filed in or after the first calendar quarter beginning 10
months or more after the date of the enactment of this
Act (or such earlier quarter as the State may select).
SEC. 202. TEENS RECEIVING AFDC REQUIRED TO LIVE AT
HOME.
Section 402(a)(43) of the Social Security Act (42
U.S.C. 602(a)(43)) is amended by striking ‘‘at the option
of the State,’’.
SEC. 204. INCREASE IN PATERNITY ESTABLISHMENT PER-
CENTAGE.
Section 452(g)(1) of the Social Security Act (42
U.S.C. 652(g)(1)) is amended by striking all that follows
‘‘—’’ and inserting the following:
‘‘(A) 90 percent;
‘‘(B) for a State with a paternity establishment
percentage of not less than 50 percent but less than
90 percent for such fiscal year, the paternity estab-
lishment percentage of the State for the immediately
preceding fiscal year plus 6 percentage points; or
‘‘(C) for a State with a paternity establishment
percentage of less than 50 percent for such fiscal
year, the paternity establishment percentage of the
State for the immediately preceding fiscal year plus
10 percentage points.’’.
SEC. 205. EFFECTIVE DATE.
Except as provided in section 201, the amendments
made by this title shall take effect on October 1, 1996,
and shall apply to payments under part A of title IV of
the Social Security Act for calendar quarters ending be-
ginning on or after such date.
TITLE III—EXPANSION OF STAT-
UTORY 
FLEXIBILITY 
OF
STATES
SEC. 301. OPTION TO CONVERT AFDC INTO A BLOCK GRANT
PROGRAM.
Section 403 of the Social Security Act (42 U.S.C.
603) is amended by inserting after subsection (b) the fol-
lowing:
‘‘(c)(1) Any State may elect to receive payments
under this subsection in lieu of receiving payments under
the other subsections of this section.
‘‘(2) If a State makes an election under paragraph
(1), then, in lieu of any payment under any other sub-
section of this section, the Secretary shall make payments
to the State under this subsection for each fiscal year in
an amount equal to 103 percent of the total amount to
which the State was entitled under this section for fiscal
year 1995, subject to paragraph (5).
‘‘(3) Each State to which an amount is paid under
paragraph (2) for a fiscal year shall expend the amount
to carry out any program established by the State to pro-
vide benefits to needy families with dependent children.
‘‘(4) Within 3 months after the end of each fiscal
year, each State that has made an election under para-
graph (1) shall submit to the Secretary a report that ac-
counts for all expenditures of amounts paid to the State
under this subsection for the fiscal year.
‘‘(5) The Secretary shall reduce by 20 percent the
amount that would otherwise be payable to a State under
this subsection for a fiscal year if the Secretary finds that
the State has expended any amount provided under this
subsection for any purpose other than to carry out a pro-
gram of cash benefits to needy families with children.
‘‘(6) The regulations issued with respect to State
plans and the operation of State programs under this part
(other than under this subsection) shall not apply to any
State that makes an election under paragraph (1).’’.
SEC. 302. OPTION TO DENY AFDC TO MINOR UNMARRIED
PARENTS.
(a) IN GENERAL.—Section 402(a) of the Social Secu-
rity Act (42 U.S.C. 602(a)), as amended by section
201(a)(1) of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(45);