620
‘‘(J) other appropriate related activities, as de-
termined by the State.’’;
(2) by striking paragraphs (2) and (4); and
(3) by redesignating paragraph (3) as para-
graph (2).
(c) ACCOUNTS, RECORDS, AND REPORTS.—The sec-
ond sentence of section 19(g)(1) of the Act is amended
by striking ‘‘at all times be available’’ and inserting ‘‘be
available at any reasonable time’’.
(d) STATE COORDINATORS FOR NUTRITION; STATE
PLAN.—Section 19(h) of the Act is amended—
(1) in the second sentence of paragraph (1)—
(A) by striking ‘‘as provided in paragraph
(2) of this subsection’’; and
(B) by striking ‘‘as provided in paragraph
(3) of this subsection’’;
(2) in paragraph (2), by striking the second
and third sentences; and
(3) by striking paragraph (3).
(e) AUTHORIZATION OF APPROPRIATIONS.—Section
19(i) of the Act is amended—
(1) in the first sentence of paragraph (2)(A), by
striking ‘‘and each succeeding fiscal year’’;
(2) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively; and
621
(3) by inserting after paragraph (2) the follow-
ing:
‘‘(3) FISCAL YEARS 1997 THROUGH 2002.—
‘‘(A) IN GENERAL.—There are authorized
to be appropriated to carry out this section
$10,000,000 for each of fiscal years 1997
through 2002.
‘‘(B) GRANTS.—
‘‘(i) IN
GENERAL.—Grants to each
State from the amounts made available
under subparagraph (A) shall be based on
a rate of 50 cents for each child enrolled
in schools or institutions within the State,
except that no State shall receive an
amount less than $75,000 per fiscal year.
‘‘(ii) INSUFFICIENT
FUNDS.—If the
amount made available for any fiscal year
is insufficient to pay the amount to which
each State is entitled under clause (i), the
amount of each grant shall be ratably re-
duced.’’.
(f) ASSESSMENT.—Section 19 of the Act is amended
by striking subsection (j).
(g) EFFECTIVE DATE.—The amendments made by
subsection (e) shall become effective on October 1, 1996.
622
CHAPTER 3—MISCELLANEOUS
PROVISIONS
SEC. 3441. COORDINATION OF SCHOOL LUNCH, SCHOOL
BREAKFAST, AND SUMMER FOOD SERVICE
PROGRAMS.
(a) COORDINATION.—
(1) IN GENERAL.—The Secretary of Agriculture
shall develop proposed changes to the regulations
under the school lunch program under the National
School Lunch Act, the summer food service program
under section 13 of that Act, and the school break-
fast program under section 4 of the Child Nutrition
Act of 1966, for the purpose of simplifying and co-
ordinating those programs into a comprehensive
meal program.
(2) CONSULTATION.—In developing proposed
changes to the regulations under paragraph (1), the
Secretary of Agriculture shall consult with local,
State, and regional administrators of the programs
described in such paragraph.
(b) REPORT.—Not later than November 1, 1997, the
Secretary of Agriculture shall submit to the Committee on
Agriculture, Nutrition, and Forestry of the Senate and the
Committee on Economic and Educational Opportunities of
623
the House of Representatives a report containing the pro-
posed changes developed under subsection (a).
Subtitle E—Related Provisions
Sec. 3501. REQUIREMENT THAT DATA RELATING TO THE IN-
CIDENCE 
OF 
POVERTY 
IN 
THE 
UNITED
STATES BE PUBLISHED AT LEAST EVERY 2
YEARS.
(a) IN GENERAL.—The Secretary shall, to the extent
feasible, produce and publish for each State, county, and
local unit of general purpose government for which data
have been compiled in the then most recent census of pop-
ulation under section 141(a) of title 13, United States
Code, and for each school district, data relating to the in-
cidence of poverty. Such data may be produced by means
of sampling, estimation, or any other method that the Sec-
retary determines will produce current, comprehensive,
and reliable data.
(b) CONTENT; FREQUENCY.—Data under this sec-
tion—
(1) shall include—
(A) for each school district, the number of
children age 5 to 17, inclusive, in families below
the poverty level; and
624
(B) for each State and county referred to
in subsection (a), the number of individuals age
65 or older below the poverty level; and
(2) shall be published—
(A) for each State, county, and local unit
of general purpose government referred to in
subsection (a), in 1997 and at least every sec-
ond year thereafter; and
(B) for each school district, in 1999 and at
least every second year thereafter.
(c) AUTHORITY TO AGGREGATE.—
(1) IN GENERAL.—If reliable data could not
otherwise be produced, the Secretary may, for pur-
poses of subsection (b)(1)(A), aggregate school dis-
tricts, but only to the extent necessary to achieve re-
liability.
(2) INFORMATION RELATING TO USE OF AU-
THORITY.—Any data produced under this subsection
shall be appropriately identified and shall be accom-
panied by a detailed explanation as to how and why
aggregation was used (including the measures taken
to minimize any such aggregation).
(d) REPORT TO BE SUBMITTED WHENEVER DATA
IS NOT TIMELY PUBLISHED.—If the Secretary is unable
to produce and publish the data required under this sec-
625
tion for any State, county, local unit of general purpose
government, or school district in any year specified in sub-
section (b)(2), a report shall be submitted by the Secretary
to the President of the Senate and the Speaker of the
House of Representatives, not later than 90 days before
the start of the following year, enumerating each govern-
ment or school district excluded and giving the reasons
for the exclusion.
(e) CRITERIA RELATING TO POVERTY.—In carrying
out this section, the Secretary shall use the same criteria
relating to poverty as were used in the then most recent
census of population under section 141(a) of title 13,
United States Code (subject to such periodic adjustments
as may be necessary to compensate for inflation and other
similar factors).
(f) CONSULTATION.—The Secretary shall consult
with the Secretary of Education in carrying out the re-
quirements of this section relating to school districts.
(g) DEFINITION.—For the purpose of this section,
the term ‘‘Secretary’’ means the Secretary of Health and
Human Services.
(h) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$1,500,000 for each of fiscal years 1997 through 2000.
627
Sec. 4101. Findings.
Sec. 4102. Reference to Social Security Act.
Sec. 4103. Block grants to States.
Sec. 4104. Services provided by charitable, religious, or private organizations.
Sec. 4105. Census data on grandparents as primary caregivers for their grand-
children.
Sec. 4106. Report on data processing.
Sec. 4107. Study on alternative outcomes measures.
Sec. 4108. Conforming amendments to the Social Security Act.
Sec. 4109. Conforming amendments to the Food Stamp Act of 1977 and relat-
ed provisions.
Sec. 4110. Conforming amendments to other laws.
Sec. 4111. Development of prototype of counterfeit-resistant social security
card required.
Sec. 4112. Disclosure of receipt of Federal funds.
Sec. 4113. Modifications to the job opportunities for certain low-income individ-
uals program.
Sec. 4114. Secretarial submission of legislative proposal for technical and con-
forming amendments.
Sec. 4115. Effective date; transition rule.
Subtitle B—Supplemental Security Income
Sec. 4200. Reference to Social Security Act.
CHAPTER 1—ELIGIBILITY RESTRICTIONS
Sec. 4201. 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. 4202. Denial of SSI benefits for fugitive felons and probation and parole
violators.
Sec. 4203. Treatment of prisoners.
Sec. 4204. Effective date of application for benefits.
CHAPTER 2—BENEFITS FOR DISABLED CHILDREN
Sec. 4211. Definition and eligibility rules.
Sec. 4212. Eligibility redeterminations and continuing disability reviews.
Sec. 4213. Additional accountability requirements.
Sec. 4214. Reduction in cash benefits payable to institutionalized individuals
whose medical costs are covered by private insurance.
Sec. 4215. Regulations.
CHAPTER 3—ADDITIONAL ENFORCEMENT PROVISIONS
Sec. 4221. Installment payment of large past-due supplemental security income
benefits.
Sec. 4222. Recovery of supplemental security income overpayments from social
security benefits.
Sec. 4223. Regulations.
CHAPTER 4—STATE SUPPLEMENTATION PROGRAMS
Sec. 4225. Repeal of maintenance of effort requirements applicable to optional
State programs for supplementation of SSI benefits.
628
CHAPTER 5—STUDIES REGARDING SUPPLEMENTAL SECURITY INCOME
PROGRAM
Sec. 4231. Annual report on the supplemental security income program.
Sec. 4232. Study of disability determination process.
Sec. 4233. Study by General Accounting Office.
CHAPTER 6—NATIONAL COMMISSION ON THE FUTURE OF DISABILITY
Sec. 4241. Establishment.
Sec. 4242. Duties of the commission.
Sec. 4243. Membership.
Sec. 4244. Staff and support services.
Sec. 4245. Powers of commission.
Sec. 4246. Reports.
Sec. 4247. Termination.
Sec. 4248. Authorization of appropriations.
Subtitle C—Child Support
Sec. 4300. Reference to Social Security Act.
CHAPTER 1—ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS
Sec. 4301. State obligation to provide child support enforcement services.
Sec. 4302. Distribution of child support collections.
Sec. 4303. Privacy safeguards.
Sec. 4304. Rights to notification of hearings.
CHAPTER 2—LOCATE AND CASE TRACKING
Sec. 4311. State case registry.
Sec. 4312. Collection and disbursement of support payments.
Sec. 4313. State directory of new hires.
Sec. 4314. Amendments concerning income withholding.
Sec. 4315. Locator information from interstate networks.
Sec. 4316. Expansion of the Federal Parent Locator Service.
Sec. 4317. Collection and use of social security numbers for use in child sup-
port enforcement.
CHAPTER 3—STREAMLINING AND UNIFORMITY OF PROCEDURES
Sec. 4321. Adoption of uniform State laws.
Sec. 4322. Improvements to full faith and credit for child support orders.
Sec. 4323. Administrative enforcement in interstate cases.
Sec. 4324. Use of forms in interstate enforcement.
Sec. 4325. State laws providing expedited procedures.
CHAPTER 4—PATERNITY ESTABLISHMENT
Sec. 4331. State laws concerning paternity establishment.
Sec. 4332. Outreach for voluntary paternity establishment.
Sec. 4333. Cooperation by applicants for and recipients of part A assistance.
CHAPTER 5—PROGRAM ADMINISTRATION AND FUNDING
Sec. 4341. Performance-based incentives and penalties.
Sec. 4342. Federal and State reviews and audits.
Sec. 4343. Required reporting procedures.
629
Sec. 4344. Automated data processing requirements.
Sec. 4345. Technical assistance.
Sec. 4346. Reports and data collection by the Secretary.
CHAPTER 6—ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS
Sec. 4351. Simplified process for review and adjustment of child support or-
ders.
Sec. 4352. Furnishing consumer reports for certain purposes relating to child
support.
Sec. 4353. Nonliability for financial institutions providing financial records to
State child support enforcement agencies in child support
cases.
CHAPTER 7—ENFORCEMENT OF SUPPORT ORDERS
Sec. 4361. Internal Revenue Service collection of arrearages.
Sec. 4362. Authority to collect support from Federal employees.
Sec. 4363. Enforcement of child support obligations of members of the Armed
Forces.
Sec. 4364. Voiding of fraudulent transfers.
Sec. 4365. Work requirement for persons owing past-due child support.
Sec. 4366. Definition of support order.
Sec. 4367. Reporting arrearages to credit bureaus.
Sec. 4368. Liens.
Sec. 4369. State law authorizing suspension of licenses.
Sec. 4370. Denial of passports for nonpayment of child support.
Sec. 4371. International support enforcement.
Sec. 4372. Financial institution data matches.
Sec. 4373. Enforcement of orders against paternal or maternal grandparents in
cases of minor parents.
Sec. 4374. Nondischargeability in bankruptcy of certain debts for the support
of a child.
CHAPTER 8—MEDICAL SUPPORT
Sec. 4376. Correction to ERISA definition of medical child support order.
Sec. 4377. Enforcement of orders for health care coverage.
CHAPTER 9—ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NON-
RESIDENTIAL PARENTS
Sec. 4381. Grants to States for access and visitation programs.
CHAPTER 10—EFFECTIVE DATES AND CONFORMING AMENDMENTS
Sec. 4391. Effective dates and conforming amendments.
Subtitle D—Restricting Welfare and Public Benefits for Aliens
Sec. 4400. Statements of national policy concerning welfare and immigration.
CHAPTER 1—ELIGIBILITY FOR FEDERAL BENEFITS
Sec. 4401. Aliens who are not qualified aliens ineligible for Federal public bene-
fits.
Sec. 4402. Limited eligibility of qualified aliens for certain Federal programs.
630
Sec. 4403. Five-year limited eligibility of qualified aliens for Federal means-
tested public benefit.
Sec. 4404. Notification and information reporting.
CHAPTER 2—ELIGIBILITY FOR STATE AND LOCAL PUBLIC BENEFITS
PROGRAMS
Sec. 4411. Aliens who are not qualified aliens or nonimmigrants ineligible for
State and local public benefits.
Sec. 4412. State authority to limit eligibility of qualified aliens for State public
benefits.
CHAPTER 3—ATTRIBUTION OF INCOME AND AFFIDAVITS OF SUPPORT
Sec. 4421. Federal attribution of sponsor’s income and resources to alien.
Sec. 4422. Authority for States to provide for attribution of sponsors income
and resources to the alien with respect to State programs.
Sec. 4423. Requirements for sponsor’s affidavit of support.
Sec. 4424. Cosignature of alien student loans.
CHAPTER 4—GENERAL PROVISIONS
Sec. 4431. Definitions.
Sec. 4432. Verification of eligibility for Federal public benefits.
Sec. 4433. Statutory construction.
Sec. 4434. Communication between State and local government agencies and
the Immigration and Naturalization Service.
Sec. 4435. Qualifying quarters.
CHAPTER 5—CONFORMING AMENDMENTS RELATING TO ASSISTED HOUSING
Sec. 4441. Conforming amendments relating to assisted housing.
CHAPTER 6—EARNED INCOME CREDIT DENIED TO UNAUTHORIZED
EMPLOYEES
Sec. 4451. Earned income credit denied to individuals not authorized to be em-
ployed in the United States.
Subtitle E—Reform of Public Housing
Sec. 4601. Fraud under means-tested welfare and public assistance programs.
Subtitle F—Child Protection Block Grant Programs and Foster Care,
Adoption Assistance, and Independent Living Programs
CHAPTER 1—CHILD PROTECTION BLOCK GRANT PROGRAM AND FOSTER
CARE, ADOPTION ASSISTANCE, AND INDEPENDENT LIVING PROGRAMS
SUBCHAPTER A—BLOCK GRANTS TO STATES FOR THE PROTECTION OF
CHILDREN
Sec. 4701. Establishment of program.
Sec. 4702. Conforming amendments.
SUBCHAPTER B—FOSTER CARE, ADOPTION ASSISTANCE, AND INDEPENDENT
LIVING PROGRAMS
Sec. 4711. Conforming amendments to part E of title IV.
631
SUBCHAPTER C—MISCELLANEOUS
Sec. 4721. Secretarial submission of legislative proposal for technical and con-
forming amendments.
Sec. 4722. Sense of the Congress regarding timely adoption of children.
Sec. 4723. Effective date; transition rules.
CHAPTER 2—CHILD AND FAMILY SERVICES BLOCK GRANT
Sec. 4751. Child and family services block grant.
Sec. 4752. Reauthorizations.
Sec. 4753. Repeals.
Subtitle G—Child Care
Sec. 4801. Short title and references.
Sec. 4802. Goals.
Sec. 4803. Authorization of appropriations and entitlement authority.
Sec. 4804. Lead agency.
Sec. 4805. Application and plan.
Sec. 4806. Limitation on State allotments.
Sec. 4807. Activities to improve the quality of child care.
Sec. 4808. Repeal of early childhood development and before- and after-school
care requirement.
Sec. 4809. Administration and enforcement.
Sec. 4810. Payments.
Sec. 4811. Annual report and audits.
Sec. 4812. Report by the Secretary.
Sec. 4813. Allotments.
Sec. 4814. Definitions.
Sec. 4815. Repeals.
Sec. 4816. Effective date.
Subtitle H—Miscellaneous
Sec. 4901. Appropriation by State legislatures.
Sec. 4902. Sanctioning for testing positive for controlled substances.
Sec. 4903. Reduction in block grants to States for social services.
Sec. 4904. Rules relating to denial of earned income credit on basis of disquali-
fied income.
Sec. 4905. Modification of adjusted gross income definition for earned income
credit.
Sec. 4906. Modification of earned income credit amount and phaseout.
Subtitle A—Block Grants for Tem-
porary 
Assistance 
for 
Needy
Families
SEC. 4101. FINDINGS.
The Congress makes the following findings:
632
(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;
633
(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
634
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.
635
(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-
636
trast, 46 percent of female-headed households
with children under 18 years of age are below
the national poverty level.
(B) Among single-parent families, nearly
1⁄2 of the mothers who never married received
AFDC while only 1⁄5 of divorced mothers re-
ceived AFDC.
(C) Children born into families receiving
welfare assistance are 3 times more likely to be
on welfare when they reach adulthood than chil-
dren not born into families receiving welfare.
(D) Mothers under 20 years of age are at
the greatest risk of bearing low-birth-weight ba-
bies.
(E) The younger the single parent mother,
the less likely she is to finish high school.
(F) Young women who have children be-
fore finishing high school are more likely to re-
ceive welfare assistance for a longer period of
time.
(G) 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.
637
(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.
638
(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 4103(a) of this Act) is
intended to address the crisis.
SEC. 4102. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in
this subtitle 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. 4103. BLOCK GRANTS TO STATES.
(a) IN GENERAL.—Part A of title IV (42 U.S.C. 601
et seq.) is amended—
(1) by striking all that precedes section 418 (as
added by section 4803(b)(2) of this Act) and insert-
ing the following:
639
‘‘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
640
fiscal year, has submitted to the Secretary a plan that the
Secretary has found includes the following:
‘‘(1) OUTLINE
OF
FAMILY
ASSISTANCE
PRO-
GRAM.—
‘‘(A) GENERAL
PROVISIONS.—A written
document that outlines how the State intends to
do the following:
‘‘(i) Conduct a program, designed to
serve all political subdivisions in the State
(not necessarily in a uniform manner),
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) Require a parent or caretaker re-
ceiving 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.
641
‘‘(iii) Ensure that parents and care-
takers receiving assistance under the pro-
gram engage in work activities in accord-
ance with section 407.
‘‘(iv) 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.
‘‘(v) Establish goals and take action
(including provision of education and coun-
seling (including abstinence-based pro-
grams) and pre-pregnancy health services)
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 document shall indicate
whether the State intends to treat families
moving into the State from another State
642
differently than other families under the
program, and if so, how the State intends
to treat such families under the program.
‘‘(ii) The document shall indicate
whether the State intends to provide as-
sistance under the program to individuals
who are not citizens of the United States,
and if so, shall include an overview of such
assistance.
‘‘(iii) The document shall set forth ob-
jective criteria for the delivery of benefits
and the determination of eligibility and for
fair and equitable treatment, including an
explanation of how the State will provide
opportunities for recipients who have been
adversely affected to be heard in a State
administrative or appeal process.
‘‘(2) CERTIFICATION
THAT
THE
STATE
WILL
OPERATE
A
CHILD
SUPPORT
ENFORCEMENT
PRO-
GRAM.—A certification by the chief executive officer
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.
‘‘(3) CERTIFICATION
THAT
THE
STATE
WILL
OPERATE A CHILD PROTECTION PROGRAM.—A cer-
643
tification by the chief executive officer of the State
that, during the fiscal year, the State will operate a
child protection program under the State plan ap-
proved under part B.
‘‘(4) CERTIFICATION OF THE ADMINISTRATION
OF THE PROGRAM.—A certification by the chief ex-
ecutive officer of the State specifying which State
agency or agencies will administer and supervise the
program referred to in paragraph (1) for the fiscal
year, which shall include assurances that local gov-
ernments and private sector organizations—
‘‘(A) have been consulted regarding the
plan and design of welfare services in the State
so that services are provided in a manner ap-
propriate to local populations; and
‘‘(B) have had at least 45 days to submit
comments on the plan and the design of such
services.
‘‘(5) CERTIFICATION
THAT
THE
STATE
WILL
PROVIDE INDIANS WITH EQUITABLE ACCESS TO AS-
SISTANCE.—A certification by the chief executive of-
ficer 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 approved under section
644
412 with equitable access to assistance under the
State program funded under this part attributable
to funds provided by the Federal Government.
‘‘(b) 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
645
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 or 1995, the Secretary ap-
proved under former section 402 an
amendment to the former State plan to
allow the provision of emergency assistance
in the context of family preservation; or
‘‘(iii) 4⁄3 of the total amount required
to be paid to the State under former sec-
tion 403 (as in effect on September 30,
1995) for the 1st 3 quarters of fiscal year
646
1995 (other than with respect to amounts
expended by the State under the State
plan approved under part F (as so in ef-
fect) or for child care under subsection (g)
or (i) of former section 402 (as so in ef-
fect)), 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;
647
‘‘(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
648
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 amounts
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
649
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
(III) 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)(IV)
650
for any State for fiscal year 1995, the
Secretary shall use information avail-
able as of February 28, 1996.
‘‘(IV) 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.—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-
651
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
652
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
653
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
654
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—
655
‘‘(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
recent fiscal year for which informa-
tion is available exceeds the average
population growth rate for all States
(as so determined) for such most re-
cent fiscal 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
656
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,
according to the population estimates
in publication CB94–204 of the Bu-
reau 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
657
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
658
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
659
baseline shall assume that no grant shall be
made under this paragraph after fiscal year
2000.
‘‘(4) BONUS TO REWARD HIGH PERFORMANCE
STATES.—
‘‘(A) IN
GENERAL.—The Secretary shall
make a grant pursuant to this paragraph to
each State for each bonus year for which the
State is a high performing State.
‘‘(B) AMOUNT OF GRANT.—
‘‘(i) IN GENERAL.—Subject to clause
(ii) of this subparagraph, the Secretary
shall determine the amount of the grant
payable under this paragraph to a high
performing State for a bonus year, which
shall be based on the score assigned to the
State under subparagraph (D)(i) for the
fiscal year that immediately precedes the
bonus year.
‘‘(ii) LIMITATION.—The amount pay-
able to a State under this paragraph for a
bonus year shall not exceed 5 percent of
the State family assistance grant.
‘‘(C) FORMULA
FOR
MEASURING
STATE
PERFORMANCE.—Not later than 1 year after
660
the date of the enactment of the Personal Re-
sponsibility and Work Opportunity Act of 1996,
the Secretary, in consultation with the National
Governors’ Association and the American Pub-
lic Welfare Association, shall develop a formula
for measuring State performance in operating
the State program funded under this part so as
to achieve the goals set forth in section 401(a).
‘‘(D) SCORING OF STATE PERFORMANCE;
SETTING
OF
PERFORMANCE
THRESHOLDS.—
For each bonus year, the Secretary shall—
‘‘(i) use the formula developed under
subparagraph (C) to assign a score to each
eligible State for the fiscal year that imme-
diately precedes the bonus year; and
‘‘(ii) prescribe a performance thresh-
old in such a manner so as to ensure
that—
‘‘(I) the average annual total
amount of grants to be made under
this paragraph for each bonus year
equals $200,000,000; and
‘‘(II) the total amount of grants
to be made under this paragraph for
661
all 
bonus 
years 
equals
$1,000,000,000.
‘‘(E) DEFINITIONS.—As used in this para-
graph:
‘‘(i) BONUS YEAR.—The term ‘bonus
year’ means fiscal years 1999, 2000, 2001,
2002, and 2003.
‘‘(ii) HIGH PERFORMING STATE.—The
term ‘high performing State’ means, with
respect a bonus year, an eligible State
whose score assigned pursuant to subpara-
graph (D)(i) for the fiscal year imme-
diately preceding the bonus year equals or
exceeds the performance threshold pre-
scribed under subparagraph (D)(ii) for
such preceding fiscal year.
‘‘(F) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
fiscal years 1999 through 2003 $1,000,000,000
for grants under this paragraph.
‘‘(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
662
State Welfare Programs’ (in this section referred to
as the ‘Fund’).
‘‘(2) DEPOSITS INTO FUND.—Out of any money
in the Treasury of the United States not otherwise
appropriated, there are appropriated for fiscal years
1997, 1998, 1999, 2000, and 2001 such sums as are
necessary for payment to the Fund in a total
amount not to exceed $2,000,000,000.
‘‘(3) GRANTS.—
‘‘(A) PROVISIONAL PAYMENTS.—If an eli-
gible State submits to the Secretary a request
for funds under this paragraph during an eligi-
ble month, the Secretary shall, subject to this
paragraph, pay to the State, from amounts ap-
propriated pursuant to paragraph (2), an
amount equal to the amount of funds so re-
quested.
‘‘(B) PAYMENT PRIORITY.—The Secretary
shall make payments under subparagraph (A)
in the order in which the Secretary receives re-
quests for such payments.
‘‘(C) LIMITATIONS.—
‘‘(i) 
MONTHLY
PAYMENT
TO
A
STATE.—The total amount paid to a single
State under subparagraph (A) during a
663
month shall not exceed 1⁄12 of 20 percent
of the State family assistance grant.
‘‘(ii) PAYMENTS
TO
ALL
STATES.—
The total amount paid to all States under
subparagraph (A) during fiscal years 1997
through 2001 shall not exceed the total
amount appropriated pursuant to para-
graph (2).
‘‘(4) ANNUAL RECONCILIATION.—Notwithstand-
ing paragraph (3), at the end of each fiscal year,
each State shall remit to the Secretary an amount
equal to the amount (if any) by which the total
amount paid to the State under paragraph (3) dur-
ing the fiscal year exceeds—
‘‘(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 under the State pro-
gram funded under this part for the fiscal year
exceed historic State expenditures (as defined in
section 409(a)(7)(B)(iii)); multiplied by
‘‘(B) 1⁄12 times the number of months dur-
ing the fiscal year for which the Secretary
664
makes a payment to the State under this sub-
section.
‘‘(5) ELIGIBLE MONTH.—As used in paragraph
(3)(A), the term ‘eligible month’ means, with respect
to a State, a month in the 2-month period that be-
gins with any month for which the State is a needy
State.
‘‘(6) NEEDY
STATE.—For purposes of para-
graph (5), a State is a needy State for a month if—
‘‘(A) the average rate of—
‘‘(i) total unemployment in such State
(seasonally adjusted) for the period con-
sisting of the most recent 3 months for
which data for all States are published
equals or exceeds 6.5 percent; and
‘‘(ii) total unemployment in such
State (seasonally adjusted) for the 3-
month period equals or exceeds 110 per-
cent of such average rate for either (or
both) of the corresponding 3-month periods
ending in the 2 preceding calendar years;
or
‘‘(B) as determined by the Secretary of
Agriculture (in the discretion of the Secretary
of Agriculture), the monthly average number of
665
individuals (as of the last day of each month)
participating in the food stamp program in the
State in the then most recently concluded 3-
month period for which data are available ex-
ceeds by not less than 10 percent the lesser
of—
‘‘(i) the monthly average number of
individuals (as of the last day of each
month) in the State that would have par-
ticipated in the food stamp program in the
corresponding 3-month period in fiscal
year 1994 if the amendments made by
subtitles D and J of the Personal Respon-
sibility and Work Opportunity Act of 1996
had been in effect throughout fiscal year
1994; or
‘‘(ii) the monthly average number of
individuals (as of the last day of each
month) in the State that would have par-
ticipated in the food stamp program in the
corresponding 3-month period in fiscal
year 1995 if the amendments made by
subtitles D and J of the Personal Respon-
sibility and Work Opportunity Act of 1996
666
had been in effect throughout fiscal year
1995.
‘‘(7) OTHER TERMS DEFINED.—As used in this
subsection:
‘‘(A) STATE.—The term ‘State’ means
each of the 50 States of the United States and
the District of Columbia.
‘‘(B) SECRETARY.—The term ‘Secretary’
means the Secretary of the Treasury.
‘‘(8) ANNUAL REPORTS.—The Secretary shall
annually report to the Congress on the status of the
Fund.
‘‘(9) BUDGET SCORING.—Notwithstanding sec-
tion 257(b)(2) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985, the baseline shall
assume that no grant shall be made under this sub-
section after fiscal year 2001.
‘‘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-
667
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 30 percent of the amount of the grant made to
668
the State under section 403 for a fiscal year to carry
out a State program pursuant to any or all of the
following provisions of law:
‘‘(A) Part B or E of this title.
‘‘(B) Title XX of this Act.
‘‘(C) 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 a provision of law spec-
ified or described in paragraph (1) 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 the provision of law 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
669
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
670
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
individual has been overpaid under the State pro-
671
gram funded under this part, the Secretary of the
Treasury shall determine whether any amounts as
refunds of Federal taxes paid are payable to such
individual, regardless of whether the individual filed
a tax return 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
672
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.
673
‘‘(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(a)(1).
‘‘(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.
674
‘‘(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.
‘‘(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:
1996 ...................................................................
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:
675
The minimum
participation
‘‘If the fiscal year is:
rate is:
1996 ...................................................................
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
676
‘‘(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
not been subject to such penalty for
more than 3 months within the pre-
ceding 12-month period (whether or
not consecutive).
‘‘(2) 2-PARENT FAMILIES.—
‘‘(A) AVERAGE MONTHLY RATE.—For pur-
poses of subsection (a)(2), the participation
rate for 2-parent families of a State for a fiscal
year is the average of the participation rates for
2-parent families of the State for each month in
the fiscal year.
‘‘(B) MONTHLY PARTICIPATION RATES.—
The participation rate of a State for 2-parent
families of the State for a month shall be cal-
culated by use of the formula set forth in para-
graph (1)(B), except that in the formula the
term ‘number of 2-parent families’ shall be sub-
stituted for the term ‘number of families’ each
place such latter term appears.
677
‘‘(3) PRO RATA REDUCTION OF PARTICIPATION
RATE
DUE
TO
CASELOAD
REDUCTIONS
NOT
RE-
QUIRED BY FEDERAL LAW.—
‘‘(A) IN
GENERAL.—The Secretary shall
prescribe regulations for reducing the minimum
participation rate otherwise required by this
section for a fiscal year by the number of per-
centage points equal to the number of percent-
age points (if any) by which—
‘‘(i) the average monthly number of
families receiving assistance during the fis-
cal year under the State program funded
under this part is less than, and
‘‘(ii) the average monthly number of
families that received aid under the State
plan approved under part A (as in effect
on September 30, 1995) during fiscal year
1995.
The minimum participation rate shall not be re-
duced to the extent that the Secretary deter-
mines that the reduction in the number of fami-
lies receiving such assistance is required by
Federal law.
‘‘(B) ELIGIBILITY CHANGES NOT COUNT-
ED.—The regulations described in subpara-
678
graph (A) shall not take into account families
that are diverted from a State program funded
under this part as a result of differences in eli-
gibility criteria under a State program funded
under this part and eligibility criteria under the
State program operated under the State plan
approved under part A (as such plan and such
part were in effect on September 30, 1995).
Such regulations shall place the burden on the
Secretary to prove that such families were di-
verted as a direct result of differences in such
eligibility criteria.
‘‘(4) STATE OPTION TO INCLUDE INDIVIDUALS
RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY
ASSISTANCE
PLAN.—For purposes of paragraphs
(1)(B) and (2)(B), a State may, at its option, in-
clude families receiving assistance under a tribal
family assistance plan approved under section 412.
‘‘(5) STATE
OPTION
FOR
PARTICIPATION
RE-
QUIREMENT EXEMPTIONS.—For any fiscal year, a
State may, at its option, not require an individual
who is a single custodial parent caring for a child
who has not attained 12 months of age to engage in
work and may disregard such an individual in deter-
mining the participation rates under subsection (a).
679
‘‘(c) ENGAGED IN WORK.—
‘‘(1) ALL
FAMILIES.—For purposes of sub-
section (b)(1)(B)(i), a recipient is engaged in work
for a month in a fiscal year if the recipient is par-
ticipating in work 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 paragraph (1), (2), (3), (4), (5), (6),
(7), or (8) of subsection (d):
The minimum
‘‘If the month is
average number of
in fiscal year:
hours per week is:
1996 ...............................................................
1997 ...............................................................
1998 ...............................................................
1999 or thereafter .........................................
25.
‘‘(2) 2-PARENT
FAMILIES.—For purposes of
subsection (b)(2)(B)(i), an adult is engaged in work
for a month in a fiscal year if the adult is making
progress in work 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 de-
scribed in paragraph (1), (2), (3), (4), (5), (6), (7),
or (8) of subsection (d).
‘‘(3) LIMITATION ON NUMBER OF WEEKS FOR
WHICH JOB SEARCH COUNTS AS WORK.—Notwith-
standing paragraphs (1) and (2), an individual shall
not be considered to be engaged in work by virtue
680
of participation in an activity described in subsection
(d)(6), after the individual has participated in such
an activity for 12 weeks in a fiscal year. An individ-
ual shall be considered to be participating in such an
activity for a week if the individual participates in
such an activity at any time during the week.
‘‘(4) LIMITATION ON VOCATIONAL EDUCATION
ACTIVITIES COUNTED AS WORK.—For purposes of
determining monthly participation rates under para-
graphs (1)(B)(i) and (2)(B)(i) of subsection (b), not
more than 20 percent of adults in all families and
in 2-parent families determined to be engaged in
work in the State for a month may meet the work
activity requirement through participation in voca-
tional educational training.
‘‘(5) SINGLE PARENT WITH CHILD UNDER AGE
6 DEEMED TO BE MEETING WORK PARTICIPATION
REQUIREMENTS IF PARENT IS ENGAGED IN WORK
FOR 20 HOURS PER WEEK.—For purposes of deter-
mining monthly participation rates under subsection
(b)(1)(B)(i), a recipient in a 1-parent family who is
the parent of a child who has not attained 6 years
of age is deemed to be engaged in work for a month
if the recipient is engaged in work for an average of
at least 20 hours per week during the month.
681
‘‘(6) TEEN HEAD OF HOUSEHOLD WHO MAIN-
TAINS
SATISFACTORY
SCHOOL
ATTENDANCE
DEEMED TO BE MEETING WORK PARTICIPATION RE-
QUIREMENTS.—For purposes of determining month-
ly participation rates under subsection (b)(1)(B)(i),
a recipient who is a single head of household and
has not attained 20 years of age is deemed to be en-
gaged in work for a month in a fiscal year if the re-
cipient—
‘‘(A) maintains satisfactory attendance at
secondary school or the equivalent during the
month; or
‘‘(B) participates in education directly re-
lated to employment for at least the minimum
average number of hours per week specified in
the table set forth in paragraph (1).
‘‘(d) WORK ACTIVITIES DEFINED.—As used in this
section, the term ‘work activities’ means—
‘‘(1) unsubsidized employment;
‘‘(2) subsidized private sector employment;
‘‘(3) subsidized public sector employment;
‘‘(4) work experience (including work associated
with the refurbishing of publicly assisted housing) if
sufficient private sector employment is not available;
‘‘(5) on-the-job training;
682
‘‘(6) job search and job readiness assistance;
‘‘(7) community service programs;
‘‘(8) vocational educational training (not to ex-
ceed 12 months with respect to any individual);
‘‘(9) job skills training directly related to em-
ployment;
‘‘(10) education directly related to employment,
in the case of a recipient who has not attained 20
years of age, and has not received a high school di-
ploma or a certificate of high school equivalency; and
‘‘(11) satisfactory attendance at secondary
school, in the case of a recipient who—
‘‘(A) has not completed secondary school;
and
‘‘(B) is a dependent child, or a head of
household who has not attained 20 years of age.
‘‘(e) PENALTIES AGAINST INDIVIDUALS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), if an adult in a family receiving assist-
ance under the State program funded under this
part refuses to engage in work required in accord-
ance with this section, the State shall—
‘‘(A) reduce the amount of assistance oth-
erwise payable to the family pro rata (or more,
at the option of the State) with respect to any
683
period during a month in which the adult so re-
fuses; or
‘‘(B) terminate such assistance,
subject to such good cause and other exceptions as
the State may establish.
‘‘(2) EXCEPTION.—Notwithstanding paragraph
(1), a State may not reduce or terminate assistance
under the State program funded under this part
based on a refusal of an adult to work if the adult
is a single custodial parent caring for a child who
has not attained 6 years of age, and the adult proves
that the adult has a demonstrated inability (as de-
termined by the State) to obtain needed child care,
for 1 or more of the following reasons:
‘‘(A) Unavailability of appropriate child
care within a reasonable distance from the indi-
vidual’s home or work site.
‘‘(B) Unavailability or unsuitability of in-
formal child care by a relative or under other
arrangements.
‘‘(C) Unavailability of appropriate and af-
fordable formal child care arrangements.
‘‘(f) NONDISPLACEMENT IN WORK ACTIVITIES.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
an adult in a family receiving assistance under a
684
State program funded under this part attributable to
funds provided by the Federal Government may fill
a vacant employment position in order to engage in
a work activity described in subsection (d).
‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No
adult in a work activity described in subsection (d)
which is funded, in whole or in part, by funds pro-
vided by the Federal Government shall be employed
or assigned—
‘‘(A) when any other individual is on layoff
from the same or any substantially equivalent
job; or
‘‘(B) if the employer has terminated the
employment of any regular employee or other-
wise caused an involuntary reduction of its
workforce in order to fill the vacancy so created
with an adult described in paragraph (1).
‘‘(3) NO PREEMPTION.—Nothing in this sub-
section shall preempt or supersede any provision of
State or local law that provides greater protection
for employees from displacement.
‘‘(g) SENSE OF THE CONGRESS.—It is the sense of
the Congress that in complying with this section, each
State that operates a program funded under this part is
encouraged to assign the highest priority to requiring
685
adults in 2-parent families and adults in single-parent
families that include older preschool or school-age children
to be engaged in work activities.
‘‘(h) SENSE
OF
THE CONGRESS THAT STATES
SHOULD IMPOSE CERTAIN REQUIREMENTS
ON NON-
CUSTODIAL, NONSUPPORTING MINOR PARENTS.—It is the
sense of the Congress that the States should require non-
custodial, nonsupporting parents who have not attained 18
years of age to fulfill community work obligations and at-
tend appropriate parenting or money management classes
after school.
‘‘SEC. 408. PROHIBITIONS; REQUIREMENTS.
‘‘(a) IN GENERAL.—
‘‘(1) NO ASSISTANCE FOR FAMILIES WITHOUT A
MINOR CHILD.—A State to which a grant is made
under section 403 shall not use any part of the
grant to provide assistance to a family, unless the
family includes—
‘‘(A) a minor child who resides with a cus-
todial parent or other adult caretaker relative of
the child; or
‘‘(B) a pregnant individual.
‘‘(2) NO
ADDITIONAL
CASH
ASSISTANCE
FOR
CHILDREN BORN TO FAMILIES RECEIVING ASSIST-
ANCE.—
686
‘‘(A) GENERAL RULE.—A State to which a
grant is made under section 403 shall not use
any part of the grant to provide cash benefits
for a minor child who is born to—
‘‘(i) a recipient of assistance under
the program operated under this part; or
‘‘(ii) a person who received such as-
sistance at any time during the 10-month
period ending with the birth of the child.
‘‘(B) EXCEPTION
FOR
CHILDREN
BORN
INTO FAMILIES WITH NO OTHER CHILDREN.—
Subparagraph (A) shall not apply to a minor
child who is born into a family that does not in-
clude any other children.
‘‘(C) EXCEPTION
FOR
VOUCHERS.—Sub-
paragraph (A) shall not apply to vouchers
which are provided in lieu of cash benefits and
which may be used only to pay for particular
goods and services specified by the State as
suitable for the care of the child involved.
‘‘(D) EXCEPTION FOR RAPE OR INCEST.—
Subparagraph (A) shall not apply with respect
to a child who is born as a result of rape or in-
cest.
687
‘‘(E) STATE ELECTION TO OPT OUT.—Sub-
paragraph (A) shall not apply to a State if
State law specifically exempts the State pro-
gram funded under this part from the applica-
tion of subparagraph (A).
‘‘(F) SUBSTITUTION OF FAMILY CAPS IN
EFFECT UNDER WAIVERS.—Subparagraph (A)
shall not apply to a State—
‘‘(i) if, as of the date of the enactment
of this part, there is in effect a waiver ap-
proved by the Secretary under section
1115 which permits the State to deny aid
under the State plan approved under part
A of this title (as in effect without regard
to the amendments made by subtitle A of
the Personal Responsibility and Work Op-
portunity Act of 1996) to a family by rea-
son of the birth of a child to a family
member otherwise eligible for such aid; and
‘‘(ii) for so long as the State contin-
ues to implement such policy under the
State program funded under this part,
under rules prescribed by the State.
‘‘(3) REDUCTION OR ELIMINATION OF ASSIST-
ANCE FOR NONCOOPERATION IN ESTABLISHING PA-
688
TERNITY
OR
OBTAINING
CHILD
SUPPORT.—If the
agency responsible for administering the State plan
approved under part D determines that an individual
is not cooperating with the State in establishing pa-
ternity or in establishing, modifying, or enforcing a
support order with respect to a child of the individ-
ual, and the individual does not qualify for any good
cause or other exception established by the State
pursuant to section 454(29), then the State—
‘‘(A) shall deduct from the assistance that
would otherwise be provided to the family of the
individual under the State program funded
under this part the share of such assistance at-
tributable to the individual; and
‘‘(B) may deny the family any assistance
under the State program.
‘‘(4) NO ASSISTANCE FOR FAMILIES NOT AS-
SIGNING
CERTAIN
SUPPORT
RIGHTS
TO
THE
STATE.—
‘‘(A) IN GENERAL.—A State to which a
grant is made under section 403 shall require,
as a condition of providing assistance to a fam-
ily under the State program funded under this
part, that a member of the family assign to the
State any rights the family member may have
689
(on behalf of the family member or of any other
person for whom the family member has applied
for or is receiving such assistance) to support
from any other person, not exceeding the total
amount of assistance so provided to the family,
which accrue (or have accrued) before the date
the family leaves the program, which assign-
ment, on and after the date the family leaves
the program, shall not apply with respect to any
support (other than support collected pursuant
to section 464) which accrued before the family
received such assistance and which the State
has not collected by—
‘‘(i) September 30, 2000, if the as-
signment is executed on or after October 1,
1997, and before October 1, 2000; or
‘‘(ii) the date the family leaves the
program, if the assignment is executed on
or after October 1, 2000.
‘‘(B) LIMITATION.—A State to which a
grant is made under section 403 shall not re-
quire, as a condition of providing assistance to
any family under the State program funded
under this part, that a member of the family
assign to the State any rights to support de-
690
scribed in subparagraph (A) which accrue after
the date the family leaves the program.
‘‘(5) NO ASSISTANCE FOR TEENAGE PARENTS
WHO
DO
NOT
ATTEND
HIGH
SCHOOL
OR
OTHER
EQUIVALENT
TRAINING
PROGRAM.—A State to
which a grant is made under section 403 shall not
use any part of the grant to provide assistance to an
individual who has not attained 18 years of age, is
not married, has a minor child at least 12 weeks of
age in his or her care, and has not successfully com-
pleted a high-school education (or its equivalent), if
the individual does not participate in—
‘‘(A) educational activities directed toward
the attainment of a high school diploma or its
equivalent; or
‘‘(B) an alternative educational or training
program that has been approved by the State.
‘‘(6) NO ASSISTANCE FOR TEENAGE PARENTS
NOT LIVING IN ADULT-SUPERVISED SETTINGS.—
‘‘(A) IN GENERAL.—
‘‘(i) REQUIREMENT.—Except as pro-
vided in subparagraph (B), a State to
which a grant is made under section 403
shall not use any part of the grant to pro-
vide assistance to an individual described
691
in clause (ii) of this subparagraph if the
individual and the minor child referred to
in clause (ii)(II) do not reside in a place of
residence maintained by a parent, legal
guardian, or other adult relative of the in-
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
692
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
and the minor child referred to in subpara-
graph (A)(ii)(II) reside in such living ar-
rangement as a condition of the continued
receipt of assistance under the State pro-
gram funded under this part attributable
to funds provided by the Federal Govern-
ment (or in an alternative appropriate ar-
rangement, should circumstances change
and the current arrangement cease to be
appropriate).
‘‘(ii) INDIVIDUAL
DESCRIBED.—For
purposes of clause (i), an individual is de-
scribed in this clause if the individual is
described in subparagraph (A)(ii), and—
‘‘(I) the individual has no parent,
legal guardian or other appropriate
adult relative described in subclause
(II) of his or her own who is living or
whose whereabouts are known;
693
‘‘(II) no living parent, legal
guardian, or other appropriate adult
relative, who would otherwise meet
applicable State criteria to act as the
individual’s legal guardian, of such in-
dividual allows the individual to live in
the home of such parent, guardian, or
relative;
‘‘(III) the State agency deter-
mines that—
‘‘(aa) the individual or the
minor child referred to in sub-
paragraph (A)(ii)(II) is being or
has been subjected to serious
physical or emotional harm, sex-
ual abuse, or exploitation in the
residence of the individual’s own
parent or legal guardian; or
‘‘(bb) substantial evidence
exists of an act or failure to act
that presents an imminent or se-
rious harm if the individual and
the minor child lived in the same
residence with the individual’s
own parent or legal guardian; or
694
‘‘(IV) the State agency otherwise
determines that it is in the best inter-
est of the minor child to waive the re-
quirement of subparagraph (A) with
respect to the individual or the minor
child.
‘‘(iii) SECOND-CHANCE
HOME.—For
purposes of this subparagraph, the term
‘second-chance home’ means an entity that
provides individuals described in clause (ii)
with a supportive and supervised living ar-
rangement in which such individuals are
required to learn parenting skills, including
child development, family budgeting, health
and nutrition, and other skills to promote
their long-term economic independence and
the well-being of their children.
‘‘(7) NO MEDICAL SERVICES.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), a State to which a grant is
made under section 403 shall not use any part
of the grant to provide medical services.
‘‘(B) EXCEPTION FOR FAMILY PLANNING
SERVICES.—As used in subparagraph (A), the
695
term ‘medical services’ does not include family
planning services.
‘‘(8) NO
ASSISTANCE
FOR
MORE
THAN
YEARS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) and (C), a State to which a
grant is made under section 403 shall not use
any part of the grant to provide assistance to
a family that includes an adult who has re-
ceived assistance under any State program
funded under this part attributable to funds
provided by the Federal Government, for 60
months (whether or not consecutive) after the
date the State program funded under this part
commences.
‘‘(B) MINOR CHILD EXCEPTION.—In deter-
mining the number of months for which an in-
dividual who is a parent or pregnant has re-
ceived assistance under the State program
funded under this part, the State shall dis-
regard any month for which such assistance
was provided with respect to the individual and
during which the individual was—
‘‘(i) a minor child; and
696
‘‘(ii) not the head of a household or
married to the head of a household.
‘‘(C) HARDSHIP EXCEPTION.—
‘‘(i) IN GENERAL.—The State may ex-
empt a family from the application of sub-
paragraph (A) by reason of hardship or if
the family includes an individual who has
been battered or subjected to extreme cru-
elty.
‘‘(ii) LIMITATION.—The number of
families with respect to which an exemp-
tion made by a State under clause (i) is in
effect for a fiscal year shall not exceed 20
percent of the average monthly number of
families to which assistance is provided
under the State program funded under this
part.
‘‘(iii) BATTERED OR SUBJECT TO EX-
TREME CRUELTY DEFINED.—For purposes
of clause (i), an individual has been bat-
tered or subjected to extreme cruelty if the
individual has been subjected to—
‘‘(I) physical acts that resulted
in, or threatened to result in, physical
injury to the individual;
697
‘‘(II) sexual abuse;
‘‘(III) sexual activity involving a
dependent child;
‘‘(IV) being forced as the care-
taker relative of a dependent child to
engage in nonconsensual sexual acts
or activities;
‘‘(V) threats of, or attempts at,
physical or sexual abuse;
‘‘(VI) mental abuse; or
‘‘(VII) neglect or deprivation of
medical care.
‘‘(D) RULE
OF
INTERPRETATION.—Sub-
paragraph (A) shall not be interpreted to re-
quire any State to provide assistance to any in-
dividual for any period of time under the State
program funded under this part.
‘‘(9) DENIAL OF ASSISTANCE FOR 10 YEARS TO
A PERSON FOUND TO HAVE FRAUDULENTLY MIS-
REPRESENTED RESIDENCE IN ORDER TO OBTAIN AS-
SISTANCE IN 2 OR MORE STATES.—A State to which
a grant is made under section 403 shall not use any
part of the grant to provide cash assistance to an in-
dividual during the 10-year period that begins on
the date the individual is convicted in Federal or
698
State court of having made a fraudulent statement
or representation with respect to the place of resi-
dence of the individual in order to receive assistance
simultaneously from 2 or more States under pro-
grams that are funded under this title, title XV or
XIX, or the Food Stamp Act of 1977, or benefits in
2 or more States under the supplemental security in-
come program under title XVI. The preceding sen-
tence shall not apply with respect to a conviction of
an individual, for any month beginning after the
President of the United States grants a pardon with
respect to the conduct which was the subject of the
conviction.
‘‘(10) DENIAL OF ASSISTANCE FOR FUGITIVE
FELONS
AND
PROBATION
AND
PAROLE
VIOLA-
TORS.—
‘‘(A) IN GENERAL.—A State to which a
grant is made under section 403 shall not use
any part of the grant to provide assistance to
any individual who is—
‘‘(i) fleeing to avoid prosecution, or
custody or confinement after conviction,
under the laws of the place from which the
individual flees, for a crime, or an attempt
to commit a crime, which is a felony under
699
the laws of the place from which the indi-
vidual flees, or which, in the case of the
State of New Jersey, is a high mis-
demeanor under the laws of such State; or
‘‘(ii) violating a condition of probation
or parole imposed under Federal or State
law.
The preceding sentence shall not apply with re-
spect to conduct of an individual, for any month
beginning after the President of the United
States grants a pardon with respect to the con-
duct.
‘‘(B) EXCHANGE OF INFORMATION WITH
LAW ENFORCEMENT AGENCIES.—If a State to
which a grant is made under section 403 estab-
lishes safeguards against the use or disclosure
of information about applicants or recipients of
assistance under the State program funded
under this part, the safeguards shall not pre-
vent the State agency administering the pro-
gram from furnishing a Federal, State, or local
law enforcement officer, upon the request of the
officer, with the current address of any recipi-
ent if the officer furnishes the agency with the
700
name of the recipient and notifies the agency
that—
‘‘(i) the recipient—
‘‘(I) is described in subparagraph
(A); or
‘‘(II) has information that is nec-
essary for the officer to conduct the
official duties of the officer; and
‘‘(ii) the location or apprehension of
the recipient is within such official duties.
‘‘(11) DENIAL
OF
ASSISTANCE
FOR
MINOR
CHILDREN WHO ARE ABSENT FROM THE HOME FOR
A SIGNIFICANT PERIOD.—
‘‘(A) IN GENERAL.—A State to which a
grant is made under section 403 shall not use
any part of the grant to provide assistance for
a minor child who has been, or is expected by
a parent (or other caretaker relative) of the
child to be, absent from the home for a period
of 45 consecutive days or, at the option of the
State, such period of not less than 30 and not
more than 180 consecutive days as the State
may provide for in the State plan submitted
pursuant to section 402.
701
‘‘(B) STATE
AUTHORITY
TO
ESTABLISH
GOOD CAUSE EXCEPTIONS.—The State may es-
tablish such good cause exceptions to subpara-
graph (A) as the State considers appropriate if
such exceptions are provided for in the State
plan submitted pursuant to section 402.
‘‘(C) DENIAL
OF
ASSISTANCE
FOR
REL-
ATIVE WHO FAILS TO NOTIFY STATE AGENCY
OF ABSENCE OF CHILD.—A State to which a
grant is made under section 403 shall not use
any part of the grant to provide assistance for
an individual who is a parent (or other care-
taker relative) of a minor child and who fails to
notify the agency administering the State pro-
gram funded under this part of the absence of
the minor child from the home for the period
specified in or provided for pursuant to sub-
paragraph (A), by the end of the 5-day period
that begins with the date that it becomes clear
to the parent (or relative) that the minor child
will be absent for such period so specified or
provided for.
‘‘(12) INCOME SECURITY PAYMENTS NOT TO BE
DISREGARDED
IN
DETERMINING
THE
AMOUNT
OF
ASSISTANCE TO BE PROVIDED TO A FAMILY.—If a
702
State to which a grant is made under section 403
uses any part of the grant to provide assistance for
any individual who is receiving benefits, or on behalf
of whom benefits are paid, under a State plan for
old-age assistance approved under section 2, under
section 202, 205(j)(1), 223, or 228, under a State
program funded under part E that provides cash
payments for foster care, or under the supplemental
security income program under title XVI, then the
State may disregard the payment in determining the
amount of assistance to be provided under the State
program funded under this part, from funds pro-
vided by the Federal Government, to the family of
which the individual is a member.
‘‘(13) MEDICAL ASSISTANCE REQUIRED TO BE
PROVIDED FOR 1 YEAR FOR FAMILIES BECOMING IN-
ELIGIBLE FOR ASSISTANCE UNDER THIS PART DUE
TO INCREASED EARNINGS FROM EMPLOYMENT OR
COLLECTION OF CHILD SUPPORT.—A State to which
a grant is made under section 403 shall take such
action as may be necessary to ensure that, if any
family becomes ineligible to receive assistance under
the State program funded under this part as a re-
sult of increased earnings from employment or as a
result of the collection or increased collection of child
703
or spousal support, or a combination thereof, having
received such assistance in at least 3 of the 6
months immediately preceding the month in which
such ineligibility begins, the family shall be eligible
for medical assistance under the State’s plan ap-
proved under title XIX (or, if applicable, title XV)
during the immediately succeeding 12-month period
for so long as family income (as defined by the
State), excluding any refund of Federal income taxes
made by reason of section 32 of the Internal Reve-
nue Code of 1986 (relating to earned income tax
credit) and any payment made by an employer under
section 3507 of such Code (relating to advance pay-
ment of earned income credit), is less than the pov-
erty line, and that the family will be appropriately
notified of such eligibility.
‘‘(14) MEDICAL ASSISTANCE REQUIRED TO BE
PROVIDED
FOR
ALL
RECIPIENTS
OF
ASSISTANCE
UNDER THIS PART.—A State to which a grant is
made under section 403 shall take such action as
may be necessary to ensure that each recipient of as-
sistance under the State program funded under this
part is eligible for medical assistance under the
State’s plan approved under title XIX (or, if applica-
ble, title XV) to the extent that the health care costs
704
of the recipient are not covered by other health in-
surance.
‘‘(b) ALIENS.—For special rules relating to the treat-
ment of aliens, see section 4402 of the Personal Respon-
sibility and Work Opportunity Act of 1996.
‘‘SEC. 409. PENALTIES.
‘‘(a) IN GENERAL.—Subject to this section:
‘‘(1) USE OF GRANT IN VIOLATION OF THIS
PART.—
‘‘(A) GENERAL
PENALTY.—If an audit
conducted under chapter 75 of title 31, United
States Code, finds that an amount paid to a
State under section 403 for a fiscal year has
been used in violation of this part, the Sec-
retary shall reduce the grant payable to the
State under section 403(a)(1) for the imme-
diately succeeding fiscal year quarter by the
amount so used.
‘‘(B) ENHANCED
PENALTY
FOR
INTEN-
TIONAL
VIOLATIONS.—If the State does not
prove to the satisfaction of the Secretary that
the State did not intend to use the amount in
violation of this part, the Secretary shall fur-
ther reduce the grant payable to the State
under section 403(a)(1) for the immediately
705
succeeding fiscal year quarter by an amount
equal to 5 percent of the State family assist-
ance grant.
‘‘(2) FAILURE
TO
SUBMIT
REQUIRED
RE-
PORT.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State has not, within 1 month
after the end of a fiscal quarter, submitted the
report required by section 411(a) for the quar-
ter, the Secretary shall reduce the grant pay-
able to the State under section 403(a)(1) for
the immediately succeeding fiscal year by an
amount equal to 4 percent of the State family
assistance grant.
‘‘(B) RESCISSION OF PENALTY.—The Sec-
retary shall rescind a penalty imposed on a
State under subparagraph (A) with respect to a
report if the State submits the report before the
end of the fiscal quarter that immediately suc-
ceeds the fiscal quarter for which the report
was required.
‘‘(3) FAILURE TO SATISFY MINIMUM PARTICIPA-
TION RATES.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
706
under section 403 for a fiscal year has failed to
comply with section 407(a) for the fiscal year,
the Secretary shall reduce the grant payable to
the State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
equal to not more than 5 percent of the State
family assistance grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) based on the de-
gree of noncompliance.
‘‘(4) FAILURE TO PARTICIPATE IN THE INCOME
AND
ELIGIBILITY
VERIFICATION
SYSTEM.—If the
Secretary determines that a State program funded
under this part is not participating during a fiscal
year in the income and eligibility verification system
required by section 1137, the Secretary shall reduce
the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year
by an amount equal to not more than 2 percent of
the State family assistance grant.
‘‘(5) FAILURE TO COMPLY WITH PATERNITY ES-
TABLISHMENT AND CHILD SUPPORT ENFORCEMENT
REQUIREMENTS UNDER PART D.—Notwithstanding
any other provision of this Act, if the Secretary de-
707
termines that the State agency that administers a
program funded under this part does not enforce the
penalties requested by the agency administering part
D against recipients of assistance under the State
program who fail to cooperate in establishing pater-
nity or in establishing, modifying, or enforcing a
child support order in accordance with such part and
who do not qualify for any good cause or other ex-
ception established by the State under section
454(29), the Secretary shall reduce the grant pay-
able to the State under section 403(a)(1) for the im-
mediately succeeding fiscal year (without regard to
this section) by not more than 5 percent.
‘‘(6) FAILURE TO TIMELY REPAY A FEDERAL
LOAN FUND FOR STATE WELFARE PROGRAMS.—If
the Secretary determines that a State has failed to
repay any amount borrowed from the Federal Loan
Fund for State Welfare Programs established under
section 406 within the period of maturity applicable
to the loan, plus any interest owed on the loan, the
Secretary shall reduce the grant payable to the State
under section 403(a)(1) for the immediately succeed-
ing fiscal year quarter (without regard to this sec-
tion) by the outstanding loan amount, plus the inter-
est owed on the outstanding amount. The Secretary
708
shall not forgive any outstanding loan amount or in-
terest owed on the outstanding amount.
‘‘(7) FAILURE
OF
ANY
STATE
TO
MAINTAIN
CERTAIN LEVEL OF HISTORIC EFFORT.—
‘‘(A) IN
GENERAL.—The Secretary shall
reduce the grant payable to the State under
section 403(a)(1) for fiscal year 1998, 1999,
2000, 2001, or 2002 by the amount (if any) by
which qualified State expenditures for the then
immediately preceding fiscal year are less than
the applicable percentage of historic State ex-
penditures with respect to such preceding fiscal
year.
‘‘(B) DEFINITIONS.—As used in this para-
graph:
‘‘(i) 
QUALIFIED
STATE
EXPENDI-
TURES.—
‘‘(I) IN
GENERAL.—The term
‘qualified State expenditures’ means,
with respect to a State and a fiscal
year, the total expenditures by the
State during the fiscal year, under all
State programs, for any of the follow-
ing with respect to eligible families:
‘‘(aa) Cash assistance.
709
‘‘(bb) Child care assistance.
‘‘(cc) Educational activities
designed to increase self-suffi-
ciency, job training, and work,
excluding any expenditure for
public education in the State ex-
cept expenditures which involve
the provision of services or assist-
ance to a member of an eligible
family which is not generally
available to persons who are not
members of an eligible family.
‘‘(dd) Administrative costs
in connection with the matters
described in items (aa), (bb),
(cc), and (ee), but only to the ex-
tent that such costs do not ex-
ceed 15 percent of the total
amount of qualified State ex-
penditures for the fiscal year.
‘‘(ee) Any other use of funds
allowable 
under 
section
404(a)(1).
‘‘(II) EXCLUSION OF TRANSFERS
FROM OTHER STATE AND LOCAL PRO-
710
GRAMS.—Such term does not include
expenditures under any State or local
program during a fiscal year, except
to the extent that—
‘‘(aa) the expenditures ex-
ceed the amount expended under
the State or local program in the
fiscal year most recently ending
before the date of the enactment
of this part; or
‘‘(bb) the State is entitled to
a payment under former section
403 (as in effect immediately be-
fore such date of enactment) with
respect to the expenditures.
‘‘(III) ELIGIBLE
FAMILIES.—As
used in subclause (I), the term ‘eligi-
ble families’ means families eligible
for assistance under the State pro-
gram funded under this part, and
families that would be eligible for such
assistance but for the application of
section 408(a)(8) of this Act or sec-
tion 4402 of the Personal Responsibil-
711
ity and Work Opportunity Act of
1996.
‘‘(ii) APPLICABLE PERCENTAGE.—The
term ‘applicable percentage’ means for fis-
cal years 1997 through 2001, 75 percent
reduced (if appropriate) in accordance with
subparagraph (C)(ii).
‘‘(iii) 
HISTORIC
STATE
EXPENDI-
TURES.—The term ‘historic State expendi-
tures’ means, with respect to a State, the
lesser of—
‘‘(I) the expenditures by the
State under parts A and F (as in ef-
fect during fiscal year 1994) for fiscal
year 1994; or
‘‘(II) the amount which bears the
same ratio to the amount described in
subclause (I) as—
‘‘(aa) the State family as-
sistance grant, plus the total
amount required to be paid to
the State under former section
403 for fiscal year 1994 with re-
spect to amounts expended by
the State for child care under
712
subsection (g) or (i) of section
402 (as in effect during fiscal
year 1994); bears to
‘‘(bb) 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.
Such term does not include any expendi-
tures under the State plan approved under
part A (as so in effect) on behalf of indi-
viduals covered by a tribal family assist-
ance plan approved under section 412, as
determined by the Secretary.
‘‘(iv) 
EXPENDITURES
BY
THE
STATE.—The term ‘expenditures by the
State’ does not include—
‘‘(I) 
any 
expenditures 
from
amounts made available by the Fed-
eral Government;
‘‘(II) State funds expended for
the medicaid program under title XV
or XIX; or
‘‘(III) any State funds which are
used to match Federal funds or are
713
expended as a condition of receiving
Federal funds under Federal pro-
grams other than under this part.
‘‘(C) APPLICABLE PERCENTAGE REDUCED
FOR HIGH PERFORMANCE STATES.—
‘‘(i) DETERMINATION OF HIGH PER-
FORMANCE STATES.—The Secretary shall
use the formula developed under section
403(a)(4)(C) to assign a score to each eli-
gible State that represents the perform-
ance of the State program funded under
this part for each fiscal year, and shall
prescribe a performance threshold which
the Secretary shall use to determine
whether to reduce the applicable percent-
age with respect to any eligible State for a
fiscal year.
‘‘(ii) REDUCTION
PROPORTIONAL
TO
PERFORMANCE.—The Secretary shall re-
duce the applicable percentage for a fiscal
year with respect to each eligible State by
an amount which is directly proportional to
the amount (if any) by which the score as-
signed to the State under clause (i) for the
immediately preceding fiscal year exceeds
714
the 
performance 
threshold 
prescribed
under clause (i) for such preceding fiscal
year, subject to clause (iii).
‘‘(iii) LIMITATION ON REDUCTION.—
The applicable percentage for a fiscal year
with respect to a State may not be reduced
by more than 8 percentage points under
this subparagraph.
‘‘(8) SUBSTANTIAL NONCOMPLIANCE OF STATE
CHILD SUPPORT ENFORCEMENT PROGRAM WITH RE-
QUIREMENTS OF PART D.—
‘‘(A) IN
GENERAL.—If a State program
operated under part D is found as a result of
a review conducted under section 452(a)(4) not
to have complied substantially with the require-
ments of such part for any quarter, and the
Secretary determines that the program is not
complying substantially with such requirements
at the time the finding is made, the Secretary
shall reduce the grant payable to the State
under section 403(a)(1) for the quarter and
each subsequent quarter that ends before the
1st quarter throughout which the program is
found to be in substantial compliance with such
requirements by—
715
‘‘(i) not less than 1 nor more than 2
percent;
‘‘(ii) not less than 2 nor more than 3
percent, if the finding is the second con-
secutive such finding made as a result of
such a review; or
‘‘(iii) not less than 3 nor more than 5
percent, if the finding is the third or a
subsequent consecutive such finding made
as a result of such a review.
‘‘(B) DISREGARD
OF
NONCOMPLIANCE
WHICH IS OF A TECHNICAL NATURE.—For pur-
poses 
of 
subparagraph 
(A) 
and 
section
452(a)(4), a State which is not in full compli-
ance with the requirements of this part shall be
determined to be in substantial compliance with
such requirements only if the Secretary deter-
mines that any noncompliance with such re-
quirements is of a technical nature which does
not adversely affect the performance of the
State’s program operated under part D.
‘‘(9) FAILURE OF STATE RECEIVING AMOUNTS
FROM CONTINGENCY FUND TO MAINTAIN 100 PER-
CENT OF HISTORIC EFFORT.—If, at the end of any
fiscal year during which amounts from the Contin-
716
gency Fund for State Welfare Programs have been
paid to a State, the Secretary finds that the expendi-
tures under the State program funded under this
part for the fiscal year are less than 100 percent of
historic State expenditures (as defined in paragraph
(8)(B)(iii) of this subsection), the Secretary shall re-
duce the grant payable to the State under section
403(a)(1) for the immediately succeeding fiscal year
by the total of the amounts so paid to the State.
‘‘(10) FAILURE TO EXPEND ADDITIONAL STATE
FUNDS
TO
REPLACE
GRANT
REDUCTIONS.—If the
grant payable to a State under section 403(a)(1) for
a fiscal year is reduced by reason of this subsection,
the State shall, during the immediately succeeding
fiscal year, expend under the State program funded
under this part an amount equal to the total amount
of such reductions.
‘‘(11) FAILURE TO PROVIDE MEDICAL ASSIST-
ANCE TO FAMILIES BECOMING INELIGIBLE FOR AS-
SISTANCE UNDER THIS PART DUE TO INCREASED
EARNINGS FROM EMPLOYMENT OR COLLECTION OF
CHILD SUPPORT.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State program funded under this
part 
is 
not 
in 
compliance 
with 
section
717
408(a)(13) for a quarter, the Secretary shall re-
duce the grant payable to the State under sec-
tion 403(a)(1) for the immediately succeeding
fiscal year by an amount equal to not more
than 5 percent of the State family assistance
grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) based on the de-
gree of noncompliance.
‘‘(b) REASONABLE CAUSE EXCEPTION.—
‘‘(1) IN GENERAL.—The Secretary may not im-
pose a penalty on a State under subsection (a) with
respect to a requirement if the Secretary determines
that the State has reasonable cause for failing to
comply with the requirement.
‘‘(2) EXCEPTION.—Paragraph (1) of this sub-
section shall not apply to any penalty under para-
graph (7), (8), or (11) of subsection (a).
‘‘(c) CORRECTIVE COMPLIANCE PLAN.—
‘‘(1) IN GENERAL.—
‘‘(A) NOTIFICATION
OF
VIOLATION.—Be-
fore imposing a penalty against a State under
subsection (a) with respect to a violation of this
part, the Secretary shall notify the State of the
718
violation and allow the State the opportunity to
enter into a corrective compliance plan in ac-
cordance with this subsection which outlines
how the State will correct the violation and how
the State will insure continuing compliance with
this part.
‘‘(B) 60-DAY PERIOD TO PROPOSE A COR-
RECTIVE COMPLIANCE PLAN.—During the 60-
day period that begins on the date the State re-
ceives a notice provided under subparagraph
(A) with respect to a violation, the State may
submit to the Federal Government a corrective
compliance plan to correct the violation.
‘‘(C) CONSULTATION
ABOUT
MODIFICA-
TIONS.—During the 60-day period that begins
with the date the Secretary receives a corrective
compliance plan submitted by a State in accord-
ance with subparagraph (B), the Secretary may
consult with the State on modifications to the
plan.
‘‘(D) ACCEPTANCE OF PLAN.— A correc-
tive compliance plan submitted by a State in ac-
cordance with subparagraph (B) is deemed to
be accepted by the Secretary if the Secretary
does not accept or reject the plan during 60-day
719
period that begins on the date the plan is sub-
mitted.
‘‘(2) EFFECT
OF
CORRECTING
VIOLATION.—
The Secretary may not impose any penalty under
subsection (a) with respect to any violation covered
by a State corrective compliance plan accepted by
the Secretary if the State corrects the violation pur-
suant to the plan.
‘‘(3) EFFECT OF FAILING TO CORRECT VIOLA-
TION.—The Secretary shall assess some or all of a
penalty imposed on a State under subsection (a)
with respect to a violation if the State does not, in
a timely manner, correct the violation pursuant to a
State corrective compliance plan accepted by the
Secretary.
‘‘(4) INAPPLICABILITY TO FAILURE TO TIMELY
REPAY A FEDERAL LOAN FUND FOR A STATE WEL-
FARE PROGRAM.—This subsection shall not apply to
the imposition of a penalty against a State under
subsection (a)(6).
‘‘(d) LIMITATION ON AMOUNT OF PENALTY.—
‘‘(1) IN GENERAL.—In imposing the penalties
described in subsection (a), the Secretary shall not
reduce any quarterly payment to a State by more
than 25 percent.
720
‘‘(2) CARRYFORWARD OF UNRECOVERED PEN-
ALTIES.—To the extent that paragraph (1) of this
subsection prevents the Secretary from recovering
during a fiscal year the full amount of penalties im-
posed on a State under subsection (a) of this section
for a prior fiscal year, the Secretary shall apply any
remaining amount of such penalties to the grant
payable to the State under section 403(a)(1) for the
immediately succeeding fiscal year.
‘‘SEC. 410. APPEAL OF ADVERSE DECISION.
‘‘(a) IN GENERAL.—Within 5 days after the date the
Secretary takes any adverse action under this part with
respect to a State, the Secretary shall notify the chief ex-
ecutive officer of the State of the adverse action, including
any action with respect to the State plan submitted under
section 402 or the imposition of a penalty under section
409.
‘‘(b) ADMINISTRATIVE REVIEW.—
‘‘(1) IN GENERAL.—Within 60 days after the
date a State receives notice under subsection (a) of
an adverse action, the State may appeal the action,
in whole or in part, to the Departmental Appeals
Board established in the Department of Health and
Human Services (in this section referred to as the
‘Board’) by filing an appeal with the Board.
721
‘‘(2) PROCEDURAL
RULES.—The Board shall
consider an appeal filed by a State under paragraph
(1) on the basis of such documentation as the State
may submit and as the Board may require to sup-
port the final decision of the Board. In deciding
whether to uphold an adverse action or any portion
of such an action, the Board shall conduct a thor-
ough review of the issues and take into account all
relevant evidence. The Board shall make a final de-
termination with respect to an appeal filed under
paragraph (1) not less than 60 days after the date
the appeal is filed.
‘‘(c) JUDICIAL REVIEW OF ADVERSE DECISION.—
‘‘(1) IN GENERAL.—Within 90 days after the
date of a final decision by the Board under this sec-
tion with respect to an adverse action taken against
a State, the State may obtain judicial review of the
final decision (and the findings incorporated into the
final decision) by filing an action in—
‘‘(A) the district court of the United States
for the judicial district in which the principal or
headquarters office of the State agency is lo-
cated; or
‘‘(B) the United States District Court for
the District of Columbia.
722
‘‘(2) PROCEDURAL RULES.—The district court
in which an action is filed under paragraph (1) shall
review the final decision of the Board on the record
established in the administrative proceeding, in ac-
cordance with the standards of review prescribed by
subparagraphs (A) through (E) of section 706(2) of
title 5, United States Code. The review shall be on
the basis of the documents and supporting data sub-
mitted to the Board.
‘‘SEC. 411. DATA COLLECTION AND REPORTING.
‘‘(a) QUARTERLY REPORTS BY STATES.—
‘‘(1) GENERAL REPORTING REQUIREMENT.—
‘‘(A) CONTENTS OF REPORT.—Each eligi-
ble State shall collect on a monthly basis, and
report to the Secretary on a quarterly basis, the
following disaggregated case record information
on the families receiving assistance under the
State program funded under this part:
‘‘(i) The county of residence of the
family.
‘‘(ii) Whether a child receiving such
assistance or an adult in the family is dis-
abled.
‘‘(iii) The ages of the members of
such families.
723
‘‘(iv) The number of individuals in the
family, and the relation of each family
member to the youngest child in the fam-
ily.
‘‘(v) The employment status and earn-
ings of the employed adult in the family.
‘‘(vi) The marital status of the adults
in the family, including whether such
adults have never married, are widowed, or
are divorced.
‘‘(vii) The race and educational status
of each adult in the family.
‘‘(viii) The race and educational sta-
tus of each child in the family.
‘‘(ix) Whether the family received sub-
sidized housing, medical assistance under
the State plan under title XV or the State
plan approved under title XIX, food
stamps, or subsidized child care, and if the
latter 2, the amount received.
‘‘(x) The number of months that the
family has received each type of assistance
under the program.
724
‘‘(xi) If the adults participated in, and
the number of hours per week of participa-
tion in, the following activities:
‘‘(I) Education.
‘‘(II) Subsidized private sector
employment.
‘‘(III) Unsubsidized employment.
‘‘(IV) Public sector employment,
work experience, or community serv-
ice.
‘‘(V) Job search.
‘‘(VI) Job skills training or on-
the-job training.
‘‘(VII) Vocational education.
‘‘(xii) Information necessary to cal-
culate participation rates under section
407.
‘‘(xiii) The type and amount of assist-
ance received under the program, including
the amount of and reason for any reduc-
tion of assistance (including sanctions).
‘‘(xiv) Any amount of unearned in-
come received by any member of the fam-
ily.
725
‘‘(xv) The citizenship of the members
of the family.
‘‘(xvi) From a sample of closed cases,
whether the family left the program, and if
so, whether the family left due to—
‘‘(I) employment;
‘‘(II) marriage;
‘‘(III) the prohibition set forth in
section 408(a)(8);
‘‘(IV) sanction; or
‘‘(V) State policy.
‘‘(B) USE OF ESTIMATES.—
‘‘(i) AUTHORITY.—A State may com-
ply with subparagraph (A) by submitting
an estimate which is obtained through the
use of scientifically acceptable sampling
methods approved by the Secretary.
‘‘(ii) SAMPLING
AND
OTHER
METH-
ODS.—The Secretary shall provide the
States with such case sampling plans and
data collection procedures as the Secretary
deems necessary to produce statistically
valid estimates of the performance of State
programs funded under this part. The Sec-
retary may develop and implement proce-
726
dures for verifying the quality of data sub-
mitted by the States.
‘‘(2) REPORT ON USE OF FEDERAL FUNDS TO
COVER ADMINISTRATIVE COSTS AND OVERHEAD.—
The report required by paragraph (1) for a fiscal
quarter shall include a statement of the percentage
of the funds paid to the State under this part for
the quarter that are used to cover administrative
costs or overhead.
‘‘(3) REPORT
ON
STATE
EXPENDITURES
ON
PROGRAMS FOR NEEDY FAMILIES.—The report re-
quired by paragraph (1) for a fiscal quarter shall in-
clude a statement of the total amount expended by
the State during the quarter on programs for needy
families.
‘‘(4) REPORT ON NONCUSTODIAL PARENTS PAR-
TICIPATING IN WORK ACTIVITIES.—The report re-
quired by paragraph (1) for a fiscal quarter shall in-
clude the number of noncustodial parents in the
State who participated in work activities (as defined
in section 407(d)) during the quarter.
‘‘(5) REPORT
ON
TRANSITIONAL
SERVICES.—
The report required by paragraph (1) for a fiscal
quarter shall include the total amount expended by
the State during the quarter to provide transitional
727
services to a family that has ceased to receive assist-
ance under this part because of employment, along
with a description of such services.
‘‘(6) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary to de-
fine the data elements with respect to which reports
are required by this subsection.
‘‘(b) ANNUAL REPORTS TO THE CONGRESS BY THE
SECRETARY.—Not later than 6 months after the end of
fiscal year 1997, and each fiscal year thereafter, the Sec-
retary shall transmit to the Congress a report describ-
ing—
‘‘(1) whether the States are meeting—
‘‘(A) the participation rates described in
section 407(a); and
‘‘(B) the objectives of—
‘‘(i) increasing employment and earn-
ings of needy families, and child support
collections; and
‘‘(ii) decreasing out-of-wedlock preg-
nancies and child poverty;
‘‘(2) the demographic and financial characteris-
tics of families applying for assistance, families re-
ceiving assistance, and families that become ineli-
gible to receive assistance;
728
‘‘(3) the characteristics of each State program
funded under this part; and
‘‘(4) the trends in employment and earnings of
needy families with minor children living at home.
‘‘SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY IN-
DIAN TRIBES.
‘‘(a) GRANTS FOR INDIAN TRIBES.—
‘‘(1) TRIBAL FAMILY ASSISTANCE GRANT.—
‘‘(A) IN
GENERAL.—For each of fiscal
years 1997, 1998, 1999, and 2000, the Sec-
retary shall pay to each Indian tribe that has
an approved tribal family assistance plan a trib-
al family assistance grant for the fiscal year in
an amount equal to the amount determined
under subparagraph (B), and shall reduce the
grant payable under section 403(a)(1) to any
State in which lies the service area or areas of
the Indian tribe by that portion of the amount
so determined that is attributable to expendi-
tures by the State.
‘‘(B) AMOUNT DETERMINED.—
‘‘(i) IN GENERAL.—The amount de-
termined under this subparagraph is an
amount equal to the total amount of the
Federal payments to a State or States
729
under section 403 (as in effect during such
fiscal year) for fiscal year 1994 attrib-
utable to expenditures (other than child
care expenditures) by the State or States
under parts A and F (as so in effect) for
fiscal year 1994 for Indian families resid-
ing in the service area or areas identified
by the Indian tribe pursuant to subsection
(b)(1)(C) of this section.
‘‘(ii) USE
OF
STATE
SUBMITTED
DATA.—
‘‘(I) IN
GENERAL.—The Sec-
retary shall use State submitted data
to make each determination under
clause (i).
‘‘(II) DISAGREEMENT WITH DE-
TERMINATION.—If an Indian tribe or
tribal organization disagrees with
State submitted data described under
subclause (I), the Indian tribe or trib-
al organization may submit to the
Secretary such additional information
as may be relevant to making the de-
termination under clause (i) and the
Secretary may consider such informa-
730
tion before making such determina-
tion.
‘‘(2) GRANTS FOR INDIAN TRIBES THAT RE-
CEIVED JOBS FUNDS.—
‘‘(A) IN
GENERAL.—The Secretary shall
pay to each eligible Indian tribe for each of fis-
cal years 1996, 1997, 1998, 1999, 2000, and
2001 a grant in an amount equal to the amount
received by the Indian tribe in fiscal year 1994
under section 482(i) (as in effect during fiscal
year 1994).
‘‘(B) ELIGIBLE INDIAN TRIBE.—For pur-
poses of subparagraph (A), the term ‘eligible
Indian tribe’ means an Indian tribe or Alaska
Native organization that conducted a job oppor-
tunities and basic skills training program in fis-
cal year 1995 under section 482(i) (as in effect
during fiscal year 1995).
‘‘(C) USE OF GRANT.—Each Indian tribe
to which a grant is made under this paragraph
shall use the grant for the purpose of operating
a program to make work activities available to
members of the Indian tribe.
‘‘(D) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
731
wise appropriated, there are appropriated
$7,638,474 for each fiscal year specified in sub-
paragraph (A) for grants under subparagraph
(A).
‘‘(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.—
‘‘(1) IN GENERAL.—Any Indian tribe that de-
sires to receive a tribal family assistance grant shall
submit to the Secretary a 3-year tribal family assist-
ance plan that—
‘‘(A) outlines the Indian tribe’s approach
to providing welfare-related services for the 3-
year period, consistent with this section;
‘‘(B) specifies whether the welfare-related
services provided under the plan will be pro-
vided by the Indian tribe or through agree-
ments, contracts, or compacts with intertribal
consortia, States, or other entities;
‘‘(C) identifies the population and service
area or areas to be served by such plan;
‘‘(D) provides that a family receiving as-
sistance under the plan may not receive duplica-
tive assistance from other State or tribal pro-
grams funded under this part;
‘‘(E) identifies the employment opportuni-
ties in or near the service area or areas of the
732
Indian tribe and the manner in which the In-
dian tribe will cooperate and participate in en-
hancing such opportunities for recipients of as-
sistance under the plan consistent with any ap-
plicable State standards; and
‘‘(F) applies the fiscal accountability provi-
sions of section 5(f)(1) of the Indian Self-De-
termination and Education Assistance Act (25
U.S.C. 450c(f)(1)), relating to the submission
of a single-agency audit report required by
chapter 75 of title 31, United States Code.
‘‘(2) APPROVAL.—The Secretary shall approve
each tribal family assistance plan submitted in ac-
cordance with paragraph (1).
‘‘(3) CONSORTIUM OF TRIBES.—Nothing in this
section shall preclude the development and submis-
sion of a single tribal family assistance plan by the
participating Indian tribes of an intertribal consor-
tium.
‘‘(c) MINIMUM
WORK
PARTICIPATION
REQUIRE-
MENTS AND TIME LIMITS.—The Secretary, with the par-
ticipation of Indian tribes, shall establish for each Indian
tribe receiving a grant under this section minimum work
participation requirements, appropriate time limits for re-
733
ceipt of welfare-related services under the grant, and pen-
alties against individuals—
‘‘(1) consistent with the purposes of this sec-
tion;
‘‘(2) consistent with the economic conditions
and resources available to each tribe; and
‘‘(3) similar to comparable provisions in section
407(d).
‘‘(d) EMERGENCY ASSISTANCE.—Nothing in this sec-
tion shall preclude an Indian tribe from seeking emergency
assistance from any Federal loan program or emergency
fund.
‘‘(e) ACCOUNTABILITY.—Nothing in this section shall
be construed to limit the ability of the Secretary to main-
tain program funding accountability consistent with—
‘‘(1) generally accepted accounting principles;
and
‘‘(2) the requirements of the Indian Self-Deter-
mination and Education Assistance Act (25 U.S.C.
450 et seq.).
‘‘(f) PENALTIES.—
‘‘(1) Subsections (a)(1), (a)(6), and (b) of sec-
tion 409, shall apply to an Indian tribe with an ap-
proved tribal assistance plan in the same manner as
such subsections apply to a State.
734
‘‘(2) Section 409(a)(3) shall apply to an Indian
tribe with an approved tribal assistance plan by sub-
stituting ‘meet minimum work participation require-
ments established under section 412(c)’ for ‘comply
with section 407(a)’.
‘‘(g) DATA COLLECTION AND REPORTING.—Section
411 shall apply to an Indian tribe with an approved tribal
family assistance plan.
‘‘(h) SPECIAL RULE FOR INDIAN TRIBES IN ALAS-
KA.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section, and except as provided in
paragraph (2), an Indian tribe in the State of Alas-
ka that receives a tribal family assistance grant
under this section shall use the grant to operate a
program in accordance with requirements com-
parable to the requirements applicable to the pro-
gram of the State of Alaska funded under this part.
Comparability of programs shall be established on
the basis of program criteria developed by the Sec-
retary in consultation with the State of Alaska and
such Indian tribes.
‘‘(2) WAIVER.—An Indian tribe described in
paragraph (1) may apply to the appropriate State
756
(B) FUNDING
PROVISIONS.—Section 403
(42 U.S.C. 603) is amended by striking sub-
section (n).
SEC. 4104. SERVICES PROVIDED BY CHARITABLE, RELI-
GIOUS, OR PRIVATE ORGANIZATIONS.
(a) IN GENERAL.—
(1) STATE OPTIONS.—A State may—
(A) administer and provide services under
the programs described in subparagraphs (A)
and (B)(i) of paragraph (2) through contracts
with charitable, religious, or private organiza-
tions; and
(B) provide beneficiaries of assistance
under the programs described in subparagraphs
(A) and (B)(ii) of paragraph (2) with certifi-
cates, vouchers, or other forms of disbursement
which are redeemable with such organizations.
(2) PROGRAMS DESCRIBED.—The programs de-
scribed in this paragraph are the following pro-
grams:
(A) A State program funded under part A
of title IV of the Social Security Act (as amend-
ed by section 4103(a) of this Act).