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of the Interstate Compact on the Place-
ment of Children.
(2) REPORT
TO
THE
CONGRESS.—Not later
than 1 year after the date of the enactment of this
Act, the Comptroller General shall submit to the ap-
propriate committees of the Congress a report that
includes—
(A) the results of the study conducted
under paragraph (1); and
(B) recommendations on how to improve
procedures to facilitate the interjurisdictional
adoption of children, including interstate and
intercounty adoptions, so that children will be
assured timely and permanent placements.
SEC. 203. PERFORMANCE OF STATES IN PROTECTING CHIL-
DREN.
(a) ANNUAL REPORT ON STATE PERFORMANCE.—
Part E of title IV of the Social Security Act (42 U.S.C.
670 et seq.) is amended by adding at the end the follow-
ing:
‘‘SEC. 479A. ANNUAL REPORT.
‘‘The Secretary, in consultation with Governors,
State legislatures, State and local public officials respon-
sible for administering child welfare programs, and child
welfare advocates, shall—
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‘‘(1) develop a set of outcome measures (includ-
ing length of stay in foster care, number of foster
care placements, and number of adoptions) that can
be used to assess the performance of States in oper-
ating child protection and child welfare programs
pursuant to parts B and E to ensure the safety of
children;
‘‘(2) to the maximum extent possible, the out-
come measures should be developed from data avail-
able from the Adoption and Foster Care Analysis
and Reporting System;
‘‘(3) develop a system for rating the perform-
ance of States with respect to the outcome meas-
ures, and provide to the States an explanation of the
rating system and how scores are determined under
the rating system;
‘‘(4) prescribe such regulations as may be nec-
essary to ensure that States provide to the Secretary
the data necessary to determine State performance
with respect to each outcome measure, as a condi-
tion of the State receiving funds under this part;
and
‘‘(5) on May 1, 1999, and annually thereafter,
prepare and submit to the Congress a report on the
performance of each State on each outcome meas-
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ure, which shall examine the reasons for high per-
formance and low performance and, where possible,
make recommendations as to how State performance
could be improved.’’.
(b) DEVELOPMENT
OF PERFORMANCE-BASED IN-
CENTIVE SYSTEM.—The Secretary of Health and Human
Services, in consultation with State and local public offi-
cials responsible for administering child welfare programs
and child welfare advocates, shall study, develop, and rec-
ommend to Congress an incentive system to provide pay-
ments under parts B and E of title IV of the Social Secu-
rity Act (42 U.S.C. 620 et seq., 670 et seq.) to any State
based on the State’s performance under such a system.
Such a system shall, to the extent the Secretary deter-
mines feasible and appropriate, be based on the annual
report required by section 479A of the Social Security Act
(as added by subsection (a) of this section) or on any pro-
posed modifications of the annual report. Not later than
6 months after the date of the enactment of this Act, the
Secretary shall submit to the Committee on Ways and
Means of the House of Representatives and the Committee
on Finance of the Senate a progress report on the feasibil-
ity, timetable, and consultation process for conducting
such a study. Not later than 15 months after such date
of enactment, the Secretary shall submit to the Committee
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on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate the final report
on a performance-based incentive system. The report may
include other recommendations for restructuring the pro-
gram and payments under parts B and E of title IV of
the Social Security Act.
TITLE III—ADDITIONAL
IMPROVEMENTS AND REFORMS
SEC. 301. EXPANSION OF CHILD WELFARE DEMONSTRA-
TION PROJECTS.
(a) IN GENERAL.—Section 1130(a) of the Social Se-
curity Act (42 U.S.C. 1320a–9) is amended to read as
follows:
‘‘(a) AUTHORITY
TO
APPROVE
DEMONSTRATION
PROJECTS.—
‘‘(1) IN GENERAL.—The Secretary may author-
ize States to conduct demonstration projects pursu-
ant to this section which the Secretary finds are
likely to promote the objectives of part B or E of
title IV.
‘‘(2) LIMITATION.—The Secretary may author-
ize not more than 10 demonstration projects under
paragraph (1) in each of fiscal years 1998 through
2002.
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‘‘(3) CERTAIN TYPES OF PROPOSALS REQUIRED
TO BE CONSIDERED.—
‘‘(A) If an appropriate application therefor
is submitted, the Secretary shall consider au-
thorizing a demonstration project which is de-
signed to identify and address barriers that re-
sult in delays to adoptive placements for chil-
dren in foster care.
‘‘(B) If an appropriate application therefor
is submitted, the Secretary shall consider au-
thorizing a demonstration project which is de-
signed to identify and address parental sub-
stance abuse problems that endanger children
and result in the placement of children in foster
care, including through the placement of chil-
dren with their parents in residential treatment
facilities (including residential treatment facili-
ties for post-partum depression) that are spe-
cifically designed to serve parents and children
together in order to promote family reunifica-
tion and that can ensure the health and safety
of the children in such placements.
‘‘(C) If an appropriate application therefor
is submitted, the Secretary shall consider au-
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thorizing a demonstration project which is de-
signed to address kinship care.
‘‘(4) LIMITATION
ON
ELIGIBILITY.—The Sec-
retary may not authorize a State to conduct a dem-
onstration project under this section if the State
fails to provide health insurance coverage to any
child with special needs (as determined under sec-
tion 473(c)) for whom there is in effect an adoption
assistance agreement between a State and an adop-
tive parent or parents.
‘‘(5) REQUIREMENT TO CONSIDER EFFECT OF
PROJECT ON TERMS AND CONDITIONS OF CERTAIN
COURT ORDERS.—In considering an application to
conduct a demonstration project under this section
that has been submitted by a State in which there
is in effect a court order determining that the
State’s child welfare program has failed to comply
with the provisions of part B or E of title IV, or
with the Constitution of the United States, the Sec-
retary shall take into consideration the effect of ap-
proving the proposed project on the terms and con-
ditions of the court order related to the failure to
comply.’’.
(b) RULE
OF
CONSTRUCTION.—Nothing in the
amendment made by subsection (a) shall be construed as
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affecting the terms and conditions of any demonstration
project approved under section 1130 of the Social Security
Act (42 U.S.C. 1320a–9) before the date of the enactment
of this Act.
(c) AUTHORITY TO EXTEND DURATION OF DEM-
ONSTRATIONS.—Section 1130(d) of such Act (42 U.S.C.
1320a–9(d)) is amended by inserting ‘‘, unless in the judg-
ment of the Secretary, the demonstration project should
be allowed to continue’’ before the period.
SEC. 302. PERMANENCY HEARINGS.
Section 475(5)(C) of the Social Security Act (42
U.S.C. 675(5)(C)) is amended—
(1) by striking ‘‘dispositional’’ and inserting
‘‘permanency’’;
(2) by striking ‘‘eighteen’’ and inserting ‘‘12’’;
(3) by striking ‘‘original placement’’ and insert-
ing ‘‘date the child is considered to have entered fos-
ter care (as determined under subparagraph (F))’’;
and
(4) by striking ‘‘future status of’’ and all that
follows through ‘‘(long term basis)’’ and inserting
‘‘permanency plan for the child that includes wheth-
er, and if applicable when, the child will be returned
to the parent, placed for adoption and the State will
file a petition for termination of parental rights, or
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referred for legal guardianship, or (in cases where
the State agency has documented to the State court
a compelling reason for determining that it would
not be in the best interests of the child to return
home, be referred for termination of parental rights,
or be placed for adoption, with a fit and willing rel-
ative, or with a legal guardian) placed in another
planned permanent living arrangement’’.
SEC. 303. KINSHIP CARE.
(a) REPORT.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall—
(A) not later than June 1, 1998, convene
the advisory panel provided for in subsection
(b)(1) and prepare and submit to the advisory
panel an initial report on the extent to which
children in foster care are placed in the care of
a relative (in this section referred to as ‘‘kin-
ship care’’); and
(B) not later than June 1, 1999, submit to
the Committee on Ways and Means of the
House of Representatives and the Committee
on Finance of the Senate a final report on the
matter described in subparagraph (A), which
shall—
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(i) be based on the comments submit-
ted by the advisory panel pursuant to sub-
section (b)(2) and other information and
considerations; and
(ii) include the policy recommenda-
tions of the Secretary with respect to the
matter.
(2) REQUIRED
CONTENTS.—Each report re-
quired by paragraph (1) shall—
(A) include, to the extent available for each
State, information on—
(i) the policy of the State regarding
kinship care;
(ii) the characteristics of the kinship
care providers (including age, income, eth-
nicity, and race, and the relationship of the
kinship care providers to the children);
(iii) the characteristics of the house-
hold of such providers (such as number of
other persons in the household and family
composition);
(iv) how much access to the child is
afforded to the parent from whom the
child has been removed;
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(v) the cost of, and source of funds
for, kinship care (including any subsidies
such as medicaid and cash assistance);
(vi) the permanency plan for the child
and the actions being taken by the State to
achieve the plan;
(vii) the services being provided to the
parent from whom the child has been re-
moved; and
(viii) the services being provided to
the kinship care provider; and
(B) specifically note the circumstances or
conditions under which children enter kinship
care.
(b) ADVISORY PANEL.—
(1) ESTABLISHMENT.—The Secretary of Health
and Human Services, in consultation with the Chair-
man of the Committee on Ways and Means of the
House of Representatives and the Chairman of the
Committee on Finance of the Senate, shall convene
an advisory panel which shall include parents, foster
parents, relative caregivers, former foster children,
State and local public officials responsible for admin-
istering child welfare programs, private persons in-
volved in the delivery of child welfare services, rep-
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resentatives of tribal governments and tribal courts,
judges, and academic experts.
(2) DUTIES.—The advisory panel convened pur-
suant to paragraph (1) shall review the report pre-
pared pursuant to subsection (a), and, not later than
October 1, 1998, submit to the Secretary comments
on the report.
SEC. 304. CLARIFICATION OF ELIGIBLE POPULATION FOR
INDEPENDENT LIVING SERVICES.
Section 477(a)(2)(A) of the Social Security Act (42
U.S.C. 677(a)(2)(A)) is amended by inserting ‘‘(including
children with respect to whom such payments are no
longer being made because the child has accumulated as-
sets, not to exceed $5,000, which are otherwise regarded
as resources for purposes of determining eligibility for
benefits under this part)’’ before the comma.
SEC. 305. REAUTHORIZATION AND EXPANSION OF FAMILY
PRESERVATION AND SUPPORT SERVICES.
(a) REAUTHORIZATION OF FAMILY PRESERVATION
AND SUPPORT SERVICES.—
(1) IN GENERAL.—Section 430(b) of the Social
Security Act (42 U.S.C. 629(b)) is amended—
(A) in paragraph (4), by striking ‘‘or’’ at
the end;
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(B) in paragraph (5), by striking the pe-
riod and inserting a semicolon; and
(C) by adding at the end the following:
‘‘(6) for fiscal year 1999, $275,000,000;
‘‘(7) for fiscal year 2000, $295,000,000; and
‘‘(8) for fiscal year 2001, $305,000,000.’’.
(2) CONTINUATION OF RESERVATION OF CER-
TAIN AMOUNTS.—Paragraphs (1) and (2) of section
430(d) of the Social Security Act (42 U.S.C.
629(d)(1) and (2)) are each amended by striking
‘‘and 1998’’ and inserting ‘‘1998, 1999, 2000, and
2001’’.
(3) 
CONFORMING
AMENDMENTS.—Section
13712 of the Omnibus Budget Reconciliation Act of
1993 (42 U.S.C. 670 note) is amended—
(A) in subsection (c), by striking ‘‘1998’’
each place it appears and inserting ‘‘2001’’; and
(B) in subsection (d)(2), by striking ‘‘and
1998’’ and inserting ‘‘1998, 1999, 2000, and
2001’’.
(b) EXPANSION FOR TIME-LIMITED FAMILY REUNI-
FICATION SERVICES
AND ADOPTION PROMOTION
AND
SUPPORT SERVICES.—