Family Support Act of 1988
PL 100-485 (H.R.1720), enacted 10/13/1988

PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2343 
Public Law 100-485 
100th Congress 
An Act 
To revise the AFDC program to emphasize work, child support, and family benefits, 
to amend title IV of the Social Security Act to encourage and assist needy children 
and parents under the new program to obtain the education, training, and employ- 
Oct. 13, 1988 
ment needed to avoid long-term welfare dependence, and to make other necessary 
[H.R. 1720] 
improvements to assure that the new program will be more effective in achieving 
its objectives. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled. 
Family Support 
™
, .^ 
Act of 1988. 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
State and local 
(a) SHORT TITLE.—This Act may be cited as the "Family Support 
governments. 
Act of 1988". 
42USC1305 
(b) TABLE OF CONTENTS.—The table of contents of this Act is as ^° ® 
follows: 
Sec. 1. Short title; table of contents. 
TITLE 1—CHILD SUPPORT AND ESTABLISHMENT OF PATERNITY 
SUBTITLE A—CHILD SUPPORT 
Sec. 101. Immediate income withholding. 
Sec. 102. Disregard applicable to timely child support pasonents. 
Sec. 103. State guidelines for child support award amounts. 
Sec. 104. Timing of notice of support payment collections. 
SUBTITLE B—ESTABUSHMENT OF PATERNITY 
Sec. 111. Performance standards for State paternity establishment programs. 
Sec. 112. Increased Federal assistance for paternity establishment. 
SuBTfTLE C—IMPROVED PROCEDURES FOR CHILD SUPPORT ENFORCEMENT AND 
ESTABUSHMENT OF PATERNmr 
Sec. 121. Requirement of prompt State response to requests for child support 
assistance. 
Sec. 122. Requirement of prompt State distribution of amounts collected as child 
support. 
Sec. 123. Automated tracking and monitoring systems made mandatory. 
Sec. 124. Additional information source for parent locator service. 
Sec. 125. Use of social security number to establish identity of parents. 
Sec. 126. Commission on Interstate Child Support. 
Sec 127. Costs of interstate enforcement demonstrations excluded in computing 
incentive payments. 
Sec. 128. Study of child-rearing costs. 
Sec. 129 Collection and reporting of child support enforcement data. 
TITLE II—JOB OPPORTUNITIES AND BASIC SKILLS TRAINING PROGRAM 
Sec. 201 Establishment and operation of program. 
Sec. 202. Technical and conforming amendments. 
Sec. 203 Regulations; performance standards; studies. 
Sec. 204. Effective date. 
TITLE III—SUPPORTIVE SERVICES FOR FAMILIES 
Sec. 301. Child care during participation in education, employment, and training. 
Sec. 302 Extended eligibility for child care. 
Sec. 303. Extended eligibility for medical assistance. 
Sec 304. Effective dates. 
102 STAT. 2344 
PUBLIC LAW 100-485—OCT. 13, 1988 
TITLE IV—RELATED AFDC AMENDMENTS 
Sec. 401. Benefits for two-parent families. 
Sec. 402. Changes in earned income disr^^rds. 
Sec. 403. Households headed by minor parents. 
Sec. 404. Periodic reevaiuation of need and payment standards. 
Sec. 405 CEO study on implementation of national minimum payment standard. 
Sec. 406. Study of new national approaches to welfare benefits for low-income fami-
lies with children. 
TITLE V—DEMONSTRATION PROJECTS 
Sec. 501. Family support demonstration projects. 
Sec. 502. Demonstration projects to test the effect of early childhood development 
programs. 
Sec. 503. Demonstration projects to test alternative definitions of unemployment. 
Sec. 504. Demonstration projects to address child access problems. 
Sec. 505. Demonstration projects to expand the niunber of job opportunities avail-
able to certain low-income individuals. 
Sec 506. Demonstration projects to provide counseling and services to high-risk 
teenagers. 
Sec. 507. Eighteen-month extension of Minnesota prepaid medicaid demonstration 
project. 
TITLE VI—MISCELLANEOUS PROVISIONS 
Sec. 601. Inclusion of American Samoa as a State under title TV. 
Sec 602. Increase in amount available for payment to Puerto Rico, the Virgin 
Islands, and Guam. 
Sec. 603. Assistant Secretary for Family Support 
Sec. 604. Responsibilities of the State. 
Sec. 605. Establishment of preeligibility fraud detection measures. 
Sec. 606. Uniform reporting requirements. 
Sec. 607. State reports on expenditure and use of social services funds. 
Sec 608. Miscellaneous teclmical corrections to Medicare Catastrophic Coverage 
Act of 1988. 
Sec. 609. Extension of quality control penalty moratorium. 
TITLE Vn—FUNDING PROVISIONS 
Sec. 701. Temporary extension of provisions relating to collection of nontax debts 
owed to Federal agencies. 
Sec. 702. Limitation on use of reimbursement arrangements to avoid 2-percent 
floor. 
Sec. 703 Modifications to dependent care credit and exclusion for dependent care 
assistance. 
Sec. 704. Taxpayer identification number required for dependents who have 
attained age 2. 
TITLE I—CHILD SUPPORT AND 
ESTABLISHMENT OF PATERNITY 
Subtitle A—Child Support 
SEC 101. IMMEDIATE INCOME WITHHOLDING. 
42 use 666. 
{&) IN GENERAL.—Section 466(bX3) of the Social Security Act is 
amended to read as follows: 
"(3)(A) The wages of an absent parent shall be subject to such 
withholding, r^ardless of whether support pa3anents by such 
parent are in arrears, in the case of a support order being 
enforced under this part that is issued or modified on or after 
the first day of the 25th month banning after the date of the 
\ 
enactment of this paragraph, on the effective date of the order; 
\ 
except that such wages shall not be subject to such withholding 
^ 
under this subparagraph in any case where (i) one of the parties 
demonstrates, and the court (or administrative process) finds, 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2345 
that there is good cause not to require immediate income 
withholding, or (ii) a written agreement is reached between both 
parties which provides for an alternative arrangement. 
"(B) The wages of an absent parent shall become subject to 
such withholding, in the case of wages not subject to withhold-
ing under subparagraph (A), on the date on which the payments 
which the absent parent has failed to make under a support 
order are at least equal to the support payable for one month or, 
' if earlier, and without regard to whether there is an arrearage, 
the earliest of— 
"(i) the date as of which the absent parent requests that 
such withholding begin, 
"(ii) the date as of which the custodial parent requests 
that such withholding begin, if the State determines, in 
accordance with such procedures and standards as it may 
establish, that the request should be approved, or 
"(iii) such earlier date as the State may select.". 
(b) APPUCATION TO ALL CHILD SUPPORT ORDERS.—Section 466(aX8) 
of such Act is amended— 
42 use 666. 
(1) by inserting "(A)" before "Procedures"; 
(2) by striking "which are issued or modified in the State" and 
inserting in lieu thereof "not described in subparagraph (B)"; 
and 
(3) by adding at the end the following new subparagraph: 
"(B) Procedures under which all child support orders which 
are initially issued in the State on or after January 1,1994, and 
are not being enforced under this part will include the following 
requirements: 
"(i) The wages of an absent parent shall be subject to 
withholding, regardless of whether support pa3mients by 
such parent are in arrears, on the effective date of the 
order; except that such wages shall not be subject to 
withholding under this clause in any case where (I) one of 
the parties demonstrates, and the court (or administrative 
process) finds, that there is good cause not to require imme-
diate income withholding, or (II) a written agreement is 
reached between both parties which provides for an alter-
native arrangement. 
"(ii) The requirements of subsection (bXD (which shall 
apply in the case of each absent parent against whom a 
support order is or has been issued or modified in the State, 
without regard to whether the order is being enforced 
under the State plan). 
"(iii) The requirements of paragraphs (2), (5), (6), (7), (8), 
(9), and (10) of subsection (b), where applicable. 
"(iv) Withholding from income of amounts payable as 
support must be carried out in full compliance with all 
procedural due process requirements of the State.". 
(c) STUDY ON MAKING IMMEDIATE INCOME WITHHOLDING MANDA- Reports. 
T
O
R
Y IN ALL CASES.—The Secretary of Health and Human Services 
42 use 666 note. 
shall conduct a study of the administrative feasibility, cost implica-
tions, and other effects of requiring immediate income withholding 
with respect to all child support awards in a State and shall report 
on the results of such study not later than 3 years after the date of 
the enactment of this Act. 
102 STAT. 2346 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 use 666 note. 
(d) EFFECTIVE DATE.—(1) The amendment made by subsection (a) 
shall become effective on the first day of the 25th month beginning 
after the date of the enactment of this Act. 
(2) The amendments made by subsection (b) shall become effective 
on January 1,1994. 
(3) Subsection (c) shall become effective on the date of the enact-
ment of this Act. 
SEC. 102. DISREGARD APPLICABLE TO TIMELY CHILD SUPPORT PAY-
MENTS. 
42 use 602. 
(a) IN GENERAL.—Section 402(aX8XAXvi) of the Social Security Act 
is amended by striking "of any child support payments received in 
such month" and inserting in lieu thereof "of any child support 
payments for such month received in that month, and the first $50 
of child support payments for each prior month received in that 
month if such payments were made by the absent parent in the 
month when due,". 
42 use 657. 
0)) CONFORMING AMENDMENT.—Section 45703X1) of such Act is 
amended by striking "the first $50 of such amounts as are collected 
periodically which represent monthly support pajrments" and 
inserting in lieu thereof "of such amounts £is are collected periodi-
cally which represent monthly support payments, the first $50 of 
any payments for a month received in that month, and the first $50 
of pajonents for each prior month received in that month which 
were made by the absent parent in the month when due,". 
42 use 602 note. 
(c) EFFECTIVE DATE.—The amendments made by this section shall 
become effective on the first day of the first calendar quarter which 
begins after the date of the enactment of this Act. 
SEC. 103. STATE GUIDELINES FOR CHILD SUPPORT AWARD AMOUNTS. 
(a) GUIDEUNES TO CREATE REBUTTABLE PRESUMPTION.—Section 
42 use 667. 
467(b) of the Social Security Act is amended— 
(1) by inserting "(1)" after "(b)"; 
(2) by striking ", but need not be binding upon such judges or 
other officials"; and 
(3) by adding at the end the following new paragraph: 
Courts, U.S. 
"(2) There shall be a rebuttable presumption, in any judicial or 
administrative proceeding for the award of child support, that the 
amount of the award which would result from the application of 
such guidelines is the correct amount of child support to be awarded. 
Records. 
A written finding or specific finding on the record that the applica-
tion of the guidelines would be unjust or inappropriate in a particu-
lar case, as determined under criteria established by the State, shall 
be sufficient to rebut the presumption in that case.". 
(b) GUIDELINES TO BE REVIEWED EVERY 4 YEARS.—Section 467(a) of 
such Act is amended by inserting ", and shall be reviewed at least 
once every 4 years to ensure that their application results in the 
determination of appropriate child support award amounts" Eifter 
"action". 
(c) 
STATE 
LAW 
REQUIREMENTS 
FOR 
REVIEW 
OF 
INDIVIDUAL 
42 use 666. 
AWARDS.—Section 466(a) of such Act is amended by inserting after 
paragraph (9) the following new paragraph: 
Effective date. 
"(lOXA) Procedures to ensure that, beginning 2 years after the 
date of the enactment of this paragraph, if the State determines 
(pursuant to a plan indicating how and when child support 
orders in effect in the State are to be periodically reviewed and 
adjusted) that a child support order being enforced under this 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2347 
part should be reviewed, the State must, at the request of either 
parent subject to the order, or of a State child support enforce-
ment agency, initiate a review of such order, and adjust such 
order, as appropriate, in accordance with the guidelines estab-
lished pursuant to section 467(a). 
"(B) Procedures to ensure that, beginning 5 years after the 
date of the enactment of this paragraph or such earlier date as 
the State may select, the State must implement a process for 
the periodic review and adjustment of child support orders 
being enforced under this part under which the order is to be 
reviewed not later than 36 months after the establishment of 
the order or the most recent review, and adjusted, as appro-
priate, in accordance with the guidelines established pursuant 
to section 467(a), unless— 
"(i) in the case of an order with respect to an individual 
with respect to whom an assignment under section 
402(aX26) is in effect, the State has determined, in accord-
ance with regulations of the Secretary, that such a review 
would not be in the best interests of the child and neither 
parent has requested review; and 
"(ii) in the case of any other order being enforced under 
this part, neither parent has requested review, 
"(C) Procedures to ensure that the State notifies each parent 
subject to a child support order in effect in the State that is 
being enforced under this part— 
"(i) of any review of such order, at least 30 days before the 
commencement of such review; and 
"(ii) of the right of such parent under subparagraph (B) to 
request the State to review such order; and 
"(iii) of a proposed adjustment (or determination that 
there should be no change) in the child support award 
amount, and such parent is afforded not less than 30 days 
after such notification to initiate proceedings to challenge 
such adjustment (or determination).". 
(d) STUDY OF IMPACT OF EXTENDING PERIODIC REVIEW REQUIRE- 42 use 666 note. 
MENT TO ALL OTHER CASES.—Within 2 years after the date of the 
enactment of this Act, the Secretary of Health and Human Services 
shall conduct and complete a study to determine the impact on child 
support awards and the courts of requiring each State to periodi-
cally review all child support orders in effect in the State. 
(e) DEMONSTRATION PROJECTS FOR EVALUATING MODEL PROCEDURES Contracts. 
FOR REVIEWING CHILD SUPPORT AWARDS.—(1) Not later than April 1, 
42 use 666 note. 
1989, the Secretary of Health and Human Services (in this subsec-
tion referred to as the "Secretary") shall enter into an agreement 
with each of 4 Stetes submitting applications under this subsection 
for the purpose of conducting a demonstration project under part D 
of title IV of the Social Security Act in the State to test and evaluate 
model procedures for reviewing child support award amounts. 
(2) Notwithstanding section 454(1) of the Social Security Act, a 
demonstration project conducted under this subsection may be con-
ducted in one or more political subdivisions of the State. 
(3) An agreement under this subsection shall be entered into 
between the Secretary and the State agency designated by the 
Governor of the State involved. Under such agreement, the Sec-
retary shall pay to the State, as an additional payment under part D 
of title IV of the Social Security Act, an amount equal to 90 percent 
of the reasonable costs incurred by the State in conducting a dem-
102 STAT. 2348 
PUBLIC LAW 100-485—OCT. 13, 1988 
onstration project under this subsection. Such costs shall not be 
t£iken into account for purposes of computing the incentive payment 
under section 458 of such Act. 
(4) A demonstration project under this subsection shall be com-
menced not later than September 30, 1989, and shall be conducted 
for a 2-year period unless the Secretary determines that the State 
conducting the project is not in substantial compliance with the 
terms of the agreement entered into with the State under paragraph 
(1). 
(5XA) Any State with an agreement under this subsection shall 
furnish the Secretary with such information as the Secretary deter-
mines to be necessary to evaluate the results of the project con-
ducted by the State. 
Reports. 
(B) The Secretary shall report the results of the demonstration 
projects conducted under this subsection to Congress not later than 
6 months after all such projects are completed. 
42 use 666 note. 
(f) EFFECTIVE DATE.—The amendments made by subsections (a), 
(b), and (c) shall become effective one year after the date of the 
enactment of this Act. 
SEC. 104. TIMING OF NOTICE OF SUPPORT PAYMENT COLLECTIONS. 
42 use 654. 
(a) IN GENERAL.—Section 454(5XA) of the Social Security Act is 
amended by striking "at legist annually" and inserting in lieu 
thereof "on a monthly basis (or on a quarterly beisis for so long as 
the Secretary determines with respect to a State that requiring such 
notice on a monthly basis would impose an unreasonable adminis-
trative burden)". 
42 use 654 note. 
Q)) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall become effective on the first day of the first calendar quarter 
which begins 4 or more years after the date of the enactment of this 
Act. 
Subtitle B—Establishment of Paternity 
SEC. 111. PERFORMANCE 
STANDARDS 
FOR 
STATE 
PATERNITY 
ESTABLISHMENT PROGRAMS. 
(a) STANDARDS FOR STATE PROGRAMS.—Section 452 of the Social 
42 use 652. 
Security Act is amended by adding at the end the following new 
subsection: 
"(gXD A State's program under this part shall be found, for 
purposes of section 403(h), not to have complied substantially with 
the requirements of this part unless, for any fiscal year beginning 
on or after October 1, 1991, its paternity establishment percentage 
for such fiscal year equals or exceeds— 
"(A) 50 percent; 
"(B) the paternity establishment percentage of the State for 
the fiscal year 1988, increased by the applicable number of 
percentage points; or 
"(C) the paternity establishment percentage determined with 
respect to all States for such fiscal year. 
"(2) For purposes of this section— 
"(A) the term 'paternity establishment percentage' means, 
with respect to a State (or all States, as the case may be) for a 
fiscal year, the ratio (expressed as a percentage) that the total 
number of children— 
"(i) who have been born out of wedlock, 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2349 
"(iiXI) except as provided in the last sentence of this 
paragraph, with respect to whom aid is being paid under 
the State's plan approved under part A (or under all such 
plans) for such fiscal year, or (II) with respect to whom 
services are being provided under the State's plan approved 
under this part (or under all such plans) for the fiscal year 
pursuant to an application submitted under section 454(6), 
and 
"(iii) the paternity of whom has been established, 
bears to the total number of children who have been bom out of 
wedlock and (except as provided in such last sentence) with 
respect to whom aid is being paid under the State's plan ap-
proved under part A (or under all such plans) for such fiscsd 
year or with respect to whom services are being provided under 
the State's plan approved under this part (or under all such 
plans) for the fiscal year pursuant to an application submitted 
under section 454(6); and 
"(B) the applicable number of percentsige points means, with 
respect to a fiscal year (beginning with the fiscal year 1991), 3 
percentage points multiplied by the number of fiscal years after 
the fiscal year 1989 and before the beginning of such fiscal year. 
For purposes of subparagraph (A), the total number of children shall 
not include any child who is a dependent child by reason of the 
death of a parent or any child with respect to whom an applicant or 
recipient is found to have good cause for refusing to cooperate under 
section 402(aX26). 
"(3XA) The requirements of this subsection are in addition to and 
shall not supplant any other requirement (that is not inconsistent 
with such requirements) established in regulations by the Secretary 
for the purpose of determining (for purposes of section 403(h)) 
whether the program of a State operated under this part shall be 
treated as complying substantially with the requirements of this 
part. 
"(B) The Secretary may modify the requirements of this subsec-
tion to take into account such additional variables as the Secretary 
identifies (including the percentage of children born out-of-wedlock 
in a State) that affect the ability of a State to meet the requirements 
of this subsection. 
"(C) The Secretary shall submit an annual report to the Congress Reports, 
that sets forth the data upon which the paternity establishment 
percentages for States for a fiscal year are based, lists any additional 
variables the Secretary has identified under subparagraph (A), and 
describes State performance in establishing paternity. . 
(b) GENETIC TESTS MAY BE REQUIRED BY CONTESTING PARTY.— 
Section 466(a)(5) of such Act is amended— 
42 use 666. 
(1) by inserting "(A)" after "(5)"; and 
(2) by adding at the end the following new subparagraph: 
"(B) Procedures under which the State is required (except in 
cases where the individual involved has been found under 
section 402(a)(26)(B) to have good cause for refusing to 
cooperate) to require the child and all other parties, in a 
contested paternity case, to submit to genetic tests upon the 
request of any such party.". 
(c) STATES MAY CHARGE INDIVIDUALS NOT RECEIVING A F D C FOR 
COSTS OF GENETIC TESTS TO ESTABLISH PATERNITY.—Section 454(6) of 
such Act is amended— 
42USC654. 
(1) by redesignating clause (D) as clause (E); and 
102 STAT. 2350 
PUBLIC LAW 100-485—OCT. 13, 1988 
(2) by inserting "(D) a fee (in accordance with regulations of 
the Secretary) for performing genetic tests may be imposed on 
any individual who is not a recipient of aid under a State plan 
approved under part A," after "section 464(aX2),". 
(d) ENCOURAGEMENT OF CIVIL PROCESSES.—Part D of title IV of 
such Act is amended by adding at the end the following new section: 
"ENCOURAGEMENT OF STATES TO ADOPT SIMPLE CIVIL PROCESS FOR 
VOLUNTARILY ACKNOWLEDGING PATERNITY AND A CIVIL PROCEDURE 
FOR ESTABUSHING PATERNITY IN CONTESTED CASES 
42 use 668. 
"SEC. 468. In the administration of the child support enforcement 
program under this part, each State is encouraged to establish and 
implement a simple civil process for voluntarily acknowledging 
paternity and a civil procedure for establishing paternity in 
contested cases.". 
(e) REQUIREMENT TO PERMIT PATERNITY ESTABUSHMENT FOR CHILD 
UNDER 18.—Section 466(aX5XA) of such Act (as so designated by 
subsection (b) of this section) is amended— 
(1) by inserting "(i)" before "(A)"; and 
(2) by inserting at the end the following new clause: 
Effective date. 
"(ii) As of August 16, 1984, the requirement of clause (i) shall also 
apply to any child for whom paternity has not yet been established 
and any child for whom a paternity action was brought but dis-
missed because a statute of limitations of less than 18 years was 
then in effect in the State.". 
42 use 652 note. 
(f) EFFECTIVE DATE; IMPLEMENTATION.—(1) The amendments made 
by subsections (a), (d), and (e) shall become effective on the date of 
the enactment of this Act. 
42 use 654 note. 
(2) The amendments made by subsections (b) and (c) shall become 
effective on the first day of the first month beginning one year or 
more after the date of the enactment of this Act. 
42 use 652 note. 
(3) The Secretary of Health and Human Services shall collect the 
data necessary to implement the requirements of section 452(g) of 
the Social Security Act (as added by subsection (a) of this section) 
and may, in carr3dng out the requirement of determining a State's 
paternity establishment percentage for the fiscal year 1988, compute 
such percentage on the basis of data collected with respect to the 
last quarter of such fiscal year (or, if such data are not available, the 
first quarter of the fiscal year 1989) if the Secretary determines that 
data for the full year are not available. 
SEC. 112. INCREASED 
FEDERAL 
ASSISTANCE 
FOR 
PATERNITY 
ESTABLISHMENT. 
(a) INCREASED PAYMENTS TO STATES.—Section 455(aXl) of the 
42 use 655. 
Social Security Act is amended— 
(1) by striking "and" at the end of subparagraph (A); 
(2) by striking the semicolon at the end of subparagraph (B) 
and inserting in lieu thereof ", and"; and 
(3) by adding at the end the following new subparsigraph: 
"(C) equal to 90 percent (rather than the percentage specified 
in subparagraph (A)) of so much of the sums expended during 
such quarter as are attributable to laboratory costs incurred in 
determining paternity;". 
42 use 655 note. 
(b) EFFECTIVE DATE.—The amendments made by subsection (a) 
shall apply with respect to laboratory costs incurred on or after 
October 1, 1988. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2351 
Subtitle C—Improved Procedures for Child 
Support Enforcement and Establishment of 
Paternity 
SEC. 121. REQUIREMENT OF PROMPT STATE RESPONSE TO REQUESTS 
FOR CHILD SUPPORT ASSISTANCE. 
(a) IN GENERAL.—Section 452 of the Social Security Act (as 
amended by section 111(a) of this Act) is further amended by adding 
at the end the following new subsection: 
"(h) The standards required by subsection (a)(1) shall include 
standards establishing time limits governing the period or periods 
within which a State must accept and respond to requests (from 
States, jurisdictions thereof, or individuals who apply for services 
furnished by the State agency under this part or with respect to 
whom an assignment under section 402(aX26) is in effect) for assist-
ance in establishing and enforcing support orders, including 
requests to locate absent parents, establish paternity, and initiate 
proceedings to establish and collect child support awards.". 
(b) ADVISORY COMMITTEE; REGULATIONS.—(1) Not later than 60 42 use 652 note. 
days after the date of the enactment of this Act, the Secretary of 
Health and Human Services shall establish an advisory committee. 
The committee shall include representatives of organizations 
representing State governors, State welfare administrators, and 
State directors of programs under part D of title IV of the Social 
Security Act. The Secretary shall consult with the advisory commit-
tee before issuing any regulations with respect to the standards 
required by the amendment made by subsection (a) (including regu-
lations regarding what constitutes an adequate response on the part 
of a State to the request of an individual. State, or jurisdiction). 
(2) Not later than 180 days after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall issue a 
notice of proposed rulemaking with respect to the standards 
required by the amendment made by subsection (a), and, after 
allowing not less than 60 days for public comment, shall issue final 
regulations not later than the first day of the 10th month beginning 
after such date of enactment. 
SEC. 122. REQUIREMENT OF PROMPT STATE DISTRIBUTION OF AMOUNTS 
COLLECTED AS CHILD SUPPORT. 
(a) IN GENERAL.—Section 452 of the Social Security Act (as 
amended by the preceding provisions of this Act) is further amended 
by adding at the end the following new subsection: 
"(i) The standards required by subsection (aXl) shall include 
standards establishing time limits governing the period or periods 
within which a State must distribute, in accordance with section 
457, amounts collected as child support pursuant to the State's plan 
approved under this part.". 
(b) REGULATIONS.—Not later than 180 days after the date of the 
42 use 652 note. 
enactment of this Act, the Secretary of Health and Human Services 
shall issue a notice of proposed rulemaking with respect to the 
standards required by the amendment made by subsection (a), and, 
after allowing not less than 60 days for public comment, shall issue 
final regulations not later than the first day of the 10th month to 
begin after such date of enactment. 
102 STAT. 2352 
PUBLIC LAW 100-485—OCT. 13, 1988 
SEC. 123. AUTOMATED TRACKING AND MONITORING SYSTEMS MADE 
MANDATORY. 
42 use 654. 
(a) PLAN REQUIREMENT.—(1) Section 454 of the Social Security Act 
is amended— 
(A) by striking "and" after the semicolon at the end of 
paragraph (22); 
(B) by striking the period at the end of paragraph (23) and 
inserting in lieu thereof "; and"; and 
(C) by inserting after paragraph (23) the following new 
paragraph: 
"(24) provide that if the State, as of the date of the enactment 
of this paragraph, does not have in effect an automated data 
processing and information retrieval system meeting all of the 
requirements of paragraph (16), the State— 
"(A) will submit to the Secretary by October 1, 1991, for 
review and approval by the Secretary within 9 months after 
submittal an advance automated data processing planning 
document of the type referred to in such paragraph; and 
"(B) will have in effect by October 1,1995, an operational 
automated data processing and information 
retrieval 
system, meeting all the requirements of that paragraph, 
which has been approved by the Secretary.". 
(2) Section 454(16) of such Act is amended by striking "an auto-
matic" and inserting in lieu thereof "a statewide automated". 
42 use 652. 
(b) WAIVER AUTHORITY.—Section 452(d) of such Act is amended— 
(1) by striking "The" in paragraph (1) and inserting in lieu 
thereof "Except as provided in paragraph (3), the"; and 
(2) by adding at the end the following new paragraph: 
"(3) The Secretary may waive any requirement of paragraph (1) or 
any condition specified under section 454(16) with respect to a State 
if— 
"(A) the State demonstrates to the satisfaction of the 
Secretary that the State has an alternative system or systems 
that enable the State, for purposes of section 403(h), to be in 
substantial compliance with other requirements of this part; 
and 
"(B)(i) the waiver meets the criteria of paragraphs (1), (2), and 
(3) of section 1115(c), or 
"(ii) the State provides assurances to the Secretary that steps 
will be taken to otherwise improve the State's child support 
enforcement program.". 
(c) REPEAL OF 90-PERCENT FEDERAL REIMBURSEMENT RATE FOR 
Effective date. 
AUTOMATED DATA SYSTEMS.—Effective September 30, 1995, section 
455(aXl) of such Act (as amended by section 112(a) of this Act) is 
amended— 
(1) by striking subparagraphs (A) £ind (B); 
(2) by redesignating subparagraph (C) as subparagraph (A); 
(3) in subparagraph (A) (as so redesignated)— 
(A) by striking "(rather than the percentage specified in 
subparagraph (A))"; and 
(B) by inserting "and" after the semicolon; and 
(4) by inserting after subparagraph (A) (as so redesignated) 
the following new subparagraph: 
"(B) equEil to the percent specified in paragraph (2) of the total 
amounts expended by such State during such quarter for the 
operation of the plan approved under section 454;". 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2353 
(d) CONFORMING AMENDMENTS.—Sections 402(e), 452(dXl), and 
454(16) of such Act are each amended by striking "automatic" each 
place it appears and inserting in lieu thereof "automated". 
SEC. 124. ADDITIONAL INFORMATION SOURCE FOR PARENT LOCATOR 
SERVICE. 
(a) IN GENERAL.—Section 453(e) of the Social Security Act is 
amended by adding at the end the following new paragraph: 
"(3) The Secretary of Labor shall enter into an agreement with 
the Secretary to provide prompt access for the Secretary (in accord-
ance with this subsection) to the wage and unemployment com-
pensation claims information and data maintained by or for the 
Department of Labor or State emplojonent security agencies.". 
(b) STATE REQUIREMENT TO ASSIST SECRETARY IN OBTAINING 
INFORMATION.—(1) Section 303 of such Act is amended by adding at 
the end the following new subsection: 
"(hXD The State agency charged with the administration of the 
State law shall take such actions (in such manner as may be 
provided in the agreement between the Secretary of Health and 
Human Services and the Secretary of Labor under section 453(eX3)) 
as may be necessary to enable the Secretary of Health and Human 
Services to obtain prompt access to any wage and unemployment 
compensation claims information (including any information that 
might be useful in locating an absent parent or such parent's 
employer) for use by the Secretary of Health and Human Services, 
for purposes of section 453, in carrying out the child support enforce-
ment program under title IV. 
"(2) Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that there is a failure to 
comply substantially with the requirement of paragraph (1), the 
Secretary of Labor shall notify such State agency that further 
payments will not be made to the State until such Secretary is 
satisfied that there is no longer any such failure. Until the Sec-
retary of Labor is so satisfied, such Secretary shall make no further 
certification to the Secretary of the Treasury with respect to such 
State.". 
(2) Section 304(aX2) of such Act is amended by striking "or (e)" and 
inserting in lieu thereof "(e), or (h)". 
(c) EFFECTIVE DATE; IMPLEMENTATION.—(1) Except as provided in 
paragraph (2), the amendments made by subsections (a) and (b) shall 
become effective on the first day of the first calendar quarter which 
begins one year or more after the date of the enactment of this Act. 
(2) The Secretary of Health and Human Services and the 
Secretary of Labor shall enter into the agreement required by the 
amendment made by subsection (a) not later than 90 days after the 
date of the enactment of this Act. 
SEC. 125. USE OF SOCIAL SECURITY NUMBER TO ESTABLISH IDENTITY OF 
PARENTS. 
(a) DISCLOSURE OF SOCIAL SECURITY NUMBER AT TIME OF CHILD'S 
BIRTH.—Section 205(cX2XC) of the Social Security Act is £imended— 
(1) in clause (i)— 
(A) by inserting " Q " after "(i)"; and 
(B) by adding at the end the following new subclause: 
"(11) In the administration of any law involving the issuance of a 
birth certificate, each State shall require each parent to furnish to 
42 use 602, 652, 
654. 
42 use 653. 
Contracts. 
42 use 503. 
42 use 504. 
42 use 653 note. 
Contracts. 
42 u s e 405. 
Regulations. 
102 STAT. 2354 
PUBLIC LAW 100-485—OCT. 13, 1988 
such State (or political subdivision thereof) or any agency thereof 
having administrative responsibility for the law involved, the social 
security account number (or numbers, if the parent has more than 
one such number) issued to the parent unless the State (in accord-
ance with regulations prescribed by the Secretary) finds good cause 
for not requiring the furnishing of such number. The State shall 
make numbers furnished under this subclause available to the 
agency administering the State's plan under part D of title IV in 
accordance with Federal or State law and regulation. Such numbers 
shall not be recorded on the birth certificate. A State shall not use 
any social security account number, obtained with respect to the 
issuance by the State of a birth certificate, for any purpose other 
than for the enforcement of child support orders in effect in the 
State, unless section 7(a) of the Privacy Act of 1974 does not prohibit 
the State from requiring the disclosure of such number, by reason of 
the State having adopted, before January 1, 1975, a statute or 
regulation requiring such disclosure."; and 
(2) in clause (ii)— 
(A) by striking "clause (i) of this subparagraph" and 
inserting in lieu thereof "subclause (I) of clause (i)"; and 
(B) by adding at the end the following new sentence: "If 
and to the extent that any such provision is inconsistent 
with the requirement set forth in subclause (II) of clause (i), 
such provision shall, on and after the date of the enactment 
of such subclause, be null, void, and of no effect.". 
42 use 405 note. 
(b) EFFECTIVE DATE.—The amendments made by subsection (a) 
shall become effective on the first day of the 25th month which 
begins on or after the date of the enactment of this Act. 
SEC. 126. COMMISSION ON INTERSTATE CHILD SUPPORT. 
42 use 666 note. 
(a) EsTABUSHMENT OF COMMISSION.—There is hereby established a 
Commission to be known as the Commission on Interstate Child 
Support (in this section referred to as the "Commission") to be 
composed of 15 members appointed in accordance with subsection 
(bXD. 
(b) APPOINTMENT AND TERM OF MEMBERS; VACANCIES; TRANS-
ACTION OF BUSINESS.—(1) Members of the Commission shall be 
appointed as follows from among individuals knowledgeable in 
matters involving interstate child support: 
(A) Four members shall be appointed jointly by the Majority 
and Minority Leaders of the Senate, in consultation with the 
chairman and ranking minority member of the Committee on 
Finance of the Senate. 
(B) Four members shall be appointed jointly by the Speaker of 
the House and the Minority Leader of the House, in consulta-
tion with the chairman and ranking minority member of the 
Committee on Ways and Means of the House of Representa-
tives. 
(C) Seven members shall be appointed by the Secretary of 
Health and Human Services (in this section referred to as the 
"Secretary"). 
(2) Members of the Commission shall serve for the life of the 
Commission. A vacancy on the Commission shall be filled in the 
manner in which the original appointment was made and shall not 
affect the powers or duties of the Commission. 
(3) A majority of the members of the Commission shall constitute 
a quorum for the transaction of business. Decisions of the Commis-
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2355 
sion shall be according to the vote of a simple majority of those 
present and voting at a properly called meeting. 
(4) The members of the Commission shall be appointed by July 1, 
1989. The first meeting of the Commission shall be called by the 
Secretary as promptly as possible after all such members are ap-
pointed. At such meeting, the members of the Commission shall 
select a chairman from among such members and shall meet there-
after at the call of the chairman or of a majority of the members. 
(c) BASIC PAY.—(1) Members of the Commission shall serve as such 
without pay. 
(2) Members of the Commission shall be allowed travel expenses, 
including a per diem allowance in lieu of subsistence, in the same 
manner as persons serving intermittently in the government service 
are allowed travel expenses under section 5703 of title 5 of the 
United States Code. 
(d) DUTIES OF THE COMMISSION.—(1) During the fiscal year 1990, 
the Commission shall hold one or more national conferences on 
interstate child support reform for the purpose of assisting the 
Commission in preparing the report required under paragraph (2). 
(2) Not later than May 1, 1991, the Commission shall submit a Reports, 
report to the Congress that contains recommendations for— 
(A) improving the interstate establishment and enforcement 
of child support awards, and 
(B) revising the Uniform Reciprocal Enforcement of Support 
Act. 
(e) POWERS OF THE COMMISSION.—(1) The Commission may use the 
United States mails in the same manner and upon the same condi-
tions as other departments and agencies of the United States 
Government. 
(2) The Commission may accept, use, and dispose of donations of 
money and property and may accept such volunteer services of 
individuals as it deems appropriate. 
(3) The Commission may procure supplies, services, and property, 
and make contracts (but only to the extent or in such amounts as 
are provided in appropriation Acts). 
(4) For purposes of carrying out its duties under subsection (d), the 
Commission may adopt such rules for its organization and proce-
dures as it deems appropriate. 
(f) TERMINATION OF THE COMMISSION.—(1) The Commission shall 
terminate on July 1,1991. 
(2) Any funds held by the Commission on the date of termination 
of the Commission shall be deposited in the general fund of the 
Treasury of the United States and credited as miscellaneous 
receipts. Any property (other than funds) held by the Commission on 
such date shall be disposed of as excess or surplus property. 
(g) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of carry-
ing out this section, there is authorized to be appropriated 
$2,000,000. 
SEC. 127. COSTS OF INTERSTATE ENFORCEMENT DEMONSTRATIONS 
EXCLUDED IN COMPUTING INCENTIVE PAYMENTS. 
Section 458(d) of the Social Security Act is amended by inserting 
42 use 658. 
immediately before the period at the end the following: ", and any 
amounts expended by the State in carr3dng out a special project 
assisted under section 455(e) shall be excluded". 
102 STAT. 2356 
PUBLIC LAW 100-485—OCT. 13, 1988 
Reports. 
Appropriation 
authorization. 
42 use 669. 
42 u s e 667 note. 
SEC. 128. STUDY OF CHILD-REARING COSTS. 
Grants. 
The Secretary of Health and Human Services shall, by grant or 
Contracts. 
contract, conduct a study of the patterns of expenditures on children 
in 2-parent families, in single-parent families following divorce or 
separation, and in single-parent families in which the parents were 
never married, giving particular attention to the relative standards 
of living in households in which both parents and all of the children 
do not live together. The Secretary shall submit to the Congress no 
later than 2 years after the date of the enactment of this Act a full 
and complete report of the results of such study, including such 
recommendations as the Secretary may have for legislative, 
administrative, and other actions. There are authorized to be appro-
priated such sums as may be necessary to carry out this section. 
SEC. 129. COLLECTION AND REPORTING OF CHILD SUPPORT ENFORCE-
MENT DATA. 
Part D of title IV of the Social Security Act is amended by adding 
at the end the following new section: 
"COLLECTION AND REPORTING OF CHILD SUPPORT ENFORCEMENT DATA 
"SEC. 469. (a) The Secretary of Health and Human Services shall 
collect and maintain, on a fiscal year basis, up-to-date statistics, by 
State, with respect to each of the services specified in subsection (b) 
(separately stated in the case of each such service for families 
receiving aid under plans approved under part A of title IV of the 
Social Security Act and for families not receiving such aid), on— 
"(1) the number of cases in the child support enforcement 
agency caseload under part D of title IV of such Act which need 
the service involved; and 
"(2) the number of such cases in which the service has 
actually been provided. 
"(b) The services referred to in subsection (a) are— 
"(1) paternity determination; 
"(2) location of an absent parent for the purpose of establish-
ing a child support obligation; 
"(3) establishment of a child support obligation; and 
"(4) location of an absent parent for the purpose of enforcing 
or modifying an established child support obligation. 
"(c) For purposes of subsection (aX2), a service has actually 
been provided when the task described by the service has been 
accomplished.". 
TITLE II—JOB OPPORTUNITIES AND 
BASIC SKILLS TRAINING PROGRAM 
SEC. 201. ESTABLISHMENT AND OPERATION OF PROGRAM. 
(a) STATE PLAN REQUIREMENT.—Section 402(aX19) of the Social 
42 use 602. 
Security Act is amended to read as follows: 
"(19) provide— 
"(A) that the State has in effect and operation a job 
opportunities and basic skills training program which 
meets the requirements of part F; 
"(B) that— 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2357 
"(i) the State will (except as otherwise provided in 
this paragraph or part F), to the extent that the 
program is available in the political subdivision 
involved and State resources otherwise permit— 
"(I) require all recipients of aid to families with 
dependent children in such subdivision with re-
spect to whom the State guarantees child care in 
accordeince with section 402(g) to participate in the 
program; and 
"(11) allow applicants for and recipients of aid to 
families with dependent children who are not 
required under subclause (I) to participate in the 
program to do so on a voluntary basis; 
"(ii) in determining the priority of participation by 
individuals from among those groups described in 
clauses (i), (ii), (iii), and (iv) of section 403(1X2XB), the 
State will give first consideration to applicants for or 
recipients of aid to families with dependent children 
within any such group who volunteer to participate in 
the program; 
"(iii) if an exempt participant drops out of the 
program without good cause after having commenced 
participation in the progrsim, he or she shall thereafter 
not be given priority so long as other individuals are 
actively seeking to participate; and 
"(iv) the State need not require or allow participation 
of an individual in the program if as a result of such 
participation the amount payable to the State for quar-
ters in a fiscal year with respect to the program would 
be reduced pursuant to section 403(1X2); 
"(C) that an individual may not be required to participate 
in the program if such individual— 
(i) is ill, incapacitated, or of advanced age; 
"(ii) is needed in the home because of the illness or 
incapacity of another member of the household; 
"(iii) subject to subparagraph (D)— 
"(I) is the parent or other relative of a child 
under 3 years of age (or, if so provided in the State 
plan, under any age that is less than 3 years but 
not less than one year) who is personally providing 
care for the child, or 
"(II) is the parent or other relative personally 
providing care for a child under 6 years of age, 
unless the State assures that child care in accord-
ance with section 402(g) will be guaranteed and 
that participation in the program by the parent or 
relative will not be required for more than 20 
hours a week; 
"(iv) works 30 or more hours a week; 
"(v) is a child who is under age 16 or attends, full-
time, an elementary, secondary, or vocational (or 
technical) school; 
"(vi) is pregnant if it has been medically verified that 
the child is expected to be born in the month in which 
such participation would otherwise be required or 
within the 6-month period immediately following such 
month; or 
102 STAT. 2358 
PUBLIC LAW 100-485—OCT. 13, 1988 
"(vii) resides in an area of the State where the 
program is not available; 
"(D) that, in the case of a family eligible for aid to 
families with dependent children by reason of the 
unemplojonent of the parent who is the principal earner, 
subparagraph (CXiii) shall apply only to one parent, except 
that, in the case of such a family, the State may at its 
option make such subparagraph inapplicable to both of the 
parents (and require their participation in the program) if 
child care in accordance with section 402(g) is guaranteed 
with respect to the family; 
"(E) that— 
"(i) to the extent that the program is available in the 
political subdivision involved and State resources 
otherwise permit, in the case of a custodial parent who 
has not attained 20 years of age, has not successfully 
completed a high-school education (or its equivalent), 
and is required to participate in the program (including 
an individual who would otherwise be exempt from 
participation in the program solely by reason of 
subparagraph (CXiii)), the State agency (subject to 
clause (ii)) will require such parent to participate in an 
educational activity; and 
"(ii) the State agency may— 
"(I) require a parent described in clause (i) (not-
withstanding 
the 
part-time 
requirement 
in 
subparagraph (CXiiiXID) to participate in edu-
cational activities directed toward the attainment 
of a high school diploma or its equivalent on a full-
time (as defined by the educational provider) basis, 
"(II) establish criteria in accordance with regula-
tions of the Secretary under which custodial par-
ents described in clause (i) who have not attained 
18 years of age may be exempted from the school 
attendance requirement under such clause, or 
"(III) require a parent described in clause (i) who 
is age 18 or 19 to participate in training or work 
activities (in lieu of the educational activities 
under such clause) if such parent fails to make 
good progress in successfully completing such edu-
cational activities or if it is determined (prior to 
any assignment of the individual to such edu-
cational activities) pursuant to an educational 
assessment that participation in such educational 
activities is inappropriate for such parent; 
"(F) that— 
"(i) if the parent or other caretaker relative or any 
dependent child in the family is attending (in good 
standing) an institution of higher education (as defined 
in section 481(a) of the Higher Education Act of 1965), 
or a school or course of vocational or technical training 
(not less than half time) consistent with the individ-
ual's emplo3niient goals, and is making satisfactory 
progress in such institution, school, or course, at the 
time he or she would otherwise commence participa-
tion in the program under this section, such attendance 
may constitute satisfactory participation in the pro-
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2359 
gram (by that caretaker or child) so long as it continues 
and is consistent with such goals; 
"(ii) any other activities in which an individual de-
scribed in clause (i) participates may not be permitted 
to interfere with the school or training described in 
that clause; 
"(iii) the costs of such school or training shall not 
constitute federally reimbursable expenses for purposes 
of section 403; and 
"(iv) the costs of day care, transportation, and other Day care. 
services which are necessary (as determined by the Transportation. 
State agency) for such attendance in accordance with 
section 402(g) are eligible for Federal reimbursement; 
'(G) t h a t -
'll) if an individual who is required by the provisions 
of this paragraph to participate in the program or who 
is so required by reason of the State's having exercised 
the option under subparagraph (D) fails without good 
cause to participate in the program or refuses without 
good cause to accept emplojrment in which such 
individual is able to engage which is offered through 
the public employment offices of the State, or is other-
wise offered by an employer if the offer of such 
employer is determined to be a bona fide offer of 
employment— 
"(I) the needs of such individual (whether or not 
section 407 applies) shall not be taken into account 
in making the determination with respect to his or 
her fgimily under paragraph (7) of this subsection, 
and if such individual is a parent or other care-
taker relative, pajrments of aid for any dependent 
child in the family in the form of pajrments of the 
type described in section 406(bX2) (which in such a 
case shall be without regard to clauses (A) through 
(D) thereof) will be made unless the State agency, 
after making reasonable efforts, is unable to locate 
an appropriate individual to whom such payments 
can be made; and 
"(II) if such individual is a member of a family 
which is eligible for aid to families with dependent 
children by reason of section 407, and his or her 
spouse is not participating in the program, the 
needs of such spouse shsill also not be taken into 
account in making such determination; 
"(ii) any sanction described in clause (i) shall 
continue— 
"(I) in the case of the individual's first failure to 
comply, until the failure to comply ceases; 
"(II) in the case of the individual's second failure 
to comply, until the failure to comply ceases or 3 
months (whichever is longer); and 
"(III) in the case of any subsequent failure to 
comply, until the failure to comply ceases or 6 
months (whichever is longer); 
"(iii) the State will promptly remind any individual 
whose failure to comply has continued for 3 months, in 
102 STAT. 2360 
PUBLIC LAW 100-485—OCT. 13, 1988 
writing, of the individual's option to end the sanction 
by terminating such failure; and 
"(iv) no sanction shall be imposed under this 
subparagraph— 
"(I) on the basis of the refusal of an individual 
described in subparagraph (CXiiiXH) to accept 
employment, if the employment would require 
such individual to work more than 20 hours a 
week, or 
"(11) on the basis of the refusal of an individual 
to participate in the program or accept employ-
ment, if child care (or day care for any incapaci-
tated individual living in the same home as a 
dependent child) is necessary for an individual to 
participate in the program or accept employment, 
such care is not available, smd the State agency 
fails to provide such care; and 
"(H) the State agency may require a participant in the 
program to accept a job only if such agency assures that the 
family of such participant will experience no net loss of 
cash income resulting from acceptance of the job; and any 
costs incurred by the State agency as a result of this 
subparagraph shall be treated as expenditures with respect 
to which section 403(aXl) or 403(aX2) applies;", 
(b) ESTABLISHMENT AND OPERATION OF PROGRAM,—Title IV of such 
Act is further amended by adding at the end the following new part: 
"PART F—JOB OPPORTUNITIES AND BASIC SKILLS TRAINING PROGRAM 
"PURPOSE AND DEFINITIONS 
42 use 681. 
"SEC. 481. (a) PURPOSE.—It is the purpose of this part to assure 
that needy families with children obtain the education, training, 
and employment that will help them avoid long-term welfare 
dependence. 
(b) MEANING OF TERMS.—Except to the extent otherwise specifi-
cally indicated, terms used in this part shall have the meanings 
given them in or under part A. 
"ESTABUSHMENT AND OPERATION OF STATE PROGRAMS 
42 use 682. 
"SEC. 482. (a) STATE PLANS FOR JOB OPPORTUNITIES AND BASIC 
Regulations. 
SKILLS TRAINING PROGRAMS.—(IXA) As a Condition of its participa-
tion in the program of aid to families with dependent children under 
part A, each State shall establish and operate a job opportunities 
and basic skills training program (in this part referred to as the 
'program') under a plan approved by the Secretary as meeting all of 
the requirements of this part and section 402(aX19), and shall, in 
accordance with regulations prescribed by the Secretary, periodi-
cally (but not less frequently than every 2 years) review and update 
its plan and submit the updated plan for approval by the Secretary. 
"(B) A State plan for establishing and operating the program must 
describe how the State intends to implement the program during 
the period covered by the plan, and must indicate, through cross-
references to the appropriate provisions of this part and part A, that 
the program will be operated in accordance with such provision of 
law. In addition, such plan must contain (i) an estimate of the 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2361 
number of persons to be served by the program, (ii) a description of 
the services to be provided within the State and the political subdivi-
sions thereof, the needs to be addressed through the provision of 
such services, the extent to which such services are expected to be 
made available by other agencies on a nonreimbursable basis, and 
the extent to which such services are to be provided or funded by the 
program, and (iii) such additional information as the Secretary may 
require by regulation to enable the Secretary to determine that the 
State program will meet all of the requirements of this part and 
part A. 
"(C) The Secretary shall consult with the Secretary of Labor on 
§
ener£d plan requirements and on criteria to be used in approving 
tate plans under this section. 
"(DXi) Not later than October 1, 1992, each State shall make the 
program available in each political subdivision of such State where 
it is feasible to do so, after taking into account the number of 
prospective participants, the local economy, and other relevant 
factors. 
"(ii) If a State determines that it is not feasible to make the 
program available in each such subdivision, the State plan must 
provide appropriate justification to the Secretary. 
"(2) The State agency that administers or supervises the adminis-
tration of the Stete's plan approved under section 402 shall be 
responsible for the administration or supervision of the administra-
tion of the Stete's program. 
"(3) Federal funds made available to a Stete for purposes of the 
program shall not be used to supplant non-Federal funds for existing 
services and activities which promote the purpose of this part. Stete 
or local funds expended for such purpose shall be mainteined at 
least at the level of such expenditures for the fiscal year 1986. 
"(b) ASSESSMENT AND REVIEW OF NEEDS AND SKIUUS OP PARTICI-
PANTS; EMPLOYABILTTY PLAN.—(IXA) The Stete agency must make 
an initial assessment of the educational, child care, and other 
supportive services needs as well as the skills, prior work experi-
ence, and employability of each participant in the program under 
this part, including a review of the family circumstances. The 
agency may also review the needs of any cMld of the participant. 
"(B) On the basis of such assessment, the Stete agency, in con-
sultetion with the participant, shall develop an employability plan 
for the participant. The employability plan shall explain the serv-
ices that will be provided by the Stete agency and the activities in 
which the participant will take part under the program, including 
child care and other supportive services, shall set forth an employ-
ment goal for the participant, and shall, to the maximum extent 
possible and consistent with this section, reflect the respective 
preferences of such participant. The plan must take into account the 
participant's supportive services needs, available program resources, 
and local employment opportunities. The employability plan shall 
not be considered a contract. 
"(2) Following the initial assessment and review and the develop-
ment of the employability plan with respect to any participant in 
the program, the Stete agency may require the participant (or the 
adult caretaker in the family of which the participant is a member) 
to negotiate and enter into an agreement with the Stete agency that 
specifies such matters as the participant's obligations under the 
program, the duration of participation in the pr(^am, and the 
activities to be conducted and the services to be provided in the 
102 STAT. 2362 
PUBLIC LAW 100-485—OCT. 13, 1988 
course of such participation. If the State agency exercises the option 
under the preceding sentence, the State agency must give the 
participant such assistance as he or she may require in reviewing 
and understanding the agreement. 
"(3) The State agency may assign a case manager to each partici-
pant and the participant's family. The case manager so eussigned 
must be responsible for assisting the family to obtain any services 
which may be needed to assure effective participation in the 
program. 
"(c) PROVISION OF PROGRAM AND EMPLOYMENT INFORMATION.—(1) 
The State agency must ensure that all applicants for and recipients 
of aid to families with dependent children are encouraged, assisted, 
and required to fulfill their responsibilities to support their children 
by preparing for, accepting, and retaining such employment as they 
are capable of performing. 
"(2) The State agency must inform all applicants for and recipi-
ents of aid to families with dependent children of the education, 
emplojnnent, and training opportunities, and the support services 
(including child care and health coverage transition options), for 
which they are eligible, the obligations of the State agency, and the 
rights, responsibilities, and obligations of participants in the 
program. 
"(3) The State agency must— 
"(A) provide (directly or through arrangements with others) 
information on the tjrpes and locations of child care services 
reasonably accessible to participants in the program, 
"(B) inform participants that assistance is available to help 
them select appropriate child care services, and 
"(C) on request, provide assistance to participants in obtain-
ing child care services. 
"(4) The State agency must inform applicants for and recipients of 
aid to families with dependent children of the grounds for exemp-
tion from participation in the program and the consequences of 
refusal to participate if not exempt, and provide other appropriate 
information with respect to such participation. 
"(5) Within one month after the State agency gives a recipient of 
aid to families with dependent children the information described in 
the preceding provisions of this paragraph, the State agency must 
notify such recipient of the opportunity to indicate his or her desire 
to participate in the program, including a clear description of how to 
enter the program. 
"(d) SERVICES AND ACTIVITIES UNDER THE PROGRAM.—(IXA) In 
canying out the program, each State shall make available a broad 
range of services and activities to aid in carrying out the purpose of 
this part. Such services and activities— 
"(i) shall include— 
"(I) educational activities (as appropriate), including high 
school or equivalent education (combined with training as 
needed), basic and remedial education to achieve a basic 
literacy level, and education for individuals with limited 
English proficiency; 
"(II) job skills training; 
"(III) job readiness activities to help prepare participants 
for work; and 
"(IV) job development and job placement; and 
"(ii) must also include at least 2 of the following: 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2363 
"(I) group and individual job search as described in 
subsection (g); 
"(11) on-the-job training; 
"(III) work supplementation programs as described in 
subsection (e); and 
"(IV) community work experience programs as described 
in subsection (f) or any other work experience program 
approved by the Secretary. 
"(B) The State may also offer to participants under the program (i) 
postsecondary education in appropriate cases, and (ii) such other 
education, training, and employment activities as may be deter-
mined by the State and allowed by regulations of the Secretary. 
"(2) If the State requires an individual who has attained the age of 
20 years and has not earned a high school diploma (or equivalent) to 
participate in the program, the State agency shall include edu-
cational activities consistent with his or her employment goals as a 
component of the individual's participation in the program, unless 
the individual demonstrates a basic literacy level, or the employ-
ability plan for the individual identifies a long-term employment 
goal that does not require a high school diploma (or equivalent). Any 
other services or activities to which such a participant is assigned 
may not be permitted to interfere with his or her participation in an 
appropriate educational activity under this subparagraph. 
"(3) Notwithstanding any other provision of this section, the 
Secretary shall permit up to 5 States to provide services under the 
program, on a voluntary or mandatory basis, to non-custodial par-
ents who are unemployed and unable to meet their child support 
obligations. Any State providing services to non-custodial parents 
pursuant to this paragraph shall evaluate the provision of such 
services, giving particular attention to the extent to which the 
provision of such services to those parents is contributing to the 
achievement of the purpose of this part, and shall report the results 
of such evaluation to the Secretary. 
"(e) WORK SUPPLEMENTATION PROGRAM.—(1) Any State may 
institute a work supplementation program under which such State, 
to the extent it considers appropriate, may reserve the sums that 
would otherwise be payable to participants in the program as aid to 
families with dependent children and use such sums instead for the 
purpose of providing and subsidizing jobs for such participants (as 
described in paragraph (3)(C) (i) and (ii)), as an alternative to the aid 
to families with dependent children that would otherwise be so 
payable to them. 
"(2)(A) Notwithstanding section 406 or any other provision of law, 
Federal funds may be paid to a State under part A, subject to this 
subsection, with respect to expenditures incurred in operating a 
work supplementation program under this subsection. 
"(B) Nothing in this part, or in any State plan approved under 
part A, shall be construed to prevent a State from operating (on 
such terms and conditions and in such cases as the State may find to 
be necessary or appropriate) a work supplementation program in 
accordance with this subsection and section 484. 
"(C) Notwithstanding section 402(aX23) or any other provision of 
law, a State may adjust the levels of the standards of need under the 
State plan as the State determines to be necessary and appropriate 
for carrying out a work supplementation program under this 
subsection. 
Reports. 
102 STAT. 2364 
PUBLIC LAW 100-485—OCT. 13, 1988 
"(D) Notwithstanding section 402(aXl) or any other provision of 
law, a State operating a work supplementation program under this 
subsection may provide that the need standards in effect in those 
areas of the State in which such program is in operation may be 
different from the need standards in effect in the areas in which 
such program is not in operation, and such State may provide that 
the need standards for categories of recipients may vary among such 
categories to the extent the State determines to be appropriate on 
the basis of ability to participate in the work supplementation 
program. 
"(E) Notwithstanding any other provision of law, a State may 
make such further adjustments in the amounts of the aid to families 
with dependent children paid under the plan to different categories 
of recipients (as determined under subparagraph (D)) in order to 
offset increases in benefits from needs-related programs (other than 
the State plan approved under part A) as the State determines to be 
necessary and appropriate to further the purposes of the work 
supplementation program. 
(F) In determining the amounts to be reserved and used for 
providing and subsidizing jobs under this subsection as described in 
paragraph (1), the State may use a sampling methodology. 
"(G) Notwithstanding section 402(a)(8) or any other provision of 
law, a State operating a work supplementation program under this 
subsection (i) may reduce or eliminate the amount of earned income 
to be disregarded under the State plan as the State determines to be 
necessary and appropriate to further the purposes of the work 
supplementation program, and (ii) during one or more of the first 9 
months of an individual's emplojrment pursuant to a program under 
this section, may apply to the wages of the individual the provisions 
of subparagraph (AXiv) of section 402(aX8) without regard to the 
provisions of subparagraph (BXii)(II) of such section. 
"(3XA) A work supplementation program operated by a State 
under this subsection may provide that any individual who is an 
eligible individual (as determined under subparagraph (B)) shall 
take a supplemented job (as defined in subparagraph (C)) to the 
extent that supplemented jobs are available under the program. 
Payments by the State to individuals or to employers under the 
work supplementation program shall be treated as expenditures 
incurred by the State for aid to families with dependent children 
except as limited by paragraph (4). 
"(B) For purposes of this subsection, an eligible individual is an 
individual who is in a category which the State determines should 
be eligible to participate in the work supplementation program, and 
who would, at the time of placement in the job involved, be eligible 
for aid to families with dependent children under an approved State 
plan if such State did not have a work supplementation program in 
effect. 
"(C) For purposes of this section, a supplemented job is— 
"(i) a job provided to an eligible individual by the State or 
local agency administering the State plan under part A; or 
"(ii) a job provided to an eligible individual by any other 
employer for which all or part of the wages are paid by such 
State or local agency. 
A State may provide or subsidize under the program any job which 
such State determines to be appropriate. 
"(D) At the option of the State, individuals who hold supple-
mented jobs under a State's work supplementation program shall be 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2365 
exempt from the retrospective budgeting requirements imposed 
pursuant to section 402(aX13XAXii) (and the amount of the aid which 
is payable to the family of any such individual for any month, or 
which would be so payable but for the individual's participation in 
the work supplementation program, shall be determined on the 
basis of the income and other relevant circumstances in that 
month). 
"(4) The amount of the Federal payment to a State under section 
403 for expenditures incurred in making payments to individuals 
and employers under a work supplementation program under this 
subsection shall not exceed an amount equal to the amount which 
would otherwise be payable under such section if the family of each 
individual employed in the program established in such State under 
this subsection had received the maximum amount of aid to families 
with dependent children payable under the State plan to such a 
family with no income (without regard to adjustments under para-
graph (2)) for the lesser of (A) 9 months, or (B) the number of months 
in which such individual was employed in such program. 
"(5XA) Nothing in this subsection shall be construed as requiring 
the State or local agency administering the State plan to provide 
employee status to an eligible individual to whom it provides a job 
under the work supplementation program (or with respect to whom 
it provides all or part of the wages paid to the individual by another 
entity under such program), or as requiring any State or local 
agency to provide that an eligible individual filling a job position 
provided by another entity under such program be provided 
employee status by such entity during the first 13 weeks such 
individual fills that position. 
"(B) Wages paid under a work supplementation program shall be Wages. 
considered to be earned income for purposes of any provision of law. 
"(6) Any State that chooses to operate a work supplementation 
program under this subsection shall provide that any individual who 
participates in such program, and any child or relative of such 
individual (or other individual living in the same household as such 
individual) who would be eligible for aid to families with dependent 
children under the State plan approved under part A if such State 
did not have a work supplementation program, shall be considered 
individuals receiving aid to fgimilies with dependent children under 
the State plan approved under part A for purposes of eligibility for 
medical assistance under the State plan approved under title XIX. 
"(7) No individual receiving aid to families with dependent chil-
dren under a State plan shall be excused by reason of the fact that 
such State has a work supplementation program from any require-
ment of this part relating to work requirements, except during 
periods in which such individual is employed under such work 
supplementation program. 
(f) COMMUNITY WORK EXPERIENCE PROGRAM.—(IXA) Any State 
may establish a community work experience program in accordance 
with this subsection. The purpose of the community work experi-
ence program is to provide experience and training for individuals 
not otherwise able to obtain employment, in order to assist them to 
move into regular employment. Community work experience pro-
grams shall be designed to improve the employability of participants 
through actual work experience and training and to enable individ-
uals employed under community work experience programs to move 
promptly into regular public or private employment. The facilities 
of the State public employment offices may be utilized to find 
102 STAT. 2366 
PUBLIC LAW 100-485—OCT. 13, 1988 
employment opportunities for recipients under this program. 
Community work experience programs shall be limited to projects 
which serve a useful public purpose in fields such as health, social 
service, environmental protection, education, urban and rural devel-
opment and redevelopment, welfare, recreation, public facilities, 
public safety, and day care. To the extent possible, the prior train-
ing, experience, and skills of a recipient shall be used in making 
appropriate work experience assignments. 
"(BXi) A State that elects to establish a community work experi-
ence program under this subsection shall operate such program so 
that each participant (as determined by the State) either works or 
undergoes training (or both) with the maximum number of hours 
that any such individual may be required to work in any month 
being a number equal to the amount of the aid to families with 
dependent children payable with respect to the family of which such 
individual is a member under the State plan approved under this 
part, divided by the greater of the Federal minimum wage or the 
applicable State minimum wage (and the portion of a recipient's aid 
for which the State is reimbursed by a child support collection shall 
not be taken into account in determining the number of hours that 
such individual may be required to work). 
"(ii) After an individual has been assigned to a position in a 
community work experience program under this subsection for 9 
months, such individual may not be required to continue in that 
assignment unless the maximum number of hours of participation is 
no greater than (I) the amount of the aid to families with dependent 
children payable with respect to the family of which such individual 
is a member under the State plan approved under this part (exclud-
ing any portion of such aid for which the State is reimbursed by a 
child support pa3mtient), divided by (II) the higher of (a) the Federal 
minimum wage or the applicable State minimum wage, whichever is 
greater, or (b) the rate of pay for individuals employed in the same 
or similar occupations by the same employer at the same site. 
"(C) Nothing contained in this subsection shall be construed as 
authorizing the payment of aid to families with dependent children 
as compensation for work performed, nor shall a participant be 
entitled to a salary or to any other work or training expense 
provided under any other provision of law by reason of his participa-
tion in a program under this subsection. 
"(D) Nothing in this part or in any State plan approved under this 
part shall be construed to prevent a State from operating (on such 
terms and conditions and in such cases as the State may find to be 
necessary or appropriate) a community work experience program in 
accordance with this subsection and subsection (d). 
"(E) Participants in community work experience programs under 
this subsection may perform work in the public interest (which 
otherwise meets the requirements of this subsection) for a Federal 
office or agency with its consent, and, notwithstanding section 1342 
of title 31, United States Code, or any other provision of law, such 
agency may accept such services, but such participants shall not be 
considered to be Federal employees for any purpose. 
"(2) After each 6 months of an individual's participation in a 
community work experience program under this subsection, and at 
the conclusion of each assignment of the individual under such 
program, the State agency must provide a reassessment and 
revision, as appropriate, of the individual's employability plan. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2367 
"(3) The State agency shall provide coordination among a commu-
nity work experience program operated pursuant to this subsection, 
any program of job search under subsection (g), and the other 
employment-related activities under the program established by this 
section so as to insure that job placement will have priority over 
participation in the community work experience program, and that 
individuals eligible to participate in more than one such program 
are not denied aid to families with dependent children on the 
grounds of failure to participate in one such program if they are 
actively and satisfactorily participating in another. The State 
agency may provide that part-time participation in more than one 
such program may be required where appropriate. 
"(4) In the case of any State that makes expenditures in the form 
described in paragraph (1) under its State plan approved under 
section 482(aXl), expenditures for the operation and administration 
of the program under this section may not include, for purposes of 
section 403, the cost of making or acquiring materials or equipment 
in connection with the work performed under a program referred to 
in paragraph (1) or the cost of supervision of work under such 
program, and may include only such other costs attributable to such 
progrgims as are permitted by the Secretary. 
"^) JOB SEARCH PROGRAM.—(1) The State agency may establish 
and carry out a program of job search for individuals participating 
in the program under this part. 
"(2) Notwithstanding section 402(aX19XBXi), the State agency may 
require job search by an individual applying for or receiving aid to 
families with dependent children (other than an individual de-
scribed in section 402(aX19XC) who is not an individual with respect 
to whom section 402(aX19XD) applies)— 
"(A) subject to the next to last sentence of this pargigraph, 
beginning at the time such individual applies for aid to families 
with dependent children and continuing for a period (prescribed 
by the State) of not more than 8 weeks (but this requirement 
may not be used as a reason for any delay in making a deter-
mination of an individual's eligibility for such aid or in issuing a 
pajonent to or on behalf of any individual who is otherwise 
eligible for such aid); and 
"(B) at such time or times after the close of the period 
prescribed under subparagraph (A) as the State agency may 
determine but not to exceed a total of 8 weeks in any period of 
12 consecutive months. 
In no event may an individual be required to participate in job 
search for more than 3 weeks before the State agency conducts the 
assessment and review with respect to such individual under subsec-
tion (bXlXA). Job search activities in addition to those required 
under the preceding provisions of this paragraph may be required 
only in combination with some other education, training, or employ-
ment activity which is designed to improve the individual's 
prospects for employment. 
"(3) Job search by an individual under this subsection shall in no 
event be treated, for any purpose, as an activity under the program 
if the individual has participated in such job search for 4 months out 
of the preceding 12 months. 
"(h) DISPUTE RESOLUTION PROCEDURES.—Each State shall establish 
a conciliation procedure for the resolution of disputes involving an 
individual's participation in the program and (if the dispute in-
volved is not resolved through conciliation) shall provide an oppor-
102 STAT. 2368 
PUBLIC LAW 100-485—OCT. 13, 1988 
tunity for a hearing with respect to the dispute, which hearing may 
be provided through a hearing process established for purposes of 
resolving disputes with respect to the program or through the 
provision of a hearing pursuant to section 402(aX4); but in no event 
shall aid to families with dependent children be suspended, reduced, 
discontinued, or terminated as a result of a dispute involving an 
individual's participation in the program until such individual has 
an opportunity for a hearing that meets the standards set forth by 
the United States Supreme Court in Goldberg v. Kelly, 397 U.S. 254 
(1970). 
Alaska. 
"(i) SPECIAL PROVISIONS RELATING TO INDIAN TRIBES.—(1) Within 6 
months after the date of the enactment of the Family Support Act of 
1988, an Indian tribe or Alaska Native organization may apply to 
the Secretary to conduct a job opportunities and basic skills training 
program to carry out the purpose of this subsection. If the Secretary 
approves such tribe's or organization's application, the maximum 
amount that may be paid to the State under section 403(1) in which 
such tribe or organization is located shall be reduced by the Sec-
retary in accordance with paragraph (2) and an amount equal to the 
amount of such reduction shall be paid directly to such tribe or 
organization (without the requirement of any nonfederal share) for 
the operation of such program. In determining whether to approve 
an application from an Alaska Native organization, the Secretary 
shall consider whether approval of the application would promote 
the efficient and nonduplicative administration of job opportunities 
and basic skills training programs in the State. 
"(2) The amount of the reduction under paragraph (1) with respect 
to any State in which is located an Indian tribe or Alaska Native 
organization with an application approved under such paragraph 
shall be an amount equal to the amount that bears the same ratio to 
the maximum amount that could be paid under section 403(1) to the 
State as— 
"(A) the number of adult members of such Indian tribe receiv-
ing aid to families with dependent children bears to the number 
of all such adult recipients in the State, or 
"(B) the number of adult Alaska Natives receiving aid to 
families with dependent children who reside within the bound-
aries of such Alaska Native organization bears to the number of 
all such adult recipients in the State of Alaska. 
"(3) The job opportunities and basic skills training program set 
forth in the application of an Indian tribe or Alaska Native 
organization under paragraph (1) need not meet any requirement of 
the program under this part or under section 402(aX19) that the 
Secretary determines is inappropriate with respect to such job 
opportunities and basic skills training program. 
"(4) The job opportunities and basic skills training program of any 
Indian tribe or Alaska Native organization may be terminated 
voluntarily by such tribe or Alaska Native organization or may be 
terminated by the Secretary upon a finding that the tribe or Alaska 
Native organization is not conducting such program in substantial 
conformity with the terms of the application approved by the Sec-
retary, and the maximum amount that may be paid under section 
403(1) to the State within which the tribe or Alaska Native organiza-
tion is located (as reduced pursuant to paragraph (1)) shall be 
increased by any portion of the amount retained by the Secretary 
with respect to such program (and not payable to such tribe or 
Alaska Native organization for obligations already incurred). The 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2369 
reduction under paragraph (1) shall in no event apply to a State for 
any fiscal year beginning after such program is terminated if no 
other such program remains in operation in the State. 
"(5) For purposes of this subsection, an Indian tribe is any tribe, 
band, nation, or other organized group or community of Indians 
that— 
"(A) is recognized as eligible for the special programs and 
services provided by the United States to Indians because of 
their status as Indians; and 
"(B) for which a reservation (as defined in paragraph (6)) 
exists. 
"(6) For purposes of this subsection, a reservation includes Indian 
reservations, public domain Indian allotments, and former Indian 
reservations in Oklahoma. 
"(7) For purposes of this subsection— 
"(A) an Alaska Native organization is any organized group of 
Alaska Natives eligible to operate a Federal program under 
Public Law 93-638 or such group's designee; 
"(B) the boundaries of an Alaska Native organization shall be 
those of the geographical region, established pursuant to section 
7(a) of the Alaska Native Claims Settlement Act, within which 
the Alaska Native organization is located (without regard to the 
ownership of the land within the boundaries); 
"(C) the Secretary may approve only one application from an 
Alaska Native organization for each of the 12 geographical 
regions established pursuant to section 7(a) of the Alaska Native 
Claims Settlement Act; and 
"(D) any Alaska Native, otherwise eligible or required to 
participate in a job opportunities and basic skills training pro-
gram, residing within the boundaries of an Alaska Native 
organization whose application has been approved by the Sec-
retary, shall be eligible to participate in the job opportunities 
and basic skills trsdning program administered by such Alaska 
Native organization. 
"(8) Nothing in this subsection shall be construed to grant or defer 
any status or powers other than those expressly granted in this 
subsection or to validate or invalidate any claim by Alaska Natives 
of sovereign authority over lands or people. 
"COORDINATION REQUIREMENTS 
"SEC. 483. (aXD The Governor of each State shall assure that 
42 use 683. 
program activities under this part are coordinated in that State with 
programs operated under the Job Training Partnership Act and 
with any other relevant employment, training, and education pro-
grams available in that State. Appropriate components of the 
State's plan developed under section 482(aXl) which relate to job 
training and work preparation shall be consistent with the coordina-
tion criteria specified in the Governor's coordination and special 
services plan required under section 121 of the Job Training Part-
nership Act. 
"(2) The State plan so developed shall be submitted to the State 
job training coordinating council not less than 60 days before its 
submission to the Secretary, for the purpose of review and comment 
by the council. Concurrent with submission of the plan to the State 
Public 
job training coordinating council, the proposed State plan shall be 
information. 
published and made reasonably available to the general public 
19-194 n_Ql _!>»_* . 
102 STAT. 2370 
PUBLIC LAW 100-485—OCT. 13, 1988 
through local news facilities and public announcements, in order to 
provide the opportunity for review and comment. 
"(3) The comments and recommendations of the State job training 
coordinating council under paragraph (2) shall be transmitted to the 
Governor of the State. 
"(b) The Secretary of Health and Human Services shall consult 
with the Secretaries of Education and Labor on a continuing basis 
for the purpose of assuring the maximum coordination of education 
and training services in the development and implementation of the 
program under this part. 
"(c) The State agency responsible for administering or supervising 
the administration of the State plan approved under part A shall 
consult with the State education agency and the agency responsible 
for administering job training programs in the State in order to 
promote coordination of the planning and delivery of services under 
the program with programs operated under the Job Training Part-
nership Act and with education programs available in the State 
(including any program under the Adult Education Act or Carl D. 
Perkins Vocational Education Act). 
PROVISIONS GENERALLY APPUCABLE TO PROVISION OF SERVICES 
42 use 684. 
"SEC. 484. (a) In assigning participants in the program under this 
part to any program activity, the State agency shall assure that— 
"(1) each assignment takes into account the physical capacity, 
skills, experience, health and safety, family responsibilities, and 
place of residence of the participant; 
"(2) no participant will be required, without his or her con-
sent, to travel an unreasonable distance from his or her home or 
remain away from such home overnight; 
Discrimination, 
"(3) individuals are not discriminated against on the basis of 
prohibition. 
race, sex, national origin, religion, age, or handicapping condi-
tion, and all participants will have such rights as are available 
under any applicable Federal, State, or local law prohibiting 
discrimination; 
"(4) the conditions of participation are reasonable, taking into 
account in each case the proficiency of the participant and the 
child care and other supportive services needs of the partici-
pant; and 
"(5) each assignment is based on available resources, the par-
ticipant's circumstances, and local employment opportunities. 
Wages. 
"(b) Appropriate workers' compensation and tort claims protec-
Claims. 
tion must be provided to participants on the same basis as they are 
provided to other individuals in the State in similar emplojmient (as 
determined under regulations of the Secretary). 
Contracts. 
"(c) No work assignment under the program shall result in— 
Wages. 
"(1) the displacement of any currently employed worker or 
position (including partial displacement such as a reduction in 
the hours of nonovertime work, wages, or employment benefits), 
or result in the impairment of existing contracts for services or 
collective bargaining agreements; 
"(2) the employment or assignment of a participant or the 
filling of a position when (A) any other individual is on layoff 
from the same or any equivalent position, or (B) the employer 
has terminated the employment of any regular employee or 
otherwise reduced its workforce with the effect of filling the 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2371 
vacancy so created with a participant subsidized under the 
program; or 
"(3) any infringement of the promotional opportunities of any 
currently employed individual. 
Funds available to carry out the program under this part may not 
be used to assist, promote, or deter union organizing. No participant 
may be assigned under section 482 (e) or (^ to fill any established 
unfilled position vacancy. 
"(dXl) The State shall establish and maintain (pursuant to r^ula-
tions jointly issued by the Secretary and the Secretary of Labor) a 
grievance procedure for resolving complaints by regular employees 
or their representatives that the work assignment of an individual 
under the program violates any of the prohibitions described in 
subsection (c). A decision of the State under such procedure may be 
appealed to the Secretary of Labor for investigation and such action 
as such Secretary may find necessary. 
"(2) The State shall hear complaints with respect to working Wages. 
conditions and workers' compensation, and wage rates in the case of 
individuals participating in community work experience programs 
described in section 482(f), under the State's fair hearing process. A 
decision of the State under such process may be appealed to the 
Secretary of Labor under such conditions as the joint regulations 
issued imder subsection (f) may provide. 
"(e) The provisions of this section apply to any work-related 
programs and activities under this part, and under any other work-
related pr(^ams and activities authorized (in connection with the 
AFDC program) under section 1115. 
"(0 The Secretary of Health and Human Services and the Sec- Regulations. 
retary of Labor shall jointly prescribe and issue regulations for the 
purpose of implementing and carrying out the provisions of this 
section, in accordance with the timetable established in section 
203(a) of the Family Support Act of 1988. 
"C»NTRACr AUTHORITY 
"SEC. 485. (a) The State agency that administers or supervises the 42 use 685. 
administration of the Stated plan approved under section 402 shall 
carry out the pr(^rams under this part directly or through arrange-
ments or under contracts with administrative entities under section 
4(2) of the Job Training Partnership Act, with State and local 
educational agencies, and with other public agencies or private 
organizations (including community-based organizations as defined 
in section 4(5) of such Act). 
"(b) Arrangements and contracts entered into under subsection (a) 
may cover any service or activity (including outreach) to be made 
available under the program to the extent that the service or 
activity is not otherwise available on a nonreimbursable basis. 
"(c) The State agency and private industry councils (as established 
under section 102 of the Job Training Partnership Act) shall consult 
on the development of arrangements and contracts under the pro-
gram established under a plan approved imder section 482(aXl)) and 
under programs established under such Act. 
"(d) In selecting service providers, the State agency shall take into 
account appropriate factors which may include past performance in 
providing similar services, demonstrated efiectiveness, fiscal 
accountability, ability to meet performance standards, and such 
other factors as the State may detbermine to be appropriate. 
102 STAT. 2372 
PUBLIC LAW 100-485—OCT. 13, 1988 
"(e) The State agency shall use the services of each private 
industry council to identify and provide advice on the types of jobs 
available or likely to become available in the service delivery area 
(as defined in the Job Training Partnership Act) of the council, and 
shall ensure that the State program provides training in any area 
for jobs of a type which are, or are likely to become, available in the 
area. 
"INITIAL STATE EVALUATIONS 
42 use 686. 
"SEC. 486. (a) With the objective of— 
"(1) providing an in-depth assessment of potential partici-
pants in the program under this part in each State, so as to 
furnish an accurate picture on which to base estimates of future 
demands for services in conducting such program and to 
improve the efficiency of targeting under such program, 
(2) assuring that training for recipients of aid under such 
program will be realistically geared to labor market demands 
and that the program will produce individuals with marketable 
skills, while avoiding duplication and redundancy in the deliv-
ery of services, and 
Effective date. 
"(3) otherwise assuring that States will have the information 
needed to carry out the purposes of the program, 
each State may undertake and carry out an evaluation of demo-
graphic characteristics of potential participants in the program 
under this part within the 12-month period beginning on the date of 
the enactment of the Family Support Act of 1988. Such evaluation 
shall be carried out in each State by the agency which administers 
the Stete's program approved under section 402. 
"(b) In canying out the evaluation under subsection (a) the State 
shall give particular attention to the current and anticipated 
demands of the labor market or markets within the State, the types 
of training which are needed to meet those demands, and any 
changes in the current service delivery systems which may be 
needed to satisfy the requirements of the program under this part. 
"(c) The evaluation shall be structured so as to produce accurate 
and usable information on the age, family status, educational and 
literacy levels, duration of eligibility for aid to families with depend-
ent children, and work experience of the individuals and families 
who are potential participants in the program under this part, 
including the actual numbers of such individuals and families in 
each such category. 
"(d) The Secretary of Health and Human Services, in consultation 
with the Secretary of Labor, shall provide each State with such 
technical assistance and date as it may need in order to carry out its 
evaluation under subsection (a); and each Stete shall transmit its 
evaluation to the Secretory by the close of the 12-month period 
specified in such subsection. The Secretary of Health and Human 
Services shall take such evaluations into account in developing 
performance standards. 
"(e) As used in this section, the term 'potential participants' with 
respect to any Stete's program under this part means collectively all 
individuals in such Stete who are recipients of aid to families with 
dependent children under part A and who are members of the terget 
populations identified in section 403(1X2).". 
(c) SEPARATE FUNDING FOR JOBS PROGRAM; FEDERAL FINANCIAL 
42 use 603. 
PARTICIPATION.—(1) Section 403 of such Act is amended by adding at 
the end the following new subsection: 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2373 
"(kXD Each State with a plan approved under part F shall be 
entitled to pajmients under subsection (1) for any fiscal year in an 
amount equal to the sum of the applicable percentages (specified in 
such subsection) of its expenditures to carry out the program under 
part F (subject to limitations prescribed by or pursuant to such part 
or this section on expenditures that may be included for purposes of 
determining payment under subsection (1)), but such payments for 
any fiscal year in the case of any State may not exceed the limita-
tion determined under paragraph (2) with respect to the State. 
"(2) The limitation determined under this paragraph with respect 
to a State for any fiscal year is— 
"(A) the amount allotted to the State for fiscal year 1987 
under part C of this title as then in effect, plus 
"(B) the amount that bears the same ratio to the amount 
specified in paragraph (3) for such fiscal year as the average 
monthly number of adult recipients (as defined in paragraph (4)) 
in the State in the preceding fiscal year bears to the average 
monthly number of such recipients in all the States for such 
preceding year. 
"(3) The amount specified in this paragraph is— 
"(A) $600,000,000 in the case of the fiscal year 1989, 
"(B) $800,000,000 in the case of the fiscal year 1990, 
"(C) $1,000,000,000 in the case of each of the fiscal years 1991, 
1992, and 1993, 
"(D) $1,100,000,000 in the case of the fiscal year 1994, 
"(E) $1,300,000,000 in the case of the fiscal year 1995, and 
"(F) $1,000,000,000 in the case of the fiscal year 1996 and each 
succeeding fiscal year, 
reduced by the aggregate amount allotted to all the States for fiscal 
year 1987 pursuant to part C of this title as then in effect. 
"(4) For purposes of this subsection, the term 'adult recipient' in 
the case of any State means an individual other than a dependent 
child (unless such child is the custodial parent of another dependent 
child) whose needs are met (in whole or in part) with pajmients of 
aid to families with dependent children. 
"(5) None of the funds available to a State for purposes of the 
programs or activities conducted under part F shall be used for 
construction.". 
(2) Section 403 of such Act (as amended by paragraph (1) of this 
suljsection) is further amended by adding at the end the following 
new subsection: 
"(IXIXA) In lieu of any pajnnent under subsection (a), the Sec-
retary shall pay to each State with a plan approved under section 
482(a) (subject to the limitation determined under section 482(iX2)) 
with respect to expenditures by the State to carry out a program 
under part F (including expenditures for child care under section 
402(gXlXA), but only in the case of a State with respect to which 
section 1108 applies), an amount equal to— 
"(i) with respect to so much of such expenditures in a fiscal 
year as do not exceed the State's expenditures in the fiscal year 
1987 with respect to which pajonents were made to such State 
from its allotment for such fiscal year pursuant to part C of this 
title as then in effect, 90 percent; and 
"(ii) with respect to so much of such expenditures in a fiscal 
year as exceed the amount described in clause (i)— 
"(I) 50 percent, in the case of expenditures for administra-
tive costs made by a State in operating such a program for 
102 STAT. 2374 
PUBLIC LAW 100-485—OCT. 13, 1988 
such fiscal year (other than the personnel costs for staff 
employed full-time in the operation of such program) and 
the costs of transportation and other work-related sup-
portive services under section 402(gX2), and 
"(II) the greater of 60 percent or the Federal medical 
assistance percentage (as defined in section 1118 in the case 
of any State to which section 1108 applies, or as defined in 
section 1905(b) in the case of any other State), in the case of 
expenditures made by a State in operating such a program 
for such fiscal year (other than for costs described in 
subclause (I)). 
"(B) With respect to the amount for which payment is made to a 
State under subparagraph (AXi), the State's expenditures for the 
costs of operating a program established under part F may be in 
cash or in kind, fairly evaluated. 
"(2XA) Notwithstaiiding paragraph (1), the Secretary shall pay to 
a State an amount equal to 50 percent of the expenditures made by 
such State in operating its program established under part F (in lieu 
of any different percentage specified in paragraph (IXA)) if less than 
55 percent of such expenditures are made with respect to individuals 
who are described in subparagraph (B). 
"(B) An individual is described in this paragraph if the indi-
vidual— 
"(i)(I) is receiving aid to families with dependent children, and 
"(II) has received such aid for any 36 of the preceding 60 
months; 
"(ii)(I) makes application for aid to families with dependent 
children, and 
"(II) has received such aid for any 36 of the 60 months 
immediately preceding the most recent month for which 
application has been made; 
(iii) is a custodial parent under the age of 24 who (I) has not 
completed a high school education and, at the time of applica-
tion for aid to families with dependent children, is not enrolled 
in high school (or a high school equivalency course of instruc-
tion), or (II) had little or no work experience in the preceding 
year; or 
"(iv) is a member of a family in which the youngest child is 
within 2 years of being ineligible for aid to families with 
dependent children because of age. 
"(C) This paragraph may be waived by the Secretary with respect 
to any State which demonstrates to the satisfaction of the Secretary 
that the characteristics of the caseload in that State make it infeasi-
ble to meet the requirements of this paragraph, and that the State is 
targeting other long-term or potential long-term recipients. 
"(D) "Hie Secretary shall biennially submit to the Congress any 
recommendations for modifications or additions to the groups of 
individuals described in subparagraph (B) that the Secretary deter-
mines would further the goal of assisting long-term or potential 
long-term recipients of aid to families with dependent children to 
achieve self-sufficiency, which recommendations shall take into ac-
count the particular characteristics of the populations of individual 
States. 
"(3XA) Notwithstanding paragraph (1), the Secretary shall pay to 
a State an amount equal to 50 percent of the expenditures made by 
such State in a fiscal year in operating its program established 
under part F (in lieu of any different percentage specified in para-
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2375 
graph (IXA)) if the State's participation rate (determined under 
subparagraph (B)) for the preceding fiscal year does not exceed or 
equal— 
"(i) 7 percent if the preceding fiscal year is 1990; 
"(ii) 7 percent if such year is 1991; 
"(iii) 11 percent if such year is 1992; 
"(iv) 11 percent if such year is 1993; 
"(v) 15 percent if such year is 1994; and 
"(vi) 20 percent if such year is 1995. 
"(BXi) The State's participation rate for a fiscal year shall be the 
average of its participation rates for computation periods (as defined 
in clause (ii)) in such fiscal year, 
"(ii) The computation periods shall be— 
"
C
D the fiscal year, in the case of fiscal year 1990, 
"(II) the first six months, and the seventh through twelfth 
months, in the case of fiscal year 1991, 
"(10) the first three months, the fourth through sixth months, 
the seventh through ninth months, and the tenth through 
twelfth months, in the case of fiscal years 1992 and 1993, and 
"(TV) each month, in the case of fiscal years 1994 and 1995. 
"(iii) The State's participation rate for a computation period shall 
be the number, expressed as a percentage, equal to— 
"(I) the average monthly number of individuals required or 
allowed by the State to participate in the pr(^ram under part F 
who have participated in such pn^ram in months in the com-
putation period, plus the number of individuals required or 
allowed by the State to participate in such pn^ram who have so 
participated in that month in such period for which the number 
of such participants is the greatest, divided by 
"(II) twice the average monthly number of individuals re-
quired to participate in such period (other than individuals 
described in subparagraph (CKiii)(I) or (D) of section 402(aX19) 
with respect to whom the State has exercised its option to 
require their participation). 
For purposes of this subparagraph, an individual shall not be consid-
ered to have satisfactorily participated in the pr(^ram under part F 
solely by reason of such individual being roistered to participate in 
such program. 
"(C) Notwithstanding any other provision of this paragraph, no 
State shall be subject to payment under this paragraph (in Ueu of 
paragraph (IXA)) for failing to meet any participation rate required 
under this paragraph with respect to any fiscal year before 1991. 
"(D) For purposes of this paragraph, an individual shall be deter-
mined to have participated in the pn^ram under part F, if such 
individual has participated in accordance with such requirements, 
consistent with r^ulations of the Secretary, as the State shall 
establish. 
"(E) If the Secretary determines that the State has failed to 
achieve the participation rate for any fiscal year specified in the 
numbered clauses of subparagraph (A), he may waive, in whole or in 
part, the reduction in the payment rate otherwise required by such 
subparagraph if he finds that— 
"(i) the State is in conformity with section 402(aX19) and 
partF; 
"(ii) the State has made a good faith effort to achieve the 
applicable participation rate for such fiscal year; and 
102 STAT. 2376 
PUBLIC LAW 100-485—OCT. 13, 1988 
"(iii) the State has submitted a proposal which is likely to 
achieve the applicable participation rate for the current fiscal 
year and the subsequent fiscal years (if any) specified therein. 
"(4XAXi) Subject to subparagraph (B), in the case of any family 
eligible for giid to families with dependent children by reason of the 
unemployment of the parent who is the principal earner, the State 
agency shall require that at least one parent in any such family 
participate, for a total of at least 16 hours a week during any period 
in which either parent is required to participate in the program, in a 
work supplementation program, a community work experience or 
other work experience program, on-the-job tredning, or a State 
designed work program approved by the Secretary, as such pro-
grams are described in section 482(dXl). In the case of a parent 
under age 25 who has not completed high school or an equivalent 
course of education, the State may require such parent to partici-
pate in educational activities directed at the attainment of a high 
school diploma (or equivalent) or another basic education program 
in lieu of one or more of the programs specified in the preceding 
sentence. 
"(ii) For purposes of clause (i), an individual participating in a 
community work experience program under section 482 shall be 
considered to have met the requirement of such clause if he partici-
pates for the number of hours in any month equal to the monthly 
pajrment of aid to families with dependent children to the family of 
which he is a member, divided by the greater of the Federal or the 
applicable State minimum wage (and the portion of such monthly 
pa3rment for which the State is reimbursed by a child support 
collection shsQl not be taken into account in determining the 
number of hours that such individual may be required to work). 
"(B) The requirement under subparagraph (A) shall not be consid-
ered to have been met by any State if the requirement is not met 
with respect to the following percentages of all families in the State 
eligible for aid to families with dependent children by reason of the 
unemplo3mient of the parent who is the principal earner: 
"(i) 40 percent, in the case of the average of each month in 
fiscal year 1994, 
"(ii) 50 percent, in the case of the average of each month in 
fiscal year 1995, 
"(iii) 60 percent, in the case of the average of each month in 
fiscal year 1996, and 
"(iv) 75 percent in the case of the average of each month in 
each of the fiscal years 1997 and 1998. 
"(C) The percentage of participants for any month in a fiscal year 
for purposes of the preceding sentence shall equal the average of— 
(i) the number of individuals described in subparagraph (AXi) 
who have met the requirement prescribed therein, divided by 
"(ii) the total number of principal earners described in such 
subparagraph (but excluding those in families who have been 
recipients of aid for 2 months or less if, during the period that 
the family received aid, at least one parent engaged in intensive 
job search). 
"(D) If the Secretary determines that the State has failed to meet 
the requirement under subparagraph (A) (determined with respect 
to the percentages prescribed in subparagraph (B)), he may waive, in 
whole or in part, any penalty if he finds that— 
"(i) the State is operating a program in conformity with 
section 402(aX19) and part F, 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2377 
"(ii) the State has made a good faith effort to meet the 
Rural areas. 
requirement of subparagraph (A) but has been unable to do so 
because of economic conditions in the State (including signifi-
cant numbers of recipients living in remote locations or isolated 
rural areas where the availability of work sites is severely 
limited), or because of rapid and substantial increases in the 
caseload that cannot reasonably be planned for, and 
"(iii) the State has submitted a proposal which is likely to 
achieve the required percentage of participants for the subse-
quent fiscal years.". 
(d) STATE EXPENDITURES TO CARRY OUT INITIAL EVALUATIONS.— 
Section 403(aX3XD) of such Act (as amended by section 202(bX4) of 
this Act) is further amended by inserting "(including any amounts 
42 use 603. 
expended by the State to carry out initial evaluations under section 
486(a))" after "such expenditures". 
SEC. 202. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) REPEAL OF PART C OF TITLE IV.—Part C of title IV of the Social 
Security Act is repealed. 
42 use 630 et 
(b) CHANGES IN PART A OF TITLE IV.—(1) Section 402(aX8XAXiv) of s^? 
such Act is amended by striking "(but excluding" and all that 
42 use 602. 
follows and inserting in lieu thereof a semicolon. 
(2) Section 402(aX9XA) of such Act is amended— 
(A) by inserting "(including activities under part F)" after 
"this part"; and 
(B) by striking "B, C, or D" and inserting in lieu thereof "B or 
D". 
(3) Section 402(aX35) of such Act is repealed. 
(4) Section 403(aX3) of such Act is amended— 
(A) by striking all of subparagraph (D) that follows "such 
expenditures" and inserting in lieu thereof "; and"; and 
(B) in the matter immediately following subparagraph (D), by 
striking "services furnished" and all that follows through the 
semicolon and inserting in lieu thereof "services furnished 
pursuant to section 402(g);". 
(5) Section 403(c) of such Act is repealed. 
(6) Section 403(d) of such Act is repealed. 
(7) Section 407(bX2XA) of such Act is amended by striking "will be 
42 use 607. 
certified" and all that follows through "within 30 days" and insert-
ing in lieu thereof "will participate or apply for participation in a 
program under part F (unless the program is not available in the 
area where the parent is living) within 30 days". 
(8) Section 407(bX2XCXi) of such Act is amended— 
(A) by striking "section 402(aX19XA)" and all that follows 
through "part C of this title," and inserting in lieu thereof 
"section 409(aX19XC), is not currently participating (or available 
for participation) in a program under part F,"; 
(B) by striking "clause (iii)" and inserting in lieu thereof 
"clause (vii)"; and 
(C) by striking "section 432(a)" and inserting in lieu thereof 
"part F". 
(9) Section 407(c) of such Act is amended by striking "to certify 
such parent" and all that follows and inserting in lieu thereof "to 
undertake appropriate steps directed toward the participation of 
such parent in a program under part F.". 
102 STAT. 2378 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 use 607. 
(10) Section 407(dXl) of such Act is amended by striking "partici-
pated" and all that follows and inserting in lieu thereof "partici-
pated in a program under part F". 
(11) Section 407(e) of such Act is amended— 
(A) by striking "registering pursuant to section 402(aX19) for 
the work incentive program established by part C of this title" 
in clause (1) and inserting in lieu thereof "participating in a 
program under part F"; 
(B) by inserting "participate in or" before "register for"; and 
(C) by striking 'the work incentive program" in clause (2) and 
inserting in lieu thereof "part F". 
42 use 609. 
(12) Section 409 of such Act is repealed. 
!o ^ i ^ al^- 
(13) Section 414 of such Act is repealed. 
42 use 671. 
(^.) j ^ OTHER PROVISIONS.—(1) Section 471(aX8XA) of such Act is 
amended by striking "part A, B, C, or D of this title" and inserting 
in lieu thereof "part A, B, or D of this title (including activities 
under part F)". 
(2) Section 1108(a) of such Act (42 U.S.C. 1308(a)) is amended by 
inserting "or, in the case of part A of title IV, section 403(k)" before 
"applies in the matter preceding paragraph (1). 
(3) Section 1108(b) of such Act (42 U.S.C. 1308(b)) is amended by 
striking "and services provided under section 402(a)(19)". 
(4) 
Section 
1902(aX10XAXiXI) 
of 
such 
Act 
(42 
U.S.C. 
1396a(aX10XAXiXI)) is amended by striking "414(g)" and inserting in 
lieu thereof "482(eX6)". 
(5) Section 1926(aXlXD) of such Act, as redesignated by section 
42 use 1396s. 
303(a) of this Act, is amended by striking "414(g) and inserting in 
lieu thereof "482(eX6)". 
26 use 51. 
(6) Section 51(cX2XB) of the Internal Revenue Code of 1986 is 
amended by striking "section 414" and inserting "section 482(e)". 
SEC. 203. REGULATIONS; PERFORMANCE STANDARDS; STUDIES. 
42 use 681 note. 
(a) REGULATIONS.—Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Health and Human Services 
(in this section referred to as the Secretary") shall issue proposed 
regulations for the purpose of implementing the amendments made 
by this title, including regulations establishing uniform data collec-
tion requirements. The Secretary shall publish final regulations for 
such purpose not later than one year after the date of the enactment 
of this Act. Regulations issued under this subsection shall be devel-
oped by the Secretary in consultation with the Secretary of Labor 
and with the responsible State agencies described in section 482(aX2) 
of the Social Security Act. 
(b) PERFORMANCE STANDARDS.—Part F of title IV of the Social 
Security Act (as added by section 201(b) of this Act) is amended by 
adding at the end the following new section: 
"PERFORMANCE STANDARDS 
42 use 687. 
"SEC. 487. (a) Not later than 3 years after the effective date 
specified in section 204(a) of the Family Support Act of 1988, the 
Secretary shall— 
"(1) in consultation with the Secretary of Labor, representa-
tives of organizations representing Grovemors, State and local 
program administrators, educators. State job training coordinat-
ing councils, community-based organizations, recipients, and 
other interested persons, develop performance standards with 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2379 
respect to the programs established pursuant to this part that 
are based, in part, on the results of the studies conducted imder 
section 203(c) of such Act, and the initial State evaluations (if 
any) performed under section 486 of this Act; and 
"(2) submit his recommendations for performance standards 
developed under ^iaragraph (D to the appropriate committees of 
jurisdiction opihe Congress, which recommendations shall be 
made with r^pect to specific measurements of outcomes and be 
based on ^ e d^ree of success which may reasonably be ex-
pected oy States in helping individuals to increase earnings, 
achieve selfHSufficiency, and reduce welfare dependency, and 
shall not be measured solely by levels of activity or participa-
tion. 
Performance standards developed imder this subsection shaU be 
reviewed periodically by the Secretary and modified to the extent 
necessary. 
f'Q)) The Secretary may collect information from the States to 
ai^ist in the development of performance standards under subsec-
tion (a), and shall include in his r^ulations (issued pursuant to 
section 203(a) of the Family Support Act of 1988 with respect to the 
program under this part) provisions establishing uniform reporting 
requirements under which States must furnish periodically informa-
tion and data, including information and data (for each program 
activity) on the average monthly number of families assisted, the 
types of such families, the amoimts spent per family, the length of 
their participation, and such other matters as the Secretary may 
determine. 
"(c) The Secretary shall develop and transmit to the Congress, for 
appropriate l^islative action, a proposal for measuring State 
progress, providing technical assistance to enable States to meet 
performance standards, and modifying the Federal matching rate to 
reflect the relative effectiveness of the various States in carrying out 
the program.". 
(c) Il«»LE»fENTATION AND EFFECTIVENESS STUDIES.—(IXA) T h e SeC- 
42 USC 681 note. 
retary shall conduct an implementation study in accordance with 
subparagraph (B). 
(B) The implementation study conducted under subparagraph (A) 
shall be based on a representative sample of States and localities 
and shall document with respect to the programs established pur-
suant to part F of title IV the Social Security Act— 
(i) the types, mix, and costs of services offered, 
(ii) participation rates or activity levels, 
(iii) the chsiracteristics of the individuals in the different type 
of activities, 
(iv) the provisions made for child and day care and the extent Day care. 
to which limitations exist with respect to the availability of 
such care, 
(v) the institutional arrangements and operatii^ procedures 
under which activities are offered in the different locations, and 
(vi) such other factors as the Secretary deems appropriate. 
(C) TTiere is authorized to be appropriated $500,000 for each of the Appropriation 
fiscal years 1989, 1990, and 1991 for the purpose of conducting the authorization. 
implementation study under this paragraph. 
(2XA) The Secretary shall conduct a study in accordance with this 
paragraph to determine the relative effectiveness of the different 
approaches for assisting long-term and potentially long-term recipi-
102 STAT. 2380 
PUBLIC LAW 100-485—OCT. 13, 1988 
Reports. 
Appropriation 
authorization. 
42 u s e 681 note. 
ents developed by States pursuant to the programs established 
under part F of title IV of the Social Security Act. 
(BXi) The study required under subparagraph (A) shall be based on 
data gathered from demonstration projects conducted in 5 States 
chosen by the Secretary from among applications submitted by 
interested States. Such projects shall be conducted for a period of 
not less than 3 years upon such terms and conditions (including 
those involving payments to the participating States) as the 
Secretary may provide. 
(ii) A demonstration project conducted under this subparagraph 
shall use specific outcome measures to test the effectiveness of 
particular programs. Such measures shall include educational 
status, employment status, earnings, receipt of aid to families with 
dependent children under a State plan approved under part A of 
title rV of the Social Security Act, receipt of other transfer pay-
ments, and, to the extent possible, the poverty status of partici-
pating families. 
(iii) A demonstration project conducted under this subparagraph 
shall use experimental and control groups that are composed of a 
random sample of participants in the program established under 
part F of title IV of the Social Security Act. The Secretary shall 
assure that the experimental design is comparable among localities. 
(C) Participating States shall provide to the Secretary in such 
form and with such frequency as he requires interim data from the 
demonstration projects conducted under this paragraph. The Sec-
retary shall report to the Congress annually on the progress of such 
projects and shall, not later than one year after the date of final 
data collection, submit to the Congress the study required under 
subparagraph (A). 
(D) There is authorized to be appropriated $5,000,000 for each of 
the fiscal years 1990 and 1991 for the purpose of making pa3rments 
to States conducting demonstration projects under this section. 
(3) The Secretary shall establish such uniform reporting require-
ments as the Secretary determines are appropriate for the purpose 
of conducting the demonstration projects required under this 
section. 
(4) Within 3 months after the date of the enactment of this Act, 
the Secretary of Health and Human Services shall convene an 
advisory panel which may include representatives from the Office of 
Management and Budget, the Congressional Budget Office, the 
Congressional Research Service, and the General Accounting Office, 
and such other individuals and organizations as the Secretary may 
determine. The panel shall meet periodically to design, implement, 
and monitor a series of implementation and evaluation studies to 
assess the methods and effects of the programs initiated under this 
Act. Insofar as possible, the panel shall work in a collegial fashion; 
but if consensus cannot be reached among panel members on 
particular decisions the Secretary of Health and Human Services is 
authorized to make all final decisions about program design, use of 
contractors, conduct of particular studies, and any other matters 
which may come before the panel. 
(d) STUDY ON APPLICATION OF JOBS PROGRAMS TO INDIANS.—The 
Secretary of Health and Human Services, in cooperation with the 
Secretary of the Interior, shall conduct a study of— 
(1) the effectiveness of such emplo3rment, training, and edu-
cation programs for low-income individuals as are specifically 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2381 
directed toward Indians in responding to the needs of Indians on 
reservations; 
(2) the effectiveness of such programs as are not specifically 
directed toward Indians in responding to such needs; 
(3) the extent to which such needs are not met by such 
programs; 
(4) how such programs could be better coordinated in respond-
ing to such needs; 
(5) how such programs could be improved or restructured to 
more effectively meet such needs; 
(6) what sustainable job markets exist in Indian communities 
(assessed by tribe and region); and 
(7) the availability of such support services (as transportation 
and child care) as are necessary to assist Indians on reservations 
in participating in such programs and obtaining permanent 
employment. 
The Secretary of Health and Human Services and the Secretary of 
the Interior shall report to the Congress on the results of the study 
under this subsection not later than October 1, 1989 (or, if later, one 
year after the date of the enactment of this Act). 
SEC. 204. EFFECTIVE DATE. 
(a) IN GENERAL.—Except as provided in subsection (b), the amend-
ments made by this title shall become effective on October 1, 1990. 
(b) SPECIAL RULES.—(IXA) If any State makes the changes in its 
State plan approved under section 402 of the Social Security Act 
that are required in order to carry out the amendments made by 
this title and formally notifies the Secretary of Health and Human 
Services of its desire to become subject to such amendments as of the 
first day of any calendar quarter beginning on or after the date on 
which the proposed regulations of the Secretary of Health and 
Human Services are published under section 203(a) (or, if earlier, 
the date on which such regulations are required to be published 
under such section) and before October 1, 1990, such amendments 
shall become effective with respect to that State as of such first day. 
(B) In the case of any State in which the amendments made by 
this title become effective (in accordance with subparagraph (A)) 
with respect to any quarter of a fiscal year beginning before 
October 1, 1990, the limitation applicable to the State for the fiscal 
year under section 403(kX2) of the Social Security Act (as added by 
section 201(cXl) of this Act) shall be an amount that bears the same 
ratio to such limitation (as otherwise determined with respect to the 
State for the fiscal year) as the number of quarters in the fiscal year 
throughout which such amendments apply to the State bears to 4. 
(2) Section 403(1X3) of the Social Security Act (as added by section 
201(cX2) of this Act) is repealed effective October 1,1995 (except that 
subparagraph (A) of such section 403(1X3) shall remain in effect for 
purposes of appl3dng any reduction in pa3nnent rates required by 
such subparagraph for any of the fiscal years specified therein); and 
section 403(1X4) of such Act (as so added) is repealed effective 
October 1,1998. 
(3) Subsections (a), (c), and (d) of section 203 of this Act, and section 
486 of the Social Security Act (as added by section 2010t>) of this Act), 
shall become effective on the date of the enactment of this Act. 
Transportation. 
Reports. 
42 u s e 681 note. 
102 STAT. 2382 
PUBLIC LAW 100-485—OCT. 13, 1988 
TITLE III—SUPPORTIVE SERVICES FOR 
FAMILIES 
SEC. 301. CHILD CARE DURING PARTICIPATION IN EMPLOYMENT, EDU-
CATION, AND TRAINING. 
42 use 602. 
Section 402 of the Social Security Act is amended by adding at the 
end the following new subsection: 
"(gXlXA) Each State agency must guarantee child care in accord-
ance with subparagraph (B)— 
"(i) for each family with a dependent child requiring such 
care, to the extent that such care is determined by the State 
agency to be necessary for an individual in the family to accept 
emplo3maent or remain employed; and 
'Xii) for each individual participating in an education and 
training activity (including participation in a program that 
meets the requirements of subsection (aX19) and part F) if the 
State agency approves the activity and determines that the 
individual is satisfactorily participating in the activity. 
"(B) The State agency may guarantee child care by— 
"(i) providing such care directly; 
Contracts. 
"(ii) arranging the care through providers by use of purchase 
of service contracts, or vouchers; 
"(iii) providing cash or vouchers in advance to the caretaker 
relative in the family; 
"(iv) reimbursing the caretaker relative in the femiily; or 
"(v) adopting such other arrangements as the agency deems 
appropriate. 
When the State agency arranges for child care, the agency shall 
take into account the individual needs of the child. 
"(CXi) Subject to clause (ii), the State sigency shall make payment 
for the cost of child care provided with respect to a family in an 
amount that is the lesser o
f
— 
"(I) the actual cost of such care; and 
"(II) the dollar amount of the child care disregard for which 
the family is otherwise eligible under subsection (aXSXAXiii), or 
(if higher) an amount established by the State. 
"(ii) The State agency may not reimburse the cost of child care 
provided with respect to a family in an amount that is greater than 
the applicable local market rate (as determined by the State in 
accordance with regulations issued by the Secretary). 
"(D) The State may not make any change in its method of 
reimbursing child care costs which has the effect of disadvantaging 
families receiving aid under the State plan on the date of the 
enactment of this section, by reducing their income or otherwise. 
"(E) The value of any child care provided or arranged (or any 
amount received as payment for such care or reimbursement for 
costs incurred for the care) under this paragraph— 
"(i) shall not be treated as income for purposes of any other 
Federal or federally-assisted program that bases eligibility for 
or the amount of benefits upon need, and 
"(ii) may not be claimed as an emplo3mient-related expense 
for purposes of the credit under section 21 of the Internal 
Revenue Code of 1986. 
"(2) In the case of any individual participating in the program 
under part F, each State agency (in addition to guaranteeing child 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2383 
care under paragraph (1)) shall provide payment or reimbursement 
for such transportation and other work-related expenses (including 
other work-related supportive services), as the State determines are 
necessary to enable such individual to participate in such prc^am. 
"(3XA) In the case of amounts expended for child care pursuant to 
paragraph (IXA) by any State to which section 1108 does not apply, 
the applicable rate for purposes of section 403(a) shall be the Federal 
medical assistance percentage (as defined in section 1905(b)). 
"(B) In the case of any amounts expended by the State agency for 
child care under this subsection, only such amounts as are within 
such limits as the State may prescribe (subject to the limitations of 
paragraph (IXQ) shall be treated as amounts for which pajmient 
may be made to a State under this part and they may be so treated 
only to the extent that— 
"(i) such amounts do not exceed the applicable local market 
rate (as determined by the State in accordance with regulations 
issued by the Secretary); 
"(ii) the child care involved meets applicable standards of 
State and local law; and 
"(ui) in the case of child care, the entity providing such care 
allows parental access. 
"(4) The State must establish procedures to ensure that center- Safety. 
based child care will be subject to State and local requirements 
designed to ensure basic health and safety, including fire safety, 
protections. The State must also endeavor to develop guidelines for 
fanuly day care. The State must provide the Secretary with a 
description of such State and local requirements and guidelines. 
"(5) By October 1,1992, the Secretary shall report to the Ck)ngress 
on the nature and content of State and local standards for health 
and safety. 
"(6XA) The Secretary shall make grants to States to improve their Grants 
child care licensing and r^istration requirements and procedures, 
and to monitor child care provided to children receiving aid under 
the State plan approved under subsection (a). 
"(B) Subject to subparagraph (C), the Secretary shall make grants 
to each State under subparagraph (A) in proportion to the number 
of children in the State receiving aid under the State plan approved 
under subsection (a). 
"(C) The Secretary may not make grants to a State under subpara-
graph (A) unless the State provides matching funds in an amount 
that is not less than 10 percent of the amount of the grant. 
"(D) For grants under this paragraph, there is authorized to be 
appropriated to the Secretary $13,000,000 for each of the fisced years 
1990 and 1991. 
"(7) Activities under this subsection shall be coordinated in each 
State with existing early childhood education programs in that 
State, including Head Start programs, preschool prc^rams funded 
under chapter 1 of the Education Consolidation and Improvement 
Act of 1981, and school and nonprofit child care programs (indudhig 
community-based organizations receiving funds designated for 
preschool programs for handicapped children).". 
SEC 302. EXTENDED EUGIBIUTY FOR CHILD CARE. 
(a) IN GENERAL.—Section 402(gXlXA) of the Social Security Act (as 
added by section 301 of this Act) is amended— 
(1) by inserting "(i)" after "(A)"; 
Reports. 
Safety. 
Appropriation 
authorization. 
Handicapped 
persons. 
102 STAT. 2384 
PUBLIC LAW 100-485—OCT. 13, 1988 
(2) by redesignating clauses (i) and-(ii) as subclauses (I) and 
(II), respectively; and 
(3) by adding at the end the following new clause: 
"(ii) Each State agency must guarantee child care, subject to the 
limitations described in this section, to the extent that such care is 
determined by the State agency to be necessary for an individual's 
employment in any case where a family has ceased to receive aid to 
families with dependent children as a result of increased hours of, or 
increased income from, such emplojmient or by reason of subsection 
(aXSKBXiiXII).". 
(b) PAYMENT.—(1) Section 402(gX3XA) of such Act (as added by 
section 301 of this Act) is amended— 
(A) by inserting "(i)" after "(A)"; and 
(B) by adding at the end the following new clause: 
"(ii) In the case of amounts expended for child care pursuant to 
paragraph (IXAXii) (relating to the provision of child care for certain 
families which cease to receive aid under this part) by any State to 
which section 1108 applies, the applicable rate for purposes of 
section 403(a) shall be the Federal medical assistance percentage (as 
defined in section 1118).". 
(2) Section 403(1X1XA) of such Act (as added by section 201(cX2) of 
this Act) is amended by striking "402(gXlXA)" in the matter preced-
ing clause (i) and inserting in lieu thereof "402(gXlXAXi)". 
(c) LIMITATIONS ON EUGIBIUTY.—Section 402(gXlXA) of the Social 
Security Act (as added by section 301 of this Act and as amended by 
subsection (aX3) of this section) is amended by adding after clause (ii) 
the following new clauses: 
"(iii) A family shall only be eligible for child care provided under 
clause (ii) for a period of 12 months after the last month for which 
the family received aid to families with dependent children under 
this part. 
"(iv) A family shall not be eligible for child care provided under 
clause (ii) unless the family includes a child who is (or, if needy, 
children in at least 3 of the 6 months immediately preceding the 
month in which the family became ineligible for such aid. 
"(v) A family shall not be eligible for child care provided under 
clause (ii) unless the family includes a child who is, (or, if needy, 
would be) a dependent child. 
"(vi) A family shall not be eligible for child care provided under 
clause (ii) for any month beginning after the caretaker relative who 
is a member of the family has— 
"(I) without good cause, terminated his or her emplojonent; or 
"(II) failed to cooperate with the State in establishing and 
enforcing his or her child support obligations. 
"(vii) A family shall contribute to child care provided under clause 
(ii) in accordance with a sliding scale formula which shall be estab-
lished by the State agency based on the family's ability to pay.". 
42 use 602 note. 
(d) STUDY OF WELFARE REQUALIFICATION; REGULATIONS BASED ON 
RESULTS OF STUDY.—The Secretary of Health and Human Services 
shall conduct a study to determine whether individuals who ceased 
receiving aid under the State program of aid to families with 
dependent children approved under this part have begun again to 
receive such aid in order to requalify for additional months of 
transition benefits, and if the study reveals that such is the case, the 
Secretary shall, not earlier than October 1, 1991, issue r^ulations 
which restrict such requedification. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2385 
(e) 
STUDY ON EFFECTS OF EXTENDING EUGIBILITY FOR CHILD 
CARE.—The Secretary of Health and Human Services shall conduct 
a study on the effectiveness of the amendments made by this section 
in reducing welfare dependence and assisting families in making the 
transition from welfare to emplojnnent, and such other effects of 
such amendments as the Secretary may find appropriate, and shall 
report the results of such study not later thein September 30, 1997. 
SEC. 303. EXTENDED ELIGIBILITY FOR MEDICAL ASSISTANCE. 
(a) IN GENERAL.—(1) Title XIX of the Social Security Act, as 
amended by section 303(aXl) of the Medicare Catastrophic Covereige 
Act of 1988, is amended by redesignating section 1925 as section 
1926 and by inserting after section 1924 the following new section: 
"EXTENSION OF EUGIBILITY FOR MEDICAL ASSISTANCE 
"SEC. 1925. (a) INITIAL 6-MONTH EXTENSION.— 
"(1) REQUIREMENT.—Notwithstanding any other provision of 
this title, each State plan approved under this title must pro-
vide that each family which was receiving aid pursuant to a 
plan of the State approved under part A of title IV in at least 3 
of the 6 months immediately preceding the month in which 
such family becomes ineligible for such aid, because of hours of, 
or income from, employment of the caretaker relative (as de-
fined in subsection (e)) or because of section 402(aX8XBXiiXII) 
(providing for a time-limited earned income disregard), shall, 
subject to paragraph (3) and without any reapplication for 
benefits under the plan, remain eligible for assistance under the 
plan approved under this title during the immediately succeed-
ing 6-month period in accordance with this subsection. 
"(2) NOTICE OF BENEFITS.—E^ach State, in the notice of termi-
nation of aid under part A of title IV sent to a family meeting 
the requirements of paragraph (1)— 
(A) shall notify the family of its right to extended medi-
cal assistance under this subsection and include in the 
notice a description of the reporting requirement of subsec-
tion (bX2XBXi) and of the circumstances (described in para-
graph (3)) under which such extension may be terminated; 
and 
"(B) shall include a card or other evidence of the family's 
entitlement to assistance under this title for the period 
provided in this subsection. 
"(3) TERMINATION OF EXTENSION.— 
"(A) No DEPENDENT CHILD.—Subject to subparagraphs (B) 
and (C), extension of assistance during the 6-month period 
described in paragraph (1) to a family shall terminate 
(during such period) at the close of the first month in which 
the family ceases to include a child who is (or would if 
needy be) a dependent child under part A of title IV. 
"(B) NOTICE BEFORE TERMINATION.—No termination of 
assistance shall become effective under subparagraph (A) 
until the State has provided the family with notice of the 
grounds for the termination. 
"(C) CONTINUATION IN CERTAIN CASES UNTIL REDETERMINA-
TION.—With respect to a child who would cease to receive 
medical assistance because of subparagraph (A) but who 
may be eligible for assistance under the State plan because 
Reports. 
42 use 602 note. 
42 use 1396s. 
42 u s e 1396r-6. 
102 STAT. 2386 
PUBLIC LAW 100-485—OCT. 13, 1988 
the child is described in clause (i) or (v) of section 1905(a), 
the State may not discontinue such assistance under such 
subparagraph until the State has determined that the child 
is not eligible for assistance under the plan. 
"(4) SCOPE OF COVERAGE.— 
"(A) IN GENERAL.—Subject to subparagraph (B), during 
the 6-month extension period under this subsection, the 
amoimt, duration, and scope of medical assistance made 
available with respect to a family shall be the same as if the 
family were still receiving aid under the plan approved 
under part A of title IV. 
"(B) STATE MEDICAID 'WRAP-AROUND' OPTION.—^A State, at 
^' 
its option, may pay a family's expenses for premiums, 
deductibles, coinsurance, and similar costs for health insur-
ance or other health coverage offered by an employer of the 
caretaker relative or by an employer of the absent parent of 
a dependent child. In the case of such coverage offered by 
an employer of the caretaker relative— 
"(i) the State may require the caretaker relative, as a 
condition of extension of coverage under this subsection 
for the caretaker and the caretaker's family, to make 
application for such employer coverage, but only if— 
"(I) the caretaker relative is not required to 
make financial contributions for such coverage 
(whether through pajrroll deduction, pajmient of 
deductibles, coinsurance, or similar costs, or other-
wise), and 
"(II) the State provides, directly or otherwise, for 
payment of any of the premium amount, deduct-
ible, coinsurance, or similar expense that the 
employee is otherwise required to pay; and 
"(ii) the State shall treat the coverg^e under such an 
employer plan as a third party liability (under section 
1902(aX25)). 
Payments for premiums, deductibles, coinsurance, and simi-
lar expenses under this subparagraph shall be considered, 
for purposes of section 1903(a), to be payments for medical 
assistance. 
"(b) ADDITIONAL 6-MONTH EIXTENSION.— 
"(1) REQUIREMENT.—^Notwithstanding any other provision of 
this title, each State plan approved under this title shall provide 
that the State shall offer to each family, which has received 
assistance during the entire 6-month period under subsection (a) 
and which meets the requirement of paragraph (2)(BXi), in the 
last month of the period the option of extending coverage under 
this subsection for the succ^ding 6-month period, s^ject to 
paragraph (3). 
"(2) NOTICE AND REPORTING REQUIREMENTS.— 
"(A) NOTICES.— 
"(i) NoncE DURING INITIAL EXTENSION PERIOD OF 
OPTION AND REQUIREMENTS.—^E^ach State, during the 
3rd and 6th month of any extended assistance fur-
nished to a family under subsection (a), shall notify the 
family of the family's option for additional extended 
assistance under this subsection. Each such notice shall 
include (I) in the 3rd month notice, a statement of the 
reporting requirement under subparagraph (BXi), and. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2387 
in the 6th month notice, a statement of the reporting 
requirement under subparagraph (BXii), (ID a state-
ment as to whether any premiums are required for 
such additional extended assistance, and (III) a descrip-
tion of other out-of-pocket expenses, benefits, reporting 
and payment procedures, and any pre-existing condi-
tion limitations, waiting periods, or other coverage 
limitations imposed under any alternative coverage 
options offered under paragrapn (4XD). The 6th month 
notice under this subparagraph shall describe the 
amount of any premium required of a particular family 
for each of the first 3 months of additional extended 
assistance under this subsection, 
"(ii) NOTICE DURING ADDITIONAL EXTENSION PERIOD OF 
REPORTING REQUIREMENTS AND PREMIUMS.—Each State, 
during the 3rd month of any additional extended assist-
ance furnished to a family under this subsection, shall 
notify the family of the reporting requirement under 
subparagraph (BXii) and a statement of the amount of 
any premium required for such extended assistance for 
the succeeding 3 months. 
"(B) REPORTING REQUIREMENTS.— 
"(i) DURING INITIAL EXTENSION PERIOD.—Each State 
shall require (as a condition for additional extended 
assistance under this subsection) that a family receiv-
ing extended assistance under subsection (a) report to 
the State, not later than the 21st day of the 4th month 
in the period of extended assistance under subsection 
(a), on the family's gross monthly earnings and on the 
family's costs for such child care as is necessary for the 
emplojnnent of the caretaker relative in each of the 
first 3 months of that period. 
"(ii) DURING ADDITIONAL EXTENSION PERIOD.—Each 
State shall require that a family receiving extended 
assistance under this subsection report to the State, not 
later than the 21st day of the 1st month and of the 4th 
month in the period of additional extended assistance 
under this subsection, on the family's gross monthly 
earnings and on the family's costs for such child care as 
is necessary for the emplojmient of the caretaker rel-
ative in each of the 3 preceding months. 
"(3) TERMINATION OF EXTENSION.— 
"(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 
extension of assistance during the 6-month period described 
in paragraph (1) to a family shall terminate (during the 
period) as follows: 
"(i) No DEPENDENT CHILD.—The extension shall 
terminate at the close of the first month in which the 
family ceases to include a child who is (or would if 
needy be) a dependent child under part A of title IV. 
"(ii) FAILURE TO PAY ANY PREMIUM.—If the family 
fails to pay any premium for a month under paragraph 
(5) by the 21st day of the following month, the exten-
sion shall terminate at the close of that following 
month, unless the family has established, to the satis-
faction of the State, good cause for the failure to pay 
such premium on a timely basis. 
102 STAT. 2388 
PUBLIC LAW 100-485—OCT. 13, 1988 
Classified 
information. 
"(iii) QUARTERLY INCOME REPORTING AND TEST.—The 
extension under this subsection shall terminate at the 
close of the 1st or 4th month of the 6-month period if— 
"(I) the family fails to report to the State, by the 
21st day of such month, the information required 
under paragraph (2)(BXii), unless the family has 
established, to the satisfaction of the State, good 
cause for the failure to report on a timely basis; 
"(11) the caretaker relative had no earnings in 
one or more of the previous 3 months, unless such 
lack of any earnings was due to an involuntary loss 
of emplojrment, illness, or other good cause, estab-
lished to the satisfaction of the State; or 
"(III) the State determines that the family's 
average gross monthly earnings (less such costs for 
such child care as is necessary for the emplo3nnent 
'H 
of the caretaker relative) during the immediately 
preceding 3-month period exceed 185 percent of the 
official poverty line (as defined by the Office of 
Management and Budget, and revised annually in 
accordance with section 673(2) of the Omnibus 
Budget Reconciliation-Act of 1981) applicable to a 
family of the size involved. 
Information described in clause (iiiXD shall be subject to the 
restrictions on use and disclosure of information provided 
under section 402(aX9). Instead of terminating a family's 
extension under clause (iiiXD, a State, at its option, may 
provide for suspension of the extension until the month 
after the month in which the family reports information 
required under paragraph (2XBXii), but only if the family's 
extension has not otherwise been terminated 
under 
subclause (II) or (III) of clause (iii). The State shall make 
determinations under clause (iiiXIII) for a family each time 
a report under paragraph (2XBXii) for the family is received. 
"(B) NOTICE BEFORE TERMINATION.—No termination of 
assistance shall become effective under subparagraph (A) 
until the State has provided the family with notice of the 
grounds for the termination, which notice shall include (in 
the case of termination under subparagraph (AXiiiXII), 
relating to no continued earnings) a description of how the 
family may reestablish eligibility for medical assistance 
under the State plan. 
"(C) CONTINUATION IN CERTAIN CASES UNTIL REDETERMI-
NATION.— 
"(i) DEPENDENT CHILDREN.—With respect to a child 
who would cease to receive medical assistance because 
of subparagraph (AXi) but who may be eligible for 
assistance under the State plan because the child is 
described in clause (i) or (v) of section 1905(a), the State 
may not discontinue such assistance under such 
subparagraph until the State has determined that the 
child is not eligible for assistance under the plan, 
"(ii) MEDICALLY NEEDY.—With respect to an individ-
ual who would cease to receive medical assistance be-
cause of clause (ii) or (iii) of subparagraph (A) but who 
may be eligible for assistance under the State plan 
because the individual is within a category of person 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2389 
for which medical assistance iinder the State plan is 
available under section 1902(aX10XC) (relatii^ to medi-
cally needy individuals), the State may not discontinue 
such assistance under such subparagraph untU the 
State has determined that the individual is not eligible 
for assistance under the plan. 
"(4) COVERAGE.— 
"(A) IN GENERAL.—During the extension period under 
this subsection— 
"(i) the State plan shall offer to each family medical 
assistance which (subject to subparagraphs (B) and (C)) 
is the same amount, duration, and scope as would be 
made available to the family if it were still receiving 
aid under the plan approved under part A of title IV; 
and 
"(ii) the State plan may offer alternative coverage 
described in subparagraph (D). 
"(B) EUBfONATION OF MOST NON-ACUTE CARE BENEFITS.—At 
a State's option and notwithstanding any other provision of 
this title, a State may choose not to provide medical assist-
ance under this subsection with respect to any (or all) of the 
items and services described in paragraphs (4XA), (6), (7), (8), 
(11), (13), (14), (15), (16), (18), (20), and (21) of section 1906(a). 
"(CJ) STATE MEDICAID 'WRAP-AROUND' OPTION.—At a State's 
option, the State may elect to apply the option described in 
subsection (aX4)(B) (relating to 'wrap-around' coverage) for 
families electing medical assistance under this subsection 
in the same manner as such option applies to families 
provided extended eligibility for medical assistance under 
subsection (a). 
"(D) ALTERNATIVE ASSISTANCE.—At a State's option, the 
State may offer families a choice of health care coverage 
under one or more of the following, instead of the medi«d 
assistance otherwise made available under this subsection: 
"(i) ENROLL&CENT IN FAMILY OPTION OF EMPLOYER 
PLAN.—Enrollment of the caretaker relative and 
dependent children in a family option of the group 
h ^ t h plan offered to the caretaker relative. 
"(ii) 
ENROLLMENT IN FAMILY 
OPTION OF STATE 
EMPLOYEE PLAN.—Enrollment of the caretaker relative 
and dependent children in a family option within the 
options of the group health plan or plans offered by the 
State to State employees. 
"(iii) ENROLLACENT IN STATE UNINSURED PLAN.— 
Enrollment of the caretaker relative and dependent 
children in a basic State health plan offered by the 
State to individuals in the State (or areas of the State) 
otherwise unable to obtain health insurance coverage, 
"(iv) ENROLLBoan' IN HMO.—Enrollment of the care-
taker relative and dependent children in a health 
maintenance 
organization (as defined in section 
1903(mXlXA)) less than 50 percent of the membership 
(enrolled on a prepaid basis) of which consists of 
individuals who are eligible to receive benefits under 
this title (other than because of the option offered 
under this clause). The option of enrollment under this 
clause is in addition to, and not in lieu of, any enroll-
102 STAT. 2390 
PUBLIC LAW 100-485—OCT. 13, 1988 
ment option that the State might offer under subpara-
graph (AXi) with respect to receiving services through a 
health maintenance organization in accordance with 
section 1903(m). 
If a State elects to offer an option to enroll a family under 
this subparagraph, the State shall pay any premiums and 
other costs for such enrollment imposed on the family and 
may pay deductibles and coinsurance imposed on the 
family. A State's payment of premiums for the enrollment 
of families under this subparagraph (not including any 
premiums otherwise payable by an employer and less the 
amount of premiums collected from such families under 
paragraph (5)) and payment of any deductibles and coinsur-
ance shall be considered, for purposes of section 1903(aXl)) 
to be payments for medical assistance. 
"(E) PROHIBITION ON OOST-SHABING FOR MATERNITY AND 
PREVENTIVE PEDIATRIC CARE.— 
"(i) IN GENERAL.—If a State offers any alternative 
option under subparagraph (D) for families, under each 
such option the State must assure that care described 
in clause (ii) is available without charge to the families 
th]:x>ugh— 
"(D payment of any deductibles, coinsurance, 
and other cost-sharing respecting such care, or 
"(ID providing coverage under the State plan for 
such care without any cost-sharing, 
or any combination of such mechanisms. 
"(ii) CARE DESCRIBED.—The care described in this 
clause consists of— 
"
O
D services related to pr^nancy (including pre-
natal, delivery, and post partum services), and 
"(H) ambulatory 
preventive 
pediatric 
care 
(including ambulatory early and periodic screen-
ing, diagnosis, and treatment services under sec-
tion 1905(aX4)(B)) for each child who meets the age 
and date of birtib requirements to be a qualified 
child under section 1905(nX2). 
"(5) PREIiaUM.— 
"(A) PERMITTED.—Notwithstanding any other provision of 
this title (including section 1916), a State may impose a 
premium for a family for additional extended coverage 
under this subsection for a premiimi payment period (as 
defined in subparagraph (DXi)), but only if the family's 
average gross monthly earnings (less the average monthly 
costs for such child care as is necessary for the employment 
of the caretaker relative) for the premium base period 
exceed 100 percent of the official poverty line (as defined by 
the C
N
E
f
i
c
e of Management and Bucket, and revised an-
nually in accordance with section 673(2) of the Omnibus 
Budget Reconciliation Act of 1981) applicable to a family of 
the size involved. 
"(B) LEVEL MAY VARY BY OPTION OFFERED.—The level of 
such premium may vary, for the same family, for each 
option offered by a State under paragraph (4)(D). 
"(Q LIMIT ON PREBAIUM.—In no case may the amount of 
any premium under this paragraph for a family for a 
month in either of the premiimi payment periods described 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2391 
in subparagraph (D)(i) exceed 3 percent of the family's 
average gross monthly earnings during the premium base 
period (as defined in subparagraph (DXii))-
"(D) DEFINITIONS.—In this paragraph: 
"(i) A 'premium payment period' described in this 
clause is a 3-month period beginning with the 1st or 4th 
month of the 6-month additional extension period 
provided under this subsection. 
"(ii) The term 'premium base period' means, with 
respect to a particular premium pajnnent period, the 
period of 3 consecutive months the last of which is 4 
months before the beginning of that premium payment 
period. 
"(c) APPLICABILITY IN STATES AND TERRITORIES.— 
"(1) STATES OPERATING UNDER DEMONSTRATION PROJECTS.—In 
the case of any State which is providing medical assistance to its 
residents under a waiver granted under section 1115(a), the 
Secretary shall require the State to meet the requirements of 
this section in the same manner as the State would be required 
to meet such requirement if the State had in effect a plan 
approved under this title. 
(2) INAPPUCABIUTY IN COMMONWEALTHS AND TERRITORIES.— 
The provisions of this section shall only apply to the 50 States 
and the District of Columbia. 
"(d) GENERAL DISQUAUFICATION FOR FRAUD.— 
"(1) INELIGIBILITY FOR AID.—This section shall not apply to an 
individual who is a member of a family which has received aid 
under part A of title IV if the State makes a finding that, at any 
time during the last 6 months in which the family was receiving 
such aid before otherwise being provided extended eligibility 
under this section, the individual was ineligible for such aid 
because of fraud. 
"(2) GENERAL DISQUAUFICATIONS.—For additional provisions 
relating to fraud and program abuse, see sections 1128, 1128A, 
and 1128B. 
"(e) CARETAKER RELATIVE DEFINED.—In this section, the term 
'caretaker relative' has the meaning of such term £is used in part A 
of title IV. 
"(f) SUNSET.—This section shall not apply with respect to families 
that cease to be eligible for aid under part A of title IV after 
September 30,1998.". 
(2) Section 1902(a) of such Act (42 U.S.C. 1396a(a)), as amended by 
section 303(e) of the Medicare Catastrophic Coverage Act of 1988, is 
amended— 
(A) by striking "and" at the end of paragraph (50), 
(B) by striking the period at the end of paragraph (51) and 
inserting "; and', and 
(C) by inserting after paragraph (51) the following new 
paragraph: 
"(52) meet the requirements of section 1925 (relating to exten-
sion of eligibility for medical assistance).". 
O
t
>
) (DoNFORMiNG AMENDMENTS.—(1) Section 1902(eXl) of such Act 
(42 U.S.C. 1396a(eXl)) is amended— 
(A) by inserting "subject to subparagraph (B)" after "January 
1,1974,", 
(B) by inserting "(A)" after "(eXD", and 
(C) by adding at the end the following new subparagraph: 
District of 
Columbia. 
Fraud. 
102 STAT. 2392 
PUBLIC LAW 100-485—OCT. 13, 1988 
"(B) Subparagraph (A) shall not apply with respect to families 
that cease to be eligible for aid under part A of title IV during the 
period beginning on April 1, 1990, and ending on September 30, 
1998. During such period, for provisions relating to extension of 
eligibility for medical assistance for certain families who have re-
ceived aid pursuant to a State plan approved under part A of title 
IV and have earned income, see section 1925.". 
(2) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is amended by 
striking "or" at the end of clause (vii), by inserting "or" at the end of 
clause (viii), and by inserting after clause (viii) the following new 
clause: 
"(ix) individuals provided extended benefits under section 
1925,". 
42 use 602. 
(3) Paragraph (37) of section 402(a) of such Act is amended to read 
as follows: 
"(37) provide that if any family becomes ineligible to receive 
aid to families with dependent children because of hours of or 
income from employment of the caretaker relative or because of 
paragraph (8XB)(iiXII), having received such aid in at least 3 of 
the 6 months immediately preceding the month in which such 
ineligibility begins, the family shall remain eligible for medical 
assistance under the State's plan approved under title XIX for 
an extended period or periods as provided in section 1925, and 
that the family will be appropriately notified of such extension 
(in the State agency's notice to the family of the termination of 
its eligibility for such aid) as required by section 1925(a)(2);". 
42 use l396r-6 
(c) STUDY AND REPORT.—(1) The Secretary of Health and Human 
note. 
Services shall conduct a study of the impact of the medicaid exten-
sion provisions under section 1925 of the Social Security Act, with 
particular focus on the costs of such provisions and the impact on 
welfare dependency, and shall report to Congress on the results of 
such study not later than April 1,1993. 
(2) The study under paragraph (1) shall include an examination 
of— 
(A) the extent to which the availability of extended medicaid 
benefits affects access to and use of medical services, 
(B) the relative effectiveness of different tjrpes of coverage 
provided by States, 
(C) the effect of requiring families to pay premiums or incur 
any other expenses with respect to such extended benefits, and 
(D) whether individuals who have exhausted such benefits 
recycle onto welfare for short periods of time in order to 
requalify for such extended benefits. 
(d) CONFORMING AMENDMENT TO SECTION 403 
AMENDMENTS.— 
Section 1902(e) of the Social Security Act (42 U.S.C. 1396a(e)) is 
amended by adding at the end the following new paragraph: 
"(lOXA) The fact that an individual, child, or pregnant woman 
may be denied aid under part A of title IV pursuant to section 
402(aX43) shall not be construed as denjring (or permitting a State to 
deny) medical assistance under this title to such individual, child, or 
woman who is eligible for assistance under this title on a basis other 
thsui the receipt of aid under such part. 
"(B) If an individual, child, or pregnant woman is receiving aid 
under part A of title IV and such aid is terminated pursuant to 
section 402(aX43), the State may not discontinue medical assistance 
under this title for the individual, child, or woman until the State 
has determined that the individual, child, or woman is not eligible 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2393 
Kentucky. 
42 use 602 note. 
for assistance under this title on a basis other than the receipt of aid 
under such part.". 
(e) 1-YEAR EXTENSION OF MEDICAID, EUGIBILITY EXTENSION DUE TO 
' 
COLLECTION OF CHILD OR SPOUSAL SUPPORT.—Section 20(b) 
of 
the 
Child Support Amendments of 1984 (Public Law 98-378) is amended 
42 USC 606 note 
by striking "October 1, 1988" and inserting "October 1, 1989". 
(f) EFFECTIVE DATE.—(1) The amendments made by this section 
(other than subsections (bX3), (d), and (e)) shall apply to pajmients 
under title X K of the Social Security Act for calendar quarters 
beginning on or after April 1, 1990 (or, in the case of the (Dommon-
wealth of Kentucky, October 1, 1990) (without regard to whether 
regulations to implement such amendments are promulgated by 
such date), with respect to families that cease to be eligible for aid 
under part A of title IV of the Social Security Act on or after such 
date. 
(2XA) The amendment made by subsection (bX3) shall become 
effective on April 1,1990. 
(B) Effective September 30,1998, the amendment made by subsec-
tion (bX3) is repealed. 
(C) Section 402(aX37) of the Social Security Act, as in effect 
immediately before April 1, 1990, shall become effective on Septem-
ber 30,1998. 
(3) The amendment made by subsection (d) shall become effective 
on the efftictive date of section 402(aX43) of the Social Security Act, 
as inserted by section 403(a) of this Act. 
(4) The amendment made by subsection (e) shall take effect on 
October 1,1988. 
SEC. 304. EFFECTIVE DATES. 
(a) CHILD CARE FOR PARTICIPANTS IN EMPLOYMENT, EDUCATION, 
AND TRAINING.—The amendment made by section 301 shall become 
effective with respect to a State on the date the amendments made 
by title II become effective with respect to the State. 
(b) TRANSITIONAL CHILD CARE.—-(1) The amendments made by 
section 302 shall become effective on April 1,1990. 
(2) Effective September 30,1998, the amendments made by section 
302 are repealed. 
42 USC 602. 
42 USC 602 note. 
TITLE IV—RELATED AFDC AMENDMENTS 
SEC. 401. BENEFITS FOR TWO-PARENT FAMILIES. 
(a) MANDATORY EXPANSION OF COVERAGE.—(1) Section 402(a) of the 
Social Security Act (as amended by section 201(a) of this Act) is 
amended— 
(A) by striking "and" after the semicolon at the end of 
paragraph (39); 
(B) by striking the period at the end of paragraph (40) and 
inserting in lieu thereof "; and"; and 
(C) by inserting immediately after paragraph (40) the follow-
ing new paragraph: 
"(41) provide that aid to families with dependent children will 
be provided under the plan with respect to dependent children 
of unemployed parents in accordance with section 407.". 
(2XA) Section 402(aX38XB) of such Act is amended by striking "(if 
such section is applicable to the State)". 
102 STAT. 2394 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 use 607. 
(B) Section 407(b) of such Act is amended by striking "(b) The 
provisions" and all that follows through "(1) requires" and inserting 
in lieu thereof the following: 
"(b) In providing for the provision of aid to families with depend-
ent children under the State's plan approved under section 402, in 
the case of families that include dependent children within the 
meaning of subsection (a) of this section, as required by section 
402(aX41), the State's plan— 
"(1) shall require". 
(C) Section 4O70t>X2) of such Act is amended by striking 
"provides—" and inserting in lieu thereof "shall provide—". 
(b) STATE FLEXIBIUTY IN STRUCTURING TWO-PARENT FAMILY PRO-
GRAM.—(1) Section 407(b) of such Act (as amended by subsection (a) 
of this section) is amended— 
(AXi) by inserting "(1)" after "(b)"; 
(ii) by redesignating paragraphs (1) and (2) as subparagraphs 
(A) and (B), respectively; 
(iii) by redesignating subparagraphs (A), (B), and (C) of such 
paragraph (1) as clauses (i), (ii), and (iii), respectively; 
(iv) by redesignating subparagraphs (A), (B), (C), and (D) of 
such paragraph (2) as clauses (i), (ii), (iii), and (iv), respectively; 
and 
(v) by redesignating clauses (i) and (ii) of subparagraph (C) of 
both such paragraphs (1) and (2) as subclauses (I) and (II), 
respectively; 
(B) in paragraph (IXA) (as so redesignated by subparagraph 
(A) of this paragraph, and as amended by subsection (aX2XA) of 
this section before such redesignation), by inserting "subject to 
paragraph (2)," before "shall require"; and 
(C) by adding at the end the following new paragraph: 
"(2XA) In carrying out the program under this section, a State 
may design its program to reflect the individual needs of the State 
and to emphasize education, training, and emplojrment services for 
unemployed parents and their spouses who are eligible for aid to 
families with dependent children by reason of this section, to the 
extent provided under this paragraph. 
"(B)(i) Subject to clauses (ii) and (iii), with respect to the require-
ment under section 402(aX41), a State may, at its option, limit the 
number of months with respect to which a family receives aid to 
families with dependent children to the extent determined appro-
priate by the State for the operation of its program under this 
section. 
"(iiXD A State may not limit the number of months under clause 
(i) for which a family may receive aid to families with dependent 
children unless it provides in its plan assurances to the Secretary 
that it has a program (that meets such requirements as the Sec-
retary may in regulation prescribe) for providing education, train-
ing, and emplojnnent services (including any activity authorized 
under section 402(aX19) or under part F) in order to assist parents of 
children described in subsection (a) in preparing for and obtaining 
employment. 
"(II) In exercising the option under clause (i), a State plan may not 
provide for the denial of aid to families with dependent children to a 
family otherwise eligible for such aid for any month unless the 
family has received such aid (on the basis of the unemplo}mient of 
the parent who is the principal earner) in at least 6 of the preceding 
12 months. 
< 
-; 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2395 
"(iii) Each State which, on September 26, 1988, has a program in 
effect under this section shall continue to operate such program 
without a time limitation. 
"(C) With respect to the participation in the program under 
section 402(aX19) and part F of a family eligible for aid to families 
with dependent children by reason of this section, a State may, at its 
option— 
"(i) except as otherwise provided in such section and such 
part, require that any parent participating in such program 
engage in program activities for up to 40 hours per week; and 
(ii) provide for the payment of aid to families with dependent 
children at regular intervals of no greater than one month but 
after the performance of assigned program activities.". 
(2) Section 402(aX19XBXiXII) of such Act (as added by the amend-
ment made by section 201(a) of this Act) is amended by inserting 42 use 602. 
"(and individuals who would be recipients of such aid if the State 
had not exercised the option under section 407(bX2XBXi))" after 
"children". 
(3XA) Section 407(bXl)(B) of such Act (as so redesignated by para-
graph (IXA) of this subsection) is amended by striking "paragraph 
42 use 607. 
(IXA)" each place it appears and inserting in lieu thereof "subpara-
graph (AXi)". 
(B) Section 407(c) of such Act is amended— 
(i) by striking "subparagraph (A) of subsection (bXD" and 
inserting in lieu thereof "subsection (bXlXAXi)"; 
(ii) by striking "subparagraph (B) of such subsection" and 
inserting in lieu thereof "subsection (bXlXAXii)"; and 
(iii) by striking "subparagraph (A) of subsection (bX2)" and 
inserting in lieu thereof "subsection (bXlXBXi)". 
(C) Section 407(dX3) of such Act is amended by striking "section 
407(bXlXC)" and inserting in lieu thereof "subsection a>XlXAXiii)". 
(c) PARTICIPATION IN TRAINING AND EDUCATION PROGRAMS AS A 
QUARTER OF WORK.—(1) Section 407(dXl) of such Act is amended— 
(A) by inserting "(A)" after "means a calendar quarter"; and 
(B) by inserting before the semicolon at the end the following: 
", or (B) at the option of the State, a calendar quarter in which 
such individual attended, full-time, an elementary school, a 
secondary school, or a vocational or technical training course 
(approved by the Secretary) that is designed to prepare the 
individual for gainful employment, or in which such individual 
participated in an education or training program established 
under the Job Training Partnership Act". 
(2) Section 407(d) of such Act is amended by adding at the end the 
following new sentence: 
"Notwithstanding section 402(aXl), a State that chooses to exercise 
the option provided under paragraph (IXB) may provide that the 
definition of calendar quarter under such option apply in one or 
more political subdivisions of the State.". 
(3) Section 407(bXlXAXiiiXI) of such Act (as so redesi^ated by 
subsection (bXlXA) of this section) is amended by inserting ", no 
more than 4 of which may be quarters of work defined in subsection 
(dXlXB)," after "(dXD)". 
(4XA) Section 4070t)X2XBXii) of such Act (as added by the amend-
ment made by subsection (bXlXC) of this section) is amended by 
adding at the end the following new subclause: 
"(III) Any family that is otherwise eligible for aid to families with 
dependent children that does not receive such aid in any month 
102 STAT. 2396 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 use 607. 
42 use 1396a. 
42 use 1396d. 
42 use 607 note. 
42 use 602. 
42 use 602 note. 
Territories, U.S. 
42 use 602 and 
note, 607. 
solely by reason of the State exercising the option under clause (i) 
shall be deemed, for purposes of determining the period under 
paragraph (IXAXiiiXD, to be receiving such aid in such month.". 
(B) Section 407(d)(1) of such Act (as amended by paragraph (1) of 
this subsection) is amended by striking "a community work experi-
ence" and all that follows through the semicolon and inserting in 
Ueu thereof "the program under section 402(aX19) and part F;". 
(d) EXPANSION OF MEDICAID COVERAGE FOR TWO-PARENT FAMI-
LIES.—(1) Section 1902(aX10XAXi) of such Act is amended— 
(A) by striking "or" at the end of subclause (HI), 
(B) by adding or" at the end of subclause (IV), and 
(
C
O by adding at the end the following new subclause: 
"(V) who are qucdified family members as de-
fined in section 1905(mXl);". 
(2) Section 1905 of such Act is amended by inserting after subsec-
tion G) the following new subsection: 
"(mXl) Subject to psuragraph (2), the term 'qualified family 
member' means an individual (other than a qualified pr^nant 
woman or child, as defined in subsection (n)) who is a member of a 
family that woidd be receiving aid under the State plan under part 
A of title IV pursuant to section 407 if the State had not exercised 
the option under section 407(bX2XBXi). 
"(2) No individual shall be a qualified family member for any 
period after September 30,1998.". 
(e) EVALUATION AND REPORT.—(1) The Secretary of Health and 
Human Services shall evaluate the time-limited and conventional 
State programs conducted under section 407 of the Social Security 
Act (as amended by this section), including the effects of the work 
requirement applicable to families receiving benefits under such 
section. 
(2) The Secretaiy shall, not later than July 1, 1996, submit to the 
Congress an interim report containing the findings of such evalua-
tion t(^ether with recommendations for any changes in such pro-
gram, and shall, not later than July 1,1998, submit to the Congress 
a final report containing such findings and recommendations. 
(f) Section 402(a) of such Act (as amended by sections 201(a) and 
401(a) of this Act) is amended— 
(1) by striking "and" at the end of paragraph (40); 
(2) by striking the period at the end of paragraph (41) and 
inserting "; and'; and 
(3) by inserting immediately after paragraph (41) the follow-
ing new paragraph: 
^'(42) provide that if, under section 407(bX2XBXi), the State 
limits the number of months for which a family may receive aid 
to families with dependent children, the State shall provide 
medical assistance to all members of the family under the 
State's plan approved under title XIX, without time limitation. 
(g) EFFECTIVE DATE.—(1) Except as provided in paragraph (2), and 
in section 1905(mX2) of the Social Security Act (as added by subsec-
tion (dX2) of this section), the amendments made by this section 
shall become effective on ()ctober 1,1990. 
(2) The amendments made by this section shall not become effec-
tive with respect to Puertp Rico, American Samoa, Guam, or the 
Virgin Islands, until October 1,1992. 
(h) TERMINATION.—Effective September 30,1998, the amendments 
msule by this section (other than by subsection (d)) are repealed, and 
the provisions of law so amended (as in effect immediately before 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2397 
the effective date of such amendments) shall apply as if such 
amendments had never been made. 
SEC. 402. CHANGES IN EARNED INCOME DISREGARDS. 
(a) LIMIT ON DISREGARD OF CHILD CARE COSTS INCREASED; CHILD 
CARE DISREGARD TO BE APPUED LAST.—Section 402(a)(8XAXiii) of the 
Social Security Act is amended— 
42 use 602. 
(1) by inserting "after applying the other clauses of this 
subparagraph," before "shall disregard"; 
(2) by striking "$160" and inserting in lieu thereof "$175"; 
and 
(3) by inserting before the semicolon ", or, in the case such 
child is under age 2, $200". 
Ot)) STANDARD DISREGARD INCREASED.—Section 402(a)(8)(A)(ii) of 
such Act is amended by striking "$75" and inserting in lieu thereof 
"$90". 
(c) DISREGARD OF ADVANCE PAYMENTS OR REFUND OF EARNED 
INCOME TAX CREDIT.—(1) Section 402(aX8XA) of such Act is 
amended— 
(A) by striking "and" at the end of clause (vi); and 
(B) bv adding at the end the following new clause: 
(viii) shall disregard any refund of Federal income taxes 
made to a family receiving aid to families with dependent 
children by reason of section 32 of the Internal Revenue 
Code of 1986 (relating to earned income tax credit) and any 
pa5maent made to such a family by an employer under 
section 3507 of such Code (relating to advance payment of 
earned income credit); and". 
(2XA) Section 402(d) of such Act is repealed. 
(B) Section 402(a)(30) of such Act is amended by striking "subsec-
tion (d)" and inserting in lieu thereof "subsection (e)". 
(d) EFFECTIVE DATE.—The amendments made by this section shall 42 use 602 note. 
become effective on October 1,1989. 
SEC. 403. HOUSEHOLDS HEADED BY MINOR PARENTS. 
(a) IN GENERAL.—Section 402(a) of the Social Security Act (as 
amended by sections 201(a), 401(a), and 401(f) of this Act) is 
amended— 
(1) by striking "emd" at the end of paragraph (41); 
(2) by striking the period at the end of paragraph (42) and 
inserting "; and"; and 
(3) by inserting immediately after paragraph (42) the follow-
ing new paragraph: 
"(43) at the option of the State, provide that— 
"(A) subject to subparagraph (B), in the case of any 
individual who is under the age of 18 and has never mar-
ried, and who has a dependent child in his or her care (or is 
pregnant and is eligible for aid to families with dependent 
children under the State plan)— 
"(i) such individual may receive aid to families with 
dependent children under the plan for the individual 
and such child (or for herself in the case of a pregnant 
womEin) only if such individual and child (or such 
pregnant woman) reside in a place of residence main-
tained by a parent, legal guardian, or other adult 
relative of such individual as such parent's, guardian's, 
or adult relative's own home, or reside in a foster home, 
102 STAT. 2398 
PUBLIC LAW 100-485—OCT. 13, 1988 
maternity home, or other adult-supervised supportive 
living arrangement; and 
"(ii) such aid (where possible) shall be provided to the 
parent, legal guardian, or other adult relative on behalf 
of such individual and child; and 
"(B) subparagraph (A) does not apply in the case where— 
"(i) such individual has no parent or legal guardian 
of his or her own who is living and whose whereabouts 
are known; 
"(ii) no living parent or legal guardian of such 
individual allows the individual to live in the home of 
such parent or guardian; 
"(iii) the State agency determines that the physical 
or emotional health or safety of such individual or such 
dependent child would be jeopardized if such individual 
and such dependent child lived in the same residence 
with such individual's own parent or legal guardian; 
"(iv) such individual lived apart from his or her own 
parent or legal guardian for a period of at least one 
year before either the birth of siny such dependent 
child or the individual having made application for aid 
to families with dependent children under the plan; or 
"(v) the State agency otherwise determines (in 
accordance with regulations issued by the Secre-
tary) that there is good cause for waiving such 
subparagraph.". 
42 use 602 note. 
(b) EFFECTIVE DATE.—The amendments made by this section shall 
become effective on the first day of the first calendar quarter to 
begin one year or more after the date of the enactment of this Act. 
SEC. 404. PERIODIC REEVALUATION OF NEED AND PAYMENT STAND-
ARDS. 
(a) IN GENERAL.—Section 402 of the Social Security Act (as 
amended by section 301 of this Act) is amended by adding at the end 
the following new subsection: 
"(hXl) Each State shall reevaluate the need standard and pay-
ment standard under its plan at least once every 3 years, in accord-
ance with a schedule established by the Secretary, and report the 
results of the reevaluation to the Secretary and the public at such 
time and in such form and manner as the Secretary may require. 
"(2) The report required by paragraph (1) shall include a state-
ment of— 
"(A) the manner in which the need standard of the State is 
determined, 
"(B) the relationship between the need standard and the 
payment standard (expressed £is a percentsige or in any other 
manner determined by the Secretary to be appropriate), and 
"(C) any changes in the need standard or the payment stand-
ard in the preceding 3-year period. 
Reports. 
"(3) The Secretary shall report promptly to the Congress the 
results of the reevaluations required by paragraph (1).". 
42 use 602 note. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall become effective on the date of the enactment of this Act. 
Reports. 
Public 
information. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2399 
SEC. 405. CBO STUDY ON IMPLEMENTATION OF NATIONAL MINIMUM 
PAYMENT STANDARD. 
(a) IN GENERAL.—The Congressional Budget Office shall conduct a 
study on the implementation of the amendments proposed by sec-
tion 101 of the bill introduced in the Senate of the United States 
during the 100th Congress and designated S. 862 (relating to the 
requirement of a minimum payment standard under part A of title 
IV of the Social Security Act with a Federal matching rate of 90 
percent). 
db) DESCRIPTION OF STUDY.—The study conducted under subsection 
(a) shall assess the extent to which— 
(1) the goal of budget neutrality may be preserved by repeal-
ing the programs included in, but not limited to, the programs 
described in the amendments proposed by section 301 of the bill 
described in subsection (a) over a more gradual period of time in 
conjunction with corresponding increases (up to 90 percent) in 
the Federal matching rates under part A of title IV, and title 
XIX, of the Social Security Act; and 
(2) the effects on local governments of repealing Federal 
programs could be mitigated by providing, over a period of time 
that corresponds with more gradual increases in the Federal 
matching rates under such part A and title XIX, general reve-
nue supplements to those localities with the lowest levels of 
fiscal capacity and pass-throughs to units of local government. 
(c) REPORT TO CONGRESS.—The Congressional Budget Office shall 
report on the results of the study conducted under this section not 
later than 12 months after the date of the enactment of this Act. 
(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 
be appropriated such sums as may be necessary to carry out this 
section. 
SEC. 406. STUDY 
OF 
NEW 
NATIONAL APPROACHES TO WELFARE 42 USC 602 note. 
BENEFITS FOR LOW-INCOME FAMILIES WITH CHILDREN. 
(a) IN GENERAL.—The Secretary of Health and Human Services Contracts. 
shall enter into a contract or arrangement with the National Acad-
emy of Sciences for the study of a new national system of welfare 
benefits for low-income families with children, giving particular 
attention to what an appropriate national minimum benefit might 
be and how it should be calculated. The study shall give consider-
ation to alternative minimum benefit proposals including proposals 
for benefits based on a famUy living standard, on weighted national 
median income, on State median income, and on the poverty level, 
and shall take into account the probable impact of a national 
minimum 
benefit 
on 
individuals 
and 
on 
State 
and 
local 
governments. 
Ot)) METHODOLOGY.—(1) The study under this section shall include 
the development of a uniform national methodology which could be 
used to calculate State-specific family living standards and benefits 
based on other minimum benefit proposals. 
(2) The methodology so developed shall be designed to identify a 
single uniform measure suitable for application in each State, and 
shall— 
(A) take into account actual living costs in each State while 
permitting variances in such costs as between the different 
geographic areas of the State; 
(B) take into account variations in actual living costs in each 
State for families of different sizes and composition; and 
102 STAT. 2400 
PUBLIC LAW 100-485—OCT. 13, 1988 
(C) specify an effective process for reassessing and updating 
both the methodology and the resulting family living standard^ 
and benefits based on other minimum benefit policies at least 
once every 4 years. 
(3) The methodology so developed shall reflect the costs of basic 
necessities including housing, furnishings, food, clothing, transpor-
tation, utilities, and other maintenance items; and the study shall 
take into account variations in costs for different geographic areas 
of the State where such costs may be substantially different, and 
variations in costs for families of different sizes and composition. 
(c) OTHER CONSIDERATIONS; PROGRESSION TO PROPOSED MINIMUM 
BENEFIT LEVELS.—In order to assess the implications of States 
moving to a new system of welfare benefits, the study shall include 
an analysis of the relationship between a State's fiscal capacity and 
other circumstances and constraints and the application of a full 
family living standard or other minimum benefit policy. The study 
shall propose a formula designed to achieve a uniform progression 
from the level of assistance currently being provided for low-income 
families with children under the AFDC program, the food stamp 
program, and the low-income energy assistance program, by each 
State, to a level based on the full family living standard or other 
minimum benefit policy for that State. For this purpose the Sec-
retary shall define the term "low-income families with children" in 
a manner which reflects all families that include dependent chil-
dren £is defined for purposes of the AFDC program. 
(d) REPORT AND RECOMMENDATIONS.—The Academy shall report 
its recommendations resulting from the study under this section to 
the Secretary no later than 24 months after the date of the enact-
ment of this Act; and the Secretary shall promptly transmit such 
recommendations to the Congress. 
(e) AUTHORIZATION OF FUNDS.—There are authorized to be appro-
priated such sums as may be necessary to carry out this section. 
TITLE V—DEMONSTRATION PROJECTS 
Grants. 
SEC. 501. FAMILY SUPPORT DEMONSTRATION PROJECTS. 
note. 
(a) DEMONSTRATION PROJECTS TO TEST THE EFFECT OF EARLY CHILD-
HOOD DEVELOPMENT PROGRAMS.—(1) In order to test the effect of in-
home early childhood development programs and pre-school center-
based development programs (emphasizing the use of volunteers and 
including academic credit for student volunteers) on families receiv-
ing aid under State plans approved under section 402 of the Social 
Security Act and participating in the job opportunities and basic 
skills training program under part F of title IV of such Act, up to 10 
States may undertake and carry out demonstration projects utiliz-
ing such development programs to enhance the cognitive skills and 
linguistic ability of children under the age of 5, to improve the 
communications skills of such children, and to develop their ability 
to read, write, and speak the English language effectively. Such 
projects may include parents along with their eligible children in 
family-centered education programs that assist children directly in 
achieving the goals stated in the preceding sentence and also help 
parents contribute to the proper development and education of their 
young children. Demonstration projects under this subsection shall 
meet such conditions and.requirements as the Secreteipr of Health 
and Human Services (in this section referred to as the ' Secretary") 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2401 
shall prescribe, and no such project shall be conducted for a period 
of more than 3 years. 
(2) The Secretary shall consider all applications received from 
States desiring to conduct demonstration projects under this subsec-
tion, shall approve up to 10 applications involving projects which 
appear likely to contribute significantly to the achievement of the 
purpose of this subsection, and shall make grants to the States 
whose applications are approved to assist them in canying out such 
projects. 
(3) The Secretary shall submit to the Congress with respect to 
each project undertaken by a State under this subsection, after such 
project has been carried out for one year and again when such 
project is completed, a detailed evaluation of the project and of its 
contribution to the achievement of the purpose of this subsection. 
(b) STATE DEMONSTRATION PROJECTS TO ENCOURAGE INNOVATIVE 
EDUCATION AND TRAINING PROGRAMS FOR CHILDREN.—In order to 
encourage States to develop innovative education and training pro-
grams for children receiving aid under State plans approved under 
section 402 of the Social Security Act, any State may establish and 
conduct one or more demonstration projects, targeted to such chil-
dren, designed to test financial incentives and interdisciplinary 
approaches to reducing school dropouts, encouraging skill develop-
ment, and avoiding welfare dependence; and the Secretary may 
make grants to States to assist in financing such projects. Dem-
onstration projects under this subsection shall meet such conditions 
and requirements as the Secretary shall prescribe, and no such 
project shall be conducted for a period of less than one year or more 
than 5 years. 
(c) DEMONSTRATIONS TO ENSURE LONG TERM FAMILY SELF-SUFFI-
ciENCY THROUGH COMMUNITY-BASED SERVICES.—Any State, using 
funds made available to it from appropriations made pursuant to 
subsection (d) in conjunction with its other resources, may conduct 
demonstrations to test more effective methods of providing coordina-
tion and services to ensure long term family self-sufficiency through 
community-based comprehensive family support services involving a 
partnership between the State agency administering or supervising 
the administrating of the State's plan under section 402 of the Social 
Security Act and community-based organizations having experience 
and demonstrated effectiveness in providing services. 
(d) 
AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose 
of 
making grants to States to conduct demonstration projects under 
this section, there is authorized to be appropriated not to exceed 
$6,000,000 for each of the fiscal years 1990,1991, arid 1992. 
SEC. 502. DEMONSTRATION PROJECTS TO ENCOURAGE STATES TO 
Grants. 
EMPLOY PARENTS RECEIVING AFDC AS PAID CHILD CARE 42 USC 1315 
PROVIDERS. 
"°*® 
(a) IN GENERAL.—In order to encourage States to employ or 
arrange for the employment of parents of dependent children receiv-
ing aid under State plans approved under section 402(a) of the Social 
Security Act as providers of child care for other children receiving 
such aid, up to 5 States may undertake and carry out demonstration 
projects designed to test whether such emplojmient will effectively 
facilitate the conduct of the job opportunities and basic skills train-
ing program under part F of title IV of such Act by making 
additional child care services available to meet the requirements of 
section 402(gXlXA) of such Act while affording significant numbers 
19-194 O—91—Part 3 
15 : QL 3 
102 STAT. 2402 
PUBLIC LAW 100-485—OCT. 13, 1988 
of families receiving such aid a realistic opportunity to avoid welfare 
dependence through emplojmient as a child care provider. 
(b) CONSIDERATION OF APPUCATIONS.—The Secretary of Health 
and Human Services shall consider all applications received from 
States desiring to conduct demonstration projects under this section, 
shall approve up to 5 applications involving projects which appear 
likely to contribute significantly to the achievement of the purpose 
of this section, and shall make grants to those States the .applica-
tions of which are approved to assist them in carrying out such 
projects. Each project conducted under this section shall meet such 
conditions and requirements as the Secretary shall prescribe. 
(c) LIMITATION ON AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of making grants to States to carry out demonstration 
projects under this section, there is authorized to be appropriated 
not to exceed $1,000,000 for each of the fiscal years 1990, 1991, and 
1992. 
(d) EFFECTIVE DATE.—This section shall become effective on Octo-
ber 1,1989. 
Contracts. 
SEC. 503. DEMONSTRATION PROJECTS TO TEST ALTERNATIVE DEFINI-
TIONS OF UNEMPLOYMENT. 
42 use 1315. 
Section 1115 of the Social Security Act is amended by adding at 
the end the following new subsection: 
"(dXlXA) The Secretary shall enter into agreements with up to 8 
States submitting applications under this subsection for the purpose 
of conducting demonstration projects in such States to test and 
evaluate the use, with respect to individuals who received aid under 
part A of title IV in the preceding month (on the basis of the 
unemplojnnent of the parent who is the principal earner), of a 
number greater than 100 for the number of hours per month that 
such individuals may work and still be considered to be unemployed 
for purposes of section 407. If any State submits an application 
under this subsection for the purpose of conducting a demonstration 
project to test and evaluate the total elimination of the 100-hour 
rule, the Secretary shall approve at least one such application. 
"(B) If any State with an agreement under this subsection so 
requests, the demonstration project conducted pursuant to such 
agreement may test and evaluate the complete elimination of the 
100-hour rule and of any other durational standard that might be 
applied in defining unemplo3mient for purposes of determining eligi-
bility under section 407. 
"(2) Notwithstanding section 402(aXl), a demonstration project 
conducted under this subsection may be conducted in one or more 
political subdivisions of the State. 
"(3) An agreement under this subsection shall be entered into 
between the Secretary and the State agency designated under sec-
tion 402(aX3). Such agreement shall provide for the pa3rment of aid 
under the applicable State plan under part A of title IV as though 
section 407 had been modified to reflect the definition of unemploy-
ment used in the demonstration project but shall also provide that 
such project shall otherwise be carried out in accordance with all of 
the requirements and conditions of section 407 (and, except as 
provided in paragraph (2), any related requirements and conditions 
under part A of title IV). 
"(4) A demonstration project under this subsection may be com-
menced any time after September 30, 1990, and shall be conducted 
for such period of time as the agreement with the Secretary may 
PUBLIC LAW 100-485-OCT. 13, 1988 
102 STAT. 2403 
Grants. 
Public 
information. 
provide; except that, in no event may a demonstration project under 
this section be conducted after September 30,1995. 
"(5XA) Any State with an agreement under this subsection shall 
evaluate the comparative cost and employment effects of the use of 
the definition of unemployment in its demonstration project under 
this section by use of experimental and control groups comprised of 
a random sample of individuals receiving aid under section 407 and 
shall furnish the Secretary with such information as the Secretary 
determines to be necessary to evaluate the results of the project 
conducted by the State. 
"(B) The Secretary shall report the results of the demonstration Reports. 
projects conducted under this subsection to the Congress not later 
than 6 months after all such projects are completed.". 
SEC. 504. DEMONSTRATION PROJECTS TO ADDRESS CHILD ACCESS 42 USC 1315 
PROBLEMS. 
note. 
(a) IN GENERAL.—Any State may establish and conduct one or 
more demonstration projects (in accordance with such terms, condi-
tions, and requirements as the Secretary of Health and Human 
Services shall prescribe, except that no such project may include the 
withholding of aid to families with dependent children pending 
visitation) to develop, improve, or expand activities designed to 
increase compliance with child access provisions of court orders. 
(b) AcnviTiES UNDER PROJECT.—Activities that may be funded by 
a grant under this section include (whether conducted through the 
executive, legislative, or judicial branches of the State) the develop-
ment of systematic procedures for enforcing access provisions of 
court orders, the establishment of special staffs to deal with and . 
mediate disputes involving access (both before and after a court 
order has been issued), and the dissemination of information to 
parents. 
(c) OTHER REQUIREMENTS.—In the case of any experimented, pilot, 
or demonstration project undertaken under this section, the 
project— 
(1) must be designed to improve the financial well-being of 
families with children or otherwise improve the operation of the 
program or programs involved; and 
(2) may not permit modifications in any program which would 
have the effect of disadvant£iging children in need. 
(d) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of Grants 
making grants to States to assist in financing the projects estab-
lished under this section, there is authorized to be appropriated not 
to exceed $4,000,000 for each of the fiscal years 1990 and 1991. 
(e) REPORT.—Not later than July 1, 1992, the Secretary of Health 
and Human Services shall submit to the Congress a report on the 
effectiveness of the demonstration projects established under this 
section in— 
(1) decreasing the time required for the resolution of disputes 
related to child access, 
(2) reducing litigation relating to access disputes, and 
(3) improving compliance with court-ordered child support 
payments. 
102 STAT. 2404 
PUBLIC LAW 100-485—OCT. 13, 1988 
note. 
Contracts. 
SEC. 505. DEMONSTRATION PROJECTS TO EXPAND THE NUMBER OF JOB 
42 use 1315 
OPPORTUNITIES 
AVAILABLE 
TO CERTAIN 
LOW-INCOME 
INDIVIDUALS. 
(a) IN GENERAL.—The Secretary of Health and Human Services (in 
this section referred to as the ' Secretary") shall enter into agree-
ments with not less than 5 nor more than 10 nonprofit organizations 
(including community development corporations) submitting ap-
plications under this section for the purpose of conducting dem-
onstration projects in accordance with subsection (b) to create 
employment opportunities for certain low-income individuals. 
(b) NATURE OF PROJECT.—(1) Each nonprofit organization conduct-
ing a demonstration project under this section shall provide 
technical and financial assistance to private employers in the 
community to eissist them in creating emplo3mient and business 
opportunities for those individuals eligible to participate in the 
projects as described in this subsection. 
(2) For purposes of this section, a nonprofit organization is any 
organization (including a community development corporation) 
exempt from taxation under section 501(a) of the Internal Revenue 
Code of 1986 by reason of paragraph (3) or (4) of section 501(c) of such 
Code. 
(3) A low-income individual eligible to participate in a project 
conducted under this section is any individual eligible to receive aid 
to families with dependent children under part A of title IV of the 
Social Security Act and any other individual whose income level 
does not exceed 100 percent of the official poverty line as defined by 
the Office of Management and Budget and revised in accordance 
with section 673(2) of the Omnibus Budget Reconciliation Act of 
1981. 
(c) CONTENT OF APPLICATIONS; SELECTION PRIORITY.—(1) Each non-
profit organization submitting an application under this section 
shall, as part of such application, describe— 
(A) the technical and financial assistance that will be made 
available under the project conducted under this section; 
(B) the geographic area to be served by the project; 
(C) the percentage of low-income individuals (as described in 
subsection (b)) and individuals receiving aid to families with 
dependent children under title IV of the Social Security Act in 
the area to be served by the project; and 
(D) unemployment rates in the geographic areas to be served 
and (to the extent practicable) the jobs available and skills 
necessary to fill those vacancies in such areas. 
(2) In approving applications under this section, the Secretary 
shall give priority to applications proposing to serve those areas 
containing the highest percentage of individuals receiving edd to 
families with dependent children under title IV of such Act. 
(d) ADMINISTRATION.—Each nonprofit organization participating 
in a demonstration project conducted under this section shall pro-
vide assurances in its agreement with the Secretary that it has or 
will have a cooperative relationship with the agency responsible for 
administering the job opportunities and basic skills training pro-
gram (as provided for under title IV of the Social Security Act) in 
the area served by the project. 
(e) DURATION.—Each demonstration project conducted under this 
section shall be commenced not later than September 30, 1989, and 
shall be conducted for a 3-year period; except that the Secretary 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2405 
may terminate a project before the end of such period if he deter-
mines that the nonprofit organization conducting the project is not 
in substantial compUance with the terms of the agreement entered 
into with the Secretary under this section. 
(f) EVALUATION AND REPORT.—(1) The Secretary shall conduct an 
evaluation of the success of each demonstration project conducted 
under this section in creating job opportunities and may require 
each nonprofit organization conducting such a project to provide the 
Secretary with such information as the Secretary determines is 
necessary to prepare the report described in paragraph (2). 
(2) Not later than January 1, 1993, the Secretary shall submit to 
the Congress a report containing a summary of the evaluations 
conducted under paragraph (1), together with such recommenda-
tions as the Secretary determines are appropriate. 
(g) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of Grants. 
making grants to conduct demonstration projects under this section, 
there is authorized to be appropriated not to exceed $6,500,000 for 
each of the fiscal years 1990,1991, and 1992. 
SEC. 506. DEMONSTRATION PROJECTS TO PROVIDE COUNSELING AND 
SERVICES TO HIGH-RISK TEENAGERS. 
42 use 1315 
note. 
(a) FINDINGS AND PURPOSE.—(1) The Congress finds that— 
(A) the incidences of teenage pregnancy, suicide, substance 
abuse, and school dropout are increasing; 
(B) research to date has established a link between low self-
esteem, perceived limited life options and the risk of teenage 
pregnancy, suicide, substance abuse, and school dropout; 
(C) little data currently exists on how to improve the self-
image of and expand the life options available to high-risk 
teenagers; and 
(D) there currently is no Federal program in place to address 
the unique and significant problems faced by today's teenagers. 
(2) It is the purpose of the demonstration projects conducted under 
this section to provide programs in which a range of non-academic 
services (sports, recreation, the arts) and self-image counseling are 
provided to high-risk teenagers in order to reduce the rates of 
pregnancy, suicide, substance abuse, and school dropout among such 
teenagers. 
(b) IN GENERAL.—The Secretary of Health and Human Services (in Contracts, 
this section referred to as the "Secretary") shall enter into an 
agreement with each of 4 States submitting applications under this 
section for the purpose of conducting demonstration projects in 
accordance with this section to provide counseling and services to 
certain high-risk teenagers. 
(c) NATURE OF PROJECT.—Under each demonstration project con-
ducted under this section— 
(1) The State shall establish a "Teen Care Plan" that shall 
consist of the following: 
(A) A clearing house where high-risk teenagers will be 
referred to and encouraged to participate in non-academic 
activities (arts, recreation, sports) which are already in 
place in the community. 
(B) A survey of the area to be targeted by the project to 
determine the need to fund and create new non-academic 
activities in the area. 
(C) Counseling services utilizing qualified, locally licensed 
psychologists, social psychologists, or other mental hesdth 
102 STAT. 2406 
PUBLIC LAW 100-485—OCT. 13, 1988 
professionals or related experts to provide individual and 
group counseling to participating high-risk teeneigers. 
Transportation. 
(D) A program to provide participants in the project (to 
the extent practicable) with such transportation, child care, 
and equipment as is necessary to carry out the purposes of 
the project. 
(2) The State shall designate two geographical areas within 
the State to be targeted by the project. One area will serve as 
the "home base" for the project, where services will be con-
centrated and in which a local school system will be selected to 
receive services and provide facilities for resource referral and 
counseling. The second geographical area will serve as a 
"peripheral" participant, receiving assistance and services from 
the home base. 
(3) A high-risk teenager is any male or female who has 
reached the age of 10 years and whose age does not exceed 20 
years, and who— 
(A) has a history of academic problems; 
(B) has a history of behavioral problems both in and out 
of school; 
(C) comes from a one-parent household; or 
(D) is pregnant or is a mother of a child. 
(d) APPUCATIONS; SELECTION CRITERIA.—(1) In selecting States to 
conduct demonstration projects under this section, the Secretary— 
(A) shall consult with the Consortium on Adolescent Preg-
nancy; 
(B) shall consider— 
(i) the rate of teenage pregnemcy in each State, 
(ii) the teenage school dropout rate in each State, 
(iii) the incidence of teenage substance abuse in each 
State, and 
(iv) the incidence of teenage suicide in each State; and 
(C) shall give priority to States whose applications— 
(i) demonstrate a current strong State commitment aimed 
at reducing teenage pregnancy, suicide, drug abuse, and 
school dropout; 
(ii) contain a "State support agreement" signed by the 
Governor, the State School Commissioner, the State Depart-
ment of Human Services, emd the State Department of 
Education, pledging their commitment to the project; 
(iii) describe facilities and services to be made available 
by the State to assist in carrying out the project; and 
(iv) indicate a demonstrably high rate of alcoholism 
among its residents. 
(2) Of the States selected to participate in the demonstration 
projects conducted under this section— 
(A) one shall be a geographically small State with a popu-
lation of less than 1,250,000; 
(B) one shall be a State with a population of over 20,000,000; 
and 
(C) two shall be States with populations of more than 
1,000,000 but less than 20,000,000. 
(e) EVALUATION AND REPORT.—(1) Each State conducting a dem-
onstration project under this section shall submit to the Secretary 
for his approval an evaluation plan that provides for examining the 
effectiveness of the project in both the home base and peripheral 
area of the State. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2407 
(2) Not later than October 1, 1992, the Secretary shall submit to 
the Congress a report containing a summary of the evaluations 
conducted by States pursuant to the plans described in paragraph 
(1). 
(f) FUNDING.—(1) Three-fifths of the total amount appropriated 
pursuant to this section for any fiscal year for each State conducting 
a demonstration project shall be expended by such State for the 
provision of services and facilities within the State's designated 
project home base, and 5 percent of such three-fifths shall be set 
aside for the conduct of the State's evaluation as provided for in 
subsection (e). 
(2) Two-fifths of the total amounts appropriated pursuant to this 
section for any fiscal year for each State conducting a demonstration 
project shall be expended by such State for the provision of services 
and facilities within the State's designated peripheral area, and 5 
percent of such two-fifths shall be set aside for the conduct of the 
State's evaluation as provided for in subsection (e). 
(g) DURATION.—A demonstration project conducted under this Contracts. 
section shall be commenced not later than September 30, 1989, and 
shall be conducted for a 3-year period; except that the Secretary 
may terminate a project before the end of such period if he deter-
mines that the State conducting the project is not in substantial 
compliance with the terms of the agreement entered into with the 
Secretary under this section. 
(h) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of fund-
ing in equal amounts each State demonstration project conducted 
under this section, there is authorized to be appropriated not to 
exceed $1,500,000 for each of the fiscal years 1990, 1991, and 1992. 
SEC. 507. EXTENSION OF MINNESOTA PREPAID MEDICAID DEMONSTRA-
TION PROJECT. 
Upon application by the State of Minnesota, the Secretary of 
Health and Human Services shall extend until June 30, 1990, the 
waiver granted to such State under section 1115(a) of the Social 
Security Act to conduct a prepaid medicaid demonstration project. 
TITLE VI—MISCELLANEOUS PROVISIONS 
SEC. 601. INCLUSION OF AMERICAN SAMOA AS A STATE UNDER TITLE IV. 
(a) IN GENERAL.—The last sentence of section llOl(aXl) of the 
Social Security Act (42 U.S.C. 1301(aXl)) is amended to read as 
follows: "Such term when used in title IV also includes American 
Samoa.". 
(b) LIMITATION ON PAYMENTS TO AMERICAN SAMOA.—Section 1108 
of such Act (42 U.S.C. 1308) is amended— 
(1) by redesignating subsection (d) as subsection (e); and 
(2) by inserting after subsection (c) the following new subsec-
tion: 
"(d) The total amount certified by the Secretary under parts A 
and E of title IV with respect to a fiscal year for payment to 
American Samoa (exclusive of any amounts on account of services 
and items to which, in the case of part A of such title, section 403(k) 
applies) shall not exceed $1,000,000.". 
(c) CONFORMING AMENDMENTS.—(1) Section 403 of such Act (42 
U.S.C. 603) is amended— 
102 STAT. 2408 
PUBLIC LAW 100-485—OCT. 13, 1988 
(A) in paragraphs (1) and (2) of subsection (a), by striking ''and 
Guam," each place it appears and inserting in lieu thereof 
"Guam, and American Samoa,"; and 
(B) in subsections (iX4) and (j), by striking "or the Viigin 
Islands" and inserting in lieu thereof "the Virgin Mands, or 
American Samoa". 
(2) The heading of section 1108 of such Act (42 U.S.C. 1308) is 
amended to read as follows: 
"LIMITATION ON PAYMENTS TO PUERTO RICO, THE VIRGIN ISLANDS, 
GUAM, AND AMERICAN SAMOA". 
(3) The last sentence of section 1118 of such Act (42 U.S.C. 1318) is 
amended by inserting before the period the following: ", and shall, 
in the case of American Samoa, mean 75 per centum with respect to 
part A of title IV". 
42 use 603 note. 
(d) EFFECTIVE DATE.—^The amendments made by this section shall 
become effective on October 1,1988. 
SEC. 602. INCREASE IN AMOUNT AVAILABLE FOR PAYMENT TO PUERTO 
RICO, THE VIRGIN ISLANDS, AND GUAM. 
(a) IN GENERAL.—Section 1108(a) of the Social Security Act (42 
U.S.C. 1308(a)) is amended— 
(1) in paragraph (1)— 
(A) by striking "or" at the end of subparagraph (E); and 
(B) by striking subparagraph (F) and inserting in lieu 
thereof the following: 
"(F) $72,000,000 with respect to each of the fiscal years 
1979 through 1988, or 
"(G) $82,000,000 with respect to the fiscal year 1989 and 
each fiscal year thereafter;'; 
(2) in paragraph (2)— 
(A) by striking "or" at the end of subparagaph (E); and 
(B) by striking subparagraph (F) and inserting in lieu 
thereof the following: 
"(F) $2,400,000 with respect to each of the fiscal years 1979 
through 1988, or 
"(G) $2,800,000 with respect to the fiscal year 1989 and 
each fiscal year thereafter;'; and 
(3) in paragraph (3)— 
(A) by striking "or" at the end of subparagraph (E); and 
(B) by striking subparagraph (F) and inserting in lieu 
thereof the following: 
"(F) $3,300,000 with respect to each of the fiscal years 
1979 through 1988, or 
"(G) $3,800,000 with respect to the fiscal year 1989 and 
each fiscal year thereafter.", 
42 use 1308 
(b) EFFECTIVE DATE.—^The amendments made by subsection (a) 
note. 
shall become effective on October 1,1988. 
SEC. 603. ASSISTANT SECRETARY FOR FAMILY SUPPORT. 
(a) IN GENERAL.—^Part A of title IV of the Social Security Act (as 
amended by the preceding provisions of this Act) is further amended 
by adding at the end the foUowing new section: 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2409 
"ASSISTANT SECRETARY FOR FAMILY SUPPORT 
"SEC. 418. The programs under this part, part D, and part F shall President of U.S. 
be administered by an Assistant Secretary for Family Support 42 use 617. 
within the Department of Health and Human Services, who shall be 
appointed by the President, by and with the advice and consent of 
the Senate, and who shall be in addition to any other Assistant 
Secretary of Health and Human Services provided for by law.". 
(b) COMPENSATION.—Section 5315 of title 5, United States Code, is 
amended by striking "(4)" at the end of the item relating to Assist-
ant Secretaries of Health and Human Services and inserting in lieu 
thereof "(5)". 
(c) EFFECTIVE DATE.—The amendments made by this section shall 
42 use 617 note. 
become effective on February 1,1989. 
SEC. 604. RESPONSIBILITIES OF THE STATE. 
(a) IN GENERAL.—Section 402(a) of the Social Security Act (as 
amended by sections 201(a), 401(a), 401(f), and 403(a) of this Act) is 
amended— 
(1) by striking "and" at the end of paragraph (42); 
(2) by striking the period at the end of paragraph (43) and 
inserting in lieu thereof "; and"; and 
(3) by inserting immediately after paragraph (43) the follow-
ing new paragraph: 
"(44) provide that the State agency shall— 
"(A) be responsible for assuring that the benefits and 
services under the programs under this part, part D, and 
part F are furnished in an integrated manner, and 
"(B) consistent with the provisions of this title, ensure 
that all applicants for and recipients of aid to families with 
dependent children are encouraged, assisted, and required 
to cooperate in the establishment of paternity and the 
enforcement of child support obligations, and are notified of 
the paternity establishment and child support services for 
which they may be eligible.". 
(b) EFFECTIVE DATE.—The amendments made by subsection (a) 
42 USe 602 note. 
shall become effective on July 1,1989. 
SEC. 605. ESTABLISHMENT OF 
PREELIGIBILITY FRAUD DETECTION 
MEASURES. 
(a) IN GENERAL.—Section 402(a) of the Social Security Act (as 
amended by sections 201(a), 401(a), 401(f), 403(a), and 604(a) of this 
Act) is amended— 
(1) by striking "and" at the end of paragraph (43); 
(2) by striking the period at the end of paragraph (44) and 
inserting in lieu thereof "; and"; dnd 
(3) by inserting immediately after paragraph (44) the follow-
ing new paragraph: 
"(45) provide (in accordance with regulations issued by the 
Secretary) for appropriate measures to detect 
fraudulent 
applications for aid to families with dependent children prior to 
the establishment of eligibility for such aid.". 
(b) EFFECTIVE DATE; REGULATIONS.—(1) The amendments made by 
42 use 602 note. 
subsection (a) shall become effective on October 1,1989. 
(2) The Secretary of Health and Human Services shall issue final 
regulations with respect to the requirement added by the amend-
102 STAT. 2410 
PUBLIC LAW 100-485—OCT. 13, 1988 
ment made by subsection (a) not later than 6 months after the date 
of the enactment of this Act. 
SEC. 606. UNIFORM REPORTING REQUIREMENTS. 
42 use 603. 
Section 403 of the Social Security Act is amended by inserting 
immediately before subsection (f) the following new subsection: 
"(e) In order to assist in obtaining the information needed to carry 
out subsection Ot>Xl) and otherwise to perform his duties under this 
part, the Secretary shall establish uniform reporting requirements 
under which each State will be required periodically to furnish such 
information and data as the Secretary may determine to be nec-
essary to ensure that sections 402(aX37), 402(aX43), and 402(gXlXA), 
are being effectively implemented, including at a minimum the 
average monthly number of families assisted under each such sec-
tion, the types of such families, the amounts expended with respect 
to such families, and the length of time for which such families are 
assisted. The information and data so furnished with respect to 
families assisted under section 402(g) shall be separately stated with 
respect to families who have earnings and those who do not, and 
with respect to families who are receiving aid under the State plan 
and those who are not.". 
SEC. 607. STATE REPORTS ON EXPENDITURE AND USE OF SOCIAL 
SERVICES FUNDS. 
42 use I397e. 
Section 2006 of the Social Security Act is amended— 
(1) by striking that part of the second sentence of subsection 
(a) which precedes "as the State finds necessary" and inserting 
in lieu thereof "Reports shall be prepared annually, covering 
the most recently completed fiscal year, and shall be in such 
form and contain such information (including but not limited to 
the information specified in subsection (c))"; 
(2) by redesignating subsection (c) £is subsection (d); and 
(3) by inserting Eifter subsection (b) the following new subsec-
tion: 
"(c) Each report prepared and transmitted by a State under 
subsection (a) shall set forth (with respect to the fiscal year covered 
by the report)— 
"(1) the number of individuals who received services paid for 
in whole or in part with funds made available under this title, 
showing separately the number of children and the number of 
adults who received such services, and broken down in each 
case to reflect the types of services and circumstances involved; 
"(2) the amount spent in providing each such tjqpe of service, 
showing separately for each t3rpe of service the amount spent 
per child recipient and the amount spent per adult recipient; 
"(3) the criteria applied in determining eligibility for services 
(such as income eligibility guidelines, sliding fee scales, the 
effect of public sissistance benefits, and any requirements for 
enrollment in school or training programs); and 
"(4) the methods by which services were provided, showing 
separately the services provided by public agencies and those 
provided by private agencies, and broken down in each case to 
reflect the tjrpes of services and circumstances involved. 
The Secretary shall establish uniform definitions of services for use 
by the States in preparing the information required by this subsec-
tion, and maJ^e such other provision as may be necessary or appro-
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2411 
priate to assure that compliance with the requirements of this 
subsection will not be unduly burdensome on the States.". 
SEC. 608. MISCELLANEOUS TECHNICAL CORRECTIONS TO MEDICARE 
CATASTROPHIC COVERAGE ACT OF 1988. 
(a) 
MODIFICATION 
OF PROVISIONS 
RELATING 
TO 
EMPLOYMENT 
MAINTENANCE OF EFFORT.—Section 421 of the Medicare Cata-
strophic Coverage Act of 1988 is amended— 
42 use I395b 
(1) in subsection (aXD— 
^°^-
(A) by striking "(cXD" and inserting "(cXlXA)", and 
(B) by striking "during the period described in subsection 
(cXlXA)" and inserting "(determined as if they were 
provided in that period)'; 
(2) in subsection (aX2)— 
(A) by striking "(cX2)" and inserting "(cXlXB)", and 
(B) by striking "during the period described in subsection 
(cXlXB)" and inserting "(determined as if they were pro-
vided in that period)"; 
(3) in subsections (aX3XA) and (aX3XB), by inserting "provided 
as of the date of the enactment of this Act" after "means 
benefits"; 
(4) in subsection (bXl)— 
(A) by inserting "1989" after "50 percent of the", and 
(B) by striking "of the duplicative part A benefits" and 
inserting "of the benefits under part A of title XVIII of the 
Social Security Act (as amended by this Act as of January 1, 
1989) which were not covered under part A of title XVIII of 
the Social Security Act as such part was in effect on the day 
before the date of the enactment of this Act"; 
(5) in subsection (bX2)— 
(A) by inserting "1990" after "50 percent of the", and 
(B) by striking "of the duplicative part B benefits" and 
inserting "of the benefits under part B of title XVIII of the 
Social Security Act (as amended by this Act as of January 1, 
1990, but excluding any such benefits with respect to cov-
ered outpatient drugs) which were not covered under part B 
of title XVIII of the Social Security Act as such part was in 
effect on the day before the date of the enactment of this 
Act."; and 
(6) in subsection (bX3)— 
(A) in subparagraph (A), by striking "the actuarial value 
of duplicative part A benefits and duplicative part B bene-
fits" and inserting "the amount of the additional benefits or 
refunds to be provided under subsections (aXD and (aX2)"; 
(B) in subparagraph (AXi), by striking "on the basis of* 
and inserting "as being equal to the respective national"; 
(C) in subparagraph (B), by striking 
COMPUTATION OF 
ACTUARIAL VALUE" and inserting "PUBUCATION OF GUIDE-
UNES AND NATIONAL AVERAGE ACTUARIAL VALUES FOR MINI-
M U M ADDITIONAL BENEFITS AND REFUNDS"; and 
(D) by striking clause (i) of subparagraph (B) and all that 
follows through "shall include instructions" and inserting 
the following: 
"(i) calculate and publish— 
"(I) the national average actuarial value for the 
following year of the benefits under part A of title 
XVIII of the Social Security Act (as amended by 
102 STAT. 2412 
PUBLIC LAW 100-485—OCT. 13, 1988 
Public 
information. 
Health and 
medical care. 
42 u s e 1320a-2 
note. 
42 u s e 1395k 
note. 
Rural areas. 
Health care 
facilities. 
42 u s e 1395k 
note. 
Contracts. 
this Act as of January 1, 1989) which were not 
covered under such part as such part was in effect 
before the date of the enactment of this Act, and 
"(ID the national average actuarial value for the 
following year of the benefits under part B of title 
XVin of the Social Security Act (as amended by 
this Act as of January 1, 1990, but excluding any 
such benefits with respect to covered outpatient 
drugs) which were not covered under such part as 
such part was in effect before the date of the 
enactment of this Act, 
to be used by employers who exercise the option under 
subparagraph (AXi) in determining the minimum 
amount of additional benefits or refunds to be provided 
under subsections (aXl) and (aX2), respectively; and 
"(ii) publish guidelines to be used by employers who 
exercise the option under subparagraph (AXii) in deter-
mining the minimum amount of additional benefits or 
refunds to be provided under subsections (aXD and 
(aX2), respectively. 
The Secretary shall publish, before the beginning of 1989 
with respect to part A benefits and before the beginning of 
1990 with respect to part B benefits, guidelines". 
(b) INCLUSION OF PROVISIONS REPEAUNG AUTHORITY TO ADMIN-
ISTER PROFICIENCY EXAMINATIONS.—The Medicare Catastrophic Cov-
erage Act of 1988 is amended by inserting after section 429 the 
following new section (and by inserting a corresponding item in the 
table of contents of such Act): 
"SEC. 430. REPEAL OF AUTHORITY TO ADMINISTER PROFICIENCY 
EXAMINATIONS. 
"(a) REPEAL.—Section 1123 of the Social Security Act (42 U.S.C. 
1320a-2) is repealed. 
"(b) EFFECT OF REPEAL.—Nothing in the amendment made by 
subsection (a) shall be construed as affecting the qualification of any 
individual, who has been determined under the program established 
under section 1123 of the Social Security Act to be qualified to 
perform the duties and functions of a health care specialty, to 
perform such duties and functions.". 
(c) CONTINUATION OF CJOST PASS-THROUGH FOR CERTIFIED REG-
ISTERED NURSE ANESTHETISTS.—Section 9320 of the Omnibus Budget 
Reconciliation Act of 1986 is amended— 
(1) in subsection (i), by striking "The amendments" and 
inserting "Except as provided in subsection (k), the amend-
ments", and 
(2) by adding at the end the following new subsection: 
"(k) AUTHORIZATION OF CONTINUATION OF PASS-THROUGH.— 
"(1) Subject to paragraph (2), the amendments made by this 
section shall not apply during 1989,1990, and 1991 to a hospital 
located in a rural area (as defined for purposes of section 1886(d) 
of the Social Security Act) if the hospital establishes, before 
April 1, 1989, to the satisfaction of the Secretary of Health and 
Human Services that— 
"(A) as of January 1, 1988, the hospital employed or 
contracted with a certified registered nurse anesthetist (but 
not more than one full-time equivalent certified registered 
nurse anesthetist), 
PUBLIC LAW 100-486—OCT. 13, 1988 
102 STAT. 2413 
"(B) in 1987 the hospital had a volume of sui^gical proce-
dures (including inpatient and outpatient procedures) 
requiring anesthesia services that did not exceed 250 (or 
such higher number as the Secretary determines to be 
appropriate), and 
"(C) each certified roistered nurse anesthetist employed 
by, or under contract with, the hospital has agreed not to 
bill under part B of title XVIII of such Act for professional 
services furnished by the anesthetist at the hospital. 
"(2) Paragraph (1) shall not apply in 1990 or 1991 to a hospital 
unless the hospital establishes, before the b^inning of each 
respective year, that the hospital has had a volume of surgical 
procedures (including inpatient and outpatient procedures) 
requiring anesthesia services in the previous year that did not 
exceed 250 (or such higher number as the Secretary determines 
to be appropriate). 
"(3) llie Secretary shall implement this subsection in such a 
manner as to maintain budget neutraUty consistent with sec-
tion 1833aX3) of the Social Security Act.", 
(d) MISCELLANEOUS TECHNICAL (CORRECTIONS TO VARIOUS PROVI-
SIONS IN T
H
E MEDICARE CATASTROPHIC COVERAGE ACT OF 
1988 
("MOCA").— 
(1) ABBREVIATIONS USED.—^In this subsection: 
(A) The term "MCCA" refers to the Medicare Cata-
strophic Coverage Act of 1988 (Public Law 100-360). 
(B) The term "OBRA" refers to the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203). 
(2) SECTION I03.—^The second sentence of section 1818(dXl) of 
the Social Security Act, as amended by section 103 of MCCA, is 
amended by striking "entire". 
(3) SECTION IO4.—Section 104 of MCJCA is amended— 
(A) in subsection (aXl), by striking "paragraphs (2) and 
(3)" and inserting "paragraph (2) and subsection (b)"; 
(B) in subsection 0)X1)—-
(i) by striking "(1) the amendment made to section 
1813(aXl) of such Act" and inserting "(IXA) section 
1813(aXl) of such Act (as amended by this subtitle)", 
and 
(ii) by adding at the end the following new subpara-
graph: 
"(B) if that individual begins a period of hospitalization (as 
defined in such section) during 1989 or 1990 after the end of that 
spell of illness, the first period of hospitalization during 1989 or 
1990 that b^ins after that spell of illness shall be considered to 
be (for purposes of such section) the first period of hospitaliza-
tion that begins during that year; and"; 
(C) in subsections (cXD and (cX2), by striking "by medi-
care beneficiaries" and inserting "by (or on behalf of) medi-
care beneficiaries"; 
(D) in subsection (cX2), by striking "cost reporting periods 
beginning on or after October 1, 1988" and inserting "por-
tions of cost reporting periods occurring on or after Janu-
ary 1,1989"; 
(E) in subsection (cX2), by inserting before the period at 
the end the following: ", without regard to whether such a 
hospital is paid on the basis described in subparagraph (A) 
or (B) of section 1886(bXl) of such Act"; 
Contracts. 
42 u s e 1395d 
note. 
42 u s e 1395e 
note. 
Health and 
medical care. 
42 u s e 1395WW 
note. 
102 STAT. 2414 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 u s e 1395CC. 
Health and 
medical care. 
42 u s e 1395Z. 
42 u s e 1395U 
note. 
42 u s e 1395u. 
42 u s e 1395x. 
(F) in subsection (dX5), by striking "each place it ap-
pears"; and 
(G) by adding at the end of subsection (d) the following 
new paragraph: 
"(7) Section 1833(b) (42 U.S.C. 13951(b)) is amended by adding 
at the end the following new sentence: 'The deductible under 
the previous sentence for blood or blood cells furnished an 
individual in a year shall be reduced to the extent that a 
deductible has been imposed under section 1813(aX2) to blood or 
blood cells furnished the individual in the year.'.". 
(4) SECTION 201.—Section 201(aXlXA) of MCCA is amended by 
striking "subsection" and inserting "subsections". 
(5) SECTION 202.—(A) Section 1842(oXl) of the Social Security 
Act, as added by section 202(cXlXC) of MCCA, is amended— 
(i) in subpar£^aph (AXi), by striking "subparagraph 
(D)(i)" and inserting paragraph (4)", and 
(ii) in subparagraph (BXii), by inserting "an" before 
"eligible organization'. 
(B) Section 1842(fX3) of the Social Security Act, as added by 
section 202(eXl) of MCCA, is amended by inserting ", including 
claims processing functions" after "and related functions". 
(C) Section 1842(bX3XK) of the Social Security Act, as inserted 
by section 202(eX2)(B) of MCCA, is amended by inserting 
", including claims processing functions," after "and for related 
functions". 
(D) Section 1842(cXlXAXii) of the Social Security Act, as 
added by section 202(eX3XAXiii) of MCCA, is amended by insert-
ing ", including claims processing functions" after "and related 
functions". 
(E) Section 202(eX3XB) of MCCA is amended by inserting 
", including claims processing functions" after "and related 
functions". 
(F) Section 202(eX3XC) of MCCA is amended by striking 
"Section 1842(bX2)" and insertmg "Section 1842(bX2XA)". 
(G) Section 1842(bX2XA) of the Social Security Act, as amend-
ed by section 202(e)(3)(C) of MCCA, as revised by the previous 
amendment, is amended by inserting ", including claims 
processing functions" after "and related functions". 
(H) Section 202(eX5XA) of MCCA is amended by— 
(i) by striking "parsigraph (3)" and inserting "paragraph 
(4)", and 
(ii) by adding "and" after the semicolon at the end. 
(I) Section 1847a)X3) of the Social Security Act, as added by 
section 202(j) of MCCA, is amended by striking "the contingency 
margin (established under section 1841A(d) for the following 
year)" and inserting "the contingency margin required for the 
following year". 
(6) SECTION 203.—(A) Section 1861 of the Social Security Act is 
amended by adding immediately before subsection (jj), as added 
by section 203(b) of MCCA, the following new heading: 
102 Stat. 724. 
"Home Intravenous Drug Therapy Services". 
(B) Section 203(cX3) of MCCA is amended by adding at the end 
the following new sentence: "Chapter 35 of title 44, United 
States C!ode, shall not apply to information required for pur-
poses of carrying out this paragraph.". 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2415 
(7) SECTION 205.—Section 205(eXlXA) of MCCA is amended by 
redesignating clause (iv) as clause (iii). 
(8) SECTION 208.—The second sentence of section 208(b) of 
MCCA is amended by striking "shall include in the report" and 
inserting "shall report, not later than 2 years after the date of 
the enactment of this Act,". 
(9) SECTION 211.—(A) Section 1839(g) of the Social Security 
Act, as added by section 211(a) of MCCA, is amended— 
(i) in paragraph (lXB)(iiiXI), by striking "and" and insert-
ing "over", 
(ii) in paragraph (IXBXiiiXH), by inserting "premium" 
after "supplemental", and 
(iii) in paragraph (TXAXii), by inserting "each" before 
"such year,". 
(B) Section 1839(f) of the Social Security Act, as amended by 
section 211(b) of MCCA, is amended by striking "for that Janu-
ary below the amount of benefits payable to that individual for 
that December" and inserting "for that December below the 
amount of benefits payable to that individual for 
that 
November". 
(10) SECTION 212.—(A) Section 1841A(aXl) of the Social Secu-
rity Act, as inserted by section 212(a) of MCCA, is amended by 
striking "1841(j)" and inserting "1840(i)". 
(B) Section 1840(i) of the Social Security Act, as added by 
section 212(bXl) of MCCA, is amended by striking "Supple-
mental" and inserting "Supplementary". 
(11) SECTION 213.—Section 213 of MCCA is amended by strik-
ing "(a) IN GENERAL.—". 
(12) SECTION 221.—Section 221(gX2) of MCCA is amended by 
striking "subsection (c)" and inserting "subsection (d)". 
(13) SECTION 222.—Section 222 of MCCA is amended— 
(A) in paragraph (1), by striking "sections 1833(aXl)(A) 
and 1876'^ and inserting "section 1876", and 
(B) in paragraph (2), by inserting "and organizations paid 
under section 1833(aXlXA) of such Act" after "organiza-
tions". 
(14) SECTION 301.—Section 301 of MCCA is amended— 
(A) in subsection (bXD, by striking "clause (ii)" and insert-
ing "subparagraph (B)" and by adding "and" at the end; 
(B) by striking paragraph (2) of subsection (b) and by 
redesignating paragraph (3) of such subsection as para-
graph (2); 
(C) in subsection (bX2), as so redesignated, by striking "by 
adding at the end the following new clause" and inserting 
"by striking subparagraph (B) and inserting the following'^ 
(D) in the matter inserted by subsection Ot)X2), as so 
redesignated and amended— 
(i) by redesignating subclauses (I) through (IV) of 
clause (ii) and subclauses (I) through (V) of clause (iii) 
as clauses (i) through (iv) of subparagraph (B) and 
clauses (i) through (v) of subparagraph (C), respectively; 
(ii) in subparagraph (B), as so redesignated, by strik-
ing "in clause (iii)' and inserting "in subparagraph 
(C)";and 
(iii) in subparagraph (C), as so redesignated, by strik-
ing "under clause (ii)" and inserting under subpara-
graph (B)"; 
42 use 1395y. 
Reports. 
42 use 1395// 
note. 
42 use 1395t-2. 
42 use 1395SS 
note. 
42 use 1395mm 
note. 
42 use 1396d. 
102 STAT. 2416 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 use 1396d. 
42 use 1396d. 
42 u s e 1395v. 
42 u s e 1396a 
note. 
42 use 1396a. 
42 use 1396d. 
42 use 1396a 
note. 
42 u s e 1396a. 
(E) in subsection (c)— 
(i) by adding "and" at the end of paragraph (1), 
(ii) by striking "; and" at the end of paragraph (2), 
and inserting a period, and 
(iii) by striking paragraph (3); 
(F) in subsection (dX2), in the subparagraph (C) amended 
by such paragraph, by inserting "section" before "1833(b)"; 
(G) in subsection (d)— 
(i) by redesignating paragraphs (1) through (3) as 
paragraphs (2) through (4), respectively, and 
(ii) by inserting before paragraph (2), as so redesig-
nated, the following new paragraph: 
"(1) in paragraph (3), by inserting ', without regard to whether 
the costs incurred were for items and services for which medical 
assistance is otherwise available under the plan' after 'qualified 
medicare beneficiary' the first place it appears;"; 
(H) in subsection (eXD— 
(i) by inserting "(A)" before "Section", and 
(ii) by adding at the end the following new subpara-
graphs: 
"(B) Subsection (hXD of such section is further amended by 
inserting '(A)' after 'include' and by inserting before the period 
at the end the following: ', or (B) qualified medicare bene-
ficiaries (as defined in section 1905(pXl))'. 
"(C) The second sentence of subsection (hX2) of such section is 
amended by inserting '(except in the case of qualified medicare 
beneficiaries, as defined in section 1905(pXl))' after 'shall be 
applied' the second place it appears."; 
(I) in subsection (eX2)— 
(i) in subparagraph (C), by striking "and" at the end 
and by redesignating such subparagraph as subpara-
graph (D); 
(ii) in subparagraph (D), by striking the period at the 
end and inserting ", and" and by redesignating such 
subparagraph as subparagraph (E); and 
(iii) by inserting after subparagraph (B) the following 
new subparagraph: 
"(C) in subsection (a), by striking paragraph (15);"; 
(J) in paragraph (5XB) of the matter added by subsection 
(gX2)-
(i) by striking "paragraph (2XA)" and inserting 
"paragraph (2)", and 
(ii) by striking "clause (ii)" and inserting "subpara-
graph (B)"; and 
(K) in subsection (hX2), by inserting "first calendar quar-
ter beginning after the close of the" after "additional 
requirements before the first day of the". 
(15) SECTION 302.—(A) Section 302(aX2XB) of MCCA is 
amended— 
(i) in clause (i), by striking "not more" the first place it 
appears £ind inserting "(not more", and 
(ii) in clause (iii), by striking "clause" and inserting 
(B) Section i902aX2XA) of the Social Security Act, as amended 
by section 302(aX2XBXiii) of MCCA, is amended— 
(i) in clause (ii>— 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2417 
(I) by striking "Subject to clause (iii), the" and insert-
ing "The", 
(II) in subclause (I), by inserting "or, if greater, the 
percentage provided under clause (iii)," after "75 per-
cent,"; and 
(ii) in clause (iii), by striking "(ii)" each place it appears 
and inserting "(iiXD". 
(C) Section 1923(aX2) of the Social Security Act is amended by 
indenting the subparagraph (C) added by section 302(bX2) of 
MCCA 2 ems. 
(16) SECTION 303.—(A) Section 1924 of the Social Security Act, 
as inserted by section 303(aXl)(B) of MCCA, is amended— 
(i) in the last sentence of subsection (cXlXB), by striking 
"has right to a fair hearing" and all that follows through 
"needs allowance" and inserting "will have a right to a fair 
hearing under subsection (eX2)"; 
(ii) in subsection (cX2XB), by striking "resources shall 
not" and all that follows through "does not exceed" and 
inserting "resources shall be considered to be available to 
an institutionalized spouse, but only to the extent that the 
amount of such resources exceeds"; 
(iii) in subsection (dX3XAXi), by striking "nonfarm"; 
(iv) in subsection (dX4), by striking * subparagraph (C)" 
and inserting "subparagraph (B)"; 
(v) in the first sentence of subsection (eX2XA), by inserting 
before the period at the end the following: "if an application 
for benefits under this title has been made on behalf of the 
institutionalized spouse"; 
(vi) in subsection (fXl)--
(I) by striking "to the community spouse (or to an-
other for the sole benefit of the community spouse)", 
and 
(II) by striking "pacticable" and inserting "prac-
ticable"; and 
(vii) in subsection (fK3), by striking "spouse of a family 
member" and inserting "spouse or a family member". 
(B) Section 1917(c) of the Social Security Act, as amended by 
section 303(b) of MCCA, is amended— 
(i) in paragraph (1)— 
(I) by inserting "for nursing facility services and for a 
level of care in a medical institution equivalent to that 
of nursing facility services and for services under sec-
tion 1915(c)" after "period of ineligibility" the first 
place it appears, 
(II) by inserting "or after" after "during", and 
(III) by striking "the individual's application for 
medical assistance under the State plan" and inserting 
"the date the individual becomes an institutionalized 
individual (if the individual is entitled to medical 
assistance under the State plan on such date) or, if the 
individual is not so entitled, the date the individual 
applies for such assistance while an institutionalized 
individual"; 
(ii) in paragraph (2XAXii), by inserting "(I)" after "who" 
and by inserting "(II)" after "or" the first place it appears; 
(iii) in paragraph (2XAXiii), by striking "of the individ-
ual's admission to the medical institution or nursing 
42 u s e 1396r-4. 
Health and 
medical care. 
Health care 
facilities. 
102 STAT. 2418 
PUBLIC LAW 100-485—OCT. 13, 1988 
Blind persons. 
Handicapped 
persons. 
Health care 
facilities. 
42 u s e 1396r-5 
note. 
Termination 
date. 
42 u s e 1395WW. 
facility" and inserting "the individual becomes an institu-
tionalized individual"; 
(iv) in paragraph (2XAXiv), by striking "of such individ-
ual's admission to the medical institution or nursing 
facility" and inserting "the individual becomes an institu-
tionalized individual"; 
(v) in paragraph (2XB)— 
(I) by inserting "(i)" after "transferred", and 
(II) by striking "or the individual's child who is blind 
or permanently and totally disabled" £ind inserting ", 
(ii) to the individual's child described in subparagraph 
(AXiiXII), or (iii) to (or to smother for the sole benefit of) 
the individual's spouse if such spouse does not transfer 
such resources to another person other than the spouse 
for less than fair market value"; 
(vi) in paragraph (3), by striking "in a medical institution 
or nursing facility" and inserting "in a nursing facility, 
who is an inpatient in a medical institution and with 
respect to whom pajrment is made based on a level of care 
provided in a nursing facility, or who is described in section 
1902(aX10XAXiiXVI)"; and 
(vii) by adding at the end the following new paragraph: 
"(5) In this subsection, the term 'resources' has the meaning given 
such term in section 1613, without regard to the exclusion described 
in subsection (aXD thereof.". 
(C) Section 1902(rX2XA) of the Social Security Act, as added by 
section 303(eX5XC) of MCCA, is amended by striking "or under 
subsection (f)" and inserting "or (f) or under section 1905(p)". 
(D) Section 303(g) of MCCA is amended— 
(i) in paragraph (2XB), by inserting before the period at 
the end the following: ", except that such section shall not 
apply with respect to inter-spousal transfers occurring 
before October 1,1989"; 
(ii) in paragraph (2XC), by inserting before the period at 
the end the following: ", and the laws and policies estab-
lished by the State as of June 30, 1988, or provided for 
before July 1,1988, shall continue to apply through Septem-
ber 30, 1989, (and may, at a State's option continue after 
such date) to inter-spousal transfers occurring before Octo-
ber 1, 1989"; and 
(iii) in paragraph (5), by striking "other than subsection 
(e)" and inserting "other than paragraphs (1) and (5) of 
siil3S6ci^ioii (G) 
(17) SECTION 4 ii(a).—Section 1842(nXlXA) of the Social Secu-
rity Act, as clarified by section 411(aX3)(C) of MCCA, is amended 
by striking "the the supplier's" and inserting "the supplier's". 
(18) SECTION 4iiOt)).—(A) Subclauses (III) and (IV) of section 
1886(bX3XBXi) of the Social Security Act, as amended by section 
411(b)(lXA) of MCCA, are amended by striking "for for hos-
pitals" and inserting "for hospitals". 
(B) Section 411(bXlXE) of MCCA is amended by designatmg 
subparagraph (E) as clause (ii) and by inserting imm^iately 
before such subparagraph the following: 
"(EXi) Section 1886(dX3XAXi) of the Social Security Act, as 
amended by section 4002(cXl)(BXi) of OBRA, is amended by 
striking 'occuring' and inserting 'occurring'.". 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2419 
(C) Section 4110t)X4) of MCCA is amended by adding at the end 
the following new subparagraph: 
"(E) Section 4005(bX3XB) of OBRA is amended by striking 'on' 
after '(B)'.". 
(D) Section 411(bX6XC) of MCCA is amended— 
(i) in clause (ixXD, by striking "payors" and inserting 
"payers", 
(ii) in clause (ixXIII), by striking "and" before "other 
persons", and 
(iii) in clause (xXH), by striking "operation" and inserting 
"operations". 
(E) Section 411(bX8XAXi) of MCCA is amended, in paragraph 
(l)(AXii) of the amendment inserted by such section, by insert-
ing "the" immediately before "previous". 
(19) SECTION 4 II(C).—Section 411(c) of MCCA is amended— 
(A) in paragraph (2), by adding at the end the following 
new subparagraph: 
"(C) Section 1866(aXl) of the Social Security Act, as amended 
by section 4012(a) of OBRA, is amended— 
"(i) by striking 'and' at the end of subparsigraph (M), and 
"(ii) by striking the period at the end of subparagraph (N) 
and inserting', and'."; 
(B) in parsigraph (4)— 
(i) by striking "and" at the end of subparagraph (A), 
(ii) by redesignating subparagraph (B) as subpara-
graph (C), and 
(iii) by inserting after subparagraph (A) the following 
new subparagraph: 
"(B) in subparagraph (BXi), by inserting 'of such subpara-
graph' after '(vXD , and"; and 
(C) by redesignating paragraph (5) as paragraph (6) and 
by inserting after paragraph (4) the following new para-
graph: 
"(5) SECTION 4015.—Section 4015(a) of OBRA is amended— 
"(A) in the first sentence of paragraph (7) by striking 'the 
the' and inserting 'the', and 
"(B) in paragraph (10), by striking 'affect' and inserting 
'effect'.". 
(20) SECTION 4ii(d).—(A) Section 411(dX2XA) of MCCA is 
amended by striking "bv inserting" and all that follows and 
inserting the following: to read as follows: 'The provisions of 
section 1128A (other than subsections (a) and (b)) shall apply to 
a civil money penalty under this paragraph in the same manner 
as such provisions apply to a penalty or proceeding under 
section 1128A.'.". 
(B) Section 411(dX4XA) of MCCA is amended— 
(i) in clause (i)— 
(I) by striking "accreditation" the first place it ap-
pears and inserting "certification", and 
(II) by striking ' accreditation survey conducted by a 
State agency or" and inserting "certification survey 
conducted by a State agency or accreditation survey 
conducted by a"; and 
(ii) in clause (ii), amend subclause (II) to read as follows: 
"(II) by striking 'pursuant to an agreement with the 
Secretary under section 1864' and inserting 'utilized by 
the Secretary under section 1865'.". 
42 u s e 1395WW. 
42 u s e 1395WW 
note. 
42 u s e 1395dd. 
42 u s e 1395CC. 
42 u s e 1395mm. 
42 u s e 1395mm. 
42 u s e 1395mm 
note. 
42 u s e 1395bbb. 
42 u s e 1395aa. 
eontracts. 
102 STAT. 2420 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 use 1395u. 
42 use 1395CCC. 
42 use I395aa. 
(C) Section 411(dX4XAXiiXI) of MCCA is amended by striking 
"such". 
42 use I395bb. 
(D) The subsection inserted bv section 411(dX4XBXii) of MCCA 
is amended by striking "agency and inserting "agency)". 
(21) SECTION 4ii(f).—(A) Section 1842(iX3) of the Social Secu-
rity Act, as redesignated by section 4042(bXlXCXiii) of OBRA as 
amended by section 411(fK2XC) of MCCA, is amended by striking 
"paragraph (3)" and inserting "subsection (bX3)". 
42 use I395u. 
(B) Section 411(fK2XFXi) of MCCA is amended, in the matter 
inserted by such section— 
(i) 
by 
striking 
"139u(bX4XA)" 
and 
inserting 
"1395u(bX4XA)", and 
(ii) by striking the closing single quotation mark and the 
i36riod ijlid.t) follows it 
42 use 1395m. 
(C) Section 411(fX8XD) of MCCA is amended by redesignating 
clauses (ii) through (v) as clauses (iii) through (vi), respectively, 
and by inserting after clause (i) the following new clause: 
"(ii) in paragraph (4XC), by striking 'Radiologist' and 
inserting 'For radiologist', and by striking *1842(bX4XEXii)' 
and inserting '1842(iX3)';". 
(D) Section 411(fK9XB) of MCCA is amended by inserting "and 
inserting '(or other applicable limit)' " before the semicolon at 
the end. 
(E) Section 411(fK10XAXiii) of MCCA is amended by striking 
"physician" and inserting "individual". 
(F) Section 411(fK10XCXi) of MCCA is amended— 
(i) by striking "and" at the end of subclause (V), 
(ii) by striking the period at the end of subclause (VI) and 
inserting ", and", and 
(iii) by adding at the end the following new subclause: 
"(VII) in subsection (dX2), by striking 'continued' and 
inserting 'continues'.". 
(G) Subclause 01) of section 411(fX10XCXi) of MCCA is 
amended to read as follows: 
"(II) by striking 'physician' and 'a physician' each place 
either appears (other than the third place either appears in 
subsection (aX4)) and inserting 'individual' and 'an individ-
ual' resuectivelv* . 
(H) Section 411(fKl6xCXiXIV) of MCCA is amended— 
(i) by striking "paragraph (IXA)" and inserting 
tion (aXlXA)", and 
(ii) by strikiiig the comma after "Loan Program". 
42 use 1395m. 
(22) SECTION 411(g).—(A) Section 411(gXlXB) of MCCA 
amended— 
(i) by amending clause (xi) to read as follows: 
"(xi) in paragraphs (8)(B) and (9)(B), by striking '(as de-
fined in section 1886(dX2)(D))' and inserting '(as defined by 
the Secretary)' and, in clause (i) of such paragraphs, by 
striking the comma after '1991';" and 
(ii) by amending clause (xv) to read as follows: 
"(xv) in paragraph (12), by striking 'for each region (as 
defined in section 1886(dX2)(D))' and inserting 'for one or 
more entire regions defined for purposes of paragraphs 
(8XB) and (9XB)'; and". 
(B) Section 1833(iX6) of the Social Security Act, as added by 
section 4063(eXl) of OBRA as amended by section 411(gX2XE) of 
'subsec-
is 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2421 
MCCA, is amended by striking "other than" the first place it 
appears and inserting "including". 
(C) Section 411(gX3XGXiXI) of MCCA is amended by strik- 
42 use i395w-2. 
ing "and 'certification' " and by striking "and 'approval', 
respectively". 
(D) Section 411(gX4XCXi) of MCCA is amended by striking the 42 USC 1395/. 
comma after "1988" the first place it appears. 
(23) SECTION 4ii(h).—(A) Section 411(hX3XB) of MCCA is 42 use 1395/. 
amended by redesignating clauses (i) and (ii) as clauses (ii) and 
(iii), respectively, and by inserting before clause (ii), as so re-
designated, the following new clause: 
"(i) by striking '1395' and inserting '13951',". 
(B) Section 1861(sX2XKXiXI) of the Social Security Act, as 
designated by the amendment made by section 411(hX6) of 
MCCA, is amended by striking "intermediate care facility (as 
defined in section 1905(c))" and inserting "nursing facility (aa 
defined in section 1919(a))". 
(24) SECTION 4ii(i).—(A) Section 411(iXlXE) of MCCA is 42USCi395ss 
amended by striking the comma after "1988". 
note. 
(B) The paragraph (26) added by section 411(iX4XCXvi) of 
MCCA is amended— 
42 use I395u. 
(i) by striking "and" at the end of subparagraph (A), 
(ii) by adding "and" at the end of clause (i) of subpara-
graph (B), and 
(iii) by redesignating clause (iii) of subparagraph (B) as 
subpareigraph (C) and by moving the indentation of such 
subparagraph 2 ems to the left. 
(C) Section 411(iX4) of MCCA is amended— 
42 use I395y 
(i) in subparagraph (DXiXD, by striking ", 1842(jX2), or 
1867(d)" and inserting "or 18420X2)", and 
(ii) in subparagraph (DXii)— 
(I) by inserting "and" at the end of subclause (III), 42 use I395aaa. 
(II) by striking subclause (IV), and 
(III) by redesignating subclause (V) as subclause (TV). 42 use I395y. 
(25) SECTION 41IO*).—(A) Section 411(jX3) of MCCA is amended 
by adding at the end the following new subpareigraph: 
"(C) Section 4094(e) of OBRA is amended by striking 
42 use l320c-5 
'feasability' and inserting 'feasibility'.". 
note. 
(B) Section 411(jX4XC) of MCXJA is amended by striking 
42 use l320c-3. 
"before 'paragraph (2)' ". 
(26) SECTION 4ii(k).—(A) Section 411(kX6XAXviXIV) of MCCA 42 use i396r-4. 
is amended by striking "the election made by a State under" 
and inserting "whether the hospital is described in subpara-
graph (A) or (B) of. 
(B) Section 411(kX6XAXviiXII) of MCCA is amended by msert-
ing "the first place it appears" before the comma. 
(C) The paragraph added by section 411(kX6XAXviiXIII) of 
MCCA is amended by striking "Statewide" and inserting 
"statewide". 
(D) Section 1923(bX3XBXi) of the Social Security Act, as des-
ignated by section 411(k)(6XBXi) of MCCA and as amended by 
section 411(kX6XAXv) of MCCA, is amended by inserting "of 
subparagraph (A)" after "clause (iXII)". 
(E) Section 1923(c) of the Social Security Act, as designated by 
section 411(kX6XBXi) of MCCA, by striking "subsection (c)" and 
inserting "this subsection". 
102 STAT. 2422 
PUBLIC LAW 100-485—OCT. 13, 1988 
42 u s e 1396r-4. 
102 Stat. 794. 
42 u s e 1320a-7, 
1320a-7a. 
42 use 
1320a-7a. 
42 u s e 704, 
1396b, 1396d. 
42 u s e 1396r-l. 
42 u s e 1396n. 
42 u s e 1395i-3. 
(F) Section 411GcX6XBXvi) of MCCA is amended by striking 
"(c)" and inserting "(d)". 
(G) Section 411(kX9) of MCCA is amended by striking "(A)" 
ii!nin6did,^Glv dj^toir ^^ 
(H) Section 411(kX10)(BXiiXn) of MCCA is amended by strik-
ing "1128(a)" and "1320a-7(a)" and inserting "1128A(a)" and 
"1320a-7a(a)", respectively. 
(I) Section 1128A(1) of the Social Security Act, as added by 
section 4118(eXlXB) of OBRA and as amended by section 
411(kX10XBXiiXIII) of MCCA, is amended by inserting "for 
penalties, assessments, and an exclusion" after "liable". 
(J) Section 4118(eX10XC) of OBRA, as inserted by section 
411(kX10XD) of MCCA, is amended by inserting "of subsection 
(i)" after "at the end". 
(K) Section 411(kXl6xD) of MCCA is amended— 
(i) in the paragraph (6XB) inserted by such section, by 
striking "or section 1867(dX2)", and 
(ii) in subparagraphs (A) and (B) of the paragraph (11) 
inserted by such section and in the paragraphs (12) and (13) 
inserted by such section, by striking "1842(jX2), or 
1867(dX2)" and inserting "or 1842(jX2)". 
(L) Section 41 l(kX16XB) of MCCA is amended— 
(i) by striking "and" at the end of clause (ii), 
(ii) by redesignating clause (iii) as clause (iv), and 
(iii) by inserting after clause (ii) the following new clause: 
"(iii) in clause (iii), by striking the period at the end and 
inserting'; or', and". 
(M) Section 411(kX17XAXiv) of MCCA is amended by inserting 
a comma immediately before "(d)" the second place it appears. 
(27) SECTION 4iia).—(A) Section 41iaXlXA) of MCCA is 
amended by redesignating clauses (iv) through (xi) as clauses (v) 
through (xii), respectively, and by inserting after clause (iii) the 
following new clause: 
"(iv) in subsection (cXl), by adding at the end the follow-
ing new subparagraph: 
" '(D) 
USE 
OF 
PSYCHOPHARMACOLOGIC 
DRUGS.— 
Psychopharmacologic drugs may be administered only on 
the orders of a physician and only as part of a plan (in-
cluded in the written plan of care described in paragraph 
(2)) designed to eliminate or modify the Sjrmptoms for which 
the drugs are prescribed and only if, at least annually, an 
independent, external consultant reviews the appropriate-
ness of the drug plan of each resident receiving such 
drugs.';". 
(B) Section 411(1X1) of MCCA is amended by adding at the end 
the following new subparagraph: 
"(C) Section 4201(d) of OBRA, as amended by subparagraph 
(B), is further amended by adding at the end the following new 
paragraphs: 
" '(3) Section 1883(f) of such Act (42 U.S.C. 1395tt(f)) is amended by 
striking "section 1861(jX15)" and inserting "section 1819". 
" '(4) The third sentence of section 1864(a) of such Act (42 U.S.C. 
1395aa(a)) is amended by striking "18610')" and inserting "1819(a)" 
" '(5) Section 1861(n) of such Act (42 U.S.C. 1395x(n)) is amended 
by striking "or (jXD of this section" and inserting "of this section or 
section 1819(aXl)".'.". 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2423 
(C) Section 411(1X2XA) of MCCA is amended by inserting a 
comma immediately after "this title" and immediately after 
"title XVni". 
(D) Section 411(lX2XDXi) of MCCA is amended by striking 
"care". 
(E) Section 41iaX3XC) of MCCA is amended by inserting "(i)" 
after "(C)" and by adding at the end the following new clauses: 
"(ii) Section 4211 of OBRA (101 Stat. 1330-196) is amended by 
striking the following (and the immediately preceding quotation 
marks and period): 
" *(c) STATE 
REQUIREMENTS 
RELATING TO NURSING 
FACILITY 
REQUIREMENTS.—Section 1919 of such Act is further amended by 
adding at the end the following new subsection:'. 
"(iii) Section 1919(cX2XBXiiiXin) of the Social Security Act, as 
inserted by section 4211(aX3) of OBRA, is amended by striking 
'responsibile' and inserting 'responsible'.". 
(F) Section 411(lX3XHXi) of MCCA is amended by striking 
"each place it appears". 
(G) Section 411(lX3XHXiii) of MCCA is amended by insertinjg 
"services" immediately after "nursing facility" the first place it 
appears. 
(H) Section 411(1X3) of MCCA is amended by adding at the end 
the following new subparagraph: 
"(J) Section 4211(hX2XB) of OBRA is amended by inserting a 
comma before 'nursing facility,' the second place it appears.". 
(I) Section 411(1X5) of MCCA is amended by redesignating 
subparagraphs (F) and (G) as subparagraphs (G) and (H), respec-
tively, and by inserting after subparagraph (E) the following 
new subparagraph: 
"(F) in paragraph (2XBXii), by striking 'practical' and 
inserting 'practicable';". 
(J) Section 411(1X6) of MCCA is amended by adding at the end 
the following new subparagraph: 
"(F) Section 1910(bXl) of the Social Security Act, as redesig-
nated by section 4212(e)(3XC) of OBRA, is amended by inserting 
'or section 1919' after '1902(aX28)'.". 
(K) Section 411(lX9XBXii) of MCCA is amended by striking "(c) 
as subsection (d)" and inserting "(b) as subsection (c)". 
(L) Section 411(1) of MCCA is further amended by adding at 
the end the following new paragraph: 
"(11) SECTION 4203.—Section 1819(hX5) of the Social Security 
Act, as added by section 4203(aX2) of OBRA, is amended by 
striking '(iii), and (iv) of paragraph (2XA)' and inserting 'and (iii) 
of paragraph (2XB)'.". 
(28) SECTION 41 i(n).—Section 411(n) of MCCA is amended by 
redesignating paragraph (3) as paragraph (4) and by inserting 
after paragraph (2) the following new paragraph: 
"(3) SECTION 9 II6.—Subsection (d) of section 9116 of OBRA is 
amended to read as follows: 
" '(d) CONFORMING AMENDMENT.—Section 1923(aX2) of the Social 
Security Act, as amended by section 4118(pX9) of this Act, is 
amended by adding at the end the following new subparagraph: 
" ' "(E) Section 1634(d) of this Act (relatmg to individuals who 
lose eligibility for SSI benefits due to entitlement to early 
widow's or widower's insurance benefits under section 202 (e) or 
(f) of this Act)."'.". 
42 u s e 1395i-3, 
1396r. 
42 u s e 1396d 
note. 
42 u s e 1396r. 
42 u s e 1396a. 
42 u s e 1396a. 
42 u s e 1395i-3, 
1396r. 
42 u s e 13961. 
42 u s e 13951-3 
note. 
42 u s e 13951-3. 
42 u s e 1396a 
and note. 
Insurance. 
102 STAT. 2424 
PUBLIC LAW 100-485—OCT. 13, 1988 
(29) SECTION 4 ii(p).—Section 411 of MCCA is amended by 
adding at the end the following new subsection: 
"(p) MISCELLANEOUS.—Section 2312(c) of the Deficit Reduction Act 
of 1984, as amended by section 9320(a) of the Omnibus Budget 
Reconciliation Act of 1986, is amended by striking 'end' and insert-
ing 'ends'.". 
(30) SECTION 428.—(A) Subsection (cXD of section 1140 of the 
Social Security Act, as added by section 428(a) of MCCA, is 
amended to read as follows: 
"(cXD The provisions of section 1128A (other than subsections (a), 
(b), (f), (h), and (i)) shedl apply to civil money penalties under 
subsection (b) in the same manner as such provisions apply to a 
penalty or proceeding under section 1128A(a).". 
(B) Section 428(b) of MCCA is amended by striking "MEDICAL" 
and inserting "MEDICARE". 
(e) EXTENSION OF PILOT PROGRAM.—The Secretary of Health and 
Human Services shall extend through December 31, 1989, the pilot 
test program, being conducted by States under the Annual Grant 
Award Study established by the Joint State/Federal Cash Manage-
ment Reform Task Force, on the same terms and conditions that 
existed as of September 30,1988. 
(f) MISCELLANEOUS CORRECTIONS.— 
(1) Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is 
amended by striking subsection (f). 
(2) Section 1915(aX2) of the Social Security Act, as amended by 
section 8(hX2) of Public Law 100-93, is amended by striking 
"Restricts" and inserting "restricts". 
42 use I396d. 
(3) Section 1905(o) of the Social Security Act is amended by 
moving the indentation of paragraph (3), as added by section 
9435(bX2) of Public Law 99-509, 2 ems to the left. 
42 use 1396b. 
(4) Section 1903(mX2XBXiXn) of the Social Security Act is 
amended 
by striking 
"1902(aX13XAXii)" 
and 
inserting 
"1902(aX10XD)". 
Effective date. 
(5) Effective as of the date of the enactment of Public Law 95-
292, section 226(a) of the Social Security Act (42 U.S.C. 426(a)) is 
amended by striking "condition specified in paragraph (1)" and 
inserting "condition specified in paragraph (2)". 
42 use 704 note. 
(g) EFFECTIVE DATE.—(1) The amendmente made by subsections 
(a), (b), and (d) shall be effective as if included in the enactment of 
the Medicare Catastrophic Coverage Act of 1988. 
(2) The amendments made by subsection (c) and subsection (f) 
/ 
(other than paragraph (5)) shall take effect on the date of the 
enactment of this Act. 
(h) QUALITY CONTROL TRANSITION.—There shall not be taken into 
account, for purposes of section 1903(u) of the Social Security Act, 
payments and expenditures for medical assistance which are made 
on or after January 1, 1989, and before July 1, 1989, and which are 
attributable to medicare-cost sharing for qualified medicare bene-
ficiaries (as defined in section 1905(p) of such Act). 
SEC. 609. EXTENSION OF QUALITY CONTROL PENALTY MORATORIUM. 
(a) MORATORIUM EXTENDED.—Section 403 of the Socied Security 
Act (as amended by section 201(cX2) of this Act) is further amended 
by adding at the end the following new subsection: 
"(mXD During the 12-month period beginning on July 1, 1988 (in 
Territories, U.S. 
this subsection referred to as the 'moratorium period'), the Sec-
retary shall not impose any reductions in pa3rments to States pursu-
42 u s e 1396b 
note. 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2425 
ant to subsection (i) (or prior r^^ations), or pursuant to any 
comparable provision of law relating to the programs under this 
part in Puerto Rico, Guam, the Virgin Islands, American Samoa, or 
the Northern Mariana Islands. 
"(2) During the moratorium period— 
"(A) the Secretary and the States shall continue to operate 
the quality control systems in effect under this part, and to 
calculate the error rates under the provisions referred to in 
paragraph (1), including the process of requesting and reviewing 
waivers; and 
"(B) the Departmental Grant Appeals Board shall, notwith-
standing paragraph (1), review disallowances for fiscal year 1981 
and thereafter and hear appecds with respect thereto (but collec-
tion of disallowances owed as a result of Departmental Grant 
Appeals Board decisions shall not occur).". 
(b) CONFORMING AMENDMENTS.—(1) Subparagraph (A) of section 
12301(cXl) of the Consolidated Omnibus Budget Reconciliation Act 
of 1985 (Public Law 99-272) is amended by striking "title IV-A and" 
42 use 603 note. 
and inserting in lieu thereof "title". 
(2) Paragraph (2) of section 12301(c) of such Act is amended by 
inserting 'binder title XIX" before ", and shall reduce payments". 
(c) EFFECTIVE DATE.—The amendments made by subsections (a) 
and (b) shall take effect on July 1,1988. 
TITLE VII—FUNDING PROVISIONS 
SEC. 701. TEMPORARY 
EXTENSION OF PROVISIONS 
RELATING TO 
COLLECTION OF NONTAX 
DEBTS 
OWED TO FEDERAL 
AGENCIES. 
(a) GENERAL RULE.—Subsection (c) of section 2653 of the Deficit 
Reduction Act of 1984 is amended by striking "before July 1, 1988" 26 use 6402 
and inserting "on or before January 10,1994". 
note. 
(b) CkX)RDINATION OF DISCLOSURE PROVISIONS.— 
(1) IN GENERAL.—Paragraph (10) of section 6103(1) of the 
Internal Revenue Gode of 1986 (relating to disclosure of certain 
information to agencies requesting a reduction imder section 
6402(c) or 6402(d)) is amended to read as follows: 
"(10) DISCLOSURE OF CERTAIN INFORMATION TO AGENCIES 
REQUESTING A REDUCTION UNDER SECTION 6402(C) OR 6402(D).— 
"(A) RETURN INFORMATION FROM INTERNAL REVENUE SERV-
ICE.—The Secretary may, upon receiving a written request, 
disclose to officers and employees of any agency seelang a 
reduction under subsection (c) or (d) of section 6402— 
"(i) taxpayer identity information with respect to the 
taxpayer against whom such a reduction was made or 
not made and with respect to any other person filing a 
joint return with such taxpayer, 
"(ii) the fact that a reduction has been made or has 
not been made under such subsection with, respect to 
such taxpayer, 
"(iii) the amount of such reduction, 
"(iv) whether such taxpayer filed a joint return, and 
"(v) the tact that a payment was made (and the 
amount of the payment) to the spouse of the taxpayer 
on the basis of a joint return. 
102 STAT. 2426 
PUBLIC LAW 100-485—OCT. 13, 1988 
"(B) RESTRICTION ON USE OF DISCLOSED INFORMATION.— 
Any officers and employees of an agency receiving return 
information 
under subparagraph 
(A) shall use such 
information only for the purposes of, and to the extent 
necessary in, establishing appropriate agency records, locat-
ing any person with respect to whom a reduction under 
subsection (c) or (d) of section 6402 is sought for purposes of 
collecting the debt with respect to which the reduction is 
sought, or in the defense of any litigation or administrative 
procedure ensuing from a reduction made under subsection 
(c) or (d) of section 6402." 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (1) of section 6103 of such Code is amended 
by striking paragraph (11) and by redesignating paragraph 
(12) as parsigraph (11). 
(B) Paragraphs (3XA) and (4) of section 6103(p) of such 
Code are each amended by striking "(10), (11), or (12)" each 
place it appears and inserting "(10), or (11)". 
(C) Paragraph (2) of section 7213(a) of such (Dode is 
amended by striking "(9), (10), or (11)" and inserting "(9), or 
(10)". 
26 use 6103 
(3) EFFECTIVE DATES.— 
note. 
(A) IN GENERAL.—The amendments made by this subsec-
tion shall take effect on the date of the enactment of this 
Act. 
(B) SPECIAL RULE.—Nothing in section 2653(c) of the Defi-
cit Reduction Act of 1984 shall be construed to limit the 
application of paragraph (10) of section 6103(1) of the 
Internal Revenue Code of 1986 (as amended by this 
subsection). 
SEC. 702. LIMITATION ON USE OF REIMBURSEMENT ARRANGEMENTS TO 
AVOID 2-PERCENT FLOOR. 
(a) GENERAL RULE.—Section 62 of the Internal Revenue (Dode of 
1986 (defining adjusted gross income) is amended by adding at the 
end thereof the following new subsection: 
"(c) CERTAIN ARRANGEMENTS NOT TREATED AS REIMBURSEMENT 
ARRANGEMENTS.—For purposes of subsection (aX2XA), an arrange-
ment shall in no event be treated as a reimbursement or other 
expense allowance arrangement if— 
"(1) such arrangement does not require the employee to 
substantiate the expenses covered by the arrangement to the 
person providing the reimbursement, or 
"(2) such arrangement provides the employee the right to 
retain any amount in excess of the subst£uitiated expenses 
covered under the arrangement. 
The substantiation requirements of the preceding sentence shall not 
apply to any expense to the extent that substantiation is not re-
quired under section 274(d) for such expense by reason of the 
regulations prescribed under the 2nd sentence thereof." 
26 use 62 note. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to taxable years beginning after December 31, 1988. 
SEC. 703. MODIFICATIONS TO DEPENDENT CARE CREDIT AND EXCLUSION 
FOR DEPENDENT CARE ASSISTANCE. 
(a) REDUCTION IN MAXIMUM AGE OF NONHANDICAPPED QUALIFYING 
INDIVIDUAL.—Subsections (bXlXA) and (eX5XB) of section 21 of the 
PUBLIC LAW 100-485—OCT. 13, 1988 
102 STAT. 2427 
Internal Revenue Code of 1986 are each amended by striking "age of 
15" and inserting "age of 13". 
(b) LIMITATION ON CREDIT REDUCED BY AMOUNT OF EXCLUSION.— 
Subsection (c) of section 21 of such Code is amended by adding at the 
end thereof the following new sentence: 
"The amount determined under paragraph (1) or (2) (whichever is 
applicable) shall be reduced by the aggregate amount excludable 
from gross income under section 129 for the taxable year." 
(c) REQUIREMENT OP FURNISHING IDENTIFYING INFORMATION WITH 
RESPECT TO SERVICE PROVIDER.— 
(1) CREDIT.—Subsection (e) of section 21 of such Code is 
amended by adding at the end thereof the following new 
paragraph: 
"(9) 
IDENTIFYING INFORMATION REQUIRED WITH RESPECT TO 
SERVICE PROVIDER.—No Credit shall be allowed under subsection 
(a) for any amount paid to any person unless— 
"(A) the name, address, and taxpayer identification 
number of such person are included on the return claiming 
the credit, or 
"(B) if such person is an organization described in section 
501(c)(3) and exempt from tax under section 501(a), the 
name and address of such person are included on the return 
claiming the credit. 
In the case of a failure to provide the information required 
under the preceding sentence, the preceding sentence shall not 
apply if it is shown that the taxpayer exercised due diligence in 
attempting to provide the information so required." 
(2) EXCLUSION.—Subsection (e) of section 129 of such C!ode is 
amended by adding at the end thereof the following new 
paragraph: 
"(9) IDENTIFYING INFORMATION REQUIRED WITH RESPECT TO 
SERVICE PROVIDER.—No amount paid or incurred by an employer 
for dependent care assist£ince provided to an employee shall be 
excluded from the gross income of such employee unless— 
"(A) the name, address, and taxpayer identification 
number of the person performing the services are included 
on the return to which the exclusion relates, or 
"(B) if such person is an organization described in section 
501(c)(3) and exempt from tax under section 501(a), the 
name and address of such person are included on the return 
to which the exclusion relates. 
In the case of a failure to provide the information required 
under the preceding sentence, the preceding sentence shall not 
apply if it is shown that the taxpayer exercised due diligence in 
attempting to provide the information so required." 
(3) 
CONFORMING AMENDMENT.—Pars^aph (2) of section 
6109(a) of such Code is amended by striking "shall furnish" and 
inserting "or whose identifying number is required to be shown 
on a return of another person shall furnish". 
(d) EFFECTIVE DATE.—The amendments made bv this section shall 
26 use 21 note. 
apply to taxable years beginning after December 31,1988. 
SEC. 704. TAXPAYER IDENTIFICATION NUMBER REQUIRED FOR DEPEND-
ENTS WHO HAVE ATTAINED AGE 2. 
(a) GENERAL RULE.—Paragraph (2) of section 6109(e) of the In-
ternal Revenue Code of 1986 (relating to furnishing number for 
102 STAT. 2428 
PUBLIC LAW 100-485—OCT. 13, 1988 
certain dependents) is amended by striking "age of 5" and inserting 
"age of 2". 
26 use 6109 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
^°^- 
shall apply to returns the due date for which (determined without 
regard to extensions) is after December 31,1989. 
Approved October 13, 1988. 
LEGISLATIVE HISTORY—H.R. 1720 (S. 1511): 
HOUSE REPORTS: No. 100-159, Pt. 1 (Comm. on Ways and Means), Pt. 2 (Comm. on 
Education and Labor), and Pt. 3 (Comm. on Energy and Com-
merce) and No. 100-998 (Comm. of Conference). 
SENATE REPORTS: No. 100-377 accompanying S. 1511 (Comm. on Finance). 
CONGRESSIONAL RECORD: 
Vol. 133 (1987): Dec. 15, 16, considered and passed House. 
Vol. 134 (1988): June 13, 14, 16, S. 1511 considered in Senate; proceedings 
vacated and H.R. 1720, amended, passed in lieu. 
Sept. 29, Senate agreed to conference report. 
Sept. 30, House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): 
Oct. 13, Presidential remarks.