any job which the State determines to be appro-
priate.
‘‘(4) At the option of the State, individuals who
hold supplemented jobs under a State’s work
supplementation program shall be exempt from the
retrospective budgeting requirements imposed pursu-
ant to section 402(a)(13)(A)(ii) (and the amount of
the aid which is payable to the family of any such
individual for any month, or which would be so pay-
able but for the individual’s participation in the
work supplementation program, shall be determined
on the basis of the income and other relevant cir-
cumstances in that month).
eligible individual filling a job position provided by
another entity under the program be provided em-
ployee status by the entity during the first 13 weeks
the individual fills the position.
‘‘(2) Wages paid under a work supplementation
program shall be considered to be earned income for
purposes of any provision of law.
‘‘(f) PRESERVATION OF MEDICAID ELIGIBILITY.—
Any State that chooses to operate a work supplementation
program under this section shall provide that any individ-
ual who participates in the program, and any child or rel-
ative of the individual (or other individual living in the
same household as the individual) who would be eligible
for aid to families with dependent children under the State
plan approved under part A if the State did not have a
work supplementation program, shall be considered indi-
viduals receiving aid to families with dependent children
under the State plan approved under part A for purposes
of eligibility for medical assistance under the State plan
approved under title XIX.
‘‘(g) RELATIONSHIP TO WORK REQUIREMENTS IM-
POSED UNDER THIS PART.—No individual receiving aid
to families with dependent children under a State plan
shall be excused from any requirement of this part relating
to work requirements by reason of the fact that the State
has a work supplementation program, except during peri-
ods in which the individual is employed under the work
supplementation program.
‘‘SEC. 487. PARTICIPATION RULES.
‘‘(a) IN GENERAL.—Except as provided in sub-
sections (b) and (c), a State that establishes a program
under this part may require any individual receiving aid
under the State plan approved under part A to participate
in the program.
‘‘(b) EXEMPTIONS.—The State may not require an
individual to participate in the program if the individual—
‘‘(1) has not attained 20 years of age, and has
attended secondary school or has been engaged in
obtaining a certificate of high school equivalency;
‘‘(2) has been employed on a part-time basis,
and has been participating on a part-time basis in
technical or vocational education;
‘‘(3) has a serious health condition (as defined
in section 101(11) of the Family and Medical Leave
Act of 1993), or has been caring for a relative who
had such a condition;
‘‘(4)(A) is incapacitated, but only if the State
verifies that a physician or licensed or certified psy-
chologist has determined that the incapacitation is
due to a physical or mental impairment that pre-
vents the individual from engaging in employment or
training under the program; or
‘‘(B) is recuperating from childbirth, and a
physician has prescribed that the individual not en-
gage in such employment or training; or
‘‘(5)(A) is pregnant, obtains physical custody of
a child, or becomes a guardian of a child, during the
3-month period that ends on the date the State may
otherwise have required the individual to participate
in the program; and
‘‘(B) the 12-week period that begins with the
first day during the 3-month period that the family
member was pregnant, obtained such custody, or be-
came such a guardian has not expired.
‘‘(c) 2-YEAR LIMITATION ON PARTICIPATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), an individual may not participate in the
State program established under this part if the in-
dividual has participated in the program for 24
months after the date the individual first signed a
participation agreement under this part.
‘‘(2) AUTHORITY TO ALLOW REPEAT PARTICI-
PATION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) of this paragraph, a State may allow
an individual who, by reason of paragraph (1),
would be prohibited from participating in the
State program established under this part to
participate in the program for such additional
period or periods as the State determines ap-
propriate, if the individual has participated for
36 months in the State community service pro-
gram established under part G.
‘‘(B) LIMITATION ON PERCENTAGE OF RE-
PEAT PARTICIPANTS.—The number of individ-
uals allowed under subparagraph (A) to partici-
pate during a program year in a State program
established under this part shall not exceed 10
percent of the total number of individuals that
the Secretary projects will participate in the
program for the program year.
‘‘SEC. 488. PHASE-IN OF PARTICIPATION.
‘‘(a) INITIAL PARTICIPANTS.—Notwithstanding sec-
tion 487(a), an individual may not participate in a pro-
gram established by a State under this part unless the
individual—
‘‘(1) has not attained 25 years of age; or
‘‘(2) was participating in the State program es-
tablished under part F (as in effect immediately be-
fore the date this part first applies to the State) im-
mediately before such date.
‘‘(b) PHASE-IN OF OLDER PARTICIPANTS.—Notwith-
standing section 487(a) and subsection (a) of this section,
effective on each October 1 of each calendar year after
1996, a State that establishes a program under this
part—
‘‘(1) except as provided in paragraph (2) of this
subsection, may not allow an individual to partici-
pate in the program unless the individual has not at-
tained the age (in years) of 25, plus 2 times the
whole number of calendar years that have elapsed
since October 1, 1996; and
‘‘(2) may include in the program not more than
20 percent of the families receiving aid under the
State plan approved under part A in which the care-
taker relative has attained 25 years of age, with an
emphasis on—
‘‘(A) recipients of such aid who have re-
ceived such aid for any 36 of the preceding 60
months; and
‘‘(B) members of families in which the
youngest child is within 2 years of being ineli-
gible for aid to families with dependent children
because of age.
‘‘PART G—COMMUNITY SERVICE PROGRAM
‘‘SEC. 491. ESTABLISHMENT AND OPERATION OF PROGRAM.
‘‘(a) IN GENERAL.—A State that establishes a work
first program under part F shall establish and carry out
a community service program that meets the requirements
of this part.
‘‘(b) OBJECTIVE.—The objective of the community
service program is for each program participant to find
and hold a full-time unsubsidized paid job, and for this
goal to be achieved in a cost-effective fashion.
‘‘(c) CASE MANAGEMENT TEAMS.—The State shall
assign to each program participant a case management
team that shall meet with the participant and assist the
participant to choose the most suitable community service
job under subsection (d) and to eventually obtain a full-
time unsubsidized paid job.
‘‘(d) PROVISION OF COMMUNITY SERVICE JOB.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the State shall provide each par-
ticipant with a full-time community service job
under which the participant works a minimum of 30
hours per week and is paid at a rate equal to—
‘‘(A) the minimum wage rate in effect
under section 6 of the Fair Labor Standards
Act of 1938; or
‘‘(B) the State minimum wage rate, if such
rate is equal to or higher than the minimum
wage rate described in subparagraph (A).
‘‘(2) EXCEPTION.—(A) If the participant has
obtained unsubsidized part-time employment in the
private sector, the State shall provide the participant
with a part-time community service job.
‘‘(B) If the State provides a participant a part-
time community service job under subparagraph (A),
such State shall ensure that the total number of
hours that the participant works in a week is at
least 30 hours.
‘‘(3) WAIVER.—(A) The State may submit to
the Secretary a request for a waiver of the 30-hour
per week work requirement described in paragraph
(1) if such requirement is too financially burdensome
for the State to meet.
‘‘(B) Any waiver granted under subparagraph
(A) shall require the State—
‘‘(i) to ensure that each participant works
part-time at the community service job; and
‘‘(ii) to meet such 30-hour per week work
requirement by the year 2001.
‘‘(4) WAGES
NOT
CONSIDERED
EARNED
IN-
COME.—Wages paid under a community service pro-
gram shall not be considered to be earned income for
purposes of any provision of law.
‘‘(5) COMMUNITY SERVICE JOB DEFINED.—For
purposes of this section, the term ‘community serv-
ice job’ means—
‘‘(A) a job provided to a participant by the
State administering the State plan under part
A; or
‘‘(B) a job provided to a participant by any
other employer for which all or part of the
wages are paid by the State.
A State may provide or subsidize under the program
any job which the State determines to be appro-
priate.
‘‘(e) JOB SEARCH REQUIREMENT.—The State shall
require each participant to spend a minimum of 5 hours
per week on activities related to securing unsubsidized
full-time employment in the private sector.
‘‘(f) DURATION OF PARTICIPATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), an individual may not participate for
more than 3 years in a community service program
under this section.
‘‘(2) AUTHORITY
TO
ALLOW
REPEATED
PAR-
TICIPATION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a State may allow an individual
whose participation in the community service
program under this section has terminated, or
(but for this paragraph) would terminate, to
participate in the program for an additional pe-
riod of time, as determined by the State.
‘‘(B) LIMITATION ON PERCENTAGE OF RE-
PEAT PARTICIPANTS.—The number of individ-
uals allowed under subparagraph (A) to partici-
pate during a program year in a State program
established under this part shall not exceed 10
percent of the total number of individuals that
the Secretary projects will participate in the
program for the program year.
‘‘(g) USE OF PLACEMENT COMPANIES.—A State that
establishes a community service program under this sec-
tion may enter into contracts with private companies
(whether operated for profit or not for profit) for the
placement of participants in the program in positions of
full-time employment, preferably in the private sector, for
wages sufficient to eliminate the need of such participants
for cash assistance in accordance with section 483.
‘‘(h) TEMPORARY SUBSIDIZED JOB CREATION.—A
State that establishes a community service program under
this part may establish a program similar to the program
operated by the State of Oregon, which is known as
‘JOBS Plus’.
‘‘(i) WORK SUPPLEMENTATION PROGRAM.—
‘‘(1) IN GENERAL.—A State that establishes a
community service program under this section may
institute a work supplementation program under
which the State, to the extent it considers appro-
priate, may reserve the sums that would otherwise
be payable to participants in the program as a com-
munity service minimum wage and use the sums in-
stead for the purpose of providing and subsidizing
private sector jobs for the participants.
‘‘(2) EMPLOYER
AGREEMENT.—An employer
who provides a private sector job to a participant
under paragraph (1) shall agree to provide to the
participant an amount in wages equal to the poverty
threshold for a family of three.
‘‘(j) FAILURE TO COMPLY WITH EMPLOYABILITY
AGREEMENT OR OTHER ACT OF NONCOMPLIANCE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
if the program participant fails without good cause
to comply with an employability agreement signed by
the participant, or the participant otherwise engages
in any other act of noncompliance, the participant
shall be afforded the opportunity to change commu-
nity service jobs.
‘‘(2) MAXIMUM
OF
COMMUNITY
SERVICE
JOBS.—A program participant may not receive more
than 3 community service jobs under the program.
‘‘(3) DETERMINATION OF ACT OF NONCOMPLI-
ANCE.—For purposes of this subsection, the term
‘act of noncompliance’ shall be determined by the
State or the employer and shall include failure by
the participant to accept an offer of full-time em-
ployment in the private sector without good rea-
son.’’.
(c) FUNDING.—
(1) GENERAL RULE.—Section 403(a) of such
Act (42 U.S.C. 603(a)) is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (3); and
(B) by inserting after paragraph (3) the
following:
‘‘(4) in the case of any State, an amount equal
to the sum of 80 percent of the total amount ex-
pended during the quarter for the operation and ad-
ministration of a program under part F, in accord-
ance with the State plan approved under part F,
and 80 percent of the total amount expended during
the quarter for the operation and administration of
a community service program under part G, in ac-
cordance with the State plan approved under such
part G, except that not more than 10 percent of the
amount payable to the State under this paragraph
for the quarter may be for expenditures made with
respect 
to 
program 
participants 
who 
are
noncustodial parents and not eligible for aid under
the State plan; and’’.
(2) RULES
APPLICABLE
TO
THE
TERRI-
TORIES.—Section 403 of such Act (42 U.S.C. 603)
is amended by redesignating subsection (b) as sub-
section (c) and by inserting after subsection (a) the
following:
‘‘(b)(1) In lieu of any payment under subsection (a),
the Secretary shall pay to each State with a plan approved
under part F and to which section 1108 applies, with re-
spect to expenditures by the State to carry out a program
under part F (including expenditures for child care under
section 402(g)(1)(A)), an amount equal to—
‘‘(A) with respect to so much of such expendi-
tures in a fiscal year as do not exceed the State’s
expenditures in the fiscal year 1987 with respect to
which payments were made to such State from its
allotment for such fiscal year pursuant to part C of
this title as then in effect, 90 percent; and
‘‘(B) with respect to so much of such expendi-
tures in a fiscal year as exceed the amount described
in subparagraph (A)—
‘‘(i) 50 percent, in the case of expenditures
for administrative costs made by a State in op-
erating such a program for such fiscal year
(other than the personnel costs for staff em-
ployed full-time in the operation of such pro-
gram) and the costs of transportation and other
work-related supportive services under section
402(g)(2); and
‘‘(ii) the greater of 60 percent or the Fed-
eral medical assistance percentage (as defined
in section 1118), in the case of expenditures
made by a State in operating such a program
for such fiscal year (other than for costs de-
scribed in clause (i)).
‘‘(2) With respect to the amount for which payment
is made to a State under paragraph (1)(A), the State’s
expenditures for the costs of operating a program estab-
lished under part F may be in cash or in kind, fairly evalu-
ated.
‘‘(3) Not more than 10 percent of the amount payable
to a State under this subsection for a quarter may be for
expenditures made during the quarter with respect to pro-
gram participants who are not eligible for aid under the
State plan approved under part A.’’.
(d) ENFORCEMENT
OF
PERFORMANCE
STAND-
ARDS.—Section 403 of such Act (42 U.S.C. 603) is
amended by inserting after subsection (c) the following:
‘‘(d) If the Secretary determines that the programs
established by a State under parts F and G, as a whole,
have failed for a fiscal year to meet the performance
standards developed by the State under section 481(13),
the Secretary shall, notwithstanding subsection (a)(4) of
this section, pay to the State an amount equal to the sum
of 50 percent of the total amount expended during the
fiscal year for the operation and administration of such
programs in accordance with the State plans approved
under parts F and G.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 402(a) of the Social Security Act
(42 U.S.C. 602(a)) is amended by striking para-
graph (19).
(2) Section 402(e)(2)(C) of such Act (42
U.S.C. 602(e)(2)(C)) is amended by striking
‘‘403(b)’’ and inserting ‘‘403(c)’’.
(3) Section 403(e) of such Act (42 U.S.C.
603(e)) is amended by striking ‘‘(b)(1)’’ and insert-
ing ‘‘(c)(1)’’.
(4) Section 403 of such Act (42 U.S.C. 603) is
amended by striking subsections (k) and (l).
(5) Section 407(b)(1)(B) of such Act (42
U.S.C. 607(b)(1)(B)) is amended—
(A) by adding ‘‘and’’ at the end of clause
(iii);
(B) by striking ‘‘; and’’ at the end of
clause (iv) and inserting a period; and
(C) by striking clause (v).
(6) Section 407(b)(2)(B)(ii)(I) of such Act (42
U.S.C. 607(b)(2)(B)(ii)(I)) is amended by striking
‘‘under section 402(a)(19) or’’.
(7) Section 407(b)(2)(C) of such Act (42
U.S.C. 607(b)(2)(C)) is amended by striking ‘‘sec-
tion 402(a)(19) and’’.
(8) Section 1115(b)(2)(A) of such Act (42
U.S.C. 1315(b)(2)(A)) is amended by striking ‘‘, and
402(a)(19) (relating to the work incentive pro-
gram)’’.
(9) Section 1108 of such Act (42 U.S.C. 1308)
is amended—
(A) in subsection (a), by striking ‘‘or, in
the case of part A of title IV, section 403(k)’’;
and
(B) in subsection (d), by striking ‘‘(exclu-
sive of any amounts on account of services and
items to which, in the case of part A of such
title, section 403(k) applies)’’.
(10) Section 1902(a)(19)(A)(i)(I) of such Act
(42 U.S.C. 1396a(a)(19)(A)(i)(I)) is amended by
striking ‘‘482(e)(6)’’ and inserting ‘‘486(f)’’.
(11) Section 1928(a)(1) of such Act (42 U.S.C.
1396s(a)(1)) is amended by striking ‘‘482(e)(6)’’
and inserting ‘‘486(f)’’.
(f) INTENT OF THE CONGRESS.—The Congress in-
tends for State activities under section 484 of the Social
Security Act (as added by the amendment made by section
301(b) of this Act) to emphasize the use of the funds that
would otherwise be used to provide individuals with aid
to families with dependent children under part A of title
IV of the Social Security Act and with food stamp benefits
under the Food Stamp Act of 1977, to subsidize the wages
of such individuals in temporary jobs.
SEC. 302. REGULATIONS.
The Secretary of Health and Human Services shall
prescribe such regulations as may be necessary to imple-
ment the amendments made by this title.
SEC. 303. APPLICABILITY TO STATES.
(a) STATE OPTION TO ACCELERATE APPLICABIL-
ITY.—If a State formally notifies the Secretary of Health
and Human Services that the State desires to accelerate
the applicability to the State of the amendments made by
this title, the amendments shall apply to the State on and
after such earlier date as the State may select.
(b) STATE OPTION TO DELAY APPLICABILITY UNTIL
WAIVERS EXPIRE.—The amendments made by this title
shall not apply to a State with respect to which there is
in effect a waiver issued under section 1115 of the Social
Security Act for the State program established under part
F of title IV of such Act, until the waiver expires, if State
formally notifies the Secretary of Health and Human
Services that the State desires to so delay such effective
date.
(c) AUTHORITY OF THE SECRETARY OF HEALTH
AND HUMAN SERVICES TO DELAY APPLICABILITY TO A
STATE.—If a State formally notifies the Secretary of
Health and Human Services that the State desires to
delay the applicability to the State of the amendments
made by this title, the amendments shall apply to the
State on and after any later date agreed upon by the Sec-
retary and the State.
(d) FULL PHASE-IN.—Effective October 1, 2005, sec-
tion 488 of the Social Security Act is hereby repealed.
Subtitle B—Targeted Jobs Tax
Credit
SEC. 311. INCREASE IN MINIMUM PERIOD OF EMPLOYMENT
REQUIRED TO RECEIVE CREDIT.
(a) IN GENERAL.—Paragraph (3) of section 51(i) of
the Internal Revenue Code of 1986 (relating to certain
individuals ineligible) is amended—
(1) by striking ‘‘90 days’’ and inserting ‘‘180
days’’,
(2) by striking ‘‘14 days’’ and inserting ‘‘28
days’’,
(3) by striking ‘‘120 hours’’ and inserting ‘‘240
hours’’, and
(4) by striking ‘‘20 hours’’ and inserting ‘‘40
hours’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to individuals who
begin work for the employer after December 31, 1994.
TITLE IV—FAMILY RESPONSIBIL-
ITY AND IMPROVED CHILD
SUPPORT ENFORCEMENT
Subtitle A—Enhancement of Ability
to 
Identify 
and 
Locate
Noncustodial Parents
SEC. 401. EXPANSION OF FUNCTIONS OF FEDERAL PARENT
LOCATOR SERVICE.
(a) IN GENERAL.—Section 453 of the Social Security
Act (42 U.S.C. 653) is amended—
(1) in subsection (a), by striking ‘‘enforcing
support obligations against such parent’’ and insert-
ing ‘‘establishing parentage, establishing, modifying,
and enforcing child support obligations, and enforc-
ing child visitation rights and responsibilities, and
which shall use safeguards to prevent the disclosure
of information in cases that would jeopardize the
safety of the custodial parent or any child of the
custodial parent’’;
(2) in subsection (b), by inserting after the 2nd
sentence the following: ‘‘Information with respect to
an absent parent shall not be disclosed to any person
if the disclosure would jeopardize the safety of the
custodial parent or any child of the custodial parent.
Information with respect to an absent parent shall
not be disclosed to any person (other than the custo-
dial parent) unless the custodial parent has been no-
tified in advance of the disclosure.’’; and
(3) in subsection (d), by inserting ‘‘and such
reasonable fees’’ after ‘‘such documents’’.
(b) SENSE OF THE CONGRESS.—It is the sense of
the Congress that—
(1) the denial of visitation rights under a child
support order should be treated as irrelevant in any
action brought to enforce the support provisions of
the order; and
(2) the failure to pay child support pursuant to
a child support order should be treated as irrelevant
in any action brought to enforce visitation rights
under the order.
SEC. 402. EXPANSION OF DATA BASES ACCESSED BY PAR-
ENT LOCATOR SYSTEMS.
(a) ADDITIONAL INFORMATION FOR FEDERAL PAR-
ENT LOCATOR SERVICE.—Section 453 of the Social Secu-
rity Act (42 U.S.C. 653) is amended—
(1) in subsection (b), by striking ‘‘the most re-
cent address and place of employment’’ and insert-
ing ‘‘the most recent residential address, employer
name and address, and amounts and nature of in-
come and assets’’;
(2) in subsection (c)(3), by striking ‘‘the resi-
dent parent’’ and inserting ‘‘either parent’’; and
(3) in subsection (e), by adding at the end the
following:
‘‘(4) The Secretary of the Treasury shall enter into
an agreement with the Secretary to provide prompt access
by the Secretary (in accordance with this subsection and
section 6103(l)(6) of the Internal Revenue Code of 1986)
to the quarterly estimated Federal income tax returns
filed by individuals with the Internal Revenue Service.’’.
(b) STATE INFORMATION.—Section 466(a) of such
Act (42 U.S.C. 666(a)) is amended by inserting after
paragraph (10) the following:
‘‘(11) Procedures under which the State child
support enforcement agency shall have automated
on-line 
or 
batch 
access 
(or, 
if 
necessary,
nonautomated access) to information regarding resi-
dential addresses, employers and employer address-
es, income and assets, and medical insurance bene-
fits with respect to absent parents that is available
through any data base maintained by—
‘‘(A) any agency of the State or any politi-
cal subdivision thereof, that contains informa-
tion on residential addresses, or on employers
and employer addresses, as the State deems ap-
propriate;
‘‘(B) any publicly regulated utility com-
pany located in the State; and
‘‘(C) any credit reporting agency located in
the State.
(c) MAINTENANCE
OF
STATE
CHILD
SUPPORT
ORDER REGISTRIES.—Section 466(a) of the Social Secu-
rity Act (42 U.S.C. 666(a)), as amended by subsection
(b) of this section, is amended by inserting after para-
graph (11) the following:
‘‘(12) Procedures under which the State child
support enforcement agency shall—
‘‘(A) maintain a child support order reg-
istry which shall include a copy of each child
support order, issued or modified in the State
after the date that is 30 years before the effec-
tive date of this paragraph; and
‘‘(B) transmit a copy of each such order
electronically to the Office of Child Support En-
forcement.’’.
(d) MAINTENANCE OF FEDERAL CHILD SUPPORT
ORDER REGISTRY.—Section 452(a) of such Act (42 U.S.C
652(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(9);
(2) by striking the period at the end of the 2nd
sentence of paragraph (10) and inserting ‘‘; and’’;
and
(3) by adding at the end the following:
‘‘(11) maintain a registry of all child support
orders 
transmitted 
pursuant 
to 
section
466(a)(12)(B).’’.
(e) SENSE OF THE CONGRESS.—It is the sense of the
Congress that the Secretary of Health and Human Serv-
ices should investigate, pursuant to section 453(e) of the
Social Security Act, accessing Federal data banks that are
not linked to the Parent Locator Service which are more
than marginally useful in locating absent parents.
SEC. 403. NATIONAL PARENT LOCATOR NETWORK.
(a) ESTABLISHMENT.—Section 453 of the Social Se-
curity Act (42 U.S.C. 653) is amended by adding at the
end the following:
‘‘(g) The Secretary shall expand the Parent Locator
Service to establish a national network based on the com-
prehensive statewide child support enforcement systems
developed by the States, to—
‘‘(1) allow each State to—
‘‘(A) locate any absent parent who owes
child support, for whom a child support obliga-
tion is being established, or for whom an order
for visitation is being enforced, by—
‘‘(i) accessing the records of other
State agencies and sources of locate infor-
mation directly from one computer system
to another; and
‘‘(ii) accessing Federal sources of lo-
cate information in the same fashion;
‘‘(B) access the files of other States to de-
termine whether there are other child support
orders and obtain the details of those orders;
‘‘(C) provide for both on-line and batch
processing of locate requests, with on-line ac-
cess restricted to cases in which the information
is needed immediately (for such reasons as
court appearances) and batch processing used
to ‘troll’ data bases to locate individuals or up-
date information periodically; and
‘‘(D) direct locate requests to individual
States or Federal agencies, broadcast requests
to selected States, or broadcast cases to all
States when there is no indication of the source
of needed information;
‘‘(2) provide for a maximum of 48-hour turn-
around time for information to be broadcast and re-
turned to a requesting State;
‘‘(3) provide ready access to courts of the infor-
mation on the network by location of a computer
terminal in each court; and
‘‘(4) access the registry of child support orders
for public and private cases maintained at the State
level by the State agencies as described in section
466(a)(12).’’.
(b) EXPANDED STATE INTERACTION WITH NA-
TIONAL NETWORK.—Section 454(16) of such Act (42
U.S.C. 654(16)) is amended—
(1) by striking ‘‘and (E)’’ and inserting ‘‘(E)’’;
and
(2) by striking ‘‘enforcement;’’ and inserting
‘‘enforcement, and (F) to provide access to the na-
tional network developed pursuant to section
453(g);’’.
(c) SENSE OF THE CONGRESS.—It is the sense of the
Congress that the national network established under sec-
tion 453(g) of the Social Security Act should be used to
access State records only through the agency that admin-
isters the State plan approved under part D of title IV
of such Act.
SEC. 404. PRIVATE ACCESS TO LOCATE AND ENFORCEMENT
SERVICES.
Section 466(a) of the Social Security Act (42 U.S.C.
666(a)), as amended by section 402 of this Act, is amend-
ed by inserting after paragraph (12) the following:
‘‘(13)(A) Procedures under which private attor-
neys and pro se obligees must be given access to
State locate resources and through enforcement
techniques of the State child support enforcement
agency, for the purpose of establishing, modifying,
and enforcing child support, visitation, and parent-
age orders, in accordance with safeguards estab-
lished—
‘‘(i) to provide the custodial parent ad-
vance notice of any release of information with
respect to a noncustodial parent; and
‘‘(ii) to prevent release of information with
respect to a noncustodial parent if the release
may jeopardize the safety of the noncustodial
parent, the custodial parent, or any child of ei-
ther parent; and
‘‘(B) The procedures described in subparagraph
(A) must require the State—
‘‘(i) to develop and publish guidelines im-
plementing the safeguards described in sub-
paragraph (A); and
‘‘(ii) if the State provides for reasonable
fees for the access referred to in subparagraph
(A), to establish such fees in accordance with
guidelines developed and published by the State
that set schedules for such fees.’’.
Subtitle B—Paternity
Establishment
SEC. 411. SENSE OF THE CONGRESS.
It is the sense of the Congress that social services
should be provided in hospitals to women who have become
pregnant as a result of rape or incest.
SEC. 412. AVAILABILITY OF PARENTING SOCIAL SERVICES
FOR NEW FATHERS.
Section 466(a) of the Social Security Act (42 U.S.C.
666(a)), as amended by sections 402 and 404 of this Act,
is amended by inserting after paragraph (13) the follow-
ing:
‘‘(14) Procedures for providing new fathers
with positive parenting counseling that stresses the
importance of paying child support in a timely man-
ner, in accordance with regulations prescribed by the
Secretary.’’.
SEC. 413. AFDC BENEFITS CONDITIONED ON COOPERATION
IN IDENTIFYING NONCUSTODIAL PARENT.
(a) IN GENERAL.—Section 402(a)(26)(B) of the So-
cial Security Act (42 U.S.C. 602(a)(26)(B)) is amended—
(1) in clause (i), by inserting ‘‘unless (in ac-
cordance with regulations prescribed by the Sec-
retary, the State finds that the child was born as a
result of rape or incest), or unless the applicant or
recipient reasonably believes that such cooperation
would endanger herself or her child and dem-
onstrates such belief through such documentation as
a police report, a restraining order, or an affidavit
from a social service provider, except that, if there
is no such documentation, the State shall provide
the applicant or recipient with information about
available social service agencies that will evaluate
claims of prior or potential harm,’’ after the comma;
(2) by inserting ‘‘and, in either case, such co-
operation shall include the provision of the full
name, the last known telephone number and ad-
dress, the name of the last known employer, the
name of the closest living relative (or, if there is no
known relative, an acquaintance), and the social se-
curity account number of any noncustodial parent of
such child, and the name of any State in which any
such noncustodial parent was known to be licensed
to operate a motor vehicle,’’ before ‘‘unless’’ the 1st
place such term appears; and
(3) by inserting ‘‘, except that the applicant or
recipient shall not be found to have such good cause
unless the applicant or recipient demonstrates that
the applicant or recipient failed to obtain such infor-
mation despite an earnest attempt to do so’’ before
the 1st semicolon.
(b) SENSE OF THE CONGRESS.—It is the sense of
the Congress that States should implement methods for
the immediate verification of information provided by ap-
plicants and recipients of aid to families with dependent
children that might serve to identify and locate
noncustodial parents of the children with respect to whom
such aid is claimed.
SEC. 414. INCREASE IN PASS-THROUGH OF COLLECTED
CHILD SUPPORT TO AFDC RECIPIENTS.
(a) IN GENERAL.—Section 457(b)(1) of the Social
Security Act (42 U.S.C. 657(b)(1)) is amended by striking
‘‘$50’’ each place such term appears and inserting
‘‘$100’’.
(b) 
CONFORMING
AMENDMENT.—Section
402(a)(8)(A)(vi) of such Act (42 U.S.C. 602(a)(8)(A)(vi))
is amended by striking ‘‘$50’’ each place such term ap-
pears and inserting ‘‘$100’’.
Subtitle C—Improvement of Child
Support 
Order 
Establishment
Process
SEC. 421. NATIONAL CHILD SUPPORT GUIDELINES COMMIS-
SION.
(a) ESTABLISHMENT.—There is hereby established a
commission to be known as the ‘‘National Child Support
Guidelines Commission’’ (in this section referred to as the
‘‘Commission’’).
(b) GENERAL DUTIES.—The Commission shall con-
vene a conference to study the desirability of a national
child support guideline, and if such guideline is advisable,
the Commission shall develop for congressional consider-
ation a national child support guideline that is based on
the conference’s study of various guideline models, the de-
ficiencies of such models, and any needed improvements,
taking into consideration differences in the cost of living
in different areas of the United States. In developing such
guideline, the Commission shall consider indexing the
guideline to the cost of living, specifying minimum (rather
than maximum) amounts, or using other methodologies to
reflect such differences.
(c) MEMBERSHIP.—
(1) NUMBER; APPOINTMENT.—
(A) IN GENERAL.—The Commission shall
be composed of 9 individuals appointed jointly
by the Secretary of Health and Human Services
and the Congress, not later than January 15,
1995.
(B) 
QUALIFICATIONS
OF
MEMBERS.—
Members of the Commission shall be appointed
from among those who are able to provide ex-
pertise and experience in the evaluation and de-
velopment of child support guidelines.
(2) TERMS OF OFFICE.—Each member shall be
appointed for a term of 2 years. A vacancy in the
Commission shall be filled in the manner in which
the original appointment was made.
(d) COMMISSION POWERS, COMPENSATION, ACCESS
TO INFORMATION, AND SUPERVISION.—The first sentence
of subparagraph (C), the first and third sentences of sub-
paragraph (D), subparagraph (F) (except with respect to
the conduct of medical studies), clauses (ii) and (iii) of
subparagraph (G), and subparagraph (H) of section
1886(e)(6) of the Social Security Act shall apply to the
Commission in the same manner in which such provisions
apply to the Prospective Payment Assessment Commis-
sion.
(e) REPORT.—Not later than 2 years after the ap-
pointment of members, the Commission shall submit to
the President, the Committee on Ways and Means of the
House of Representatives, and the Committee on Finance
of the Senate, a report on the results of the study de-
scribed in subsection (b) and the final assessment by the
Commission of issues relating to a national child support
guideline.
(f) TERMINATION.—The Commission shall terminate
upon the submission of the report described in subsection
(e).
Subtitle D—Child Support
Enforcement
SEC. 431. NATIONAL REPORTING OF NEW HIRES AND CHILD
SUPPORT INFORMATION.
(a) FEDERAL IMPLEMENTATION OF SYSTEM.—
(1) IN GENERAL.—The Secretary of the Treas-
ury, in consultation with the Secretary of Labor,
shall establish a system of reporting of new employ-
ees by requiring employers to provide a copy of every
new employee’s W–4 form to the employment secu-
rity agency of the State in which the employment is
located.
(2) EXPANDED USE OF FORM.—The Secretary
of the Treasury shall modify the W–4 form to be
completed by a new employee to enable the employee
to indicate on the form—
(A) whether the employee owes child sup-
port, and if so—
(i) to whom the support is payable
and the amount of the support payable;
and
(ii) whether the support is to be paid
through wage withholding; and
(B) whether health care insurance is avail-
able to the new employee, and, if so, whether
the new employee has obtained such insurance
for the dependent children of the new employee.
(3) EMPLOYER WITHHOLDING OBLIGATION.—
(A) IN GENERAL.—Subtitle C of the Inter-
nal Revenue Code of 1986 (relating to employ-
ment taxes) is amended by inserting after chap-
ter 24 the following new chapter:
‘‘CHAPTER 24A—COLLECTION OF CHILD
SUPPORT OBLIGATIONS AT SOURCE
ON WAGES
‘‘Sec. 3411. Child support obligations collected at source.
‘‘SEC. 3411. CHILD SUPPORT OBLIGATIONS COLLECTED AT
SOURCE.
‘‘(a) REQUIREMENT OF WITHHOLDING.—Every em-
ployer making payment of wages shall deduct and with-
hold upon such wages a specified child support obligation
amount.
‘‘(b) SPECIFIED
CHILD
SUPPORT
OBLIGATION
AMOUNT.—For purposes of this chapter, the specified
child support obligation amount with respect to any em-
ployee shall be determined based on—
‘‘(1) information provided by the employee, or
(if an agency of the State in which the employer is
located notifies the employer that such information
is inaccurate) information provided by the agency;
and
‘‘(2) information contained in any wage with-
holding order received by the employer from any
State.
‘‘(c) LIABILITY FOR PAYMENT.—The employer shall
be liable for the payment of the specified child support
obligation amount to the payee identified by the employee.
‘‘(d) SPECIAL RULES.—For purposes of this chapter
(and so much of subtitle F as relates to this chapter), any
specified child support obligation amount shall be treated
as if it were a tax withheld under chapter 24 and rules
similar to the rules of such chapter shall apply.’’.
(B) CLERICAL AMENDMENT.—The table of
chapters of subtitle C of the Internal Revenue
Code of 1986 is amended by inserting after the
item relating to chapter 24 the following new
item:
‘‘CHAPTER 24A. Child support obligations collected at source.’’.
(4) WITHHELD CHILD SUPPORT OBLIGATIONS
REPORTED ON W–2 FORMS.—Subsection (a) of sec-
tion 6051 of the Internal Revenue Code of 1986 (re-
lating to receipts for employees) is amended by
striking ‘‘and’’ at the end of paragraph (8), by strik-
ing the period at the end of paragraph (9) and in-
serting ‘‘, and’’, and by inserting after paragraph
(9) the following new paragraph:
‘‘(10) the total amount of specified child sup-
port obligations withheld under section 3411.’’.
(b) STATE IMPLEMENTATION OF SYSTEM.—Section
466(a) of the Social Security Act (42 U.S.C. 666(a)), as
amended by sections 402, 404, and 412 of this Act, is
amended by inserting after paragraph (14) the following:
‘‘(15) Procedures under which the State shall—
‘‘(A) use the Parent Locator Service estab-
lished under section 453 to access information
in the national registry of child support orders
maintained pursuant to section 452(a)(11) with
respect to new employee, compare such infor-
mation with the information reported on W–4
forms of new employees, and identify child sup-
port obligations not reported on such forms;
‘‘(B) if child support information from the
W–4 form of a new employee agrees with infor-
mation with respect to the new employee in the
national registry of child support orders main-
tained pursuant to section 452(a)(11), notify
the individual owed the support (or the individ-
ual’s designee) of such information;
‘‘(C) notify an employer of any new em-
ployee who has not reported on the W–4 form
a child support obligation of the new employee,
using the wage withholding order developed
under section 452(a)(12);
‘‘(D) impose monetary penalties on—
‘‘(i) any individual who owes child
support and fails to report the obligation
to provide the support on a Federal income
tax W–4 form at time of employment;
‘‘(ii) any employer who fails to for-
ward a W–4 form for a new employee to
the State employment security agency
within 10 calendar days of the date of the
first payroll from which the new employee
is paid; and
‘‘(iii) any employer who fails to with-
hold from the pay of any new employee
who reports a child support obligation on
a W–4 form an amount equal to the sup-
port owed, or fails to pay to the individual
owed the obligation the amount so with-
held, within 10 calendar days of the date
of the payroll, using electronic funds trans-
fer, if possible, unless otherwise notified by
a State agency;
‘‘(E) provide the services described in this
paragraph to any individual owed child support
who applies for assistance under the State plan;
and
‘‘(F) on request of another State, broad-
cast over the Parent Locator Service to such
other State child support information from W–
4 forms that have been sent to the State em-
ployment security agency.’’.
(c) 
UNIFORM
WITHHOLDING
ORDER.—Section
452(a) of the Social Security Act (42 U.S.C. 652(a)), as
amended by section 402(d) of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(10);
(2) by striking the period at the end of para-
graph (11) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (11) the fol-
lowing:
‘‘(12) develop a uniform order to be used in all
cases in which income is to be withheld for the pay-
ment of child support, which shall contain the name
of the individual whose income is to be withheld, the
number of children covered by the order, and the in-
dividual or State to whom the withheld income is to
be paid, and be generic to allow for the service of
the order on all sources of income.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1995.
SEC. 432. CERTAIN BENEFITS SUBJECT TO GARNISHMENT.
(a) FEDERAL DEATH BENEFITS, BLACK LUNG BEN-
EFITS, AND VETERANS BENEFITS.—Section 462(f)(2) of
the Social Security Act (42 U.S.C. 662(f)(2)) is amended
by striking ‘‘(not including’’ and all that follows through
‘‘compensation)’’.
(b) WORKERS’ COMPENSATION.—Section 462(f) of
such Act (42 U.S.C. 662(f)) is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(1);
(2) by striking the period at the end of para-
graph (2) and inserting ‘‘, or’’; and
(3) by adding at the end the following:
‘‘(3) workers’ compensation benefits.’’.
SEC. 433. SEIZURE OF LOTTERY WINNINGS, SETTLEMENTS,
PAYOUTS, AWARDS, AND BEQUESTS, AND
SALE OF FORFEITED PROPERTY, TO PAY
CHILD SUPPORT ARREARAGES.
Section 466(a) of the Social Security Act (42 U.S.C.
666(a)), as amended by sections 402, 404, 412, and
431(b) of this Act, is amended by inserting after para-
graph (15) the following:
‘‘(16) Procedures, in addition to other income
withholding procedures, under which a lien is im-
posed against property with the following effect:
‘‘(A) The distributor of the winnings from
a State lottery or State-sanctioned or tribal-
sanctioned gambling house or casino shall—
‘‘(i) suspend payment of the winnings
from the person otherwise entitled to the
payment until an inquiry is made to and a
response is received from the State child
support enforcement agency as to whether
the person owes a child support arrearage;
and
‘‘(ii) if there is such an arrearage,
withhold from the payment the lesser of
the amount of the payment or the amount
of the arrearage, and pay the amount with-
held to the agency for distribution.
‘‘(B) The person required to make a pay-
ment under a policy of insurance or a settle-
ment of a claim made with respect to the policy
shall—
‘‘(i) suspend the payment until an in-
quiry is made to and a response received
from the agency as to whether the person
otherwise entitled to the payment owes a
child support arrearage; and
‘‘(ii) if there is such an arrearage,
withhold from the payment the lesser of
the amount of the payment or the amount
of the arrearage, and pay the amount with-
held to the agency for distribution.
‘‘(C) The payor of any amount pursuant to
an award, judgment, or settlement in any ac-
tion brought in Federal or State court shall—
‘‘(i) suspend the payment of the
amount until an inquiry is made to and a
response is received from the agency as to
whether the person otherwise entitled to
the payment owes a child support arrear-
age; and
‘‘(ii) if there is such an arrearage,
withhold from the payment the lesser of
the amount of the payment or the amount
of the arrearage, and pay the amount with-
held to the agency for distribution.
‘‘(D) If the State seizes property forfeited
to the State by an individual by reason of a
criminal conviction, the State shall—
‘‘(i) hold the property until an inquiry
is made to and a response is received from
the agency as to whether the individual
owes a child support arrearage; and
‘‘(ii) if there is such an arrearage, sell
the property and, after satisfying the
claims of all other private or public claim-
ants to the property and deducting from
the proceeds of the sale the attendant costs
(such as for towing, storage, and the sale),
pay the lesser of the remaining proceeds or
the amount of the arrearage directly to the
agency for distribution.
‘‘(E) Any person required to make a pay-
ment in respect of a decedent shall—
‘‘(i) suspend the payment until an in-
quiry is made to and a response received
from the agency as to whether the person
otherwise entitled to the payment owes a
child support arrearage; and
‘‘(ii) if there is such an arrearage,
withhold from the payment the lesser of
the amount of the payment or the amount
of the arrearage, and pay the amount with-
held to the agency for distribution.’’.
SEC. 434. REPORTING OF CHILD SUPPORT ARREARAGES TO
CREDIT BUREAUS.
Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amend-
ed—
(1) by inserting ‘‘(A)’’ after ‘‘(7)’’;
(2) by redesignating subparagraphs (A), (B),
and (C) as clauses (i), (ii), and (iii), respectively;
and
(3) by adding after and below the end the fol-
lowing:
‘‘(B) Procedures requiring any court or admin-
istrative agency of the State, at the time the court
or agency issues or modifies a child support order,
to report to each consumer reporting agency (as so
defined)—
‘‘(i) the name of the individual on whom
the order imposes an obligation to pay child
support pursuant to the order; and
‘‘(ii) the amount of the obligation.’’.
SEC. 435. LIABILITY OF GRANDPARENTS FOR FINANCIAL
SUPPORT OF CHILDREN OF THEIR MINOR
CHILDREN.
Section 466(a) of the Social Security Act (42 U.S.C.
666(a)), as amended by sections 402, 404, 412, 431(b),
and 433 of this Act, is amended by inserting after para-
graph (16) the following:
‘‘(17) Procedures under which each parent of
an individual who has not attained 18 years of age
is liable for the financial support of any child of the
individual to the extent that the individual is unable
to provide such support. The preceding sentence
shall not apply to the State if the State plan explic-
itly provides for such inapplicability.’’.
SEC. 436. SENSE OF THE CONGRESS REGARDING PRO-
GRAMS FOR NONCUSTODIAL PARENTS UN-
ABLE TO MEET CHILD SUPPORT OBLIGA-
TIONS.
It is the sense of the Congress that the States should
develop programs, such as the program of the State of
Wisconsin known as the ‘‘Children’s First Program’’, that
are designed to work with noncustodial parents who are
unable to meet their child support obligations.
TITLE V—TEEN PREGNANCY
AND FAMILY STABILITY
Subtitle A—Federal Role
SEC. 501. STATE OPTION NOT TO DENY AFDC FOR ADDI-
TIONAL CHILDREN.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)), as amended by sections 101, 102(a), 211(a), 224,
232, 243(a), and 301(a) of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(51);
(2) by striking the period at the end of para-
graph (52) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (52) the fol-
lowing:
‘‘(53)(A) provide that, notwithstanding para-
graph (7)(A), the needs of a child shall not be taken
into account in making the determination under
paragraph (7) with respect to the family of the child
if the child was born (other than as a result of rape
or incest) to a member of the family—
‘‘(i) while the family was a recipient of aid
under the State plan; or
‘‘(ii) during the 6-month period ending
with the date the family applied for such aid;
except that
‘‘(B) subparagraph (A) shall not apply to the
State if the State plan explicitly provides for such
inapplicability.’’.
SEC. 502. MINORS RECEIVING AFDC REQUIRED TO LIVE
UNDER RESPONSIBLE ADULT SUPERVISION.
Section 402(a)(43) of the Social Security Act (42
U.S.C. 602(a)(43)) is amended—
(1) by striking ‘‘at the option of the State,’’;
and
(2) by striking ‘‘18’’ and inserting ‘‘19’’.
SEC. 503. TASK FORCE TO REDUCE TEENAGE PREGNANCY.
The Secretary of Education, in conjunction with the
Secretary of Health and Human Services, shall establish
a task force to—
(1) educate children regarding the risks in-
volved in choosing parenthood at an early age;
(2) ensure that every potential parent is given
the opportunity to avoid unintended births through
reproductive family planning and education;
(3) encourage States to use funds received
under title XX of the Social Security Act for com-
prehensive services to youth in high risk areas
through community organizations, and schools; and
(4) encourage States to work with schools for
the early identification and referral of children at
risk for parenthood at an early age.
SEC. 504. INCENTIVE FOR TEEN PARENTS TO ATTEND
SCHOOL.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)), as amended by sections 101, 102(a), 211(a), 224,
232, 243(a), 301(a), and 501 of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(52);
(2) by striking the period at the end of para-
graph (53) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (53) the fol-
lowing:
‘‘(54) provide that the amount of aid otherwise
payable under the plan for a month to a family that
includes a parent who has not attained 20 years of
age and has not completed secondary school (or re-
ceived a certificate of high school equivalency) shall
be—
‘‘(A) reduced by 25 percent if, during the
immediately preceding month, the parent has
failed without good cause (as defined by the
State in consultation with the Secretary) to
maintain minimum attendance (as defined by
the State in consultation with the Secretary) at
an educational institution; or
‘‘(B) increased by 25 percent if, during the
immediately preceding month, the parent has
maintained minimum attendance (as defined by
the State in consultation with the Secretary) at
an educational institution.’’.
SEC. 505. STATE OPTION TO DISREGARD 100–HOUR RULE
UNDER AFDC–UP PROGRAM.
Section 407(a) of the Social Security Act (42 U.S.C.
607(a)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(2) by adding at the end the following:
‘‘(2) A standard prescribed pursuant to paragraph
(1) that imposes a limit on the amount of time during
which a parent who is the principal earner in a family
in which both parents are married may be employed dur-
ing a month shall not apply to a State if the State plan
under this part explicitly provides for such inapplicabil-
ity.’’.
SEC. 506. STATE OPTION TO DISREGARD 6–MONTH LIMITA-
TION ON AFDC–UP BENEFITS.
Section 407(b)(2)(B) of the Social Security Act (42
U.S.C. 607(b)(2)(B)) is amended by adding at the end
the following:
‘‘(iv) A regulation prescribed by the Secretary that
limits the length of time with respect to which a family
of a dependent child in which both parents are married
may receive aid to families with dependent children by rea-
son of this section shall not apply to a State if the State
plan under this part explicitly provides for such inapplica-
bility.’’.
SEC. 507. ELIMINATION OF QUARTERS OF COVERAGE RE-
QUIREMENT UNDER AFDC–UP PROGRAM FOR
FAMILIES IN WHICH BOTH PARENTS ARE
TEENS.
Section 407(b)(1)(A)(iii) of the Social Security Act
(42 U.S.C. 607(b)(1)(A)(iii)) is amended by striking
‘‘(iii)(I)’’ and inserting ‘‘(iii) neither of the child’s parents
have attained 20 years of age, and (I)’’.
Subtitle B—State Role
SEC. 511. TEENAGE PREGNANCY PREVENTION AND FAMILY
STABILITY.
(a) FINDINGS.—The Congress finds that—
(1) long-term welfare dependency is increasing
driven by illegitimate births;
(2) too many teens are becoming parents and
too few are able to responsibly care for and nurture
their children;
(3) new research has shown that spending time
in a single-parent family puts children at substan-
tially increased risk of dropping out of high school,
having a child out-of-wedlock, or being neither in
school nor at work; and
(4) between 1986 and 1991, the rate of births
to teens aged 15 to 19 rose 24 percent, from 50.2
to 62.1 births per 1,000 females.
(b) SENSE OF THE CONGRESS.—It is the sense of
the Congress that—
(1) children should be educated about the risks
involved in choosing parenthood at an early age;
(2) reproductive family planning and education
should be made available to every potential parent so
as to give such parents the opportunity to avoid un-
intended births;
(3) States should use funds provided under title
XX of the Social Security Act to provide comprehen-
sive services to youth in high risk neighborhoods,
through community organizations, churches, and
schools; and
(4) States should work with schools for the
early identification and referral of children at risk
for parenthood at an early age.
SEC. 512. AVAILABILITY OF FAMILY PLANNING SERVICES.
Section 402(a)(15)(A) of the Social Security Act (42
U.S.C. 602(a)(15)(A)) is amended by striking ‘‘out of
wedlock’’.
TITLE VI—PROGRAM
SIMPLIFICATION
Subtitle A—Increased State
Flexibility
SEC. 601. STATE OPTION TO PROVIDE AFDC THROUGH
ELECTRONIC BENEFIT TRANSFER SYSTEMS.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)), as amended by sections 101, 102(a), 211(a), 224,
232, 243(a), 301(a), 501, and 504 of this Act, is amend-
ed—
(1) by striking ‘‘and’’ at the end of paragraph
(53);
(2) by striking the period at the end of para-
graph (54) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (54) the fol-
lowing:
‘‘(55) at the option of the State, provide for the
payment of aid under the State plan through the use
of electronic benefit transfer systems.’’.
SEC. 602. DEADLINE FOR ACTION ON APPLICATION FOR
WAIVER OF REQUIREMENT APPLICABLE TO
PROGRAM OF AID TO FAMILIES WITH DE-
PENDENT CHILDREN.
Section 1115 of the Social Security Act (42 U.S.C.
1315) is amended by adding at the end the following:
‘‘(e) The Secretary shall approve or deny an applica-
tion for a waiver under this section with respect to a re-
quirement of section 402, not later than 90 days after the
Secretary receives the application, unless otherwise agreed
upon by the Secretary and the applicant.’’.
Subtitle B—Coordination of AFDC
and Food Stamp Programs
SEC. 611. AMENDMENTS TO PART A OF TITLE IV OF THE SO-
CIAL SECURITY ACT.
(a) STATE OPTION
TO USE INCOME
AND ELIGI-
BILITY VERIFICATION SYSTEM.—Section 1137(b) of the
Social Security Act (42 U.S.C. 1320b–7(b)) is amended—
(1) by striking paragraphs (1) and (4), and re-
designating paragraphs (2), (3), and (5) as para-
graphs (1), (2), and (3), respectively; and
(2) in paragraph (2) (as so redesignated), by
adding ‘‘or’’ at the end.
(b) STATE OPTION TO USE RETROSPECTIVE BUDG-
ETING
WITHOUT
MONTHLY
REPORTING.—Section
402(a)(13) of such Act (42 U.S.C. 602(a)(13)) is amend-
ed—
(1) by striking all that precedes subparagraph
(A) and inserting the following:
‘‘(13) provide, at the option of the State and
with respect to such category or categories as the
State may select and identify in the State plan,
that—’’; and
(2) in each of subparagraphs (A) and (B), by
striking ‘‘, in the case of families who are required
to report monthly to the State agency pursuant to
paragraph (14)’’.
(c) EXCLUSION FROM INCOME OF ALL INCOME OF
DEPENDENT
CHILD
WHO
IS
A
STUDENT.—Section
402(a)(8)(A)(i) of such Act (42 U.S.C. 602(a)(8)(A)(i))
is amended—
(1) by striking ‘‘earned’’; and
(2) by inserting ‘‘applying for or’’ before ‘‘re-
ceiving’’.
(d) EXCLUSION FROM INCOME OF ENERGY ASSIST-
ANCE
PAYMENTS
BASED
ON
NEED.—Section
402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as
amended by sections 231 and 242(b)(1) of this Act, is
amended—
(1) by striking ‘‘and’’ at the end of clause (ix);
and
(2) by adding at the end the following:
‘‘(xi) shall disregard any energy or utility-
cost assistance payment based on need, that is
paid to any member of the family under—
‘‘(I) a State or local general assist-
ance program; or
‘‘(II) another basic assistance pro-
gram comparable to general assistance (as
determined by the Secretary); and’’.
(e) APPLICABILITY TO AFDC OF FUTURE INCOME
EXCLUSIONS UNDER FOOD STAMP PROGRAM.—Section
402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as
amended by sections 231 and 242(b)(1) of this Act and
by subsection (d) of this section, is amended—
(1) by striking ‘‘and’’ at the end of clause (x);
and
100
(2) by adding at the end the following:
‘‘(xii) shall disregard from the income of
any child, relative, or other individual described
in clause (ii) applying for aid under the State
plan, any child, relative, or other individual so
described receiving such aid, or both, any funds
that a Federal statute (enacted after the date
of the enactment of this clause) excludes from
income for purposes of determining eligibility
for benefits under the food stamp program
under the Food Stamp Act of 1977, the level of
benefits under the program, or both, respec-
tively.’’.
(f) EXCLUSION OF EARNINGS FROM STATE TRAIN-
ING PROGRAMS UNDER THE JOB TRAINING PARTNER-
SHIP ACT.—Section 402(a)(8)(A)(v) of such Act (42
U.S.C. 602(a)(8)(A)(v)) is amended to read as follows:
‘‘(v) with respect to earned income from an
on-the-job training program under section
204(b)(1)(C) or 264(c)(1)(A) of the Job Train-
ing Partnership Act—
‘‘(I) shall disregard such earned in-
come received by any dependent child ap-
plying for or receiving aid to families with
dependent children; and
101
‘‘(II) notwithstanding section 142(b)
of the Job Training Partnership Act, shall
not disregard such earned income received
by any other individual (living in the same
home as the dependent child) whose needs
are taken into account in making such de-
termination;’’.
(g) USE OF FOOD STAMP PROGRAM LUMP-SUM PAY-
MENT RULE.—Section 402(a)(17) of such Act (42 U.S.C.
602(a)(17)) is amended by inserting ‘‘(excluding income
tax refunds, rebates, or credits, cash donations based on
need that are received from 1 or more private nonprofit
charitable organizations, but not in excess of $300 in the
aggregate in a quarter, retroactive lump-sum social secu-
rity or railroad retirement pension payments and retro-
active lump-sum insurance settlements)’’ after ‘‘unearned
income’’.
(h) PERIODIC REVIEWS.—Section 402(a) of such Act
(42 U.S.C. 602(a)), as amended by sections 101, 102(a),
211(a), 224, 232, 243(a), 301(a), 501, 504, and 601 of
this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(54);
(2) by striking the period at the end of para-
graph (55) and inserting ‘‘; and’’; and
102
(3) by inserting after paragraph (55) the fol-
lowing:
‘‘(56) provide that the State shall, not less fre-
quently than annually review each determination
made under the State plan with respect to the eligi-
bility of each recipient of aid under the State plan;’’.
(i) EXCLUSION FROM RESOURCES OF ESSENTIAL
EMPLOYMENT-RELATED
PROPERTY.—Section
402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)), as
amended by section 242(a) of this Act, is amended—
(1) by striking ‘‘or’’ at the end of clause (iv);
and
(2) by inserting ‘‘, or (vi) the value of real and
tangible personal property (other than currency,
commercial paper, and similar property) of a family
member that is essential to the employment or self-
employment of the member, until the expiration of
the 1-year period beginning on the date the member
ceases to be so employed or so self-employed’’ before
the semicolon.
(j) EXCLUSION FROM RESOURCES OF EQUITY IN
CERTAIN INCOME-PRODUCING REAL PROPERTY.—Sec-
tion 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)),
as amended by section 242(a) of this Act and by sub-
section (i) of this section, is amended—
103
(1) by striking ‘‘or’’ at the end of clause (v);
and
(2) by inserting ‘‘, or (vii) the equity of any
member of the family in real property to which 1 or
more members of the family have sole and clear title,
that the State agency determines is producing in-
come consistent with the fair market value of the
property’’ before the semicolon.
(k) EXCLUSION FROM RESOURCES OF LIFE INSUR-
ANCE POLICIES.—Section 402(a)(7)(B) of such Act (42
U.S.C. 602(a)(7)(B)), as amended by section 242(a) of
this Act and by subsections (i) and (j) of this section, is
amended—
(1) by striking ‘‘or’’ at the end of clause (vi);
and
(2) by inserting ‘‘, or (viii) any life insurance
policy’’ before the semicolon.
(l) EXCLUSION FROM RESOURCES OF REAL PROP-
ERTY THAT THE FAMILY IS MAKING A GOOD FAITH EF-
FORT TO SELL.—Section 402(a)(7)(B)(iii) of such Act (42
U.S.C. 602(a)(7)(B)(iii)) is amended—
(1) by striking ‘‘for such period or periods of
time as the Secretary may prescribe’’; and
104
(2) by striking ‘‘any such period’’ and inserting
‘‘any period during which the family is making such
an effort’’.
(m) PROMPT RESTORATION OF BENEFITS WRONG-
FULLY DENIED.—Section 402(a) of such Act (42 U.S.C.
602(a)), as amended by sections 101, 102(a), 211(a), 224,
232, 243(a), 301(a), 501, 504, and 601 of this Act and
by subsection (h) of this section, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(55);
(2) by striking the period at the end of para-
graph (56) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (56) the fol-
lowing:
‘‘(57) provide that, upon receipt of a request
from a family for the payment of any amount of aid
under the State plan the payment of which to the
family has been wrongfully denied or terminated, the
State shall promptly pay the amount to the family
if the wrongful denial or termination occurred not
more than 1 year before the date of the request or
the date the State agency is notified or otherwise
discovers the wrongful denial or termination.’’.
105
SEC. 612. AMENDMENTS TO THE FOOD STAMP ACT OF 1977.
(a) CERTIFICATION PERIOD.—(1) Section 3(c) of the
Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended
to read as follows:
‘‘(c) ‘Certification period’ means the period specified
by the State agency for which households shall be eligible
to receive authorization cards, except that such period
shall be—
‘‘(1) 24 months for households in which all
adult members are elderly or disabled; and
‘‘(2) not more than 12 months for all other
households.’’.
(2) Section 6(c)(1)(C) of the Food Stamp Act of
1977 (7 U.S.C. 2015(c)(1)(C)) is amended—
(A) in clause (ii) by adding ‘‘and’’ at the end;
(B) in clause (iii) by striking ‘‘; and’’ at the end
and inserting a period; and
(C) by striking clause (iv).
(b) EXCLUSION OF CERTAIN JTPA INCOME.—Sec-
tion 5(d) of the Food Stamp Act of 1977 (7 U.S.C.
2014(d)) is amended—
(1) by striking ‘‘and (16)’’ and inserting
‘‘(16)’’; and
(2) by inserting before the period the following:
106
‘‘, and (17) income received under the Job Training Part-
nership Act by a household member who is less than 19
years of age’’.
(c) EXCLUSION OF EDUCATIONAL ASSISTANCE FROM
INCOME.—Section 5(d)(3) of the Food Stamp Act of 1977
(7 U.S.C. 2014(d)(3)) is amended to read as follows: ‘‘(3)
all educational loans on which payment is deferred (includ-
ing any loan origination fees or insurance premiums asso-
ciated with such loans), grants, scholarships, fellowships,
veterans’ educational benefits, and the like awarded to a
household member enrolled at a recognized institution of
post-secondary education, at a school for the handicapped,
in a vocational education program, or in a program that
provides for completion of a secondary school diploma or
obtaining the equivalent thereof,’’.
(d) LIMITATION ON ADDITIONAL EARNED INCOME
DEDUCTION.—The 3rd sentence of section 5(e) of the
Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended
by striking ‘‘that a household’’ and all that follows
through 
‘‘report’’, 
and 
inserting 
‘‘determining 
an
overissuance due to the failure of a household to report
earned income’’.
(e) SHELTER EXPENSE DEDUCTION.—Section 5(e)
of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is
amended—
107
(1) by amending paragraph (2) of the 4th sen-
tence to read as follows:‘‘(2) a shelter expense de-
duction for the monthly amount expended by a
household for shelter’’;
(2) by striking the 5th and 6th sentences and
inserting the following:‘‘In computing the shelter ex-
pense deduction, a State may use a standard shelter
expense deduction based on the actual shelter ex-
penses incurred monthly by all households in the
State in the preceding year, except that the shelter
expense deduction shall be the actual shelter expense
incurred monthly by a household if such household
is located in public housing or verifies that it in-
curred shelter expenses monthly in excess of the
amount of such standard shelter expense.’’;
(3) in the 7th sentence by striking ‘‘excess’’;
and
(4) in the last sentence by striking ‘‘excess’’.
(f) REPEAL OF EXCESS MEDICAL EXPENSE DEDUC-
TION.—Section 5(e) of the Food Stamp Act of 1977 (7
U.S.C. 2014(e)) is amended—
(1) in the 15th sentence—
(A) by striking subparagraph (A); and
108
(B) by redesignating subparagraphs (B)
and (C) as subparagraphs (A) and (B), respec-
tively; and
(2) by striking the 16th and 17th sentences.
(g) EXCLUSION
OF ESSENTIAL EMPLOYMENT-RE-
LATED PROPERTY.—Section 5(g)(3) of the Food Stamp
Act of 1977 (7 U.S.C. 2014(g)(3)) is amended to read
as follows:
‘‘(3) The value of real and tangible personal property
(other than currency, commercial paper, and similar prop-
erty) of a household member that is essential to the em-
ployment or self-employment of such member shall be ex-
cluded by the Secretary from financial resources until the
expiration of the 1-year period beginning on the date such
member ceases to be so employed or so self-employed.’’.
(h) EXCLUSION OF LIFE INSURANCE POLICIES.—
Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C.
2014(g)) is amended by adding at the end the following:
‘‘(6) The Secretary shall exclude from financial re-
sources the cash value of any life insurance policy owned
by a member of a household.’’.
(i) IN-TANDEM EXCLUSIONS FROM INCOME.—Sec-
tion 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014)
is amended by adding at the end the following:
109
‘‘(n) Whenever a Federal statute enacted after the
date of the enactment of this Act excludes funds from in-
come for purposes of determining eligibility, benefit levels,
or both under State plans approved under part A of title
IV of the Social Security Act, then such funds shall be
excluded from income for purposes of determining eligi-
bility, benefit levels, or both, respectively, under the food
stamp program of households all of whose members re-
ceive benefits under a State plan approved under part A
of title IV of the Social Security Act.’’.
(j) REMOVAL OF DISQUALIFICATION OF STUDENTS
RECEIVING GENERAL ASSISTANCE.—Section 6(e) of the
Food Stamp Act of 1977 (7 U.S.C. 2015(e)) is amended—
(1) in paragraph (7) by striking ‘‘or’’ at the
end;
(2) in paragraph (8) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(9) is receiving general assistance under a
State or local program.’’.
(k) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall not apply with respect
to certification periods beginning before the effective date
of this section.
110
Subtitle C—Fraud Reduction
SEC. 631. SENSE OF THE CONGRESS IN SUPPORT OF THE
EFFORTS OF THE ADMINISTRATION TO AD-
DRESS 
THE 
PROBLEMS 
OF 
FRAUD 
AND
ABUSE IN THE SUPPLEMENTAL SECURITY IN-
COME PROGRAM.
The Congress hereby expresses support for the efforts
of the Social Security Administration to reduce fraud and
abuse in the supplemental security income program under
title XVI of the Social Security Act by implementing a
structured approach to disability decisionmaking that
takes into consideration the large number of disability
claims received while providing a basis for consistent, equi-
table decisionmaking by claims adjudicators at each level,
that provides for the following:
(1) A simplification of the monetary guidelines
for determining whether an individual (except those
filing for benefits based on blindness) is engaging in
substantial gainful activity.
(2) The replacement of a threshold severity re-
quirement for determining whether a claimant has a
medically determinable impairment with a threshold
inquiry as to whether the claimant has a medically
determinable physical or mental impairment that
111
can be demonstrated by acceptable clinical and lab-
oratory diagnostic techniques.
(3) The comparison of an impairment referred
to in paragraph (2) with an index of disabling im-
pairments that contains fewer impairments, has less
detail and complexity, and does not rely on the con-
cept of ‘‘medical equivalence’’.
(4)(A) The consideration of whether an individ-
ual has the ability to perform substantial gainful ac-
tivity despite any functional loss caused by a medi-
cally determinable physical or mental impairment.
(B) The definition of the physical and mental
requirements of substantial gainful activity.
(C) The objective measurement, to the extent
possible, of whether an individual meets such re-
quirements.
(D) The development, with the assistance of the
medical community and other outside experts from
disability programs, of standardized criteria which
can be used to measure an individual’s functional
ability.
(E) The assumption by the Social Security Ad-
ministration of primary responsibility for document-
ing functional ability using the standardized meas-
urement criteria, with the goal of developing func-
112
tional assessment instruments that are standardized,
accurately measure an individual’s functional abili-
ties, and are universally accepted by the public, the
advocacy community, and health care professionals.
(F) The use of the results of the standardized
functional measurement with a new standard to de-
scribe basic physical and mental demands of a base-
line of work that represents substantial gainful ac-
tivity and that exists in significant numbers in the
national economy.
(5)(A) An evaluation of whether a child is en-
gaging in substantial gainful activity, whether a
child has a medically determinable physical or men-
tal impairment that will meet the duration require-
ment, and whether a child has an impairment that
meets the criteria in the index of disabling impair-
ments.
(B) The development, with the assistance of the
medical community and educational experts, of
standardized criteria which can be used to measure
a child’s functional ability to perform a baseline of
functions that are comparable to the baseline of oc-
cupational demands for an adult.
(C) The conduct of research to specifically iden-
tify a skill acquisition threshold to measure broad
119
(B) by striking ‘‘who is not lawfully admit-
ted’’ and all that follows and inserting a period;
(2) in paragraph (2), by striking ‘‘described in
paragraph (1)’’; and
(3) by adding at the end the following new
paragraph:
‘‘(4) The limitation on payments provided under
paragraph (1) shall not apply with respect to medical as-
sistance furnished to an alien—
‘‘(A) who is 75 years of age or older and has
resided in the United States for at least 5 years; and
‘‘(B)(i) in the case of an alien who has qualified
for entry pursuant to section 207 of the Immigra-
tion and Nationality Act, during the 6-year period
beginning on the date such alien is admitted to the
United States; or
‘‘(ii) in the case of an alien who has applied for
asylum under section 208 of the Immigration and
Nationality Act, during the 6-year period beginning
on the date the alien is granted asylum.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to medical assistance furnished
during quarters beginning on or after October 1, 1995,
without regard to whether or not regulations to carry out
such amendments have been promulgated by such date.