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permanent adoptions of children across State
and county jurisdictions;
(B) examine, at a minimum, interjurisdic-
tional adoption issues—
(i) concerning the recruitment of pro-
spective adoptive families from other States
and counties;
(ii) concerning the procedures to grant
reciprocity to prospective adoptive family
home studies from other States and coun-
ties;
(iii) arising from a review of the com-
ity and full faith and credit provided to
adoption decrees and termination of paren-
tal rights orders from other States; and
(iv) concerning the procedures related
to the administration and implementation
of the Interstate Compact on the Placement
of Children; and
(C) not later than 12 months after the final
appointment to the advisory panel, submit to the
Secretary the report described in paragraph (3).
(2) COMPOSITION OF ADVISORY PANEL.—In es-
tablishing the advisory panel required under para-
graph (1), the Secretary shall appoint members from
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the general public who are individuals knowledgeable
on adoption and foster care issues, and with due con-
sideration to representation of ethnic or racial mi-
norities and diverse geographic areas, and who, at a
minimum, include the following:
(A) Adoptive and foster parents.
(B) Public and private child welfare agen-
cies that place children in and out of home care.
(C) Family court judges.
(D) Adoption attorneys.
(E) An Administrator of the Interstate
Compact on the Placement of Children and an
Administrator of the Interstate Compact on
Adoption and Medical Assistance.
(F) A representative cross-section of indi-
viduals from other organizations and individuals
with expertise or advocacy experience in adop-
tion and foster care issues.
(3) CONTENTS OF REPORT.—The report required
under paragraph (1)(C) shall include the results of
the study conducted under subparagraphs (A) and
(B) of paragraph (1) and recommendations on how to
improve procedures to facilitate the interjurisdictional
adoption of children, including interstate and inter-
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county adoptions, so that children will be assured
timely and permanent placements.
(4) CONGRESS.—The Secretary shall submit a
copy of the report required under paragraph (1)(C) to
the appropriate committees of Congress, and, if rel-
evant, make recommendations for proposed legisla-
tion.
SEC. 203. STATE PERFORMANCE IN PROTECTING CHIL-
DREN.
(a) ANNUAL REPORT.—
(1) IN GENERAL.—Part E of title IV of the So-
cial Security Act (42 U.S.C. 670 et seq.) is amended
by adding at the end the following:
‘‘SEC. 479A. ANNUAL REPORT.
‘‘(a) IN GENERAL.—The Secretary shall issue an an-
nual report containing ratings of the performance of each
State in protecting children who are placed in foster care,
for adoption, or with a relative or guardian. The report
shall include ratings on outcome measures for categories re-
lated to safety and permanence for children.
‘‘(b) OUTCOME MEASURES.—
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the American Public Welfare Association,
the National Governors’ Association, the National
Conference of State Legislatures, and child welfare
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advocates, shall develop a set of outcome measures to
be used in preparing the report.
‘‘(2) CATEGORIES.—In developing the outcome
measures, the Secretary shall develop measures that
can track performance over time for the following cat-
egories:
‘‘(A) The number of children placed annu-
ally for adoption, the number of placements of
children with special needs, and the number of
children placed permanently in a foster family
home, with a relative, or with a guardian who
is not a relative.
‘‘(B) The number of children, including
those with parental rights terminated, that an-
nually leave foster care at the age of majority
without having been adopted or placed with a
guardian.
‘‘(C) The median and mean length of stay
of children in foster care, for children with pa-
rental rights terminated, and children for whom
parental rights are retained by the biological or
adoptive parent.
‘‘(D) The median and mean length of time
between a child having a plan of adoption and
termination of parental rights, between the
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availability of a child for adoption and the
placement of the child in an adoptive family,
and between the placement of the child in such
a family and the finalization of the adoption.
‘‘(E) The number of deaths of children in
foster care and other out-of-home care, including
kinship care, resulting from substantiated child
abuse and neglect.
‘‘(F) The specific steps taken by the State to
facilitate permanence for children.
‘‘(3) MEASURES.—In developing the outcome
measures, the Secretary shall use data from the Adop-
tion and Foster Care Analysis and Reporting System
established under section 479 to the maximum extent
possible.
‘‘(c) RATING SYSTEM.—The Secretary shall develop a
system (including using State census data and poverty
rates) to rate the performance of each State based on the
outcome measures.
‘‘(d) PREPARATION AND ISSUANCE.—On May 1, 1999,
and annually thereafter, the Secretary shall prepare, submit
to Congress, and issue to the States the report described in
subsection (a). Each report shall rate the performance of
a State on each outcome measure developed under sub-
section (b), include an explanation of the rating system de-
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veloped under subsection (c), and the way in which scores
are determined under the rating system, analyze high and
low performances for the State, and make recommendations
to the State for improvement.’’.
(2) CONFORMING AMENDMENTS.—Section 471(a)
of the Social Security Act (42 U.S.C. 671(a)), as
amended by section 202(a), is amended—
(A) in paragraph (20), by striking ‘‘and’’
at the end;
(B) in paragraph (21), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(22) provides that the State shall annually pro-
vide to the Secretary the information required under
section 479A.’’.
(b) DEVELOPMENT OF PERFORMANCE-BASED INCEN-
TIVE SYSTEM.—The Secretary of Health and Human Serv-
ices, in consultation with State and local public officials
responsible for administering child welfare programs and
child welfare advocates, shall develop and recommend to
Congress an incentive system to provide payments under
parts B and E of title IV of the Social Security Act (42
U.S.C. 620 et seq., 670 et seq.) to any State based on such
State’s performance under such a system. Such system shall,
to the extent the Secretary determines feasible and appro-
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priate, be based on the annual report required under section
479A of the Social Security Act (as added by subsection
(a) of this Act) or on any proposed modifications of such
annual report. Not later than 6 months after the date of
enactment of this Act, the Secretary shall report on the new
system to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the
Senate.
TITLE III—ADDITIONAL
IMPROVEMENTS AND REFORMS
SEC. 301. EXPANSION OF CHILD WELFARE DEMONSTRA-
TION PROJECTS.
(a) IN GENERAL.—Section 1130(a) of the Social Secu-
rity Act (42 U.S.C. 1320a–9) is amended to read as follows:
‘‘(a) AUTHORITY
TO
APPROVE
DEMONSTRATION
PROJECTS.—
‘‘(1) IN GENERAL.—The Secretary may authorize
States to conduct demonstration projects pursuant to
this section which the Secretary finds are likely to
promote the objectives of part B or E of title IV. Such
projects shall be designed to achieve 1 or more of the
following goals:
‘‘(A) Reducing a backlog of children in
long-term foster care or awaiting adoption place-
ment.
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‘‘(B) Ensuring, not later than 1 year after
a child enters foster care, an adoptive placement
for the child.
‘‘(C) Identifying and addressing barriers
that result in delays to adoptive placements for
children in foster care.
‘‘(D) Identifying and addressing parental
substance abuse problems that endanger children
and result in the placement of children in foster
care, including through the placement of children
with their parents in residential treatment fa-
cilities (including residential treatment facilities
for post-partum depression) that are specifically
designed to serve parents and children together
in order to promote family reunification and
that can ensure the health and safety of the chil-
dren in such placements.
‘‘(E) Overcoming barriers to the adoption of
children with special needs resulting from a lack
of health insurance coverage for such children.
‘‘(F) Any other goal that the Secretary has
approved for a demonstration project under this
section as of the date of enactment of the Pro-
motion of Adoption, Safety, and Support for
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Abused and Neglected Children (PASS) Act, or,
after such date, specifies by regulation.
‘‘(2) REQUIREMENT.—In considering an appli-
cation to conduct a demonstration project under this
section that has been submitted by a State in which
there has been a court order determining that the
State’s child welfare program has failed to comply
with the provisions of part B or E of title IV or of
the Constitution, the Secretary shall take into consid-
eration the effect of approving the proposed project on
the terms and conditions of any court order related
to such failure to comply that is in effect in the
State.’’.
(b) RULE OF CONSTRUCTION.—Nothing in the amend-
ments made by subsection (a) shall be construed as affecting
the terms and conditions of any demonstration projects
under section 1130 of the Social Security Act (42 U.S.C.
1320a–9) that have been approved by the Secretary as of
the date of enactment of this Act.
SEC. 302. PERMANENCY PLANNING HEARINGS.
Section 475(5)(C) of the Social Security Act (42
U.S.C. 675(5)(C)) is amended—
(1) by striking ‘‘dispositional’’ and inserting
‘‘permanency planning’’;
(2) by striking ‘‘eighteen’’ and inserting ‘‘12’’;
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(3) by striking ‘‘original placement’’ and insert-
ing ‘‘date the child is considered to have entered foster
care (as determined under subparagraph (F))’’; and
(4) by striking ‘‘future status of’’ and all that
follows through ‘‘long term basis)’’ and inserting
‘‘permanency plan for the child that includes whether,
and if applicable when, the child will be returned to
the parent, placed for adoption and the State will file
a petition for termination of parental rights, or re-
ferred for legal guardianship or custody, or (in cases
where the State agency has documented to the State
court a compelling reason for determining that it
would not be in the best interests of the child to re-
turn home, be referred for termination of parental
rights, or be placed for adoption, with a qualified rel-
ative, or with a legal guardian) placed in another
planned permanent living arrangement’’.
SEC. 303. KINSHIP CARE.
(a) REPORT.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall—
(A) not later than March 1, 1998, convene
the advisory panel provided for in subsection
(b)(1) and prepare and submit to the advisory
panel an initial report on the extent to which
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children in foster care are placed in the care of
a relative (in this section referred to as ‘‘kinship
care’’); and
(B) not later than November 1, 1998, sub-
mit to the Committee on Ways and Means of the
House of Representatives and the Committee on
Finance of the Senate a final report on the mat-
ter described in subparagraph (A), which shall—
(i) be based on the comments submitted
by the advisory panel pursuant to sub-
section (b)(2) and other information and
considerations; and
(ii) include the policy recommenda-
tions of the Secretary with respect to the
matter.
(2) REQUIRED CONTENTS.—Each report required
by paragraph (1) shall—
(A) include, to the extent available for each
State, information on—
(i) the policy of the State regarding
kinship care;
(ii) the characteristics of the kinship
care providers (including age, income, eth-
nicity, and race, and the relationship of the
kinship care providers to the children);
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(iii) the characteristics of the household
of such providers (such as number of other
persons in the household and family com-
position);
(iv) how much access to the child is af-
forded to the parent from whom the child
has been removed;
(v) the cost of, and source of funds for,
kinship care (including any subsidies such
as medicaid and cash assistance);
(vi) the permanency plan for the child
and the actions being taken by the State to
achieve the plan;
(vii) the services being provided to the
parent from whom the child has been re-
moved; and
(viii) the services being provided to the
kinship care provider; and
(B) specifically note the circumstances or
conditions under which children enter kinship
care.
(b) ADVISORY PANEL.—
(1) ESTABLISHMENT.—The Secretary of Health
and Human Services, in consultation with the Chair-
man of the Committee on Ways and Means of the