I
104TH CONGRESS
2D SESSION
H. R. 3832
To restore the American family, enhance support and work opportunities
for families with children, reduce out-of-wedlock pregnancies, reduce wel-
fare dependence, and control welfare spending.
IN THE HOUSE OF REPRESENTATIVES
JULY 17, 1996
Mr. TANNER (for himself and Mr. CASTLE) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committees on Agriculture, Commerce, Economic and Edu-
cational Opportunities, Government Reform and Oversight, Banking and
Financial Services, the Judiciary, and the Budget, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of
such provisions as fall within the jurisdiction of the committee concerned
A BILL
To restore the American family, enhance support and work
opportunities for families with children, reduce out-of-
wedlock pregnancies, reduce welfare dependence, and
control welfare spending.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Bipartisan Welfare Re-
form Act of 1996’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES
Sec. 101. Findings.
Sec. 102. Reference to Social Security Act.
Sec. 103. Block grants to States.
Sec. 104. Services provided by charitable, religious, or private organizations.
Sec. 105. Census data on grandparents as primary caregivers for their grand-
children.
Sec. 106. Report on data processing.
Sec. 107. Study on alternative outcomes measures.
Sec. 108. Conforming amendments to the Social Security Act.
Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and related
provisions.
Sec. 110. Conforming amendments to other laws.
Sec. 111. Development of prototype of counterfeit-resistant social security card
required.
Sec. 112. Disclosure of receipt of Federal funds.
Sec. 113. Modifications to the job opportunities for certain low-income individ-
uals program.
Sec. 114. Secretarial submission of legislative proposal for technical and con-
forming amendments.
Sec. 115. Application of current AFDC standards under medicaid program.
Sec. 116. Effective date; transition rule.
TITLE II—SUPPLEMENTAL SECURITY INCOME
Sec. 200. Reference to Social Security Act.
Subtitle A—Eligibility Restrictions
Sec. 201. Denial of SSI benefits for 10 years to individuals found to have
fraudulently misrepresented residence in order to obtain bene-
fits simultaneously in 2 or more States.
Sec. 202. Denial of SSI benefits for fugitive felons and probation and parole
violators.
Sec. 203. Verification of eligibility for certain SSI disability benefits.
Sec. 204. Treatment of prisoners.
Sec. 205. Effective date of application for benefits.
Sec. 206. Installment payment of large past-due supplemental security income
benefits.
Sec. 207. Recovery of supplemental security income overpayments from social
security benefits.
Subtitle B—Benefits for Disabled Children
Sec. 211. Definition and eligibility rules.
Sec. 212. Eligibility redeterminations and continuing disability reviews.
Sec. 213. Additional accountability requirements.
Sec. 214. Reduction in cash benefits payable to institutionalized individuals
whose medical costs are covered by private insurance.
Sec. 215. Modification respecting parental income deemed to disabled children.
Sec. 216. Graduated benefits for additional children.
Subtitle C—State Supplementation Programs
Sec. 221. Repeal of maintenance of effort requirements applicable to optional
State programs for supplementation of SSI benefits.
Subtitle D—Studies Regarding Supplemental Security Income Program
Sec. 231. Annual report on the supplemental security income program.
Sec. 232. Study of disability determination process.
Sec. 233. Study by General Accounting Office.
Subtitle E—National Commission on the Future of Disability
Sec. 241. Establishment.
Sec. 242. Duties of the Commission.
Sec. 243. Membership.
Sec. 244. Staff and support services.
Sec. 245. Powers of Commission.
Sec. 246. Reports.
Sec. 247. Termination.
Sec. 248. Authorization of appropriations.
TITLE III—CHILD SUPPORT
Sec. 300. Reference to Social Security Act.
Subtitle A—Eligibility for Services; Distribution of Payments
Sec. 301. State obligation to provide child support enforcement services.
Sec. 302. Distribution of child support collections.
Sec. 303. Privacy safeguards.
Sec. 304. Rights to notification and hearings.
Subtitle B—Locate and Case Tracking
Sec. 311. State case registry.
Sec. 312. Collection and disbursement of support payments.
Sec. 313. State directory of new hires.
Sec. 314. Amendments concerning income withholding.
Sec. 315. Locator information from interstate networks.
Sec. 316. Expansion of the Federal parent locator service.
Sec. 317. Collection and use of social security numbers for use in child support
enforcement.
Subtitle C—Streamlining and Uniformity of Procedures
Sec. 321. Adoption of uniform State laws.
Sec. 322. Improvements to full faith and credit for child support orders.
Sec. 323. Administrative enforcement in interstate cases.
Sec. 324. Use of forms in interstate enforcement.
Sec. 325. State laws providing expedited procedures.
Subtitle D—Paternity Establishment
Sec. 331. State laws concerning paternity establishment.
Sec. 332. Outreach for voluntary paternity establishment.
Sec. 333. Cooperation by applicants for and recipients of temporary family as-
sistance.
Subtitle E—Program Administration and Funding
Sec. 341. Performance-based incentives and penalties.
Sec. 342. Federal and State reviews and audits.
Sec. 343. Required reporting procedures.
Sec. 344. Automated data processing requirements.
Sec. 345. Technical assistance.
Sec. 346. Reports and data collection by the Secretary.
Subtitle F—Establishment and Modification of Support Orders
Sec. 351. Simplified process for review and adjustment of child support orders.
Sec. 352. Furnishing consumer reports for certain purposes relating to child
support.
Sec. 353. Nonliability for financial institutions providing financial records to
State child support enforcement agencies in child support
cases.
Subtitle G—Enforcement of Support Orders
Sec. 361. Internal Revenue Service collection of arrearages.
Sec. 362. Authority to collect support from Federal employees.
Sec. 363. Enforcement of child support obligations of members of the Armed
Forces.
Sec. 364. Voiding of fraudulent transfers.
Sec. 365. Work requirement for persons owing past-due child support.
Sec. 366. Definition of support order.
Sec. 367. Reporting arrearages to credit bureaus.
Sec. 368. Liens.
Sec. 369. State law authorizing suspension of licenses.
Sec. 370. Denial of passports for nonpayment of child support.
Sec. 371. International child support enforcement.
Sec. 372. Financial institution data matches.
Sec. 373. Enforcement of orders against paternal or maternal grandparents in
cases of minor parents.
Sec. 374. Nondischargeability in bankruptcy of certain debts for the support of
a child.
Subtitle H—Medical Support
Sec. 376. Correction to ERISA definition of medical child support order.
Sec. 377. Enforcement of orders for health care coverage.
Subtitle I—Enhancing Responsibility and Opportunity for Non-Residential
Parents
Sec. 381. Grants to States for access and visitation programs.
Subtitle J—Effect of Enactment
Sec. 391. Effective dates.
TITLE IV—RESTRICTING WELFARE AND PUBLIC BENEFITS FOR
ALIENS
Sec. 400. Statements of national policy concerning welfare and immigration.
Subtitle A—Eligibility for Federal Benefits
Sec. 401. Aliens who are not qualified aliens ineligible for Federal public bene-
fits.
Sec. 402. Limited eligibility of certain qualified aliens for certain Federal pro-
grams.
Sec. 403. Five-year limited eligibility of qualified aliens for Federal means-test-
ed public benefit.
Sec. 404. Notification and information reporting.
Subtitle B—Eligibility for State and Local Public Benefits Programs
Sec. 411. Aliens who are not qualified aliens or nonimmigrants ineligible for
State and local public benefits.
Sec. 412. State authority to limit eligibility of qualified aliens for State public
benefits.
Subtitle C—Attribution of Income and Affidavits of Support
Sec. 421. Federal attribution of sponsor’s income and resources to alien for
purposes of medicaid eligibility.
Sec. 422. Authority for States to provide for attribution of sponsor’s income
and resources to the alien with respect to State programs.
Sec. 423. Requirements for sponsor’s affidavit of support.
Sec. 424. Cosignature of alien student loans.
Subtitle D—General Provisions
Sec. 431. Definitions.
Sec. 432. Verification of eligibility for Federal public benefits.
Sec. 433. Statutory construction.
Sec. 434. Communication between State and local government agencies and the
Immigration and Naturalization Service.
Sec. 435. Qualifying quarters.
Sec. 436. Title inapplicable to programs specified by Attorney General.
Sec. 437. Title inapplicable to programs of nonprofit charitable organizations.
Subtitle E—Conforming Amendments
Sec. 441. Conforming amendments relating to assisted housing.
TITLE V—REDUCTIONS IN FEDERAL GOVERNMENT POSITIONS
Sec. 501. Reductions.
Sec. 502. Reductions in Federal bureaucracy.
Sec. 503. Reducing personnel in Washington, D.C. area.
TITLE VI—REFORM OF PUBLIC HOUSING
Sec. 601. Failure to comply with other welfare and public assistance programs.
Sec. 602. Fraud under means-tested welfare and public assistance programs.
Sec. 603. Annual adjustment factors for operating costs only; restraint on rent
increases.
Sec. 604. Effective date.
TITLE VII—CHILD CARE
Sec. 701. Short title and references.
Sec. 702. Goals.
Sec. 703. Authorization of appropriations.
Sec. 704. Lead agency.
Sec. 705. Application and plan.
Sec. 706. Limitation on State allotments.
Sec. 707. Activities to improve the quality of child care.
Sec. 708. Repeal of early childhood development and before- and after-school
care requirement.
Sec. 709. Administration and enforcement.
Sec. 710. Payments.
Sec. 711. Annual report and audits.
Sec. 712. Report by the Secretary.
Sec. 713. Allotments.
Sec. 714. Definitions.
Sec. 715. Repeals.
TITLE VIII—CHILD NUTRITION PROGRAMS
Subtitle A—National School Lunch Act
Sec. 801. Value of food assistance.
Sec. 802. Commodity assistance.
Sec. 803. State disbursement to schools.
Sec. 804. Nutritional and other program requirements.
Sec. 805. Free and reduced price policy statement.
Sec. 806. Special assistance.
Sec. 807. Miscellaneous provisions and definitions.
Sec. 808. Summer food service program for children.
Sec. 809. Commodity distribution.
Sec. 810. Child care food program.
Sec. 811. Pilot projects.
Sec. 812. Reduction of paperwork.
Sec. 813. Information on income eligibility.
Sec. 814. Nutrition guidance for child nutrition programs.
Sec. 815. Information clearinghouse.
Subtitle B—Child Nutrition Act of 1966
Sec. 821. Special milk program.
Sec. 822. Reimbursement rates for free and reduced price breakfasts.
Sec. 823. Free and reduced price policy statement.
Sec. 824. School breakfast program authorization.
Sec. 825. State administrative expenses.
Sec. 826. Regulations.
Sec. 827. Prohibitions.
Sec. 828. Miscellaneous provisions and definitions.
Sec. 829. Accounts and records.
Sec. 830. Special supplemental nutrition program for women, infants, and chil-
dren.
Sec. 831. Cash grants for nutrition education.
Sec. 832. Nutrition education and training.
Sec. 833. Breastfeeding promotion program.
TITLE IX—FOOD STAMP AND RELATED PROGRAMS
Sec. 901. Definition of certification period.
Sec. 902. Expanded definition of ‘‘coupon’’.
Sec. 903. Treatment of children living at home.
Sec. 904. Adjustment of thrifty food plan.
Sec. 905. Definition of homeless individual.
Sec. 906. Income Exclusions.
Sec. 907. Deductions from income.
Sec. 908. Vehicle allowance.
Sec. 909. Vendor payments for transitional housing counted as income.
Sec. 910. Increased penalties for violating food stamp program requirements.
Sec. 911. Disqualification of convicted individuals.
Sec. 912. Disqualification.
Sec. 913. Caretaker exemption.
Sec. 914. Employment and training.
Sec. 915. Comparable treatment for disqualification.
Sec. 916. Disqualification for receipt of multiple food stamp benefits.
Sec. 917. Disqualification of fleeing felons.
Sec. 918. Cooperation with child support agencies.
Sec. 919. Disqualification relating to child support arrears.
Sec. 920. Work requirement for able-bodied recipients.
Sec. 921. Encourage electronic benefit transfer systems.
Sec. 922. Value of minimum allotment.
Sec. 923. Benefits on recertification.
Sec. 924. Optional combined allotment for expedited households.
Sec. 925. Failure to comply with other means-tested public assistance pro-
grams.
Sec. 926. Allotments for households residing in centers.
Sec. 927. Authority to establish authorization periods.
Sec. 928. Specific period for prohibiting participation of stores based on lack
of business integrity.
Sec. 929. Information for verifying eligibility for authorization.
Sec. 930. Waiting period for stores that initially fail to meet authorization cri-
teria.
Sec. 931. Operation of food stamp offices.
Sec. 932. Mandatory claims collection methods.
Sec. 933. Exchange of law enforcement information.
Sec. 934. Expedited coupon service.
Sec. 935.
Withdrawing fair hearing requests.
Sec. 936. Income, eligibility, and immigration status verification systems.
Sec. 937. Bases for suspensions and disqualifications.
Sec. 938. Authority to suspend stores violating program requirements pending
administrative and judicial review.
Sec. 939. Disqualification of retailers who are disqualified from the WIC pro-
gram.
Sec. 940. Permanent debarment of retailers who intentionally submit falsified
applications.
Sec. 941. Expanded civil and criminal forfeiture for violations of the food
stamp act.
Sec. 942. Expanded authority for sharing information provided by retailers.
Sec. 943. Limitation of Federal match.
Sec. 944. Collection of overissuances.
Sec. 945. Standards for administration.
Sec. 946. Response to waivers.
Sec. 947. Authorization of appropriations.
Sec. 948. Authorize States to operate simplified food stamp programs.
Sec. 949. Emergency food assistance program.
Sec. 950. Food bank demonstration project.
Sec. 951. Report on entitlement commodity processing.
TITLE X—MISCELLANEOUS
Subtitle A—General Provisions
Sec. 1001. Expenditure of Federal funds in accordance with laws and proce-
dures applicable to expenditure of State funds.
Sec. 1002. Elimination of housing assistance with respect to fugitive felons and
probation and parole violators.
Sec. 1003. Sense of the Senate regarding enterprise zones.
Sec. 1004. Sense of the Senate regarding the inability of the non-custodial par-
ent to pay child support.
Sec. 1005. Food stamp eligibility.
Sec. 1006. Establishing national goals to prevent teenage pregnancies.
Sec. 1007. Sense of the Senate regarding enforcement of statutory rape laws.
Sec. 1008. Sanctioning for testing positive for controlled substances.
Sec. 1009. Abstinence education.
Sec. 1010. Provisions to encourage electronic benefit transfer systems.
Sec. 1011. Reduction in block grants to States for social services.
Sec. 1012. Efficient use of Federal transportation funds.
Sec. 1013. Enhanced Federal match for child welfare automation expenses.
Subtitle B—Earned Income Tax Credit
Sec. 1021. Earned income credit and other tax benefits denied to individuals
failing to provide taxpayer identification numbers.
Sec. 1022. Rules relating to denial of earned income credit on basis of disquali-
fied income.
Sec. 1023. Modification of adjusted gross income definition for earned income
credit.
Sec. 1024. Notice of availability required to be provided to applicants and
former recipients of AFDC, food stamps, and medicaid.
Sec. 1025. Notice of availability of earned income tax credit and dependent care
tax credit to be included on W–4 form.
Sec. 1026. Advance payment of earned income tax credit through State dem-
onstration programs.
TITLE I—BLOCK GRANTS FOR
TEMPORARY 
ASSISTANCE
FOR NEEDY FAMILIES
SEC. 101. FINDINGS.
The Congress makes the following findings:
(1) Marriage is the foundation of a successful
society.
(2) Marriage is an essential institution of a suc-
cessful society which promotes the interests of chil-
dren.
(3) Promotion of responsible fatherhood and
motherhood is integral to successful child rearing
and the well-being of children.
(4) In 1992, only 54 percent of single-parent
families with children had a child support order es-
tablished and, of that 54 percent, only about one-
half received the full amount due. Of the cases en-
forced through the public child support enforcement
system, only 18 percent of the caseload has a collec-
tion.
(5) The number of individuals receiving aid to
families with dependent children (in this section re-
ferred to as ‘‘AFDC’’) has more than tripled since
1965. More than two-thirds of these recipients are
children. Eighty-nine percent of children receiving
AFDC benefits now live in homes in which no father
is present.
(A)(i) The average monthly number of
children receiving AFDC benefits—
(I) was 3,300,000 in 1965;
(II) was 6,200,000 in 1970;
(III) was 7,400,000 in 1980; and
(IV) was 9,300,000 in 1992.
(ii) While the number of children receiving
AFDC benefits increased nearly threefold be-
tween 1965 and 1992, the total number of chil-
dren in the United States aged 0 to 18 has de-
clined by 5.5 percent.
(B) The Department of Health and
Human Services has estimated that 12,000,000
children will receive AFDC benefits within 10
years.
(C) The increase in the number of children
receiving public assistance is closely related to
the increase in births to unmarried women. Be-
tween 1970 and 1991, the percentage of live
births to unmarried women increased nearly
threefold, from 10.7 percent to 29.5 percent.
(6) The increase of out-of-wedlock pregnancies
and births is well documented as follows:
(A) It is estimated that the rate of non-
marital teen pregnancy rose 23 percent from 54
pregnancies per 1,000 unmarried teenagers in
1976 to 66.7 pregnancies in 1991. The overall
rate of nonmarital pregnancy rose 14 percent
from 90.8 pregnancies per 1,000 unmarried
women in 1980 to 103 in both 1991 and 1992.
In contrast, the overall pregnancy rate for mar-
ried couples decreased 7.3 percent between
1980 and 1991, from 126.9 pregnancies per
1,000 married women in 1980 to 117.6 preg-
nancies in 1991.
(B) The total of all out-of-wedlock births
between 1970 and 1991 has risen from 10.7
percent to 29.5 percent and if the current trend
continues, 50 percent of all births by the year
2015 will be out-of-wedlock.
(7) The negative consequences of an out-of-wed-
lock birth on the mother, the child, the family, and
society are well documented as follows:
(A) Young women 17 and under who give
birth outside of marriage are more likely to go
on public assistance and to spend more years
on welfare once enrolled. These combined ef-
fects of ‘‘younger and longer’’ increase total
AFDC costs per household by 25 percent to 30
percent for 17-year olds.
(B) Children born out-of-wedlock have a
substantially higher risk of being born at a very
low or moderately low birth weight.
(C) Children born out-of-wedlock are more
likely to experience low verbal cognitive attain-
ment, as well as more child abuse, and neglect.
(D) Children born out-of-wedlock were
more likely to have lower cognitive scores, lower
educational aspirations, and a greater likelihood
of becoming teenage parents themselves.
(E) Being born out-of-wedlock significantly
reduces the chances of the child growing up to
have an intact marriage.
(F) Children born out-of-wedlock are 3
times more likely to be on welfare when they
grow up.
(8) Currently 35 percent of children in single-
parent homes were born out-of-wedlock, nearly the
same percentage as that of children in single-parent
homes whose parents are divorced (37 percent).
While many parents find themselves, through divorce
or tragic circumstances beyond their control, facing
the difficult task of raising children alone, neverthe-
less, the negative consequences of raising children in
single-parent homes are well documented as follows:
(A) Only 9 percent of married-couple fami-
lies with children under 18 years of age have
income below the national poverty level. In con-
(H) The absence of a father in the life of
a child has a negative effect on school perform-
ance and peer adjustment.
(I) Children of teenage single parents have
lower cognitive scores, lower educational aspira-
tions, and a greater likelihood of becoming teen-
age parents themselves.
(J) Children of single-parent homes are 3
times more likely to fail and repeat a year in
grade school than are children from intact 2-
parent families.
(K) Children from single-parent homes are
almost 4 times more likely to be expelled or sus-
pended from school.
(L) Neighborhoods with larger percentages
of youth aged 12 through 20 and areas with
higher percentages of single-parent households
have higher rates of violent crime.
(M) Of those youth held for criminal of-
fenses within the State juvenile justice system,
only 29.8 percent lived primarily in a home with
both parents. In contrast to these incarcerated
youth, 73.9 percent of the 62,800,000 children
in the Nation’s resident population were living
with both parents.
(9) Therefore, in light of this demonstration of
the crisis in our Nation, it is the sense of the Con-
gress that prevention of out-of-wedlock pregnancy
and reduction in out-of-wedlock birth are very im-
portant Government interests and the policy con-
tained in part A of title IV of the Social Security
Act (as amended by section 103 of this Act) is in-
tended to address the crisis.
SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in
this title an amendment is expressed in terms of an
amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that sec-
tion or other provision of the Social Security Act.
SEC. 103. BLOCK GRANTS TO STATES.
Part A of title IV (42 U.S.C. 601 et seq.) is amended
to read as follows:
‘‘PART A—BLOCK GRANTS TO STATES FOR
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
‘‘SEC. 401. PURPOSE.
‘‘(a) IN GENERAL.—The purpose of this part is to
increase the flexibility of States in operating a program
designed to—
‘‘(1) provide assistance to needy families so that
children may be cared for in their own homes or in
the homes of relatives;
‘‘(2) end the dependence of needy parents on
government benefits by promoting job preparation,
work, and marriage;
‘‘(3) prevent and reduce the incidence of out-of-
wedlock pregnancies and establish annual numerical
goals for preventing and reducing the incidence of
these pregnancies; and
‘‘(4) encourage the formation and maintenance
of two-parent families.
‘‘(b) NO INDIVIDUAL ENTITLEMENT.—This part
shall not be interpreted to entitle any individual or family
to assistance under any State program funded under this
part.
‘‘SEC. 402. ELIGIBLE STATES; STATE PLAN.
‘‘(a) IN GENERAL.—As used in this part, the term
‘eligible State’ means, with respect to a fiscal year, a State
that, during the 2-year period immediately preceding the
fiscal year, has submitted to the Secretary a plan that
meets the requirements of subsection (b) and has been ap-
proved by the Secretary with respect to the fiscal year.
‘‘(b) CONTENTS OF STATE PLANS.—A plan meets
the requirements of this subsection if the plan includes
the following:
‘‘(1) OUTLINE
OF
FAMILY
ASSISTANCE
PRO-
GRAM.—
‘‘(A) GENERAL
PROVISIONS.—A written
document that outlines how the State will do
the following:
‘‘(i) Conduct a program, designed to
serve all political subdivisions in the State,
that provides assistance to needy families
with (or expecting) children and provides
parents with job preparation, work, and
support services to enable them to leave
the program and become self-sufficient.
‘‘(ii) Determine, on an objective and
equitable basis, the needs of and the
amount of assistance to be provided to
needy families, and treat families of similar
needs and circumstances similarly, subject
to subparagraph (B).
‘‘(iii) Require a parent or caretaker
receiving assistance under the program to
engage in work (as defined by the State)
once the State determines the parent or
caretaker is ready to engage in work, or
once the parent or caretaker has received
assistance under the program for 24
months (whether or not consecutive),
whichever is earlier.
‘‘(iv) Ensure that parents and care-
takers receiving assistance under the pro-
gram engage in work activities in accord-
ance with section 407.
‘‘(v) Grant an opportunity for a fair
hearing before the State agency to any in-
dividual to whom assistance under the pro-
gram is denied, reduced, or terminated, or
whose request for such assistance is not
acted on with reasonable promptness.
‘‘(vi) Take such reasonable steps as
the State deems necessary to restrict the
use and disclosure of information about in-
dividuals and families receiving assistance
under the program attributable to funds
provided by the Federal Government.
‘‘(vii) Establish goals and take action
to prevent and reduce the incidence of out-
of-wedlock pregnancies, with special em-
phasis on teenage pregnancies, and estab-
lish numerical goals for reducing the ille-
gitimacy ratio of the State (as defined in
section 403(a)(2)(B)) for calendar years
1996 through 2005.
‘‘(B) SPECIAL PROVISIONS.—
‘‘(i) The plan shall indicate whether
the State intends to treat families moving
into the State from another State dif-
ferently than other families under the pro-
gram, and if so, how the State intends to
treat such families under the program.
‘‘(ii) The plan shall indicate whether
the State intends to provide assistance
under the program to individuals who are
not citizens of the United States, and if so,
shall include an overview of such assist-
ance.
‘‘(iii) The plan shall contain an esti-
mate of the number of individuals (if any)
who will become ineligible for medical as-
sistance under the State plan approved
under title XIX as a result of changes in
the rules governing eligibility for the State
program funded under this part, and shall
indicate the extent (if any) to which the
State will provide medical assistance to
such individuals, and the scope of such
medical assistance.
‘‘(2) CERTIFICATION
THAT
THE
STATE
WILL
OPERATE
A
CHILD
SUPPORT
ENFORCEMENT
PRO-
GRAM.—The plan shall include a certification by the
chief executive officer of the State that, during the
fiscal year, the State will operate a child support en-
forcement program under the State plan approved
under part D.
‘‘(3) CERTIFICATION
THAT
THE
STATE
WILL
NOT
OPERATE
A
SEPARATE
FINANCIAL
SUPPORT
PROGRAM WITH STATE FUNDS TARGETED AT CER-
TAIN CHILD SUPPORT RECIPIENTS.—The plan shall
include a certification by the chief executive officer
of the State that, during the fiscal year, the State
will not operate a separate financial support pro-
gram with State funds targeted at child support re-
cipients who would be eligible for assistance under
the program funded under this part were it not for
payments from the State-funded financial assistance
program.
‘‘(4) CERTIFICATION
THAT
THE
STATE
WILL
OPERATE
A
CHILD
PROTECTION
PROGRAM.—The
plan shall include a certification by the chief execu-
tive officer of the State that, during the fiscal year,
the State will operate a child protection program
under the State plan approved under part B.
‘‘(5) CERTIFICATION OF THE ADMINISTRATION
OF THE PROGRAM.—The plan shall include a certifi-
cation by the chief executive officer of the State
specifying which State agency or agencies will ad-
minister and supervise the program referred to in
paragraph (1) for the fiscal year, which shall include
assurances that local governments and private sector
organizations—
‘‘(A) have been working jointly with the
State in all phases of the plan and design of
welfare services in the State so that services are
provided in a manner appropriate to local popu-
lations;
‘‘(B) have had at least 60 days to submit
comments on the final plan and the design of
such services; and
‘‘(C) will not have unfunded mandates im-
posed on them under such plan.
Such certification shall also include assurance that
when local elected officials are currently responsible
for the administration of welfare services, the local
elected officials will be able to plan, design, and ad-
minister for their jurisdictions the programs estab-
lished pursuant to this Act.
‘‘(6) CERTIFICATION
THAT
THE
STATE
WILL
PROVIDE INDIANS WITH EQUITABLE ACCESS TO AS-
SISTANCE.—The plan shall include a certification by
the chief executive officer of the State that, during
the fiscal year, the State will provide each Indian
who is a member of an Indian tribe in the State that
does not have a tribal family assistance plan ap-
proved under section 412 with equitable access to
assistance under the State program funded under
this part attributable to funds provided by the Fed-
eral Government.
‘‘(7) CERTIFICATION
OF
NONDISPLACEMENT
AND NONREPLACEMENT OF EMPLOYEES.—The plan
shall include a certification that the implementation
of the plan will not result in—
‘‘(A) the displacement of a currently em-
ployed worker or position by an individual to
whom assistance is provided under the State
program funded under this part;
‘‘(B) the replacement of an employee who
has been terminated with an individual to whom
assistance is provided under the State program
funded under this part; or
‘‘(C) the replacement of an employee who
is on layoff from the same position filled by an
individual to whom assistance is provided under
the State program funded under this part or
any equivalent position.
‘‘(c) APPROVAL OF STATE PLANS.—The Secretary
shall approve any State plan that meets the requirements
of subsection (b) if the Secretary determines that operat-
ing a State program pursuant to the plan will contribute
to achieving the purposes of this part.
‘‘(d) PUBLIC AVAILABILITY OF STATE PLAN SUM-
MARY.—The State shall make available to the public a
summary of any plan submitted by the State under this
section.
‘‘SEC. 403. GRANTS TO STATES.
‘‘(a) GRANTS.—
‘‘(1) FAMILY ASSISTANCE GRANT.—
‘‘(A) IN
GENERAL.—Each eligible State
shall be entitled to receive from the Secretary,
for each of fiscal years 1996, 1997, 1998,
1999, 2000, and 2001 a grant in an amount
equal to the State family assistance grant.
‘‘(B) STATE
FAMILY
ASSISTANCE
GRANT
DEFINED.—As used in this part, the term
‘State family assistance grant’ means the great-
est of—
‘‘(i) 1⁄3 of the total amount required
to be paid to the State under former sec-
tion 403 (as in effect on September 30,
1995) for fiscal years 1992, 1993, and
1994 (other than with respect to amounts
expended by the State for child care under
subsection (g) or (i) of former section 402
(as so in effect));
‘‘(ii)(I) the total amount required to
be paid to the State under former section
403 for fiscal year 1994 (other than with
respect to amounts expended by the State
for child care under subsection (g) or (i) of
former section 402 (as so in effect)); plus
‘‘(II) an amount equal to 85 percent
of the amount (if any) by which the total
amount required to be paid to the State
under former section 403(a)(5) for emer-
gency assistance for fiscal year 1995 ex-
ceeds the total amount required to be paid
to 
the 
State 
under 
former 
section
403(a)(5) for fiscal year 1994, if, during
fiscal year 1994, the Secretary approved
under former section 402 an amendment
to the former State plan with respect to
the provision of emergency assistance in
the context of family preservation; or
‘‘(iii) the amount required to be paid
to the State under former section 403 (as
in effect on September 30, 1995) for fiscal
year 1995 (other than with respect to
amounts expended by the State under the
State plan approved under part F (as so in
effect) or for child care under subsection
(g) or (i) of former section 402 (as so in
effect)), plus the total amount required to
be paid to the State for fiscal year 1995
under former section 403(l) (as so in ef-
fect).
‘‘(C) TOTAL
AMOUNT
REQUIRED
TO
BE
PAID TO THE STATE UNDER FORMER SECTION
403 DEFINED.—As used in this part, the term
‘total amount required to be paid to the State
under former section 403’ means, with respect
to a fiscal year—
‘‘(i) in the case of a State to which
section 1108 does not apply, the sum of—
‘‘(I) the Federal share of mainte-
nance assistance expenditures for the
fiscal year, before reduction pursuant
to subparagraph (B) or (C) of section
403(b)(2) (as in effect on September
30, 1995), as reported by the State on
ACF Form 231;
‘‘(II) the Federal share of admin-
istrative expenditures (including ad-
ministrative expenditures for the de-
velopment of management information
systems) for the fiscal year, as re-
ported by the State on ACF Form
231;
‘‘(III) the Federal share of emer-
gency assistance expenditures for the
fiscal year, as reported by the State
on ACF Form 231;
‘‘(IV) the Federal share of ex-
penditures for the fiscal year with re-
spect to child care pursuant to sub-
sections (g) and (i) of former section
402 (as in effect on September 30,
1995), as reported by the State on
ACF Form 231; and
‘‘(V) the aggregate amount re-
quired to be paid to the State for the
fiscal year with respect to the State
program operated under part F (as in
effect on September 30, 1995), as de-
termined by the Secretary, including
additional obligations or reductions in
obligations made after the close of the
fiscal year; and
‘‘(ii) in the case of a State to which
section 1108 applies, the lesser of—
‘‘(I) the sum described in clause
(i); or
‘‘(II) the total amount certified
by the Secretary under former section
403 (as in effect during the fiscal
year) with respect to the territory.
‘‘(D) INFORMATION TO BE USED IN DE-
TERMINING AMOUNTS.—
‘‘(i) FOR
FISCAL
YEARS
1992
AND
1993.—
‘‘(I) In determining the amount
described in subclauses (I) through
(IV) of subparagraph (C)(i) for any
State for each of fiscal years 1992
and 1993, the Secretary shall use in-
formation available as of April 28,
1995.
‘‘(II) In determining the amount
described in subparagraph (C)(i)(V)
for any State for each of fiscal years
1992 and 1993, the Secretary shall
use information available as of Janu-
ary 6, 1995.
‘‘(ii) FOR FISCAL YEAR 1994.—In de-
termining the amounts described in sub-
paragraph (C)(i) for any State for fiscal
year 1994, the Secretary shall use informa-
tion available as of April 28, 1995.
‘‘(iii) FOR FISCAL YEAR 1995.—
‘‘(I) In determining the amount
described in subparagraph (B)(ii)(II)
for any State for fiscal year 1995, the
Secretary shall use the information
which was reported by the States and
estimates made by the States with re-
spect to emergency assistance expend-
itures and was available as of August
11, 1995.
‘‘(II) In determining the amounts
described in subclauses (I) through
(IV) of subparagraph (C)(i) for any
State for fiscal year 1995, the Sec-
retary shall use information available
as of October 2, 1995.
‘‘(III) In determining the amount
described in subparagraph (C)(i)(V)
for any State for fiscal year 1995, the
Secretary shall use information avail-
able as of October 5, 1995.
‘‘(E) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
fiscal years 1996, 1997, 1998, 1999, 2000, and
2001 such sums as are necessary for grants
under this paragraph.
‘‘(2) GRANT TO REWARD STATES THAT REDUCE
OUT-OF-WEDLOCK BIRTHS.—
‘‘(A) IN
GENERAL.—In addition to any
grant under paragraph (1), each eligible State
shall be entitled to receive from the Secretary
for fiscal year 1998 or any succeeding fiscal
year, a grant in an amount equal to the State
family assistance grant multiplied by—
‘‘(i) 5 percent if—
‘‘(I) the illegitimacy ratio of the
State for the fiscal year is at least 1
percentage point lower than the ille-
gitimacy ratio of the State for fiscal
year 1995; and
‘‘(II) the rate of induced preg-
nancy terminations in the State for
the fiscal year is less than the rate of
induced pregnancy terminations in the
State for fiscal year 1995; or
‘‘(ii) 10 percent if—
‘‘(I) the illegitimacy ratio of the
State for the fiscal year is at least 2
percentage points lower than the ille-
gitimacy ratio of the State for fiscal
year 1995; and
‘‘(II) the rate of induced preg-
nancy terminations in the State for
the fiscal year is less than the rate of
induced pregnancy terminations in the
State for fiscal year 1995.
‘‘(B) ILLEGITIMACY
RATIO.—As used in
this paragraph, the term ‘illegitimacy ratio’
means, with respect to a State and a fiscal
year—
‘‘(i) the number of out-of-wedlock
births that occurred in the State during
the most recent fiscal year for which such
information is available; divided by
‘‘(ii) the number of births that oc-
curred in the State during the most recent
fiscal year for which such information is
available.
‘‘(C) DISREGARD
OF
CHANGES
IN
DATA
DUE TO CHANGED REPORTING METHODS.—For
purposes of subparagraph (A), the Secretary
shall disregard—
‘‘(i) any difference between the illegit-
imacy ratio of a State for a fiscal year and
the illegitimacy ratio of the State for fiscal
year 1995 which is attributable to a
change in State methods of reporting data
used to calculate the illegitimacy ratio; and
‘‘(ii) any difference between the rate
of induced pregnancy terminations in a
State for a fiscal year and such rate for
fiscal year 1995 which is attributable to a
change in State methods of reporting data
used to calculate such rate.
‘‘(D) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
fiscal year 1998 and for each succeeding fiscal
year such sums as are necessary for grants
under this paragraph.
‘‘(3) SUPPLEMENTAL GRANT FOR POPULATION
INCREASES IN CERTAIN STATES.—
‘‘(A) IN GENERAL.—Each qualifying State
shall, subject to subparagraph (F), be entitled
to receive from the Secretary—
‘‘(i) for fiscal year 1997 a grant in an
amount equal to 2.5 percent of the total
amount required to be paid to the State
under former section 403 (as in effect dur-
ing fiscal year 1994) for fiscal year 1994;
and
‘‘(ii) for each of fiscal years 1998,
1999, and 2000, a grant in an amount
equal to the sum of—
‘‘(I) the amount (if any) required
to be paid to the State under this
paragraph for the immediately preced-
ing fiscal year; and
‘‘(II) 2.5 percent of the sum of—
‘‘(aa) the total amount re-
quired to be paid to the State
under former section 403 (as in
effect during fiscal year 1994)
for fiscal year 1994; and
‘‘(bb) the amount (if any)
required to be paid to the State
under this paragraph for the fis-
cal year preceding the fiscal year
for which the grant is to be
made.
‘‘(B) PRESERVATION OF GRANT WITHOUT
INCREASES
FOR
STATES
FAILING
TO
REMAIN
QUALIFYING STATES.—Each State that is not a
qualifying State for a fiscal year specified in
subparagraph (A)(ii) but was a qualifying State
for a prior fiscal year shall, subject to subpara-
graph (F), be entitled to receive from the Sec-
retary for the specified fiscal year, a grant in
an amount equal to the amount required to be
paid to the State under this paragraph for the
most recent fiscal year for which the State was
a qualifying State.
‘‘(C) QUALIFYING STATE.—
‘‘(i) IN
GENERAL.—For purposes of
this paragraph, a State is a qualifying
State for a fiscal year if—
‘‘(I) the level of welfare spending
per poor person by the State for the
immediately preceding fiscal year is
less than the national average level of
State welfare spending per poor per-
son for such preceding fiscal year; and
‘‘(II) the population growth rate
of the State (as determined by the
Bureau of the Census for the most re-
cent fiscal year for which information
is available) exceeds the average popu-
lation growth rate for all States (as so
determined) for such most recent fis-
cal year.
‘‘(ii) STATE MUST QUALIFY IN FISCAL
YEAR 1997.—Notwithstanding clause (i), a
State shall not be a qualifying State for
any fiscal year after 1997 by reason of
clause (i) if the State is not a qualifying
State for fiscal year 1997 by reason of
clause (i).
‘‘(iii) 
CERTAIN
STATES
DEEMED
QUALIFYING
STATES.—For purposes of
this paragraph, a State is deemed to be a
qualifying State for fiscal years 1997,
1998, 1999, and 2000 if—
‘‘(I) the level of welfare spending
per poor person by the State for fiscal
year 1996 is less than 35 percent of
the national average level of State
welfare spending per poor person for
fiscal year 1996; or
‘‘(II) the population of the State
increased by more than 10 percent
from April 1, 1990, to July 1, 1994,
as determined by the Bureau of the
Census.
‘‘(D) DEFINITIONS.—As used in this para-
graph:
‘‘(i) LEVEL OF WELFARE SPENDING
PER
POOR
PERSON.—The term ‘level of
State welfare spending per poor person’
means, with respect to a State and a fiscal
year—
‘‘(I) the sum of—
‘‘(aa) the total amount re-
quired to be paid to the State
under former section 403 (as in
effect during fiscal year 1994)
for fiscal year 1994; and
‘‘(bb) the amount (if any)
paid to the State under this
paragraph for the immediately
preceding fiscal year; divided by
‘‘(II) the number of individuals,
according to the 1990 decennial cen-
sus, who were residents of the State
and whose income was below the pov-
erty line.
‘‘(ii) NATIONAL AVERAGE LEVEL OF
STATE
WELFARE
SPENDING
PER
POOR
PERSON.—The term ‘national average level
of State welfare spending per poor person’
means, with respect to a fiscal year, an
amount equal to—
‘‘(I) the total amount required to
be paid to the States under former
section 403 (as in effect during fiscal
year 1994) for fiscal year 1994; di-
vided by
‘‘(II) the number of individuals,
according to the 1990 decennial cen-
sus, who were residents of any State
and whose income was below the pov-
erty line.
‘‘(iii) 
STATE.—The 
term 
‘State’
means each of the 50 States of the United
States and the District of Columbia.
‘‘(E) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
fiscal years 1997, 1998, 1999, and 2000 such
sums as are necessary for grants under this
paragraph, in a total amount not to exceed
$800,000,000.
‘‘(F) GRANTS REDUCED PRO RATA IF IN-
SUFFICIENT APPROPRIATIONS.—If the amount
appropriated pursuant to this paragraph for a
fiscal year is less than the total amount of pay-
ments otherwise required to be made under this
paragraph for the fiscal year, then the amount
otherwise payable to any State for the fiscal
year under this paragraph shall be reduced by
a percentage equal to the amount so appro-
priated divided by such total amount.
‘‘(G) BUDGET SCORING.—Notwithstanding
section 257(b)(2) of the Balanced Budget and
Emergency Deficit Control Act of 1985, the
baseline shall assume that no grant shall be
made under this paragraph after fiscal year
2000.
‘‘(4) SUPPLEMENTAL GRANT FOR OPERATION
OF WORK PROGRAM.—
‘‘(A) APPLICATION
REQUIREMENTS.—An
eligible State may submit to the Secretary an
application for additional funds to meet the re-
quirements of section 407 with respect to a fis-
cal year if the Secretary determines that—
‘‘(i) the total expenditures of the
State to meet such requirements for the
fiscal year exceed the total expenditures of
the State during fiscal year 1994 to carry
out part F (as in effect on September 30,
1994);
‘‘(ii) the work programs of the State
under section 407 are coordinated with the
job training programs established by title
II of the Job Training Partnership Act, or
(if such title is repealed by the Consoli-
dated and Reformed Education, Employ-
ment, and Rehabilitation Systems Act) the
Consolidated and Reformed Education,
Employment, and Rehabilitation Systems
Act; and
‘‘(iii) the State needs additional funds
to meet such requirements or certifies that
it intends to exceed such requirements.
‘‘(B) GRANTS.—The Secretary may make
a grant to any eligible State which submits an
application in accordance with subparagraph
(A) of this paragraph for a fiscal year in an
amount equal to the Federal medical assistance
percentage of the amount (if any) by which the
total expenditures of the State to meet or ex-
ceed the requirements of section 407 for the fis-
cal year exceeds the total expenditures of the
State during fiscal year 1994 to carry out part
F (as in effect on September 30, 1994).
‘‘(C) REGULATIONS.—The Secretary shall
issue regulations providing for the equitable dis-
tribution of funds under this paragraph.
‘‘(D) APPROPRIATIONS.—
‘‘(i) IN GENERAL.—Out of any money
in the Treasury of the United States not
otherwise appropriated, there are appro-
priated to the Secretary for grants under
this paragraph—
‘‘(I) $150,000,000 for fiscal year
1999;
‘‘(II) $850,000,000 for fiscal
year 2000;
‘‘(III) $900,000,000 for fiscal
year 2001; and
‘‘(IV) $1,100,000,000 for fiscal
year 2002 and for each succeeding fis-
cal year.
‘‘(ii) AVAILABILITY.—Amounts appro-
priated pursuant to clause (i) shall remain
available until expended.
‘‘(b) CONTINGENCY FUND.—
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished in the Treasury of the United States a fund
which shall be known as the ‘Contingency Fund for
State Welfare Programs’ (in this section referred to
as the ‘Fund’).
‘‘(2) DEPOSITS INTO FUND.—
‘‘(A) Out of any money in the Treasury of
the United States not otherwise appropriated,
there are appropriated for fiscal years 1997,
1998, 1999, 2000, 2001 and 2002 such sums
as are necessary for payment to the Fund in a
total amount not to exceed $2,000,000,000, ex-
cept as provided in subparagraphs (B) and (C).
‘‘(B) If—
‘‘(i) the average rate of total unem-
ployment in the United States for the most
recent 3 months for which data for all
States are available is not less than 7 per-
cent; and
‘‘(ii) there are insufficient amounts in
the Fund to pay all State claims under
paragraph (4) for a quarter in that fiscal
year;
then there are appropriated for that fiscal year,
in addition to amounts appropriated under
paragraph (2)(A), such sums as equal the dif-
ference between the amount needed to pay all
State claims for that quarter and the amount
remaining in the Fund.
‘‘(C) If—
‘‘(i)(I)(aa) the average rate of total
unemployment in a State (seasonally ad-
justed) for the period consisting of the
most recent 3 months for which data for
all States are published is not less than 9
percent; or
‘‘(bb) the average rate of total unem-
ployment in such State (seasonally ad-
justed) for the 3-month period is not less
than 120 percent of such average rate for
either of the prior 2 years; or
‘‘(II) the average number of persons
in the State receiving assistance under the
food stamp program, as defined in section
3(h) of the Food Stamp Act of 1977, for
the most recent 3-month period for which
data are available is not less than 120 per-
cent of such average monthly number for
fiscal year 1994 or for fiscal year 1995;
and
‘‘(ii) there are insufficient amounts in
the Fund to pay all State claims under
paragraph (4) for a quarter in that fiscal
year; then
there are appropriated for payment to the Fund
for that fiscal year, in addition to amounts ap-
propriated pursuant to paragraph (2)(A), for
payments to States described in this subpara-
graph, the amount by which payments to such
States under paragraph (4) would otherwise be
reduced under paragraph (8).
‘‘(3) PAYMENTS TO STATES.—The method of
computing and paying amounts to States from the
Fund under this subsection shall be as follows:
‘‘(A) The Secretary shall, before each
quarter, estimate the amount to be paid to each
State for the quarter from the Fund, such esti-
mate to be based on—
‘‘(i) a report filed by the State con-
taining an estimate by the State of qualify-
ing State expenditures for the quarter; and
‘‘(ii) such other information as the
Secretary may find relevant and reliable.
‘‘(B) The Secretary shall then certify to
the Secretary of the Treasury the amount so es-
timated by the Secretary.
‘‘(C) The Secretary of the Treasury shall
thereupon pay to the State, at the time or times
fixed by the Secretary, the amount so certified.
‘‘(4) GRANTS.—From amounts appropriated
pursuant to paragraph (2), the Secretary of the
Treasury shall pay to each eligible State for a fiscal
year an amount equal to the lesser of—
‘‘(A) the Federal medical assistance per-
centage for the State for the fiscal year (as de-
fined in section 1905(b), as in effect on Sep-
tember 30, 1995) of the amount, if any, by
which the expenditures of the State in the fiscal
year under the State program funded under
this part and expenditures on cash assistance
under other State programs with respect to eli-
gible 
families 
(as 
defined 
in 
section
409(a)(5)(B)(i)(III)) exceed historic State ex-
penditures 
(as 
defined 
in 
section
409(a)(5)(B)(iii)); or
‘‘(B) the number of percentage points (if
any) by which 40 percent of the State family
assistance grant for the fiscal year exceeds any
payment to the State for the fiscal year under
section 403(a)(3).
‘‘(5) ANNUAL RECONCILIATION.—At the end of
each fiscal year, each State shall remit to the Sec-
retary an amount equal to the amount (if any) by
which the total amount paid to the State under
paragraph (4) during the fiscal year exceeds the
lesser of—
‘‘(A) the Federal medical assistance per-
centage for the State for the fiscal year (as de-
fined in section 1905(b), as in effect on Sep-
tember 30, 1995) of the amount (if any) by
which the expenditures of the State in the fiscal
year under the State program funded under
this part and expenditures on cash assistance
under other State programs with respect to eli-
gible 
families 
(as 
defined 
in 
section
409(a)(5)(B)(i)(III)) exceed historic State ex-
penditures 
(as 
defined 
in 
section
409(a)(5)(B)(iii)); or
‘‘(B) the amount (if any) by which 40 per-
cent of the State family assistance grant for the
fiscal year exceeds any payment to the State for
the fiscal year under section 403(a)(3).
‘‘(6) ELIGIBLE STATE.—For purposes of this
subsection, a State is an eligible State for a fiscal
year, if—
‘‘(A)(i) the average rate of total unemploy-
ment in such State (seasonally adjusted) for the
period consisting of the most recent 3 months
for which data for all States are published is
not less than 6.5 percent; and
‘‘(ii) the average rate of total unemploy-
ment in such State (seasonally adjusted) for the
3-month period is not less than 110 percent of
such average rate for either 1994 or 1995; or
‘‘(B)(i) the average number of persons in
the State receiving assistance under the food
stamp program, as defined in section 3(h) of
the Food Stamp Act of 1977, for the most re-
cent 3-month period for which data are avail-
able is not less than 110 percent of the product
of—
‘‘(I) such average monthly number for
either fiscal year 1994 or fiscal year 1995;
and
‘‘(II) the number of percentage points
(if any) by which 100 percent exceeds the
percentage by which the Bipartisan Wel-
fare Reform Act of 1996, had it been in ef-
fect, would have reduced such average
monthly number in such State in such fis-
cal year, as most recently estimated by the
Secretary of Agriculture before the date of
the enactment of such Act; and
‘‘(ii) the State is not participating in the
program established under section 23(b) of the
Food Stamp Act of 1977.
‘‘(7) STATE.—As used in this subsection, the
term ‘State’ means each of the 50 States of the
United States and the District of Columbia.
‘‘(8) PAYMENT
PRIORITY.—Claims by States
for payment from the Fund shall be filed quarterly.
If the total amount of claims for any quarter exceeds
the amount available for payment from the fund,
claims shall be paid on a pro rata basis in a manner
to be determined by the Secretary, except in the case
of a State described in paragraph (2)(C).
‘‘(9) ANNUAL REPORTS.—The Secretary of the
Treasury shall annually report to Congress on the
status of the Fund.
‘‘SEC. 404. USE OF GRANTS.
‘‘(a) GENERAL RULES.—Subject to this part, a State
to which a grant is made under section 403 may use the
grant—
‘‘(1) in any manner that is reasonably cal-
culated to accomplish the purpose of this part, in-
cluding to provide low income households with as-
sistance in meeting home heating and cooling costs;
or
‘‘(2) in any manner that the State was author-
ized to use amounts received under part A or F, as
such parts were in effect on September 30, 1995.
‘‘(b) LIMITATION ON USE OF GRANT FOR ADMINIS-
TRATIVE PURPOSES.—
‘‘(1) LIMITATION.—A State to which a grant is
made under section 403 shall not expend more than
15 percent of the grant for administrative purposes.
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply to the use of a grant for information tech-
nology and computerization needed for tracking or
monitoring required by or under this part.
‘‘(c) AUTHORITY TO TREAT INTERSTATE IMMI-
GRANTS UNDER RULES OF FORMER STATE.—A State op-
erating a program funded under this part may apply to
a family the rules (including benefit amounts) of the pro-
gram funded under this part of another State if the family
has moved to the State from the other State and has re-
sided in the State for less than 12 months.
‘‘(d) AUTHORITY TO USE PORTION OF GRANT FOR
OTHER PURPOSES.—
‘‘(1) IN GENERAL.—A State may use not more
than 20 percent of the amount of the grant made to
the State under section 403 for a fiscal year to carry
out a State program pursuant to the Child Care and
Development Block Grant Act of 1990.
‘‘(2) APPLICABLE RULES.—Any amount paid to
the State under this part that is used to carry out
a State program pursuant to the Child Care and De-
velopment Block Grant Act of 1990 shall not be sub-
ject to the requirements of this part, but shall be
subject to the requirements that apply to Federal
funds provided directly under such Act to carry out
the program.
‘‘(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS
FOR ASSISTANCE.—A State may reserve amounts paid to
the State under this part for any fiscal year for the pur-
pose of providing, without fiscal year limitation, assistance
under the State program funded under this part.
‘‘(f) AUTHORITY TO OPERATE EMPLOYMENT PLACE-
MENT PROGRAM.—A State to which a grant is made under
section 403 may use the grant to make payments (or pro-
vide job placement vouchers) to State-approved public and
private job placement agencies that provide employment
placement services to individuals who receive assistance
under the State program funded under this part.
‘‘(g) IMPLEMENTATION
OF ELECTRONIC BENEFIT
TRANSFER SYSTEM.—A State to which a grant is made
under section 403 is encouraged to implement an elec-
tronic benefit transfer system for providing assistance
under the State program funded under this part, and may
use the grant for such purpose.
‘‘SEC. 405. ADMINISTRATIVE PROVISIONS.
‘‘(a) QUARTERLY.—The Secretary shall pay each
grant payable to a State under section 403 in quarterly
installments.
‘‘(b) NOTIFICATION.—Not later than 3 months before
the payment of any such quarterly installment to a State,
the Secretary shall notify the State of the amount of any
reduction determined under section 412(a)(1)(B) with re-
spect to the State.
‘‘(c) COMPUTATION AND CERTIFICATION OF PAY-
MENTS TO STATES.—
‘‘(1) COMPUTATION.—The Secretary shall esti-
mate the amount to be paid to each eligible State for
each quarter under this part, such estimate to be
based on a report filed by the State containing an
estimate by the State of the total sum to be ex-
pended by the State in the quarter under the State
program funded under this part and such other in-
formation as the Secretary may find necessary.
‘‘(2) CERTIFICATION.—The Secretary of Health
and Human Services shall certify to the Secretary of
the Treasury the amount estimated under paragraph
(1) with respect to a State, reduced or increased to
the extent of any overpayment or underpayment
which the Secretary of Health and Human Services
determines was made under this part to the State
for any prior quarter and with respect to which ad-
justment has not been made under this paragraph.
‘‘(d) PAYMENT METHOD.—Upon receipt of a certifi-
cation under subsection (c)(2) with respect to a State, the
Secretary of the Treasury shall, through the Fiscal Service
of the Department of the Treasury and before audit or
settlement by the General Accounting Office, pay to the
State, at the time or times fixed by the Secretary of
Health and Human Services, the amount so certified.
‘‘(e) COLLECTION
OF STATE OVERPAYMENTS
TO
FAMILIES FROM FEDERAL TAX REFUNDS.—
‘‘(1) IN GENERAL.—Upon receiving notice from
the Secretary of Health and Human Services that a
State agency administering a program funded under
this part has notified the Secretary that a named in-
dividual has been overpaid under the State program
funded under this part, the Secretary of the Treas-
ury shall determine whether any amounts as refunds
of Federal taxes paid are payable to such individual,
regardless of whether the individual filed a tax re-
turn as a married or unmarried individual. If the
Secretary of the Treasury finds that any such
amount is so payable, the Secretary shall withhold
from such refunds an amount equal to the overpay-
ment sought to be collected by the State and pay
such amount to the State agency.
‘‘(2) REGULATIONS.—The Secretary of the
Treasury shall issue regulations, after review by the
Secretary of Health and Human Services, that pro-
vide—
‘‘(A) that a State may only submit under
paragraph (1) requests for collection of over-
payments with respect to individuals—
‘‘(i) who are no longer receiving as-
sistance under the State program funded
under this part;
‘‘(ii) with respect to whom the State
has already taken appropriate action under
State law against the income or resources
of the individuals or families involved to
collect the past-due legally enforceable
debt; and
‘‘(iii) to whom the State agency has
given notice of its intent to request with-
holding by the Secretary of the Treasury
from the income tax refunds of such indi-
viduals;
‘‘(B) that the Secretary of the Treasury
will give a timely and appropriate notice to any
other person filing a joint return with the indi-
vidual whose refund is subject to withholding
under paragraph (1); and
‘‘(C) the procedures that the State and the
Secretary of the Treasury will follow in carrying
out this subsection which, to the maximum ex-
tent feasible and consistent with the provisions
of this subsection, will be the same as those is-
sued pursuant to section 464(b) applicable to
collection of past-due child support.
‘‘SEC. 406. FEDERAL LOANS FOR STATE WELFARE PRO-
GRAMS.
‘‘(a) LOAN AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary shall make
loans to any loan-eligible State, for a period to ma-
turity of not more than 3 years.
‘‘(2) LOAN-ELIGIBLE STATE.—As used in para-
graph (1), the term ‘loan-eligible State’ means a
State against which a penalty has not been imposed
under section 409(e).
‘‘(b) RATE
OF
INTEREST.—The Secretary shall
charge and collect interest on any loan made under this
section at a rate equal to the current average market yield
on outstanding marketable obligations of the United
States with remaining periods to maturity comparable to
the period to maturity of the loan.
‘‘(c) USE OF LOAN.—A State shall use a loan made
to the State under this section only for any purpose for
which grant amounts received by the State under section
403(a) may be used, including—
‘‘(1) welfare anti-fraud activities; and
‘‘(2) the provision of assistance under the State
program to Indian families that have moved from
the service area of an Indian tribe with a tribal fam-
ily assistance plan approved under section 412.
‘‘(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO
A STATE.—The cumulative dollar amount of all loans
made to a State under this section during fiscal years
1997 through 2001 shall not exceed 10 percent of the
State family assistance grant.
‘‘(e) LIMITATION ON TOTAL AMOUNT OF OUTSTAND-
ING LOANS.—The total dollar amount of loans outstand-
ing under this section may not exceed $1,700,000,000.
‘‘(f) APPROPRIATION.—Out of any money in the
Treasury of the United States not otherwise appropriated,
there are appropriated such sums as may be necessary for
the cost of loans under this section.
‘‘SEC. 407. MANDATORY WORK REQUIREMENTS; INDIVID-
UAL RESPONSIBILITY PLANS.
‘‘(a) PARTICIPATION RATE REQUIREMENTS.—
‘‘(1) ALL FAMILIES.—A State to which a grant
is made under section 403 for a fiscal year shall
achieve the minimum participation rate specified in
the following table for the fiscal year with respect to
all families receiving assistance under the State pro-
gram funded under this part:
The minimum
participation
‘‘If the fiscal year is:
rate is:
1997 ...............................................................
1998 ...............................................................
1999 ...............................................................
2000 ...............................................................
2001 ...............................................................
2002 or thereafter .........................................
50.
‘‘(2) 2-PARENT FAMILIES.—A State to which a
grant is made under section 403 for a fiscal year
shall achieve the minimum participation rate speci-
fied in the following table for the fiscal year with re-
spect to 2-parent families receiving assistance under
the State program funded under this part:
The minimum
participation
‘‘If the fiscal year is:
rate is:
1997 ...............................................................
1998 ...............................................................
1999 or thereafter .........................................
90.
‘‘(b) CALCULATION OF PARTICIPATION RATES.—
‘‘(1) ALL FAMILIES.—
‘‘(A) AVERAGE MONTHLY RATE.—For pur-
poses of subsection (a)(1), the participation
rate for all families of a State for a fiscal year
is the average of the participation rates for all
families of the State for each month in the fis-
cal year.
‘‘(B) MONTHLY PARTICIPATION RATES.—
The participation rate of a State for all families
of the State for a month, expressed as a per-
centage, is—
‘‘(i) the number of families receiving
assistance under the State program funded
under this part that include an adult who
is engaged in work for the month; divided
by
‘‘(ii) the amount by which—
‘‘(I) the number of families re-
ceiving such assistance during the
month that include an adult receiving
such assistance; exceeds
‘‘(II) the number of families re-
ceiving such assistance that are sub-
ject in such month to a penalty de-
scribed in subsection (e)(1) but have
dividual as such parent’s, guardian’s, or
adult relative’s own home.
‘‘(ii) INDIVIDUAL
DESCRIBED.—For
purposes of clause (i), an individual de-
scribed in this clause is an individual
who—
‘‘(I) has not attained 18 years of
age; and
‘‘(II) is not married, and has a
minor child in his or her care.
‘‘(B) EXCEPTION.—
‘‘(i) PROVISION OF, OR ASSISTANCE IN
LOCATING, ADULT-SUPERVISED LIVING AR-
RANGEMENT.—In the case of an individual
who is described in clause (ii), the State
agency referred to in section 402(a)(4)
shall provide, or assist the individual in lo-
cating, a second chance home, maternity
home, or other appropriate adult-super-
vised supportive living arrangement, taking
into consideration the needs and concerns
of the individual, unless the State agency
determines that the individual’s current
living arrangement is appropriate, and
thereafter shall require that the individual