708
Integrated Service Networks) and, to the extent prac-
ticable for each facility within each such network. The
Secretary shall include in the report an analysis of dif-
ferences among the networks with respect to (A) the mar-
ket in which the networks operates, (B) the effort ex-
pended to achieve collections, (C) the efficiency of such
effort, and (D) any other relevant information.
(2) The Secretary shall adjust the allocation policy
established under section 1729A(d)(2) of title 38, United
States Code, as added by subsection (a), to take account
of differences in collections that the Secretary determines
are attributable to the different markets in which net-
works operate and shall include in the report under para-
graph (1) a description of such adjustments.
(g) EFFECTIVE DATE.—(1) Except as provided in
paragraph (2), this section and the amendments made by
this section shall take effect on October 1, 1997.
(2) The amendments made by subsection (d) shall
take effect on the date of the enactment of this Act.
SEC. 8014. INCOME VERIFICATION AUTHORITY.
(a) EXTENSION.—Section 5317(g) of title 38, United
States Code, is amended by striking out ‘‘September 30,
1998’’ and inserting in lieu thereof ‘‘September 30,
2002’’.
709
(b) SOCIAL SECURITY AND TAX RETURN INFORMA-
TION.—Section 6103(l)(7) of the Internal Revenue Code
of 1986 is amended by striking out ‘‘Clause (viii) shall
not apply after September 30, 1998’’ and inserting in lieu
thereof ‘‘Clause (viii) shall not apply after September 30,
2002’’.
SEC. 8015. LIMITATION ON PENSION FOR CERTAIN RECIPI-
ENTS 
OF 
MEDICAID-COVERED 
NURSING
HOME CARE.
Section 5503(f)(7) of title 38, United States Code,
is amended by striking out ‘‘September 30, 1998’’ and in-
serting in lieu thereof ‘‘September 30, 2002’’.
SEC. 8016. HOME LOAN FEES.
(a) INCREASE
IN LOAN FEE UNDER PROPERTY
MANAGEMENT
PROGRAM.—Paragraph (2) of section
3729(a) of title 38, United States Code, is amended—
(1) in subparagraph (A), by striking out ‘‘or
3733(a)’’;
(2) by striking out ‘‘and’’ at the end of sub-
paragraph (D);
(3) by striking out the period at the end of sub-
paragraph (E) and inserting in lieu thereof ‘‘; and’’;
and
(4) by adding at the end the following new sub-
paragraph:
710
‘‘(F) in the case of a loan made under section
3733(a) of this title, the amount of such fee shall be
2.25 percent of the total loan amount.’’.
(b) EXTENSIONS.—Such section is further amend-
ed—
(1) in paragraph (4)—
(A) by striking out ‘‘October 1, 1998’’ and
inserting in lieu thereof ‘‘October 1, 2002’’; and
(B) by striking out ‘‘or (E)’’ and inserting
in lieu thereof ‘‘(E), or (F)’’; and
(2) in paragraph (5)(C), by striking out ‘‘Octo-
ber 1, 1998’’ and inserting in lieu thereof ‘‘October
1, 2002’’.
SEC. 8017. PROCEDURES APPLICABLE TO LIQUIDATION
SALES ON DEFAULTED HOME LOANS GUAR-
ANTEED BY THE SECRETARY OF VETERANS
AFFAIRS.
Section 3732(c)(11) of title 38, United States Code,
is amended by striking out ‘‘October 1, 1998’’ and insert-
ing ‘‘October 1, 2002’’.
SEC. 8018. ENHANCED LOAN ASSET SALE AUTHORITY.
Section 3720(h)(2) of title 38, United States Code,
is amended by striking out ‘‘December 31, 1997’’ and in-
serting in lieu thereof ‘‘September 30, 2002’’.
711
Subtitle B—Other Matters
SEC. 8021. ROUNDING DOWN OF COST-OF-LIVING ADJUST-
MENTS IN COMPENSATION AND DIC RATES.
(a) COMPENSATION COLAS.—(1) Chapter 11 of title
38, United States Code, is amended by inserting after sec-
tion 1102 the following new section:
‘‘§ 1103. Cost-of-living adjustments
‘‘(a) In the computation of cost-of-living adjustments
for fiscal years 1998 through 2002 in the rates of, and
dollar limitations applicable to, compensation payable
under this chapter, such adjustments shall be made by a
uniform percentage that is no more than the percentage
equal to the social security increase for that fiscal year,
with all increased monthly rates and limitations (other
than increased rates or limitations equal to a whole dollar
amount) rounded down to the next lower whole dollar
amount.
‘‘(b) For purposes of this section, the term ‘social se-
curity increase’ means the percentage by which benefit
amounts payable under title II of the Social Security Act
(42 U.S.C. 401 et seq.) are increased for any fiscal year
as a result of a determination under section 215(i) of such
Act (42 U.S.C. 415(i)).’’.
712
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1102 the following new item:
‘‘1103. Cost-of-living adjustments.’’.
(b) OUT-YEAR DIC COLAS.—(1) Chapter 13 of title
38, United States Code, is amended by inserting after sec-
tion 1302 the following new section:
‘‘§ 1303. Cost-of-living adjustments
‘‘(a) In the computation of cost-of-living adjustments
for fiscal years 1998 through 2002 in the rates of depend-
ency and indemnity compensation payable under this
chapter, such adjustments shall be made by a uniform per-
centage that is no more than the percentage equal to the
social security increase for that fiscal year, with all in-
creased monthly rates (other than increased rates equal
to a whole dollar amount) rounded down to the next lower
whole dollar amount.
‘‘(b) For purposes of this section, the term ‘social se-
curity increase’ means the percentage by which benefit
amounts payable under title II of the Social Security Act
(42 U.S.C. 401 et seq.) are increased for any fiscal year
as a result of a determination under section 215(i) of such
Act (42 U.S.C. 415(i)).’’.
713
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1302 the following new item:
‘‘1303. Cost-of-living adjustments.’’.
SEC. 8022. WITHHOLDING OF PAYMENTS AND BENEFITS.
(a) NOTICE REQUIRED IN LIEU OF CONSENT OR
COURT ORDER.—Section 3726 of title 38, United States
Code, is amended by striking out ‘‘unless’’ and all that
follows and inserting in lieu thereof the following: ‘‘unless
the Secretary provides such veteran or surviving spouse
with notice by certified mail with return receipt requested
of the authority of the Secretary to waive the payment
of indebtedness under section 5302(b) of this title. If the
Secretary does not waive the entire amount of the liability,
the Secretary shall then determine whether the veteran or
surviving spouse should be released from liability under
section 3713(b) of this title. If the Secretary determines
that the veteran or surviving spouse should not be released
from liability, the Secretary shall notify the veteran or sur-
viving spouse of that determination and provide a notice
of the procedure for appealing that determination, unless
the Secretary has previously made such determination and
notified the veteran or surviving spouse of the procedure
for appealing the determination.’’.
714
(b) CONFORMING AMENDMENT.—Section 5302(b) of
such title is amended by inserting ‘‘with return receipt re-
quested’’ after ‘‘certified mail’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to any indebtedness
to the United States arising pursuant to chapter 37 of
title 38, United States Code, before, on, or after the date
of the enactment of this Act.
TITLE IX—COMMITTEE ON WAYS
AND MEANS—NONMEDICARE
SEC. 9000. TABLE OF CONTENTS.
The table of contents of this title is as follows:
Sec. 9000. Table of contents.
Subtitle A—TANF Block Grant
Sec. 9001. Welfare-to-work grants.
Sec. 9002. Limitation on amount of Federal funds transferable to title XX pro-
grams.
Sec. 9003. Clarification of limitation on number of persons who may be treated
as engaged in work by reason of participation in vocational
educational training.
Sec. 9004. Rules governing expenditures of funds for work experience and com-
munity service programs.
Sec. 9005. State option to take account of certain work activities of recipients
with sufficient participation in work experience or community
service programs.
Sec. 9006. Worker protections.
Sec. 9007. Penalty for failure of State to reduce assistance for recipients refus-
ing without good cause to work.
Subtitle B—Supplemental Security Income
Sec. 9101. Requirement to perform childhood disability redeterminations in
missed cases.
Sec. 9102. Repeal of maintenance of effort requirements applicable to optional
State programs for supplementation of SSI benefits.
Sec. 9103. Fees for Federal administration of State supplementary payments.
Subtitle C—Child Support Enforcement
715
Sec. 9201. Clarification of authority to permit certain redisclosures of wage and
claim information.
Subtitle D—Restricting Welfare and Public Benefits for Aliens
Sec. 9301. Extension of eligibility period for refugees and certain other quali-
fied aliens from 5 to 7 years for SSI and medicaid.
Sec. 9302. SSI eligibility for aliens receiving SSI on August 22, 1996.
Sec. 9303. SSI eligibility for permanent resident aliens who are members of an
Indian tribe.
Sec. 9304. Verification of eligibility for State and local public benefits.
Sec. 9305. Derivative eligibility for benefits.
Sec. 9306. Effective date.
Subtitle E—Unemployment Compensation
Sec. 9401. Clarifying provision relating to base periods.
Sec. 9402. Increase in Federal unemployment account ceiling.
Sec. 9403. Special distribution to States from Unemployment Trust Fund.
Sec. 9404. Interest-free advances to State accounts in Unemployment Trust
Fund restricted to States which meet funding goals.
Sec. 9405. Exemption of service performed by election workers from the Fed-
eral unemployment tax.
Sec. 9406. Treatment of certain services performed by inmates.
Sec. 9407. Exemption of service performed for an elementary or secondary
school operated primarily for religious purposes from the Fed-
eral unemployment tax.
Sec. 9408. State program integrity activities for unemployment compensation.
Subtitle F—Increase in Public Debt Limit
Sec. 9501. Increase in public debt limit.
Subtitle A—TANF Block Grant
SEC. 9001. WELFARE-TO-WORK GRANTS.
(a) GRANTS TO STATES.—
(1) IN GENERAL.—Section 403(a) of the Social
Security Act (42 U.S.C. 603(a)) is amended by add-
ing at the end the following:
‘‘(5) WELFARE-TO-WORK GRANTS.—
‘‘(A) NONCOMPETITIVE GRANTS.—
‘‘(i) ENTITLEMENT.—A State shall be
entitled to receive from the Secretary a
grant for each fiscal year specified in sub-
716
paragraph (H) of this paragraph for which
the State is a welfare-to-work State, in an
amount that does not exceed the lesser
of——
‘‘(I) 2 times the total of the ex-
penditures by the State (excluding
qualified State expenditures (as de-
fined in section 409(a)(7)(B)(i)) and
any expenditure described in sub-
clause (I), (II), or (IV) of section
409(a)(7)(B)(iv)) during the fiscal
year for activities described in sub-
paragraph (C)(i) of this paragraph; or
‘‘(II) the allotment of the State
under clause (iii) of this subparagraph
for the fiscal year.
‘‘(ii) WELFARE-TO-WORK
STATE.—A
State shall be considered a welfare-to-work
State for a fiscal year for purposes of this
subparagraph if the Secretary, after con-
sultation (and the sharing of any plan or
amendment thereto submitted under this
clause) with the Secretary of Health and
Human Services and the Secretary of
Housing and Urban Development, deter-
717
mines that the State meets the following
requirements:
‘‘(I) The State has submitted to
the Secretary (in the form of an ad-
dendum to the State plan submitted
under section 402) a plan which—
‘‘(aa) describes how, consist-
ent with this subparagraph, the
State will use any funds provided
under this subparagraph during
the fiscal year;
‘‘(bb) specifies the formula
to be used pursuant to clause (vi)
to distribute funds in the State,
and describes the process by
which the formula was developed;
‘‘(cc) contains evidence that
the plan was developed in con-
sultation and coordination with
sub-State areas; and
‘‘(dd) is approved by the
agency administering the State
program funded under this part.
‘‘(II) The State has provided the
Secretary with an estimate of the
718
amount that the State intends to ex-
pend during the fiscal year (excluding
expenditures 
described 
in 
section
409(a)(7)(B)(iv)) for activities de-
scribed in subparagraph (C)(i) of this
paragraph.
‘‘(III) The State has agreed to
negotiate in good faith with the Sec-
retary of Health and Human Services
with respect to the substance of any
evaluation under section 413(j), and
to cooperate with the conduct of any
such evaluation.
‘‘(IV) The State is an eligible
State for the fiscal year.
‘‘(V) Qualified State expenditures
(within 
the 
meaning 
of 
section
409(a)(7)) are at least 80 percent of
historic State expenditures (within the
meaning of such section), with respect
to the fiscal year or the immediately
preceding fiscal year.
‘‘(iii) ALLOTMENTS TO WELFARE-TO-
WORK STATES.—The allotment of a wel-
fare-to-work State for a fiscal year shall be
719
the available amount for the fiscal year
multiplied by the State percentage for the
fiscal year.
‘‘(iv) AVAILABLE AMOUNT.—As used
in this subparagraph, the term ‘available
amount’ means, for a fiscal year, the sum
of—
‘‘(I) 50 percent of the sum of—
‘‘(aa) the amount specified
in subparagraph (H) for the fis-
cal year, minus the total of the
amounts reserved pursuant to
subparagraphs (F) and (G) for
the fiscal year; and
‘‘(bb) any amount reserved
pursuant to subparagraph (F)
for the immediately preceding fis-
cal year that has not been obli-
gated; and
‘‘(II) any available amount for
the immediately preceding fiscal year
that has not been obligated by a State
or sub-State entity.
‘‘(v) STATE
PERCENTAGE.—As
used in clause (iii), the term ‘State
720
percentage’ means, with respect to a
fiscal year, 1⁄3 of the sum of—
‘‘(aa) the percentage rep-
resented by the number of indi-
viduals in the State whose in-
come is less than the poverty line
divided by the number of such in-
dividuals in the United States;
‘‘(bb) the percentage rep-
resented by the number of unem-
ployed individuals in the State di-
vided by the number of such indi-
viduals in the United States; and
‘‘(cc) the percentage rep-
resented by the number of indi-
viduals who are adult recipients
of assistance under the State
program funded under this part
divided by the number of individ-
uals in the United States who are
adult recipients of assistance
under any State program funded
under this part.
‘‘(vi) DISTRIBUTION OF FUNDS WITH-
IN STATES.—
721
‘‘(I) IN
GENERAL.—A State to
which a grant is made under this sub-
paragraph shall distribute not less
than 85 percent of the grant funds
among the service delivery areas in
the State, in accordance with a for-
mula which—
‘‘(aa) 
determines 
the
amount to be distributed for the
benefit of a service delivery area
in proportion to the number (if
any) by which the number of in-
dividuals residing in the service
delivery area with an income that
is less than the poverty line ex-
ceeds 5 percent of the population
of the service delivery area, rel-
ative to such number for the
other service delivery areas in the
State, and accords a weight of
not less than 50 percent to this
factor;
‘‘(bb) may determine the
amount to be distributed for the
benefit of a service delivery area
722
in proportion to the number of
adults residing in the service de-
livery area who are recipients of
assistance under the State pro-
gram funded under this part
(whether in effect before or after
the amendments made by section
103(a) of the Personal Respon-
sibility and Work Opportunity
Reconciliation Act first applied to
the State) for at least 30 months
(whether or not consecutive) rel-
ative to the number of such
adults residing in the other serv-
ice delivery areas in the State;
and
‘‘(cc) may determine the
amount to be distributed for the
benefit of a service delivery area
in proportion to the number of
unemployed individuals residing
in the service delivery area rel-
ative to the number of such indi-
viduals residing in the other serv-
ice delivery areas in the State.
723
‘‘(II) SPECIAL
RULE.—Notwith-
standing subclause (I), if the formula
used pursuant to subclause (I) would
result in the distribution of less than
$100,000 during a fiscal year for the
benefit of a service delivery area, then
in lieu of distributing such sum in ac-
cordance with the formula, such sum
shall be available for distribution
under subclause (III) during the fiscal
year.
‘‘(III) PROJECTS TO HELP LONG-
TERM
RECIPIENTS
OF
ASSISTANCE
INTO THE WORK FORCE.—The Gov-
ernor of a State to which a grant is
made under this subparagraph may
distribute not more than 15 percent of
the grant funds (plus any amount re-
quired to be distributed under this
subclause by reason of subclause (II))
to projects that appear likely to help
long-term 
recipients 
of 
assistance
under the State program funded
under this part (whether in effect be-
fore or after the amendments made by
724
section 103(a) of the Personal Re-
sponsibility and Work Opportunity
Reconciliation Act first applied to the
State) enter the work force.
‘‘(vii) ADMINISTRATION.—
‘‘(I) 
IN
GENERAL.—A 
grant
made under this subparagraph to a
State shall be administered by the
State agency that is administering, or
supervising the administration of, the
State program funded under this part,
or by another State agency designated
by the Governor of the State.
‘‘(II) SPENDING BY PRIVATE IN-
DUSTRY
COUNCILS.—The private in-
dustry council for a service delivery
area shall have sole authority to ex-
pend the amounts provided for the
benefit of a service delivery area
under subparagraph (vi)(I), pursuant
to an agreement with the agency that
is administering the State program
funded under this part in the service
delivery area.
‘‘(B) COMPETITIVE GRANTS.—
725
‘‘(i) IN GENERAL.—The Secretary, in
consultation with the Secretary of Health
and Human Services and the Secretary of
Housing and Urban Development, shall
award grants in accordance with this sub-
paragraph, in fiscal years 1998 and 1999,
for projects proposed by eligible applicants,
based on the following:
‘‘(I) The effectiveness of the pro-
posal in—
‘‘(aa) expanding the base of
knowledge about programs aimed
at moving recipients of assistance
under State programs funded
under this part who are least job
ready into the work force.
‘‘(bb) moving recipients of
assistance under State programs
funded under this part who are
least job ready into the work
force; and
‘‘(cc) moving recipients of
assistance under State programs
funded under this part who are
least job ready into the work
726
force, even in labor markets that
have a shortage of low-skill jobs.
‘‘(II) At the discretion of the
Secretary, any of the following:
‘‘(aa) The history of success
of the applicant in moving indi-
viduals with multiple barriers
into work.
‘‘(bb) Evidence of the appli-
cant’s ability to leverage private,
State, and local resources.
‘‘(cc) Use by the applicant
of State and local resources be-
yond those required by subpara-
graph (A).
‘‘(dd) Plans of the applicant
to coordiate with other organiza-
tions at the local and State level.
‘‘(ee) Use by the applicant
of current or former recipients of
assistance under a State program
funded under this part as men-
tors, case managers, or service
providers.
727
‘‘(ii) ELIGIBLE APPLICANTS.—As used
in clause (i), the term ‘eligible applicant’
means a private industry council or a polit-
ical subdivision of a State that submits a
proposal that is approved by the agency
administering the State program funded
under this part.
‘‘(iii) DETERMINATION
OF
GRANT
AMOUNT.—In determining the amount of a
grant to be made under this subparagraph
for a project proposed by an applicant, the
Secretary shall provide the applicant with
an amount sufficient to ensure that the
project has a reasonable opportunity to be
successful, taking into account the number
of long-term recipients of assistance under
a State program funded under this part,
the level of unemployment, the job oppor-
tunities and job growth, the poverty rate,
and such other factors as the Secretary
deems appropriate, in the area to be served
by the project.
‘‘(iv) TARGETING OF FUNDS TO CER-
TAIN AREAS.—
728
‘‘(I) CITIES
WITH
GREATEST
NUMBER OF PERSONS WITH INCOME
LESS THAN THE POVERTY LINE.—The
Secretary shall use not less than 65
percent of the funds available for
grants under this subparagraph for a
fiscal year to award grants for ex-
penditures in cities that are among
the 100 cities in the United States
with the highest number of residents
with an income that is less than the
poverty line.
‘‘(II) RURAL AREAS.—
‘‘(aa) IN
GENERAL.—The
Secretary shall use not less than
25 percent of the funds available
for grants under this subpara-
graph for a fiscal year to award
grants for expenditures in rural
areas.
‘‘(bb) 
RURAL
AREA
DE-
FINED.—As used in item (aa),
the term ‘rural area’ means a
city, town, or unincorporated
area that has a population of
729
50,000 or fewer inhabitants and
that is not an urbanized area im-
mediately adjacent to a city,
town, or unincorporated area
that has a population of more
than 50,000 inhabitants.
‘‘(v) FUNDING.—For grants under
this subparagraph for each fiscal year
specified in subparagraph (H), there shall
be available to the Secretary an amount
equal to the sum of—
‘‘(I) 50 percent of the sum of—
‘‘(aa) the amount specified
in subparagraph (H) for the fis-
cal year, minus the total of the
amounts reserved pursuant to
subparagraphs (F) and (G) for
the fiscal year; and
‘‘(bb) any amount reserved
pursuant to subparagraph (F)
for the immediately preceding fis-
cal year that has not been obli-
gated; and
‘‘(II) any amount available for
grants under this subparagraph for
730
the immediately preceding fiscal year
that has not been obligated.
‘‘(C) LIMITATIONS ON USE OF FUNDS.—
‘‘(i) ALLOWABLE ACTIVITIES.—An en-
tity to which funds are provided under this
paragraph may use the funds to move into
the work force recipients of assistance
under the program funded under this part
of the State in which the entity is located
and the noncustodial parent of any minor
who is such a recipient, by means of any
of the following:
‘‘(I) Job creation through public
or private sector employment wage
subsidies.
‘‘(II) On-the-job training.
‘‘(III) Contracts with public or
private providers of readiness, place-
ment, and post-employment services.
‘‘(IV) Job vouchers for place-
ment, readiness, and postemployment
services.
‘‘(V) Job support services (ex-
cluding child care services) if such
services are not otherwise available.
731
‘‘(ii) REQUIRED BENEFICIARIES.—An
entity that operates a project with funds
provided under this paragraph shall expend
at least 90 percent of all funds provided to
the project for the benefit of recipients of
assistance under the program funded
under this part of the State in which the
entity is located who meet the require-
ments of each of the following subclauses:
‘‘(I) At least 2 of the following
apply to the recipient:
‘‘(aa) The individual has not
completed secondary school or
obtained a certificate of general
equivalency, and has low skills in
reading and mathematics.
‘‘(bb) The individual re-
quires substance abuse treatment
for employment.
‘‘(cc) The individual has a
poor work history.
The Secretary shall prescribe such
regulations as may be necessary to in-
terpret this subclause.
‘‘(II) The individual—
732
‘‘(aa) has received assistance
under the State program funded
under this part (whether in effect
before or after the amendments
made by section 103 of the Per-
sonal Responsibility and Work
Opportunity Reconciliation Act of
1996 first apply to the State) for
at least 30 months (whether or
not consecutive); or
‘‘(bb) within 12 months, will
become ineligible for assistance
under the State program funded
under this part by reason of a
durational limit on such assist-
ance, without regard to any ex-
emption provided pursuant to
section 408(a)(7)(C) that may
apply to the individual.
‘‘(iii) LIMITATION ON APPLICABILITY
OF
SECTION
404.—The rules of section
404, other than subsections (b), (f), and
(h) of section 404, shall not apply to a
grant made under this paragraph.
733
‘‘(iv) LIMITATIONS RELATING TO PRI-
VATE INDUSTRY COUNCILS.—
‘‘(I) NO
DIRECT
PROVISION
OF
SERVICES.—A private industry council
may not directly provide services
using funds provided under this para-
graph.
‘‘(II) COOPERATION WITH TANF
AGENCY.—On a determination by the
Secretary, in consultation with the
Secretary of Health and Human Serv-
ices and the Secretary of Housing and
Urban Development, that the private
industry council for a service delivery
area in a State for which funds are
provided under this paragraph and
the agency administering the State
program funded under this part are
not adhering to the agreement re-
ferred to in subparagraph (A)(vii)(II)
to implement any plan or project for
which the funds are provided, the re-
cipient of the funds shall remit the
funds to the Secretary.
734
‘‘(v) PROHIBITION
AGAINST
USE
OF
GRANT
FUNDS
FOR
ANY
OTHER
FUND
MATCHING
REQUIREMENT.—An entity to
which funds are provided under this para-
graph shall not use any part of the funds
to fulfill any obligation of any State, politi-
cal subdivision, or private industry council
to contribute funds under other Federal
law.
‘‘(vi) 
DEADLINE
FOR
EXPENDI-
TURE.—An entity to which funds are pro-
vided under this paragraph shall remit to
the Secretary any part of the funds that
are not expended within 3 years after the
date the funds are so provided.
‘‘(D) INDIVIDUALS
WITH
INCOME
LESS
THAN THE POVERTY LINE.—For purposes of
this paragraph, the number of individuals with
an income that is less than the poverty line
shall be determined based on the methodology
used by the Bureau of the Census to produce
and publish intercensal poverty data for 1993
for States and counties.
‘‘(E) DEFINITIONS.—As used in this para-
graph:
735
‘‘(i) PRIVATE INDUSTRY COUNCIL.—
The term ‘private industry council’ means,
with respect to a service delivery area, the
private industry council (or successor en-
tity) established for the service delivery
area pursuant to the Job Training Part-
nership Act.
‘‘(ii) SECRETARY.—The term ‘Sec-
retary’ means the Secretary of Labor, ex-
cept as otherwise expressly provided.
‘‘(iii) SERVICE DELIVERY AREA.—The
term ‘service delivery area’ shall have the
meaning given such term for purposes of
the Job Training Partnership Act.
‘‘(F) SET-ASIDE FOR INDIAN TRIBES.—1
percent of the amount specified in subpara-
graph (H) for each fiscal year shall be reserved
for grants to Indian tribes under section
412(a)(3).
‘‘(G) SET-ASIDE FOR EVALUATIONS.—0.5
percent of the amount specified in subpara-
graph (H) for each fiscal year shall be reserved
for use by the Secretary of Health and Human
Services to carry out section 413(j).
736
‘‘(H) FUNDING.—The amount specified in
this subparagraph is $1,500,000,000 for each
of fiscal years 1998 and 1999.
‘‘(I) BUDGET SCORING.—Notwithstanding
section 457(b)(2) of the Balanced Budget and
Emergency Deficit Control Act of 1985, the
baseline shall assume that no grant shall be
awarded under this paragraph or under section
412(a)(3) after fiscal year 2000.
(2) 
CONFORMING
AMENDMENT.—Section
409(a)(7)(B)(iv) 
of 
such 
Act 
(42 
U.S.C.
609(a)(7)(B)(iv)) is amended to read as follows:
‘‘(iv) 
EXPENDITURES
BY
THE
STATE.—The term ‘expenditures by the
State’ does not include—
‘‘(I) 
any 
expenditure 
from
amounts made available by the Fed-
eral Government;
‘‘(II) any State funds expended
for the medicaid program under title
XIX;
‘‘(III) any State funds which are
used to match Federal funds provided
under section 403(a)(5); or
737
‘‘(IV) any State funds which are
expended as a condition of recieving
Federal funds other than under this
part.
Notwithstanding subclause (IV) of the pre-
ceding sentence, such term includes ex-
penditures by a State for child care in a
fiscal year to the extent that the total
amount of the expenditures does not ex-
ceed the amount of State expenditures in
fiscal year 1994 or 1995 (whichever is the
greater) that equal the non-Federal share
for the programs described in section
418(a)(1)(A).’’.
(b) GRANTS TO OUTLYING AREAS.—Section 1108(a)
of such Act (42 U.S.C. 1308(a)) is amended by inserting
‘‘(except section 403(a)(5))’’ after ‘‘title IV’’.
(c) GRANTS TO INDIAN TRIBES.—Section 412(a) of
such Act (42 U.S.C. 612(a)) is amended by adding at the
end the following:
‘‘(3) WELFARE-TO-WORK GRANTS.—
‘‘(A) IN
GENERAL.—The Secretary shall
award a grant in accordance with this para-
graph to an Indian tribe for each fiscal year
specified in section 403(a)(5)(H) for which the
738
Indian tribe is a welfare-to-work tribe, in such
amount as the Secretary deems appropriate,
subject to subparagraph (B) of this paragraph.
‘‘(B) WELFARE-TO-WORK TRIBE.—An In-
dian tribe shall be considered a welfare-to-work
tribe for a fiscal year for purposes of this para-
graph if the Indian tribe meets the following re-
quirements:
‘‘(i) The Indian tribe has submitted to
the Secretary (in the form of an addendum
to the tribal family assistance plan, if any,
of the Indian tribe) a plan which describes
how, consistent with section 403(a)(5), the
Indian tribe will use any funds provided
under this paragraph during the fiscal
year.
‘‘(ii) The Indian tribe has provided
the Secretary with an estimate of the
amount that the Indian tribe intends to ex-
pend during the fiscal year (excluding trib-
al 
expenditures 
described 
in 
section
409(a)(7)(B)(iv)) for activities described in
section 403(a)(5)(C)(i).
‘‘(iii) The Indian tribe has agreed to
negotiate in good faith with the Secretary
739
of Health and Human Services with re-
spect to the substance of any evaluation
under section 413(j), and to cooperate with
the conduct of any such evaluation.
‘‘(C) LIMITATIONS ON USE OF FUNDS.—
Section 403(a)(5)(C) shall apply to funds pro-
vided to Indian tribes under this paragraph in
the same manner in which such section applies
to funds provided under section 403(a)(5).’’.
(d) FUNDS RECEIVED FROM GRANTS TO BE DIS-
REGARDED IN APPLYING DURATIONAL LIMIT ON ASSIST-
ANCE.—Section 408(a)(7) of such Act (42 U.S.C.
608(a)(7)) is amended by adding at the end the following:
‘‘(G) INAPPLICABILITY
TO
WELFARE-TO-
WORK GRANTS AND ASSISTANCE.—For purposes
of subparagraph (A) of this paragraph, a grant
made under section 403(a)(5) shall not be con-
sidered a grant made under section 403, and
assistance from funds provided under section
403(a)(5) shall not be considered assistance.’’.
(e) EVALUATIONS.—Section 413 of such Act (42
U.S.C. 613) is amended by adding at the end the follow-
ing:
‘‘(j) EVALUATION
OF
WELFARE-TO-WORK
PRO-
GRAMS.—
740
‘‘(1) EVALUATION.—The Secretary—
‘‘(A) shall, in consultation with the Sec-
retary of Labor, develop a plan to evaluate how
grants made under sections 403(a)(5) and
412(a)(3) have been used;
‘‘(B) may evaluate the use of such grants
by such grantees as the Secretary deems appro-
priate, in accordance with an agreement entered
into with the grantees after good-faith negotia-
tions; and
‘‘(C) is urged to include the following out-
come measures in the plan developed under
subparagraph (A):
‘‘(i) Placements in the labor force and
placements in the labor force that last for
at least 6 months.
‘‘(ii) Placements in the private and
public sectors.
‘‘(iii) Earnings of individuals who ob-
tain employment.
‘‘(iv) Average expenditures per place-
ment.
‘‘(2) REPORTS TO THE CONGRESS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), the Secretary, in consulta-
741
tion with the Secretary of Labor and the Sec-
retary of Housing and Urban Development,
shall submit to the Congress reports on the
projects funded under section 403(a)(5) and
412(a)(3) and on the evaluations of the
projects.
‘‘(B) INTERIM
REPORT.—Not later than
January 1, 1999, the Secretary shall submit an
interim report on the matter described in sub-
paragraph (A).
‘‘(C) FINAL REPORT.—Not later than Jan-
uary 1, 2001, (or at a later date, if the Sec-
retary informs the Committees of the Congress
with jurisdiction over the subject matter of the
report) the Secretary shall submit a final report
on the matter described in subparagraph (A).’’.
SEC. 9002. LIMITATION ON AMOUNT OF FEDERAL FUNDS
TRANSFERABLE TO TITLE XX PROGRAMS.
(a) IN GENERAL.—Section 404(d) of the Social Secu-
rity Act (42 U.S.C. 604(d)) is amended—
(1) in paragraph (1), by striking ‘‘A State
may’’ and inserting ‘‘Subject to paragraph (2), a
State may’’; and
(2) by amending paragraph (2) to read as fol-
lows:
742
‘‘(2) LIMITATION ON AMOUNT TRANSFERABLE
TO
TITLE
XX
PROGRAMS.—A State may use not
more than 10 percent of the amount of any grant
made to the State under section 403(a) for a fiscal
year to carry out State programs pursuant to title
XX.’’.
(b) RETROACTIVITY.—The amendments made by
subsection (a) of this section shall take effect as if in-
cluded in the enactment of section 103(a) of the Personal
Responsibility and Work Opportunity Reconciliation Act
of 1996.
SEC. 9003. CLARIFICATION OF LIMITATION ON NUMBER OF
PERSONS WHO MAY BE TREATED AS EN-
GAGED IN WORK BY REASON OF PARTICIPA-
TION IN VOCATIONAL EDUCATIONAL TRAIN-
ING.
(a) IN GENERAL.—Section 407(c)(2)(D) of the Social
Security Act (42 U.S.C. 607(c)(2)(D)) is amended to read
as follows:
‘‘(D) LIMITATION
ON
NUMBER
OF
PER-
SONS WHO MAY BE TREATED AS ENGAGED IN
WORK BY REASON OF PARTICIPATION IN VOCA-
TIONAL
EDUCATIONAL
TRAINING.—For pur-
poses of determining monthly participation
rates under paragraphs (1)(B)(i) and (2)(B) of
743
subsection (b), not more than 30 percent of the
number of individuals in all families and in 2-
parent families, respectively, in a State who are
treated as engaged in work for a month may
consist of individuals who are determined to be
engaged in work for the month by reason of
participation in vocational educational train-
ing.’’.
(b) RETROACTIVITY.—The amendment made by sub-
section (a) of this section shall take effect as if included
in the enactment of section 103(a) of the Personal Re-
sponsibility and Work Opportunity Reconciliation Act of
1996.
SEC. 9004. RULES GOVERNING EXPENDITURE OF FUNDS
FOR WORK EXPERIENCE AND COMMUNITY
SERVICE PROGRAMS.
(a) IN GENERAL.—Section 407 of the Social Security
Act (42 U.S.C. 607) is amended by adding at the end the
following:
‘‘(j) RULES GOVERNING EXPENDITURE OF FUNDS
FOR WORK EXPERIENCE AND COMMUNITY SERVICE PRO-
GRAMS.—
‘‘(1) IN GENERAL.—To the extent that a State
to which a grant is made under section 403(a)(5) or
any other provision of section 403 uses the grant to
744
establish or operate a work experience or community
service program, the State may establish and oper-
ate the program in accordance with this subsection.
‘‘(2) PURPOSE.—The purpose of a work experi-
ence or community experience program is to provide
experience or training for individuals not able to ob-
tain employment in order to assist them to move to
regular employment. Such a program shall be de-
signed to improve the employability of participants
through actual work experience to enable individuals
participating in the program to move promptly into
regular public or private employment. Such a pro-
gram shall not place individuals in private, for-profit
entities.
‘‘(3) LIMITATION ON PROJECTS THAT MAY BE
UNDERTAKEN.—A work experience or community
service program shall be limited to projects which
serve a useful public purpose in fields such as
health, social service, environmental protection, edu-
cation, urban and rural development and redevelop-
ment, welfare, recreation, public facilities, public
safety, and day care, and other purposes identified
by the State.
‘‘(4) MAXIMUM HOURS OF PARTICIPATION PER
MONTH.—A State that elects to establish a work ex-
745
perience or community service program shall operate
the program so that each participant participates in
the program with the maximum number of hours
that any such individual may be required to partici-
pate in any month being a number equal to—
‘‘(A)(i) the amount of assistance provided
during the month to the family of which the in-
dividual is a member under the State program
funded under this part; plus
‘‘(ii) the dollar value equivalent of any ben-
efits provided during the month to the house-
hold of which the individual is a member under
the food stamp program under the Food Stamp
Act of 1977; minus
‘‘(iii) any amount collected by the State as
child support with respect to the family that is
retained by the State; divided by
‘‘(B) the greater of the Federal minimum
wage or the applicable State minimum wage.
‘‘(5) MAXIMUM HOURS OF PARTICIPATION PER
WEEK.—A State that elects to establish a work ex-
perience or community service program may not re-
quire any participant in any such program to par-
ticipate in any such program for a combined total of
more than 40 hours per week.
746
‘‘(6) RULE
OF
INTERPRETATION.—This sub-
section shall not be construed as authorizing the
provision of assistance under a State program fund-
ed under this part as compensation for work per-
formed, nor shall a participant be entitled to a sal-
ary or to any other work or training expense pro-
vided under any other provision of law by reason of
participation in a work experience or community
service program described in this subsection.’’.
(b) RETROACTIVITY.—The amendment made by sub-
section (a) of this section shall take effect as if included
in the enactment of section 103(a) of the Personal Re-
sponsibility and Work Opportunity Reconciliation Act of
1996.
SEC. 9005. STATE OPTION TO TAKE ACCOUNT OF CERTAIN
WORK ACTIVITIES OF RECIPIENTS WITH SUF-
FICIENT PARTICIPATION IN WORK EXPERI-
ENCE OR COMMUNITY SERVICE PROGRAMS.
(a) IN GENERAL.—Section 407(c) of the Social Secu-
rity Act (42 U.S.C. 607(c)) is amended by adding at the
end the following:
‘‘(3) STATE OPTION TO TAKE ACCOUNT OF CER-
TAIN WORK ACTIVITIES OF RECIPIENTS WITH SUFFI-
CIENT
PARTICIPATION
IN
WORK
EXPERIENCE
OR
COMMUNITY SERVICE PROGRAMS.—Notwithstanding
747
paragraphs (1) and (2) of this subsection and sub-
section (d)(8), for purposes of determining monthly
participation rates under paragraphs (1)(B)(i) and
(2)(B) of subsection (b), an individual who, during
a month, has participated in a work experience or
community service program operated in accordance
with subsection (j), for the maximum number of
hours that the individual may be required to partici-
pate in such a program during the month shall be
treated as engaged in work for the month if, during
the month, the individual has participated in any
other work activity for a number of hours that is not
less than the number of hours required by sub-
section (c)(1) for the month minus such maximum
number of hours.’’.
(b) RETROACTIVITY.—The amendment made by sub-
section (a) of this section shall take effect as if included
in the enactment of section 103(a) of the Personal Re-
sponsibility and Work Opportunity Reconciliation Act of
1996.
SEC. 9006. WORKER PROTECTIONS.
Section 407(f) of the Social Security Act (42 U.S.C.
607(f)) is amended to read as follows:
‘‘(f) WORKER PROTECTIONS.—
748
‘‘(1) NONDISPLACEMENT
IN
WORK
ACTIVI-
TIES.—
‘‘(A) GENERAL PROHIBITION.—Subject to
this paragraph, an adult in a family receiving
assistance under a State program funded under
this part attributable to funds provided by the
Federal Government may fill a vacant employ-
ment position in order to engage in a work ac-
tivity.
‘‘(B) PROHIBITION AGAINST VIOLATION OF
CONTRACTS.—A work activity shall not violate
an existing contract for services or collective
bargaining agreement.
‘‘(C) OTHER
PROHIBITIONS.—An adult
participant in a work activity shall not be em-
ployed or assigned—
‘‘(i) when any other individual is on
layoff from the same or any substantially
equivalent job; or
‘‘(ii) if the employer has terminated
the employment of any regular employee or
otherwise caused an involuntary reduction
if its workforce with the intention of filling
the vacancy so created with the partici-
pant.
749
‘‘(2) HEALTH AND SAFETY.—Health and safety
standards established under Federal and State law
otherwise applicable to working conditions of em-
ployees shall be equally applicable to working condi-
tions of participants engaged in a work activity.
‘‘(3) NONDISCRIMINATION.—In addition to the
protections provided under the provisions of law
specified in section 408(c), an individual may not be
discriminated against with respect to participation in
work activities by reason of gender.
‘‘(4) GRIEVANCE PROCEDURE.—
‘‘(A) IN GENERAL.—Each State to which a
grant is made under section 403 shall establish
and maintain a procedure for grievances or
complaints from employees alleging violations of
paragraph (1) and participants in work activi-
ties alleging violations of paragraph (1), (2), or
(3).
‘‘(B) HEARING.—The procedure shall in-
clude an opportunity for a hearing.
‘‘(C) REMEDIES.—The procedure shall in-
clude remedies for violation of paragraph (1),
(2), or (3), which may include—
750
‘‘(i) prohibition against placement of a
participant with an employer that has vio-
lated paragraph (1), (2), or (3);
‘‘(ii) where applicable, reinstatement
of an employee, payment of lost wages and
benefits, and reestablishment of other rel-
evant terms, conditions and privileges of
employment; and
‘‘(iii) where appropriate, other equi-
table relief.
‘‘(5) 
NONPREEMPTION
OF
STATE
NON-
DISPLACEMENT LAWS.—The provisions of this sub-
section relating to nondisplacement of employees
shall not be construed to preempt any provision of
State law relating to nondisplacement of employees
that affords greater protections to employees than is
afforded by such provisions of this subsection.’’.
SEC. 9007. PENALTY FOR FAILURE OF STATE TO REDUCE
ASSISTANCE 
FOR 
RECIPIENTS 
REFUSING
WITHOUT GOOD CAUSE TO WORK.
(a) IN GENERAL.—Section 409(a) of the Social Secu-
rity Act (42 U.S.C. 609(a)) is amended by adding at the
end the following:
751
‘‘(13) PENALTY FOR FAILURE TO REDUCE AS-
SISTANCE
FOR
RECIPIENTS
REFUSING
WITHOUT
GOOD CAUSE TO WORK.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
under section 403 in a fiscal year has violated
section 407(e) during the fiscal year, the Sec-
retary shall reduce the grant payable to the
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
equal to not less than 1 percent and not more
than 5 percent of the State family assistance
grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a
fiscal year based on the degree of noncompli-
ance.’’.
(b) RETROACTIVITY.—The amendment made by sub-
section (a) of this section shall take effect as if included
in the enactment of section 103(a) of the Personal Re-
sponsibility and Work Opportunity Reconciliation Act of
1996.
752
Subtitle B—Supplemental Security
Income
SEC. 9101. REQUIREMENT TO PERFORM CHILDHOOD DIS-
ABILITY 
REDETERMINATIONS 
IN 
MISSED
CASES.
Section 211(d)(2) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (110 Stat.
2190) is amended—
(1) in subparagraph (A)—
(A) in the 1st sentence, by striking ‘‘1
year’’ and inserting ‘‘18 months’’; and
(B) by inserting after the 1st sentence the
following: ‘‘Any redetermination required by the
preceding sentence that is not performed before
the end of the period described in the preceding
sentence shall be performed as soon as is prac-
ticable thereafter.’’; and
(2) in subparagraph (C), by adding at the end
the following: ‘‘Before commencing a redetermina-
tion under the 2nd sentence of subparagraph (A), in
any case in which the individual involved has not al-
ready been notified of the provisions of this para-
graph, the Commissioner of Social Security shall no-
tify the individual involved of the provisions of this
paragraph.’’.
753
SEC. 9102. REPEAL OF MAINTENANCE OF EFFORT RE-
QUIREMENTS 
APPLICABLE 
TO 
OPTIONAL
STATE PROGRAMS FOR SUPPLEMENTATION
OF SSI BENEFITS.
Section 1618 of the Social Security Act (42 U.S.C.
1382g) is repealed.
SEC. 9103. FEES FOR FEDERAL ADMINISTRATION OF STATE
SUPPLEMENTARY PAYMENTS.
(a) FEE SCHEDULE.—
(1) OPTIONAL
STATE
SUPPLEMENTARY
PAY-
MENTS.—
(A) IN GENERAL.—Section 1616(d)(2)(B)
of 
the 
Social 
Security 
Act 
(42 
U.S.C.
1382e(d)(2)(B)) is amended—
(i) by striking ‘‘and’’ at the end of
clause (iii); and
(ii) by striking clause (iv) and insert-
ing the following:
‘‘(iv) for fiscal year 1997, $5.00;
‘‘(v) for fiscal year 1998, $6.20;
‘‘(vi) for fiscal year 1999, $7.60;
‘‘(vii) for fiscal year 2000, $7.80;
‘‘(viii) for fiscal year 2001, $8.10;
‘‘(ix) for fiscal year 2002, $8.50; and
‘‘(x) for fiscal year 2003 and each succeeding
fiscal year—
754
‘‘(I) the applicable rate in the preceding
fiscal year, increased by the percentage, if any,
by which the Consumer Price Index for the
month of June of the calendar year of the in-
crease exceeds the Consumer Price Index for
the month of June of the calendar year preced-
ing the calendar year of the increase, and
rounded to the nearest whole cent; or
‘‘(II) such different rate as the Commis-
sioner determines is appropriate for the State.’’.
(B) CONFORMING
AMENDMENT.—Section
1616(d)(2)(C) 
of 
such 
Act 
(42 
U.S.C.
1382e(d)(2)(C)) 
is 
amended 
by 
striking
‘‘(B)(iv)’’ and inserting ‘‘(B)(x)(II)’’.
(2) MANDATORY STATE SUPPLEMENTARY PAY-
MENTS.—
(A) 
IN
GENERAL.—Section
212(b)(3)(B)(ii) of Public Law 93–66 (42
U.S.C. 1382 note) is amended—
(i) by striking ‘‘and’’ at the end of
subclause (III); and
(ii) by striking subclause (IV) and in-
serting the following:
‘‘(IV) for fiscal year 1997, $5.00;
‘‘(V) for fiscal year 1998, $6.20;
755
‘‘(VI) for fiscal year 1999, $7.60;
‘‘(VII) for fiscal year 2000, $7.80;
‘‘(VIII) for fiscal year 2001, $8.10;
‘‘(IX) for fiscal year 2002, $8.50; and
‘‘(X) for fiscal year 2003 and each succeeding
fiscal year—
‘‘(aa) the applicable rate in the preceding
fiscal year, increased by the percentage, if any,
by which the Consumer Price Index for the
month of June of the calendar year of the in-
crease exceeds the Consumer Price Index for
the month of June of the calendar year preced-
ing the calendar year of the increase, and
rounded to the nearest whole cent; or
‘‘(bb) such different rate as the Commis-
sioner determines is appropriate for the State.’’.
(B) CONFORMING
AMENDMENT.—Section
212(b)(3)(B)(iii) of such Act (42 U.S.C. 1382
note) is amended by striking ‘‘(ii)(IV)’’ and in-
serting ‘‘(ii)(X)(bb)’’.
(b) USE OF NEW FEES TO DEFRAY THE SOCIAL SE-
CURITY
ADMINISTRATION’S
ADMINISTRATIVE
EX-
PENSES.—
(1) CREDIT
TO
SPECIAL
FUND
FOR
FISCAL
YEAR 1998 AND SUBSEQUENT YEARS.—
756
(A) OPTIONAL
STATE
SUPPLEMENTARY
PAYMENT FEES.—Section 1616(d)(4) of the So-
cial Security Act (42 U.S.C. 1382e(d)(4)) is
amended to read as follows:
‘‘(4)(A) The first $5 of each administration fee as-
sessed pursuant to paragraph (2), upon collection, shall
be deposited in the general fund of the Treasury of the
United States as miscellaneous receipts.
‘‘(B) That portion of each administration fee in ex-
cess of $5, and 100 percent of each additional services
fee charged pursuant to paragraph (3), upon collection for
fiscal year 1998 and each subsequent fiscal year, shall be
credited to a special fund established in the Treasury of
the United States for State supplementary payment fees.
The amounts so credited, to the extent and in the amounts
provided in advance in appropriations Acts, shall be avail-
able to defray expenses incurred in carrying out this title
and related laws.’’.
(B) MANDATORY STATE SUPPLEMENTARY
PAYMENT FEES.—Section 212(b)(3)(D) of Pub-
lic Law 93–66 (42 U.S.C. 1382 note) is amend-
ed to read as follows:
‘‘(D)(i) The first $5 of each administration fee as-
sessed pursuant to subparagraph (B), upon collection,
757
shall be deposited in the general fund of the Treasury of
the United States as miscellaneous receipts.
‘‘(ii) The portion of each administration fee in excess
of $5, and 100 percent of each additional services fee
charged pursuant to subparagraph (C), upon collection for
fiscal year 1998 and each subsequent fiscal year, shall be
credited to a special fund established in the Treasury of
the United States for State supplementary payment fees.
The amounts so credited, to the extent and in the amounts
provided in advance in appropriations Acts, shall be avail-
able to defray expenses incurred in carrying out this sec-
tion and title XVI of the Social Security Act and related
laws.’’.
(2) LIMITATIONS ON AUTHORIZATION OF AP-
PROPRIATIONS.—From amounts credited pursuant
to section 1616(d)(4)(B) of the Social Security Act
and section 212(b)(3)(D)(ii) of Public Law 93–66 to
the special fund established in the Treasury of the
United States for State supplementary payment
fees, there is authorized to be appropriated an
amount not to exceed $35,000,000 for fiscal year
1998, and such sums as may be necessary for each
fiscal year thereafter.
758
Subtitle C—Child Support
Enforcement
SEC. 9201. CLARIFICATION OF AUTHORITY TO PERMIT CER-
TAIN REDISCLOSURES OF WAGE AND CLAIM
INFORMATION.
Section 303(h)(1)(C) of the Social Security Act (42
U.S.C. 503(h)(1)(C)) is amended by striking ‘‘section
453(i)(1) in carrying out the child support enforcement
program under title IV’’ and inserting ‘‘subsections (i)(1),
(i)(3), and (j) of section 453’’.
Subtitle D—Restricting Welfare
and Public Benefits for Aliens
SEC. 9301. EXTENSION OF ELIGIBILITY PERIOD FOR REFU-
GEES 
AND 
CERTAIN 
OTHER 
QUALIFIED
ALIENS FROM 5 TO 7 YEARS FOR SSI AND
MEDICAID.
(a) SSI.—Section 402(a)(2)(A) of the Personal Re-
sponsibility and Work Opportunity Reconciliation Act of
1996 (8 U.S.C. 1612(a)(2)(A)) is amended to read as fol-
lows:
‘‘(A) TIME-LIMITED EXCEPTION FOR REF-
UGEES AND ASYLEES.—
‘‘(i) SSI.—With respect to the speci-
fied Federal program described in para-
759
graph (3)(A) paragraph 1 shall not apply
to an alien until 7 years after the date—
‘‘(I) an alien is admitted to the
United States as a refugee under sec-
tion 207 of the Immigration and Na-
tionality Act;
‘‘(II) an alien is granted asylum
under section 208 of such Act; or
‘‘(III) an alien’s deportation is
withheld under section 243(h) of such
Act.
‘‘(ii) FOOD STAMPS.—With respect to
the specified Federal program described in
paragraph (3)(B), paragraph 1 shall not
apply to an alien until 5 years after the
date—
‘‘(I) an alien is admitted to the
United States as a refugee under sec-
tion 207 of the Immigration and Na-
tionality Act;
‘‘(II) an alien is granted asylum
under section 208 of such Act; or
‘‘(III) an alien’s deportation is
withheld under section 243(h) of such
Act.’’.
760
(b) MEDICAID.—Section 402(b)(2)(A) of the Per-
sonal Responsibility and Work Opportunity Reconciliation
Act of 1996 (8 U.S.C. 1612(b)(2)(A)) is amended to read
as follows:
‘‘(A) TIME-LIMITED EXCEPTION FOR REF-
UGEES AND ASYLEES.—
‘‘(i) MEDICAID.—With respect to the
designated Federal program described in
paragraph (3)(C), paragraph 1 shall not
apply to an alien until 7 years after the
date—
‘‘(I) an alien is admitted to the
United States as a refugee under sec-
tion 207 of the Immigration and Na-
tionality Act;
‘‘(II) an alien is granted asylum
under section 208 of such Act; or
‘‘(III) an alien’s deportation is
withheld under section 243(h) of such
Act.
‘‘(ii) OTHER
DESIGNATED
FEDERAL
PROGRAMS.—With respect to the des-
ignated Federal programs under paragraph
(3) (other than subparagraph (C)), para-
761
graph 1 shall not apply to an alien until 5
years after the date—
‘‘(I) an alien is admitted to the
United States as a refugee under sec-
tion 207 of the Immigration and Na-
tionality Act;
‘‘(II) an alien is granted asylum
under section 208 of such Act; or
‘‘(III) an alien’s deportation is
withheld under section 243(h) of such
Act.’’.
SEC. 9302. SSI ELIGIBILITY FOR ALIENS RECEIVING SSI ON
AUGUST 22, 1996.
(a) IN GENERAL.—Section 402(a)(2) of the Personal
Responsibility and Work Opportunity Reconciliation Act
of 1996 (8 U.S.C. 1612(a)(2)) is amended by adding after
subparagraph (D) the following new subparagraph:
‘‘(E) ALIENS RECEIVING SSI ON AUGUST
22, 1996.—With respect to eligibility for bene-
fits for the program defined in paragraph
(3)(A) (relating to the supplemental security in-
come program), paragraph (1) shall not apply
to an alien who was receiving such benefits on
August 22, 1996.’’.
762
(b) STATUS OF CUBAN AND HAITIAN ENTRANTS AND
AMERASIAN PERMANENT RESIDENT ALIENS.—For pur-
poses of section 402(a)(2)(E) of the Personal Responsibil-
ity and Work Opportunity Reconciliation Act of 1996, the
following aliens shall be considered qualified aliens:
(1) An alien who is a Cuban and Haitian en-
trant as defined in section 501(e) of the Refugee
Education Assistance Act of 1980.
(2) An alien admitted to the United States as
an Amerasian immigrant pursuant to section 584 of
the Foreign Operations, Export Financing, and Re-
lated Programs Appropriations Act, 1988, as con-
tained in section 101(e) of Public Law 100-202,
(other than an alien admitted pursuant to section
584(b)(1)(C)).
(c) 
CONFORMING
AMENDMENTS.—Section
402(a)(2)(D) of the Personal Responsibility and Work Op-
portunity 
Reconciliation 
Act 
of 
1996 
(8 
U.S.C.
1612(a)(D)) is amended—
(1) by striking clause (i);
(2) in the subparagraph heading by striking
‘‘BENEFITS’’ and inserting ‘‘FOOD STAMPS’’;
(3) by striking ‘‘(ii) FOOD STAMPS’.—’;
(3) by redesignating subclauses (I), (II), and
(III) as clauses (i), (ii), and (iii).
763
SEC. 9303. SSI ELIGIBILITY FOR PERMANENT RESIDENT
ALIENS WHO ARE MEMBERS OF AN INDIAN
TRIBE.
Section 402(a)(2) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1612(a)(2)) (as amended by section 9302) is amended by
adding after subparagraph (E) the following new subpara-
graph:
‘‘(F) PERMANENT RESIDENT ALIENS WHO
ARE MEMBERS OF AN INDIAN TRIBE.—With re-
spect to eligibility for benefits for the program
defined in paragraph (3)(A) (relating to the
supplemental security income program), para-
graph (1) shall not apply to an alien who—
‘‘(i) is lawfully admitted for perma-
nent residence under the Immigration and
Nationality Act; and
‘‘(ii) is a member of an Indian tribe
(as defined in section 4(e) of the Indian
Self-Determination and Education Assist-
ance Act).’’.
SEC. 9304. VERIFICATION OF ELIGIBILITY FOR STATE AND
LOCAL PUBLIC BENEFITS.
(a) IN GENERAL.—The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 is amended
by adding after section 412 the following new section:
764
‘‘SEC. 413. AUTHORIZATION FOR VERIFICATION OF ELIGI-
BILITY FOR STATE AND LOCAL PUBLIC BENE-
FITS.
‘‘A State or political subdivision of a State is author-
ized to require an applicant for State and local public ben-
efits (as defined in section 411(c)) to provide proof of eli-
gibility.’’.
(b) CLERICAL AMENDMENT.—Section 2 of the Per-
sonal Responsibility and Work Opportunity Reconciliation
Act of 1996 is amended by adding after the item related
to section 412 the following:
‘‘Sec. 413. Authorization for verification of eligibility for state and local public
benefits.’’.
SEC. 9305. DERIVATIVE ELIGIBILITY FOR BENEFITS.
(a) IN GENERAL.—The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 is amended
by adding after section 435 the following new section:
‘‘SEC. 436. DERIVATIVE ELIGIBILITY FOR BENEFITS.
‘‘(a) FOOD STAMPS.—Notwithstanding any other
provision of law, an alien who under the provisions of this
title is ineligible for benefits under the food stamp pro-
gram (as defined in section 402(a)(3)(A)) shall not be eli-
gible for such benefits because the alien receives benefits
under the supplemental security income program (as de-
fined in section 402(a)(3)(B)).
765
‘‘(b) MEDICAID.—Notwithstanding any other provi-
sion of this title, an alien who under the provisions of this
title is ineligible for benefits under the medicaid program
(as defined in section 402(b)(3)(C)) shall be eligible for
such benefits if the alien is receiving benefits under the
supplemental security income program and title XIX of
the Social Security Act provides for such derivative eligi-
bility.’’.
(b) CLERICAL AMENDMENT.—Section 2 of the Per-
sonal Responsibility and Work Opportunity Reconciliation
Act of 1996 is amended by adding after the item related
to section 435 the following:
‘‘Sec. 436. Derivative eligibility for benefits.’’.
SEC. 9306. EFFECTIVE DATE.
Except as otherwise provided, the amendments made
by this subtitle shall be effective as if included in the en-
actment of title IV of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996.
Subtitle E—Unemployment
Compensation
SEC. 9401. CLARIFYING PROVISION RELATING TO BASE PE-
RIODS.
(a) IN GENERAL.—No provision of a State law under
which the base period for such State is defined or other-
wise determined shall, for purposes of section 303(a)(1)
766
of the Social Security Act (42 U.S.C. 503(a)(1)), be con-
sidered a provision for a method of administration.
(b) DEFINITIONS.—For purposes of this section, the
terms ‘‘State law’’, ‘‘base period’’, and ‘‘State’’ shall have
the meanings given them under section 205 of the Fed-
eral-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note).
(c) EFFECTIVE DATE.—This section shall apply for
purposes of any period beginning before, on, or after the
date of the enactment of this Act.
SEC. 9402. INCREASE IN FEDERAL UNEMPLOYMENT AC-
COUNT CEILING.
(a) IN GENERAL.—Section 902(a)(2) of the Social
Security Act (42 U.S.C. 1102(a)(2)) is amended by strik-
ing ‘‘0.25 percent’’ and inserting ‘‘0.5 percent’’.
(b) EFFECTIVE DATE.—This section and the amend-
ment made by this section—
(1) shall take effect on October 1, 2001, and
(2) shall apply to fiscal years beginning on or
after that date.
SEC. 9403. SPECIAL DISTRIBUTION TO STATES FROM UNEM-
PLOYMENT TRUST FUND.
(a) IN GENERAL.—Subsection (a) of section 903 of
the Social Security Act (42 U.S.C. 1103(a)) is amended
by adding at the end the following new paragraph:
767
‘‘(3)(A) Notwithstanding any other provision of this
section, for purposes of carrying out this subsection with
respect to any excess amount (referred to in paragraph
(1)) remaining in the employment security administration
account as of the close of fiscal year 1999, 2000, or 2001,
such amount shall—
‘‘(i) to the extent of any amounts not in excess
of $100,000,000, be subject to subparagraph (B),
and
‘‘(ii) to the extent of any amounts in excess of
$100,000,000, be subject to subparagraph (C).
‘‘(B) Paragraphs (1) and (2) shall apply with respect
to any amounts described in subparagraph (A)(i), except
that—
‘‘(i) in carrying out the provisions of paragraph
(2)(B) with respect to such amounts (to determine
the portion of such amounts which is to be allocated
to a State for a succeeding fiscal year), the ratio to
be applied under such provisions shall be the same
as the ratio that—
‘‘(I) the amount of funds to be allocated to
such State for such fiscal year pursuant to title
III, bears to
768
‘‘(II) the total amount of funds to be allo-
cated to all States for such fiscal year pursuant
to title III,
as determined by the Secretary of Labor, and
‘‘(ii) the amounts allocated to a State pursuant
to this subparagraph shall be available to such
State, subject to the last sentence of subsection
(c)(2).
Nothing in this paragraph shall preclude the application
of subsection (b) with respect to any allocation determined
under this subparagraph.
‘‘(C) Any amounts described in clause (ii) of subpara-
graph (A) (remaining in the employment security adminis-
tration account as of the close of any fiscal year specified
in such subparagraph) shall, as of the beginning of the
succeeding fiscal year, accrue to the Federal unemploy-
ment account, without regard to the limit provided in sec-
tion 902(a).’’
(b) CONFORMING AMENDMENT.—Paragraph (2) of
section 903(c) of the Social Security Act is amended by
adding at the end, as a flush left sentence, the following:
‘‘Any amount allocated to a State under this section for
fiscal year 2000, 2001, or 2002 may be used by such State
only to pay expenses incurred by it for the administration
of its unemployment compensation law, and may be so
769
used by it without regard to any of the conditions pre-
scribed in any of the preceding provisions of this para-
graph.’’
SEC. 9404. INTEREST-FREE ADVANCES TO STATE AC-
COUNTS IN UNEMPLOYMENT TRUST FUND
RESTRICTED TO STATES WHICH MEET FUND-
ING GOALS.
(a) IN GENERAL.—Paragraph (2) of section 1202(b)
of the Social Security Act (42 U.S.C. 1322(b)) is amend-
ed—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A),
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘, and’’, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) the average daily balance in the account of
such State in the Unemployment Trust Fund for
each of 4 of the 5 calendar quarters preceding the
calendar quarter in which such advances were made
exceeds the funding goal of such State (as defined
in subsection (d)).’’
(b) FUNDING GOAL DEFINED.—Section 1202 of the
Social Security Act is amended by adding at the end the
following new subsection:
770
‘‘(d) For purposes of subsection (b)(2)(C), the term
‘funding goal’ means, for any State for any calendar quar-
ter, the average of the unemployment insurance benefits
paid by such State during each of the 3 years, in the 20-
year period ending with the calendar year containing such
calendar quarter, during which the State paid the greatest
amount of unemployment benefits.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar years beginning after
the date of the enactment of this Act.
SEC. 9405. EXEMPTION OF SERVICE PERFORMED BY ELEC-
TION WORKERS FROM THE FEDERAL UNEM-
PLOYMENT TAX.
(a) IN GENERAL.—Paragraph (3) of section 3309(b)
of the Internal Revenue Code of 1986 (relating to exemp-
tion for certain services) is amended—
(1) by striking ‘‘or’’ at the end of subparagraph
(D),
(2) by adding ‘‘or’’ at the end of subparagraph
(E), and
(3) by inserting after subparagraph (E) the fol-
lowing new subparagraph:
‘‘(F) as an election official or election
worker if the amount of remuneration received
by the individual during the calendar year for
771
services as an election official or election worker
is less than $1,000;’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to service performed
after the date of the enactment of this Act.
SEC. 9406. TREATMENT OF CERTAIN SERVICES PER-
FORMED BY INMATES.
(a) IN GENERAL.—Subsection (c) of section 3306 of
the Internal Revenue Code of 1986 (defining employment)
is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(19),
(2) by striking the period at the end of para-
graph (20) and inserting ‘‘; or’’, and
(3) by adding at the end the following new
paragraph:
‘‘(21) service performed by a person committed
to a penal institution.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to service performed
after March 26, 1996.
772
SEC. 9407. EXEMPTION OF SERVICE PERFORMED FOR AN
ELEMENTARY OR SECONDARY SCHOOL OPER-
ATED PRIMARILY FOR RELIGIOUS PURPOSES
FROM THE FEDERAL UNEMPLOYMENT TAX.
(a) IN GENERAL.—Paragraph (1) of section 3309(b)
of the Internal Revenue Code of 1986 (relating to exemp-
tion for certain services) is amended—
(1) by striking ‘‘or’’ at the end of subparagraph
(A), and
(2) by inserting before the semicolon at the end
the following: ‘‘, or (C) an elementary or secondary
school which is operated primarily for religious pur-
poses, which is described in section 501(c)(3), and
which is exempt from tax under section 501(a)’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to service performed
after the date of the enactment of this Act.
SEC. 9408. STATE PROGRAM INTEGRITY ACTIVITIES FOR
UNEMPLOYMENT COMPENSATION.
Section 901(c) of the Social Security Act (42 U.S.C.
1101(c)) is amended by adding at the end the following
new paragraph:
‘‘(5)(A) There are authorized to be appropriated out
of the employment security administration account to
carry out program integrity activities, in addition to any
amounts available under paragraph (1)(A)(i)—
773
‘‘(i) $89,000,000 for fiscal year 1998;
‘‘(ii) $91,000,000 for fiscal year 1999;
‘‘(iii) $93,000,000 fiscal year 2000;
‘‘(iv) $96,000,000 for fiscal year 2001; and
‘‘(v) $98,000,000 for fiscal year 2002.
‘‘(B) In any fiscal year in which a State receives
funds appropriated pursuant to this paragraph, the State
shall expend a proportion of the funds appropriated pursu-
ant to paragraph (1)(A)(i) to carry out program integrity
activities that is not less than the proportion of the funds
appropriated under such paragraph that was expended by
the State to carry out program integrity activities in fiscal
year 1997.
‘‘(C) For purposes of this paragraph, the term ‘pro-
gram integrity activities’ means initial claims review ac-
tivities, eligibility review activities, benefit payments con-
trol activities, and employer liability auditing activities.’’.
Subtitle F—Increase in Public Debt
Limit
SEC. 9501. INCREASE IN PUBLIC DEBT LIMIT.
Subsection (b) of section 3101 of title 31, United
States Code, is amended by striking the dollar amount
contained therein and inserting ‘‘$5,950,000,000,000’’.
774
TITLE X—COMMITTEE ON WAYS
AND MEANS—MEDICARE
SEC. 10000. AMENDMENTS TO SOCIAL SECURITY ACT AND
REFERENCES TO OBRA; TABLE OF CONTENTS
OF TITLE.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
title an amendment is expressed in terms of an amend-
ment to or repeal of a section or other provision, the ref-
erence shall be considered to be made to that section or
other provision of the Social Security Act.
(b) REFERENCES TO OBRA.—In this title, the terms
‘‘OBRA–1986’’, 
‘‘OBRA–1987’’, 
‘‘OBRA–1989’’,
‘‘OBRA–1990’’, and ‘‘OBRA–1993’’ refer to the Omnibus
Budget Reconciliation Act of 1986 (Public Law 99–509),
the Omnibus Budget Reconciliation Act of 1987 (Public
Law 100–203), the Omnibus Budget Reconciliation Act
of 1989 (Public Law 101–239), the Omnibus Budget Rec-
onciliation Act of 1990 (Public Law 101–508), and the
Omnibus Budget Reconciliation Act of 1993 (Public Law
103–66), respectively.
(c) TABLE OF CONTENTS OF TITLE.—The table of
contents of this title is as follows:
Sec. 10000. Amendments to Social Security Act and references to OBRA; table
of contents of title.
Subtitle A—MedicarePlus Program
775
CHAPTER 1—MEDICAREPLUS PROGRAM
SUBCHAPTER A—MEDICAREPLUS PROGRAM
Sec. 10001. Establishment of MedicarePlus program.
‘‘PART C—MEDICAREPLUS PROGRAM
‘‘Sec. 1851. Eligibility, election, and enrollment.
‘‘Sec. 1852. Benefits and beneficiary protections.
‘‘Sec. 1853. Payments to MedicarePlus organizations.
‘‘Sec. 1854. Premiums.
‘‘Sec. 1855. Organizational and financial requirements for MedicarePlus
organizations; provider-sponsored organizations.
‘‘Sec. 1856. Establishment of standards.
‘‘Sec. 1857. Contracts with MedicarePlus organizations.
‘‘Sec. 1859. Definitions; miscellaneous provisions.
Sec. 10002. Transitional rules for current medicare HMO program.
Sec. 10003. Conforming changes in medigap program.
SUBCHAPTER B—SPECIAL RULES FOR MEDICAREPLUS MEDICAL SAVINGS
ACCOUNTS
Sec. 10006. MedicarePlus MSA.
CHAPTER 2—INTEGRATED LONG-TERM CARE PROGRAMS
SUBCHAPTER A—PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY
(PACE)
Sec. 10011. Coverage of PACE under the medicare program.
Sec. 10012. Establishment of PACE program as medicaid State option.
Sec. 10013. Effective date; transition.
Sec. 10014. Study and reports.
SUBCHAPTER B—SOCIAL HEALTH MAINTENANCE ORGANIZATIONS
Sec. 10015. Social health maintenance organizations (SHMOs).
SUBCHAPTER C—OTHER PROGRAMS
Sec. 10018. Orderly transition of municipal health service demonstration
projects.
Sec. 10019. Extension of certain medicare community nursing organization
demonstration projects.
CHAPTER 3—MEDICARE PAYMENT ADVISORY COMMISSION
Sec. 10021. Medicare Payment Advisory Commission.
CHAPTER 4—MEDIGAP PROTECTIONS
Sec. 10031. Medigap protections.
Sec. 10032. Medicare prepaid competitive pricing demonstration project.
CHAPTER 5—TAX TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-
SPONSORED ORGANIZATIONS
Sec. 10041. Tax treatment of hospitals which participate in provider-sponsored
organizations.
776
Subtitle B—Prevention Initiatives
Sec. 10101. Screening mammography.
Sec. 10102. Screening pap smear and pelvic exams.
Sec. 10103. Prostate cancer screening tests.
Sec. 10104. Coverage of colorectal screening.
Sec. 10105. Diabetes screening tests.
Sec. 10106. Standardization of medicare coverage of bone mass measurements.
Sec. 10107. Vaccines outreach expansion.
Sec. 10108. Study on preventive benefits.
Subtitle C—Rural Initiatives
Sec. 10201. Rural primary care hospital program.
Sec. 10202. Prohibiting denial of request by rural referral centers for reclassi-
fication on basis of comparability of wages.
Sec. 10203. Hospital geographic reclassification permitted for purposes of dis-
proportionate share payment adjustments.
Sec. 10204. Medicare-dependent, small rural hospital payment extension.
Sec. 10205. Geographic reclassification for certain disproportionately large hos-
pitals.
Sec. 10206. Floor on area wage index.
Sec. 10207. Informatics, telemedicine, and education demonstration project.
Subtitle D—Anti-Fraud and Abuse Provisions
Sec. 10301. Permanent exclusion for those convicted of 3 health care related
crimes.
Sec. 10302. Authority to refuse to enter into medicare agreements with individ-
uals or entities convicted of felonies.
Sec. 10303. Inclusion of toll-free number to report medicare waste, fraud, and
abuse in explanation of benefits forms.
Sec. 10304. Liability of medicare carriers and fiscal intermediaries for claims
submitted by excluded providers.
Sec. 10305. Exclusion of entity controlled by family member of a sanctioned in-
dividual.
Sec. 10306. Imposition of civil money penalties.
Sec. 10307. Disclosure of information and surety bonds.
Sec. 10308. Provision of certain identification numbers.
Sec. 10309. Advisory opinions regarding certain physician self-referral provi-
sions.
Sec. 10310. Other fraud and abuse related provisions.
Subtitle E—Prospective Payment Systems
CHAPTER 1—PAYMENT UNDER PART A
Sec. 10401. Prospective payment for skilled nursing facility services.
Sec. 10402. Prospective payment for inpatient rehabilitation hospital services.
CHAPTER 2—PAYMENT UNDER PART B
SUBCHAPTER A—PAYMENT FOR HOSPITAL OUTPATIENT DEPARTMENT
SERVICES
Sec. 10411. Elimination of formula-driven overpayments (FDO) for certain
outpatient hospital services.
777
Sec. 10412. Extension of reductions in payments for costs of hospital out-
patient services.
Sec. 10413. Prospective payment system for hospital outpatient department
services.
SUBCHAPTER B—REHABILITATION SERVICES
Sec. 10421. Rehabilitation agencies and services.
Sec. 10422. Comprehensive outpatient rehabilitation facilities (corf).
SUBCHAPTER C—AMBULANCE SERVICES
Sec. 10431. Payments for ambulance services.
Sec. 10432. Demonstration of coverage of ambulance services under medicare
through contracts with units of local government.
CHAPTER 3—PAYMENT UNDER PARTS A AND B
Sec. 10441. Prospective payment for home health services.
Subtitle F—Provisions Relating to Part A
CHAPTER 1—PAYMENT OF PPS HOSPITALS
Sec. 10501. PPS hospital payment update.
Sec. 10502. Capital payments for PPS hospitals.
Sec. 10503. Freeze in disproportionate share.
Sec. 10504. Medicare capital asset sales price equal to book value.
Sec. 10505. Elimination of IME and DSH payments attributable to outlier
payments.
Sec. 10506. Reduction in adjustment for indirect medical education.
Sec. 10507. Treatment of transfer cases.
Sec. 10508. Increase base payment rate to Puerto Rico hospitals.
CHAPTER 2—PAYMENT OF PPS EXEMPT HOSPITALS
Sec. 10511. Payment update.
Sec. 10512. Reductions to capital payments for certain PPS-exempt hospitals
and units.
Sec. 10513. Cap on TEFRA limits.
Sec. 10514. Change in bonus and relief payments.
Sec. 10515. Change in payment and target amount for new providers.
Sec. 10516. Rebasing.
Sec. 10517. Treatment of certain long-term care hospitals.
Sec. 10518. Elimination of exemptions; report on exceptions and adjustments.
CHAPTER 3—PROVISIONS RELATED TO HOSPICE SERVICES
Sec. 10521. Payments for hospice services.
Sec. 10522. Payment for home hospice care based on location where care is fur-
nished.
Sec. 10523. Hospice care benefits periods.
Sec. 10524. Other items and services included in hospice care.
Sec. 10525. Contracting with independent physicians or physician groups for
hospice care services permitted.
Sec. 10526. Waiver of certain staffing requirements for hospice care programs
in non-urbanized areas.
778
Sec. 10527. Limitation on liability of beneficiaries for certain hospice coverage
denials.
Sec. 10528. Extending the period for physician certification of an individual’s
terminal illness.
Sec. 10529. Effective date.
CHAPTER 4—MODIFICATION OF PART A HOME HEALTH BENEFIT
Sec. 10531. Modification of part A home health benefit for individuals enrolled
under part B.
CHAPTER 5—OTHER PAYMENT PROVISIONS
Sec. 10541. Reductions in payments for enrollee bad debt.
Sec. 10542. Permanent extension of hemophilia pass-through.
Sec. 10543. Reduction in part A medicare premium for certain public retirees.
Subtitle G—Provisions Relating to Part B Only
CHAPTER 1—PHYSICIANS’ SERVICES
Sec. 10601. Establishment of single conversion factor for 1998.
Sec. 10602. Establishing update to conversion factor to match spending under
sustainable growth rate.
Sec. 10603. Replacement of volume performance standard with sustainable
growth rate.
Sec. 10604. Payment rules for anesthesia services.
Sec. 10605. Implementation of resource-based physician practice expense.
Sec. 10606. Dissemination of information on high per discharge relative values
for in-hospital physicians’ services.
Sec. 10607. No X-ray required for chiropractic services.
Sec. 10608. Temporary coverage restoration for portable electrocardiogram
transportation.
CHAPTER 2—OTHER PAYMENT PROVISIONS
Sec. 10611. Payments for durable medical equipment.
Sec. 10612. Oxygen and oxygen equipment.
Sec. 10613. Reduction in updates to payment amounts for clinical diagnostic
laboratory tests.
Sec. 10614. Simplification in administration of laboratory tests.
Sec. 10615. Updates for ambulatory surgical services.
Sec. 10616. Reimbursement for drugs and biologicals.
Sec. 10617. Coverage of oral anti-nausea drugs under chemotherapeutic regi-
men.
Sec. 10618. Rural health clinic services.
Sec. 10619. Increased medicare reimbursement for nurse practitioners and clin-
ical nurse specialists.
Sec. 10620. Increased medicare reimbursement for physician assistants.
Sec. 10621. Renal dialysis-related services.
CHAPTER 3—PART B PREMIUM
Sec. 10631. Part B premium.
Subtitle H—Provisions Relating to Parts A and B
CHAPTER 1—PROVISIONS RELATING TO MEDICARE SECONDARY PAYER
779
Sec. 10701. Permanent extension and revision of certain secondary payer provi-
sions.
Sec. 10702. Clarification of time and filing limitations.
Sec. 10703. Permitting recovery against third party administrators.
CHAPTER 2—HOME HEALTH SERVICES
Sec. 10711. Recapturing savings resulting from temporary freeze on payment
increases for home health services.
Sec. 10712. Interim payments for home health services.
Sec. 10713. Clarification of part-time or intermittent nursing care.
Sec. 10714. Study of definition of homebound.
Sec. 10715. Payment based on location where home health service is furnished.
Sec. 10716. Normative standards for home health claims denials,
Sec. 10717. No home health benefits based solely on drawing blood.
CHAPTER 3—BABY BOOM GENERATION MEDICARE COMMISSION
Sec. 10721. Bipartisan Commission on the Effect of the Baby Boom Genera-
tion on the Medicare Program.
CHAPTER 4—PROVISIONS RELATING TO DIRECT GRADUATE MEDICAL
EDUCATION
Sec. 10731. Limitation on payment based on number of residents and imple-
mentation of rolling average FTE count.
Sec. 10732. Phased-in limitation on hospital overhead and supervisory physi-
cian component of direct medical education costs.
Sec. 10733. Permitting payment to non-hospital providers.
Sec. 10734. Incentive payments under plans for voluntary reduction in number
of residents.
Sec. 10735. Demonstration project on use of consortia.
Sec. 10736. Recommendations on long-term payment policies regarding financ-
ing teaching hospitals and graduate medical education.
Sec. 10737. Medicare special reimbursement rule for certain combined resi-
dency programs.
CHAPTER 5—OTHER PROVISIONS
Sec. 10741. Centers of excellence.
Sec. 10742. Medicare part B special enrollment period and waiver of part B
late enrollment penalty and medigap special open enrollment
period for certain military retirees and dependents.
Sec. 10743. Protections under the medicare program for disabled workers who
lose benefits under a group health plan.
Sec. 10744. Placement of advance directive in medical record.
Subtitle I—Medical Liability Reform
CHAPTER 1—GENERAL PROVISIONS
Sec. 10801. Federal reform of health care liability actions.
Sec. 10802. Definitions.
Sec. 10803. Effective date.
CHAPTER 2—UNIFORM STANDARDS FOR HEALTH CARE LIABILITY ACTIONS
Sec. 10811. Statute of limitations.
780
Sec. 10812. Calculation and payment of damages.
Sec. 10813. Alternative dispute resolution.
Subtitle A—MedicarePlus Program
CHAPTER 1—MEDICAREPLUS PROGRAM
Subchapter A—MedicarePlus Program
SEC. 10001. ESTABLISHMENT OF MEDICAREPLUS PRO-
GRAM.
(a) IN GENERAL.—Title XVIII is amended by redes-
ignating part C as part D and by inserting after part B
the following new part:
‘‘PART C—MEDICAREPLUS PROGRAM
‘‘ELIGIBILITY, ELECTION, AND ENROLLMENT
‘‘SEC. 1851. (a) CHOICE OF MEDICARE BENEFITS
THROUGH MEDICAREPLUS PLANS.—
‘‘(1) IN GENERAL.—Subject to the provisions of
this section, each MedicarePlus eligible individual
(as defined in paragraph (3)) is entitled to elect to
receive benefits under this title—
‘‘(A) through the medicare fee-for-service
program under parts A and B, or
‘‘(B) through enrollment in a MedicarePlus
plan under this part.
‘‘(2) TYPES
OF
MEDICAREPLUS
PLANS
THAT
MAY BE AVAILABLE.—A MedicarePlus plan may be
any of the following types of plans of health insur-
ance:
781
‘‘(A) COORDINATED CARE PLANS.—Coordi-
nated care plans which provide health care serv-
ices, including health maintenance organization
plans and preferred provider organization plans.
‘‘(B) PLANS OFFERED BY PROVIDER-SPON-
SORED
ORGANIZATION.—A MedicarePlus plan
offered by a provider-sponsored organization, as
defined in section 1855(e).
‘‘(C) COMBINATION
OF
MSA
PLAN
AND
CONTRIBUTIONS TO MEDICAREPLUS MSA.—An
MSA plan, as defined in section 1859(b)(2),
and a contribution into a MedicarePlus medical
savings account (MSA).
‘‘(3) MEDICAREPLUS ELIGIBLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—In this title, subject to
subparagraph (B), the term ‘MedicarePlus eligi-
ble individual’ means an individual who is enti-
tled to benefits under part A and enrolled under
part B.
‘‘(B) SPECIAL
RULE
FOR
END-STAGE
RENAL DISEASE.—Such term shall not include
an individual medically determined to have end-
stage renal disease, except that an individual
who develops end-stage renal disease while en-
782
rolled in a MedicarePlus plan may continue to
be enrolled in that plan.
‘‘(b) SPECIAL RULES.—
‘‘(1) RESIDENCE REQUIREMENT.—
‘‘(A) IN
GENERAL.—Except as the Sec-
retary may otherwise provide, an individual is
eligible to elect a MedicarePlus plan offered by
a MedicarePlus organization only if the organi-
zation serves the geographic area in which the
individual resides.
‘‘(B) CONTINUATION
OF
ENROLLMENT
PERMITTED.—Pursuant to rules specified by
the Secretary, the Secretary shall provide that
an individual may continue enrollment in a
plan, notwithstanding that the individual no
longer resides in the service area of the plan, so
long as the plan provides benefits for enrollees
located in the area in which the individual re-
sides.
‘‘(2) SPECIAL RULE FOR CERTAIN INDIVIDUALS
COVERED UNDER FEHBP OR ELIGIBLE FOR VETER-
ANS OR MILITARY HEALTH BENEFITS, VETERANS .—
‘‘(A) FEHBP.—An individual who is en-
rolled in a health benefit plan under chapter 89
of title 5, United States Code, is not eligible to
783
enroll in an MSA plan until such time as the
Director of the Office of Management and
Budget certifies to the Secretary that the Office
of Personnel Management has adopted policies
which will ensure that the enrollment of such
individuals in such plans will not result in in-
creased expenditures for the Federal Govern-
ment for health benefit plans under such chap-
ter.
‘‘(B) VA AND DOD.—The Secretary may
apply rules similar to the rules described in
subparagraph (A) in the case of individuals who
are eligible for health care benefits under chap-
ter 55 of title 10, United States Code, or under
chapter 17 of title 38 of such Code.
‘‘(3) LIMITATION
ON
ELIGIBILITY
OF
QUALI-
FIED MEDICARE BENEFICIARIES AND OTHER MEDIC-
AID
BENEFICIARIES
TO
ENROLL
IN
AN
MSA
PLAN.—An individual who is a qualified medicare
beneficiary (as defined in section 1905(p)(1)), a
qualified disabled and working individual (described
in section 1905(s)), an individual described in sec-
tion 1902(a)(10)(E)(iii), or otherwise entitled to
medicare cost-sharing under a State plan under title
XIX is not eligible to enroll in an MSA plan.
784
‘‘(4) COVERAGE UNDER MSA PLANS ON A DEM-
ONSTRATION BASIS.—
‘‘(A) IN GENERAL.—An individual is not
eligible to enroll in an MSA plan under this
part—
‘‘(i) on or after January 1, 2003, un-
less the enrollment is the continuation of
such an enrollment in effect as of such
date; or
‘‘(ii) as of any date if the number of
such individuals so enrolled as of such date
has reached 500,000.
Under rules established by the Secretary, an in-
dividual is not eligible to enroll (or continue en-
rollment) in an MSA plan for a year unless the
individual provides assurances satisfactory to
the Secretary that the individual will reside in
the United States for at least 183 days during
the year.
‘‘(B) EVALUATION.—The Secretary shall
regularly evaluate the impact of permitting en-
rollment in MSA plans under this part on selec-
tion (including adverse selection), use of preven-
tive care, access to care, and the financial sta-
tus of the Trust Funds under this title.
785
‘‘(C) REPORTS.—The Secretary shall sub-
mit to Congress periodic reports on the num-
bers of individuals enrolled in such plans and
on the evaluation being conducted under sub-
paragraph (B). The Secretary shall submit such
a report, by not later than March 1, 2002, on
whether the time limitation under subparagraph
(A)(i) should be extended or removed and
whether to change the numerical limitation
under subparagraph (A)(ii).
‘‘(c) PROCESS FOR EXERCISING CHOICE.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a process through which elections described in
subsection (a) are made and changed, including the
form and manner in which such elections are made
and changed. Such elections shall be made or
changed only during coverage election periods speci-
fied under subsection (e) and shall become effective
as provided in subsection (f).
‘‘(2) COORDINATION THROUGH MEDICAREPLUS
ORGANIZATIONS.—
‘‘(A) ENROLLMENT.—Such process shall
permit an individual who wishes to elect a
MedicarePlus plan offered by a MedicarePlus
organization to make such election through the
786
filing of an appropriate election form with the
organization.
‘‘(B) 
DISENROLLMENT.—Such 
process
shall permit an individual, who has elected a
MedicarePlus plan offered by a MedicarePlus
organization and who wishes to terminate such
election, to terminate such election through the
filing of an appropriate election form with the
organization.
‘‘(3) DEFAULT.—
‘‘(A) INITIAL ELECTION.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), an individual who fails to make an
election during an initial election period
under subsection (e)(1) is deemed to have
chosen the medicare fee-for-service pro-
gram option.
‘‘(ii) SEAMLESS
CONTINUATION
OF
COVERAGE.—The Secretary may establish
procedures under which an individual who
is enrolled in a health plan (other than
MedicarePlus 
plan) 
offered 
by 
a
MedicarePlus organization at the time of
the initial election period and who fails to
elect to receive coverage other than
787
through the organization is deemed to have
elected the MedicarePlus plan offered by
the organization (or, if the organization of-
fers more than one such plan, such plan or
plans as the Secretary identifies under
such procedures).
‘‘(B) CONTINUING PERIODS.—An individ-
ual who has made (or is deemed to have made)
an election under this section is considered to
have continued to make such election until such
time as—
‘‘(i) the individual changes the elec-
tion under this section, or
‘‘(ii) a MedicarePlus plan is discon-
tinued, if the individual had elected such
plan at the time of the discontinuation.
‘‘(d) PROVIDING INFORMATION TO PROMOTE IN-
FORMED CHOICE.—
‘‘(1) IN GENERAL.—The Secretary shall provide
for activities under this subsection to broadly dis-
seminate information to medicare beneficiaries (and
prospective medicare beneficiaries) on the coverage
options provided under this section in order to pro-
mote an active, informed selection among such op-
tions.
788
‘‘(2) PROVISION OF NOTICE.—
‘‘(A) OPEN
SEASON
NOTIFICATION.—At
least 30 days before the beginning of each an-
nual, coordinated election period (as defined in
subsection (e)(3)(B)), the Secretary shall mail
to each MedicarePlus eligible individual residing
in an area the following:
‘‘(i) GENERAL
INFORMATION.—The
general information described in paragraph
(3).
‘‘(ii) LIST OF PLANS AND COMPARI-
SON OF PLAN OPTIONS.—A list identifying
the MedicarePlus plans that are (or will
be) available to residents of the area and
information described in paragraph (4)
concerning such plans. Such information
shall be presented in a comparative form.
‘‘(iii) MEDICAREPLUS MONTHLY CAPI-
TATION RATE.—The amount of the month-
ly MedicarePlus capitation rate for the
area.
‘‘(iv) ADDITIONAL
INFORMATION.—
Any other information that the Secretary
determines will assist the individual in
making the election under this section.
789
The mailing of such information shall be coordi-
nated with the mailing of any annual notice
under section 1804.
‘‘(B) 
NOTIFICATION
TO
NEWLY
MEDICAREPLUS
ELIGIBLE
INDIVIDUALS.—To
the extent practicable, the Secretary shall, not
later than 2 months before the beginning of the
initial MedicarePlus enrollment period for an
individual described in subsection (e)(1), mail
to the individual the information described in
subparagraph (A).
‘‘(C) FORM.—The information dissemi-
nated under this paragraph shall be written and
formatted using language that is easily under-
standable by medicare beneficiaries.
‘‘(D) PERIODIC UPDATING.—The informa-
tion described in subparagraph (A) shall be up-
dated on at least an annual basis to reflect
changes in the availability of MedicarePlus
plans and the benefits and monthly premiums
(and net monthly premiums) for such plans.
‘‘(3) GENERAL INFORMATION.—General infor-
mation under this paragraph, with respect to cov-
erage under this part during a year, shall include
the following:
790
‘‘(A) BENEFITS UNDER FEE-FOR-SERVICE
PROGRAM
OPTION.—A general description of
the benefits covered (and not covered) under
the medicare fee-for-service program under
parts A and B, including—
‘‘(i) covered items and services,
‘‘(ii) beneficiary cost sharing, such as
deductibles, coinsurance, and copayment
amounts, and
‘‘(iii) any beneficiary liability for bal-
ance billing.
‘‘(B) PART B PREMIUM.—The part B pre-
mium rates that will be charged for part B cov-
erage.
‘‘(C) ELECTION
PROCEDURES.—Informa-
tion and instructions on how to exercise election
options under this section.
‘‘(D) RIGHTS.—The general description of
procedural rights (including grievance and ap-
peals procedures) of beneficiaries under the
medicare 
fee-for-service 
program 
and 
the
MedicarePlus program and right to be pro-
tected against discrimination based on health
status-related factors under section 1852(b).
808
viduals enrolled under this part, other than
under an MSA plan, supplemental health care
benefits that the individuals may elect, at their
option, to have covered.
‘‘(4) ORGANIZATION AS SECONDARY PAYER.—
Notwithstanding any other provision of law, a
MedicarePlus organization may (in the case of the
provision of items and services to an individual
under a MedicarePlus plan under circumstances in
which payment under this title is made secondary
pursuant to section 1862(b)(2)) charge or authorize
the provider of such services to charge, in accord-
ance with the charges allowed under such a law,
plan, or policy—
‘‘(A) the insurance carrier, employer, or
other entity which under such law, plan, or pol-
icy is to pay for the provision of such services,
or
‘‘(B) such individual to the extent that the
individual has been paid under such law, plan,
or policy for such services.
‘‘(5) NATIONAL COVERAGE DETERMINATIONS.—
If there is a national coverage determination made
in the period beginning on the date of an announce-
ment under section 1853(b) and ending on the date