104TH CONGRESS
1ST SESSION
H. R. 4
AN ACT
To restore the American family, reduce illegitimacy,
control welfare spending and reduce welfare de-
pendence.
#
104TH CONGRESS
1ST SESSION
H. R. 4
AN ACT
To restore the American family, reduce illegitimacy, control
welfare spending and reduce welfare dependence.
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 ‘‘Personal Responsibility
Act of 1995’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
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TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES
Sec. 100. Sense of the Congress.
Sec. 101. Block grants to States.
Sec. 102. Report on data processing.
Sec. 103. Transfers.
Sec. 104. Conforming amendments to the Social Security Act.
Sec. 105. Conforming amendments to other laws.
Sec. 106. Continued application of current standards under medicaid program.
Sec. 107. Effective date.
TITLE II—CHILD PROTECTION BLOCK GRANT PROGRAM
Sec. 201. Establishment of program.
Sec. 202. Conforming amendments.
Sec. 203. Continued application of current standards under medicaid program.
Sec. 204. Effective date.
Sec. 205. Sense of the Congress regarding timely adoption of children.
TITLE III—BLOCK GRANTS FOR CHILD CARE AND FOR
NUTRITION ASSISTANCE
Subtitle A—Child Care Block Grants
Sec. 301. Amendments to the Child Care and Development Block Grant Act of
1990.
Sec. 302. Repeal of child care assistance authorized by Acts other than the So-
cial Security Act.
Subtitle B—Family and School-Based Nutrition Block Grants
CHAPTER 1—FAMILY NUTRITION BLOCK GRANT PROGRAM
Sec. 321. Amendment to Child Nutrition Act of 1966.
CHAPTER 2—SCHOOL-BASED NUTRITION BLOCK GRANT PROGRAM
Sec. 341. Amendment to National School Lunch Act.
CHAPTER 3—MISCELLANEOUS PROVISIONS
Sec. 361. Repealers.
Subtitle C—Other Repealers and Conforming Amendments
Sec. 371. Amendments to laws relating to child protection block grant.
Subtitle D—Related Provisions
Sec. 381. Requirement that data relating to the incidence of poverty in the
United States be published at least every 2 years.
Sec. 382. Data on program participation and outcomes.
Subtitle E—General Effective Date; Preservation of Actions, Obligations, and
Rights
Sec. 391. Effective date.
Sec. 392. Application of amendments and repealers.
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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 Programs
Sec. 401. Ineligibility of illegal aliens for certain public benefits programs.
Sec. 402. Ineligibility of nonimmigrants for certain public benefits programs.
Sec. 403. Limited eligibility of immigrants for 5 specified Federal public bene-
fits programs.
Sec. 404. Notification.
Subtitle B—Eligibility for State and Local Public Benefits Programs
Sec. 411. Ineligibility of illegal aliens for State and local public benefits pro-
grams.
Sec. 412. Ineligibility of nonimmigrants for State and local public benefits pro-
grams.
Sec. 413. State authority to limit eligibility of immigrants for State and local
means-tested public benefits programs.
Subtitle C—Attribution of Income and Affidavits of Support
Sec. 421. Attribution of sponsor’s income and resources to family-sponsored im-
migrants.
Sec. 422. Requirements for sponsor’s affidavit of support.
Subtitle D—General Provisions
Sec. 431. Definitions.
Sec. 432. Construction.
Subtitle E—Conforming Amendments
Sec. 441. Conforming amendments relating to assisted housing.
TITLE V—FOOD STAMP REFORM AND COMMODITY DISTRIBUTION
Sec. 501. Short title.
Subtitle A—Commodity Distribution Provisions
Sec. 511. Short title.
Sec. 512. Availability of commodities.
Sec. 513. State, local and private supplementation of commodities.
Sec. 514. State plan.
Sec. 515. Allocation of commodities to States.
Sec. 516. Priority system for State distribution of commodities.
Sec. 517. Initial processing costs.
Sec. 518. Assurances; anticipated use.
Sec. 519. Authorization of appropriations.
Sec. 520. Commodity supplemental food program.
Sec. 521. Commodities not income.
Sec. 522. Prohibition against certain State charges.
Sec. 523. Definitions.
Sec. 524. Regulations.
Sec. 525. Finality of determinations.
Sec. 526. Sale of commodities prohibited.
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Sec. 527. Settlement and adjustment of claims.
Sec. 528. Repealers; amendments.
Subtitle B—Simplification and Reform of Food Stamp Program
Sec. 531. Short title.
CHAPTER 1—SIMPLIFIED FOOD STAMP PROGRAM AND STATE ASSISTANCE
FOR NEEDY FAMILIES
Sec. 541. Establishment of simplified food stamp program.
Sec. 542. Simplified food stamp program.
Sec. 543. Conforming amendments.
CHAPTER 2—FOOD STAMP PROGRAM
Sec. 551. Thrifty food plan.
Sec. 552. Income deductions and energy assistance.
Sec. 553. Vehicle allowance.
Sec. 554. Work requirements.
Sec. 555. Comparable treatment of disqualified individuals.
Sec. 556. Encourage electronic benefit transfer systems.
Sec. 557. Value of minimum allotment.
Sec. 558. Initial month benefit determination.
Sec. 559. Improving food stamp program management.
Sec. 560. Work supplementation or support program.
Sec. 561. Obligations and allotments.
CHAPTER 3—PROGRAM INTEGRITY
Sec. 571. Authority to establish authorization periods.
Sec. 572. Condition precedent for approval of retail food stores and wholesale
food concerns.
Sec. 573. Waiting period for retail food stores and wholesale food concerns that
are denied approval to accept coupons.
Sec. 574. Disqualification of retail food stores and wholesale food concerns.
Sec. 575. Authority to suspend stores violating program requirements pending
administrative and judicial review.
Sec. 576. Criminal forfeiture.
Sec. 577. Expanded definition of ‘‘coupon’’.
Sec. 578. Doubled penalties for violating food stamp program requirements.
Sec. 579. Disqualification of convicted individuals.
Sec. 580. Claims collection.
Sec. 581. Denial of food stamp benefits for 10 years to individuals found to
have fraudulently misrepresented residence in order to obtain
benefits simultaneously in 2 or more States.
Sec. 582. Disqualification relating to child support arrears.
Sec. 583. Elimination of food stamp benefits with respect to fugitive felons and
probation and parole violators.
Subtitle C—Effective Dates and Miscellaneous Provisions
Sec. 591. Effective dates.
Sec. 592. Sense of the Congress.
Sec. 593. Deficit reduction.
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TITLE VI—SUPPLEMENTAL SECURITY INCOME
Sec. 601. Denial of supplemental security income benefits by reason of disabil-
ity to drug addicts and alcoholics.
Sec. 602. Supplemental security income benefits for disabled children.
Sec. 603. Examination of mental listings used to determine eligibility of chil-
dren for SSI benefits by reason of disability.
Sec. 604. Limitation on payments to Puerto Rico, the Virgin Islands, and
Guam under programs of aid to the aged, blind, or disabled.
Sec. 605. Repeal of maintenance of effort requirements applicable to optional
State programs for supplementation of SSI benefits.
Sec. 606. 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. 607. Denial of SSI benefits for fugitive felons and probation and parole
violators.
TITLE VII—CHILD SUPPORT
Sec. 700. References.
Subtitle A—Eligibility for Services; Distribution of Payments
Sec. 701. State obligation to provide child support enforcement services.
Sec. 702. Distribution of child support collections.
Sec. 703. Privacy safeguards.
Subtitle B—Locate and Case Tracking
Sec. 711. State case registry.
Sec. 712. Collection and disbursement of support payments.
Sec. 713. State directory of new hires.
Sec. 714. Amendments concerning income withholding.
Sec. 715. Locator information from interstate networks.
Sec. 716. Expansion of the Federal Parent Locator Service.
Sec. 717. Collection and use of social security numbers for use in child support
enforcement.
Subtitle C—Streamlining and Uniformity of Procedures
Sec. 721. Adoption of uniform State laws.
Sec. 722. Improvements to full faith and credit for child support orders.
Sec. 723. Administrative enforcement in interstate cases.
Sec. 724. Use of forms in interstate enforcement.
Sec. 725. State laws providing expedited procedures.
Subtitle D—Paternity Establishment
Sec. 731. State laws concerning paternity establishment.
Sec. 732. Outreach for voluntary paternity establishment.
Sec. 733. Cooperation by applicants for and recipients of temporary family as-
sistance.
Subtitle E—Program Administration and Funding
Sec. 741. Federal matching payments.
Sec. 742. Performance-based incentives and penalties.
Sec. 743. Federal and State reviews and audits.
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Sec. 744. Required reporting procedures.
Sec. 745. Automated data processing requirements.
Sec. 746. Technical assistance.
Sec. 747. Reports and data collection by the Secretary.
Subtitle F—Establishment and Modification of Support Orders
Sec. 751. Simplified process for review and adjustment of child support orders.
Sec. 752. Furnishing consumer reports for certain purposes relating to child
support.
Subtitle G—Enforcement of Support Orders
Sec. 761. Federal income tax refund offset.
Sec. 762. Authority to collect support from Federal employees.
Sec. 763. Enforcement of child support obligations of members of the Armed
Forces.
Sec. 764. Voiding of fraudulent transfers.
Sec. 765. Sense of the Congress that States should suspend drivers’, business,
and occupational licenses of persons owing past-due child sup-
port.
Sec. 766. Work requirement for persons owing past-due child support.
Sec. 767. Definition of support order.
Sec. 768. Liens.
Sec. 769. State law authorizing suspension of licenses.
Subtitle H—Medical Support
Sec. 771. Technical correction to ERISA definition of medical child support
order.
Subtitle I—Enhancing Responsibility and Opportunity for Nonresidential
Parents
Sec. 781. Grants to States for access and visitation programs.
Subtitle J—Effect of Enactment
Sec. 791. Effective dates.
TITLE VIII—MISCELLANEOUS PROVISIONS
Sec. 801. Scoring.
Sec. 802. Provisions to encourage electronic benefit transfer systems.
TITLE I—BLOCK GRANTS FOR
TEMPORARY 
ASSISTANCE
FOR NEEDY FAMILIES
SEC. 100. SENSE OF THE CONGRESS.
It is the sense of the Congress that—
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(1) marriage is the foundation of a successful
society;
(2) marriage is an essential social institution
which promotes the interests of children and society
at large;
(3) the negative consequences of an out-of-wed-
lock birth on the child, the mother, and society are
well documented as follows:
(A) the illegitimacy rate among black
Americans was 26 percent in 1965, but today
the rate is 68 percent and climbing;
(B) the illegitimacy rate among white
Americans has risen tenfold, from 2.29 percent
in 1960 to 22 percent today;
(C) the total of all out-of-wedlock births
between 1970 and 1991 has risen from 10 per-
cent to 30 percent and if the current trend con-
tinues, 50 percent of all births by the year 2015
will be out-of-wedlock;
(D) 3⁄4 of illegitimate births among whites
are to women with a high school education or
less;
(E) the 1-parent family is 6 times more
likely to be poor than the 2-parent family;
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(F) children born into families receiving
welfare assistance are 3 times more likely than
children not born into families receiving welfare
to be on welfare when they reach adulthood;
(G) teenage single parent mothering is the
single biggest contributor to low birth weight
babies;
(H) children born out-of-wedlock are more
likely to experience low verbal cognitive attain-
ment, child abuse, and neglect;
(I) young people from single parent or
stepparent families are 2 to 3 times more likely
to have emotional or behavioral problems than
those from intact families;
(J) young white women who were raised in
a single parent family are more than twice as
likely to have children out-of-wedlock and to be-
come parents as teenagers, and almost twice as
likely to have their marriages end in divorce, as
are children from 2-parent families;
(K) the younger the single parent mother,
the less likely she is to finish high school;
(L) young women who have children before
finishing high school are more likely to receive
welfare assistance for a longer period of time;
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(M) between 1985 and 1990, the public
cost of births to teenage mothers under the aid
to families with dependent children program,
the food stamp program, and the medicaid pro-
gram has been estimated at $120,000,000,000;
(N) the absence of a father in the life of
a child has a negative effect on school perform-
ance and peer adjustment;
(O) the likelihood that a young black man
will engage in criminal activities doubles if he
is raised without a father and triples if he lives
in a neighborhood with a high concentration of
single parent families; and
(P) the greater the incidence of single par-
ent families in a neighborhood, the higher the
incidence of violent crime and burglary; and
(4) in light of this demonstration of the crisis
in our Nation, the reduction of out-of-wedlock births
is an important government interest and the policy
contained in provisions of this title address the
crisis.
SEC. 101. BLOCK GRANTS TO STATES.
Title IV of the Social Security Act (42 U.S.C. 601
et seq.) is amended by striking part A, except sections
403(h) and 417, and inserting the following:
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‘‘PART A—BLOCK GRANTS TO STATES FOR
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
‘‘SEC. 401. PURPOSE.
‘‘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
the children in such families may be cared for in
their homes or in the homes of relatives;
‘‘(2) end the dependence of needy parents on
government benefits by promoting work and mar-
riage; and
‘‘(3) discourage out-of-wedlock births.
‘‘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 3-year period immediately preceding the
fiscal year, has submitted to the Secretary a plan that in-
cludes the following:
‘‘(1) OUTLINE
OF
FAMILY
ASSISTANCE
PRO-
GRAM.—A written document that outlines how the
State intends to do the following:
‘‘(A) Conduct a program designed to—
‘‘(i) provide cash benefits to needy
families with children; and
‘‘(ii) provide parents of children in
such families with work experience, assist-
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ance in finding employment, and other
work preparation activities and support
services that the State considers appro-
priate to enable such families to leave the
program and become self-sufficient.
‘‘(B) Require at least 1 parent of a child
in any family which has received benefits for
more than 24 months (whether or not consecu-
tive) under the program to engage in work ac-
tivities (as defined by the State).
‘‘(C) Ensure that parents receiving assist-
ance under the program engage in work activi-
ties in accordance with section 404.
‘‘(D) Treat interstate immigrants, if fami-
lies including such immigrants are to be treated
differently than other families.
‘‘(E) Take such reasonable steps as the
State deems necessary to restrict the use and
disclosure of information about individuals and
families receiving benefits under the program.
‘‘(F) Take actions to reduce the incidence
of out-of-wedlock pregnancies, which may in-
clude providing unmarried mothers and unmar-
ried fathers with services which will help
them—
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‘‘(i) avoid subsequent pregnancies;
and
‘‘(ii) provide adequate care to their
children.
‘‘(G) Reduce teenage pregnancy, including
(at the option of the State) through the provi-
sion of education and counseling to male and
female teenagers.
‘‘(2) CERTIFICATION
THAT
THE
STATE
WILL
OPERATE
A
CHILD
SUPPORT
ENFORCEMENT
PRO-
GRAM.—A certification by the Governor of the State
that, during the fiscal year, the State will operate a
child support enforcement program under the State
plan approved under part D, in a manner that com-
plies with the requirements of such part.
‘‘(3) CERTIFICATION
THAT
THE
STATE
WILL
OPERATE A CHILD PROTECTION PROGRAM.—A cer-
tification by the Governor of the State that, during
the fiscal year, the State will operate a child protec-
tion program in accordance with part B, which in-
cludes a foster care program and an adoption assist-
ance program.
‘‘(b) DETERMINATIONS.—The Secretary shall deter-
mine whether a plan submitted pursuant to subsection (a)
contains the material required by subsection (a).
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‘‘SEC. 403. PAYMENTS TO STATES.
‘‘(a) ENTITLEMENTS.—
‘‘(1) GRANTS FOR FAMILY ASSISTANCE.—
‘‘(A) IN
GENERAL.—Each eligible State
shall be entitled to receive from the Secretary
for each of fiscal years 1996, 1997, 1998,
1999, and 2000 a grant in an amount equal to
the State family assistance grant for the fiscal
year.
‘‘(B) GRANT
INCREASED
TO
REWARD
STATES
THAT
REDUCE
OUT-OF-WEDLOCK
BIRTHS.—The amount of the grant payable to
a State under subparagraph (A) for fiscal year
1998 or any succeeding fiscal year shall be in-
creased by—
‘‘(i) 5 percent if the illegitimacy ratio
of the State for the fiscal year is at least
1 percentage point lower than the illegit-
imacy ratio of the State for fiscal year
1995; or
‘‘(ii) 10 percent if the illegitimacy
ratio of the State for the fiscal year is at
least 2 percentage points lower than the il-
legitimacy ratio of the State for fiscal year
1995.
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‘‘(2) SUPPLEMENTAL GRANTS TO ADJUST FOR
POPULATION INCREASES.—In addition to any grant
under paragraph (1), each eligible State shall be en-
titled to receive from the Secretary for each of fiscal
years 1997, 1998, 1999, and 2000, a grant in an
amount 
equal 
to 
the 
State 
proportion 
of
$100,000,000.
‘‘(b) DEFINITIONS.—As used in this section:
‘‘(1) STATE FAMILY ASSISTANCE GRANT.—
‘‘(A) IN GENERAL.—The term ‘State fam-
ily assistance grant’ means, with respect to a
fiscal year, the provisional State family assist-
ance grant adjusted in accordance with sub-
paragraph (C).
‘‘(B) PROVISIONAL STATE FAMILY ASSIST-
ANCE
GRANT.—The term ‘provisional State
family assistance grant’ means—
‘‘(i) the greater of—
‘‘(I) 1⁄3 of the total amount of ob-
ligations to the State under section
403 of this title (as in effect before
October 1, 1995) for fiscal years
1992, 1993, and 1994 (other than
with respect to amounts expended for
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child care under subsection (g) or (i)
of such section); or
‘‘(II) the total amount of obliga-
tions to the State under such section
403 for fiscal year 1994 (other than
with respect to amounts expended for
child care under subsection (g) or (i)
of such section); multiplied by
‘‘(ii)(I) the total amount of outlays to
all of the States under such section 403
for fiscal year 1994 (other than with re-
spect to amounts expended for child care
under subsection (g) or (i) of such sec-
tion); divided by
‘‘(II) the total amount of obligations
to all of the States under such section 403
for fiscal year 1994 (other than with re-
spect to amounts expended for child care
under subsection (g) or (i) of such sec-
tion).
‘‘(C) PROPORTIONAL
ADJUSTMENT.—The
Secretary shall determine the percentage (if
any) by which each provisional State family as-
sistance grant must be reduced or increased to
ensure that the sum of such grants equals
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$15,390,296,000, and shall adjust each provi-
sional State family assistance grant by the per-
centage so determined.
‘‘(2) ILLEGITIMACY RATIO.—The term ‘illegit-
imacy ratio’ means, with respect to a State and a
fiscal year—
‘‘(A) the sum of—
‘‘(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; and
‘‘(ii) the amount (if any) by which the
number of abortions performed in the
State during the most recent fiscal year for
which such information is available exceeds
the number of abortions performed in the
State during the fiscal year that imme-
diately precedes such most recent fiscal
year; divided by
‘‘(B) the number of births that occurred in
the State during the most recent fiscal year for
which such information is available.
‘‘(3) STATE
PROPORTION.—The term ‘State
proportion’ means, with respect to a fiscal year, the
amount that bears the same ratio to the amount
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specified in subsection (a)(2) as the increase (if any)
in the population of the State for the most recent
fiscal year for which such information is available
over the population of the State for the fiscal year
that immediately precedes such most recent fiscal
year bears to the total increase in the population of
all States which have such an increase in population,
as determined by the Secretary using data from the
Bureau of the Census.
‘‘(4) FISCAL
YEAR.—The term ‘fiscal year’
means any 12-month period ending on September 30
of a calendar year.
‘‘(5) STATE.—The term ‘State’ includes the
several States, the District of Columbia, the Com-
monwealth of Puerto Rico, the United States Virgin
Islands, Guam, and American Samoa.
‘‘(c) USE OF GRANT.—
‘‘(1) IN GENERAL.—A State to which a grant
is made under this section may use the grant in any
manner that is reasonably calculated to accomplish
the purpose of this part, subject to this part, includ-
ing to provide noncash assistance to mothers who
have not attained 18 years of age and their children
and to provide low income households with assist-
ance in meeting home heating and cooling costs.
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Notwithstanding any other provision of this Act, a
State to which a grant is made under section 403
may not use any part of the grant to provide medi-
cal services.
‘‘(2) AUTHORITY TO TREAT INTERSTATE IMMI-
GRANTS UNDER RULES OF FORMER STATE.—A State
to which a grant is made under this section may
apply to a family the rules of the program operated
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.
‘‘(3) AUTHORITY TO USE PORTION OF GRANT
FOR OTHER PURPOSES.—
‘‘(A) IN GENERAL.—A State may use not
more than 30 percent of the amount of the
grant made to the State under this section for
a fiscal year to carry out a State program pur-
suant to any or all of the following provisions
of law:
‘‘(i) Part B of this title.
‘‘(ii) Title XX of this Act.
‘‘(iii) Any provision of law, enacted
into law during the 104th Congress, under
which grants are made to States for food
and nutrition.
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‘‘(iv) The Child Care and Develop-
ment Block Grant Act of 1990.
‘‘(B) APPLICABLE
RULES.—Any amount
paid to the State under this part that is used
to carry out a State program pursuant to a pro-
vision of law specified in subparagraph (A)
shall not be subject to the requirements of this
part, but shall be subject to the requirements
that apply to Federal funds provided directly
under the provision of law to carry out the
program.
‘‘(4) 
AUTHORITY
TO
RESERVE
CERTAIN
AMOUNTS
FOR
EMERGENCY
BENEFITS.—A State
may reserve amounts paid to the State under this
section for any fiscal year for the purpose of provid-
ing emergency assistance under the State program
operated under this part.
‘‘(5) IMPLEMENTATION OF ELECTRONIC BENE-
FIT TRANSFER SYSTEM.—A State to which a grant
is made under this section is encouraged to imple-
ment an electronic benefit transfer system for pro-
viding assistance under the State program funded
under this part, and may use the grant for such
purpose.
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‘‘(d) TIMING OF PAYMENTS.—The Secretary shall
pay each grant payable to a State under this section in
quarterly installments.
‘‘(e) PENALTIES.—
‘‘(1) FOR
USE
OF
GRANT
IN
VIOLATION
OF
THIS PART.—
‘‘(A) IN GENERAL.—If an audit conducted
pursuant to chapter 75 of title 31, United
States Code, finds that an amount paid to a
State under this section for a fiscal year has
been used in violation of this part, then the
Secretary shall reduce the amount of the grant
otherwise payable to the State under this sec-
tion for the immediately succeeding fiscal year
by the amount so used.
‘‘(B) LIMITATION
ON
AMOUNT
OF
PEN-
ALTY.—In carrying out subparagraph (A), the
Secretary shall not reduce any quarterly pay-
ment by more than 25 percent.
‘‘(C) CARRYFORWARD
OF
UNRECOVERED
PENALTIES.—To the extent that subparagraph
(B) prevents the Secretary from recovering dur-
ing a fiscal year the full amount of a penalty
imposed on a State under subparagraph (A) for
a prior fiscal year, the Secretary shall apply
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subparagraph (A) to the grant otherwise pay-
able to the State under this section for the im-
mediately succeeding fiscal year.
‘‘(2) FOR FAILURE TO SUBMIT REQUIRED RE-
PORT.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State has not, within 6 months
after the end of a fiscal year, submitted the re-
port required by section 406 for the fiscal year,
the Secretary shall reduce by 3 percent the
amount of the grant that would (in the absence
of this subsection, subsection (a)(1)(B) of this
section, and section 404(c)(2)) be payable to
the State under subsection (a)(1)(A) for the im-
mediately succeeding fiscal year.
‘‘(B) RESCISSION OF PENALTY.—The Sec-
retary shall rescind a penalty imposed on a
State under subparagraph (A) with respect to a
report for a fiscal year if the State submits the
report before the end of the immediately suc-
ceeding fiscal year.
‘‘(3) FOR FAILURE TO PARTICIPATE IN THE IN-
COME AND ELIGIBILITY VERIFICATION SYSTEM.—If
the Secretary determines that a State program fund-
ed under this part is not participating during a fis-
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cal year in the income and eligibility verification sys-
tem required by section 1137, the Secretary shall re-
duce by 1 percent the amount of the grant that
would (in the absence of this subsection, subsection
(a)(1)(B) of this section, and section 404(c)(2)) be
payable to the State under subsection (a)(1)(A) for
the fiscal year.
‘‘(f) LIMITATION
ON FEDERAL AUTHORITY.—The
Secretary may not regulate the conduct of States under
this part or enforce any provision of this part, except to
the extent expressly provided in this part.
‘‘(g) FEDERAL RAINY DAY FUND.—
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished in the Treasury of the United States a revolv-
ing loan fund which shall be known as the ‘Federal
Rainy Day Fund’.
‘‘(2) DEPOSITS INTO FUND.—
‘‘(A) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, $1,000,000,000 are hereby
appropriated for fiscal year 1996 for payment
to the Federal Rainy Day Fund.
‘‘(B) LOAN REPAYMENTS.—The Secretary
shall deposit into the fund any principal or in-
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terest payment received with respect to a loan
made under this subsection.
‘‘(3) AVAILABILITY.—Amounts in the fund are
authorized to remain available without fiscal year
limitation for the purpose of making loans and re-
ceiving payments of principal and interest on such
loans, in accordance with this subsection.
‘‘(4) USE OF FUND.—
‘‘(A) LOANS TO QUALIFIED STATES.—
‘‘(i) IN
GENERAL.—The Secretary
shall make loans from the fund to any
qualified State for a period to maturity of
not more than 3 years.
‘‘(ii) RATE OF INTEREST.—The Sec-
retary shall charge and collect interest on
any loan made under clause (i) 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.
‘‘(iii) MAXIMUM LOAN.—The amount
of any loan made to a State under clause
(i) during a fiscal year shall not exceed the
lesser of—
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‘‘(I) 50 percent of the amount of
the grant payable to the State under
this section for the fiscal year; or
‘‘(II) $100,000,000.
‘‘(B) QUALIFIED
STATE
DEFINED.—A
State is a qualified State for purposes of sub-
paragraph (A) if the unemployment rate of the
State (as determined by the Bureau of Labor
Statistics) for the most recent 3-month period
for which such information is available is—
‘‘(i) more than 6.5 percent; and
‘‘(ii) at least 110 percent of such rate
for the corresponding 3-month period in ei-
ther of the 2 immediately preceding cal-
endar years.
‘‘SEC. 404. MANDATORY WORK REQUIREMENTS.
‘‘(a) PARTICIPATION RATE REQUIREMENTS.—
‘‘(1) REQUIREMENT APPLICABLE TO ALL FAMI-
LIES RECEIVING ASSISTANCE.—
‘‘(A) IN GENERAL.—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 fis-
cal year with respect to all families receiving as-
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sistance under the State program funded under
this part:
The minimum
participation
‘‘If the fiscal year is:
rate is:
1996 ...............................................................
1997 ...............................................................
1998 ...............................................................
1999 ...............................................................
2000 ...............................................................
2001 ...............................................................
2002 ...............................................................
2003 or thereafter .........................................
50.
‘‘(B) PRO RATA REDUCTION OF PARTICIPA-
TION
RATE
DUE
TO
CASELOAD
REDUCTIONS
NOT REQUIRED BY FEDERAL LAW.—The mini-
mum participation rate otherwise required by
subparagraph (A) for a fiscal year shall be re-
duced by a percentage equal to the percentage
(if any) by which the number of families receiv-
ing assistance during the fiscal year under the
State program funded under this part is less
than the number of families that received aid
under the State plan approved under part A of
this title (as in effect before October 1, 1995)
during the fiscal year immediately preceding
such effective date, except to the extent that the
Secretary determines that the reduction in the
number of families receiving such assistance is
required by Federal law.
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‘‘(C) PARTICIPATION RATE.—For purposes
of this paragraph:
‘‘(i) AVERAGE MONTHLY RATE.—The
participation rate of a State for a fiscal
year is the average of the participation
rates of the State for each month in the
fiscal year.
‘‘(ii) 
MONTHLY
PARTICIPATION
RATES.—The participation rate of a State
for a month is—
‘‘(I) the number of families re-
ceiving cash assistance under the
State program funded under this part
which include an individual who is en-
gaged in work activities for the
month; divided by
‘‘(II) the total number of families
receiving cash assistance under the
State program funded under this part
during the month which include an in-
dividual who has attained 18 years of
age.
‘‘(iii) ENGAGED.—A recipient is en-
gaged in work activities for a month in a
fiscal year if the recipient is making
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progress in such activities for at least the
minimum average number of hours per
week specified in the following table during
the month, not fewer than 20 hours per
week of which are attributable to an activ-
ity described in subparagraph (A), (B),
(C), or (D) of subsection (b)(1) (or, in the
case of the first 4 weeks for which the re-
cipient is required under this section to
participate in work activities, an activity
described in subsection (b)(1)(E)):
The minimum
‘‘If the month is
average number of
in fiscal year:
hours per week is:
1996 .....................................................
1997 .....................................................
1998 .....................................................
1999 .....................................................
2000 .....................................................
2001 .....................................................
2002 .....................................................
2003 or thereafter ................................
35.
‘‘(2) REQUIREMENT APPLICABLE TO 2-PARENT
FAMILIES.—
‘‘(A) IN GENERAL.—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 fis-
cal year with respect to 2-parent families receiv-
ing assistance under the State program funded
under this part:
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The minimum
participation
‘‘If the fiscal year is:
rate is:
1996 ...............................................................
1997 ...............................................................
1998 or thereafter .........................................
90.
‘‘(B) PARTICIPATION RATE.—For purposes
of this paragraph:
‘‘(i) AVERAGE MONTHLY RATE.—The
participation rate of a State for a fiscal
year is the average of the participation
rates of the State for each month in the
fiscal year.
‘‘(ii) 
MONTHLY
PARTICIPATION
RATES.—The participation rate of a State
for a month is—
‘‘(I) the number of 2-parent fam-
ilies receiving cash assistance under
the State program funded under this
part which include at least 1 adult
who is engaged in work activities for
the month; divided by
‘‘(II) the total number of 2-par-
ent families receiving cash assistance
under the State program funded
under this part during the month.
‘‘(iii) ENGAGED.—An adult is engaged
in work activities for a month in a fiscal
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year if the adult is making progress in
such activities for at least 35 hours per
week during the month, not fewer than 30
hours per week of which are attributable to
an activity described in subparagraph (A),
(B), (C), or (D) of subsection (b)(1) (or, in
the case of the first 4 weeks for which the
recipient is required under this section to
participate in work activities, an activity
described in subsection (b)(1)(E)).
‘‘(b) DEFINITIONS.—As used in this section:
‘‘(1) WORK ACTIVITIES.—The term ‘work ac-
tivities’ means—
‘‘(A) unsubsidized employment;
‘‘(B) subsidized private sector employment;
‘‘(C) subsidized public sector employment
or work experience (including work associated
with the refurbishing of publicly assisted hous-
ing) only if sufficient private sector employment
is not available;
‘‘(D) on-the-job training;
‘‘(E) job search and job readiness assist-
ance;
‘‘(F) education directly related to employ-
ment, in the case of a recipient who has not at-