H.R. 4414 (103rd): Independence for Families Act of 1994

103rd Congress, 1993–1994. Text as of May 12, 1994 (Introduced).

Status & Summary | PDF | Source: GPO

HR 4414 IH

103d CONGRESS

2d Session

H. R. 4414

To reconnect welfare families to the world of work, make work pay, strengthen families, require personal responsibility, and support State flexibility.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 1994

Mr. MCCURDY (for himself, Mr. WHEAT, Mr. CLEMENT, Mr. DARDEN, Mr. DEAL, Ms. LONG, Mr. SWETT, Mr. TANNER, Mr. JOHNSON of Georgia, Ms. LAMBERT, Mr. PAYNE of Virginia, Mr. BARLOW, Mr. SKELTON, Mr. GORDON, Mr. MINGE, Mr. LIPINSKI, Mr. ORTON, Mr. BREWSTER, Mr. MANN, Mr. KLINK, Mr. PETERSON of Minnesota, Mr. LAUGHLIN, Mr. ROWLAND, Mr. PETE GEREN of Texas, Ms. KAPTUR, Mr. MONTGOMERY, Mr. HAYES, and Mr. TAYLOR of Mississippi) introduced the following bill; which was referred jointly to the Committees on Ways and Means, Agriculture, Energy and Commerce, Education and Labor, and the Judiciary


A BILL

To reconnect welfare families to the world of work, make work pay, strengthen families, require personal responsibility, and support State flexibility.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Independence for Families Act of 1994’.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

      Sec. 1. Short title.

      Sec. 2. Table of contents.

TITLE I--TIME-LIMITED TRANSITIONAL ASSISTANCE

      Sec. 101. Limitation on duration of AFDC benefits.

      Sec. 102. Job search requirement.

      Sec. 103. Transitional child care benefits for persons who exhaust AFDC.

      Sec. 104. Establishment of Federal data base.

TITLE II--MAKE WORK PAY

Subtitle A--Health Care

      Sec. 201. Transitional medicaid benefits.

Subtitle B--Earned Income Tax Credit

      Sec. 211. Notice of availability required to be provided to applicants and former recipients of AFDC, food stamps, and medicaid.

      Sec. 212. Notice of availability of earned income tax credit and dependent care tax credit to be included on W-4 form.

Subtitle C--Child Care

      Sec. 221. Dependent care credit to be refundable; high-income taxpayers ineligible for credit.

      Sec. 222. Increased Federal matching rate for child care costs of the 50 States and the District of Columbia.

      Sec. 223. Maintenance of effort.

      Sec. 224. Notice of eligibility for transitional child care benefits required to be provided to applicants for, and upon termination of, AFDC.

      Sec. 225. Extension of eligibility for transitional child care benefits.

      Sec. 226. Increased funding for at-risk child care.

      Sec. 227. Authority to use certain child care funds for training.

      Sec. 228. Transitional child care for 2-parent families.

      Sec. 229. Sense of the Congress regarding the Child Care Development and Block Grant Act.

      Sec. 230. Use of child care funds to create child care jobs for welfare recipients.

      Sec. 230A. Sense of the Congress regarding child care vouchers.

Subtitle D--AFDC Work Disregards

      Sec. 231. Option to increase disregard of earned income.

      Sec. 232. State option to establish voluntary diversion program.

      Sec. 233. Elimination of quarters of coverage requirement for married teens under AFDC-UP program.

Subtitle E--AFDC Asset Limitations

      Sec. 241. Increase in resource thresholds; separate threshold for vehicles.

      Sec. 242. Limited disregard of amounts saved for postsecondary education, the purchase of a first car or a first home, or the establishment or operation of a microenterprise.

      Sec. 243. Treatment of microenterprises.

TITLE III--THE WORK FIRST PROGRAM

Subtitle A--AFDC

      Sec. 301. Work first program.

      Sec. 302. Regulations.

      Sec. 303. Applicability to States.

Subtitle B--Targeted Jobs Tax Credit

      Sec. 311. Increase in minimum period of employment required to receive credit.

TITLE IV--FAMILY RESPONSIBILITY AND IMPROVED CHILD SUPPORT ENFORCEMENT

Subtitle A--Enhancement of Ability to Identify and Locate Noncustodial Parents

      Sec. 401. Expansion of functions of Federal parent locator service.

      Sec. 402. Expansion of data bases accessed by parent locator systems.

      Sec. 403. National parent locator network.

      Sec. 404. Private access to locate and enforcement services.

Subtitle B--Paternity Establishment

      Sec. 411. Sense of the Congress.

      Sec. 412. Availability of parenting social services for new fathers.

      Sec. 413. AFDC benefits conditioned on cooperation in identifying noncustodial parent.

      Sec. 414. Increase in pass-through of collected child support to AFDC recipients.

Subtitle C--Improvement of Child Support Order Establishment Process

      Sec. 421. National Child Support Guidelines Commission.

Subtitle D--Child Support Enforcement

      Sec. 431. National reporting of new hires and child support information.

      Sec. 432. Certain benefits subject to garnishment.

      Sec. 433. Seizure of lottery winnings, settlements, payouts, awards, and bequests, and sale of forfeited property, to pay child support arrearages.

      Sec. 434. Reporting of child support arrearages to credit bureaus.

      Sec. 435. Liability of grandparents for financial support of children of their minor children.

      Sec. 436. Sense of the Congress regarding programs for noncustodial parents unable to meet child support obligations.

TITLE V--TEEN PREGNANCY AND FAMILY STABILITY

Subtitle A--Federal Role

      Sec. 501. State option not to deny AFDC for additional children.

      Sec. 502. Minors receiving AFDC required to live under responsible adult supervision.

      Sec. 503. Task force to reduce teenage pregnancy.

      Sec. 504. Incentive for teen parents to attend school.

      Sec. 505. State option to disregard 100-hour rule under AFDC-UP program.

      Sec. 506. State option to disregard 6-month limitation on AFDC-UP benefits.

      Sec. 507. Elimination of quarters of coverage requirement under AFDC-UP program for families in which both parents are teens.

Subtitle B--State Role

      Sec. 511. Teenage pregnancy prevention and family stability.

      Sec. 512. Availability of family planning services.

TITLE VI--PROGRAM SIMPLIFICATION

Subtitle A--Increased State Flexibility

      Sec. 601. State option to provide AFDC through electronic benefit transfer systems.

      Sec. 602. Deadline for action on application for waiver of requirement applicable to program of aid to families with dependent children.

Subtitle B--Coordination of AFDC and Food Stamp Programs

      Sec. 611. Amendments to part A of title IV of the Social Security Act.

      Sec. 612. Amendments to the Food Stamp Act of 1977.

Subtitle C--Fraud Reduction

      Sec. 631. Sense of the Congress in support of the efforts of the administration to address the problems of fraud and abuse in the supplemental security income program.

      Sec. 632. Study on feasibility of single tamper-proof identification card to serve programs under both the Social Security Act and health reform legislation.

TITLE VII--FINANCING

Subtitle A--Ineligibility of Certain Aliens for Certain Social Services

      Sec. 701. Certain aliens ineligible for aid to families with dependent children.

      Sec. 702. Certain aliens ineligible for supplemental security income benefits.

      Sec. 703. Illegal aliens not eligible for earned income tax credit.

      Sec. 704. Disqualification of certain aliens to receive food stamp benefits.

      Sec. 705. Certain aliens ineligible for medical assistance under medicaid.

Subtitle B--Other Provisions Relating to Aliens

      Sec. 711. Sponsor responsibility for costs of general cash public assistance provided to an alien.

      Sec. 712. Enforcement of affidavits of support or financial responsibility by State and local governments providing assistance.

      Sec. 713. Authority to States and localities to limit assistance to aliens and to distinguish among classes of aliens in providing general public assistance.

      Sec. 714. Federal financial assistance to States for assistance to immigrants.

Subtitle C--Limitation on Emergency Assistance Expenditures

      Sec. 721. Limitation on expenditures for emergency assistance.

Subtitle D--Family Day Care Homes Program Improvements

      Sec. 731. Improvement of operation of family or group day care homes located in low- and moderate-income areas under the child and adult care food program under the National School Lunch Act.

Subtitle E--Collection of Certain State and Local Taxes on Out-of-State Sales

      Sec. 741. Short title.

      Sec. 742. Findings.

      Sec. 743. Sense of Congress.

      Sec. 744. Authority for collection of sales tax.

      Sec. 745. Treatment of local sales taxes.

      Sec. 746. Return and remittance requirements.

      Sec. 747. Nondiscrimination and exemptions.

      Sec. 748. Application of State law.

      Sec. 749. Toll-free information service.

      Sec. 750. Definitions.

      Sec. 751. Effective date.

TITLE VIII--EFFECTIVE DATE

      Sec. 801. Effective date.

TITLE I--TIME-LIMITED TRANSITIONAL ASSISTANCE

SEC. 101. LIMITATION ON DURATION OF AFDC BENEFITS.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)) is amended--

      (1) by striking ‘and’ at the end of paragraph (44);

      (2) by striking the period at the end of paragraph (45) and inserting ‘; and’; and

      (3) by inserting after paragraph (45) the following:

      ‘(46) in the case of a State that has exercised the option provided for in paragraph (52), provide that a family shall not be eligible for aid under the State plan if a member of the family is prohibited from participating in the State program established under part F by reason of section 487(c).’.

SEC. 102. JOB SEARCH REQUIREMENT.

    (a) IN GENERAL- Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by section 101 of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (45);

      (2) by striking the period at the end of paragraph (46) and inserting ‘; and’; and

      (3) by inserting after paragraph (46) the following:

      ‘(47) provide that participation in job search activities shall be a condition of eligibility for aid under the State plan, except during any period of unsubsidized full-time employment in the private sector.’.

SEC. 103. TRANSITIONAL CHILD CARE BENEFITS FOR PERSONS WHO EXHAUST AFDC.

    Section 402(g)(1)(A)(ii) of the Social Security Act (42 U.S.C. 602(g)(1)(A)(ii)) is amended by inserting ‘or subsection (a)(46)’ before the period.

SEC. 104. ESTABLISHMENT OF FEDERAL DATA BASE.

    Section 402 of the Social Security Act (42 U.S.C. 602) is amended by inserting after subsection (c) the following:

    ‘(d) The Secretary shall establish and maintain a data base of participants in State programs established under parts F and G which shall be made available to the States for use in administering subsection (a)(46).’.

TITLE II--MAKE WORK PAY

Subtitle A--Health Care

SEC. 201. TRANSITIONAL MEDICAID BENEFITS.

    (a) EXTENSION OF MEDICAID ENROLLMENT FOR FORMER AFDC RECIPIENTS FOR 1 ADDITIONAL YEAR-

      (1) IN GENERAL- Section 1925(b)(1) of the Social Security Act (42 U.S.C. 1396r-6(b)(1)) is amended by striking the period at the end and inserting the following: ‘, and that the State shall offer to each such family the option of extending coverage under this subsection for any of the first 2 succeeding 6-month periods, in the same manner and under the same conditions as the option of extending coverage under this subsection for the first succeeding 6-month period.’.

      (2) CONFORMING AMENDMENTS- Section 1925(b) of such Act (42 U.S.C. 1396r-6(b)) is amended--

        (A) in the heading, by striking ‘EXTENSION’ and inserting ‘EXTENSIONS’;

        (B) in the heading of paragraph (1), by striking ‘REQUIREMENT’ and inserting ‘IN GENERAL’;

        (C) in paragraph (2)(B)(ii)--

          (i) in the heading, by striking ‘PERIOD’ and inserting ‘PERIODS’, and

          (ii) by striking ‘in the period’ and inserting ‘in each of the 6-month periods’;

        (D) in paragraph (3)(A), by striking ‘the 6-month period’ and inserting ‘any 6-month period’;

        (E) in paragraph (4)(A), by striking ‘the extension period’ and inserting ‘any extension period’; and

        (F) in paragraph (5)(D)(i), by striking ‘is a 3-month period’ and all that follows and inserting the following: ‘is, with respect to a particular 6-month additional extension period provided under this subsection, a 3-month period beginning with the 1st or 4th month of such extension period.’.

    (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to calendar quarters beginning on or after October 1, 1996, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.

Subtitle B--Earned Income Tax Credit

SEC. 211. NOTICE OF AVAILABILITY REQUIRED TO BE PROVIDED TO APPLICANTS AND FORMER RECIPIENTS OF AFDC, FOOD STAMPS, AND MEDICAID.

    (a) AFDC- Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101 and 102(a) of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (46);

      (2) by striking the period at the end of paragraph (47) and inserting ‘; and’; and

      (3) by inserting after paragraph (47) the following:

      ‘(48) provide that the State agency must provide written notice of the existence and availability of the earned income credit under section 32 of the Internal Revenue Code of 1986 to--

        ‘(A) any individual who applies for aid under the State plan, upon receipt of the application; and

        ‘(B) any individual whose aid under the State plan is terminated, in the notice of termination of benefits.’.

    (b) FOOD STAMPS- Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)) is amended--

      (1) in paragraph (24) by striking ‘and’ at the end;

      (2) in paragraph (25) by striking the period at the end and inserting ‘; and’; and

      (3) by inserting after paragraph (25) the following:

      ‘(26) that whenever a household applies for food stamp benefits, and whenever such benefits are terminated with respect to a household, the State agency shall provide to each member of such household notice of--

        ‘(A) the existence of the earned income tax credit under section 32 of the Internal Revenue Code of 1986; and

        ‘(B) the fact that such credit may be applicable to such member.’.

    (c) MEDICAID- Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) is amended--

      (1) by striking ‘and’ at the end of paragraph (61);

      (2) by striking the period at the end of paragraph (62) and inserting ‘; and’; and

      (3) by adding at the end the following new paragraph:

      ‘(63) provide that the State shall provide notice of the existence and availability of the earned income tax credit under section 32 of the Internal Revenue Code of 1986 to each individual applying for medical assistance under the State plan and to each individual whose eligibility for medical assistance under the State plan is terminated.’.

SEC. 212. NOTICE OF AVAILABILITY OF EARNED INCOME TAX CREDIT AND DEPENDENT CARE TAX CREDIT TO BE INCLUDED ON W-4 FORM.

    Section 11114 of the Omnibus Budget Reconciliation Act of 1990 (relating to program to increase public awareness) is amended by adding at the end the following new sentence: ‘Such means shall include printing a notice of the availability of such credits on the forms used by employees to determine the proper number of withholding exemptions under chapter 24 of the Internal Revenue Code of 1986.’.

Subtitle C--Child Care

SEC. 221. DEPENDENT CARE CREDIT TO BE REFUNDABLE; HIGH-INCOME TAXPAYERS INELIGIBLE FOR CREDIT.

    (a) CREDIT TO BE REFUNDABLE-

      (1) IN GENERAL- Section 21 of the Internal Revenue Code of 1986 (relating to expenses for household and dependent care services necessary for gainful employment) is hereby moved to subpart C of part IV of subchapter A of chapter 1 of such Code (relating to refundable credits) and inserted after section 34.

      (2) TECHNICAL AMENDMENTS-

        (A) Section 35 of such Code is redesignated as section 36.

        (B) Section 21 of such Code is redesignated as section 35.

        (C) Paragraph (1) of section 35(a) of such Code (as redesignated by subparagraph (B)) is amended by striking ‘this chapter’ and inserting ‘this subtitle’.

        (D) Subparagraph (C) of section 129(a)(2) of such Code is amended by striking ‘section 21(e)’ and inserting ‘section 35(e)’.

        (E) Paragraph (2) of section 129(b) of such Code is amended by striking ‘section 21(d)(2)’ and inserting ‘section 35(d)(2)’.

        (F) Paragraph (1) of section 129(e) of such Code is amended by striking ‘section 21(b)(2)’ and inserting ‘section 35(b)(2)’.

        (G) Subsection (e) of section 213 of such Code is amended by striking ‘section 21’ and inserting ‘section 35’.

        (H) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period ‘or from section 35 of such Code’.

        (I) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 35 and inserting the following:

‘Sec. 35. Expenses for household and dependent care services necessary for gainful employment.

‘Sec. 36. Overpayments of tax.’.

        (J) The table of sections for subpart A of such part IV is amended by striking the item relating to section 21.

    (b) HIGHER-INCOME TAXPAYERS INELIGIBLE FOR CREDIT- Subsection (a) of section 35 of such Code, as redesignated by subsection (a), is amended by adding at the end the following new paragraph:

      ‘(3) PHASEOUT OF CREDIT FOR HIGHER-INCOME TAXPAYERS- The amount of the credit which would (but for this paragraph) be allowed by this section shall be reduced (but not below zero) by an amount which bears the same ratio to such amount of credit as the excess of the taxpayer’s adjusted gross income for the taxable year over $110,000 bears to $10,000. Any reduction determined under the preceding sentence which is not a multiple of $10 shall be rounded to the nearest multiple of $10.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1995.

SEC. 222. INCREASED FEDERAL MATCHING RATE FOR CHILD CARE COSTS OF THE 50 STATES AND THE DISTRICT OF COLUMBIA.

    Section 402(g)(3)(A)(i) of the Social Security Act (42 U.S.C. 602(g)(3)(A)(i)) is amended by striking ‘the Federal medical assistance percentage (as defined in section 1118)’ and inserting ‘80 percent’.

SEC. 223. MAINTENANCE OF EFFORT.

    Section 403 of the Social Security Act (42 U.S.C. 603) is amended by adding at the end the following:

    ‘(o) Notwithstanding any other provision of this part, the amount otherwise payable to a State under this part for a fiscal year shall be reduced by the percentage (if any) by which the total expenditures by the State under this part for the fiscal year does not exceed the average annual expenditures by the State under this part during fiscal years 1994, 1995, and 1996.’.

SEC. 224. NOTICE OF ELIGIBILITY FOR TRANSITIONAL CHILD CARE BENEFITS REQUIRED TO BE PROVIDED TO APPLICANTS FOR, AND UPON TERMINATION OF, AFDC.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), and 211(a) of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (47);

      (2) by striking the period at the end of paragraph (48);

      (3) by inserting after paragraph (48) the following:

      ‘(49) provide that the State agency must provide written notice that, upon termination of aid under the State plan, a family may be eligible for child care benefits under section 402(g)(1)(A)(ii), to--

        ‘(A) any individual who applies for aid under the State plan, upon receipt of the application; and

        ‘(B) any individual whose aid under the State plan is terminated, in the notice of termination of benefits.’.

SEC. 225. EXTENSION OF ELIGIBILITY FOR TRANSITIONAL CHILD CARE BENEFITS.

    Section 402(g)(1)(A) of the Social Security Act (42 U.S.C. 602(g)(1)(A)) is amended--

      (1) in clause (iii), by striking ‘12’ and inserting ‘24’; and

      (2) in clause (iv), by striking ‘3 of the 6’ and inserting ‘1 of the ‘24’.

SEC. 226. INCREASED FUNDING FOR AT-RISK CHILD CARE.

    Section 403(n) of the Social Security Act (42 U.S.C. 603(n)) is amended--

      (1) in paragraph (1)(A), by striking ‘the Federal medical assistance percentage (as defined in section 1905(b))’ and inserting ‘80 percent’; and

      (2) in paragraph (2)(B)--

        (A) by striking ‘and’ at the end of clause (iv); and

        (B) by striking clause (v) and inserting the following:

      ‘(v) $300,000,000 for each of fiscal years 1995, 1996, and 1997;

      ‘(vi) $500,000,000 for fiscal year 1998;

      ‘(vii) $1,000,000,000 for fiscal year 1999;

      ‘(viii) $1,500,000,000 for fiscal year 2000; and

      ‘(vi) $2,000,000,000 for fiscal year 2001.’.

SEC. 227. AUTHORITY TO USE CERTAIN CHILD CARE FUNDS FOR TRAINING.

    (a) TRANSITIONAL CHILD CARE FUNDS- Section 402(g)(1)(A)(ii) of the Social Security Act (42 U.S.C. 602(g)(1)(A)(ii)) is amended by inserting ‘training or’ before ‘employment’ the first place such term appears.

    (b) AT-RISK CHILD CARE FUNDS- Section 402(i)(1)(B) of such Act (42 U.S.C. 602(i)(1)(B)) is amended by inserting ‘or receive training for work’ before the semicolon.

SEC. 228. TRANSITIONAL CHILD CARE FOR 2-PARENT FAMILIES.

    Section 402(g)(1)(A)(i) of the Social Security Act (42 U.S.C. 602(g)(1)(A)(i)) is amended--

      (1) by striking ‘and’ at the end of subclause (I);

      (2) by striking the period at the end of subclause (II) and inserting ‘; and’; and

      (3) by adding at the end the following:

      ‘(III) for each 2-parent family with a dependent child requiring such care, if 1 parent in the family is employed and the other parent in the family is not available to provide such care because such other parent is employed or receiving training, to the extent that such care is determined by the State agency to be necessary for either parent to accept employment, remain employed, or receive such training;’.

SEC. 229. SENSE OF THE CONGRESS REGARDING THE CHILD CARE DEVELOPMENT AND BLOCK GRANT ACT.

    It is the sense of the Congress that the Child Care Development and Block Grant Act should be reauthorized to allow States greater flexibility in the use of their funds to strengthen child care quality and to increase supply.

SEC. 230. USE OF CHILD CARE FUNDS TO CREATE CHILD CARE JOBS FOR WELFARE RECIPIENTS.

    Section 402(g)(3) of the Social Security Act (42 U.S.C. 602(g)(3)) is amended by adding at the end the following:

    ‘(C) Amounts expended by a State with a plan approved under part G for the creation of employment in the field of child care (in accordance with State licensing requirements) for recipients of aid under the State plan approved under this part shall be considered amounts expended for child care pursuant to paragraph (1), and subparagraph (B) of this paragraph shall not apply to such amounts.’.

SEC. 230A. SENSE OF THE CONGRESS REGARDING CHILD CARE VOUCHERS.

    It is the sense of the Congress that--

      (1) the States should institute a system under which--

        (A) vouchers are provided to each family eligible for child care services under subsections (g) and (i) of section 402 of the Social Security Act, under programs operated with funds provided under title XX of the Social Security Act, or under the Child Care Development and Block Grant Act, which may be used by the family to purchase child care services;

        (B) 1 voucher is provided to the family for each child in the family with respect to whom child care services may be provided;

        (C) the dollar value of each voucher is set at a level that is greater than the dollar value of the dependent care disregard under section 402(a)(8)(A)(iii) of the Social Security Act, and is adjusted to reflect regional differences in the kinds and costs of such services;

        (D) a board consisting of child care providers and representatives from the State agency referred to in section 402(a)(3) of the Social Security Act annually negotiates and determines the dollar value of the child care vouchers to be issued by the State; and

        (E) the State agency referred to in section 402(a)(3) of the Social Security Act monitors the performance of private providers of child care services in the State and the compliance of such providers with the system;

      (2) the States should create a Consumer Information Center responsible for maintaining an updated roster of eligible providers of child care services, and a record of the performance of such providers as evaluated by recipients of such services, which should be published in a brochure that is available to all persons who are eligible to receive such services; and

      (3) the States should loosen their regulations to allow for the reimbursement of the child costs of licensed child care providers and unsolicited or home care child care providers.

Subtitle D--AFDC Work Disregards

SEC. 231. OPTION TO INCREASE DISREGARD OF EARNED INCOME.

    Section 402(a)(8)(A) of the Social Security Act (42 U.S.C. 602(a)(8)(A)) is amended--

      (1) by striking ‘and’ at the end of clause (vii); and

      (2) by adding at the end the following:

        ‘(ix) if electing to disregard clauses (ii) and (iv), shall disregard from the earned income of any child, relative, or other individual specified in clause (ii) an amount equal to not less than the first $120 and not more than the first $225 of the total of such earned income not disregarded under any other clause of this subparagraph, plus not more than 1/3 of the remainder of such earned income; and’.

SEC. 232. STATE OPTION TO ESTABLISH VOLUNTARY DIVERSION PROGRAM.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), and 224 of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (48);

      (2) by striking the period at the end of paragraph (49) and inserting ‘; and’; and

      (3) by inserting after paragraph (49) the following:

      ‘(50) at the option of the State, and in such part or parts of the State as the State may select, provide that--

        ‘(A) upon the recommendation of the caseworker who is handling the case of a family eligible for aid under the State plan, the State shall, in lieu of any other payment under the State plan to a family during a 3-month period, make a lump-sum payment to the family for the 3-month period in an amount equal to 3 times the amount of the monthly benefit to which the family is entitled under the State plan;

        ‘(B) a lump-sum payment pursuant to subparagraph (A) shall not be made more than once to any family; and

        ‘(C) if, during a 3-month period for which the State has made a lump-sum payment to a family pursuant to subparagraph (A), the family applies for and (but for the lump-sum payment) would be eligible for aid under the State plan for a greater monthly benefit than the monthly benefit to which the family was entitled under the State plan at the time of the calculation of the lump sum payment, then, notwithstanding subparagraph (A), the State shall, for that part of the 3-month period that remains after the family becomes eligible for the greater monthly benefit, provide monthly benefits to the family in an amount equal to--

          ‘(i) 3 times the amount by which the greater monthly benefit exceeds the former monthly benefit; divided by

          ‘(ii) the whole number of months remaining in the 3-month period.’.

SEC. 233. ELIMINATION OF QUARTERS OF COVERAGE REQUIREMENT FOR MARRIED TEENS UNDER AFDC-UP PROGRAM.

    Section 407(b)(1)(A)(iii)(I) of the Social Security Act (42 U.S.C. 607(b)(1)(A)(iii)(I)) is amended by inserting ‘except in the case of a family in which the parents are married and neither parent has attained 20 years of age,’ after ‘(I)’.

Subtitle E--AFDC Asset Limitations

SEC. 241. INCREASE IN RESOURCE THRESHOLDS; SEPARATE THRESHOLD FOR VEHICLES.

    Section 402(a)(7)(B) of the Social Security Act (42 U.S.C. 602(a)(7)(B)) is amended--

      (1) by striking ‘$1,000 or such lower amount as the State may determine’ and inserting ‘$2,000’; and

      (2) in clause (i), by striking ‘such amount as the Secretary may prescribe’ and inserting ‘the dollar amount prescribed by the Secretary of Agriculture under section 5(g) of the Food Stamp Act of 1977’.

SEC. 242. LIMITED DISREGARD OF AMOUNTS SAVED FOR POST-SECONDARY EDUCATION, THE PURCHASE OF A FIRST CAR OR A FIRST HOME, OR THE ESTABLISHMENT OR OPERATION OF A MICROENTERPRISE.

    (a) DISREGARD FROM RESOURCES- Section 402(a)(7)(B) of the Social Security Act (42 U.S.C. 602(a)(7)(B)) is amended--

      (1) by striking ‘or’ before ‘(iv)’; and

      (2) by inserting ‘, or (v) any amount not exceeding $8,000 in 1 qualified asset account (as defined in section 406(i)) of 1 member of such family’ before ‘; and’.

    (b) DISREGARD FROM INCOME-

      (1) IN GENERAL- Section 402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as amended by section 231 of this Act, is amended--

        (A) by striking ‘and’ at the end of clause (viii); and

        (B) by inserting after clause (ix) the following new clause:

          ‘(x) shall disregard any interest or income earned on a qualified asset account (as defined in section 406(i)) and paid into the account, to the extent that the total amount in the account, after such payment, does not exceed $8,000; and’.

      (2) NONRECURRING LUMP SUM EXEMPT FROM LUMP SUM RULE- Section 402(a)(17) of such Act (42 U.S.C. 602(a)(17)) is amended by adding at the end the following: ‘; and that this paragraph shall not apply to earned or unearned income received in a month on a nonrecurring basis to the extent that such income is placed in a qualified asset account (as defined in section 406(i)) the total amount in which, after such placement, does not exceed $8,000;’.

      (3) TREATMENT AS INCOME- Section 402(a)(7) of such Act (42 U.S.C. 602(a)(7)) is amended--

        (A) by striking ‘and’ at the end of subparagraph (B);

        (B) by striking the semicolon at the end of subparagraph (C) and inserting ‘; and’; and

        (C) by adding at the end the following new subparagraph:

        ‘(D) shall treat as income any distribution from a qualified asset account (as defined in section 406(i)(1)) that is not a qualified distribution (as defined in section 406(i)(2));’.

    (c) DEFINITIONS- Section 406 of such Act (42 U.S.C. 606) is amended by adding at the end the following:

    ‘(i)(1) The term ‘qualified asset account’ means a mechanism approved by the State (such as individual retirement accounts, escrow accounts, or savings bonds) that allows savings of an individual receiving aid to families with dependent children to be used for a purpose described in paragraph (2).

    ‘(2) The term ‘qualified distribution’ means a distribution for expenses directly related to 1 or more of the following purposes:

      ‘(A) The attendance of a member of the family at any postsecondary education program.

      ‘(B) The purchase of residential real property for the family that the family intends to occupy, if no member of the family has an ownership interest in such a property.

      ‘(C) The purchase of an automobile if no member of the family has an ownership interest in an automobile.

      ‘(D) The establishment or operation of a microenterprise owned by a member of the family.

    ‘(j) The term ‘microenterprise’ means a commercial enterprise which has 5 or fewer employees, 1 or more of whom owns the enterprise.’.

SEC. 243. TREATMENT OF MICROENTERPRISES.

    (a) IN GENERAL- Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, and 232 of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (49);

      (2) by striking the period at the end of paragraph (50) and inserting ‘; and’; and

      (3) by inserting after paragraph (50) the following:

      ‘(51) provide that the State agency--

        ‘(A) shall not include as a resource of the family of which a child referred to in paragraph (7)(A) is a member, for purposes of paragraph (7)(B), the first $8,000 of the net worth (assets reduced by liabilities with respect thereto) of 1 microenterprise (as defined in section 406(j)(1)) owned, in whole or in part, by the child or by a relative or other individual referred to in paragraph (7)(A), for a period not to exceed 2 years; and

        ‘(B) shall take into consideration as earned income of the family of which the child is a member, only the net profits (as defined in section 406(j)(2)) of 1 such microenterprise, for a period not to exceed 2 years.’.

    (b) DEFINITIONS- Section 406(j) of such Act (42 U.S.C. 606(j)), as added by section 242(c) of this Act, is amended--

      (1) by inserting ‘(1)’ after ‘(j)’; and

      (2) by adding at the end the following:

    ‘(2) The term ‘net profits’ means, with respect to a microenterprise, the gross receipts of the microenterprise, minus--

      ‘(A) payments of principal or interest on a loan to the microenterprise;

      ‘(B) transportation expenses incurred in operating the microenterprise;

      ‘(C) expenses incurred in maintaining inventory for the microenterprise;

      ‘(D) expenditures for the purchase of capital equipment for the microenterprise;

      ‘(E) cash retained by the microenterprise for future use;

      ‘(F) taxes paid by the microenterprise;

      ‘(G) if the microenterprise is covered under a policy of insurance against loss--

        ‘(i) the premiums paid for such insurance; and

        ‘(ii) the losses incurred by the microenterprise that are not reimbursed by the insurer solely by reason of the existence of a deductible with respect to the insurance policy;

      ‘(H) the reasonable costs of obtaining and operating 1 motor vehicle necessary for the conduct of the microenterprise; and

      ‘(I) the other expenses of the microenterprise.’.

TITLE III--THE WORK FIRST PROGRAM

Subtitle A--AFDC

SEC. 301. WORK FIRST PROGRAM.

    (a) STATE PLAN REQUIREMENT- Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, 232, and 243(a) of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (50);

      (2) by striking the period at the end of paragraph (51) and inserting ‘; and’; and

      (3) by inserting after paragraph (51) the following:

      ‘(52) at the option of the State, provide that the State has in effect and operation a work first program that meets the requirements of part F and a community service program that meets the requirements of part G, and must provide to participants in such programs such case management services as are necessary to ensure the integrated provision of benefits and services under such programs.’.

    (b) ESTABLISHMENT AND OPERATION OF PROGRAM- Title IV of such Act (42 U.S.C. 601 et seq.) is amended by striking part F and inserting the following:

‘Part F--Work First Program

‘SEC. 481. ESTABLISHMENT AND OPERATION OF STATE PROGRAMS.

    ‘A work first program meets the requirements of this part if the program meets the following requirements:

      ‘(1) OBJECTIVE- The objective of the program is for each program participant to find and hold a full-time unsubsidized paid job, and for this goal to be achieved in a cost-effective fashion.

      ‘(2) METHOD- The method of the program is to connect recipients of aid to families with dependent children with the private sector labor market as soon as possible and offer them the support and skills necessary to remain in the labor market. Each component of the program should be permeated with an emphasis on employment and with an understanding that minimum wage jobs are a stepping stone to more highly paid employment.

      ‘(3) JOB CREATION- The creation of jobs, with an emphasis on private sector jobs, shall be a component of the program and shall be a priority for each State office with responsibilities under the program.

      ‘(4) USE OF INCENTIVES- The State shall use incentives to change the culture of each State office with responsibilities under the State plan approved under part A, improve the performance of employees, and ensure that the objective of each employee of each such State office is to find an unsubsidized paid job for each program participant.

      ‘(5) CASEWORKER TRAINING- The State shall provide such training to caseworkers and related personnel (including through the use of incentives) as may be necessary to ensure successful job placements that result in full-time public or private employment (outside the State agencies with responsibilities under part A) for program participants. The State shall reward any caseworker who enters a participation agreement with a program participant that provides for education or training activities as well as work.

      ‘(6) REPORTS- Each office with responsibility for operating the program shall make monthly statistical reports to the governing body of the State, county, and city in which located, of job placements and the number of program participants who are no longer receiving aid under the State plan approved under part A as a result of participation in the program.

      ‘(7) PLAN REQUIRED- The program is established and operated in accordance with a plan approved by the Secretary as meeting the requirements of this part.

      ‘(8) CASE MANAGEMENT TEAMS-

        ‘(A) DUTIES- The program requires the State to assign to each individual required or allowed to participate in the program a case management team that shall meet with the program participant and develop a participation agreement for the individual.

        ‘(B) DEADLINE-

          ‘(i) IN GENERAL- The case management team shall comply with subparagraph (A) with respect to a program participant within 30 days (or, at the option of the State, within a period not exceeding 90 days) after the later of--

            ‘(I) the date the application of the program participant for aid under the State plan approved under part A was approved; or

            ‘(II) the date this part first applies to the State.

          ‘(ii) REPEAT PARTICIPANTS- Within 30 days after the State makes a determination under section 487(c)(2) to allow an individual to participate in the program, the case management team shall meet with the individual and develop a participation agreement for the individual.

      ‘(9) PARTICIPATION AGREEMENTS- The participation agreement for a participant shall--

        ‘(A) contain an individualized comprehensive plan, developed by the team and the participant, to move the participant into a full-time unsubsidized job, through activities under section 482, 483, 484, 485, or 486;

        ‘(B) to the greatest extent possible, be designed to move the participant as quickly as possible into whatever type and amount of work as the participant is capable of handling, and increases the responsibility and amount of work over time until the participant is able to work full-time;

        ‘(C) where necessary, provide for education or training of the participant;

        ‘(D) provide that aid under the State plan is to be paid to the participant based on the number of hours that the participant spends in activities provided for in the agreement;

        ‘(E) provide that the participant shall spend at least 20 hours per week in activities provided for in the agreement;

        ‘(F) provide that the participant shall accept any bona fide offer of unsubsidized full-time employment, unless the participant has good cause for not doing so; and

        ‘(G) at the option of the State, require the participant to undergo appropriate substance abuse treatment.

      ‘(10) OPTIONS FOR PARTICIPANTS- The case manager for a program participant shall present the participant with each option offered under the State program through which the participant will, over time, be moved into full-time unsubsidized employment.

      ‘(11) ONE-STOP EMPLOYMENT SHOPS-

        ‘(A) IN GENERAL- In carrying out the program, the State shall utilize and make available to each program participant, through the establishment and operation or utilization of appropriate Federal or State one-stop employment shops, services under programs carried out under the following provisions of law:

          ‘(i) Part A of title II of the Job Training Partnership Act (29 U.S.C. 1601 et seq.) (relating to the adult training program).

          ‘(ii) Part B of title II of such Act (29 U.S.C. 1630 et seq.) (relating to the summer youth employment and training programs).

          ‘(iii) Part C of title II of such Act (29 U.S.C. 1641 et seq.) (relating to the youth training program).

          ‘(iv) Title III of such Act (29 U.S.C. 1651 et seq.) (relating to employment and training assistance for dislocated workers).

          ‘(v) Part B of title IV of such Act (29 U.S.C. 1691 et seq.) (relating to the Job Corps).

          ‘(vi) The Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 et seq.).

          ‘(vii) The Adult Education Act (20 U.S.C. 1201 et seq.).

          ‘(viii) Part B of chapter 1 of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 2741 et seq.) (relating to Even Start family literacy programs).

          ‘(ix) Subtitle A of title VII of the Stewart B. Mckinney Homeless Assistance Act (42 U.S.C. 11421) (relating to adult education for the homeless).

          ‘(x) Subtitle B of title VII of such Act (42 U.S.C. 11431 et seq.) (relating to education for homeless children and youth).

          ‘(xi) Subtitle C of title VII of such Act (42 U.S.C. 11441) (relating to job training for the homeless).

          ‘(xii) The School-to-Work Opportunities Act of 1994.

          ‘(xiii) The National and Community Service Act of 1990 (42 U.S.C. 12501 et seq.).

          ‘(xiv) The National Skill Standards Act of 1994.

        ‘(B) COORDINATION- In utilizing appropriate Federal or State one-stop employment shops described in subparagraph (A), the State shall ensure coordination between the caseworker of each program participant and the administrators of the programs carried out under the provisions of law described in such subparagraph.

      ‘(12) PENALTIES FOR REFUSAL TO WORK- The amount of aid otherwise payable under the State plan approved under part A to a family that includes an individual who fails without good cause to comply with a participation agreement signed by the individual shall be reduced for 1 month by 25 percent for each act of noncompliance.

      ‘(13) PERFORMANCE STANDARDS- The State shall (in accordance with regulations prescribed by the Secretary) develop standards to be used to measure the effectiveness of the programs established under this part and part G in moving recipients of aid under the State plan approved under part A into full-time unsubsidized employment.

‘SEC. 482. REVAMPED JOBS PROGRAM.

    ‘A State that establishes a program under this part may operate a program similar to the program known as the ‘GAIN Program’ that has been operated by Riverside County, California, under Federal law in effect immediately before the date this part first applies to the State of California.

‘SEC. 483. USE OF PLACEMENT COMPANIES.

    ‘(a) IN GENERAL- A State that establishes a program under this part may enter into contracts with private companies (whether operated for profit or not for profit) for the placement of participants in the program in positions of full-time employment, preferably in the private sector, for wages sufficient to eliminate the need of such participants for cash assistance.

    ‘(b) REQUIRED CONTRACT TERMS- Each contract entered into under this section with a company shall meet the following requirements:

      ‘(1) PROVISION OF JOB READINESS AND SUPPORT SERVICES- The contract shall require the company to provide, to any program participant who presents to the company a voucher issued under subsection (d) intensive personalized support and job readiness services designed to prepare the individual for employment and ensure the continued success of the individual in employment.

      ‘(2) PAYMENTS-

        ‘(A) IN GENERAL- The contract shall provide for payments to be made to the company with respect to each program participant who presents to the company a voucher issued under subsection (d).

        ‘(B) STRUCTURE- The contract shall provide for the majority of the amounts to be paid under the contract with respect to a program participant, to be paid after the company has placed the participant in a position of full-time employment and the participant has been employed in the position for such period of not less than 5 months as the State deems appropriate.

    ‘(c) COMPETITIVE BIDDING REQUIRED- Contracts under this section shall be awarded only after competitive bidding.

    ‘(d) VOUCHERS- The State shall issue a voucher to each program participant whose participation agreement provides for the use of placement companies under this section, indicating that the participant is eligible for the services of such a company.

‘SEC. 484. TEMPORARY SUBSIDIZED JOB CREATION.

    ‘A State that establishes a program under this part may establish a program similar to the program known as ‘JOBS Plus’ that has been operated by the State of Oregon under Federal law in effect immediately before the date this part first applies to the State of Oregon.

‘SEC. 485. MICROENTERPRISE.

    ‘(a) GRANTS AND LOANS TO NONPROFIT ORGANIZATIONS FOR THE PROVISION OF TECHNICAL ASSISTANCE, TRAINING, AND CREDIT TO LOW INCOME ENTREPRENEURS- A State that establishes a program under this part may make grants and loans to nonprofit organizations to provide technical assistance, training, and credit to low income entrepreneurs for the purpose of establishing microenterprises.

    ‘(b) MICROENTERPRISE DEFINED- For purposes of this subsection, the term ‘microenterprise’ means a commercial enterprise which has 5 or fewer employees, 1 or more of whom owns the enterprise.

‘SEC. 486. WORK SUPPLEMENTATION PROGRAM.

    ‘(a) IN GENERAL- A State that establishes a program under this part may institute a work supplementation program under which the 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 the sums instead for the purpose of providing and subsidizing jobs for the participants (as described in subsection (c)(3)(A) and (B)), as an alternative to the aid to families with dependent children that would otherwise be so payable to the participants.

    ‘(b) STATE FLEXIBILITY-

      ‘(1) 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 section and section 484 (as in effect immediately before the date this part first applies to the State).

      ‘(2) Notwithstanding section 402(a)(23) 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 section.

      ‘(3) Notwithstanding section 402(a)(1) or any other provision of law, a State operating a work supplementation program under this section may provide that the need standards in effect in those areas of the State in which the program is in operation may be different from the need standards in effect in the areas in which the program is not in operation, and the 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.

      ‘(4) 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 paragraph (3)) 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.

      ‘(5) In determining the amounts to be reserved and used for providing and subsidizing jobs under this section as described in subsection (a), the State may use a sampling methodology.

      ‘(6) Notwithstanding section 402(a)(8) or any other provision of law, a State operating a work supplementation program under this section--

        ‘(A) 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

        ‘(B) during 1 or more of the first 9 months of an individual’s employment pursuant to a program under this part, may apply to the wages of the individual the provisions of subparagraph (A)(iv) of section 402(a)(8) without regard to the provisions of subparagraph (B)(ii)(II) of such section.

    ‘(c) RULES RELATING TO SUPPLEMENTED JOBS-

      ‘(1) A work supplementation program operated by a State under this section may provide that any individual who is an eligible individual (as determined under paragraph (2)) shall take a supplemented job (as defined in paragraph (3)) 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 subsection (d).

      ‘(2) For purposes of this section, 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 the State did not have a work supplementation program in effect.

      ‘(3) For purposes of this subsection, a supplemented job is--

        ‘(A) a job provided to an eligible individual by the State or local agency administering the State plan under part A; or

        ‘(B) a job provided to an eligible individual by any other employer for which all or part of the wages are paid by the State or local agency.

      A State may provide or subsidize under the program any job which the State determines to be appropriate.

      ‘(4) At the option of the State, individuals who hold supplemented jobs under a State’s work supplementation program shall be exempt from the retrospective budgeting requirements imposed pursuant to section 402(a)(13)(A)(ii) (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).

    ‘(d) COST LIMITATION- 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 the State under this section 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 subsection (b)) for the lesser of--

      ‘(1) 9 months; or

      ‘(2) the number of months in which the individual was employed in the program.

    ‘(e) RULES OF INTERPRETATION-

      ‘(1) This section shall not be construed as requiring the State or local agency administering the State plan to provide employee status to an eligible individual to whom the State or local agency provides a job under the work supplementation program (or with respect to whom the State or local agency provides all or part of the wages paid to the individual by another entity under the program), or as requiring any State or local agency to provide that an eligible individual filling a job position provided by another entity under the program be provided employee status by the entity during the first 13 weeks the individual fills the position.

      ‘(2) Wages paid under a work supplementation program shall be considered to be earned income for purposes of any provision of law.

    ‘(f) PRESERVATION OF MEDICAID ELIGIBILITY- Any State that chooses to operate a work supplementation program under this section shall provide that any individual who participates in the program, and any child or relative of the individual (or other individual living in the same household as the individual) who would be eligible for aid to families with dependent children under the State plan approved under part A if the State did not have a work supplementation program, shall be considered individuals receiving aid to families 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.

    ‘(g) RELATIONSHIP TO WORK REQUIREMENTS IMPOSED UNDER THIS PART- No individual receiving aid to families with dependent children under a State plan shall be excused from any requirement of this part relating to work requirements by reason of the fact that the State has a work supplementation program, except during periods in which the individual is employed under the work supplementation program.

‘SEC. 487. PARTICIPATION RULES.

    ‘(a) IN GENERAL- Except as provided in subsections (b) and (c), a State that establishes a program under this part may require any individual receiving aid under the State plan approved under part A to participate in the program.

    ‘(b) EXEMPTIONS- The State may not require an individual to participate in the program if the individual--

      ‘(1) has not attained 20 years of age, and has attended secondary school or has been engaged in obtaining a certificate of high school equivalency;

      ‘(2) has been employed on a part-time basis, and has been participating on a part-time basis in technical or vocational education;

      ‘(3) has a serious health condition (as defined in section 101(11) of the Family and Medical Leave Act of 1993), or has been caring for a relative who had such a condition;

      ‘(4)(A) is incapacitated, but only if the State verifies that a physician or licensed or certified psychologist has determined that the incapacitation is due to a physical or mental impairment that prevents the individual from engaging in employment or training under the program; or

      ‘(B) is recuperating from childbirth, and a physician has prescribed that the individual not engage in such employment or training; or

      ‘(5)(A) is pregnant, obtains physical custody of a child, or becomes a guardian of a child, during the 3-month period that ends on the date the State may otherwise have required the individual to participate in the program; and

      ‘(B) the 12-week period that begins with the first day during the 3-month period that the family member was pregnant, obtained such custody, or became such a guardian has not expired.

    ‘(c) 2-YEAR LIMITATION ON PARTICIPATION-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), an individual may not participate in the State program established under this part if the individual has participated in the program for 24 months after the date the individual first signed a participation agreement under this part.

      ‘(2) AUTHORITY TO ALLOW REPEAT PARTICIPATION-

        ‘(A) IN GENERAL- Subject to subparagraph (B) of this paragraph, a State may allow an individual who, by reason of paragraph (1), would be prohibited from participating in the State program established under this part to participate in the program for such additional period or periods as the State determines appropriate, if the individual has participated for 36 months in the State community service program established under part G.

        ‘(B) LIMITATION ON PERCENTAGE OF REPEAT PARTICIPANTS- The number of individuals allowed under subparagraph (A) to participate during a program year in a State program established under this part shall not exceed 10 percent of the total number of individuals that the Secretary projects will participate in the program for the program year.

‘SEC. 488. PHASE-IN OF PARTICIPATION.

    ‘(a) INITIAL PARTICIPANTS- Notwithstanding section 487(a), an individual may not participate in a program established by a State under this part unless the individual--

      ‘(1) has not attained 25 years of age; or

      ‘(2) was participating in the State program established under part F (as in effect immediately before the date this part first applies to the State) immediately before such date.

    ‘(b) PHASE-IN OF OLDER PARTICIPANTS- Notwithstanding section 487(a) and subsection (a) of this section, effective on each October 1 of each calendar year after 1996, a State that establishes a program under this part--

      ‘(1) except as provided in paragraph (2) of this subsection, may not allow an individual to participate in the program unless the individual has not attained the age (in years) of 25, plus 2 times the whole number of calendar years that have elapsed since October 1, 1996; and

      ‘(2) may include in the program not more than 20 percent of the families receiving aid under the State plan approved under part A in which the caretaker relative has attained 25 years of age, with an emphasis on--

        ‘(A) recipients of such aid who have received such aid for any 36 of the preceding 60 months; and

        ‘(B) members of families in which the youngest child is within 2 years of being ineligible for aid to families with dependent children because of age.

‘Part G--Community Service Program

‘SEC. 491. ESTABLISHMENT AND OPERATION OF PROGRAM.

    ‘(a) IN GENERAL- A State that establishes a work first program under part F shall establish and carry out a community service program that meets the requirements of this part.

    ‘(b) OBJECTIVE- The objective of the community service program is for each program participant to find and hold a full-time unsubsidized paid job, and for this goal to be achieved in a cost-effective fashion.

    ‘(c) CASE MANAGEMENT TEAMS- The State shall assign to each program participant a case management team that shall meet with the participant and assist the participant to choose the most suitable community service job under subsection (d) and to eventually obtain a full-time unsubsidized paid job.

    ‘(d) PROVISION OF COMMUNITY SERVICE JOB-

      ‘(1) IN GENERAL- Except as provided in paragraphs (2) and (3), the State shall provide each participant with a full-time community service job under which the participant works a minimum of 30 hours per week and is paid at a rate equal to--

        ‘(A) the minimum wage rate in effect under section 6 of the Fair Labor Standards Act of 1938; or

        ‘(B) the State minimum wage rate, if such rate is equal to or higher than the minimum wage rate described in subparagraph (A).

      ‘(2) EXCEPTION- (A) If the participant has obtained unsubsidized part-time employment in the private sector, the State shall provide the participant with a part-time community service job.

      ‘(B) If the State provides a participant a part-time community service job under subparagraph (A), such State shall ensure that the total number of hours that the participant works in a week is at least 30 hours.

      ‘(3) WAIVER- (A) The State may submit to the Secretary a request for a waiver of the 30-hour per week work requirement described in paragraph (1) if such requirement is too financially burdensome for the State to meet.

      ‘(B) Any waiver granted under subparagraph (A) shall require the State--

        ‘(i) to ensure that each participant works part-time at the community service job; and

        ‘(ii) to meet such 30-hour per week work requirement by the year 2001.

      ‘(4) WAGES NOT CONSIDERED EARNED INCOME- Wages paid under a community service program shall not be considered to be earned income for purposes of any provision of law.

      ‘(5) COMMUNITY SERVICE JOB DEFINED- For purposes of this section, the term ‘community service job’ means--

        ‘(A) a job provided to a participant by the State administering the State plan under part A; or

        ‘(B) a job provided to a participant by any other employer for which all or part of the wages are paid by the State.

      A State may provide or subsidize under the program any job which the State determines to be appropriate.

    ‘(e) JOB SEARCH REQUIREMENT- The State shall require each participant to spend a minimum of 5 hours per week on activities related to securing unsubsidized full-time employment in the private sector.

    ‘(f) DURATION OF PARTICIPATION-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), an individual may not participate for more than 3 years in a community service program under this section.

      ‘(2) AUTHORITY TO ALLOW REPEATED PARTICIPATION-

        ‘(A) IN GENERAL- Subject to subparagraph (B), a State may allow an individual whose participation in the community service program under this section has terminated, or (but for this paragraph) would terminate, to participate in the program for an additional period of time, as determined by the State.

        ‘(B) LIMITATION ON PERCENTAGE OF REPEAT PARTICIPANTS- The number of individuals allowed under subparagraph (A) to participate during a program year in a State program established under this part shall not exceed 10 percent of the total number of individuals that the Secretary projects will participate in the program for the program year.

    ‘(g) USE OF PLACEMENT COMPANIES- A State that establishes a community service program under this section may enter into contracts with private companies (whether operated for profit or not for profit) for the placement of participants in the program in positions of full-time employment, preferably in the private sector, for wages sufficient to eliminate the need of such participants for cash assistance in accordance with section 483.

    ‘(h) TEMPORARY SUBSIDIZED JOB CREATION- A State that establishes a community service program under this part may establish a program similar to the program operated by the State of Oregon, which is known as ‘JOBS Plus’.

    ‘(i) WORK SUPPLEMENTATION PROGRAM-

      ‘(1) IN GENERAL- A State that establishes a community service program under this section may institute a work supplementation program under which the State, to the extent it considers appropriate, may reserve the sums that would otherwise be payable to participants in the program as a community service minimum wage and use the sums instead for the purpose of providing and subsidizing private sector jobs for the participants.

      ‘(2) EMPLOYER AGREEMENT- An employer who provides a private sector job to a participant under paragraph (1) shall agree to provide to the participant an amount in wages equal to the poverty threshold for a family of three.

    ‘(j) FAILURE TO COMPLY WITH EMPLOYABILITY AGREEMENT OR OTHER ACT OF NONCOMPLIANCE-

      ‘(1) IN GENERAL- Subject to paragraph (2), if the program participant fails without good cause to comply with an employability agreement signed by the participant, or the participant otherwise engages in any other act of noncompliance, the participant shall be afforded the opportunity to change community service jobs.

      ‘(2) MAXIMUM OF 3 COMMUNITY SERVICE JOBS- A program participant may not receive more than 3 community service jobs under the program.

      ‘(3) DETERMINATION OF ACT OF NONCOMPLIANCE- For purposes of this subsection, the term ‘act of noncompliance’ shall be determined by the State or the employer and shall include failure by the participant to accept an offer of full-time employment in the private sector without good reason.’.

    (c) FUNDING-

      (1) GENERAL RULE- Section 403(a) of such Act (42 U.S.C. 603(a)) is amended--

        (A) by striking ‘and’ at the end of paragraph (3); and

        (B) by inserting after paragraph (3) the following:

      ‘(4) in the case of any State, an amount equal to the sum of 80 percent of the total amount expended during the quarter for the operation and administration of a program under part F, in accordance with the State plan approved under part F, and 80 percent of the total amount expended during the quarter for the operation and administration of a community service program under part G, in accordance with the State plan approved under such part G, except that not more than 10 percent of the amount payable to the State under this paragraph for the quarter may be for expenditures made with respect to program participants who are noncustodial parents and not eligible for aid under the State plan; and’.

      (2) RULES APPLICABLE TO THE TERRITORIES- Section 403 of such Act (42 U.S.C. 603) is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following:

    ‘(b)(1) In lieu of any payment under subsection (a), the Secretary shall pay to each State with a plan approved under part F and to which section 1108 applies, with respect to expenditures by the State to carry out a program under part F (including expenditures for child care under section 402(g)(1)(A)), an amount equal to--

      ‘(A) 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 payments 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

      ‘(B) with respect to so much of such expenditures in a fiscal year as exceed the amount described in subparagraph (A)--

        ‘(i) 50 percent, in the case of expenditures for administrative costs made by a State in operating such a program for 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 supportive services under section 402(g)(2); and

        ‘(ii) the greater of 60 percent or the Federal medical assistance percentage (as defined in section 1118), in the case of expenditures made by a State in operating such a program for such fiscal year (other than for costs described in clause (i)).

    ‘(2) With respect to the amount for which payment is made to a State under paragraph (1)(A), the State’s expenditures for the costs of operating a program established under part F may be in cash or in kind, fairly evaluated.

    ‘(3) Not more than 10 percent of the amount payable to a State under this subsection for a quarter may be for expenditures made during the quarter with respect to program participants who are not eligible for aid under the State plan approved under part A.’.

    (d) ENFORCEMENT OF PERFORMANCE STANDARDS- Section 403 of such Act (42 U.S.C. 603) is amended by inserting after subsection (c) the following:

    ‘(d) If the Secretary determines that the programs established by a State under parts F and G, as a whole, have failed for a fiscal year to meet the performance standards developed by the State under section 481(13), the Secretary shall, notwithstanding subsection (a)(4) of this section, pay to the State an amount equal to the sum of 50 percent of the total amount expended during the fiscal year for the operation and administration of such programs in accordance with the State plans approved under parts F and G.’.

    (e) CONFORMING AMENDMENTS-

      (1) Section 402(a) of the Social Security Act (42 U.S.C. 602(a)) is amended by striking paragraph (19).

      (2) Section 402(e)(2)(C) of such Act (42 U.S.C. 602(e)(2)(C)) is amended by striking ‘403(b)’ and inserting ‘403(c)’.

      (3) Section 403(e) of such Act (42 U.S.C. 603(e)) is amended by striking ‘(b)(1)’ and inserting ‘(c)(1)’.

      (4) Section 403 of such Act (42 U.S.C. 603) is amended by striking subsections (k) and (l).

      (5) Section 407(b)(1)(B) of such Act (42 U.S.C. 607(b)(1)(B)) is amended--

        (A) by adding ‘and’ at the end of clause (iii);

        (B) by striking ‘; and’ at the end of clause (iv) and inserting a period; and

        (C) by striking clause (v).

      (6) Section 407(b)(2)(B)(ii)(I) of such Act (42 U.S.C. 607(b)(2)(B)(ii)(I)) is amended by striking ‘under section 402(a)(19) or’.

      (7) Section 407(b)(2)(C) of such Act (42 U.S.C. 607(b)(2)(C)) is amended by striking ‘section 402(a)(19) and’.

      (8) Section 1115(b)(2)(A) of such Act (42 U.S.C. 1315(b)(2)(A)) is amended by striking ‘, and 402(a)(19) (relating to the work incentive program)’.

      (9) Section 1108 of such Act (42 U.S.C. 1308) is amended--

        (A) in subsection (a), by striking ‘or, in the case of part A of title IV, section 403(k)’; and

        (B) in subsection (d), by striking ‘(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)’.

      (10) Section 1902(a)(19)(A)(i)(I) of such Act (42 U.S.C. 1396a(a)(19)(A)(i)(I)) is amended by striking ‘482(e)(6)’ and inserting ‘486(f)’.

      (11) Section 1928(a)(1) of such Act (42 U.S.C. 1396s(a)(1)) is amended by striking ‘482(e)(6)’ and inserting ‘486(f)’.

    (f) INTENT OF THE CONGRESS- The Congress intends for State activities under section 484 of the Social Security Act (as added by the amendment made by section 301(b) of this Act) to emphasize the use of the funds that would otherwise be used to provide individuals with aid to families with dependent children under part A of title IV of the Social Security Act and with food stamp benefits under the Food Stamp Act of 1977, to subsidize the wages of such individuals in temporary jobs.

SEC. 302. REGULATIONS.

    The Secretary of Health and Human Services shall prescribe such regulations as may be necessary to implement the amendments made by this title.

SEC. 303. APPLICABILITY TO STATES.

    (a) STATE OPTION TO ACCELERATE APPLICABILITY- If a State formally notifies the Secretary of Health and Human Services that the State desires to accelerate the applicability to the State of the amendments made by this title, the amendments shall apply to the State on and after such earlier date as the State may select.

    (b) STATE OPTION TO DELAY APPLICABILITY UNTIL WAIVERS EXPIRE- The amendments made by this title shall not apply to a State with respect to which there is in effect a waiver issued under section 1115 of the Social Security Act for the State program established under part F of title IV of such Act, until the waiver expires, if State formally notifies the Secretary of Health and Human Services that the State desires to so delay such effective date.

    (c) AUTHORITY OF THE SECRETARY OF HEALTH AND HUMAN SERVICES TO DELAY APPLICABILITY TO A STATE- If a State formally notifies the Secretary of Health and Human Services that the State desires to delay the applicability to the State of the amendments made by this title, the amendments shall apply to the State on and after any later date agreed upon by the Secretary and the State.

    (d) FULL PHASE-IN- Effective October 1, 2005, section 488 of the Social Security Act is hereby repealed.

Subtitle B--Targeted Jobs Tax Credit

SEC. 311. INCREASE IN MINIMUM PERIOD OF EMPLOYMENT REQUIRED TO RECEIVE CREDIT.

    (a) IN GENERAL- Paragraph (3) of section 51(i) of the Internal Revenue Code of 1986 (relating to certain individuals ineligible) is amended--

      (1) by striking ‘90 days’ and inserting ‘180 days’,

      (2) by striking ‘14 days’ and inserting ‘28 days’,

      (3) by striking ‘120 hours’ and inserting ‘240 hours’, and

      (4) by striking ‘20 hours’ and inserting ‘40 hours’.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply with respect to individuals who begin work for the employer after December 31, 1994.

TITLE IV--FAMILY RESPONSIBILITY AND IMPROVED CHILD SUPPORT ENFORCEMENT

Subtitle A--Enhancement of Ability to Identify and Locate Noncustodial Parents

SEC. 401. EXPANSION OF FUNCTIONS OF FEDERAL PARENT LOCATOR SERVICE.

    (a) IN GENERAL- Section 453 of the Social Security Act (42 U.S.C. 653) is amended--

      (1) in subsection (a), by striking ‘enforcing support obligations against such parent’ and inserting ‘establishing parentage, establishing, modifying, and enforcing child support obligations, and enforcing child visitation rights and responsibilities, and which shall use safeguards to prevent the disclosure of information in cases that would jeopardize the safety of the custodial parent or any child of the custodial parent’;

      (2) in subsection (b), by inserting after the 2nd sentence the following: ‘Information with respect to an absent parent shall not be disclosed to any person if the disclosure would jeopardize the safety of the custodial parent or any child of the custodial parent. Information with respect to an absent parent shall not be disclosed to any person (other than the custodial parent) unless the custodial parent has been notified in advance of the disclosure.’; and

      (3) in subsection (d), by inserting ‘and such reasonable fees’ after ‘such documents’.

    (b) SENSE OF THE CONGRESS- It is the sense of the Congress that--

      (1) the denial of visitation rights under a child support order should be treated as irrelevant in any action brought to enforce the support provisions of the order; and

      (2) the failure to pay child support pursuant to a child support order should be treated as irrelevant in any action brought to enforce visitation rights under the order.

SEC. 402. EXPANSION OF DATA BASES ACCESSED BY PARENT LOCATOR SYSTEMS.

    (a) ADDITIONAL INFORMATION FOR FEDERAL PARENT LOCATOR SERVICE- Section 453 of the Social Security Act (42 U.S.C. 653) is amended--

      (1) in subsection (b), by striking ‘the most recent address and place of employment’ and inserting ‘the most recent residential address, employer name and address, and amounts and nature of income and assets’;

      (2) in subsection (c)(3), by striking ‘the resident parent’ and inserting ‘either parent’; and

      (3) in subsection (e), by adding at the end the following:

    ‘(4) The Secretary of the Treasury shall enter into an agreement with the Secretary to provide prompt access by the Secretary (in accordance with this subsection and section 6103(l)(6) of the Internal Revenue Code of 1986) to the quarterly estimated Federal income tax returns filed by individuals with the Internal Revenue Service.’.

    (b) STATE INFORMATION- Section 466(a) of such Act (42 U.S.C. 666(a)) is amended by inserting after paragraph (10) the following:

      ‘(11) Procedures under which the State child support enforcement agency shall have automated on-line or batch access (or, if necessary, nonautomated access) to information regarding residential addresses, employers and employer addresses, income and assets, and medical insurance benefits with respect to absent parents that is available through any data base maintained by--

        ‘(A) any agency of the State or any political subdivision thereof, that contains information on residential addresses, or on employers and employer addresses, as the State deems appropriate;

        ‘(B) any publicly regulated utility company located in the State; and

        ‘(C) any credit reporting agency located in the State.

    (c) MAINTENANCE OF STATE CHILD SUPPORT ORDER REGISTRIES- Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as amended by subsection (b) of this section, is amended by inserting after paragraph (11) the following:

      ‘(12) Procedures under which the State child support enforcement agency shall--

        ‘(A) maintain a child support order registry which shall include a copy of each child support order, issued or modified in the State after the date that is 30 years before the effective date of this paragraph; and

        ‘(B) transmit a copy of each such order electronically to the Office of Child Support Enforcement.’.

    (d) MAINTENANCE OF FEDERAL CHILD SUPPORT ORDER REGISTRY- Section 452(a) of such Act (42 U.S.C 652(a)) is amended--

      (1) by striking ‘and’ at the end of paragraph (9);

      (2) by striking the period at the end of the 2nd sentence of paragraph (10) and inserting ‘; and’; and

      (3) by adding at the end the following:

      ‘(11) maintain a registry of all child support orders transmitted pursuant to section 466(a)(12)(B).’.

    (e) SENSE OF THE CONGRESS- It is the sense of the Congress that the Secretary of Health and Human Services should investigate, pursuant to section 453(e) of the Social Security Act, accessing Federal data banks that are not linked to the Parent Locator Service which are more than marginally useful in locating absent parents.

SEC. 403. NATIONAL PARENT LOCATOR NETWORK.

    (a) ESTABLISHMENT- Section 453 of the Social Security Act (42 U.S.C. 653) is amended by adding at the end the following:

    ‘(g) The Secretary shall expand the Parent Locator Service to establish a national network based on the comprehensive statewide child support enforcement systems developed by the States, to--

      ‘(1) allow each State to--

        ‘(A) locate any absent parent who owes child support, for whom a child support obligation is being established, or for whom an order for visitation is being enforced, by--

          ‘(i) accessing the records of other State agencies and sources of locate information directly from one computer system to another; and

          ‘(ii) accessing Federal sources of locate information in the same fashion;

        ‘(B) access the files of other States to determine whether there are other child support orders and obtain the details of those orders;

        ‘(C) provide for both on-line and batch processing of locate requests, with on-line access restricted to cases in which the information is needed immediately (for such reasons as court appearances) and batch processing used to ‘troll’ data bases to locate individuals or update information periodically; and

        ‘(D) direct locate requests to individual States or Federal agencies, broadcast requests to selected States, or broadcast cases to all States when there is no indication of the source of needed information;

      ‘(2) provide for a maximum of 48-hour turnaround time for information to be broadcast and returned to a requesting State;

      ‘(3) provide ready access to courts of the information on the network by location of a computer terminal in each court; and

      ‘(4) access the registry of child support orders for public and private cases maintained at the State level by the State agencies as described in section 466(a)(12).’.

    (b) EXPANDED STATE INTERACTION WITH NATIONAL NETWORK- Section 454(16) of such Act (42 U.S.C. 654(16)) is amended--

      (1) by striking ‘and (E)’ and inserting ‘(E)’; and

      (2) by striking ‘enforcement;’ and inserting ‘enforcement, and (F) to provide access to the national network developed pursuant to section 453(g);’.

    (c) SENSE OF THE CONGRESS- It is the sense of the Congress that the national network established under section 453(g) of the Social Security Act should be used to access State records only through the agency that administers the State plan approved under part D of title IV of such Act.

SEC. 404. PRIVATE ACCESS TO LOCATE AND ENFORCEMENT SERVICES.

    Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as amended by section 402 of this Act, is amended by inserting after paragraph (12) the following:

      ‘(13)(A) Procedures under which private attorneys and pro se obligees must be given access to State locate resources and through enforcement techniques of the State child support enforcement agency, for the purpose of establishing, modifying, and enforcing child support, visitation, and parentage orders, in accordance with safeguards established--

        ‘(i) to provide the custodial parent advance notice of any release of information with respect to a noncustodial parent; and

        ‘(ii) to prevent release of information with respect to a noncustodial parent if the release may jeopardize the safety of the noncustodial parent, the custodial parent, or any child of either parent; and

      ‘(B) The procedures described in subparagraph (A) must require the State--

        ‘(i) to develop and publish guidelines implementing the safeguards described in subparagraph (A); and

        ‘(ii) if the State provides for reasonable fees for the access referred to in subparagraph (A), to establish such fees in accordance with guidelines developed and published by the State that set schedules for such fees.’.

Subtitle B--Paternity Establishment

SEC. 411. SENSE OF THE CONGRESS.

    It is the sense of the Congress that social services should be provided in hospitals to women who have become pregnant as a result of rape or incest.

SEC. 412. AVAILABILITY OF PARENTING SOCIAL SERVICES FOR NEW FATHERS.

    Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as amended by sections 402 and 404 of this Act, is amended by inserting after paragraph (13) the following:

      ‘(14) Procedures for providing new fathers with positive parenting counseling that stresses the importance of paying child support in a timely manner, in accordance with regulations prescribed by the Secretary.’.

SEC. 413. AFDC BENEFITS CONDITIONED ON COOPERATION IN IDENTIFYING NONCUSTODIAL PARENT.

    (a) IN GENERAL- Section 402(a)(26)(B) of the Social Security Act (42 U.S.C. 602(a)(26)(B)) is amended--

      (1) in clause (i), by inserting ‘unless (in accordance with regulations prescribed by the Secretary, the State finds that the child was born as a result of rape or incest), or unless the applicant or recipient reasonably believes that such cooperation would endanger herself or her child and demonstrates such belief through such documentation as a police report, a restraining order, or an affidavit from a social service provider, except that, if there is no such documentation, the State shall provide the applicant or recipient with information about available social service agencies that will evaluate claims of prior or potential harm,’ after the comma;

      (2) by inserting ‘and, in either case, such cooperation shall include the provision of the full name, the last known telephone number and address, the name of the last known employer, the name of the closest living relative (or, if there is no known relative, an acquaintance), and the social security account number of any noncustodial parent of such child, and the name of any State in which any such noncustodial parent was known to be licensed to operate a motor vehicle,’ before ‘unless’ the 1st place such term appears; and

      (3) by inserting ‘, except that the applicant or recipient shall not be found to have such good cause unless the applicant or recipient demonstrates that the applicant or recipient failed to obtain such information despite an earnest attempt to do so’ before the 1st semicolon.

    (b) SENSE OF THE CONGRESS- It is the sense of the Congress that States should implement methods for the immediate verification of information provided by applicants and recipients of aid to families with dependent children that might serve to identify and locate noncustodial parents of the children with respect to whom such aid is claimed.

SEC. 414. INCREASE IN PASS-THROUGH OF COLLECTED CHILD SUPPORT TO AFDC RECIPIENTS.

    (a) IN GENERAL- Section 457(b)(1) of the Social Security Act (42 U.S.C. 657(b)(1)) is amended by striking ‘$50’ each place such term appears and inserting ‘$100’.

    (b) CONFORMING AMENDMENT- Section 402(a)(8)(A)(vi) of such Act (42 U.S.C. 602(a)(8)(A)(vi)) is amended by striking ‘$50’ each place such term appears and inserting ‘$100’.

Subtitle C--Improvement of Child Support Order Establishment Process

SEC. 421. NATIONAL CHILD SUPPORT GUIDELINES COMMISSION.

    (a) ESTABLISHMENT- There is hereby established a commission to be known as the ‘National Child Support Guidelines Commission’ (in this section referred to as the ‘Commission’).

    (b) GENERAL DUTIES- The Commission shall convene a conference to study the desirability of a national child support guideline, and if such guideline is advisable, the Commission shall develop for congressional consideration a national child support guideline that is based on the conference’s study of various guideline models, the deficiencies of such models, and any needed improvements, taking into consideration differences in the cost of living in different areas of the United States. In developing such guideline, the Commission shall consider indexing the guideline to the cost of living, specifying minimum (rather than maximum) amounts, or using other methodologies to reflect such differences.

    (c) MEMBERSHIP-

      (1) NUMBER; APPOINTMENT-

        (A) IN GENERAL- The Commission shall be composed of 9 individuals appointed jointly by the Secretary of Health and Human Services and the Congress, not later than January 15, 1995.

        (B) QUALIFICATIONS OF MEMBERS- Members of the Commission shall be appointed from among those who are able to provide expertise and experience in the evaluation and development of child support guidelines.

      (2) TERMS OF OFFICE- Each member shall be appointed for a term of 2 years. A vacancy in the Commission shall be filled in the manner in which the original appointment was made.

    (d) COMMISSION POWERS, COMPENSATION, ACCESS TO INFORMATION, AND SUPERVISION- The first sentence of subparagraph (C), the first and third sentences of subparagraph (D), subparagraph (F) (except with respect to the conduct of medical studies), clauses (ii) and (iii) of subparagraph (G), and subparagraph (H) of section 1886(e)(6) of the Social Security Act shall apply to the Commission in the same manner in which such provisions apply to the Prospective Payment Assessment Commission.

    (e) REPORT- Not later than 2 years after the appointment of members, the Commission shall submit to the President, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate, a report on the results of the study described in subsection (b) and the final assessment by the Commission of issues relating to a national child support guideline.

    (f) TERMINATION- The Commission shall terminate upon the submission of the report described in subsection (e).

Subtitle D--Child Support Enforcement

SEC. 431. NATIONAL REPORTING OF NEW HIRES AND CHILD SUPPORT INFORMATION.

    (a) FEDERAL IMPLEMENTATION OF SYSTEM-

      (1) IN GENERAL- The Secretary of the Treasury, in consultation with the Secretary of Labor, shall establish a system of reporting of new employees by requiring employers to provide a copy of every new employee’s W-4 form to the employment security agency of the State in which the employment is located.

      (2) EXPANDED USE OF FORM- The Secretary of the Treasury shall modify the W-4 form to be completed by a new employee to enable the employee to indicate on the form--

        (A) whether the employee owes child support, and if so--

          (i) to whom the support is payable and the amount of the support payable; and

          (ii) whether the support is to be paid through wage withholding; and

        (B) whether health care insurance is available to the new employee, and, if so, whether the new employee has obtained such insurance for the dependent children of the new employee.

      (3) EMPLOYER WITHHOLDING OBLIGATION-

        (A) IN GENERAL- Subtitle C of the Internal Revenue Code of 1986 (relating to employment taxes) is amended by inserting after chapter 24 the following new chapter:

‘CHAPTER 24A--COLLECTION OF CHILD SUPPORT OBLIGATIONS AT SOURCE ON WAGES

‘Sec. 3411. Child support obligations collected at source.

‘SEC. 3411. CHILD SUPPORT OBLIGATIONS COLLECTED AT SOURCE.

    ‘(a) REQUIREMENT OF WITHHOLDING- Every employer making payment of wages shall deduct and withhold upon such wages a specified child support obligation amount.

    ‘(b) SPECIFIED CHILD SUPPORT OBLIGATION AMOUNT- For purposes of this chapter, the specified child support obligation amount with respect to any employee shall be determined based on--

      ‘(1) information provided by the employee, or (if an agency of the State in which the employer is located notifies the employer that such information is inaccurate) information provided by the agency; and

      ‘(2) information contained in any wage withholding order received by the employer from any State.

    ‘(c) LIABILITY FOR PAYMENT- The employer shall be liable for the payment of the specified child support obligation amount to the payee identified by the employee.

    ‘(d) SPECIAL RULES- For purposes of this chapter (and so much of subtitle F as relates to this chapter), any specified child support obligation amount shall be treated as if it were a tax withheld under chapter 24 and rules similar to the rules of such chapter shall apply.’.

        (B) CLERICAL AMENDMENT- The table of chapters of subtitle C of the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 24 the following new item:

‘CHAPTER 24A. Child support obligations collected at source.’.

      (4) WITHHELD CHILD SUPPORT OBLIGATIONS REPORTED ON W-2 FORMS- Subsection (a) of section 6051 of the Internal Revenue Code of 1986 (relating to receipts for employees) is amended by striking ‘and’ at the end of paragraph (8), by striking the period at the end of paragraph (9) and inserting ‘, and’, and by inserting after paragraph (9) the following new paragraph:

      ‘(10) the total amount of specified child support obligations withheld under section 3411.’.

    (b) STATE IMPLEMENTATION OF SYSTEM- Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as amended by sections 402, 404, and 412 of this Act, is amended by inserting after paragraph (14) the following:

      ‘(15) Procedures under which the State shall--

        ‘(A) use the Parent Locator Service established under section 453 to access information in the national registry of child support orders maintained pursuant to section 452(a)(11) with respect to new employee, compare such information with the information reported on W-4 forms of new employees, and identify child support obligations not reported on such forms;

        ‘(B) if child support information from the W-4 form of a new employee agrees with information with respect to the new employee in the national registry of child support orders maintained pursuant to section 452(a)(11), notify the individual owed the support (or the individual’s designee) of such information;

        ‘(C) notify an employer of any new employee who has not reported on the W-4 form a child support obligation of the new employee, using the wage withholding order developed under section 452(a)(12);

        ‘(D) impose monetary penalties on--

          ‘(i) any individual who owes child support and fails to report the obligation to provide the support on a Federal income tax W-4 form at time of employment;

          ‘(ii) any employer who fails to forward a W-4 form for a new employee to the State employment security agency within 10 calendar days of the date of the first payroll from which the new employee is paid; and

          ‘(iii) any employer who fails to withhold from the pay of any new employee who reports a child support obligation on a W-4 form an amount equal to the support owed, or fails to pay to the individual owed the obligation the amount so withheld, within 10 calendar days of the date of the payroll, using electronic funds transfer, if possible, unless otherwise notified by a State agency;

        ‘(E) provide the services described in this paragraph to any individual owed child support who applies for assistance under the State plan; and

        ‘(F) on request of another State, broadcast over the Parent Locator Service to such other State child support information from W-4 forms that have been sent to the State employment security agency.’.

    (c) UNIFORM WITHHOLDING ORDER- Section 452(a) of the Social Security Act (42 U.S.C. 652(a)), as amended by section 402(d) of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (10);

      (2) by striking the period at the end of paragraph (11) and inserting ‘; and’; and

      (3) by inserting after paragraph (11) the following:

      ‘(12) develop a uniform order to be used in all cases in which income is to be withheld for the payment of child support, which shall contain the name of the individual whose income is to be withheld, the number of children covered by the order, and the individual or State to whom the withheld income is to be paid, and be generic to allow for the service of the order on all sources of income.’.

    (d) EFFECTIVE DATE- The amendments made by this section shall take effect on January 1, 1995.

SEC. 432. CERTAIN BENEFITS SUBJECT TO GARNISHMENT.

    (a) FEDERAL DEATH BENEFITS, BLACK LUNG BENEFITS, AND VETERANS BENEFITS- Section 462(f)(2) of the Social Security Act (42 U.S.C. 662(f)(2)) is amended by striking ‘(not including’ and all that follows through ‘compensation)’.

    (b) WORKERS’ COMPENSATION- Section 462(f) of such Act (42 U.S.C. 662(f)) is amended--

      (1) by striking ‘or’ at the end of paragraph (1);

      (2) by striking the period at the end of paragraph (2) and inserting ‘, or’; and

      (3) by adding at the end the following:

      ‘(3) workers’ compensation benefits.’.

SEC. 433. SEIZURE OF LOTTERY WINNINGS, SETTLEMENTS, PAYOUTS, AWARDS, AND BEQUESTS, AND SALE OF FORFEITED PROPERTY, TO PAY CHILD SUPPORT ARREARAGES.

    Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as amended by sections 402, 404, 412, and 431(b) of this Act, is amended by inserting after paragraph (15) the following:

      ‘(16) Procedures, in addition to other income withholding procedures, under which a lien is imposed against property with the following effect:

        ‘(A) The distributor of the winnings from a State lottery or State-sanctioned or tribal-sanctioned gambling house or casino shall--

          ‘(i) suspend payment of the winnings from the person otherwise entitled to the payment until an inquiry is made to and a response is received from the State child support enforcement agency as to whether the person owes a child support arrearage; and

          ‘(ii) if there is such an arrearage, withhold from the payment the lesser of the amount of the payment or the amount of the arrearage, and pay the amount withheld to the agency for distribution.

        ‘(B) The person required to make a payment under a policy of insurance or a settlement of a claim made with respect to the policy shall--

          ‘(i) suspend the payment until an inquiry is made to and a response received from the agency as to whether the person otherwise entitled to the payment owes a child support arrearage; and

          ‘(ii) if there is such an arrearage, withhold from the payment the lesser of the amount of the payment or the amount of the arrearage, and pay the amount withheld to the agency for distribution.

        ‘(C) The payor of any amount pursuant to an award, judgment, or settlement in any action brought in Federal or State court shall--

          ‘(i) suspend the payment of the amount until an inquiry is made to and a response is received from the agency as to whether the person otherwise entitled to the payment owes a child support arrearage; and

          ‘(ii) if there is such an arrearage, withhold from the payment the lesser of the amount of the payment or the amount of the arrearage, and pay the amount withheld to the agency for distribution.

        ‘(D) If the State seizes property forfeited to the State by an individual by reason of a criminal conviction, the State shall--

          ‘(i) hold the property until an inquiry is made to and a response is received from the agency as to whether the individual owes a child support arrearage; and

          ‘(ii) if there is such an arrearage, sell the property and, after satisfying the claims of all other private or public claimants to the property and deducting from the proceeds of the sale the attendant costs (such as for towing, storage, and the sale), pay the lesser of the remaining proceeds or the amount of the arrearage directly to the agency for distribution.

        ‘(E) Any person required to make a payment in respect of a decedent shall--

          ‘(i) suspend the payment until an inquiry is made to and a response received from the agency as to whether the person otherwise entitled to the payment owes a child support arrearage; and

          ‘(ii) if there is such an arrearage, withhold from the payment the lesser of the amount of the payment or the amount of the arrearage, and pay the amount withheld to the agency for distribution.’.

SEC. 434. REPORTING OF CHILD SUPPORT ARREARAGES TO CREDIT BUREAUS.

    Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended--

      (1) by inserting ‘(A)’ after ‘(7)’;

      (2) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively; and

      (3) by adding after and below the end the following:

      ‘(B) Procedures requiring any court or administrative agency of the State, at the time the court or agency issues or modifies a child support order, to report to each consumer reporting agency (as so defined)--

        ‘(i) the name of the individual on whom the order imposes an obligation to pay child support pursuant to the order; and

        ‘(ii) the amount of the obligation.’.

SEC. 435. LIABILITY OF GRANDPARENTS FOR FINANCIAL SUPPORT OF CHILDREN OF THEIR MINOR CHILDREN.

    Section 466(a) of the Social Security Act (42 U.S.C. 666(a)), as amended by sections 402, 404, 412, 431(b), and 433 of this Act, is amended by inserting after paragraph (16) the following:

      ‘(17) Procedures under which each parent of an individual who has not attained 18 years of age is liable for the financial support of any child of the individual to the extent that the individual is unable to provide such support. The preceding sentence shall not apply to the State if the State plan explicitly provides for such inapplicability.’.

SEC. 436. SENSE OF THE CONGRESS REGARDING PROGRAMS FOR NONCUSTODIAL PARENTS UNABLE TO MEET CHILD SUPPORT OBLIGATIONS.

    It is the sense of the Congress that the States should develop programs, such as the program of the State of Wisconsin known as the ‘Children’s First Program’, that are designed to work with noncustodial parents who are unable to meet their child support obligations.

TITLE V--TEEN PREGNANCY AND FAMILY STABILITY

Subtitle A--Federal Role

SEC. 501. STATE OPTION NOT TO DENY AFDC FOR ADDITIONAL CHILDREN.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, 232, 243(a), and 301(a) of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (51);

      (2) by striking the period at the end of paragraph (52) and inserting ‘; and’; and

      (3) by inserting after paragraph (52) the following:

      ‘(53)(A) provide that, notwithstanding paragraph (7)(A), the needs of a child shall not be taken into account in making the determination under paragraph (7) with respect to the family of the child if the child was born (other than as a result of rape or incest) to a member of the family--

        ‘(i) while the family was a recipient of aid under the State plan; or

        ‘(ii) during the 6-month period ending with the date the family applied for such aid; except that

      ‘(B) subparagraph (A) shall not apply to the State if the State plan explicitly provides for such inapplicability.’.

SEC. 502. MINORS RECEIVING AFDC REQUIRED TO LIVE UNDER RESPONSIBLE ADULT SUPERVISION.

    Section 402(a)(43) of the Social Security Act (42 U.S.C. 602(a)(43)) is amended--

      (1) by striking ‘at the option of the State,’; and

      (2) by striking ‘18’ and inserting ‘19’.

SEC. 503. TASK FORCE TO REDUCE TEENAGE PREGNANCY.

    The Secretary of Education, in conjunction with the Secretary of Health and Human Services, shall establish a task force to--

      (1) educate children regarding the risks involved in choosing parenthood at an early age;

      (2) ensure that every potential parent is given the opportunity to avoid unintended births through reproductive family planning and education;

      (3) encourage States to use funds received under title XX of the Social Security Act for comprehensive services to youth in high risk areas through community organizations, and schools; and

      (4) encourage States to work with schools for the early identification and referral of children at risk for parenthood at an early age.

SEC. 504. INCENTIVE FOR TEEN PARENTS TO ATTEND SCHOOL.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, 232, 243(a), 301(a), and 501 of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (52);

      (2) by striking the period at the end of paragraph (53) and inserting ‘; and’; and

      (3) by inserting after paragraph (53) the following:

      ‘(54) provide that the amount of aid otherwise payable under the plan for a month to a family that includes a parent who has not attained 20 years of age and has not completed secondary school (or received a certificate of high school equivalency) shall be--

        ‘(A) reduced by 25 percent if, during the immediately preceding month, the parent has failed without good cause (as defined by the State in consultation with the Secretary) to maintain minimum attendance (as defined by the State in consultation with the Secretary) at an educational institution; or

        ‘(B) increased by 25 percent if, during the immediately preceding month, the parent has maintained minimum attendance (as defined by the State in consultation with the Secretary) at an educational institution.’.

SEC. 505. STATE OPTION TO DISREGARD 100-HOUR RULE UNDER AFDC-UP PROGRAM.

    Section 407(a) of the Social Security Act (42 U.S.C. 607(a)) is amended--

      (1) by inserting ‘(1)’ after ‘(a)’; and

      (2) by adding at the end the following:

    ‘(2) A standard prescribed pursuant to paragraph (1) that imposes a limit on the amount of time during which a parent who is the principal earner in a family in which both parents are married may be employed during a month shall not apply to a State if the State plan under this part explicitly provides for such inapplicability.’.

SEC. 506. STATE OPTION TO DISREGARD 6-MONTH LIMITATION ON AFDC-UP BENEFITS.

    Section 407(b)(2)(B) of the Social Security Act (42 U.S.C. 607(b)(2)(B)) is amended by adding at the end the following:

    ‘(iv) A regulation prescribed by the Secretary that limits the length of time with respect to which a family of a dependent child in which both parents are married may receive aid to families with dependent children by reason of this section shall not apply to a State if the State plan under this part explicitly provides for such inapplicability.’.

SEC. 507. ELIMINATION OF QUARTERS OF COVERAGE REQUIREMENT UNDER AFDC-UP PROGRAM FOR FAMILIES IN WHICH BOTH PARENTS ARE TEENS.

    Section 407(b)(1)(A)(iii) of the Social Security Act (42 U.S.C. 607(b)(1)(A)(iii)) is amended by striking ‘(iii)(I)’ and inserting ‘(iii) neither of the child’s parents have attained 20 years of age, and (I)’.

Subtitle B--State Role

SEC. 511. TEENAGE PREGNANCY PREVENTION AND FAMILY STABILITY.

    (a) FINDINGS- The Congress finds that--

      (1) long-term welfare dependency is increasing driven by illegitimate births;

      (2) too many teens are becoming parents and too few are able to responsibly care for and nurture their children;

      (3) new research has shown that spending time in a single-parent family puts children at substantially increased risk of dropping out of high school, having a child out-of-wedlock, or being neither in school nor at work; and

      (4) between 1986 and 1991, the rate of births to teens aged 15 to 19 rose 24 percent, from 50.2 to 62.1 births per 1,000 females.

    (b) SENSE OF THE CONGRESS- It is the sense of the Congress that--

      (1) children should be educated about the risks involved in choosing parenthood at an early age;

      (2) reproductive family planning and education should be made available to every potential parent so as to give such parents the opportunity to avoid unintended births;

      (3) States should use funds provided under title XX of the Social Security Act to provide comprehensive services to youth in high risk neighborhoods, through community organizations, churches, and schools; and

      (4) States should work with schools for the early identification and referral of children at risk for parenthood at an early age.

SEC. 512. AVAILABILITY OF FAMILY PLANNING SERVICES.

    Section 402(a)(15)(A) of the Social Security Act (42 U.S.C. 602(a)(15)(A)) is amended by striking ‘out of wedlock’.

TITLE VI--PROGRAM SIMPLIFICATION

Subtitle A--Increased State Flexibility

SEC. 601. STATE OPTION TO PROVIDE AFDC THROUGH ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, 232, 243(a), 301(a), 501, and 504 of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (53);

      (2) by striking the period at the end of paragraph (54) and inserting ‘; and’; and

      (3) by inserting after paragraph (54) the following:

      ‘(55) at the option of the State, provide for the payment of aid under the State plan through the use of electronic benefit transfer systems.’.

SEC. 602. DEADLINE FOR ACTION ON APPLICATION FOR WAIVER OF REQUIREMENT APPLICABLE TO PROGRAM OF AID TO FAMILIES WITH DEPENDENT CHILDREN.

    Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended by adding at the end the following:

    ‘(e) The Secretary shall approve or deny an application for a waiver under this section with respect to a requirement of section 402, not later than 90 days after the Secretary receives the application, unless otherwise agreed upon by the Secretary and the applicant.’.

Subtitle B--Coordination of AFDC and Food Stamp Programs

SEC. 611. AMENDMENTS TO PART A OF TITLE IV OF THE SOCIAL SECURITY ACT.

    (a) STATE OPTION TO USE INCOME AND ELIGIBILITY VERIFICATION SYSTEM- Section 1137(b) of the Social Security Act (42 U.S.C. 1320b-7(b)) is amended--

      (1) by striking paragraphs (1) and (4), and redesignating paragraphs (2), (3), and (5) as paragraphs (1), (2), and (3), respectively; and

      (2) in paragraph (2) (as so redesignated), by adding ‘or’ at the end.

    (b) STATE OPTION TO USE RETROSPECTIVE BUDGETING WITHOUT MONTHLY REPORTING- Section 402(a)(13) of such Act (42 U.S.C. 602(a)(13)) is amended--

      (1) by striking all that precedes subparagraph (A) and inserting the following:

      ‘(13) provide, at the option of the State and with respect to such category or categories as the State may select and identify in the State plan, that--’; and

      (2) in each of subparagraphs (A) and (B), by striking ‘, in the case of families who are required to report monthly to the State agency pursuant to paragraph (14)’.

    (c) EXCLUSION FROM INCOME OF ALL INCOME OF DEPENDENT CHILD WHO IS A STUDENT- Section 402(a)(8)(A)(i) of such Act (42 U.S.C. 602(a)(8)(A)(i)) is amended--

      (1) by striking ‘earned’; and

      (2) by inserting ‘applying for or’ before ‘receiving’.

    (d) EXCLUSION FROM INCOME OF ENERGY ASSISTANCE PAYMENTS BASED ON NEED- Section 402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as amended by sections 231 and 242(b)(1) of this Act, is amended--

      (1) by striking ‘and’ at the end of clause (ix); and

      (2) by adding at the end the following:

        ‘(xi) shall disregard any energy or utility-cost assistance payment based on need, that is paid to any member of the family under--

          ‘(I) a State or local general assistance program; or

          ‘(II) another basic assistance program comparable to general assistance (as determined by the Secretary); and’.

    (e) APPLICABILITY TO AFDC OF FUTURE INCOME EXCLUSIONS UNDER FOOD STAMP PROGRAM- Section 402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as amended by sections 231 and 242(b)(1) of this Act and by subsection (d) of this section, is amended--

      (1) by striking ‘and’ at the end of clause (x); and

      (2) by adding at the end the following:

        ‘(xii) shall disregard from the income of any child, relative, or other individual described in clause (ii) applying for aid under the State plan, any child, relative, or other individual so described receiving such aid, or both, any funds that a Federal statute (enacted after the date of the enactment of this clause) excludes from income for purposes of determining eligibility for benefits under the food stamp program under the Food Stamp Act of 1977, the level of benefits under the program, or both, respectively.’.

    (f) EXCLUSION OF EARNINGS FROM STATE TRAINING PROGRAMS UNDER THE JOB TRAINING PARTNERSHIP ACT- Section 402(a)(8)(A)(v) of such Act (42 U.S.C. 602(a)(8)(A)(v)) is amended to read as follows:

        ‘(v) with respect to earned income from an on-the-job training program under section 204(b)(1)(C) or 264(c)(1)(A) of the Job Training Partnership Act--

          ‘(I) shall disregard such earned income received by any dependent child applying for or receiving aid to families with dependent children; and

          ‘(II) notwithstanding section 142(b) of the Job Training Partnership Act, shall not disregard such earned income received by any other individual (living in the same home as the dependent child) whose needs are taken into account in making such determination;’.

    (g) USE OF FOOD STAMP PROGRAM LUMP-SUM PAYMENT RULE- Section 402(a)(17) of such Act (42 U.S.C. 602(a)(17)) is amended by inserting ‘(excluding income tax refunds, rebates, or credits, cash donations based on need that are received from 1 or more private nonprofit charitable organizations, but not in excess of $300 in the aggregate in a quarter, retroactive lump-sum social security or railroad retirement pension payments and retroactive lump-sum insurance settlements)’ after ‘unearned income’.

    (h) PERIODIC REVIEWS- Section 402(a) of such Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, 232, 243(a), 301(a), 501, 504, and 601 of this Act, is amended--

      (1) by striking ‘and’ at the end of paragraph (54);

      (2) by striking the period at the end of paragraph (55) and inserting ‘; and’; and

      (3) by inserting after paragraph (55) the following:

      ‘(56) provide that the State shall, not less frequently than annually review each determination made under the State plan with respect to the eligibility of each recipient of aid under the State plan;’.

    (i) EXCLUSION FROM RESOURCES OF ESSENTIAL EMPLOYMENT-RELATED PROPERTY- Section 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)), as amended by section 242(a) of this Act, is amended--

      (1) by striking ‘or’ at the end of clause (iv); and

      (2) by inserting ‘, or (vi) the value of real and tangible personal property (other than currency, commercial paper, and similar property) of a family member that is essential to the employment or self-employment of the member, until the expiration of the 1-year period beginning on the date the member ceases to be so employed or so self-employed’ before the semicolon.

    (j) EXCLUSION FROM RESOURCES OF EQUITY IN CERTAIN INCOME-PRODUCING REAL PROPERTY- Section 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)), as amended by section 242(a) of this Act and by subsection (i) of this section, is amended--

      (1) by striking ‘or’ at the end of clause (v); and

      (2) by inserting ‘, or (vii) the equity of any member of the family in real property to which 1 or more members of the family have sole and clear title, that the State agency determines is producing income consistent with the fair market value of the property’ before the semicolon.

    (k) EXCLUSION FROM RESOURCES OF LIFE INSURANCE POLICIES- Section 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)), as amended by section 242(a) of this Act and by subsections (i) and (j) of this section, is amended--

      (1) by striking ‘or’ at the end of clause (vi); and

      (2) by inserting ‘, or (viii) any life insurance policy’ before the semicolon.

    (l) EXCLUSION FROM RESOURCES OF REAL PROPERTY THAT THE FAMILY IS MAKING A GOOD FAITH EFFORT TO SELL- Section 402(a)(7)(B)(iii) of such Act (42 U.S.C. 602(a)(7)(B)(iii)) is amended--

      (1) by striking ‘for such period or periods of time as the Secretary may prescribe’; and

      (2) by striking ‘any such period’ and inserting ‘any period during which the family is making such an effort’.

    (m) PROMPT RESTORATION OF BENEFITS WRONGFULLY DENIED- Section 402(a) of such Act (42 U.S.C. 602(a)), as amended by sections 101, 102(a), 211(a), 224, 232, 243(a), 301(a), 501, 504, and 601 of this Act and by subsection (h) of this section, is amended--

      (1) by striking ‘and’ at the end of paragraph (55);

      (2) by striking the period at the end of paragraph (56) and inserting ‘; and’; and

      (3) by inserting after paragraph (56) the following:

      ‘(57) provide that, upon receipt of a request from a family for the payment of any amount of aid under the State plan the payment of which to the family has been wrongfully denied or terminated, the State shall promptly pay the amount to the family if the wrongful denial or termination occurred not more than 1 year before the date of the request or the date the State agency is notified or otherwise discovers the wrongful denial or termination.’.

SEC. 612. AMENDMENTS TO THE FOOD STAMP ACT OF 1977.

    (a) CERTIFICATION PERIOD- (1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended to read as follows:

    ‘(c) ‘Certification period’ means the period specified by the State agency for which households shall be eligible to receive authorization cards, except that such period shall be--

      ‘(1) 24 months for households in which all adult members are elderly or disabled; and

      ‘(2) not more than 12 months for all other households.’.

    (2) Section 6(c)(1)(C) of the Food Stamp Act of 1977 (7 U.S.C. 2015(c)(1)(C)) is amended--

      (A) in clause (ii) by adding ‘and’ at the end;

      (B) in clause (iii) by striking ‘; and’ at the end and inserting a period; and

      (C) by striking clause (iv).

    (b) EXCLUSION OF CERTAIN JTPA INCOME- Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is amended--

      (1) by striking ‘and (16)’ and inserting ‘(16)’; and

      (2) by inserting before the period the following:

    ‘, and (17) income received under the Job Training Partnership Act by a household member who is less than 19 years of age’.

    (c) EXCLUSION OF EDUCATIONAL ASSISTANCE FROM INCOME- Section 5(d)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(3)) is amended to read as follows: ‘(3) all educational loans on which payment is deferred (including any loan origination fees or insurance premiums associated with such loans), grants, scholarships, fellowships, veterans’ educational benefits, and the like awarded to a household member enrolled at a recognized institution of post-secondary education, at a school for the handicapped, in a vocational education program, or in a program that provides for completion of a secondary school diploma or obtaining the equivalent thereof,’.

    (d) LIMITATION ON ADDITIONAL EARNED INCOME DEDUCTION- The 3rd sentence of section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended by striking ‘that a household’ and all that follows through ‘report’, and inserting ‘determining an overissuance due to the failure of a household to report earned income’.

    (e) SHELTER EXPENSE DEDUCTION- Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended--

      (1) by amending paragraph (2) of the 4th sentence to read as follows:‘(2) a shelter expense deduction for the monthly amount expended by a household for shelter’;

      (2) by striking the 5th and 6th sentences and inserting the following:‘In computing the shelter expense deduction, a State may use a standard shelter expense deduction based on the actual shelter expenses incurred monthly by all households in the State in the preceding year, except that the shelter expense deduction shall be the actual shelter expense incurred monthly by a household if such household is located in public housing or verifies that it incurred shelter expenses monthly in excess of the amount of such standard shelter expense.’;

      (3) in the 7th sentence by striking ‘excess’; and

      (4) in the last sentence by striking ‘excess’.

    (f) REPEAL OF EXCESS MEDICAL EXPENSE DEDUCTION- Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended--

      (1) in the 15th sentence--

        (A) by striking subparagraph (A); and

        (B) by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; and

      (2) by striking the 16th and 17th sentences.

    (g) EXCLUSION OF ESSENTIAL EMPLOYMENT-RELATED PROPERTY- Section 5(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) is amended to read as follows:

    ‘(3) The value of real and tangible personal property (other than currency, commercial paper, and similar property) of a household member that is essential to the employment or self-employment of such member shall be excluded by the Secretary from financial resources until the expiration of the 1-year period beginning on the date such member ceases to be so employed or so self-employed.’.

    (h) EXCLUSION OF LIFE INSURANCE POLICIES- Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is amended by adding at the end the following:

    ‘(6) The Secretary shall exclude from financial resources the cash value of any life insurance policy owned by a member of a household.’.

    (i) IN-TANDEM EXCLUSIONS FROM INCOME- Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended by adding at the end the following:

    ‘(n) Whenever a Federal statute enacted after the date of the enactment of this Act excludes funds from income for purposes of determining eligibility, benefit levels, or both under State plans approved under part A of title IV of the Social Security Act, then such funds shall be excluded from income for purposes of determining eligibility, benefit levels, or both, respectively, under the food stamp program of households all of whose members receive benefits under a State plan approved under part A of title IV of the Social Security Act.’.

    (j) REMOVAL OF DISQUALIFICATION OF STUDENTS RECEIVING GENERAL ASSISTANCE- Section 6(e) of the Food Stamp Act of 1977 (7 U.S.C. 2015(e)) is amended--

      (1) in paragraph (7) by striking ‘or’ at the end;

      (2) in paragraph (8) by striking the period at the end and inserting ‘; or’; and

      (3) by adding at the end the following:

      ‘(9) is receiving general assistance under a State or local program.’.

    (k) APPLICATION OF AMENDMENTS- The amendments made by this section shall not apply with respect to certification periods beginning before the effective date of this section.

Subtitle C--Fraud Reduction

SEC. 631. SENSE OF THE CONGRESS IN SUPPORT OF THE EFFORTS OF THE ADMINISTRATION TO ADDRESS THE PROBLEMS OF FRAUD AND ABUSE IN THE SUPPLEMENTAL SECURITY INCOME PROGRAM.

    The Congress hereby expresses support for the efforts of the Social Security Administration to reduce fraud and abuse in the supplemental security income program under title XVI of the Social Security Act by implementing a structured approach to disability decisionmaking that takes into consideration the large number of disability claims received while providing a basis for consistent, equitable decisionmaking by claims adjudicators at each level, that provides for the following:

      (1) A simplification of the monetary guidelines for determining whether an individual (except those filing for benefits based on blindness) is engaging in substantial gainful activity.

      (2) The replacement of a threshold severity requirement for determining whether a claimant has a medically determinable impairment with a threshold inquiry as to whether the claimant has a medically determinable physical or mental impairment that can be demonstrated by acceptable clinical and laboratory diagnostic techniques.

      (3) The comparison of an impairment referred to in paragraph (2) with an index of disabling impairments that contains fewer impairments, has less detail and complexity, and does not rely on the concept of ‘medical equivalence’.

      (4)(A) The consideration of whether an individual has the ability to perform substantial gainful activity despite any functional loss caused by a medically determinable physical or mental impairment.

      (B) The definition of the physical and mental requirements of substantial gainful activity.

      (C) The objective measurement, to the extent possible, of whether an individual meets such requirements.

      (D) The development, with the assistance of the medical community and other outside experts from disability programs, of standardized criteria which can be used to measure an individual’s functional ability.

      (E) The assumption by the Social Security Administration of primary responsibility for documenting functional ability using the standardized measurement criteria, with the goal of developing functional assessment instruments that are standardized, accurately measure an individual’s functional abilities, and are universally accepted by the public, the advocacy community, and health care professionals.

      (F) The use of the results of the standardized functional measurement with a new standard to describe basic physical and mental demands of a baseline of work that represents substantial gainful activity and that exists in significant numbers in the national economy.

      (5)(A) An evaluation of whether a child is engaging in substantial gainful activity, whether a child has a medically determinable physical or mental impairment that will meet the duration requirement, and whether a child has an impairment that meets the criteria in the index of disabling impairments.

      (B) The development, with the assistance of the medical community and educational experts, of standardized criteria which can be used to measure a child’s functional ability to perform a baseline of functions that are comparable to the baseline of occupational demands for an adult.

      (C) The conduct of research to specifically identify a skill acquisition threshold to measure broad areas required to develop the ability to perform substantial gainful activity.

SEC. 632. STUDY ON FEASIBILITY OF SINGLE TAMPER-PROOF IDENTIFICATION CARD TO SERVE PROGRAMS UNDER BOTH THE SOCIAL SECURITY ACT AND HEALTH REFORM LEGISLATION.

    (a) STUDY- As soon as practicable after the date of the enactment of this Act, the Secretary of Health and Human Services shall conduct a study of the feasibility of issuing, in counterfeit-resistant form, a single identification card which would combine the features of the social security card now issued pursuant to section 205 of the Social Security Act and any health security card which may be provided for in health reform legislation enacted in the 103d Congress. In such study, the Secretary shall devote particular consideration to--

      (1) employment in such card of finger-print identification, bar code validation, a photograph, a hologram, or any other identifiable feature,

      (2) the efficiencies and economies which may be achieved by combining the features of the social security card as currently issued and the features of any health security card which might be issued under health reform legislation, and

      (3) any costs and risks which might result from combining such features in a single identification card and possible means of alleviating any such costs and risks.

    (b) REPORT- The Secretary of Health and Human Services shall, not later than 1 year after the date of the enactment of this Act, transmit a report to each House of the Congress setting forth the Secretary’s findings from the study conducted pursuant to subsection (a). Such report may include such recommendations for administrative or legislative changes as the Secretary considers appropriate.

TITLE VII--FINANCING

Subtitle A--Ineligibility of Certain Aliens for Certain Social Services

SEC. 701. CERTAIN ALIENS INELIGIBLE FOR AID TO FAMILIES WITH DEPENDENT CHILDREN.

    (a) IN GENERAL- Section 402(a)(33) of the Social Security Act (42 U.S.C. 602(a)) is amended--

      (1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;

      (2) by inserting ‘(A)’ after ‘(33)’;

      (3) by adding ‘and’ at the end; and

      (4) by adding after and below the end the following:

      ‘(B) provide that--

        ‘(i) notwithstanding subparagraph (A), an alien otherwise eligible for aid under the State plan shall not be eligible for such aid--

          ‘(I) after the 6-year period that begins with the date the alien is admitted to the United States, in the case of an alien who has qualified for entry pursuant to section 207 of the Immigration and Nationality Act; or

          ‘(II) after the 6-year period that begins with the date the alien is granted asylum, in the case of an alien who has applied for asylum under section 208 of the Immigration and Nationality Act; and

        ‘(ii) clause (i) shall not apply to an alien who has attained 75 years of age and has resided in the United States for at least 5 years.’.

    (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect on October 1, 1995.

SEC. 702. CERTAIN ALIENS INELIGIBLE FOR SUPPLEMENTAL SECURITY INCOME BENEFITS.

    (a) IN GENERAL- Section 1614(a) of the Social Security Act (42 U.S.C. 1382c(a)) is amended by adding at the end the following:

    ‘(5)(A) Notwithstanding any other provision of this title, an alien otherwise eligible for benefits under this title shall not be eligible for such benefits--

      ‘(i) after the 6-year period that begins with the date the alien is admitted to the United States, in the case of an alien who has qualified for entry pursuant to section 207 of the Immigration and Nationality Act; or

      ‘(ii) after the 6-year period that begins with the date the alien is granted asylum, in the case of an alien who has applied for asylum under section 208 of the Immigration and Nationality Act.

    ‘(B) Subparagraph (A) shall not apply to an alien who has attained 75 years of age and has resided in the United States for at least 5 years.’.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on October 1, 1995.

SEC. 703. ILLEGAL ALIENS NOT ELIGIBLE FOR EARNED INCOME TAX CREDIT.

    (a) IN GENERAL- Paragraph (1) of section 32(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

        ‘(E) EXCEPTION FOR INDIVIDUALS NOT LAWFULLY ADMITTED- The term ‘eligible individual’ shall not include any alien unless such alien is lawfully present in the United States (or has been granted asylum in the United States) and, under the provisions of the Immigration and Nationality Act governing such alien’s presence in the United States, is permitted to be employed.’.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 704. DISQUALIFICATION OF CERTAIN ALIENS TO RECEIVE FOOD STAMP BENEFITS.

    (a) AMENDMENT- Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) is amended by adding at the end the following:

    ‘(i)(1) Except as provided in paragraph (2), an alien who is otherwise eligible to participate in the food stamp program shall not be eligible to participate in the food stamp program--

      ‘(A) after the expiration of the 6-year period beginning on the date such alien is admitted to the United States, in the case of an alien who has qualified for entry pursuant to section 207 of the Immigration and Nationality Act; and

      ‘(B) after the expiration of the 6-year period beginning on the date such alien is granted asylum, in the case of an alien who has applied for asylum under section 208 of the Immigration and Nationality Act.

    ‘(2) Paragraph (1) shall not apply with respect to an alien who is 75 years of age or older and has resided in the United States for at least 5 years.’.

    (b) EFFECTIVE DATE; APPLICATION OF AMENDMENT- The amendment made by subsection (a) shall take effect on October 1, 1995 and shall not apply with respect to certification periods beginning before such date.

SEC. 705. CERTAIN ALIENS INELIGIBLE FOR MEDICAL ASSISTANCE UNDER MEDICAID.

    (a) IN GENERAL- Section 1903(v) of the Social Security Act (42 U.S.C. 1396b(v)(1)) is amended--

      (1) in paragraph (1)--

        (A) by striking ‘paragraph (2)’ and inserting ‘paragraphs (2) and (3)’, and

        (B) by striking ‘who is not lawfully admitted’ and all that follows and inserting a period;

      (2) in paragraph (2), by striking ‘described in paragraph (1)’; and

      (3) by adding at the end the following new paragraph:

    ‘(4) The limitation on payments provided under paragraph (1) shall not apply with respect to medical assistance furnished to an alien--

      ‘(A) who is 75 years of age or older and has resided in the United States for at least 5 years; and

      ‘(B)(i) in the case of an alien who has qualified for entry pursuant to section 207 of the Immigration and Nationality Act, during the 6-year period beginning on the date such alien is admitted to the United States; or

      ‘(ii) in the case of an alien who has applied for asylum under section 208 of the Immigration and Nationality Act, during the 6-year period beginning on the date the alien is granted asylum.’.

    (b) EFFECTIVE DATE- The amendments made by this section shall apply to medical assistance furnished during quarters beginning on or after October 1, 1995, without regard to whether or not regulations to carry out such amendments have been promulgated by such date.

Subtitle B--Other Provisions Relating to Aliens

SEC. 711. SPONSOR RESPONSIBILITY FOR COSTS OF GENERAL CASH PUBLIC ASSISTANCE PROVIDED TO AN ALIEN.

    An affidavit of support or similar document of financial responsibility with respect to the admission into the United States of an alien under the Immigration and Nationality Act shall provide that the sponsor shall be liable for any costs incurred by any State or a political subdivision of a State for general cash public assistance provided to such alien until the date on which the alien becomes a citizen of the United States.

SEC. 712. ENFORCEMENT OF AFFIDAVITS OF SUPPORT OR FINANCIAL RESPONSIBILITY BY STATE AND LOCAL GOVERNMENTS PROVIDING ASSISTANCE.

    An affidavit of support or document of financial responsibility referred to in section 711 may be enforced with respect to an alien against the alien’s sponsor in a civil suit brought by the Attorney General or a State or political subdivision of a State in the United States district court for the district in which the sponsor resides for the recovery of any costs incurred by any State or political subdivision of a State for general cash public assistance provided to such alien for which the sponsor agreed to be liable under such an affidavit or document. A sponsor or the sponsor’s estate shall not be liable under such an affidavit or document if the sponsor dies or is adjudicated a bankrupt under title 11, United States Code.

SEC. 713. AUTHORITY TO STATES AND LOCALITIES TO LIMIT ASSISTANCE TO ALIENS AND TO DISTINGUISH AMONG CLASSES OF ALIENS IN PROVIDING GENERAL PUBLIC ASSISTANCE.

    (a) IN GENERAL- Subject to subsection (b) and notwithstanding any other provision of law, a State or local government may prohibit or otherwise limit or restrict the eligibility of aliens or classes of aliens for programs of general public assistance furnished under the law of the State or a political subdivision of a State.

    (b) LIMITATION- The authority under subsection (a) may be exercised only to the extent that any prohibitions, limitations, or restrictions are not inconsistent with the eligibility requirements for comparable Federal programs or are less restrictive. For the purposes of this section, attribution to an alien of a sponsor’s income and resources for purposes of determining the eligibility for and amount of benefits of an alien shall be considered less restrictive than a prohibition of eligibility.

SEC. 714. FEDERAL FINANCIAL ASSISTANCE TO STATES FOR ASSISTANCE TO IMMIGRANTS.

    (a) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated for each of the fiscal years 1995, 1996, 1997, and 1998 $250,000,000 for financial assistance to States for State discretionary programs of assistance to aliens lawfully admitted for permanent residence under the Immigration and Nationality Act.

    (b) ALLOCATION OF FUNDS- Subject to subsection (c), for each fiscal year funds appropriated under subsection (a) shall be allocated as follows:

      (1) California--$107,114,100.

      (2) New York--$37,886,750.

      (3) Florida--$23,852,725.

      (4) Texas--$17,796,225.

      (5) New Jersey--$8,146,075.

      (6) Illinois--$8,083,875.

      (7) Massachusetts--$7,406,850.

      (8) Washington--$4,212,100.

      (9) Pennsylvania--$3,663,175.

      (10) Maryland--$2,832,450.

      (11) Michigan--$2,521,400.

      (12) Virginia--$2,364,025.

      (13) Arizona--$2,221,325.

      (14) Minnesota--$1,924,900.

      (15) Ohio--$1,771,200.

      (16) Hawaii--$1,569,925.

      (17) Colorado--$1,493,075.

      (18) Connecticut--$1,485,750.

      (19) Wisconsin--$1,467,450.

      (20) Oregon--$1,332,050.

      (21) Georgia--$1,273,500.

      (22) Rhode Island--$1,028,300.

      (23) New Mexico--$966,100.

      (24) Louisiana--$955,125.

      (25) Nevada--$720,925.

      (26) North Carolina--$640,400.

      (27) Missouri--$530,625.

      (28) Kansas--$457,425.

      (29) Oklahoma--$373,250.

      (30) Utah--$384,225.

      (31) Iowa--$373,250.

      (32) Tennessee--$347,650.

      (33) Indiana--$340,325.

      (34) District of Columbia--$329,350.

      (35) Alaska--$230,525.

      (36) South Carolina--$230,525.

      (37) Kentucky--$208,575.

      (38) Maine--$204,925.

      (39) Alabama--$186,625.

      (40) Nebraska--$164,675.

      (41) Mississippi--$157,350.

      (42) Delaware--$124,400.

      (43) Arkansas--$113,425.

      (44) Idaho--$106,125.

      (45) New Hampshire--$102,450.

      (46) West Virginia--$69,525.

      (47) South Dakota--$62,200.

      (48) Vermont--$43,900.

      (49) Montana--$43,900.

      (50) North Dakota--$36,575.

      (51) Wyoming--22,710.

    (c) INSUFFICIENT APPROPRIATIONS- If for any fiscal year sums appropriated under subsection (a) are not sufficient to pay the allocations under subsection (b) each allocated amount under subsection (b) shall be ratably reduced.

Subtitle C--Limitation on Emergency Assistance Expenditures

SEC. 721. LIMITATION ON EXPENDITURES FOR EMERGENCY ASSISTANCE.

    (a) IN GENERAL- Section 403(a)(5) of the Social Security Act (42 U.S.C. 602(a)(5)) is amended to read as follows:

      ‘(5) in the case of any State, an amount equal to the lesser of--

        ‘(A) 50 percent of the total amount expended under the State plan during such quarter as emergency assistance to needy families with children; or

        ‘(B) the greater of--

          ‘(i) the total amount expended under the State plan during the fiscal year that immediately precedes the fiscal year in which the quarter occurs; multiplied by

            ‘(I) 4 percent, if the national unemployment rate for the United States (as determined by the Secretary of Labor) for the 3rd or 4th quarter of the immediately preceding fiscal year is at least 7 percent; or

            ‘(II) 3 percent, otherwise; or

          ‘(ii) the total amount expended under the State plan during fiscal year 1993 as emergency assistance to needy families with children.’.

    (b) AUTHORITY OF STATES TO DEFINE EMERGENCY ASSISTANCE- Section 406(e)(1) of such Act (42 U.S.C. 606(e)(1)) is amended to read as follows:

    ‘(e)(1)(A) The term ‘emergency assistance to needy families with children’ means emergency assistance furnished by an eligible State with respect to an eligible needy child to avoid destitution of the child or to provide living arrangements in a home for the child.

    ‘(B) As used in this paragraph:

      ‘(i) The term ‘emergency assistance’ means emergency assistance as provided for in the State plan approved under section 402 of an eligible State, but shall not include care for an eligible needy child or other member of the household in which the child is living to the extent that the child or other member is entitled to such care as medical assistance under the State plan under title XIX.

      ‘(ii) The term ‘eligible needy child’ means a needy child--

        ‘(I) who has not attained 21 years of age;

        ‘(II) who is or (within such period as the Secretary may specify) has been living with any relative specified in subsection (a)(1) in a place of residence maintained by 1 or more of such relatives as the home of the relative or relatives;

        ‘(III) who is without available resources; and

        ‘(IV) whose requirement for emergency assistance did not arise because the child or relative refused without good cause to accept employment or training for employment.

      ‘(iii) The term ‘eligible State’ means a State whose State plan approved under section 402 includes provision for emergency assistance.’.

Subtitle D--Family Day Care Homes Program Improvements

SEC. 731. IMPROVEMENT OF OPERATION OF FAMILY OR GROUP DAY CARE HOMES LOCATED IN LOW- AND MODERATE-INCOME AREAS UNDER THE CHILD AND ADULT CARE FOOD PROGRAM UNDER THE NATIONAL SCHOOL LUNCH ACT.

    (a) IN GENERAL- Section 17(f)(3)(A) of the National School Lunch Act (42 U.S.C. 1766(f)(3)(A)) is amended to read as follows:

    ‘(A)(i) Institutions that participate in the program under this section as family or group day care home sponsoring organizations shall be provided, for payment to such homes, a reimbursement factor in accordance with this subparagraph for the cost of obtaining and preparing food and prescribed labor costs, involved in providing meals under this section.

    ‘(ii)(I) A low- or moderate-income family or group day care home shall be provided a reimbursement factor without a requirement for documentation of the costs described in clause (i), except that reimbursement shall not be provided under this clause for meals or supplements served to the children of a person acting as a family or group day care home provider unless such children meet the eligibility standards for free or reduced price meals under section 9 of this Act. The reimbursement factors applied to such a home shall be the factors in effect on the date of enactment of the Self-Sufficient and Independence Act of 1994. The reimbursement factors under this subparagraph shall be adjusted on July 1 of each year to reflect changes in the Consumer Price Index for food away from home for the most recent 12-month period for which such data are available. The reimbursement factors under this subparagraph shall be rounded to the nearest one-fourth cent.

    ‘(II) For purposes of this clause, the term ‘low- or moderate-income family or group day care home’ means--

      ‘(aa) a family or group day care home that is located in a census tract area in which at least 40 percent of the children residing in such area are members of households whose incomes meet the eligibility standards for free or reduced price meals under section 9 of this Act, as determined by the family or group day care home sponsoring organization using census tract data provided to such organization by the State agency in accordance with subparagraph (B)(i);

      ‘(bb) a family or group day care home that is located in an area served by a school in which at least 40 percent of the total number of children enrolled are certified to receive free or reduced price meals under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), as determined by the family or group day care home sponsoring organization using data provided to such organization by the State agency in accordance with subparagraph (B)(ii); or

      ‘(cc) a family or group day care home that is operated by a provider whose household meets the eligibility standards for free or reduced price meals under section 9 of this Act.

    ‘(iii)(I) Except as provided for in subclause (II), with respect to meals or supplements served under this clause by a family or group day care home that does not meet the criteria set forth in clause (ii)(II), the reimbursement factors shall be--

      ‘(aa) $1.2675 for lunches and suppers;

      ‘(bb) $.5375 for breakfasts; and

      ‘(cc) $.25 for supplements.

    Such factors shall be adjusted on July 1, 1995, and each July 1 thereafter to reflect changes in the Consumer Price Index for food away from home for the most recent 12-month period for which such data are available. The reimbursement factors under this clause shall be rounded to the nearest one-fourth cent. A family or group day care home shall be provided a reimbursement factor under this subclause without a requirement for documentation of the costs described in clause (i), except that reimbursement shall not be provided under this clause for meals or supplements served to the children of a person acting as a family or group day care home provider unless such children meet the eligibility standards for free or reduced price meals under section 9 of this Act.

    ‘(II) A family or group day care home that does not meet the criteria set forth in clause (ii)(II), may elect to be provided a reimbursement factor determined in accordance with the following requirements:

      ‘(aa) With respect to meals or supplements served under this subsection to children who are members of households whose incomes meet the eligibility standards for free or reduced price meals under section 9 of this Act, the family or group day care home shall be provided reimbursement factors set by the Secretary in accordance with subclause (ii)(I).

      ‘(bb) With respect to meals or supplements served under this subsection to children who are members of households whose incomes do not meet such eligibility standards, the family or group day care home shall be provided a reimbursement factor in accordance with subclause (I).

    ‘(III) A family or group day care home electing to use the procedures under subclause (II) may consider a child with a parent participating in the work first program established under part F of title IV of the Social Security Act, the community service program established under section 489 of such Act, the transitional child care program under title IV of such Act, the at-risk child care program under title IV of such Act, or a State child care program with an income eligibility limit that does not exceed the eligibility standard for free or reduced price meals under section 9 of this Act, to be a child who is a member of a household whose income meets the eligibility standards under section 9 of this Act. A family or group day care home may elect to receive the reimbursement factors prescribed under clause (ii)(I) solely for such children if it does not wish to have income statements collected from parents.

    ‘(IV) The Secretary shall prescribe simplified meal counting and reporting procedures for use by family and group day care homes that elect to use the procedures under clause (iii)(II) and by family and group day care home sponsoring organizations that serve such homes. Such procedures may include the following:

      ‘(aa) Setting an annual percentage for each such home of the number of meals served that are to be reimbursed in accordance with the reimbursement factors prescribed under clause (ii)(I) and an annual percentage of the number of meals served that are to be reimbursed in accordance with the reimbursement factors prescribed under clause (ii)(II), based on the incomes of children enrolled in the home in a specified month or other period.

      ‘(bb) Setting blended reimbursement factors for a home annually based on the incomes of children enrolled in the home in a specified month or period.

      ‘(cc) Placing a home into one of several reimbursement categories annually based on the percentage of children in the home whose households have incomes that meet the eligibility standards under section 9 of this Act.

      ‘(dd) Such other simplified procedures as the Secretary may prescribe.’.

    (b) PROVISION OF DATA TO FAMILY OR GROUP DAY CARE HOMES- Section 17(f)(3) of such Act (42 U.S.C. 1766(f)(3)) is amended--

      (1) by redesignating subparagraphs (B) and (C) as subparagraphs (D) and (E), respectively; and

      (2) by inserting after subparagraph (A) (as amended by subsection (a)) the following new subparagraph:

    ‘(B)(i) The Secretary shall provide to each State agency administering a child and adult care food program under this section data from the most recent decennial census for which such data are available showing which census tracts in the State meet the requirements of subparagraph (A)(ii)(II)(aa). The State agency shall provide such data to family or group day care home sponsoring organizations located in the State.

    ‘(ii) Each State agency administering a child and adult care food program under this section shall annually provide to family or group day care home sponsoring organizations located in the State a list of all schools in the State in which at least 40 percent of the children are enrolled are certified to receive free or reduced price meals under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.). The Secretary shall direct State agencies administering the school lunch program under this Act and the school breakfast program under the Child Nutrition Act of 1966 to collect this information annually and to provide it on a timely basis to the State agency administering the program under this section.’.

    (c) GRANTS TO STATES TO PROVIDE ASSISTANCE TO FAMILY OR GROUP DAY CARE HOMES- Section 17(f)(3) of such Act (42 U.S.C. 1766(f)(3)) is amended by inserting after subparagraph (B) (as added by subsection (b)(2)) the following new subparagraph:

    ‘(C)(i) From amounts appropriated to carry out this section, the Secretary shall reserve $2,000,000 in fiscal year 1995 and $5,000,000 in fiscal year 1996 to provide grants to States for the purpose of providing grants to family and day care home sponsoring organizations and other appropriate organizations to secure and provide training, materials, automated data processing assistance, and other assistance for the staff of such sponsoring organizations and for family and group day care homes in order to assist in the implementation of the requirements contained in subparagraph (A).

    ‘(ii) From amounts appropriated to carry out this section, the Secretary shall reserve $5,000,000 in fiscal year 1997 and in each fiscal year thereafter to provide grants to States for the purpose of making grants to family or group day care home sponsoring organizations and other appropriate organizations to assist low- or moderate-income family or group day care homes (as such term is defined in subparagraph (A)(ii)(II)) become licensed or registered for the program under this section or overcome other barriers to the program.’.

    (d) EFFECTIVE DATES- (1) The amendments made by subsections (a) and (b) shall take effect on July 1, 1996.

    (2) The amendments made by subsection (c) shall take effect on the date of the enactment of this Act.

Subtitle E--Collection of Certain State and Local Taxes on Out-of-State Sales

SEC. 741. SHORT TITLE.

    This subtitle may be cited as the ‘Tax Fairness for Main Street Business Act of 1994’.

SEC. 742. FINDINGS.

    The Congress finds that--

      (1) sales by out-of-State firms already are subject to State and local sales taxes, but State and local governments are unable to compel out-of-State firms to collect and remit such taxes,

      (2) small businesses, which are compelled to collect State and local sales taxes, are subject to unfair competition when out-of-State firms cannot be compelled to collect and remit such taxes on their sales to residents of the State,

      (3) State and local governments provide a number of resources to out-of-State firms including government services relating to mail delivery, communications, bank and court systems, and disposal of tons of catalogs,

      (4) the inability of State and local governments to require out-of-State firms to collect and remit sales taxes deprives State and local governments of needed revenue and forces such State and local governments to raise taxes on taxpayers, including small businesses, in such State,

      (5) the Supreme Court ruled in Quill v. North Dakota, 112 U.S. 1904 (1992) that the due process clause of the Constitution does not prohibit a State government from imposing personal jurisdiction and tax obligations on out-of-State firms that purposefully solicit sales from residents therein, and that the Congress has the power to authorize State governments to require out-of-State firms to collect State and local sales taxes, and

      (6) as a matter of federalism, the Federal Government has a duty to assist State and local governments in collecting sales taxes on sales from out-of-State firms.

SEC. 743. SENSE OF CONGRESS.

    Congress recognizes that some States will be adversely affected by the provisions of this Act which deny immigrants certain public assistance and pledges to help those States offset the potential cost shift. In authorizing States to require out-of-State companies to collect sales taxes on mail order purchases, Congress encourages States to use increased revenues resulting from such collections to offset such cost shift and to design assistance programs that address the special needs of immigrants entering this country.

SEC. 744. AUTHORITY FOR COLLECTION OF SALES TAX.

    (a) IN GENERAL- A State is authorized to require a person who is subject to the personal jurisdiction of the State to collect and remit a State sales tax, a local sales tax, or both, with respect to tangible personal property if--

      (1) the destination of the tangible personal property is in the State,

      (2) during the 1-year period ending on September 30 of the calendar year preceding the calendar year in which the taxable event occurs, the person has gross receipts from sales of such tangible personal property--

        (A) in the United States exceeding $3,000,000, or

        (B) in the State exceeding $100,000, and

      (3) the State, on behalf of its local jurisdictions, collects and administers all local sales taxes imposed pursuant to this subtitle.

    (b) STATES MUST COLLECT LOCAL SALES TAXES- A State in which both State and local sales taxes are imposed may not require State sales taxes to be collected and remitted under subsection (a) unless the State also requires the local sales taxes to be collected and remitted under subsection (a).

    (c) AGGREGATION RULES- All persons that would be treated as a single employer under section 52 (a) or (b) of the Internal Revenue Code of 1986 shall be treated as one person for purposes of subsection (a).

    (d) DESTINATION- For purposes of subsection (a), the destination of tangible personal property is the State or local jurisdiction which is the final location to which the seller ships or delivers the property, or to which the seller causes the property to be shipped or delivered, regardless of the means of shipment or delivery or the location of the buyer.

SEC. 745. TREATMENT OF LOCAL SALES TAXES.

    (a) UNIFORM LOCAL SALES TAXES-

      (1) IN GENERAL- Sales taxes imposed by local jurisdictions of a State shall be deemed to be uniform for purposes of this subtitle and shall be collected under this subtitle in the same manner as State sales taxes if--

        (A) such local sales taxes are imposed at the same rate and on identical transactions in all geographic areas in the State, and

        (B) such local sales taxes imposed on sales by out-of-State persons are collected and administered by the State.

      (2) APPLICATION TO BORDER JURISDICTION TAX RATES- A State shall not be treated as failing to meet the requirements of paragraph (1)(A) if, with respect to a local jurisdiction which borders on another State, such State or local jurisdiction--

        (A) either reduces or increases the local sales tax in order to achieve a rate of tax equal to that imposed by the bordering State on identical transactions, or

        (B) exempts from the tax transactions which are exempt from tax in the bordering State.

    (b) NONUNIFORM LOCAL SALES TAXES-

      (1) IN GENERAL- Nonuniform local sales taxes required to be collected pursuant to this subtitle shall be collected under one of the options provided under paragraph (2).

      (2) ELECTION- For purposes of paragraph (1), any person required under authority of this subtitle to collect nonuniform local sales taxes shall elect to collect either--

        (A) all nonuniform local sales taxes applicable to transactions in the State, or

        (B) a fee (at the rate determined under paragraph (3)) which shall be in lieu of the nonuniform local sales taxes described in subparagraph (A).

      Such election shall require the person to use the method elected for all transactions in the State while the election is in effect.

      (3) RATE OF IN-LIEU FEE- For purposes of paragraph (2)(B), the rate of the in-lieu fee for any calendar year shall be an amount equal to the product of--

        (A) the amount determined by dividing total nonuniform local sales tax revenues collected in the State for the most recently completed State fiscal year for which data is available by total State sales tax revenues for the same year, and

        (B) the State sales tax rate.

      Such amount shall be rounded to the nearest 0.25 percent.

      (4) NONUNIFORM LOCAL SALES TAXES- For purposes of this subtitle, nonuniform local sales taxes are local sales taxes which do not meet the requirements of subsection (a).

    (c) DISTRIBUTION OF LOCAL SALES TAXES-

      (1) IN GENERAL- A State shall distribute to local jurisdictions a portion of the amounts collected pursuant to this subtitle determined on the basis of--

        (A) in the case of uniform local sales taxes, the proportion which each local jurisdiction receives of uniform local sales taxes not collected pursuant to this subtitle,

        (B) in the case of in-lieu fees, as described in subsection (b)(2)(B), the proportion which each local jurisdiction’s nonuniform local sales tax receipts bears to the total nonuniform local sales tax receipts in the State, and

        (C) in the case of any nonuniform local sales tax collected pursuant to this subtitle, the geographical location of the transaction on which the tax was imposed.

      The amounts determined under subparagraphs (A) and (B) shall be calculated on the basis of data for the most recently completed State fiscal year for which the data is available.

      (2) TIMING- Amounts described in paragraph (1) (B) or (C) shall be distributed by a State to its local jurisdictions in accordance with State timetables for distributing local sales taxes, but not less frequently than every calendar quarter. Amounts described in paragraph (1)(A) shall be distributed by a State as provided under State law.

      (3) TRANSITION RULE- If, upon the effective date of this subtitle, a State has a State law in effect providing a method for distributing local sales taxes other than the method under this subsection, then this subsection shall not apply to that State until the 91st day following the adjournment sine die of that State’s next regular legislative session which convenes after the effective date of this subtitle (or such earlier date as State law may provide). Local sales taxes collected pursuant to this subtitle prior to the application of this subsection shall be distributed as provided by State law.

SEC. 746. RETURN AND REMITTANCE REQUIREMENTS.

    (a) IN GENERAL- A State may not require any person subject to this subtitle--

      (1) to file a return reporting the amount of any tax collected or required to be collected under this subtitle, or to remit the receipts of such tax, more frequently than once with respect to sales in a calendar quarter, or

      (2) to file the initial such return, or to make the initial such remittance, before the 90th day after the person’s first taxable transaction under this subtitle.

    (b) LOCAL TAXES- The provisions of subsection (a) shall also apply to any person required by a State acting under authority of this subtitle to collect a local sales tax or in-lieu fee.

SEC. 747. NONDISCRIMINATION AND EXEMPTIONS.

    A State shall not have power under this subtitle to require any person not located in the State or local jurisdiction to collect and remit a State or local sales tax if a person located in the State or local jurisdiction would have been exempt from or otherwise not subject to such State or local sales tax under similar circumstances.

SEC. 748. APPLICATION OF STATE LAW.

    (a) PERSONS REQUIRED TO COLLECT STATE OR LOCAL SALES TAX- Any person required by section 744 to collect a State or local sales tax shall be subject to the laws of such State relating to such sales tax to the extent that such laws are consistent with the limitations contained in this subtitle.

    (b) LIMITATIONS- Except as provided in subsection (a), nothing in this subtitle shall be construed to permit a State--

      (1) to license or regulate any person,

      (2) to require any person to qualify to transact intrastate business, or

      (3) to subject any person to State taxes not related to the sales of tangible personnel property.

    (c) PREEMPTION- Except as otherwise provided in this subtitle, this subtitle shall not be construed to preempt or limit any power exercised or to be exercised by a State or local jurisdiction under the law of such State or local jurisdiction or under any other Federal law.

SEC. 749. TOLL-FREE INFORMATION SERVICE.

    A State shall not have power under this subtitle to require any person to collect a State or local sales tax on any sale unless, at the time of such sale, such State has a toll-free telephone service available to provide such person information relating to collection of such State or local sales tax. Such information shall include, at a minimum, all applicable tax rates, return and remittance addresses and deadlines, and penalty and interest information. As part of the service, the State shall also provide all necessary forms and instructions at no cost to any person using the service. The State shall prominently display the toll-free telephone number on all correspondence with any person using the service. This service may be provided jointly with other States.

SEC. 750. DEFINITIONS.

    For the purposes of this subtitle--

      (1) the term ‘compensating use tax’ means a tax imposed on or incident to the use, storage, consumption, distribution, or other use within a State or local jurisdiction or other area of a State, of tangible personal property;

      (2) the term ‘local sales tax’ means a sales tax imposed in a local jurisdiction or area of a State and includes, but is not limited to--

        (A) a sales tax or in-lieu fee imposed in a local jurisdiction or area of a State by the State on behalf of such jurisdiction or area, and

        (B) a sales tax imposed by a local jurisdiction or other State-authorized entity pursuant to the authority of State law, local law, or both;

      (3) the term ‘person’ means an individual, a trust, estate, partnership, society, association, company or corporation, including a limited liability company, whether or not acting in a fiduciary or representative capacity, and any combination of the foregoing;

      (4) the term ‘sales tax’ means a tax, including a compensating use tax, that is--

        (A) imposed on or incident to the sale, purchase, storage, consumption, distribution, or other use of tangible personal property as may be defined or specified under the laws imposing such tax, and

        (B) measured by the amount of the sales price, cost, charge or other value of or for such property; and

      (5) the term ‘State’ means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.

SEC. 751. EFFECTIVE DATE.

    This subtitle shall take effect 180 days after the date of the enactment of this subtitle. In no event shall this subtitle apply to any sale occurring before such effective date.

TITLE VIII--EFFECTIVE DATE

SEC. 801. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the amendments made by this Act shall take effect on October 1, 1996.