H. R. 3734
One Hundred Fourth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, one thousand nine hundred and ninety-six
An Act
To provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution
on the budget for fiscal year 1997.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Personal Responsibility and
Work Opportunity Reconciliation Act of 1996’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY
FAMILIES
Sec. 101. Findings.
Sec. 102. Reference to Social Security Act.
Sec. 103. Block grants to States.
Sec. 104. Services provided by charitable, religious, or private organizations.
Sec. 105. Census data on grandparents as primary caregivers for their grand-
children.
Sec. 106. Report on data processing.
Sec. 107. Study on alternative outcomes measures.
Sec. 108. Conforming amendments to the Social Security Act.
Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and related pro-
visions.
Sec. 110. Conforming amendments to other laws.
Sec. 111. Development of prototype of counterfeit-resistant Social Security card re-
quired.
Sec. 112. Modifications to the job opportunities for certain low-income individuals
program.
Sec. 113. Secretarial submission of legislative proposal for technical and conforming
amendments.
Sec. 114. Assuring medicaid coverage for low-income families.
Sec. 115. Denial of assistance and benefits for certain drug-related convictions.
Sec. 116. Effective date; transition rule.
TITLE II—SUPPLEMENTAL SECURITY INCOME
Sec. 200. Reference to Social Security Act.
Subtitle A—Eligibility Restrictions
Sec. 201. Denial of SSI benefits for 10 years to individuals found to have fraudu-
lently misrepresented residence in order to obtain benefits simulta-
neously in 2 or more States.
Sec. 202. Denial of SSI benefits for fugitive felons and probation and parole viola-
tors.
Sec. 203. Treatment of prisoners.
Sec. 204. Effective date of application for benefits.
Subtitle B—Benefits for Disabled Children
Sec. 211. Definition and eligibility rules.
Sec. 212. Eligibility redeterminations and continuing disability reviews.
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Sec. 213. Additional accountability requirements.
Sec. 214. Reduction in cash benefits payable to institutionalized individuals whose
medical costs are covered by private insurance.
Sec. 215. Regulations.
Subtitle C—Additional Enforcement Provision
Sec. 221. Installment payment of large past-due supplemental security income ben-
efits.
Sec. 222. Regulations.
Subtitle D—Studies Regarding Supplemental Security Income Program
Sec. 231. Annual report on the supplemental security income program.
Sec. 232. Study by General Accounting Office.
TITLE III—CHILD SUPPORT
Sec. 300. Reference to Social Security Act.
Subtitle A—Eligibility for Services; Distribution of Payments
Sec. 301. State obligation to provide child support enforcement services.
Sec. 302. Distribution of child support collections.
Sec. 303. Privacy safeguards.
Sec. 304. Rights to notification of hearings.
Subtitle B—Locate and Case Tracking
Sec. 311. State case registry.
Sec. 312. Collection and disbursement of support payments.
Sec. 313. State directory of new hires.
Sec. 314. Amendments concerning income withholding.
Sec. 315. Locator information from interstate networks.
Sec. 316. Expansion of the Federal Parent Locator Service.
Sec. 317. Collection and use of Social Security numbers for use in child support en-
forcement.
Subtitle C—Streamlining and Uniformity of Procedures
Sec. 321. Adoption of uniform State laws.
Sec. 322. Improvements to full faith and credit for child support orders.
Sec. 323. Administrative enforcement in interstate cases.
Sec. 324. Use of forms in interstate enforcement.
Sec. 325. State laws providing expedited procedures.
Subtitle D—Paternity Establishment
Sec. 331. State laws concerning paternity establishment.
Sec. 332. Outreach for voluntary paternity establishment.
Sec. 333. Cooperation by applicants for and recipients of part A assistance.
Subtitle E—Program Administration and Funding
Sec. 341. Performance-based incentives and penalties.
Sec. 342. Federal and State reviews and audits.
Sec. 343. Required reporting procedures.
Sec. 344. Automated data processing requirements.
Sec. 345. Technical assistance.
Sec. 346. Reports and data collection by the Secretary.
Subtitle F—Establishment and Modification of Support Orders
Sec. 351. Simplified process for review and adjustment of child support orders.
Sec. 352. Furnishing consumer reports for certain purposes relating to child sup-
port.
Sec. 353. Nonliability for financial institutions providing financial records to State
child support enforcement agencies in child support cases.
Subtitle G—Enforcement of Support Orders
Sec. 361. Internal Revenue Service collection of arrearages.
Sec. 362. Authority to collect support from Federal employees.
Sec. 363. Enforcement of child support obligations of members of the Armed Forces.
Sec. 364. Voiding of fraudulent transfers.
Sec. 365. Work requirement for persons owing past-due child support.
Sec. 366. Definition of support order.
Sec. 367. Reporting arrearages to credit bureaus.
Sec. 368. Liens.
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Sec. 369. State law authorizing suspension of licenses.
Sec. 370. Denial of passports for nonpayment of child support.
Sec. 371. International support enforcement.
Sec. 372. Financial institution data matches.
Sec. 373. Enforcement of orders against paternal or maternal grandparents in
cases of minor parents.
Sec. 374. Nondischargeability in bankruptcy of certain debts for the support of a
child.
Sec. 375. Child support enforcement for Indian tribes.
Subtitle H—Medical Support
Sec. 381. Correction to ERISA definition of medical child support order.
Sec. 382. Enforcement of orders for health care coverage.
Subtitle I—Enhancing Responsibility and Opportunity for Non-Residential Parents
Sec. 391. Grants to States for access and visitation programs.
Subtitle J—Effective Dates and Conforming Amendments
Sec. 395. Effective dates and conforming amendments.
TITLE IV—RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS
Sec. 400. Statements of national policy concerning welfare and immigration.
Subtitle A—Eligibility for Federal Benefits
Sec. 401. Aliens who are not qualified aliens ineligible for Federal public benefits.
Sec. 402. Limited eligibility of qualified aliens for certain Federal programs.
Sec. 403. Five-year limited eligibility of qualified aliens for Federal means-tested
public benefit.
Sec. 404. Notification and information reporting.
Subtitle B—Eligibility for State and Local Public Benefits Programs
Sec. 411. Aliens who are not qualified aliens or nonimmigrants ineligible for State
and local public benefits.
Sec. 412. State authority to limit eligibility of qualified aliens for State public bene-
fits.
Subtitle C—Attribution of Income and Affidavits of Support
Sec. 421. Federal attribution of sponsor’s income and resources to alien.
Sec. 422. Authority for States to provide for attribution of sponsors income and re-
sources to the alien with respect to State programs.
Sec. 423. Requirements for sponsor’s affidavit of support.
Subtitle D—General Provisions
Sec. 431. Definitions.
Sec. 432. Verification of eligibility for Federal public benefits.
Sec. 433. Statutory construction.
Sec. 434. Communication between State and local government agencies and the Im-
migration and Naturalization Service.
Sec. 435. Qualifying quarters.
Subtitle E—Conforming Amendments Relating to Assisted Housing
Sec. 441. Conforming amendments relating to assisted housing.
Subtitle F—Earning Income Credit Denied to Unauthorized Employees
Sec. 451. Earned income credit denied to individuals not authorized to be employed
in the United States.
TITLE V—CHILD PROTECTION
Sec. 501. Authority of States to make foster care maintenance payments on behalf
of children in any private child care institution.
Sec. 502. Extension of enhanced match for implementation of statewide automated
child welfare information systems.
Sec. 503. National random sample study of child welfare.
Sec. 504. Redesignation of section 1123.
Sec. 505. Kinship care.
TITLE VI—CHILD CARE
Sec. 601. Short title and references.
Sec. 602. Goals.
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Sec. 603. Authorization of appropriations and entitlement authority.
Sec. 604. Lead agency.
Sec. 605. Application and plan.
Sec. 606. Limitation on State allotments.
Sec. 607. Activities to improve the quality of child care.
Sec. 608. Repeal of early childhood development and before- and after-school care
requirement.
Sec. 609. Administration and enforcement.
Sec. 610. Payments.
Sec. 611. Annual report and audits.
Sec. 612. Report by the Secretary.
Sec. 613. Allotments.
Sec. 614. Definitions.
Sec. 615. Effective date.
TITLE VII—CHILD NUTRITION PROGRAMS
Subtitle A—National School Lunch Act
Sec. 701. State disbursement to schools.
Sec. 702. Nutritional and other program requirements.
Sec. 703. Free and reduced price policy statement.
Sec. 704. Special assistance.
Sec. 705. Miscellaneous provisions and definitions.
Sec. 706. Summer food service program for children.
Sec. 707. Commodity distribution.
Sec. 708. Child and adult care food program.
Sec. 709. Pilot projects.
Sec. 710. Reduction of paperwork.
Sec. 711. Information on income eligibility.
Sec. 712. Nutrition guidance for child nutrition programs.
Subtitle B—Child Nutrition Act of 1966
Sec. 721. Special milk program.
Sec. 722. Free and reduced price policy statement.
Sec. 723. School breakfast program authorization.
Sec. 724. State administrative expenses.
Sec. 725. Regulations.
Sec. 726. Prohibitions.
Sec. 727. Miscellaneous provisions and definitions.
Sec. 728. Accounts and records.
Sec. 729. Special supplemental nutrition program for women, infants, and children.
Sec. 730. Cash grants for nutrition education.
Sec. 731. Nutrition education and training.
Subtitle C—Miscellaneous Provisions
Sec. 741. Coordination of school lunch, school breakfast, and summer food service
programs.
Sec. 742. Requirements relating to provision of benefits based on citizenship,
alienage, or immigration status under the National School Lunch Act,
the Child Nutrition Act of 1966, and certain other acts.
TITLE VIII—FOOD STAMPS AND COMMODITY DISTRIBUTION
Subtitle A—Food Stamp Program
Sec. 801. Definition of certification period.
Sec. 802. Definition of coupon.
Sec. 803. Treatment of children living at home.
Sec. 804. Adjustment of thrifty food plan.
Sec. 805. Definition of homeless individual.
Sec. 806. State option for eligibility standards.
Sec. 807. Earnings of students.
Sec. 808. Energy assistance.
Sec. 809. Deductions from income.
Sec. 810. Vehicle allowance.
Sec. 811. Vendor payments for transitional housing counted as income.
Sec. 812. Simplified calculation of income for the self-employed.
Sec. 813. Doubled penalties for violating food stamp program requirements.
Sec. 814. Disqualification of convicted individuals.
Sec. 815. Disqualification.
Sec. 816. Caretaker exemption.
Sec. 817. Employment and training.
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Sec. 818. Food stamp eligibility.
Sec. 819. Comparable treatment for disqualification.
Sec. 820. Disqualification for receipt of multiple food stamp benefits.
Sec. 821. Disqualification of fleeing felons.
Sec. 822. Cooperation with child support agencies.
Sec. 823. Disqualification relating to child support arrears.
Sec. 824. Work requirement.
Sec. 825. Encouragement of electronic benefit transfer systems.
Sec. 826. Value of minimum allotment.
Sec. 827. Benefits on recertification.
Sec. 828. Optional combined allotment for expedited households.
Sec. 829. Failure to comply with other means-tested public assistance programs.
Sec. 830. Allotments for households residing in centers.
Sec. 831. Condition precedent for approval of retail food stores and wholesale food
concerns.
Sec. 832. Authority to establish authorization periods.
Sec. 833. Information for verifying eligibility for authorization.
Sec. 834. Waiting period for stores that fail to meet authorization criteria.
Sec. 835. Operation of food stamp offices.
Sec. 836. State employee and training standards.
Sec. 837. Exchange of law enforcement information.
Sec. 838. Expedited coupon service.
Sec. 839. Withdrawing fair hearing requests.
Sec. 840. Income, eligibility, and immigration status verification systems.
Sec. 841. Investigations.
Sec. 842. Disqualification of retailers who intentionally submit falsified applica-
tions.
Sec. 843. Disqualification of retailers who are disqualified under the WIC program.
Sec. 844. Collection of overissuances.
Sec. 845. Authority to suspend stores violating program requirements pending ad-
ministrative and judicial review.
Sec. 846. Expanded criminal forfeiture for violations.
Sec. 847. Limitation on Federal match.
Sec. 848. Standards for administration.
Sec. 849. Work supplementation or support program.
Sec. 850. Waiver authority.
Sec. 851. Response to waivers.
Sec. 852. Employment initiatives program.
Sec. 853. Reauthorization.
Sec. 854. Simplified food stamp program.
Sec. 855. Study of the use of food stamps to purchase vitamins and minerals.
Sec. 856. Deficit reduction.
Subtitle B—Commodity Distribution Programs
Sec. 871. Emergency food assistance program.
Sec. 872. Food bank demonstration project.
Sec. 873. Hunger prevention programs.
Sec. 874. Report on entitlement commodity processing.
Subtitle C—Electronic Benefit Transfer Systems
Sec. 891. Provisions to encourage electronic benefit transfer systems.
TITLE IX—MISCELLANEOUS
Sec. 901. Appropriation by State legislatures.
Sec. 902. Sanctioning for testing positive for controlled substances.
Sec. 903. Elimination of housing assistance with respect to fugitive felons and pro-
bation and parole violators.
Sec. 904. Sense of the Senate regarding the inability of the noncustodial parent to
pay child support.
Sec. 905. Establishing national goals to prevent teenage pregnancies.
Sec. 906. Sense of the Senate regarding enforcement of statutory rape laws.
Sec. 907. Provisions to encourage electronic benefit transfer systems.
Sec. 908. Reduction of block grants to States for social services; use of vouchers.
Sec. 909. Rules relating to denial of earned income credit on basis of disqualified
income.
Sec. 910. Modification of adjusted gross income definition for earned income credit.
Sec. 911. Fraud under means-tested welfare and public assistance programs.
Sec. 912. Abstinence education.
Sec. 913. Change in reference.
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TITLE I—BLOCK GRANTS FOR TEM-
PORARY 
ASSISTANCE 
FOR 
NEEDY
FAMILIES
SEC. 101. FINDINGS.
The Congress makes the following findings:
(1) Marriage is the foundation of a successful society.
(2) Marriage is an essential institution of a successful
society which promotes the interests of children.
(3) Promotion of responsible fatherhood and motherhood
is integral to successful child rearing and the well-being of
children.
(4) In 1992, only 54 percent of single-parent families with
children had a child support order established and, of that
54 percent, only about one-half received the full amount due.
Of the cases enforced through the public child support enforce-
ment system, only 18 percent of the caseload has a collection.
(5) The number of individuals receiving aid to families
with dependent children (in this section referred to as ‘‘AFDC’’)
has more than tripled since 1965. More than two-thirds of
these recipients are children. Eighty-nine percent of children
receiving AFDC benefits now live in homes in which no father
is present.
(A)(i) The average monthly number of children receiv-
ing AFDC benefits—
(I) was 3,300,000 in 1965;
(II) was 6,200,000 in 1970;
(III) was 7,400,000 in 1980; and
(IV) was 9,300,000 in 1992.
(ii) While the number of children receiving AFDC bene-
fits increased nearly threefold between 1965 and 1992,
the total number of children in the United States aged
0 to 18 has declined by 5.5 percent.
(B) The Department of Health and Human Services
has estimated that 12,000,000 children will receive AFDC
benefits within 10 years.
(C) The increase in the number of children receiving
public assistance is closely related to the increase in births
to unmarried women. Between 1970 and 1991, the percent-
age of live births to unmarried women increased nearly
threefold, from 10.7 percent to 29.5 percent.
(6) The increase of out-of-wedlock pregnancies and births
is well documented as follows:
(A) It is estimated that the rate of nonmarital teen
pregnancy rose 23 percent from 54 pregnancies per 1,000
unmarried teenagers in 1976 to 66.7 pregnancies in 1991.
The overall rate of nonmarital pregnancy rose 14 percent
from 90.8 pregnancies per 1,000 unmarried women in 1980
to 103 in both 1991 and 1992. In contrast, the overall
pregnancy rate for married couples decreased 7.3 percent
between 1980 and 1991, from 126.9 pregnancies per 1,000
married women in 1980 to 117.6 pregnancies in 1991.
(B) The total of all out-of-wedlock births between 1970
and 1991 has risen from 10.7 percent to 29.5 percent and
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if the current trend continues, 50 percent of all births
by the year 2015 will be out-of-wedlock.
(7) An effective strategy to combat teenage pregnancy must
address the issue of male responsibility, including statutory
rape culpability and prevention. The increase of teenage preg-
nancies among the youngest girls is particularly severe and
is linked to predatory sexual practices by men who are signifi-
cantly older.
(A) It is estimated that in the late 1980’s, the rate
for girls age 14 and under giving birth increased 26 percent.
(B) Data indicates that at least half of the children
born to teenage mothers are fathered by adult men. Avail-
able data suggests that almost 70 percent of births to
teenage girls are fathered by men over age 20.
(C) Surveys of teen mothers have revealed that a
majority of such mothers have histories of sexual and phys-
ical abuse, primarily with older adult men.
(8) The negative consequences of an out-of-wedlock birth
on the mother, the child, the family, and society are well
documented as follows:
(A) Young women 17 and under who give birth outside
of marriage are more likely to go on public assistance
and to spend more years on welfare once enrolled. These
combined effects of ‘‘younger and longer’’ increase total
AFDC costs per household by 25 percent to 30 percent
for 17-year-olds.
(B) Children born out-of-wedlock have a substantially
higher risk of being born at a very low or moderately
low birth weight.
(C) Children born out-of-wedlock are more likely to
experience low verbal cognitive attainment, as well as more
child abuse, and neglect.
(D) Children born out-of-wedlock were more likely to
have lower cognitive scores, lower educational aspirations,
and a greater likelihood of becoming teenage parents them-
selves.
(E) Being born out-of-wedlock significantly reduces the
chances of the child growing up to have an intact marriage.
(F) Children born out-of-wedlock are 3 times more
likely to be on welfare when they grow up.
(9) Currently 35 percent of children in single-parent homes
were born out-of-wedlock, nearly the same percentage as that
of children in single-parent homes whose parents are divorced
(37 percent). While many parents find themselves, through
divorce or tragic circumstances beyond their control, facing
the difficult task of raising children alone, nevertheless, the
negative consequences of raising children in single-parent
homes are well documented as follows:
(A) Only 9 percent of married-couple families with
children under 18 years of age have income below the
national poverty level. In contrast, 46 percent of female-
headed households with children under 18 years of age
are below the national poverty level.
(B) Among single-parent families, nearly 1⁄2 of the
mothers who never married received AFDC while only
1⁄5 of divorced mothers received AFDC.
H. R. 3734—8
(C) Children born into families receiving welfare assist-
ance are 3 times more likely to be on welfare when they
reach adulthood than children not born into families receiv-
ing welfare.
(D) Mothers under 20 years of age are at the greatest
risk of bearing low birth weight babies.
(E) The younger the single-parent mother, the less
likely she is to finish high school.
(F) Young women who have children before finishing
high school are more likely to receive welfare assistance
for a longer period of time.
(G) Between 1985 and 1990, the public cost of births
to teenage mothers under the aid to families with depend-
ent children program, the food stamp program, and the
medicaid program has been estimated at $120,000,000,000.
(H) The absence of a father in the life of a child
has a negative effect on school performance and peer
adjustment.
(I) Children of teenage single parents have lower cog-
nitive scores, lower educational aspirations, and a greater
likelihood of becoming teenage parents themselves.
(J) Children of single-parent homes are 3 times more
likely to fail and repeat a year in grade school than are
children from intact 2-parent families.
(K) Children from single-parent homes are almost 4
times more likely to be expelled or suspended from school.
(L) Neighborhoods with larger percentages of youth
aged 12 through 20 and areas with higher percentages
of single-parent households have higher rates of violent
crime.
(M) Of those youth held for criminal offenses within
the State juvenile justice system, only 29.8 percent lived
primarily in a home with both parents. In contrast to
these incarcerated youth, 73.9 percent of the 62,800,000
children in the Nation’s resident population were living
with both parents.
(10) Therefore, in light of this demonstration of the crisis
in our Nation, it is the sense of the Congress that prevention
of out-of-wedlock pregnancy and reduction in out-of-wedlock
birth are very important Government interests and the policy
contained in part A of title IV of the Social Security Act (as
amended by section 103(a) of this Act) is intended to address
the crisis.
SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in this title
an amendment is expressed in terms of an amendment to or repeal
of a section or other provision, the reference shall be considered
to be made to that section or other provision of the Social Security
Act.
SEC. 103. BLOCK GRANTS TO STATES.
(a) IN GENERAL.—Part A of title IV (42 U.S.C. 601 et seq.)
is amended—
(1) by striking all that precedes section 418 (as added
by section 603(b)(2) of this Act) and inserting the following:
H. R. 3734—9
‘‘PART A—BLOCK GRANTS TO STATES FOR
TEMPORARY ASSISTANCE FOR NEEDY FAMI-
LIES
‘‘SEC. 401. PURPOSE.
‘‘(a) IN GENERAL.—The purpose of this part is to increase the
flexibility of States in operating a program designed to—
‘‘(1) provide assistance to needy families so that children
may be cared for in their own homes or in the homes of
relatives;
‘‘(2) end the dependence of needy parents on government
benefits by promoting job preparation, work, and marriage;
‘‘(3) prevent and reduce the incidence of out-of-wedlock
pregnancies and establish annual numerical goals for prevent-
ing and reducing the incidence of these pregnancies; and
‘‘(4) encourage the formation and maintenance of two-par-
ent families.
‘‘(b) NO INDIVIDUAL ENTITLEMENT.—This part shall not be inter-
preted to entitle any individual or family to assistance under any
State program funded under this part.
‘‘SEC. 402. ELIGIBLE STATES; STATE PLAN.
‘‘(a) IN GENERAL.—As used in this part, the term ‘eligible State’
means, with respect to a fiscal year, a State that, during the
2-year period immediately preceding the fiscal year, has submitted
to the Secretary a plan that the Secretary has found includes
the following:
‘‘(1) OUTLINE OF FAMILY ASSISTANCE PROGRAM.—
‘‘(A) GENERAL PROVISIONS.—A written document that
outlines how the State intends to do the following:
‘‘(i) Conduct a program, designed to serve all politi-
cal subdivisions in the State (not necessarily in a uni-
form manner), that provides assistance to needy fami-
lies with (or expecting) children and provides parents
with job preparation, work, and support services to
enable them to leave the program and become self-
sufficient.
‘‘(ii) Require a parent or caretaker receiving assist-
ance under the program to engage in work (as defined
by the State) once the State determines the parent
or caretaker is ready to engage in work, or once the
parent or caretaker has received assistance under the
program for 24 months (whether or not consecutive),
whichever is earlier.
‘‘(iii) Ensure that parents and caretakers receiving
assistance under the program engage in work activities
in accordance with section 407.
‘‘(iv) Take such reasonable steps as the State
deems necessary to restrict the use and disclosure of
information about individuals and families receiving
assistance under the program attributable to funds
provided by the Federal Government.
‘‘(v) Establish goals and take action to prevent
and reduce the incidence of out-of-wedlock pregnancies,
with special emphasis on teenage pregnancies, and
establish numerical goals for reducing the illegitimacy
H. R. 3734—10
ratio of the State (as defined in section 403(a)(2)(B))
for calendar years 1996 through 2005.
‘‘(vi) Conduct a program, designed to reach State
and local law enforcement officials, the education sys-
tem, and relevant counseling services, that provides
education and training on the problem of statutory
rape so that teenage pregnancy prevention programs
may be expanded in scope to include men.
‘‘(B) SPECIAL PROVISIONS.—
‘‘(i) The document shall indicate whether the State
intends to treat families moving into the State from
another State differently than other families under
the program, and if so, how the State intends to treat
such families under the program.
‘‘(ii) The document shall indicate whether the State
intends to provide assistance under the program to
individuals who are not citizens of the United States,
and if so, shall include an overview of such assistance.
‘‘(iii) The document shall set forth objective criteria
for the delivery of benefits and the determination of
eligibility and for fair and equitable treatment, includ-
ing an explanation of how the State will provide
opportunities for recipients who have been adversely
affected to be heard in a State administrative or appeal
process.
‘‘(iv) Not later than 1 year after the date of enact-
ment of this Act, unless the chief executive officer
of the State opts out of this provision by notifying
the Secretary, a State shall, consistent with the excep-
tion provided in section 407(e)(2), require a parent
or caretaker receiving assistance under the program
who, after receiving such assistance for 2 months is
not exempt from work requirements and is not engaged
in work, as determined under section 407(c), to partici-
pate in community service employment, with minimum
hours per week and tasks to be determined by the
State.
‘‘(2) CERTIFICATION THAT THE STATE WILL OPERATE A CHILD
SUPPORT ENFORCEMENT PROGRAM.—A certification by the chief
executive officer of the State that, during the fiscal year, the
State will operate a child support enforcement program under
the State plan approved under part D.
‘‘(3) CERTIFICATION THAT THE STATE WILL OPERATE A FOSTER
CARE AND ADOPTION ASSISTANCE PROGRAM.—A certification by
the chief executive officer of the State that, during the fiscal
year, the State will operate a foster care and adoption assist-
ance program under the State plan approved under part E,
and that the State will take such actions as are necessary
to ensure that children receiving assistance under such part
are eligible for medical assistance under the State plan under
title XIX.
‘‘(4) CERTIFICATION OF THE ADMINISTRATION OF THE PRO-
GRAM.—A certification by the chief executive officer of the State
specifying which State agency or agencies will administer and
supervise the program referred to in paragraph (1) for the
fiscal year, which shall include assurances that local govern-
ments and private sector organizations—
H. R. 3734—11
‘‘(A) have been consulted regarding the plan and design
of welfare services in the State so that services are provided
in a manner appropriate to local populations; and
‘‘(B) have had at least 45 days to submit comments
on the plan and the design of such services.
‘‘(5) CERTIFICATION THAT THE STATE WILL PROVIDE INDIANS
WITH EQUITABLE ACCESS TO ASSISTANCE.—A certification by the
chief executive officer of the State that, during the fiscal year,
the State will provide each member of an Indian tribe, who
is domiciled in the State and is not eligible for assistance
under a tribal family assistance plan approved under section
412, with equitable access to assistance under the State pro-
gram funded under this part attributable to funds provided
by the Federal Government.
‘‘(6) CERTIFICATION
OF
STANDARDS
AND
PROCEDURES
TO
ENSURE AGAINST PROGRAM FRAUD AND ABUSE.—A certification
by the chief executive officer of the State that the State has
established and is enforcing standards and procedures to ensure
against program fraud and abuse, including standards and
procedures concerning nepotism, conflicts of interest among
individuals responsible for the administration and supervision
of the State program, kickbacks, and the use of political
patronage.
‘‘(7) OPTIONAL CERTIFICATION OF STANDARDS AND PROCE-
DURES TO ENSURE THAT THE STATE WILL SCREEN FOR AND IDEN-
TIFY DOMESTIC VIOLENCE.—
‘‘(A) IN GENERAL.—At the option of the State, a certifi-
cation by the chief executive officer of the State that the
State has established and is enforcing standards and proce-
dures to—
‘‘(i) screen and identify individuals receiving assist-
ance under this part with a history of domestic violence
while 
maintaining 
the 
confidentiality 
of 
such
individuals;
‘‘(ii) refer such individuals to counseling and
supportive services; and
‘‘(iii) waive, pursuant to a determination of good
cause, other program requirements such as time limits
(for so long as necessary) for individuals receiving
assistance, residency requirements, child support
cooperation requirements, and family cap provisions,
in cases where compliance with such requirements
would make it more difficult for individuals receiving
assistance under this part to escape domestic violence
or unfairly penalize such individuals who are or have
been victimized by such violence, or individuals who
are at risk of further domestic violence.
‘‘(B) DOMESTIC
VIOLENCE
DEFINED.—For purposes of
this paragraph, the term ‘domestic violence’ has the same
meaning as the term ‘battered or subjected to extreme
cruelty’, as defined in section 408(a)(7)(C)(iii).
‘‘(b) PUBLIC AVAILABILITY OF STATE PLAN SUMMARY.—The State
shall make available to the public a summary of any plan submitted
by the State under this section.
‘‘SEC. 403. GRANTS TO STATES.
‘‘(a) GRANTS.—
H. R. 3734—12
‘‘(1) FAMILY ASSISTANCE GRANT.—
‘‘(A) IN GENERAL.—Each eligible State shall be entitled
to receive from the Secretary, for each of fiscal years 1996,
1997, 1998, 1999, 2000, 2001, and 2002, a grant in an
amount equal to the State family assistance grant.
‘‘(B) STATE
FAMILY
ASSISTANCE
GRANT
DEFINED.—As
used in this part, the term ‘State family assistance grant’
means the greatest of—
‘‘(i) 1⁄3 of the total amount required to be paid
to the State under former section 403 (as in effect
on September 30, 1995) for fiscal years 1992, 1993,
and 1994 (other than with respect to amounts expended
by the State for child care under subsection (g) or
(i) of former section 402 (as so in effect));
‘‘(ii)(I) the total amount required to be paid to
the State under former section 403 for fiscal year 1994
(other than with respect to amounts expended by the
State for child care under subsection (g) or (i) of former
section 402 (as so in effect)); plus
‘‘(II) an amount equal to 85 percent of the amount
(if any) by which the total amount required to be
paid to the State under former section 403(a)(5) for
emergency assistance for fiscal year 1995 exceeds the
total amount required to be paid to the State under
former section 403(a)(5) for fiscal year 1994, if, during
fiscal year 1994 or 1995, the Secretary approved under
former section 402 an amendment to the former State
plan with respect to the provision of emergency assist-
ance; or
‘‘(iii) 4⁄3 of the total amount required to be paid
to the State under former section 403 (as in effect
on September 30, 1995) for the 1st 3 quarters of fiscal
year 1995 (other than with respect to amounts
expended by the State under the State plan approved
under part F (as so in effect) or for child care under
subsection (g) or (i) of former section 402 (as so in
effect)), plus the total amount required to be paid to
the State for fiscal year 1995 under former section
403(l) (as so in effect).
‘‘(C) TOTAL AMOUNT REQUIRED TO BE PAID TO THE STATE
UNDER FORMER SECTION 403 DEFINED.—As used in this part,
the term ‘total amount required to be paid to the State
under former section 403’ means, with respect to a fiscal
year—
‘‘(i) in the case of a State to which section 1108
does not apply, the sum of—
‘‘(I) the Federal share of maintenance assist-
ance expenditures for the fiscal year, before reduc-
tion pursuant to subparagraph (B) or (C) of section
403(b)(2) (as in effect on September 30, 1995),
as reported by the State on ACF Form 231;
‘‘(II) the Federal share of administrative
expenditures (including administrative expendi-
tures for the development of management informa-
tion systems) for the fiscal year, as reported by
the State on ACF Form 231;
H. R. 3734—13
‘‘(III) the Federal share of emergency assist-
ance expenditures for the fiscal year, as reported
by the State on ACF Form 231;
‘‘(IV) the Federal share of expenditures for
the fiscal year with respect to child care pursuant
to subsections (g) and (i) of former section 402
(as in effect on September 30, 1995), as reported
by the State on ACF Form 231; and
‘‘(V) the Federal obligations made to the State
under section 403 for the fiscal year with respect
to the State program operated under part F (as
in effect on September 30, 1995), as determined
by the Secretary, including additional obligations
or reductions in obligations made after the close
of the fiscal year; and
‘‘(ii) in the case of a State to which section 1108
applies, the lesser of—
‘‘(I) the sum described in clause (i); or
‘‘(II) the total amount certified by the Sec-
retary under former section 403 (as in effect during
the fiscal year) with respect to the territory.
‘‘(D) INFORMATION
TO
BE
USED
IN
DETERMINING
AMOUNTS.—
‘‘(i) FOR FISCAL YEARS 1992 AND 1993.—
‘‘(I) In determining the amounts described in
subclauses (I) through (IV) of subparagraph (C)(i)
for any State for each of fiscal years 1992 and
1993, the Secretary shall use information available
as of April 28, 1995.
‘‘(II) In determining the amount described in
subparagraph (C)(i)(V) for any State for each of
fiscal years 1992 and 1993, the Secretary shall
use information available as of January 6, 1995.
‘‘(ii) FOR FISCAL YEAR 1994.—In determining the
amounts described in subparagraph (C)(i) for any State
for fiscal year 1994, the Secretary shall use information
available as of April 28, 1995.
‘‘(iii) FOR FISCAL YEAR 1995.—
‘‘(I) In determining the amount described in
subparagraph (B)(ii)(II) for any State for fiscal year
1995, the Secretary shall use the information
which was reported by the States and estimates
made by the States with respect to emergency
assistance expenditures and was available as of
August 11, 1995.
‘‘(II) In determining the amounts described in
subclauses (I) through (III) of subparagraph (C)(i)
for any State for fiscal year 1995, the Secretary
shall use information available as of October 2,
1995.
‘‘(III) In determining the amount described in
subparagraph (C)(i)(IV) for any State for fiscal year
1995, the Secretary shall use information available
as of February 28, 1996.
‘‘(IV) In determining the amount described in
subparagraph (C)(i)(V) for any State for fiscal year
H. R. 3734—14
1995, the Secretary shall use information available
as of October 5, 1995.
‘‘(E) APPROPRIATION.—Out of any money in the Treas-
ury of the United States not otherwise appropriated, there
are appropriated for fiscal years 1996, 1997, 1998, 1999,
2000, 2001, and 2002 such sums as are necessary for grants
under this paragraph.
‘‘(2) BONUS TO REWARD DECREASE IN ILLEGITIMACY.—
‘‘(A) IN GENERAL.—Each eligible State shall be entitled
to receive from the Secretary a grant for each bonus year
for which the State demonstrates a net decrease in out-
of-wedlock births.
‘‘(B) AMOUNT OF GRANT.—
‘‘(i) IF 5 ELIGIBLE STATES.—If there are 5 eligible
States for a bonus year, the amount of the grant shall
be $20,000,000.
‘‘(ii) IF FEWER THAN 5 ELIGIBLE STATES.—If there
are fewer than 5 eligible States for a bonus year,
the amount of the grant shall be $25,000,000.
‘‘(C) DEFINITIONS.—As used in this paragraph:
‘‘(i) ELIGIBLE STATE.—
‘‘(I) IN
GENERAL.—The term ‘eligible State’
means a State that the Secretary determines meets
the following requirements:
‘‘(aa) The State demonstrates that the
number of out-of-wedlock births that occurred
in the State during the most recent 2-year
period for which such information is available
decreased as compared to the number of such
births that occurred during the previous 2-
year period, and the magnitude of the decrease
for the State for the period is not exceeded
by the magnitude of the corresponding
decrease for 5 or more other States for the
period.
‘‘(bb) The rate of induced pregnancy termi-
nations in the State for the fiscal year is less
than the rate of induced pregnancy termi-
nations in the State for fiscal year 1995.
‘‘(II) DISREGARD OF CHANGES IN DATA DUE TO
CHANGED
REPORTING
METHODS.—In making the
determination required by subclause (I), the Sec-
retary shall disregard—
‘‘(aa) any difference between the number
of out-of-wedlock births that occurred in a
State for a fiscal year and the number of out-
of-wedlock births that occurred in a State for
fiscal year 1995 which is attributable to a
change in State methods of reporting data
used to calculate the number of out-of-wedlock
births; and
‘‘(bb) any difference between the rate of
induced pregnancy terminations in a State for
a fiscal year and such rate for fiscal year 1995
which is attributable to a change in State
methods of reporting data used to calculate
such rate.
H. R. 3734—15
‘‘(ii) BONUS YEAR.—The term ‘bonus year’ means
fiscal years 1999, 2000, 2001, and 2002.
‘‘(D) APPROPRIATION.—Out of any money in the Treas-
ury of the United States not otherwise appropriated, there
are appropriated for fiscal years 1999 through 2002, such
sums as are necessary for grants under this paragraph.
‘‘(3) SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN
CERTAIN STATES.—
‘‘(A) IN GENERAL.—Each qualifying State shall, subject
to subparagraph (F), be entitled to receive from the Sec-
retary—
‘‘(i) for fiscal year 1998 a grant in an amount
equal to 2.5 percent of the total amount required to
be paid to the State under former section 403 (as
in effect during fiscal year 1994) for fiscal year 1994;
and
‘‘(ii) for each of fiscal years 1999, 2000, and 2001,
a grant in an amount equal to the sum of—
‘‘(I) the amount (if any) required to be paid
to the State under this paragraph for the imme-
diately preceding fiscal year; and
‘‘(II) 2.5 percent of the sum of—
‘‘(aa) the total amount required to be paid
to the State under former section 403 (as in
effect during fiscal year 1994) for fiscal year
1994; and
‘‘(bb) the amount (if any) required to be
paid to the State under this paragraph for
the fiscal year preceding the fiscal year for
which the grant is to be made.
‘‘(B) PRESERVATION OF GRANT WITHOUT INCREASES FOR
STATES FAILING TO REMAIN QUALIFYING STATES.—Each State
that is not a qualifying State for a fiscal year specified
in subparagraph (A)(ii) but was a qualifying State for a
prior fiscal year shall, subject to subparagraph (F), be
entitled to receive from the Secretary for the specified
fiscal year, a grant in an amount equal to the amount
required to be paid to the State under this paragraph
for the most recent fiscal year for which the State was
a qualifying State.
‘‘(C) QUALIFYING STATE.—
‘‘(i) IN GENERAL.—For purposes of this paragraph,
a State is a qualifying State for a fiscal year if—
‘‘(I) the level of welfare spending per poor per-
son by the State for the immediately preceding
fiscal year is less than the national average level
of State welfare spending per poor person for such
preceding fiscal year; and
‘‘(II) the population growth rate of the State
(as determined by the Bureau of the Census) for
the most recent fiscal year for which information
is available exceeds the average population growth
rate for all States (as so determined) for such
most recent fiscal year.
‘‘(ii) STATE MUST QUALIFY IN FISCAL YEAR 1997.—
Notwithstanding clause (i), a State shall not be a
qualifying State for any fiscal year after 1998 by reason
H. R. 3734—16
of clause (i) if the State is not a qualifying State
for fiscal year 1998 by reason of clause (i).
‘‘(iii) 
CERTAIN
STATES
DEEMED
QUALIFYING
STATES.—For purposes of this paragraph, a State is
deemed to be a qualifying State for fiscal years 1998,
1999, 2000, and 2001 if—
‘‘(I) the level of welfare spending per poor per-
son by the State for fiscal year 1994 is less than
35 percent of the national average level of State
welfare spending per poor person for fiscal year
1994; or
‘‘(II) the population of the State increased by
more than 10 percent from April 1, 1990 to July
1, 1994, according to the population estimates in
publication CB94–204 of the Bureau of the Census.
‘‘(D) DEFINITIONS.—As used in this paragraph:
‘‘(i) LEVEL OF WELFARE SPENDING PER POOR PER-
SON.—The term ‘level of State welfare spending per
poor person’ means, with respect to a State and a
fiscal year—
‘‘(I) the sum of—
‘‘(aa) the total amount required to be paid
to the State under former section 403 (as in
effect during fiscal year 1994) for fiscal year
1994; and
‘‘(bb) the amount (if any) paid to the State
under this paragraph for the immediately
preceding fiscal year; divided by
‘‘(II) the number of individuals, according to
the 1990 decennial census, who were residents
of the State and whose income was below the
poverty line.
‘‘(ii) NATIONAL AVERAGE LEVEL OF STATE WELFARE
SPENDING PER POOR PERSON.—The term ‘national aver-
age level of State welfare spending per poor person’
means, with respect to a fiscal year, an amount
equal to—
‘‘(I) the total amount required to be paid to
the States under former section 403 (as in effect
during fiscal year 1994) for fiscal year 1994;
divided by
‘‘(II) the number of individuals, according to
the 1990 decennial census, who were residents
of any State and whose income was below the
poverty line.
‘‘(iii) STATE.—The term ‘State’ means each of the
50 States of the United States and the District of
Columbia.
‘‘(E) APPROPRIATION.—Out of any money in the
Treasury of the United States not otherwise appropriated,
there are appropriated for fiscal years 1998, 1999, 2000,
and 2001 such sums as are necessary for grants under
this paragraph, in a total amount not to exceed
$800,000,000.
‘‘(F) GRANTS REDUCED PRO RATA IF INSUFFICIENT APPRO-
PRIATIONS.—If the amount appropriated pursuant to this
paragraph for a fiscal year is less than the total amount
H. R. 3734—17
of payments otherwise required to be made under this
paragraph for the fiscal year, then the amount otherwise
payable to any State for the fiscal year under this para-
graph shall be reduced by a percentage equal to the amount
so appropriated divided by such total amount.
‘‘(G) 
BUDGET
SCORING.—Notwithstanding 
section
257(b)(2) of the Balanced Budget and Emergency Deficit
Control Act of 1985, the baseline shall assume that no
grant shall be made under this paragraph after fiscal year
2001.
‘‘(4) BONUS TO REWARD HIGH PERFORMANCE STATES.—
‘‘(A) IN GENERAL.—The Secretary shall make a grant
pursuant to this paragraph to each State for each bonus
year for which the State is a high performing State.
‘‘(B) AMOUNT OF GRANT.—
‘‘(i) IN
GENERAL.—Subject to clause (ii) of this
subparagraph, the Secretary shall determine the
amount of the grant payable under this paragraph
to a high performing State for a bonus year, which
shall be based on the score assigned to the State under
subparagraph (D)(i) for the fiscal year that immediately
precedes the bonus year.
‘‘(ii) LIMITATION.—The amount payable to a State
under this paragraph for a bonus year shall not exceed
5 percent of the State family assistance grant.
‘‘(C) FORMULA FOR MEASURING STATE PERFORMANCE.—
Not later than 1 year after the date of the enactment
of the Personal Responsibility and Work Opportunity Rec-
onciliation Act of 1996, the Secretary, in consultation with
the National Governors’ Association and the American Pub-
lic Welfare Association, shall develop a formula for measur-
ing State performance in operating the State program
funded under this part so as to achieve the goals set
forth in section 401(a).
‘‘(D) SCORING
OF
STATE
PERFORMANCE; SETTING
OF
PERFORMANCE THRESHOLDS.—For each bonus year, the Sec-
retary shall—
‘‘(i) use the formula developed under subparagraph
(C) to assign a score to each eligible State for the
fiscal year that immediately precedes the bonus
year; and
‘‘(ii) prescribe a performance threshold in such a
manner so as to ensure that—
‘‘(I) the average annual total amount of grants
to be made under this paragraph for each bonus
year equals $200,000,000; and
‘‘(II) the total amount of grants to be made
under this paragraph for all bonus years equals
$1,000,000,000.
‘‘(E) DEFINITIONS.—As used in this paragraph:
‘‘(i) BONUS YEAR.—The term ‘bonus year’ means
fiscal years 1999, 2000, 2001, 2002, and 2003.
‘‘(ii) HIGH
PERFORMING
STATE.—The term ‘high
performing State’ means, with respect to a bonus year,
an eligible State whose score assigned pursuant to
subparagraph (D)(i) for the fiscal year immediately
preceding the bonus year equals or exceeds the
H. R. 3734—18
performance threshold prescribed under subparagraph
(D)(ii) for such preceding fiscal year.
‘‘(F) APPROPRIATION.—Out of any money in the Treas-
ury of the United States not otherwise appropriated, there
are appropriated for fiscal years 1999 through 2003
$1,000,000,000 for grants under this paragraph.
‘‘(b) CONTINGENCY FUND.—
‘‘(1) ESTABLISHMENT.—There is hereby established in the
Treasury of the United States a fund which shall be known
as the ‘Contingency Fund for State Welfare Programs’ (in this
section referred to as the ‘Fund’).
‘‘(2) DEPOSITS INTO FUND.—Out of any money in the Treas-
ury of the United States not otherwise appropriated, there
are appropriated for fiscal years 1997, 1998, 1999, 2000, and
2001 such sums as are necessary for payment to the Fund
in a total amount not to exceed $2,000,000,000.
‘‘(3) GRANTS.—
‘‘(A) PROVISIONAL PAYMENTS.—If an eligible State sub-
mits to the Secretary a request for funds under this para-
graph during an eligible month, the Secretary shall, subject
to this paragraph, pay to the State, from amounts appro-
priated pursuant to paragraph (2), an amount equal to
the amount of funds so requested.
‘‘(B) PAYMENT
PRIORITY.—The Secretary shall make
payments under subparagraph (A) in the order in which
the Secretary receives requests for such payments.
‘‘(C) LIMITATIONS.—
‘‘(i) MONTHLY
PAYMENT
TO
A
STATE.—The total
amount paid to a single State under subparagraph
(A) during a month shall not exceed 1⁄12 of 20 percent
of the State family assistance grant.
‘‘(ii) PAYMENTS TO ALL STATES.—The total amount
paid to all States under subparagraph (A) during fiscal
years 1997 through 2001 shall not exceed the total
amount appropriated pursuant to paragraph (2).
‘‘(4) ANNUAL RECONCILIATION.—Notwithstanding paragraph
(3), at the end of each fiscal year, each State shall remit
to the Secretary an amount equal to the amount (if any) by
which the total amount paid to the State under paragraph
(3) during the fiscal year exceeds—
‘‘(A) the Federal medical assistance percentage for the
State for the fiscal year (as defined in section 1905(b),
as in effect on September 30, 1995) of the amount (if
any) by which—
‘‘(i) if the Secretary makes a payment to the State
under section 418(a)(2) in the fiscal year—
‘‘(I) the expenditures under the State program
funded under this part for the fiscal year, exclud-
ing any amounts made available by the Federal
Government (except amounts paid to the State
under paragraph (3) during the fiscal year that
have been expended by the State) and any amounts
expended by the State during the fiscal year for
child care; exceeds
‘‘(II) historic State expenditures (as defined
in section 409(a)(7)(B)(iii)), excluding the expendi-
tures by the State for child care under subsection
H. R. 3734—19
(g) or (i) of section 402 (as in effect during fiscal
year 1994) for fiscal year 1994 minus any Federal
payment with respect to such child care expendi-
tures; or
‘‘(ii) if the Secretary does not make a payment
to the State under section 418(a)(2) in the fiscal year—
‘‘(I) the expenditures under the State program
funded under this part for the fiscal year (exclud-
ing any amounts made available by the Federal
Government, except amounts paid to the State
under paragraph (3) during the fiscal year that
have been expended by the State); exceeds
‘‘(II) historic State expenditures (as defined
in section 409(a)(7)(B)(iii)); multiplied by
‘‘(B) 1⁄12 times the number of months during the fiscal
year for which the Secretary makes a payment to the
State under this subsection.
‘‘(5) ELIGIBLE MONTH.—As used in paragraph (3)(A), the
term ‘eligible month’ means, with respect to a State, a month
in the 2-month period that begins with any month for which
the State is a needy State.
‘‘(6) NEEDY STATE.—For purposes of paragraph (5), a State
is a needy State for a month if—
‘‘(A) the average rate of—
‘‘(i) total unemployment in such State (seasonally
adjusted) for the period consisting of the most recent
3 months for which data for all States are published
equals or exceeds 6.5 percent; and
‘‘(ii) total unemployment in such State (seasonally
adjusted) for the 3-month period equals or exceeds
110 percent of such average rate for either (or both)
of the corresponding 3-month periods ending in the
2 preceding calendar years; or
‘‘(B) as determined by the Secretary of Agriculture
(in the discretion of the Secretary of Agriculture), the
monthly average number of individuals (as of the last day
of each month) participating in the food stamp program
in the State in the then most recently concluded 3-month
period for which data are available exceeds by not less
than 10 percent the lesser of—
‘‘(i) the monthly average number of individuals
(as of the last day of each month) in the State that
would have participated in the food stamp program
in the corresponding 3-month period in fiscal year 1994
if the amendments made by titles IV and VIII of the
Personal Responsibility and Work Opportunity Rec-
onciliation Act of 1996 had been in effect throughout
fiscal year 1994; or
‘‘(ii) the monthly average number of individuals
(as of the last day of each month) in the State that
would have participated in the food stamp program
in the corresponding 3-month period in fiscal year 1995
if the amendments made by titles IV and VIII of the
Personal Responsibility and Work Opportunity Rec-
onciliation Act of 1996 had been in effect throughout
fiscal year 1995.
‘‘(7) OTHER TERMS DEFINED.—As used in this subsection:
H. R. 3734—20
‘‘(A) STATE.—The term ‘State’ means each of the 50
States of the United States and the District of Columbia.
‘‘(B) SECRETARY.—The term ‘Secretary’ means the Sec-
retary of the Treasury.
‘‘(8) ANNUAL REPORTS.—The Secretary shall annually report
to the Congress on the status of the Fund.
‘‘SEC. 404. USE OF GRANTS.
‘‘(a) GENERAL RULES.—Subject to this part, a State to which
a grant is made under section 403 may use the grant—
‘‘(1) in any manner that is reasonably calculated to accom-
plish the purpose of this part, including to provide low income
households with assistance in meeting home heating and cool-
ing costs; or
‘‘(2) in any manner that the State was authorized to use
amounts received under part A or F, as such parts were in
effect on September 30, 1995.
‘‘(b) LIMITATION
ON
USE
OF
GRANT
FOR
ADMINISTRATIVE
PURPOSES.—
‘‘(1) LIMITATION.—A State to which a grant is made under
section 403 shall not expend more than 15 percent of the
grant for administrative purposes.
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to the use
of a grant for information technology and computerization
needed for tracking or monitoring required by or under this
part.
‘‘(c) AUTHORITY TO TREAT INTERSTATE IMMIGRANTS UNDER
RULES OF FORMER STATE.—A State operating a program funded
under this part may apply to a family the rules (including benefit
amounts) of the program funded under this part of another State
if the family has moved to the State from the other State and
has resided in the State for less than 12 months.
‘‘(d) AUTHORITY TO USE PORTION OF GRANT FOR OTHER PUR-
POSES.—
‘‘(1) IN
GENERAL.—A State may use not more than 30
percent of the amount of any grant made to the State under
section 403(a) for a fiscal year to carry out a State program
pursuant to any or all of the following provisions of law:
‘‘(A) Title XX of this Act.
‘‘(B) The Child Care and Development Block Grant
Act of 1990.
‘‘(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX
PROGRAMS.—Notwithstanding paragraph (1), not more than 1⁄3
of the total amount paid to a State under this part for a
fiscal year that is used to carry out State programs pursuant
to provisions of law specified in paragraph (1) may be used
to carry out State programs pursuant to title XX.
‘‘(3) APPLICABLE RULES.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B) of this paragraph, any amount paid to a State under
this part that is used to carry out a State program pursuant
to a provision of law specified in paragraph (1) shall not
be subject to the requirements of this part, but shall be
subject to the requirements that apply to Federal funds
provided directly under the provision of law to carry out
the program, and the expenditure of any amount so used
H. R. 3734—21
shall not be considered to be an expenditure under this
part.
‘‘(B) EXCEPTION RELATING TO TITLE XX PROGRAMS.—
All amounts paid to a State under this part that are
used to carry out State programs pursuant to title XX
shall be used only for programs and services to children
or their families whose income is less than 200 percent
of the income official poverty line (as defined by the Office
of Management and Budget, and revised annually in
accordance with section 673(2) of the Omnibus Budget Rec-
onciliation Act of 1981) applicable to a family of the size
involved.
‘‘(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS FOR ASSIST-
ANCE.—A State may reserve amounts paid to the State under this
part for any fiscal year for the purpose of providing, without fiscal
year limitation, assistance under the State program funded under
this part.
‘‘(f) 
AUTHORITY
TO
OPERATE
EMPLOYMENT
PLACEMENT
PROGRAM.—A State to which a grant is made under section 403
may use the grant to make payments (or provide job placement
vouchers) to State-approved public and private job placement agen-
cies that provide employment placement services to individuals
who receive assistance under the State program funded under this
part.
‘‘(g) IMPLEMENTATION
OF
ELECTRONIC
BENEFIT
TRANSFER
SYSTEM.—A State to which a grant is made under section 403
is encouraged to implement an electronic benefit transfer system
for providing assistance under the State program funded under
this part, and may use the grant for such purpose.
‘‘(h) USE OF FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS.—
‘‘(1) IN GENERAL.—A State to which a grant is made under
section 403 may use the grant to carry out a program to
fund individual development accounts (as defined in paragraph
(2)) established by individuals eligible for assistance under
the State program funded under this part.
‘‘(2) INDIVIDUAL DEVELOPMENT ACCOUNTS.—
‘‘(A) ESTABLISHMENT.—Under a State program carried
out under paragraph (1), an individual development
account may be established by or on behalf of an individual
eligible for assistance under the State program operated
under this part for the purpose of enabling the individual
to accumulate funds for a qualified purpose described in
subparagraph (B).
‘‘(B) 
QUALIFIED
PURPOSE.—A 
qualified 
purpose
described in this subparagraph is 1 or more of the following,
as provided by the qualified entity providing assistance
to the individual under this subsection:
‘‘(i) POSTSECONDARY
EDUCATIONAL
EXPENSES.—
Postsecondary educational expenses paid from an
individual development account directly to an eligible
educational institution.
‘‘(ii) FIRST HOME PURCHASE.—Qualified acquisition
costs with respect to a qualified principal residence
for a qualified first-time homebuyer, if paid from an
individual development account directly to the persons
to whom the amounts are due.
H. R. 3734—22
‘‘(iii) BUSINESS
CAPITALIZATION.—Amounts paid
from an individual development account directly to
a business capitalization account which is established
in a federally insured financial institution and is
restricted to use solely for qualified business capitaliza-
tion expenses.
‘‘(C) CONTRIBUTIONS TO BE FROM EARNED INCOME.—
An individual may only contribute to an individual develop-
ment account such amounts as are derived from earned
income, as defined in section 911(d)(2) of the Internal Reve-
nue Code of 1986.
‘‘(D) WITHDRAWAL
OF
FUNDS.—The Secretary shall
establish such regulations as may be necessary to ensure
that funds held in an individual development account are
not withdrawn except for 1 or more of the qualified pur-
poses described in subparagraph (B).
‘‘(3) REQUIREMENTS.—
‘‘(A) IN GENERAL.—An individual development account
established under this subsection shall be a trust created
or organized in the United States and funded through
periodic contributions by the establishing individual and
matched by or through a qualified entity for a qualified
purpose (as described in paragraph (2)(B)).
‘‘(B) QUALIFIED ENTITY.—As used in this subsection,
the term ‘qualified entity’ means—
‘‘(i) a not-for-profit organization described in sec-
tion 501(c)(3) of the Internal Revenue Code of 1986
and exempt from taxation under section 501(a) of such
Code; or
‘‘(ii) a State or local government agency acting
in cooperation with an organization described in
clause (i).
‘‘(4) NO
REDUCTION
IN
BENEFITS.—Notwithstanding any
other provision of Federal law (other than the Internal Revenue
Code of 1986) that requires consideration of 1 or more financial
circumstances of an individual, for the purpose of determining
eligibility to receive, or the amount of, any assistance or benefit
authorized by such law to be provided to or for the benefit
of such individual, funds (including interest accruing) in an
individual development account under this subsection shall be
disregarded for such purpose with respect to any period during
which such individual maintains or makes contributions into
such an account.
‘‘(5) DEFINITIONS.—As used in this subsection—
‘‘(A) ELIGIBLE
EDUCATIONAL
INSTITUTION.—The term
‘eligible educational institution’ means the following:
‘‘(i) An institution described in section 481(a)(1)
or 1201(a) of the Higher Education Act of 1965 (20
U.S.C. 1088(a)(1) or 1141(a)), as such sections are in
effect on the date of the enactment of this subsection.
‘‘(ii) An area vocational education school (as
defined in subparagraph (C) or (D) of section 521(4)
of the Carl D. Perkins Vocational and Applied Tech-
nology Education Act (20 U.S.C. 2471(4))) which is
in any State (as defined in section 521(33) of such
Act), as such sections are in effect on the date of
the enactment of this subsection.
H. R. 3734—23
‘‘(B) POST-SECONDARY
EDUCATIONAL
EXPENSES.—The
term ‘post-secondary educational expenses’ means—
‘‘(i) tuition and fees required for the enrollment
or attendance of a student at an eligible educational
institution, and
‘‘(ii) fees, books, supplies, and equipment required
for courses of instruction at an eligible educational
institution.
‘‘(C) QUALIFIED ACQUISITION COSTS.—The term ‘quali-
fied acquisition costs’ means the costs of acquiring, con-
structing, or reconstructing a residence. The term includes
any usual or reasonable settlement, financing, or other
closing costs.
‘‘(D) QUALIFIED BUSINESS.—The term ‘qualified busi-
ness’ means any business that does not contravene any
law or public policy (as determined by the Secretary).
‘‘(E) QUALIFIED BUSINESS CAPITALIZATION EXPENSES.—
The term ‘qualified business capitalization expenses’ means
qualified expenditures for the capitalization of a qualified
business pursuant to a qualified plan.
‘‘(F) QUALIFIED
EXPENDITURES.—The term ‘qualified
expenditures’ means expenditures included in a qualified
plan, including capital, plant, equipment, working capital,
and inventory expenses.
‘‘(G) QUALIFIED FIRST-TIME HOMEBUYER.—
‘‘(i) IN
GENERAL.—The term ‘qualified first-time
homebuyer’ means a taxpayer (and, if married, the
taxpayer’s spouse) who has no present ownership
interest in a principal residence during the 3-year
period ending on the date of acquisition of the principal
residence to which this subsection applies.
‘‘(ii) DATE
OF
ACQUISITION.—The term ‘date of
acquisition’ means the date on which a binding contract
to acquire, construct, or reconstruct the principal resi-
dence to which this subparagraph applies is entered
into.
‘‘(H) QUALIFIED PLAN.—The term ‘qualified plan’ means
a business plan which—
‘‘(i) is approved by a financial institution, or by
a nonprofit loan fund having demonstrated fiduciary
integrity,
‘‘(ii) includes a description of services or goods
to be sold, a marketing plan, and projected financial
statements, and
‘‘(iii) may require the eligible individual to obtain
the assistance of an experienced entrepreneurial
advisor.
‘‘(I) QUALIFIED PRINCIPAL RESIDENCE.—The term ‘quali-
fied principal residence’ means a principal residence (within
the meaning of section 1034 of the Internal Revenue Code
of 1986), the qualified acquisition costs of which do not
exceed 100 percent of the average area purchase price
applicable to such residence (determined in accordance with
paragraphs (2) and (3) of section 143(e) of such Code).
‘‘(i) SANCTION WELFARE RECIPIENTS FOR FAILING TO ENSURE
THAT MINOR DEPENDENT CHILDREN ATTEND SCHOOL.—A State to
which a grant is made under section 403 shall not be prohibited
H. R. 3734—24
from sanctioning a family that includes an adult who has received
assistance under any State program funded under this part attrib-
utable to funds provided by the Federal Government or under
the food stamp program, as defined in section 3(h) of the Food
Stamp Act of 1977, if such adult fails to ensure that the minor
dependent children of such adult attend school as required by
the law of the State in which the minor children reside.
‘‘(j) REQUIREMENT
FOR HIGH SCHOOL DIPLOMA
OR EQUIVA-
LENT.—A State to which a grant is made under section 403 shall
not be prohibited from sanctioning a family that includes an adult
who is older than age 20 and younger than age 51 and who has
received assistance under any State program funded under this
part attributable to funds provided by the Federal Government
or under the food stamp program, as defined in section 3(h) of
the Food Stamp Act of 1977, if such adult does not have, or is
not working toward attaining, a secondary school diploma or its
recognized equivalent unless such adult has been determined in
the judgment of medical, psychiatric, or other appropriate profes-
sionals to lack the requisite capacity to complete successfully a
course of study that would lead to a secondary school diploma
or its recognized equivalent.
‘‘SEC. 405. ADMINISTRATIVE PROVISIONS.
‘‘(a) QUARTERLY.—The Secretary shall pay each grant payable
to a State under section 403 in quarterly installments, subject
to this section.
‘‘(b) NOTIFICATION.—Not later than 3 months before the pay-
ment of any such quarterly installment to a State, the Secretary
shall notify the State of the amount of any reduction determined
under section 412(a)(1)(B) with respect to the State.
‘‘(c) COMPUTATION
AND
CERTIFICATION
OF
PAYMENTS
TO
STATES.—
‘‘(1) COMPUTATION.—The Secretary shall estimate the
amount to be paid to each eligible State for each quarter
under this part, such estimate to be based on a report filed
by the State containing an estimate by the State of the total
sum to be expended by the State in the quarter under the
State program funded under this part and such other informa-
tion as the Secretary may find necessary.
‘‘(2) CERTIFICATION.—The Secretary of Health and Human
Services shall certify to the Secretary of the Treasury the
amount estimated under paragraph (1) with respect to a State,
reduced or increased to the extent of any overpayment or under-
payment which the Secretary of Health and Human Services
determines was made under this part to the State for any
prior quarter and with respect to which adjustment has not
been made under this paragraph.
‘‘(d) PAYMENT METHOD.—Upon receipt of a certification under
subsection (c)(2) with respect to a State, the Secretary of the Treas-
ury shall, through the Fiscal Service of the Department of the
Treasury and before audit or settlement by the General Accounting
Office, pay to the State, at the time or times fixed by the Secretary
of Health and Human Services, the amount so certified.
‘‘SEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS.
‘‘(a) LOAN AUTHORITY.—
H. R. 3734—25
‘‘(1) IN GENERAL.—The Secretary shall make loans to any
loan-eligible State, for a period to maturity of not more than
3 years.
‘‘(2) LOAN-ELIGIBLE STATE.—As used in paragraph (1), the
term ‘loan-eligible State’ means a State against which a penalty
has not been imposed under section 409(a)(1).
‘‘(b) RATE OF INTEREST.—The Secretary shall charge and collect
interest on any loan made under this section at a rate equal
to the current average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity
comparable to the period to maturity of the loan.
‘‘(c) USE
OF LOAN.—A State shall use a loan made to the
State under this section only for any purpose for which grant
amounts received by the State under section 403(a) may be used,
including—
‘‘(1) welfare anti-fraud activities; and
‘‘(2) the provision of assistance under the State program
to Indian families that have moved from the service area of
an Indian tribe with a tribal family assistance plan approved
under section 412.
‘‘(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO A STATE.—
The cumulative dollar amount of all loans made to a State under
this section during fiscal years 1997 through 2002 shall not exceed
10 percent of the State family assistance grant.
‘‘(e) LIMITATION ON TOTAL AMOUNT OF OUTSTANDING LOANS.—
The total dollar amount of loans outstanding under this section
may not exceed $1,700,000,000.
‘‘(f) APPROPRIATION.—Out of any money in the Treasury of
the United States not otherwise appropriated, there are appro-
priated such sums as may be necessary for the cost of loans under
this section.
‘‘SEC. 407. MANDATORY WORK REQUIREMENTS.
‘‘(a) PARTICIPATION RATE REQUIREMENTS.—
‘‘(1) ALL
FAMILIES.—A State to which a grant is made
under section 403 for a fiscal year shall achieve the minimum
participation rate specified in the following table for the fiscal
year with respect to all families receiving assistance under
the State program funded under this part:
The minimum
participation
‘‘If the fiscal year is:
rate is:
1997 ...................................................................................
1998 ...................................................................................
1999 ...................................................................................
2000 ...................................................................................
2001 ...................................................................................
2002 or thereafter ............................................................
50.
‘‘(2) 2-PARENT FAMILIES.—A State to which a grant is made
under section 403 for a fiscal year shall achieve the minimum
participation rate specified in the following table for the fiscal
year with respect to 2-parent families receiving assistance
under the State program funded under this part:
The minimum
participation
‘‘If the fiscal year is:
rate is:
1997 ...................................................................................
1998 ...................................................................................
1999 or thereafter ............................................................
90.
H. R. 3734—26
‘‘(b) CALCULATION OF PARTICIPATION RATES.—
‘‘(1) ALL FAMILIES.—
‘‘(A) AVERAGE MONTHLY RATE.—For purposes of sub-
section (a)(1), the participation rate for all families of a
State for a fiscal year is the average of the participation
rates for all families of the State for each month in the
fiscal year.
‘‘(B) MONTHLY PARTICIPATION RATES.—The participa-
tion rate of a State for all families of the State for a
month, expressed as a percentage, is—
‘‘(i) the number of families receiving assistance
under the State program funded under this part that
include an adult or a minor child head of household
who is engaged in work for the month; divided by
‘‘(ii) the amount by which—
‘‘(I) the number of families receiving such
assistance during the month that include an adult
or a minor child head of household receiving such
assistance; exceeds
‘‘(II) the number of families receiving such
assistance that are subject in such month to a
penalty described in subsection (e)(1) but have not
been subject to such penalty for more than 3
months within the preceding 12-month period
(whether or not consecutive).
‘‘(2) 2-PARENT FAMILIES.—
‘‘(A) AVERAGE MONTHLY RATE.—For purposes of sub-
section (a)(2), the participation rate for 2-parent families
of a State for a fiscal year is the average of the participation
rates for 2-parent families of the State for each month
in the fiscal year.
‘‘(B) MONTHLY PARTICIPATION RATES.—The participa-
tion rate of a State for 2-parent families of the State
for a month shall be calculated by use of the formula
set forth in paragraph (1)(B), except that in the formula
the term ‘number of 2-parent families’ shall be substituted
for the term ‘number of families’ each place such latter
term appears.
‘‘(3) PRO RATA REDUCTION OF PARTICIPATION RATE DUE TO
CASELOAD REDUCTIONS NOT REQUIRED BY FEDERAL LAW.—
‘‘(A) IN GENERAL.—The Secretary shall prescribe regu-
lations for reducing the minimum participation rate other-
wise required by this section for a fiscal year by the number
of percentage points equal to the number of percentage
points (if any) by which—
‘‘(i) the average monthly number of families receiv-
ing assistance during the immediately preceding fiscal
year under the State program funded under this part
is less than
‘‘(ii) the average monthly number of families that
received aid under the State plan approved under part
A (as in effect on September 30, 1995) during fiscal
year 1995.
The minimum participation rate shall not be reduced to
the extent that the Secretary determines that the reduction
in the number of families receiving such assistance is
required by Federal law.
H. R. 3734—27
‘‘(B) ELIGIBILITY CHANGES NOT COUNTED.—The regula-
tions required by subparagraph (A) shall not take into
account families that are diverted from a State program
funded under this part as a result of differences in eligi-
bility criteria under a State program funded under this
part and eligibility criteria under the State program oper-
ated under the State plan approved under part A (as such
plan and such part were in effect on September 30, 1995).
Such regulations shall place the burden on the Secretary
to prove that such families were diverted as a direct result
of differences in such eligibility criteria.
‘‘(4) STATE
OPTION
TO
INCLUDE
INDIVIDUALS
RECEIVING
ASSISTANCE
UNDER
A
TRIBAL
FAMILY
ASSISTANCE
PLAN.—For
purposes of paragraphs (1)(B) and (2)(B), a State may, at its
option, include families in the State that are receiving assist-
ance under a tribal family assistance plan approved under
section 412.
‘‘(5) STATE OPTION FOR PARTICIPATION REQUIREMENT EXEMP-
TIONS.—For any fiscal year, a State may, at its option, not
require an individual who is a single custodial parent caring
for a child who has not attained 12 months of age to engage
in work, and may disregard such an individual in determining
the participation rates under subsection (a) for not more than
12 months.
‘‘(c) ENGAGED IN WORK.—
‘‘(1) GENERAL RULES.—
‘‘(A) ALL
FAMILIES.—For purposes of subsection
(b)(1)(B)(i), a recipient is engaged in work for a month
in a fiscal year if the recipient is participating in work
activities for at least the minimum average number of
hours per week specified in the following table during
the month, not fewer than 20 hours per week of which
are attributable to an activity described in paragraph (1),
(2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d), subject
to this subsection:
The minimum
‘‘If the month is
average number of
in fiscal year:
hours per week is:
1997 ...............................................................................
1998 ...............................................................................
1999 ...............................................................................
2000 or thereafter .........................................................
30.
‘‘(B) 2-PARENT FAMILIES.—For purposes of subsection
(b)(2)(B), an individual is engaged in work for a month
in a fiscal year if—
‘‘(i) the individual is making progress in work
activities for at least 35 hours per week during the
month, not fewer than 30 hours per week of which
are attributable to an activity described in paragraph
(1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection
(d), subject to this subsection; and
‘‘(ii) if the family of the individual receives feder-
ally-funded child care assistance and an adult in the
family is not disabled or caring for a severely disabled
child, the individual’s spouse is making progress in
work activities during the month, not fewer than 20
hours per week of which are attributable to an activity
H. R. 3734—28
described in paragraph (1), (2), (3), (4), (5), or (7) of
subsection (d).
‘‘(2) LIMITATIONS AND SPECIAL RULES.—
‘‘(A) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS
AS WORK.—
‘‘(i) LIMITATION.—Notwithstanding paragraph (1)
of this subsection, an individual shall not be considered
to be engaged in work by virtue of participation in
an activity described in subsection (d)(6) of a State
program funded under this part, after the individual
has participated in such an activity for 6 weeks (or,
if the unemployment rate of the State is at least 50
percent greater than the unemployment rate of the
United States, 12 weeks), or if the participation is
for a week that immediately follows 4 consecutive
weeks of such participation.
‘‘(ii) LIMITED AUTHORITY TO COUNT LESS THAN FULL
WEEK OF PARTICIPATION.—For purposes of clause (i)
of this subparagraph, on not more than 1 occasion
per individual, the State shall consider participation
of the individual in an activity described in subsection
(d)(6) for 3 or 4 days during a week as a week of
participation in the activity by the individual.
‘‘(B) SINGLE PARENT WITH CHILD UNDER AGE 6 DEEMED
TO BE MEETING WORK PARTICIPATION REQUIREMENTS IF PAR-
ENT IS ENGAGED IN WORK FOR 20 HOURS PER WEEK.—For
purposes of determining monthly participation rates under
subsection (b)(1)(B)(i), a recipient in a 1-parent family who
is the parent of a child who has not attained 6 years
of age is deemed to be engaged in work for a month
if the recipient is engaged in work for an average of at
least 20 hours per week during the month.
‘‘(C) TEEN HEAD OF HOUSEHOLD WHO MAINTAINS SATIS-
FACTORY
SCHOOL
ATTENDANCE
DEEMED
TO
BE
MEETING
WORK
PARTICIPATION
REQUIREMENTS.—For purposes of
determining monthly participation rates under sub-
section (b)(1)(B)(i), a recipient who is a single head of
household and has not attained 20 years of age is deemed,
subject to subparagraph (D) of this paragraph, to be
engaged in work for a month in a fiscal year if the recipi-
ent—
‘‘(i) maintains satisfactory attendance at secondary
school or the equivalent during the month; or
‘‘(ii) participates in education directly related to
employment for at least the minimum average number
of hours per week specified in the table set forth in
paragraph (1)(A) of this subsection.
‘‘(D) NUMBER OF PERSONS THAT MAY BE TREATED AS
ENGAGED IN WORK BY VIRTUE OF PARTICIPATION IN VOCA-
TIONAL EDUCATION ACTIVITIES OR BEING A TEEN HEAD OF
HOUSEHOLD WHO MAINTAINS SATISFACTORY SCHOOL ATTEND-
ANCE.—For purposes of determining monthly participation
rates under paragraphs (1)(B)(i) and (2)(B) of subsection
(b), not more than 20 percent of individuals in all families
and in 2-parent families may be determined to be engaged
in work in the State for a month by reason of participation
H. R. 3734—29
in vocational educational training or deemed to be engaged
in work by reason of subparagraph (C) of this paragraph.
‘‘(d) WORK ACTIVITIES DEFINED.—As used in this section, the
term ‘work activities’ means—
‘‘(1) unsubsidized employment;
‘‘(2) subsidized private sector employment;
‘‘(3) subsidized public sector employment;
‘‘(4) work experience (including work associated with the
refurbishing of publicly assisted housing) if sufficient private
sector employment is not available;
‘‘(5) on-the-job training;
‘‘(6) job search and job readiness assistance;
‘‘(7) community service programs;
‘‘(8) vocational educational training (not to exceed 12
months with respect to any individual);
‘‘(9) job skills training directly related to employment;
‘‘(10) education directly related to employment, in the case
of a recipient who has not received a high school diploma
or a certificate of high school equivalency;
‘‘(11) satisfactory attendance at secondary school or in a
course of study leading to a certificate of general equivalence,
in the case of a recipient who has not completed secondary
school or received such a certificate; and
‘‘(12) the provision of child care services to an individual
who is participating in a community service program.
‘‘(e) PENALTIES AGAINST INDIVIDUALS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
if an individual in a family receiving assistance under the
State program funded under this part refuses to engage in
work required in accordance with this section, the State shall—
‘‘(A) reduce the amount of assistance otherwise payable
to the family pro rata (or more, at the option of the State)
with respect to any period during a month in which the
individual so refuses; or
‘‘(B) terminate such assistance,
subject to such good cause and other exceptions as the State
may establish.
‘‘(2) EXCEPTION.—Notwithstanding paragraph (1), a State
may not reduce or terminate assistance under the State pro-
gram funded under this part based on a refusal of an individual
to work if the individual is a single custodial parent caring
for a child who has not attained 6 years of age, and the
individual proves that the individual has a demonstrated inabil-
ity (as determined by the State) to obtain needed child care,
for 1 or more of the following reasons:
‘‘(A) Unavailability of appropriate child care within
a reasonable distance from the individual’s home or work
site.
‘‘(B) Unavailability or unsuitability of informal child
care by a relative or under other arrangements.
‘‘(C) Unavailability of appropriate and affordable for-
mal child care arrangements.
‘‘(f) NONDISPLACEMENT IN WORK ACTIVITIES.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), an adult in
a family receiving assistance under a State program funded
under this part attributable to funds provided by the Federal
H. R. 3734—30
Government may fill a vacant employment position in order
to engage in a work activity described in subsection (d).
‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No adult in a
work activity described in subsection (d) which is funded, in
whole or in part, by funds provided by the Federal Government
shall be employed or assigned—
‘‘(A) when any other individual is on layoff from the
same or any substantially equivalent job; or
‘‘(B) if the employer has terminated the employment
of any regular employee or otherwise caused an involuntary
reduction of its workforce in order to fill the vacancy so
created with an adult described in paragraph (1).
‘‘(3) GRIEVANCE
PROCEDURE.—A State with a program
funded under this part shall establish and maintain a grievance
procedure for resolving complaints of alleged violations of para-
graph (2).
‘‘(4) NO PREEMPTION.—Nothing in this subsection shall pre-
empt or supersede any provision of State or local law that
provides greater protection for employees from displacement.
‘‘(g) SENSE OF THE CONGRESS.—It is the sense of the Congress
that in complying with this section, each State that operates a
program funded under this part is encouraged to assign the highest
priority to requiring adults in 2-parent families and adults in single-
parent families that include older preschool or school-age children
to be engaged in work activities.
‘‘(h) SENSE OF THE CONGRESS THAT STATES SHOULD IMPOSE
CERTAIN REQUIREMENTS ON NONCUSTODIAL, NONSUPPORTING MINOR
PARENTS.—It is the sense of the Congress that the States should
require noncustodial, nonsupporting parents who have not attained
18 years of age to fulfill community work obligations and attend
appropriate parenting or money management classes after school.
‘‘(i) REVIEW OF IMPLEMENTATION OF STATE WORK PROGRAMS.—
During fiscal year 1999, the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate shall hold hearings and engage in other appropriate
activities to review the implementation of this section by the States,
and shall invite the Governors of the States to testify before them
regarding such implementation. Based on such hearings, such
Committees may introduce such legislation as may be appropriate
to remedy any problems with the State programs operated pursuant
to this section.
‘‘SEC. 408. PROHIBITIONS; REQUIREMENTS.
‘‘(a) IN GENERAL.—
‘‘(1) NO
ASSISTANCE
FOR
FAMILIES
WITHOUT
A
MINOR
CHILD.—A State to which a grant is made under section 403
shall not use any part of the grant to provide assistance to
a family—
‘‘(A) unless the family includes—
‘‘(i) a minor child who resides with a custodial
parent or other adult caretaker relative of the
child; or
‘‘(ii) a pregnant individual; and
‘‘(B) if the family includes an adult who has received
assistance under any State program funded under this
part attributable to funds provided by the Federal Govern-
ment, for 60 months (whether or not consecutive) after
H. R. 3734—31
the date the State program funded under this part com-
mences (unless an exception described in subparagraph
(B), (C), or (D) of paragraph (7) applies).
‘‘(2) REDUCTION OR ELIMINATION OF ASSISTANCE FOR NON-
COOPERATION IN ESTABLISHING PATERNITY OR OBTAINING CHILD
SUPPORT.—If the agency responsible for administering the State
plan approved under part D determines that an individual
is not cooperating with the State in establishing paternity
or in establishing, modifying, or enforcing a support order with
respect to a child of the individual, and the individual does
not qualify for any good cause or other exception established
by the State pursuant to section 454(29), then the State—
‘‘(A) shall deduct from the assistance that would other-
wise be provided to the family of the individual under
the State program funded under this part an amount equal
to not less than 25 percent of the amount of such assistance;
and
‘‘(B) may deny the family any assistance under the
State program.
‘‘(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN
SUPPORT RIGHTS TO THE STATE.—
‘‘(A) IN GENERAL.—A State to which a grant is made
under section 403 shall require, as a condition of providing
assistance to a family under the State program funded
under this part, that a member of the family assign to
the State any rights the family member may have (on
behalf of the family member or of any other person for
whom the family member has applied for or is receiving
such assistance) to support from any other person, not
exceeding the total amount of assistance so provided to
the family, which accrue (or have accrued) before the date
the family leaves the program, which assignment, on and
after the date the family leaves the program, shall not
apply with respect to any support (other than support
collected pursuant to section 464) which accrued before
the family received such assistance and which the State
has not collected by—
‘‘(i) September 30, 2000, if the assignment is
executed on or after October 1, 1997, and before Octo-
ber 1, 2000; or
‘‘(ii) the date the family leaves the program, if
the assignment is executed on or after October 1, 2000.
‘‘(B) LIMITATION.—A State to which a grant is made
under section 403 shall not require, as a condition of provid-
ing assistance to any family under the State program
funded under this part, that a member of the family assign
to the State any rights to support described in subpara-
graph (A) which accrue after the date the family leaves
the program.
‘‘(4) NO ASSISTANCE FOR TEENAGE PARENTS WHO DO NOT
ATTEND HIGH SCHOOL OR OTHER EQUIVALENT TRAINING PRO-
GRAM.—A State to which a grant is made under section 403
shall not use any part of the grant to provide assistance to
an individual who has not attained 18 years of age, is not
married, has a minor child at least 12 weeks of age in his
or her care, and has not successfully completed a high-school
H. R. 3734—32
education (or its equivalent), if the individual does not partici-
pate in—
‘‘(A) educational activities directed toward the attain-
ment of a high school diploma or its equivalent; or
‘‘(B) an alternative educational or training program
that has been approved by the State.
‘‘(5) NO ASSISTANCE FOR TEENAGE PARENTS NOT LIVING IN
ADULT-SUPERVISED SETTINGS.—
‘‘(A) IN GENERAL.—
‘‘(i) 
REQUIREMENT.—Except 
as 
provided 
in
subparagraph (B), a State to which a grant is made
under section 403 shall not use any part of the grant
to provide assistance to an individual described in
clause (ii) of this subparagraph if the individual and
the minor child referred to in clause (ii)(II) do not
reside in a place of residence maintained by a parent,
legal guardian, or other adult relative of the individual
as such parent’s, guardian’s, or adult relative’s own
home.
‘‘(ii) INDIVIDUAL
DESCRIBED.— For purposes of
clause (i), an individual described in this clause is
an individual who—
‘‘(I) has not attained 18 years of age; and
‘‘(II) is not married, and has a minor child
in his or her care.
‘‘(B) EXCEPTION.—
‘‘(i) PROVISION
OF, OR
ASSISTANCE
IN
LOCATING,
ADULT-SUPERVISED LIVING ARRANGEMENT.—In the case
of an individual who is described in clause (ii), the
State agency referred to in section 402(a)(4) shall pro-
vide, or assist the individual in locating, a second
chance home, maternity home, or other appropriate
adult-supervised supportive living arrangement, taking
into consideration the needs and concerns of the
individual, unless the State agency determines that
the individual’s current living arrangement is appro-
priate, and thereafter shall require that the individual
and the minor child referred to in subparagraph
(A)(ii)(II) reside in such living arrangement as a condi-
tion of the continued receipt of assistance under the
State program funded under this part attributable to
funds provided by the Federal Government (or in an
alternative 
appropriate 
arrangement, 
should 
cir-
cumstances change and the current arrangement cease
to be appropriate).
‘‘(ii) INDIVIDUAL
DESCRIBED.—For purposes of
clause 
(i), 
an 
individual 
is 
described 
in 
this
clause if the individual is described in subparagraph
(A)(ii), and—
‘‘(I) the individual has no parent, legal guard-
ian, or other appropriate adult relative described
in subclause (II) of his or her own who is living
or whose whereabouts are known;
‘‘(II) no living parent, legal guardian, or other
appropriate adult relative, who would otherwise
meet applicable State criteria to act as the individ-
ual’s legal guardian, of such individual allows the
H. R. 3734—33
individual to live in the home of such parent,
guardian, or relative;
‘‘(III) the State agency determines that—
‘‘(aa) the individual or the minor child
referred to in subparagraph (A)(ii)(II) is being
or has been subjected to serious physical or
emotional harm, sexual abuse, or exploitation
in the residence of the individual’s own parent
or legal guardian; or
‘‘(bb) substantial evidence exists of an act
or failure to act that presents an imminent
or serious harm if the individual and the minor
child lived in the same residence with the
individual’s own parent or legal guardian; or
‘‘(IV) the State agency otherwise determines
that it is in the best interest of the minor child
to waive the requirement of subparagraph (A) with
respect to the individual or the minor child.
‘‘(iii) SECOND-CHANCE HOME.—For purposes of this
subparagraph, the term ‘second-chance home’ means
an entity that provides individuals described in clause
(ii) with a supportive and supervised living arrange-
ment in which such individuals are required to learn
parenting skills, including child development, family
budgeting, health and nutrition, and other skills to
promote their long-term economic independence and
the well-being of their children.
‘‘(6) NO MEDICAL SERVICES.—
‘‘(A) IN GENERAL.—A State to which a grant is made
under section 403 shall not use any part of the grant
to provide medical services.
‘‘(B) EXCEPTION FOR PREPREGNANCY FAMILY PLANNING
SERVICES.—As used in subparagraph (A), the term ‘medical
services’ 
does 
not 
include 
prepregnancy 
family
planning services.
‘‘(7) NO ASSISTANCE FOR MORE THAN 5 YEARS.—
‘‘(A) IN GENERAL.—A State to which a grant is made
under section 403 shall not use any part of the grant
to provide assistance to a family that includes an adult
who has received assistance under any State program
funded under this part attributable to funds provided by
the Federal Government, for 60 months (whether or not
consecutive) after the date the State program funded under
this part commences, subject to this paragraph.
‘‘(B) MINOR
CHILD
EXCEPTION.—In determining the
number of months for which an individual who is a parent
or pregnant has received assistance under the State pro-
gram funded under this part, the State shall disregard
any month for which such assistance was provided with
respect to the individual and during which the individual
was—
‘‘(i) a minor child; and
‘‘(ii) not the head of a household or married to
the head of a household.
‘‘(C) HARDSHIP EXCEPTION.—
‘‘(i) IN GENERAL.—The State may exempt a family
from the application of subparagraph (A) by reason
H. R. 3734—34
of hardship or if the family includes an individual
who has been battered or subjected to extreme cruelty.
‘‘(ii) LIMITATION.—The number of families with
respect to which an exemption made by a State under
clause (i) is in effect for a fiscal year shall not exceed
20 percent of the average monthly number of families
to which assistance is provided under the State pro-
gram funded under this part.
‘‘(iii) BATTERED OR SUBJECT TO EXTREME CRUELTY
DEFINED.—For purposes of clause (i), an individual has
been battered or subjected to extreme cruelty if the
individual has been subjected to—
‘‘(I) physical acts that resulted in, or threat-
ened to result in, physical injury to the individual;
‘‘(II) sexual abuse;
‘‘(III) sexual activity involving a dependent
child;
‘‘(IV) being forced as the caretaker relative
of a dependent child to engage in nonconsensual
sexual acts or activities;
‘‘(V) threats of, or attempts at, physical or
sexual abuse;
‘‘(VI) mental abuse; or
‘‘(VII) neglect or deprivation of medical care.
‘‘(D) DISREGARD OF MONTHS OF ASSISTANCE RECEIVED
BY ADULT WHILE LIVING ON AN INDIAN RESERVATION OR
IN
AN
ALASKAN
NATIVE
VILLAGE
WITH
PERCENT
UNEMPLOYMENT.—In determining the number of months
for which an adult has received assistance under the State
program funded under this part, the State shall disregard
any month during which the adult lived on an Indian
reservation or in an Alaskan Native village if, during the
month—
‘‘(i) at least 1,000 individuals were living on the
reservation or in the village ; and
‘‘(ii) at least 50 percent of the adults living on
the reservation or in the village were unemployed.
‘‘(E) RULE
OF
INTERPRETATION.—Subparagraph (A)
shall not be interpreted to require any State to provide
assistance to any individual for any period of time under
the State program funded under this part.
‘‘(F) RULE
OF
INTERPRETATION.—This part shall not
be interpreted to prohibit any State from expending State
funds not originating with the Federal Government on
benefits for children or families that have become ineligible
for assistance under the State program funded under this
part by reason of subparagraph (A).
‘‘(8) DENIAL
OF
ASSISTANCE
FOR
YEARS
TO
A
PERSON
FOUND
TO
HAVE
FRAUDULENTLY
MISREPRESENTED
RESIDENCE
IN
ORDER
TO
OBTAIN
ASSISTANCE
IN
OR
MORE
STATES.—A
State to which a grant is made under section 403 shall not
use any part of the grant to provide cash assistance to an
individual during the 10-year period that begins on the date
the individual is convicted in Federal or State court of having
made a fraudulent statement or representation with respect
to the place of residence of the individual in order to receive
assistance simultaneously from 2 or more States under pro-
H. R. 3734—35
grams that are funded under this title, title XIX, or the Food
Stamp Act of 1977, or benefits in 2 or more States under
the supplemental security income program under title XVI.
The preceding sentence shall not apply with respect to a convic-
tion of an individual, for any month beginning after the Presi-
dent of the United States grants a pardon with respect to
the conduct which was the subject of the conviction.
‘‘(9) DENIAL
OF
ASSISTANCE
FOR
FUGITIVE
FELONS
AND
PROBATION AND PAROLE VIOLATORS.—
‘‘(A) IN GENERAL.—A State to which a grant is made
under section 403 shall not use any part of the grant
to provide assistance to any individual who is—
‘‘(i) fleeing to avoid prosecution, or custody or
confinement after conviction, under the laws of the
place from which the individual flees, for a crime,
or an attempt to commit a crime, which is a felony
under the laws of the place from which the individual
flees, or which, in the case of the State of New Jersey,
is a high misdemeanor under the laws of such
State; or
‘‘(ii) violating a condition of probation or parole
imposed under Federal or State law.
The preceding sentence shall not apply with respect to
conduct of an individual, for any month beginning after
the President of the United States grants a pardon with
respect to the conduct.
‘‘(B) EXCHANGE OF INFORMATION WITH LAW ENFORCE-
MENT
AGENCIES.—If a State to which a grant is made
under section 403 establishes safeguards against the use
or disclosure of information about applicants or recipients
of assistance under the State program funded under this
part, the safeguards shall not prevent the State agency
administering the program from furnishing a Federal,
State, or local law enforcement officer, upon the request
of the officer, with the current address of any recipient
if the officer furnishes the agency with the name of the
recipient and notifies the agency that—
‘‘(i) the recipient—
‘‘(I) is described in subparagraph (A); or
‘‘(II) has information that is necessary for the
officer to conduct the official duties of the officer;
and
‘‘(ii) the location or apprehension of the recipient
is within such official duties.
‘‘(10) DENIAL
OF
ASSISTANCE
FOR
MINOR
CHILDREN
WHO
ARE
ABSENT
FROM
THE
HOME
FOR
A
SIGNIFICANT
PERIOD.—
‘‘(A) IN GENERAL.—A State to which a grant is made
under section 403 shall not use any part of the grant
to provide assistance for a minor child who has been,
or is expected by a parent (or other caretaker relative)
of the child to be, absent from the home for a period
of 45 consecutive days or, at the option of the State, such
period of not less than 30 and not more than 180 consecu-
tive days as the State may provide for in the State plan
submitted pursuant to section 402.
‘‘(B) STATE
AUTHORITY
TO
ESTABLISH
GOOD
CAUSE
EXCEPTIONS.—The State may establish such good cause
H. R. 3734—36
exceptions to subparagraph (A) as the State considers
appropriate if such exceptions are provided for in the State
plan submitted pursuant to section 402.
‘‘(C) DENIAL OF ASSISTANCE FOR RELATIVE WHO FAILS
TO NOTIFY STATE AGENCY OF ABSENCE OF CHILD.—A State
to which a grant is made under section 403 shall not
use any part of the grant to provide assistance for an
individual who is a parent (or other caretaker relative)
of a minor child and who fails to notify the agency admin-
istering the State program funded under this part of the
absence of the minor child from the home for the period
specified in or provided for pursuant to subparagraph (A),
by the end of the 5-day period that begins with the date
that it becomes clear to the parent (or relative) that the
minor child will be absent for such period so specified
or provided for.
‘‘(11) MEDICAL ASSISTANCE REQUIRED TO BE PROVIDED FOR
CERTAIN
FAMILIES
HAVING
EARNINGS
FROM
EMPLOYMENT
OR
CHILD SUPPORT.—
‘‘(A) EARNINGS FROM EMPLOYMENT.—A State to which
a grant is made under section 403 and which has a State
plan approved under title XIX shall provide that in the
case of a family that is treated (under section 1931(b)(1)(A)
for purposes of title XIX) as receiving aid under a State
plan approved under this part (as in effect on July 16,
1996), that would become ineligible for such aid because
of hours of or income from employment of the caretaker
relative (as defined under this part as in effect on such
date) or because of section 402(a)(8)(B)(ii)(II) (as so in
effect), and that was so treated as receiving such aid in
at least 3 of the 6 months immediately preceding the month
in which such ineligibility begins, the family shall remain
eligible for medical assistance under the State’s plan
approved under title XIX for an extended period or periods
as provided in section 1925 or 1902(e)(1) (as applicable),
and that the family will be appropriately notified of such
extension as required by section 1925(a)(2).
‘‘(B) CHILD
SUPPORT.—A State to which a grant is
made under section 403 and which has a State plan
approved under title XIX shall provide that in the case
of a family that is treated (under section 1931(b)(1)(A)
for purposes of title XIX) as receiving aid under a State
plan approved under this part (as in effect on July 16,
1996), that would become ineligible for such aid as a result
(wholly or partly) of the collection of child or spousal sup-
port under part D and that was so treated as receiving
such aid in at least 3 of the 6 months immediately preced-
ing the month in which such ineligibility begins, the family
shall remain eligible for medical assistance under the
State’s plan approved under title XIX for an extended
period or periods as provided in section 1931(c)(1).
‘‘(b) INDIVIDUAL RESPONSIBILITY PLANS.—
‘‘(1) ASSESSMENT.—The State agency responsible for admin-
istering the State program funded under this part shall make
an initial assessment of the skills, prior work experience, and
employability of each recipient of assistance under the program
who—
H. R. 3734—37
‘‘(A) has attained 18 years of age; or
‘‘(B) has not completed high school or obtained a certifi-
cate of high school equivalency, and is not attending second-
ary school.
‘‘(2) CONTENTS OF PLANS.—
‘‘(A) IN
GENERAL.—On the basis of the assessment
made under subsection (a) with respect to an individual,
the State agency, in consultation with the individual, may
develop an individual responsibility plan for the individual,
which—
‘‘(i) sets forth an employment goal for the individ-
ual and a plan for moving the individual immediately
into private sector employment;
‘‘(ii) sets forth the obligations of the individual,
which may include a requirement that the individual
attend school, maintain certain grades and attendance,
keep school age children of the individual in school,
immunize children, attend parenting and money
management classes, or do other things that will help
the individual become and remain employed in the
private sector;
‘‘(iii) to the greatest extent possible is designed
to move the individual into whatever private sector
employment the individual is capable of handling as
quickly as possible, and to increase the responsibility
and amount of work the individual is to handle over
time;
‘‘(iv) describes the services the State will provide
the individual so that the individual will be able to
obtain and keep employment in the private sector,
and describe the job counseling and other services that
will be provided by the State; and
‘‘(v) may require the individual to undergo appro-
priate substance abuse treatment.
‘‘(B) TIMING.—The State agency may comply with para-
graph (1) with respect to an individual—
‘‘(i) within 90 days (or, at the option of the State,
180 days) after the effective date of this part, in the
case of an individual who, as of such effective date,
is a recipient of aid under the State plan approved
under part A (as in effect immediately before such
effective date); or
‘‘(ii) within 30 days (or, at the option of the State,
90 days) after the individual is determined to be
eligible for such assistance, in the case of any other
individual.
‘‘(3) PENALTY FOR NONCOMPLIANCE BY INDIVIDUAL.—In addi-
tion to any other penalties required under the State program
funded under this part, the State may reduce, by such amount
as the State considers appropriate, the amount of assistance
otherwise payable under the State program to a family that
includes an individual who fails without good cause to comply
with an individual responsibility plan signed by the individual.
‘‘(4) STATE DISCRETION.—The exercise of the authority of
this subsection shall be within the sole discretion of the State.
H. R. 3734—38
‘‘(c) NONDISCRIMINATION PROVISIONS.—The following provisions
of law shall apply to any program or activity which receives funds
provided under this part:
‘‘(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101
et seq.).
‘‘(2) Section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794).
‘‘(3) The Americans with Disabilities Act of 1990 (42 U.S.C.
12101 et seq.).
‘‘(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.).
‘‘(d) ALIENS.—For special rules relating to the treatment of
aliens, see section 402 of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996.
‘‘SEC. 409. PENALTIES.
‘‘(a) IN GENERAL.—Subject to this section:
‘‘(1) USE OF GRANT IN VIOLATION OF THIS PART.—
‘‘(A) GENERAL PENALTY.—If an audit conducted under
chapter 75 of title 31, United States Code, finds that an
amount paid to a State under section 403 for a fiscal
year has been used in violation of this part, the Secretary
shall reduce the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year quarter
by the amount so used.
‘‘(B) ENHANCED
PENALTY
FOR
INTENTIONAL
VIOLA-
TIONS.—If the State does not prove to the satisfaction of
the Secretary that the State did not intend to use the
amount in violation of this part, the Secretary shall further
reduce the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year quarter
by an amount equal to 5 percent of the State family assist-
ance grant.
‘‘(2) FAILURE TO SUBMIT REQUIRED REPORT.—
‘‘(A) IN
GENERAL.—If the Secretary determines that
a State has not, within 1 month after the end of a fiscal
quarter, submitted the report required by section 411(a)
for the quarter, the Secretary shall reduce the grant pay-
able to the State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount equal to 4
percent of the State family assistance grant.
‘‘(B) RESCISSION
OF
PENALTY.—The Secretary shall
rescind a penalty imposed on a State under subparagraph
(A) with respect to a report if the State submits the report
before the end of the fiscal quarter that immediately suc-
ceeds the fiscal quarter for which the report was required.
‘‘(3) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES.—
‘‘(A) IN
GENERAL.—If the Secretary determines that
a State to which a grant is made under section 403 for
a fiscal year has failed to comply with section 407(a) for
the fiscal year, the Secretary shall reduce the grant payable
to the State under section 403(a)(1) for the immediately
succeeding fiscal year by an amount equal to not more
than the applicable percentage of the State family assist-
ance grant.
H. R. 3734—39
‘‘(B) APPLICABLE
PERCENTAGE
DEFINED.—As used in
subparagraph (A), the term ‘applicable percentage’ means,
with respect to a State—
‘‘(i) if a penalty was not imposed on the State
under subparagraph (A) for the immediately preceding
fiscal year, 5 percent; or
‘‘(ii) if a penalty was imposed on the State under
subparagraph (A) for the immediately preceding fiscal
year, the lesser of—
‘‘(I) the percentage by which the grant payable
to the State under section 403(a)(1) was reduced
for such preceding fiscal year, increased by 2
percentage points; or
‘‘(II) 21 percent.
‘‘(C) PENALTY BASED ON SEVERITY OF FAILURE.—The
Secretary shall impose reductions under subparagraph (A)
with respect to a fiscal year based on the degree of non-
compliance, and may reduce the penalty if the noncompli-
ance is due to circumstances that caused the State to
become a needy State (as defined in section 403(b)(6)) dur-
ing the fiscal year.
‘‘(4) FAILURE TO PARTICIPATE IN THE INCOME AND ELIGI-
BILITY VERIFICATION SYSTEM.—If the Secretary determines that
a State program funded under this part is not participating
during a fiscal year in the income and eligibility verification
system required by section 1137, the Secretary shall reduce
the grant payable to the State under section 403(a)(1) for the
immediately succeeding fiscal year by an amount equal to not
more than 2 percent of the State family assistance grant.
‘‘(5) FAILURE TO COMPLY WITH PATERNITY ESTABLISHMENT
AND
CHILD
SUPPORT
ENFORCEMENT
REQUIREMENTS
UNDER
PART D.—Notwithstanding any other provision of this Act, if
the Secretary determines that the State agency that admin-
isters a program funded under this part does not enforce the
penalties requested by the agency administering part D against
recipients of assistance under the State program who fail to
cooperate in establishing paternity or in establishing, modify-
ing, or enforcing a child support order in accordance with
such part and who do not qualify for any good cause or other
exception established by the State under section 454(29), the
Secretary shall reduce the grant payable to the State under
section 403(a)(1) for the immediately succeeding fiscal year
(without regard to this section) by not more than 5 percent.
‘‘(6) FAILURE TO TIMELY REPAY A FEDERAL LOAN FUND FOR
STATE WELFARE PROGRAMS.—If the Secretary determines that
a State has failed to repay any amount borrowed from the
Federal Loan Fund for State Welfare Programs established
under section 406 within the period of maturity applicable
to the loan, plus any interest owed on the loan, the Secretary
shall reduce the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year quarter
(without regard to this section) by the outstanding loan amount,
plus the interest owed on the outstanding amount. The Sec-
retary shall not forgive any outstanding loan amount or interest
owed on the outstanding amount.
‘‘(7) FAILURE OF ANY STATE TO MAINTAIN CERTAIN LEVEL
OF HISTORIC EFFORT.—
H. R. 3734—40
‘‘(A) IN GENERAL.—The Secretary shall reduce the grant
payable to the State under section 403(a)(1) for fiscal year
1998, 1999, 2000, 2001, 2002, or 2003 by the amount (if
any) by which qualified State expenditures for the then
immediately preceding fiscal year are less than the
applicable percentage of historic State expenditures with
respect to such preceding fiscal year.
‘‘(B) DEFINITIONS.—As used in this paragraph:
‘‘(i) QUALIFIED STATE EXPENDITURES.—
‘‘(I) IN
GENERAL.—The term ‘qualified State
expenditures’ means, with respect to a State and
a fiscal year, the total expenditures by the State
during the fiscal year, under all State programs,
for any of the following with respect to eligible
families:
‘‘(aa) Cash assistance.
‘‘(bb) Child care assistance.
‘‘(cc) Educational activities designed to
increase self-sufficiency, job training, and
work, excluding any expenditure for public
education in the State except expenditures
which involve the provision of services or
assistance to a member of an eligible family
which is not generally available to persons
who are not members of an eligible family.
‘‘(dd) Administrative costs in connection
with the matters described in items (aa), (bb),
(cc), and (ee), but only to the extent that such
costs do not exceed 15 percent of the total
amount of qualified State expenditures for the
fiscal year.
‘‘(ee) Any other use of funds allowable
under section 404(a)(1).
‘‘(II) EXCLUSION OF TRANSFERS FROM OTHER
STATE AND LOCAL PROGRAMS.—Such term does not
include expenditures under any State or local pro-
gram 
during 
a 
fiscal 
year, 
except 
to 
the
extent that—
‘‘(aa) the expenditures exceed the amount
expended under the State or local program
in the fiscal year most recently ending before
the date of the enactment of this part; or
‘‘(bb) the State is entitled to a payment
under former section 403 (as in effect imme-
diately before such date of enactment) with
respect to the expenditures.
‘‘(III) ELIGIBLE
FAMILIES.—As used in sub-
clause (I), the term ‘eligible families’ means fami-
lies eligible for assistance under the State program
funded under this part, and families that would
be eligible for such assistance but for the applica-
tion of section 408(a)(7) of this Act or section 402
of the Personal Responsibility and Work Oppor-
tunity Reconciliation Act of 1996.
‘‘(ii) 
APPLICABLE
PERCENTAGE.—The 
term
‘applicable percentage’ means for fiscal years 1997
through 2002, 80 percent (or, if the State meets the
H. R. 3734—41
requirements of section 407(a) for the fiscal year, 75
percent) reduced (if appropriate) in accordance with
subparagraph (C)(ii).
‘‘(iii) HISTORIC
STATE
EXPENDITURES.—The term
‘historic State expenditures’ means, with respect to
a State, the lesser of—
‘‘(I) the expenditures by the State under parts
A and F (as in effect during fiscal year 1994)
for fiscal year 1994; or
‘‘(II) the amount which bears the same ratio
to the amount described in subclause (I) as—
‘‘(aa) the State family assistance grant,
plus the total amount required to be paid to
the State under former section 403 for fiscal
year 1994 with respect to amounts expended
by the State for child care under subsection
(g) or (i) of section 402 (as in effect during
fiscal year 1994); bears to
‘‘(bb) the total amount required to be paid
to the State under former section 403 (as in
effect during fiscal year 1994) for fiscal
year 1994.
Such term does not include any expenditures under
the State plan approved under part A (as so in effect)
on behalf of individuals covered by a tribal family
assistance plan approved under section 412, as deter-
mined by the Secretary.
‘‘(iv) EXPENDITURES
BY
THE
STATE.—The term
‘expenditures by the State’ does not include—
‘‘(I) any expenditures from amounts made
available by the Federal Government;
‘‘(II) any State funds expended for the medic-
aid program under title XIX;
‘‘(III) any State funds which are used to match
Federal funds; or
‘‘(IV) any State funds which are expended as
a condition of receiving Federal funds under Fed-
eral programs other than under this part.
Notwithstanding subclause (IV) of the preceding sen-
tence, such term includes expenditures by a State for
child care in a fiscal year to the extent that the total
amount of such expenditures does not exceed an
amount equal to the amount of State expenditures
in fiscal year 1994 or 1995 (whichever is greater) that
equal the non-Federal share for the programs described
in section 418(a)(1)(A).
‘‘(8) SUBSTANTIAL NONCOMPLIANCE OF STATE CHILD SUPPORT
ENFORCEMENT PROGRAM WITH REQUIREMENTS OF PART D.—
‘‘(A) IN GENERAL.—If a State program operated under
part D is found as a result of a review conducted under
section 452(a)(4) not to have complied substantially with
the requirements of such part for any quarter, and the
Secretary determines that the program is not complying
substantially with such requirements at the time the find-
ing is made, the Secretary shall reduce the grant payable
to the State under section 403(a)(1) for the quarter and
each subsequent quarter that ends before the 1st quarter
H. R. 3734—42
throughout which the program is found to be in substantial
compliance with such requirements by—
‘‘(i) not less than 1 nor more than 2 percent;
‘‘(ii) not less than 2 nor more than 3 percent,
if the finding is the 2nd consecutive such finding made
as a result of such a review; or
‘‘(iii) not less than 3 nor more than 5 percent,
if the finding is the 3rd or a subsequent consecutive
such finding made as a result of such a review.
‘‘(B) DISREGARD
OF
NONCOMPLIANCE
WHICH
IS
OF
A
TECHNICAL NATURE.—For purposes of subparagraph (A) and
section 452(a)(4), a State which is not in full compliance
with the requirements of this part shall be determined
to be in substantial compliance with such requirements
only if the Secretary determines that any noncompliance
with such requirements is of a technical nature which
does not adversely affect the performance of the State’s
program operated under part D.
‘‘(9) FAILURE
TO
COMPLY
WITH
5-YEAR
LIMIT
ON
ASSIST-
ANCE.—If the Secretary determines that a State has not com-
plied with section 408(a)(1)(B) during a fiscal year, the Sec-
retary shall reduce the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year by an
amount equal to 5 percent of the State family assistance grant.
‘‘(10) FAILURE OF STATE RECEIVING AMOUNTS FROM CONTIN-
GENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT.—
If, at the end of any fiscal year during which amounts from
the Contingency Fund for State Welfare Programs have been
paid to a State, the Secretary finds that the expenditures
under the State program funded under this part for the fiscal
year (excluding any amounts made available by the Federal
Government) are less than 100 percent of historic State
expenditures (as defined in paragraph (7)(B)(iii) of this sub-
section), the Secretary shall reduce the grant payable to the
State under section 403(a)(1) for the immediately succeeding
fiscal year by the total of the amounts so paid to the State.
‘‘(11) FAILURE TO MAINTAIN ASSISTANCE TO ADULT SINGLE
CUSTODIAL PARENT WHO CANNOT OBTAIN CHILD CARE FOR CHILD
UNDER AGE 6.—
‘‘(A) IN
GENERAL.—If the Secretary determines that
a State to which a grant is made under section 403 for
a fiscal year has violated section 407(e)(2) during the fiscal
year, the Secretary shall reduce the grant payable to the
State under section 403(a)(1) for the immediately succeed-
ing fiscal year by an amount equal to not more than 5
percent of the State family assistance grant.
‘‘(B) PENALTY BASED ON SEVERITY OF FAILURE.—The
Secretary shall impose reductions under subparagraph (A)
with respect to a fiscal year based on the degree of non-
compliance.
‘‘(12) FAILURE
TO
EXPEND
ADDITIONAL
STATE
FUNDS
TO
REPLACE GRANT REDUCTIONS.—If the grant payable to a State
under section 403(a)(1) for a fiscal year is reduced by reason
of this subsection, the State shall, during the immediately
succeeding fiscal year, expend under the State program funded
under this part an amount equal to the total amount of such
reductions.
H. R. 3734—43
‘‘(b) REASONABLE CAUSE EXCEPTION.—
‘‘(1) IN GENERAL.—The Secretary may not impose a penalty
on a State under subsection (a) with respect to a requirement
if the Secretary determines that the State has reasonable cause
for failing to comply with the requirement.
‘‘(2) EXCEPTION.—Paragraph (1) of this subsection shall
not apply to any penalty under paragraph (7) or (8) of sub-
section (a).
‘‘(c) CORRECTIVE COMPLIANCE PLAN.—
‘‘(1) IN GENERAL.—
‘‘(A) NOTIFICATION OF VIOLATION.—Before imposing a
penalty against a State under subsection (a) with respect
to a violation of this part, the Secretary shall notify the
State of the violation and allow the State the opportunity
to enter into a corrective compliance plan in accordance
with this subsection which outlines how the State will
correct the violation and how the State will insure continu-
ing compliance with this part.
‘‘(B) 60-DAY PERIOD TO PROPOSE A CORRECTIVE COMPLI-
ANCE PLAN.—During the 60-day period that begins on the
date the State receives a notice provided under sub-
paragraph (A) with respect to a violation, the State may
submit to the Federal Government a corrective compliance
plan to correct the violation.
‘‘(C) CONSULTATION
ABOUT
MODIFICATIONS.—During
the 60-day period that begins with the date the Secretary
receives a corrective compliance plan submitted by a State
in accordance with subparagraph (B), the Secretary may
consult with the State on modifications to the plan.
‘‘(D) ACCEPTANCE OF PLAN.— A corrective compliance
plan submitted by a State in accordance with subparagraph
(B) is deemed to be accepted by the Secretary if the Sec-
retary does not accept or reject the plan during 60-day
period that begins on the date the plan is submitted.
‘‘(2) EFFECT
OF
CORRECTING
VIOLATION.—The Secretary
may not impose any penalty under subsection (a) with respect
to any violation covered by a State corrective compliance plan
accepted by the Secretary if the State corrects the violation
pursuant to the plan.
‘‘(3) EFFECT OF FAILING TO CORRECT VIOLATION.—The Sec-
retary shall assess some or all of a penalty imposed on a
State under subsection (a) with respect to a violation if
the State does not, in a timely manner, correct the violation
pursuant to a State corrective compliance plan accepted by
the Secretary.
‘‘(4) INAPPLICABILITY
TO
FAILURE
TO
TIMELY
REPAY
A
FEDERAL LOAN FUND FOR A STATE WELFARE PROGRAM.—This
subsection shall not apply to the imposition of a penalty against
a State under subsection (a)(6).
‘‘(d) LIMITATION ON AMOUNT OF PENALTIES.—
‘‘(1) IN GENERAL.—In imposing the penalties described in
subsection (a), the Secretary shall not reduce any quarterly
payment to a State by more than 25 percent.
‘‘(2) CARRYFORWARD OF UNRECOVERED PENALTIES.—To the
extent that paragraph (1) of this subsection prevents the Sec-
retary from recovering during a fiscal year the full amount
of penalties imposed on a State under subsection (a) of this
H. R. 3734—44
section for a prior fiscal year, the Secretary shall apply any
remaining amount of such penalties to the grant payable to
the State under section 403(a)(1) for the immediately succeeding
fiscal year.
‘‘SEC. 410. APPEAL OF ADVERSE DECISION.
‘‘(a) IN GENERAL.—Within 5 days after the date the Secretary
takes any adverse action under this part with respect to a State,
the Secretary shall notify the chief executive officer of the State
of the adverse action, including any action with respect to the
State plan submitted under section 402 or the imposition of a
penalty under section 409.
‘‘(b) ADMINISTRATIVE REVIEW.—
‘‘(1) IN GENERAL.—Within 60 days after the date a State
receives notice under subsection (a) of an adverse action, the
State may appeal the action, in whole or in part, to the Depart-
mental Appeals Board established in the Department of Health
and Human Services (in this section referred to as the ‘Board’)
by filing an appeal with the Board.
‘‘(2) PROCEDURAL
RULES.—The Board shall consider an
appeal filed by a State under paragraph (1) on the basis of
such documentation as the State may submit and as the Board
may require to support the final decision of the Board. In
deciding whether to uphold an adverse action or any portion
of such an action, the Board shall conduct a thorough review
of the issues and take into account all relevant evidence. The
Board shall make a final determination with respect to an
appeal filed under paragraph (1) not less than 60 days after
the date the appeal is filed.
‘‘(c) JUDICIAL REVIEW OF ADVERSE DECISION.—
‘‘(1) IN GENERAL.—Within 90 days after the date of a final
decision by the Board under this section with respect to an
adverse action taken against a State, the State may obtain
judicial review of the final decision (and the findings incor-
porated into the final decision) by filing an action in—
‘‘(A) the district court of the United States for the
judicial district in which the principal or headquarters
office of the State agency is located; or
‘‘(B) the United States District Court for the District
of Columbia.
‘‘(2) PROCEDURAL RULES.—The district court in which an
action is filed under paragraph (1) shall review the final deci-
sion of the Board on the record established in the administrative
proceeding, in accordance with the standards of review pre-
scribed by subparagraphs (A) through (E) of section 706(2)
of title 5, United States Code. The review shall be on the
basis of the documents and supporting data submitted to the
Board.
‘‘SEC. 411. DATA COLLECTION AND REPORTING.
‘‘(a) QUARTERLY REPORTS BY STATES.—
‘‘(1) GENERAL REPORTING REQUIREMENT.—
‘‘(A) CONTENTS OF REPORT.—Each eligible State shall
collect on a monthly basis, and report to the Secretary
on a quarterly basis, the following disaggregated case
record information on the families receiving assistance
under the State program funded under this part:
‘‘(i) The county of residence of the family.
H. R. 3734—45
‘‘(ii) Whether a child receiving such assistance or
an adult in the family is disabled.
‘‘(iii) The ages of the members of such families.
‘‘(iv) The number of individuals in the family, and
the relation of each family member to the youngest
child in the family.
‘‘(v) The employment status and earnings of the
employed adult in the family.
‘‘(vi) The marital status of the adults in the family,
including whether such adults have never married,
are widowed, or are divorced.
‘‘(vii) The race and educational status of each adult
in the family.
‘‘(viii) The race and educational status of each
child in the family.
‘‘(ix) Whether the family received subsidized hous-
ing, medical assistance under the State plan approved
under title XIX, food stamps, or subsidized child care,
and if the latter 2, the amount received.
‘‘(x) The number of months that the family has
received each type of assistance under the program.
‘‘(xi) If the adults participated in, and the number
of hours per week of participation in, the following
activities:
‘‘(I) Education.
‘‘(II) Subsidized private sector employment.
‘‘(III) Unsubsidized employment.
‘‘(IV) Public sector employment, work experi-
ence, or community service.
‘‘(V) Job search.
‘‘(VI) Job skills training or on-the-job training.
‘‘(VII) Vocational education.
‘‘(xii) Information necessary to calculate participa-
tion rates under section 407.
‘‘(xiii) The type and amount of assistance received
under the program, including the amount of and reason
for any reduction of assistance (including sanctions).
‘‘(xiv) Any amount of unearned income received
by any member of the family.
‘‘(xv) The citizenship of the members of the family.
‘‘(xvi) From a sample of closed cases, whether the
family left the program, and if so, whether the family
left due to—
‘‘(I) employment;
‘‘(II) marriage;
‘‘(III) the prohibition set forth in section
408(a)(7);
‘‘(IV) sanction; or
‘‘(V) State policy.
‘‘(B) USE OF ESTIMATES.—
‘‘(i) 
AUTHORITY.—A 
State 
may 
comply 
with
subparagraph (A) by submitting an estimate which
is obtained through the use of scientifically acceptable
sampling methods approved by the Secretary.
‘‘(ii) SAMPLING
AND
OTHER
METHODS.—The Sec-
retary shall provide the States with such case sampling
plans and data collection procedures as the Secretary
H. R. 3734—46
deems necessary to produce statistically valid esti-
mates of the performance of State programs funded
under this part. The Secretary may develop and imple-
ment procedures for verifying the quality of data
submitted by the States.
‘‘(2) REPORT ON USE OF FEDERAL FUNDS TO COVER ADMINIS-
TRATIVE COSTS AND OVERHEAD.—The report required by para-
graph (1) for a fiscal quarter shall include a statement of
the percentage of the funds paid to the State under this part
for the quarter that are used to cover administrative costs
or overhead.
‘‘(3) REPORT ON STATE EXPENDITURES ON PROGRAMS FOR
NEEDY
FAMILIES.—The report required by paragraph (1) for
a fiscal quarter shall include a statement of the total amount
expended by the State during the quarter on programs for
needy families.
‘‘(4) REPORT ON NONCUSTODIAL PARENTS PARTICIPATING IN
WORK ACTIVITIES.—The report required by paragraph (1) for
a fiscal quarter shall include the number of noncustodial
parents in the State who participated in work activities (as
defined in section 407(d)) during the quarter.
‘‘(5) REPORT
ON
TRANSITIONAL
SERVICES.—The report
required by paragraph (1) for a fiscal quarter shall include
the total amount expended by the State during the quarter
to provide transitional services to a family that has ceased
to receive assistance under this part because of employment,
along with a description of such services.
‘‘(6) REGULATIONS.—The Secretary shall prescribe such
regulations as may be necessary to define the data elements
with respect to which reports are required by this subsection.
‘‘(b) ANNUAL REPORTS TO THE CONGRESS BY THE SECRETARY.—
Not later than 6 months after the end of fiscal year 1997, and
each fiscal year thereafter, the Secretary shall transmit to the
Congress a report describing—
‘‘(1) whether the States are meeting—
‘‘(A) the participation rates described in section
407(a); and
‘‘(B) the objectives of—
‘‘(i) increasing employment and earnings of needy
families, and child support collections; and
‘‘(ii) decreasing out-of-wedlock pregnancies and
child poverty;
‘‘(2) the demographic and financial characteristics of fami-
lies applying for assistance, families receiving assistance, and
families that become ineligible to receive assistance;
‘‘(3) the characteristics of each State program funded under
this part; and
‘‘(4) the trends in employment and earnings of needy fami-
lies with minor children living at home.
‘‘SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.
‘‘(a) GRANTS FOR INDIAN TRIBES.—
‘‘(1) TRIBAL FAMILY ASSISTANCE GRANT.—
‘‘(A) IN GENERAL.—For each of fiscal years 1997, 1998,
1999, 2000, 2001, and 2002, the Secretary shall pay to
each Indian tribe that has an approved tribal family assist-
ance plan a tribal family assistance grant for the fiscal
H. R. 3734—47
year in an amount equal to the amount determined under
subparagraph (B), and shall reduce the grant payable under
section 403(a)(1) to any State in which lies the service
area or areas of the Indian tribe by that portion of the
amount so determined that is attributable to expenditures
by the State.
‘‘(B) AMOUNT DETERMINED.—
‘‘(i) IN GENERAL.—The amount determined under
this subparagraph is an amount equal to the total
amount of the Federal payments to a State or States
under section 403 (as in effect during such fiscal year)
for fiscal year 1994 attributable to expenditures (other
than child care expenditures) by the State or States
under parts A and F (as so in effect) for fiscal year
1994 for Indian families residing in the service area
or areas identified by the Indian tribe pursuant to
subsection (b)(1)(C) of this section.
‘‘(ii) USE OF STATE SUBMITTED DATA.—
‘‘(I) IN
GENERAL.—The Secretary shall use
State submitted data to make each determination
under clause (i).
‘‘(II) DISAGREEMENT
WITH
DETERMINATION.—
If an Indian tribe or tribal organization disagrees
with State submitted data described under sub-
clause (I), the Indian tribe or tribal organization
may submit to the Secretary such additional
information as may be relevant to making the
determination under clause (i) and the Secretary
may consider such information before making such
determination.
‘‘(2) 
GRANTS
FOR
INDIAN
TRIBES
THAT
RECEIVED
JOBS FUNDS.—
‘‘(A) IN
GENERAL.—The Secretary shall pay to each
eligible Indian tribe for each of fiscal years 1997, 1998,
1999, 2000, 2001, and 2002 a grant in an amount equal
to the amount received by the Indian tribe in fiscal year
1994 under section 482(i) (as in effect during fiscal
year 1994).
‘‘(B) ELIGIBLE INDIAN TRIBE.—For purposes of subpara-
graph (A), the term ‘eligible Indian tribe’ means an Indian
tribe or Alaska Native organization that conducted a job
opportunities and basic skills training program in fiscal
year 1995 under section 482(i) (as in effect during fiscal
year 1995).
‘‘(C) USE OF GRANT.—Each Indian tribe to which a
grant is made under this paragraph shall use the grant
for the purpose of operating a program to make work
activities available to members of the Indian tribe.
‘‘(D) APPROPRIATION.—Out of any money in the Treas-
ury of the United States not otherwise appropriated, there
are appropriated $7,638,474 for each fiscal year specified
in subparagraph (A) for grants under subparagraph (A).
‘‘(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.—
‘‘(1) IN GENERAL.—Any Indian tribe that desires to receive
a tribal family assistance grant shall submit to the Secretary
a 3-year tribal family assistance plan that—
H. R. 3734—48
‘‘(A) outlines the Indian tribe’s approach to providing
welfare-related services for the 3-year period, consistent
with this section;
‘‘(B) specifies whether the welfare-related services pro-
vided under the plan will be provided by the Indian tribe
or through agreements, contracts, or compacts with inter-
tribal consortia, States, or other entities;
‘‘(C) identifies the population and service area or areas
to be served by such plan;
‘‘(D) provides that a family receiving assistance under
the plan may not receive duplicative assistance from other
State or tribal programs funded under this part;
‘‘(E) identifies the employment opportunities in or near
the service area or areas of the Indian tribe and the manner
in which the Indian tribe will cooperate and participate
in enhancing such opportunities for recipients of assistance
under the plan consistent with any applicable State stand-
ards; and
‘‘(F) applies the fiscal accountability provisions of sec-
tion 5(f)(1) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450c(f)(1)), relating to the submis-
sion of a single-agency audit report required by chapter
75 of title 31, United States Code.
‘‘(2) APPROVAL.—The Secretary shall approve each tribal
family assistance plan submitted in accordance with paragraph
(1).
‘‘(3) CONSORTIUM OF TRIBES.—Nothing in this section shall
preclude the development and submission of a single tribal
family assistance plan by the participating Indian tribes of
an intertribal consortium.
‘‘(c) MINIMUM WORK PARTICIPATION REQUIREMENTS AND TIME
LIMITS.—The Secretary, with the participation of Indian tribes,
shall establish for each Indian tribe receiving a grant under this
section minimum work participation requirements, appropriate time
limits for receipt of welfare-related services under the grant, and
penalties against individuals—
‘‘(1) consistent with the purposes of this section;
‘‘(2) consistent with the economic conditions and resources
available to each tribe; and
‘‘(3) similar to comparable provisions in section 407(e).
‘‘(d) EMERGENCY ASSISTANCE.—Nothing in this section shall
preclude an Indian tribe from seeking emergency assistance from
any Federal loan program or emergency fund.
‘‘(e) ACCOUNTABILITY.—Nothing in this section shall be con-
strued to limit the ability of the Secretary to maintain program
funding accountability consistent with—
‘‘(1) generally accepted accounting principles; and
‘‘(2) the requirements of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450 et seq.).
‘‘(f) PENALTIES.—
‘‘(1) Subsections (a)(1), (a)(6), and (b) of section 409, shall
apply to an Indian tribe with an approved tribal assistance
plan in the same manner as such subsections apply to a State.
‘‘(2) Section 409(a)(3) shall apply to an Indian tribe with
an approved tribal assistance plan by substituting ‘meet mini-
mum work participation requirements established under section
412(c)’ for ‘comply with section 407(a)’.
H. R. 3734—49
‘‘(g) DATA COLLECTION
AND REPORTING.—Section 411 shall
apply to an Indian tribe with an approved tribal family assistance
plan.
‘‘(h) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
this section, and except as provided in paragraph (2), an Indian
tribe in the State of Alaska that receives a tribal family assist-
ance grant under this section shall use the grant to operate
a program in accordance with requirements comparable to the
requirements applicable to the program of the State of Alaska
funded under this part. Comparability of programs shall be
established on the basis of program criteria developed by the
Secretary in consultation with the State of Alaska and such
Indian tribes.
‘‘(2) WAIVER.—An Indian tribe described in paragraph (1)
may apply to the appropriate State authority to receive a waiver
of the requirement of paragraph (1).
‘‘SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.
‘‘(a) RESEARCH.—The Secretary shall conduct research on the
benefits, effects, and costs of operating different State programs
funded under this part, including time limits relating to eligibility
for assistance. The research shall include studies on the effects
of different programs and the operation of such programs on welfare
dependency, illegitimacy, teen pregnancy, employment rates, child
well-being, and any other area the Secretary deems appropriate.
The Secretary shall also conduct research on the costs and benefits
of State activities under section 409.
‘‘(b) 
DEVELOPMENT
AND
EVALUATION
OF
INNOVATIVE
APPROACHES TO REDUCING WELFARE DEPENDENCY AND INCREASING
CHILD WELL-BEING.—
‘‘(1) IN GENERAL.—The Secretary may assist States in devel-
oping, and shall evaluate, innovative approaches for reducing
welfare dependency and increasing the well-being of minor
children living at home with respect to recipients of assistance
under programs funded under this part. The Secretary may
provide funds for training and technical assistance to carry
out the approaches developed pursuant to this paragraph.
‘‘(2) EVALUATIONS.—In performing the evaluations under
paragraph (1), the Secretary shall, to the maximum extent
feasible, use random assignment as an evaluation methodology.
‘‘(c) DISSEMINATION
OF INFORMATION.—The Secretary shall
develop innovative methods of disseminating information on any
research, evaluations, and studies conducted under this section,
including the facilitation of the sharing of information and best
practices among States and localities through the use of computers
and other technologies.
‘‘(d) ANNUAL RANKING OF STATES AND REVIEW OF MOST AND
LEAST SUCCESSFUL WORK PROGRAMS.—
‘‘(1) ANNUAL RANKING OF STATES.—The Secretary shall rank
annually the States to which grants are paid under section
403 in the order of their success in placing recipients of assist-
ance under the State program funded under this part into
long-term private sector jobs, reducing the overall welfare case-
load, and, when a practicable method for calculating this
information becomes available, diverting individuals from for-
mally applying to the State program and receiving assistance.
H. R. 3734—50
In ranking States under this subsection, the Secretary shall
take into account the average number of minor children living
at home in families in the State that have incomes below
the poverty line and the amount of funding provided each
State for such families.
‘‘(2) ANNUAL REVIEW OF MOST AND LEAST SUCCESSFUL WORK
PROGRAMS.—The Secretary shall review the programs of the
3 States most recently ranked highest under paragraph (1)
and the 3 States most recently ranked lowest under paragraph
(1) that provide parents with work experience, assistance in
finding employment, and other work preparation activities and
support services to enable the families of such parents to leave
the program and become self-sufficient.
‘‘(e) ANNUAL RANKING OF STATES AND REVIEW OF ISSUES RELAT-
ING TO OUT-OF-WEDLOCK BIRTHS.—
‘‘(1) ANNUAL RANKING OF STATES.—
‘‘(A) IN GENERAL.—The Secretary shall annually rank
States to which grants are made under section 403 based
on the following ranking factors:
‘‘(i) ABSOLUTE OUT-OF-WEDLOCK RATIOS.—The ratio
represented by—
‘‘(I) the total number of out-of-wedlock births
in families receiving assistance under the State
program under this part in the State for the most
recent fiscal year for which information is avail-
able; over
‘‘(II) the total number of births in families
receiving assistance under the State program
under this part in the State for such year.
‘‘(ii) NET
CHANGES
IN
THE
OUT-OF-WEDLOCK
RATIO.—The difference between the ratio described in
subparagraph (A)(i) with respect to a State for the
most recent fiscal year for which such information
is available and the ratio with respect to the State
for the immediately preceding year.
‘‘(2) ANNUAL REVIEW.—The Secretary shall review the pro-
grams of the 5 States most recently ranked highest under
paragraph (1) and the 5 States most recently ranked the lowest
under paragraph (1).
‘‘(f) STATE-INITIATED EVALUATIONS.—A State shall be eligible
to receive funding to evaluate the State program funded under
this part if—
‘‘(1) the State submits a proposal to the Secretary for
the evaluation;
‘‘(2) the Secretary determines that the design and approach
of the evaluation is rigorous and is likely to yield information
that is credible and will be useful to other States; and
‘‘(3) unless otherwise waived by the Secretary, the State
contributes to the cost of the evaluation, from non-Federal
sources, an amount equal to at least 10 percent of the cost
of the evaluation.
‘‘(g) REPORT ON CIRCUMSTANCES OF CERTAIN CHILDREN AND
FAMILIES.—
‘‘(1) IN GENERAL.—Beginning 3 years after the date of the
enactment of this Act, the Secretary of Health and Human
Services shall prepare and submit to the Committees on Ways
and Means and on Economic and Educational Opportunities
H. R. 3734—51
of the House of Representatives and to the Committees on
Finance and on Labor and Resources of the Senate annual
reports that examine in detail the matters described in para-
graph (2) with respect to each of the following groups for
the period after such enactment:
‘‘(A) Individuals who were children in families that
have become ineligible for assistance under a State pro-
gram funded under this part by reason of having reached
a time limit on the provision of such assistance.
‘‘(B) Children born after such date of enactment to
parents who, at the time of such birth, had not attained
20 years of age.
‘‘(C) Individuals who, after such date of enactment,
became parents before attaining 20 years of age.
‘‘(2) MATTERS DESCRIBED.—The matters described in this
paragraph are the following:
‘‘(A) The percentage of each group that has dropped
out of secondary school (or the equivalent), and the percent-
age of each group at each level of educational attainment.
‘‘(B) The percentage of each group that is employed.
‘‘(C) The percentage of each group that has been con-
victed of a crime or has been adjudicated as a delinquent.
‘‘(D) The rate at which the members of each group
are born, or have children, out-of-wedlock, and the percent-
age of each group that is married.
‘‘(E) The percentage of each group that continues to
participate in State programs funded under this part.
‘‘(F) The percentage of each group that has health
insurance provided by a private entity (broken down by
whether the insurance is provided through an employer
or otherwise), the percentage that has health insurance
provided by an agency of government, and the percentage
that does not have health insurance.
‘‘(G) The average income of the families of the members
of each group.
‘‘(H) Such other matters as the Secretary deems appro-
priate.
‘‘(h) FUNDING OF STUDIES AND DEMONSTRATIONS.—
‘‘(1) IN GENERAL.—Out of any money in the Treasury of
the United States not otherwise appropriated, there are appro-
priated $15,000,000 for each of fiscal years 1997 through 2002
for the purpose of paying—
‘‘(A) the cost of conducting the research described in
subsection (a);
‘‘(B) the cost of developing and evaluating innovative
approaches for reducing welfare dependency and increasing
the well-being of minor children under subsection (b);
‘‘(C) the Federal share of any State-initiated study
approved under subsection (f); and
‘‘(D) an amount determined by the Secretary to be
necessary to operate and evaluate demonstration projects,
relating to this part, that are in effect or approved under
section 1115 as of September 30, 1995, and are continued
after such date.
‘‘(2) ALLOCATION.—Of the amount appropriated under para-
graph (1) for a fiscal year—
H. R. 3734—52
‘‘(A) 50 percent shall be allocated for the pur-
poses described in subparagraphs (A) and (B) of paragraph
(1), and
‘‘(B) 50 percent shall be allocated for the purposes
described in subparagraphs (C) and (D) of paragraph (1).
‘‘(3) DEMONSTRATIONS
OF
INNOVATIVE
STRATEGIES.—The
Secretary may implement and evaluate demonstrations of
innovative and promising strategies which—
‘‘(A) provide one-time capital funds to establish,
expand, or replicate programs;
‘‘(B) test performance-based grant-to-loan financing in
which programs meeting performance targets receive
grants while programs not meeting such targets repay
funding on a prorated basis; and
‘‘(C) test strategies in multiple States and types of
communities.
‘‘(i) CHILD POVERTY RATES.—
‘‘(1) IN GENERAL.—Not later than 90 days after the date
of the enactment of this part, and annually thereafter, the
chief executive officer of each State shall submit to the Sec-
retary a statement of the child poverty rate in the State as
of such date of enactment or the date of the most recent
prior statement under this paragraph.
‘‘(2) SUBMISSION OF CORRECTIVE ACTION PLAN.—Not later
than 90 days after the date a State submits a statement under
paragraph (1) which indicates that, as a result of the amend-
ments made by section 103 of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, the child poverty
rate of the State has increased by 5 percent or more since
the most recent prior statement under paragraph (1), the State
shall prepare and submit to the Secretary a corrective action
plan in accordance with paragraph (3).
‘‘(3) CONTENTS OF PLAN.—A corrective action plan submit-
ted under paragraph (2) shall outline the manner in which
the State will reduce the child poverty rate in the State. The
plan shall include a description of the actions to be taken
by the State under such plan.
‘‘(4) COMPLIANCE
WITH
PLAN.—A State that submits a
corrective action plan that the Secretary has found contains
the information required by this subsection shall implement
the corrective action plan until the State determines that the
child poverty rate in the State is less than the lowest child
poverty rate on the basis of which the State was required
to submit the corrective action plan.
‘‘(5) METHODOLOGY.—The Secretary shall prescribe regula-
tions establishing the methodology by which a State shall deter-
mine the child poverty rate in the State. The methodology
shall take into account factors including the number of children
who receive free or reduced-price lunches, the number of food
stamp households, and the county-by-county estimates of chil-
dren in poverty as determined by the Census Bureau.
‘‘SEC. 414. STUDY BY THE CENSUS BUREAU.
‘‘(a) IN GENERAL.—The Bureau of the Census shall continue
to collect data on the 1992 and 1993 panels of the Survey of
Income and Program Participation as necessary to obtain such
information as will enable interested persons to evaluate the impact
H. R. 3734—53
of the amendments made by title I of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 on a random
national sample of recipients of assistance under State programs
funded under this part and (as appropriate) other low-income fami-
lies, and in doing so, shall pay particular attention to the issues
of out-of-wedlock birth, welfare dependency, the beginning and end
of welfare spells, and the causes of repeat welfare spells, and
shall obtain information about the status of children participating
in such panels.
‘‘(b) APPROPRIATION.—Out of any money in the Treasury of
the United States not otherwise appropriated, there are appro-
priated $10,000,000 for each of fiscal years 1996, 1997, 1998, 1999,
2000, 2001, and 2002 for payment to the Bureau of the Census
to carry out subsection (a).
‘‘SEC. 415. WAIVERS.
‘‘(a) CONTINUATION OF WAIVERS.—
‘‘(1) WAIVERS IN EFFECT ON DATE OF ENACTMENT OF WEL-
FARE REFORM.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), if any waiver granted to a State under section 1115
of this Act or otherwise which relates to the provision
of assistance under a State plan under this part (as in
effect on September 30, 1996) is in effect as of the date
of the enactment of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, the amendments
made by the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (other than by section 103(c)
of the Personal Responsibility and Work Opportunity Rec-
onciliation Act of 1996) shall not apply with respect to
the State before the expiration (determined without regard
to any extensions) of the waiver to the extent such amend-
ments are inconsistent with the waiver.
‘‘(B) FINANCING
LIMITATION.—Notwithstanding any
other provision of law, beginning with fiscal year 1996,
a State operating under a waiver described in subpara-
graph (A) shall be entitled to payment under section 403
for the fiscal year, in lieu of any other payment provided
for in the waiver.
‘‘(2) WAIVERS GRANTED SUBSEQUENTLY.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), if any waiver granted to a State under section 1115
of this Act or otherwise which relates to the provision
of assistance under a State plan under this part (as in
effect on September 30, 1996) is submitted to the Secretary
before the date of the enactment of the Personal Respon-
sibility and Work Opportunity Reconciliation Act of 1996
and approved by the Secretary on or before July 1, 1997,
and the State demonstrates to the satisfaction of the Sec-
retary that the waiver will not result in Federal expendi-
tures under title IV of this Act (as in effect without regard
to the amendments made by the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996) that
are greater than would occur in the absence of the waiver,
the amendments made by the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (other than
by section 103(c) of the Personal Responsibility and Work
H. R. 3734—54
Opportunity Reconciliation Act of 1996) shall not apply
with respect to the State before the expiration (determined
without regard to any extensions) of the waiver to the
extent the amendments made by the Personal Responsibil-
ity and Work Opportunity Reconciliation Act of 1996 are
inconsistent with the waiver.
‘‘(B) NO EFFECT ON NEW WORK REQUIREMENTS.—Not-
withstanding subparagraph (A), a waiver granted under
section 1115 or otherwise which relates to the provision
of assistance under a State program funded under this
part (as in effect on September 30, 1996) shall not affect
the applicability of section 407 to the State.
‘‘(b) STATE OPTION TO TERMINATE WAIVER.—
‘‘(1) IN
GENERAL.—A State may terminate a waiver
described in subsection (a) before the expiration of the waiver.
‘‘(2) REPORT.—A State which terminates a waiver under
paragraph (1) shall submit a report to the Secretary summariz-
ing the waiver and any available information concerning the
result or effect of the waiver.
‘‘(3) HOLD HARMLESS PROVISION.—
‘‘(A) IN GENERAL.—Notwithstanding any other provi-
sion of law, a State that, not later than the date described
in subparagraph (B) of this paragraph, submits a written
request to terminate a waiver described in subsection (a)
shall be held harmless for accrued cost neutrality liabilities
incurred under the waiver.
‘‘(B) DATE
DESCRIBED.—The date described in this
subparagraph is 90 days following the adjournment of the
first regular session of the State legislature that begins
after the date of the enactment of the Personal Responsibil-
ity and Work Opportunity Reconciliation Act of 1996.
‘‘(c) SECRETARIAL ENCOURAGEMENT
OF CURRENT WAIVERS.—
The Secretary shall encourage any State operating a waiver
described in subsection (a) to continue the waiver and to evaluate,
using random sampling and other characteristics of accepted sci-
entific evaluations, the result or effect of the waiver.
‘‘(d) CONTINUATION OF INDIVIDUAL WAIVERS.—A State may elect
to continue 1 or more individual waivers described in sub-
section (a).
‘‘SEC. 416. ADMINISTRATION.
‘‘The programs under this part and part D shall be administered
by an Assistant Secretary for Family Support within the Depart-
ment of Health and Human Services, who shall be appointed by
the President, by and with the advice and consent of the Senate,
and who shall be in addition to any other Assistant Secretary
of Health and Human Services provided for by law, and the Sec-
retary shall reduce the Federal workforce within the Department
of Health and Human Services by an amount equal to the sum
of 75 percent of the full-time equivalent positions at such Depart-
ment that relate to any direct spending program, or any program
funded through discretionary spending, that has been converted
into a block grant program under the Personal Responsibility and
Work Opportunity Act of 1996 and the amendments made by such
Act, and by an amount equal to 75 percent of that portion of
the total full-time equivalent departmental management positions
at such Department that bears the same relationship to the amount
H. R. 3734—55
appropriated for any direct spending program, or any program
funded through discretionary spending, that has been converted
into a block grant program under the Personal Responsibility and
Work Opportunity Act of 1996 and the amendments made by such
Act, as such amount relates to the total amount appropriated for
use by such Department, and, notwithstanding any other provision
of law, the Secretary shall take such actions as may be necessary,
including reductions in force actions, consistent with sections 3502
and 3595 of title 5, United States Code, to reduce the full-time
equivalent positions within the Department of Health and Human
Services by 245 full-time equivalent positions related to the program
converted into a block grant under the amendment made by section
2103 of the Personal Responsibility and Work Opportunity Act
of 1996, and by 60 full-time equivalent managerial positions in
the Department.
‘‘SEC. 417. LIMITATION ON FEDERAL AUTHORITY.
‘‘No officer or employee of the Federal Government may regulate
the conduct of States under this part or enforce any pro-
vision of this part, except to the extent expressly provided in this
part.’’; and
(2) by inserting after such section 418 the following:
‘‘SEC. 419. DEFINITIONS.
‘‘As used in this part:
‘‘(1) ADULT.—The term ‘adult’ means an individual who
is not a minor child.
‘‘(2) MINOR
CHILD.—The term ‘minor child’ means an
individual who—
‘‘(A) has not attained 18 years of age; or
‘‘(B) has not attained 19 years of age and is a full-
time student in a secondary school (or in the equivalent
level of vocational or technical training).
‘‘(3) FISCAL YEAR.—The term ‘fiscal year’ means any 12-
month period ending on September 30 of a calendar year.
‘‘(4) INDIAN, INDIAN
TRIBE, AND
TRIBAL
ORGANIZATION.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), the terms ‘Indian’, ‘Indian tribe’, and ‘tribal organiza-
tion’ have the meaning given such terms by section 4
of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
‘‘(B) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA.—
The term ‘Indian tribe’ means, with respect to the State
of Alaska, only the Metlakatla Indian Community of the
Annette Islands Reserve and the following Alaska Native
regional nonprofit corporations:
‘‘(i) Arctic Slope Native Association.
‘‘(ii) Kawerak, Inc.
‘‘(iii) Maniilaq Association.
‘‘(iv) Association of Village Council Presidents.
‘‘(v) Tanana Chiefs Conference.
‘‘(vi) Cook Inlet Tribal Council.
‘‘(vii) Bristol Bay Native Association.
‘‘(viii) Aleutian and Pribilof Island Association.
‘‘(ix) Chugachmuit.
‘‘(x) Tlingit Haida Central Council.
‘‘(xi) Kodiak Area Native Association.
‘‘(xii) Copper River Native Association.
H. R. 3734—56
‘‘(5) STATE.—Except as otherwise specifically provided, the
term ‘State’ means the 50 States of the United States,
the District of Columbia, the Commonwealth of Puerto Rico,
the United States Virgin Islands, Guam, and American
Samoa.’’.
(b) GRANTS TO OUTLYING AREAS.—Section 1108 (42 U.S.C. 1308)
is amended—
(1) by striking subsections (d) and (e);
(2) by redesignating subsection (c) as subsection (f); and
(3) by striking all that precedes subsection (c) and inserting
the following:
‘‘SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN
ISLANDS, GUAM, AND AMERICAN SAMOA; LIMITATION ON
TOTAL PAYMENTS.
‘‘(a) LIMITATION ON TOTAL PAYMENTS TO EACH TERRITORY.—
Notwithstanding any other provision of this Act, the total amount
certified by the Secretary of Health and Human Services under
titles I, X, XIV, and XVI, under parts A and E of title IV, and
under subsection (b) of this section, for payment to any territory
for a fiscal year shall not exceed the ceiling amount for the territory
for the fiscal year.
‘‘(b) ENTITLEMENT TO MATCHING GRANT.—
‘‘(1) IN GENERAL.—Each territory shall be entitled to receive
from the Secretary for each fiscal year a grant in an amount
equal to 75 percent of the amount (if any) by which—
‘‘(A) the total expenditures of the territory during the
fiscal year under the territory programs funded under parts
A and E of title IV; exceeds
‘‘(B) the sum of—
‘‘(i) the amount of the family assistance grant pay-
able to the territory without regard to section
409; and
‘‘(ii) the total amount expended by the territory
during fiscal year 1995 pursuant to parts A and F
of title IV (as so in effect), other than for child care.
‘‘(2) APPROPRIATION.—Out of any money in the Treasury
of the United States not otherwise appropriated, there are
appropriated for fiscal years 1997 through 2002, such sums
as are necessary for grants under this paragraph.
‘‘(c) DEFINITIONS.—As used in this section:
‘‘(1) TERRITORY.—The term ‘territory’ means Puerto Rico,
the Virgin Islands, Guam, and American Samoa.
‘‘(2) CEILING AMOUNT.—The term ‘ceiling amount’ means,
with respect to a territory and a fiscal year, the mandatory
ceiling amount with respect to the territory, reduced for the
fiscal year in accordance with subsection (e), and reduced by
the amount of any penalty imposed on the territory under
any provision of law specified in subsection (a) during the
fiscal year.
‘‘(3) FAMILY ASSISTANCE GRANT.—The term ‘family assist-
ance grant’ has the meaning given such term by section
403(a)(1)(B).
‘‘(4) MANDATORY CEILING AMOUNT.—The term ‘mandatory
ceiling amount’ means—
‘‘(A) $107,255,000 with respect to Puerto Rico;
‘‘(B) $4,686,000 with respect to Guam;
H. R. 3734—57
‘‘(C) 
$3,554,000 
with 
respect 
to 
the 
Virgin
Islands; and
‘‘(D) $1,000,000 with respect to American Samoa.
‘‘(5) TOTAL
AMOUNT
EXPENDED
BY
THE
TERRITORY.—The
term ‘total amount expended by the territory’—
‘‘(A) does not include expenditures during the fiscal
year from amounts made available by the Federal Govern-
ment; and
‘‘(B) when used with respect to fiscal year 1995, also
does not include—
‘‘(i) expenditures during fiscal year 1995 under
subsection (g) or (i) of section 402 (as in effect on
September 30, 1995); or
‘‘(ii) any expenditures during fiscal year 1995 for
which the territory (but for section 1108, as in effect
on 
September 
30, 
1995) 
would 
have 
received
reimbursement from the Federal Government.
‘‘(d) AUTHORITY TO TRANSFER FUNDS TO CERTAIN PROGRAMS.—
A territory to which an amount is paid under subsection (b) of
this section may use the amount in accordance with section 404(d).
‘‘(e) MAINTENANCE
OF
EFFORT.—The ceiling amount with
respect to a territory shall be reduced for a fiscal year by an
amount equal to the amount (if any) by which—
‘‘(1) the total amount expended by the territory under all
programs of the territory operated pursuant to the provisions
of law specified in subsection (a) (as such provisions were
in effect for fiscal year 1995) for fiscal year 1995; exceeds
‘‘(2) the total amount expended by the territory under all
programs of the territory that are funded under the provisions
of law specified in subsection (a) for the fiscal year that imme-
diately precedes the fiscal year referred to in the matter preced-
ing paragraph (1).’’.
(c) ELIMINATION OF CHILD CARE PROGRAMS UNDER THE SOCIAL
SECURITY ACT.—
(1) AFDC AND TRANSITIONAL CHILD CARE PROGRAMS.—Sec-
tion 402 (42 U.S.C. 602) is amended by striking sub-
section (g).
(2) AT-RISK CHILD CARE PROGRAM.—
(A) AUTHORIZATION.—Section 402 (42 U.S.C. 602) is
amended by striking subsection (i).
(B) FUNDING PROVISIONS.—Section 403 (42 U.S.C. 603)
is amended by striking subsection (n).
SEC. 104. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR
PRIVATE ORGANIZATIONS.
(a) IN GENERAL.—
(1) STATE OPTIONS.—A State may—
(A) administer and provide services under the pro-
grams described in subparagraphs (A) and (B)(i) of
paragraph (2) through contracts with charitable, religious,
or private organizations; and
(B) provide beneficiaries of assistance under the pro-
grams described in subparagraphs (A) and (B)(ii) of para-
graph (2) with certificates, vouchers, or other forms of
disbursement which are redeemable with such organiza-
tions.
H. R. 3734—58
(2) PROGRAMS DESCRIBED.—The programs described in this
paragraph are the following programs:
(A) A State program funded under part A of title
IV of the Social Security Act (as amended by section 103(a)
of this Act).
(B) Any other program established or modified under
title I or II of this Act, that—
(i) permits contracts with organizations; or
(ii) permits certificates, vouchers, or other forms
of disbursement to be provided to beneficiaries, as a
means of providing assistance.
(b) RELIGIOUS ORGANIZATIONS.—The purpose of this section
is to allow States to contract with religious organizations, or to
allow religious organizations to accept certificates, vouchers, or
other forms of disbursement under any program described in sub-
section (a)(2), on the same basis as any other nongovernmental
provider without impairing the religious character of such organiza-
tions, and without diminishing the religious freedom of beneficiaries
of assistance funded under such program.
(c) NONDISCRIMINATION AGAINST RELIGIOUS ORGANIZATIONS.—
In the event a State exercises its authority under subsection (a),
religious organizations are eligible, on the same basis as any other
private organization, as contractors to provide assistance, or to
accept certificates, vouchers, or other forms of disbursement, under
any program described in subsection (a)(2) so long as the programs
are implemented consistent with the Establishment Clause of the
United States Constitution. Except as provided in subsection (k),
neither the Federal Government nor a State receiving funds under
such programs shall discriminate against an organization which
is or applies to be a contractor to provide assistance, or which
accepts certificates, vouchers, or other forms of disbursement, on
the basis that the organization has a religious character.
(d) RELIGIOUS CHARACTER AND FREEDOM.—
(1) RELIGIOUS
ORGANIZATIONS.—A religious organization
with a contract described in subsection (a)(1)(A), or which
accepts certificates, vouchers, or other forms of disbursement
under subsection (a)(1)(B), shall retain its independence from
Federal, State, and local governments, including such organiza-
tion’s control over the definition, development, practice, and
expression of its religious beliefs.
(2) ADDITIONAL SAFEGUARDS.—Neither the Federal Govern-
ment nor a State shall require a religious organization to—
(A) alter its form of internal governance; or
(B) remove religious art, icons, scripture, or other
symbols;
in order to be eligible to contract to provide assistance, or
to accept certificates, vouchers, or other forms of disbursement,
funded under a program described in subsection (a)(2).
(e) RIGHTS OF BENEFICIARIES OF ASSISTANCE.—
(1) IN GENERAL.—If an individual described in paragraph
(2) has an objection to the religious character of the organization
or institution from which the individual receives, or would
receive, assistance funded under any program described in sub-
section (a)(2), the State in which the individual resides shall
provide such individual (if otherwise eligible for such assist-
ance) within a reasonable period of time after the date of
such objection with assistance from an alternative provider
H. R. 3734—59
that is accessible to the individual and the value of which
is not less than the value of the assistance which the individual
would have received from such organization.
(2) INDIVIDUAL DESCRIBED.—An individual described in this
paragraph is an individual who receives, applies for, or requests
to apply for, assistance under a program described in subsection
(a)(2).
(f) EMPLOYMENT PRACTICES.—A religious organization’s exemp-
tion provided under section 702 of the Civil Rights Act of 1964
(42 U.S.C. 2000e–1a) regarding employment practices shall not
be affected by its participation in, or receipt of funds from, programs
described in subsection (a)(2).
(g) NONDISCRIMINATION AGAINST BENEFICIARIES.—Except as
otherwise provided in law, a religious organization shall not
discriminate against an individual in regard to rendering assistance
funded under any program described in subsection (a)(2) on the
basis of religion, a religious belief, or refusal to actively participate
in a religious practice.
(h) FISCAL ACCOUNTABILITY.—
(1) IN GENERAL.—Except as provided in paragraph (2), any
religious organization contracting to provide assistance funded
under any program described in subsection (a)(2) shall be sub-
ject to the same regulations as other contractors to account
in accord with generally accepted auditing principles for the
use of such funds provided under such programs.
(2) LIMITED AUDIT.—If such organization segregates Federal
funds provided under such programs into separate accounts,
then only the financial assistance provided with such funds
shall be subject to audit.
(i) COMPLIANCE.—Any party which seeks to enforce its rights
under this section may assert a civil action for injunctive relief
exclusively in an appropriate State court against the entity or
agency that allegedly commits such violation.
(j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN PURPOSES.—
No funds provided directly to institutions or organizations to provide
services and administer programs under subsection (a)(1)(A) shall
be expended for sectarian worship, instruction, or proselytization.
(k) PREEMPTION.—Nothing in this section shall be construed
to preempt any provision of a State constitution or State statute
that prohibits or restricts the expenditure of State funds in or
by religious organizations.
SEC. 105. CENSUS DATA ON GRANDPARENTS AS PRIMARY CAREGIVERS
FOR THEIR GRANDCHILDREN.
(a) IN GENERAL.—Not later than 90 days after the date of
the enactment of this Act, the Secretary of Commerce, in carrying
out section 141 of title 13, United States Code, shall expand the
data collection efforts of the Bureau of the Census (in this section
referred to as the ‘‘Bureau’’) to enable the Bureau to collect statis-
tically significant data, in connection with its decennial census
and its mid-decade census, concerning the growing trend of grand-
parents who are the primary caregivers for their grandchildren.
(b) EXPANDED CENSUS QUESTION.—In carrying out subsection
(a), the Secretary of Commerce shall expand the Bureau’s census
question that details households which include both grandparents
and their grandchildren. The expanded question shall be formulated
to distinguish between the following households:
H. R. 3734—60
(1) A household in which a grandparent temporarily pro-
vides a home for a grandchild for a period of weeks or months
during periods of parental distress.
(2) A household in which a grandparent provides a home
for a grandchild and serves as the primary caregiver for the
grandchild.
SEC. 106. REPORT ON DATA PROCESSING.
(a) IN GENERAL.—Within 6 months after the date of the enact-
ment of this Act, the Secretary of Health and Human Services
shall prepare and submit to the Congress a report on—
(1) the status of the automated data processing systems
operated by the States to assist management in the admin-
istration of State programs under part A of title IV of the
Social Security Act (whether in effect before or after October
1, 1995); and
(2) what would be required to establish a system cap-
able of—
(A) tracking participants in public programs over
time; and
(B) checking case records of the States to determine
whether individuals are participating in public programs
of 2 or more States.
(b) PREFERRED CONTENTS.—The report required by subsection
(a) should include—
(1) a plan for building on the automated data processing
systems of the States to establish a system with the capabilities
described in subsection (a)(2); and
(2) an estimate of the amount of time required to establish
such a system and of the cost of establishing such a system.
SEC. 107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.
(a) STUDY.—The Secretary shall, in cooperation with the States,
study and analyze outcomes measures for evaluating the success
of the States in moving individuals out of the welfare system
through employment as an alternative to the minimum participation
rates described in section 407 of the Social Security Act. The study
shall include a determination as to whether such alternative out-
comes measures should be applied on a national or a State-by-
State basis and a preliminary assessment of the effects of section
409(a)(7)(C) of such Act.
(b) REPORT.—Not later than September 30, 1998, the Secretary
shall submit to the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of Represen-
tatives a report containing the findings of the study required by
subsection (a).
SEC. 108. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.
(a) AMENDMENTS TO TITLE II.—
(1) Section 205(c)(2)(C)(vi) (42 U.S.C. 405(c)(2)(C)(vi)), as
so redesignated by section 321(a)(9)(B) of the Social Security
Independence and Program Improvements Act of 1994, is
amended—
(A) by inserting ‘‘an agency administering a program
funded under part A of title IV or’’ before ‘‘an agency
operating’’; and
(B) by striking ‘‘A or D of title IV of this Act’’ and
inserting ‘‘D of such title’’.
H. R. 3734—61
(2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is amended by
inserting ‘‘under a State program funded under’’ before ‘‘part
A of title IV’’.
(b) AMENDMENTS TO PART B OF TITLE IV.—Section 422(b)(2)
(42 U.S.C. 622(b)(2)) is amended—
(1) by striking ‘‘plan approved under part A of this title’’
and inserting ‘‘program funded under part A’’; and
(2) by striking ‘‘part E of this title’’ and inserting ‘‘under
the State plan approved under part E’’.
(c) AMENDMENTS TO PART D OF TITLE IV.—
(1) Section 451 (42 U.S.C. 651) is amended by striking
‘‘aid’’ and inserting ‘‘assistance under a State program funded’’.
(2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is
amended—
(A) by striking ‘‘aid to families with dependent chil-
dren’’ and inserting ‘‘assistance under a State program
funded under part A’’;
(B) by striking ‘‘such aid’’ and inserting ‘‘such assist-
ance’’; and
(C) by striking ‘‘under section 402(a)(26) or’’ and insert-
ing ‘‘pursuant to section 408(a)(3) or under section’’.
(3) Section 452(a)(10)(F) (42 U.S.C. 652(a)(10)(F)) is
amended—
(A) by striking ‘‘aid under a State plan approved’’ and
inserting ‘‘assistance under a State program funded’’; and
(B) by striking ‘‘in accordance with the standards
referred to in section 402(a)(26)(B)(ii)’’ and inserting ‘‘by
the State’’.
(4) Section 452(b) (42 U.S.C. 652(b)) is amended in the
first sentence by striking ‘‘aid under the State plan approved
under part A’’ and inserting ‘‘assistance under the State pro-
gram funded under part A’’.
(5) Section 452(d)(3)(B)(i) (42 U.S.C. 652(d)(3)(B)(i)) is
amended by striking ‘‘1115(c)’’ and inserting ‘‘1115(b)’’.
(6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C. 652(g)(2)(A)(ii)(I))
is amended by striking ‘‘aid is being paid under the State’s
plan approved under part A or E’’ and inserting ‘‘assistance
is being provided under the State program funded under
part A’’.
(7) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended
in the matter following clause (iii) by striking ‘‘aid was being
paid under the State’s plan approved under part A or E’’
and inserting ‘‘assistance was being provided under the State
program funded under part A’’.
(8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in
the matter following subparagraph (B)—
(A) by striking ‘‘who is a dependent child’’ and inserting
‘‘with respect to whom assistance is being provided under
the State program funded under part A’’;
(B) by inserting ‘‘by the State’’ after ‘‘found’’; and
(C) by striking ‘‘to have good cause for refusing to
cooperate under section 402(a)(26)’’ and inserting ‘‘to qual-
ify for a good cause or other exception to cooperation pursu-
ant to section 454(29)’’.
(9) Section 452(h) (42 U.S.C. 652(h)) is amended by striking
‘‘under section 402(a)(26)’’ and inserting ‘‘pursuant to section
408(a)(3)’’.
H. R. 3734—62
(10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is amended by
striking ‘‘aid under part A of this title’’ and inserting ‘‘assistance
under a State program funded under part A’’.
(11) Section 454(5)(A) (42 U.S.C. 654(5)(A)) is amended—
(A) by striking ‘‘under section 402(a)(26)’’ and inserting
‘‘pursuant to section 408(a)(3)’’; and
(B) by striking ‘‘; except that this paragraph shall
not apply to such payments for any month following the
first month in which the amount collected is sufficient
to make such family ineligible for assistance under the
State plan approved under part A;’’ and inserting a comma.
(12) Section 454(6)(D) (42 U.S.C. 654(6)(D)) is amended
by striking ‘‘aid under a State plan approved’’ and inserting
‘‘assistance under a State program funded’’.
(13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is amended by
striking ‘‘under section 402(a)(26)’’.
(14) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is
amended by striking ‘‘402(a)(26)’’ and inserting ‘‘408(a)(3)’’.
(15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is amended by
striking ‘‘aid’’ and inserting ‘‘assistance under a State program
funded’’.
(16) Section 469(a) (42 U.S.C. 669(a)) is amended—
(A) by striking ‘‘aid under plans approved’’ and insert-
ing ‘‘assistance under State programs funded’’; and
(B) by striking ‘‘such aid’’ and inserting ‘‘such assist-
ance’’.
(d) AMENDMENTS TO PART E OF TITLE IV.—
(1) Section 470 (42 U.S.C. 670) is amended—
(A) by striking ‘‘would be’’ and inserting ‘‘would have
been’’; and
(B) by inserting ‘‘(as such plan was in effect on June
1, 1995)’’ after ‘‘part A’’.
(2) Section 471(a)(17) (42 U.S.C. 671(a)(17)) is amended
by striking ‘‘plans approved under parts A and D’’ and inserting
‘‘program funded under part A and plan approved under
part D’’.
(3) Section 472(a) (42 U.S.C. 672(a)) is amended—
(A) in the matter preceding paragraph (1)—
(i) by striking ‘‘would meet’’ and inserting ‘‘would
have met’’;
(ii) by inserting ‘‘(as such sections were in effect
on June 1, 1995)’’ after ‘‘407’’; and
(iii) 
by 
inserting 
‘‘(as 
so 
in 
effect)’’ 
after
‘‘406(a)’’; and
(B) in paragraph (4)—
(i) in subparagraph (A)—
(I) by inserting ‘‘would have’’ after ‘‘(A)’’; and
(II) by inserting ‘‘(as in effect on June 1, 1995)’’
after ‘‘section 402’’; and
(ii) in subparagraph (B)(ii), by inserting ‘‘(as in
effect on June 1, 1995)’’ after ‘‘406(a)’’.
(4) Section 472(h) (42 U.S.C. 672(h)) is amended to read
as follows:
‘‘(h)(1) For purposes of title XIX, any child with respect to
whom foster care maintenance payments are made under this sec-
tion is deemed to be a dependent child as defined in section 406
(as in effect as of June 1, 1995) and deemed to be a recipient
H. R. 3734—63
of aid to families with dependent children under part A of this
title (as so in effect). For purposes of title XX, any child with
respect to whom foster care maintenance payments are made under
this section is deemed to be a minor child in a needy family
under a State program funded under part A of this title and
is deemed to be a recipient of assistance under such part.
‘‘(2) For purposes of paragraph (1), a child whose costs in
a foster family home or child care institution are covered by the
foster care maintenance payments being made with respect to the
child’s minor parent, as provided in section 475(4)(B), shall be
considered a child with respect to whom foster care maintenance
payments are made under this section.’’.
(5) Section 473(a)(2) (42 U.S.C. 673(a)(2)) is amended—
(A) in subparagraph (A)(i)—
(i) by inserting ‘‘(as such sections were in effect
on June 1, 1995)’’ after ‘‘407’’;
(ii) by inserting ‘‘(as so in effect)’’ after ‘‘specified
in section 406(a)’’; and
(iii) by inserting ‘‘(as such section was in effect
on June 1, 1995)’’ after ‘‘403’’;
(B) in subparagraph (B)(i)—
(i) by inserting ‘‘would have’’ after ‘‘(B)(i)’’; and
(ii) by inserting ‘‘(as in effect on June 1, 1995)’’
after ‘‘section 402’’; and
(C) in subparagraph (B)(ii)(II), by inserting ‘‘(as in
effect on June 1, 1995)’’ after ‘‘406(a)’’.
(6) Section 473(b) (42 U.S.C. 673(b)) is amended to read
as follows:
‘‘(b)(1) For purposes of title XIX, any child who is described
in paragraph (3) is deemed to be a dependent child as defined
in section 406 (as in effect as of June 1, 1995) and deemed to
be a recipient of aid to families with dependent children under
part A of this title (as so in effect) in the State where such child
resides.
‘‘(2) For purposes of title XX, any child who is described in
paragraph (3) is deemed to be a minor child in a needy family
under a State program funded under part A of this title and
deemed to be a recipient of assistance under such part.
‘‘(3) A child described in this paragraph is any child—
‘‘(A)(i) who is a child described in subsection (a)(2), and
‘‘(ii) with respect to whom an adoption assistance agree-
ment is in effect under this section (whether or not adoption
assistance payments are provided under the agreement or are
being made under this section), including any such child who
has been placed for adoption in accordance with applicable
State and local law (whether or not an interlocutory or other
judicial decree of adoption has been issued), or
‘‘(B) with respect to whom foster care maintenance pay-
ments are being made under section 472.
‘‘(4) For purposes of paragraphs (1) and (2), a child whose
costs in a foster family home or child-care institution are covered
by the foster care maintenance payments being made with respect
to the child’s minor parent, as provided in section 475(4)(B), shall
be considered a child with respect to whom foster care maintenance
payments are being made under section 472.’’.
(e) REPEAL OF PART F OF TITLE IV.—Part F of title IV (42
U.S.C. 681–687) is repealed.
H. R. 3734—64
(f) AMENDMENT
TO TITLE X.—Section 1002(a)(7) (42 U.S.C.
1202(a)(7)) is amended by striking ‘‘aid to families with dependent
children under the State plan approved under section 402 of this
Act’’ and inserting ‘‘assistance under a State program funded under
part A of title IV’’.
(g) AMENDMENTS TO TITLE XI.—
(1) Section 1109 (42 U.S.C. 1309) is amended by striking
‘‘or part A of title IV,’’.
(2) Section 1115 (42 U.S.C. 1315) is amended—
(A) in subsection (a)(2)—
(i) by inserting ‘‘(A)’’ after ‘‘(2)’’;
(ii) by striking ‘‘403,’’;
(iii) by striking the period at the end and
inserting ‘‘, and’’; and
(iv) by adding at the end the following new
subparagraph:
‘‘(B) costs of such project which would not otherwise be
a permissible use of funds under part A of title IV and which
are not included as part of the costs of projects under section
1110, shall to the extent and for the period prescribed by
the Secretary, be regarded as a permissible use of funds under
such part.’’;
(B) in subsection (c)(3), by striking ‘‘the program of
aid to families with dependent children’’ and inserting ‘‘part
A of such title’’; and
(C) by striking subsection (b) and redesignating sub-
sections (c) and (d) as subsections (b) and (c), respectively.
(3) Section 1116 (42 U.S.C. 1316) is amended—
(A) in each of subsections (a)(1), (b), and (d), by striking
‘‘or part A of title IV,’’; and
(B) in subsection (a)(3), by striking ‘‘404,’’.
(4) Section 1118 (42 U.S.C. 1318) is amended—
(A) by striking ‘‘403(a),’’;
(B) by striking ‘‘and part A of title IV,’’; and
(C) by striking ‘‘, and shall, in the case of American
Samoa, mean 75 per centum with respect to part A of
title IV’’.
(5) Section 1119 (42 U.S.C. 1319) is amended—
(A) by striking ‘‘or part A of title IV’’; and
(B) by striking ‘‘403(a),’’.
(6) Section 1133(a) (42 U.S.C. 1320b–3(a)) is amended by
striking ‘‘or part A of title IV,’’.
(7) Section 1136 (42 U.S.C. 1320b–6) is repealed.
(8) Section 1137 (42 U.S.C. 1320b–7) is amended—
(A) in subsection (b), by striking paragraph (1) and
inserting the following:
‘‘(1) any State program funded under part A of title IV
of this Act;’’; and
(B) in subsection (d)(1)(B)—
(i) by striking ‘‘In this subsection—’’ and all that
follows through ‘‘(ii) in’’ and inserting ‘‘In this sub-
section, in’’;
(ii) by redesignating subclauses (I), (II), and (III)
as clauses (i), (ii), and (iii); and
(iii) by moving such redesignated material 2 ems
to the left.
H. R. 3734—65
(h) AMENDMENT TO TITLE XIV.—Section 1402(a)(7) (42 U.S.C.
1352(a)(7)) is amended by striking ‘‘aid to families with dependent
children under the State plan approved under section 402 of this
Act’’ and inserting ‘‘assistance under a State program funded under
part A of title IV’’.
(i) AMENDMENT TO TITLE XVI AS IN EFFECT WITH RESPECT
TO
THE TERRITORIES.—Section 1602(a)(11), as in effect without
regard to the amendment made by section 301 of the Social Security
Amendments of 1972 (42 U.S.C. 1382 note), is amended by striking
‘‘aid under the State plan approved’’ and inserting ‘‘assistance under
a State program funded’’.
(j) AMENDMENT TO TITLE XVI AS IN EFFECT WITH RESPECT
TO THE STATES.—Section 1611(c)(5)(A) (42 U.S.C. 1382(c)(5)(A)) is
amended to read as follows: ‘‘(A) a State program funded under
part A of title IV,’’.
(k) AMENDMENT
TO TITLE XIX.—Section 1902(j) (42 U.S.C.
1396a(j)) is amended by striking ‘‘1108(c)’’ and inserting ‘‘1108(f)’’.
SEC. 109. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF
1977 AND RELATED PROVISIONS.
(a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014)
is amended—
(1) in the second sentence of subsection (a), by striking
‘‘plan approved’’ and all that follows through ‘‘title IV of the
Social Security Act’’ and inserting ‘‘program funded under
part A of title IV of the Social Security Act (42 U.S.C. 601
et seq.)’’;
(2) in subsection (d)—
(A) in paragraph (5), by striking ‘‘assistance to families
with dependent children’’ and inserting ‘‘assistance under
a State program funded’’; and
(B) by striking paragraph (13) and redesignating para-
graphs (14), (15), and (16) as paragraphs (13), (14), and
(15), respectively;
(3) in subsection (j), by striking ‘‘plan approved under part
A of title IV of such Act (42 U.S.C. 601 et seq.)’’ and inserting
‘‘program funded under part A of title IV of the Act (42 U.S.C.
601 et seq.)’’; and
(4) by striking subsection (m).
(b) Section 6 of such Act (7 U.S.C. 2015) is amended—
(1) in subsection (c)(5), by striking ‘‘the State plan
approved’’ and inserting ‘‘the State program funded’’; and
(2) in subsection (e)(6), by striking ‘‘aid to families with
dependent children’’ and inserting ‘‘benefits under a State pro-
gram funded’’.
(c) Section 16(g)(4) of such Act (7 U.S.C. 2025(g)(4)) is amended
by striking ‘‘State plans under the Aid to Families with Dependent
Children Program under’’ and inserting ‘‘State programs funded
under part A of’’.
(d) Section 17 of such Act (7 U.S.C. 2026) is amended—
(1) in the first sentence of subsection (b)(1)(A), by striking
‘‘to aid to families with dependent children under part A of
title IV of the Social Security Act’’ and inserting ‘‘or are
receiving assistance under a State program funded under part
A of title IV of the Social Security Act (42 U.S.C. 601 et
seq.)’’; and
H. R. 3734—66
(2) in subsection (b)(3), by adding at the end the following
new subparagraph:
‘‘(I) The Secretary may not grant a waiver under this paragraph
on or after the date of enactment of this subparagraph. Any ref-
erence in this paragraph to a provision of title IV of the Social
Security Act shall be deemed to be a reference to such provision
as in effect on the day before such date.’’;
(e) Section 20 of such Act (7 U.S.C. 2029) is amended—
(1) in subsection (a)(2)(B) by striking ‘‘operating—’’ and
all that follows through ‘‘(ii) any other’’ and inserting ‘‘operating
any’’; and
(2) in subsection (b)—
(A) in paragraph (1)—
(i) by striking ‘‘(b)(1) A household’’ and inserting
‘‘(b) A household’’; and
(ii) in subparagraph (B), by striking ‘‘training pro-
gram’’ and inserting ‘‘activity’’;
(B) by striking paragraph (2); and
(C) by redesignating subparagraphs (A) through (F)
as paragraphs (1) through (6), respectively.
(f) Section 5(h)(1) of the Agriculture and Consumer Protection
Act of 1973 (Public Law 93–186; 7 U.S.C. 612c note) is amended
by striking ‘‘the program for aid to families with dependent children’’
and inserting ‘‘the State program funded’’.
(g) Section 9 of the National School Lunch Act (42 U.S.C.
1758) is amended—
(1) in subsection (b)—
(A) in paragraph (2)(C)(ii)(II)—
(i) by striking ‘‘program for aid to families with
dependent children’’ and inserting ‘‘State program
funded’’; and
(ii) by inserting before the period at the end the
following: ‘‘that the Secretary determines complies with
standards established by the Secretary that ensure
that the standards under the State program are com-
parable to or more restrictive than those in effect on
June 1, 1995’’; and
(B) in paragraph (6)—
(i) in subparagraph (A)(ii)—
(I) by striking ‘‘an AFDC assistance unit
(under the aid to families with dependent children
program authorized’’ and inserting ‘‘a family
(under the State program funded’’; and
(II) by striking ‘‘, in a State’’ and all that
follows through ‘‘9902(2)))’’ and inserting ‘‘that the
Secretary determines complies with standards
established by the Secretary that ensure that the
standards under the State program are comparable
to or more restrictive than those in effect on June
1, 1995’’; and
(ii) in subparagraph (B), by striking ‘‘aid to families
with dependent children’’ and inserting ‘‘assistance
under the State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et seq.)
that the Secretary determines complies with standards
established by the Secretary that ensure that the
standards under the State program are comparable
H. R. 3734—98
that accrued before the family received assist-
ance from the State.
‘‘(bb) REIMBURSEMENT
OF
GOVERNMENTS
FOR ASSISTANCE PROVIDED TO THE FAMILY.—
After the application of clause (i)(II)(aa) and
division (aa) with respect to the amount so
collected, the State shall retain the State share
of the amount so collected, and pay to the
Federal Government the Federal share (as
defined in subsection (c)(2)) of the amount so
collected, but only to the extent necessary to
reimburse amounts paid to the family as
assistance by the State.
‘‘(cc) DISTRIBUTION OF THE REMAINDER TO
THE FAMILY.—To the extent that neither divi-
sion (aa) nor division (bb) applies to the
amount so collected, the State shall distribute
the amount to the family.
‘‘(iii) DISTRIBUTION OF ARREARAGES THAT ACCRUED
WHILE THE FAMILY RECEIVED ASSISTANCE.—In the case
of a family described in this subparagraph, the provi-
sions of paragraph (1) shall apply with respect to the
distribution of support arrearages that accrued while
the family received assistance.
‘‘(iv) AMOUNTS COLLECTED PURSUANT TO SECTION
464.—Notwithstanding any other provision of this sec-
tion, any amount of support collected pursuant to
section 464 shall be retained by the State to the extent
past-due support has been assigned to the State as
a condition of receiving assistance from the State, up
to the amount necessary to reimburse the State for
amounts paid to the family as assistance by the State.
The State shall pay to the Federal Government the
Federal share of the amounts so retained. To the extent
the amount collected pursuant to section 464 exceeds
the amount so retained, the State shall distribute the
excess to the family.
‘‘(v) ORDERING
RULES
FOR
DISTRIBUTIONS.—For
purposes of this subparagraph, unless an earlier effec-
tive date is required by this section, effective October
1, 2000, the State shall treat any support arrearages
collected, except for amounts collected pursuant to sec-
tion 464, as accruing in the following order:
‘‘(I) To the period after the family ceased to
receive assistance.
‘‘(II) To the period before the family received
assistance.
‘‘(III) To the period while the family was
receiving assistance.
‘‘(3) FAMILIES THAT NEVER RECEIVED ASSISTANCE.—In the
case of any other family, the State shall distribute the amount
so collected to the family.
‘‘(4) FAMILIES UNDER CERTAIN AGREEMENTS.—In the case
of a family receiving assistance from an Indian tribe, distribute
the amount so collected pursuant to an agreement entered
into pursuant to a State plan under section 454(33).
H. R. 3734—192
‘‘(II) OTHER FACTORS.—A family or group day
care home that does not meet the criteria set forth
in clause (ii)(I) may elect to be provided reimburse-
ment factors determined in accordance with the
following requirements:
‘‘(aa) CHILDREN
ELIGIBLE
FOR
FREE
OR
REDUCED PRICE MEALS.—In the case of meals
or supplements served under this subsection
to children who are members of households
whose incomes meet the income eligibility
guidelines for free or reduced price meals
under section 9, the family or group day care
home shall be provided reimbursement factors
set by the Secretary in accordance with clause
(ii)(III).
‘‘(bb) INELIGIBLE CHILDREN.—In the case
of meals or supplements served under this
subsection to children who are members of
households whose incomes do not meet the
income eligibility guidelines, the family or
group day care home shall be provided
reimbursement factors in accordance with sub-
clause (I).
‘‘(III) INFORMATION AND DETERMINATIONS.—
‘‘(aa) IN GENERAL.—If a family or group
day care home elects to claim the factors
described in subclause (II), the family or group
day care home sponsoring organization serving
the home shall collect the necessary income
information, as determined by the Secretary,
from any parent or other caretaker to make
the determinations specified in subclause (II)
and shall make the determinations in accord-
ance with rules prescribed by the Secretary.
‘‘(bb) CATEGORICAL ELIGIBILITY.—In mak-
ing a determination under item (aa), a family
or group day care home sponsoring organiza-
tion may consider a child participating in or
subsidized under, or a child with a parent
participating in or subsidized under, a feder-
ally or State supported child care or other
benefit program with an income eligibility
limit that does not exceed the eligibility stand-
ard for free or reduced price meals under sec-
tion 9 to be a child who is a member of a
household whose income meets the income
eligibility guidelines under section 9.
‘‘(cc) FACTORS
FOR
CHILDREN
ONLY.—A
family or group day care home may elect to
receive the reimbursement factors prescribed
under clause (ii)(III) solely for the children
participating in a program referred to in item
(bb) if the home elects not to have income
statements collected from parents or other
caretakers.
‘‘(IV) SIMPLIFIED MEAL COUNTING AND REPORT-
ING PROCEDURES.—The Secretary shall prescribe
H. R. 3734—193
simplified meal counting and reporting procedures
for use by a family or group day care home that
elects to claim the factors under subclause (II)
and by a family or group day care home sponsoring
organization that sponsors the home. The proce-
dures the Secretary prescribes may include 1 or
more of the following:
‘‘(aa) Setting an annual percentage for
each home of the number of meals served that
are to be reimbursed in accordance with the
reimbursement factors prescribed under clause
(ii)(III) and an annual percentage of the num-
ber of meals served that are to be reimbursed
in accordance with the reimbursement factors
prescribed under subclause (I), based on the
family income of children enrolled in the home
in a specified month or other period.
‘‘(bb) Placing a home into 1 of 2 or more
reimbursement categories annually based on
the percentage of children in the home whose
households have incomes that meet the income
eligibility guidelines under section 9, with each
such reimbursement category carrying a set
of reimbursement factors such as the factors
prescribed under clause (ii)(III) or subclause
(I) or factors established within the range of
factors prescribed under clause (ii)(III) and
subclause (I).
‘‘(cc) Such other simplified procedures as
the Secretary may prescribe.
‘‘(V) MINIMUM VERIFICATION REQUIREMENTS.—
The Secretary may establish any minimum ver-
ification requirements that are necessary to carry
out this clause.’’.
(2) GRANTS TO STATES TO PROVIDE ASSISTANCE TO FAMILY
OR GROUP DAY CARE HOMES.—Section 17(f)(3) of the National
School Lunch Act (42 U.S.C. 1766(f)(3)) is amended by adding
at the end the following:
‘‘(D) GRANTS
TO
STATES
TO
PROVIDE
ASSISTANCE
TO
FAMILY OR GROUP DAY CARE HOMES.—
‘‘(i) IN GENERAL.—
‘‘(I) RESERVATION.—From amounts made avail-
able to carry out this section, the Secretary shall
reserve $5,000,000 of the amount made available
for fiscal year 1997.
‘‘(II) PURPOSE.—The Secretary shall use the
funds made available under subclause (I) to pro-
vide grants to States for the purpose of providing—
‘‘(aa) assistance, including grants, to fam-
ily and day care home sponsoring organiza-
tions and other appropriate organizations, in
securing and providing training, materials,
automated data processing assistance, and
other assistance for the staff of the sponsoring
organizations; and
‘‘(bb) training and other assistance to
family and group day care homes in the