Welfare Reform Bill: HR 3734, Final Passage
H.R. 3734 by KASICH (R-OH) -- Personal Responsibility, Work
Opportunity and Medicaid Restructuring Act of 1996
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LEGI-SLATE Report for the 104th Congress Fri, August 9, 1996 12:44pm (EDT)
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BILL TEXT Report for H.R.3734
As finally approved by the House and Senate (Enrolled)
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H.R.3734 As finally approved by the House and Senate (Enrolled)
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SENATE VOTE ON H.R. 3734
Abraham, Ashcroft, Baucus, Bennett, Biden, Bond, Breaux, Brown, Bryan, Burns,
Byrd, Campbell, Chafee, Coats, Cochran, Cohen, Conrad, Coverdell, Craig,
D'Amato, DeWine, Domenici, Dorgan, Exon, Faircloth, Feingold, Ford, Frahm,
Frist, Gorton, Graham, Gramm, Grams, Grassley, Gregg, Harkin, Hatch,
Hatfield, Heflin, Helms, Hollings, Hutchison, Inhofe, Jeffords, Johnston,
Kassebaum, Kempthorne, Kerry, Kohl, Kyl, Levin, Lieberman, Lott, Lugar, Mack,
McCain, McConnell, Mikulski, Murkowski, Nickles, Nunn, Pressler, Reid, Robb,
Rockefeller, Roth, Santorum, Shelby, Simpson, Smith, Snowe, Specter, Stevens,
Thomas, Thompson, Thurmond, Warner, Wyden
NAYS--21
Akaka, Bingaman, Boxer, Bradley, Bumpers, Daschle, Dodd, Feinstein, Glenn,
Inouye, Kennedy, Kerrey, Lautenberg, Leahy, Moseley-Braun, Moynihan, Murray,
Pell, Sarbanes, Simon, Wellstone,
NOT VOTING--1
Pryor
H. R. 3734
One Hundred Fourth Congress
of the
United States of America
A T T H E SECOND S E S S I O N
Begun and held at the City of Washington on Wednesday, the third day of
January, one thousand nine hundred and ninety-six
An Act
To provide for reconciliation pursuant to section 201(a)(1) of the
concurrent resolution on the budget for fiscal year 1997.
==============================
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 "Personal Responsibility and Work
Opportunity Reconciliation Act of 1996".
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
Sec. 101. Findings.
Sec. 102. Reference to Social Security Act.
Sec. 103. Block grants to States.
Sec. 104. Services provided by charitable, religious, or private
organizations.
Sec. 105. Census data on grandparents as primary caregivers for their
grandchildren.
Sec. 106. Report on data processing.
Sec. 107. Study on alternative outcomes measures.
Sec. 108. Conforming amendments to the Social Security Act.
Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and related
provisions.
Sec. 110. Conforming amendments to other laws.
Sec. 111. Development of prototype of counterfeit-resistant Social Security
card required.
Sec. 112. Modifications to the job opportunities for certain low-income
individuals program.
Sec. 113. Secretarial submission of legislative proposal for technical and
conforming amendments.
Sec. 114. Assuring medicaid coverage for low-income families.
Sec. 115. Denial of assistance and benefits for certain drug-related
convictions.
Sec. 116. Effective date; transition rule.
TITLE II--SUPPLEMENTAL SECURITY INCOME
Sec. 200. Reference to Social Security Act.
Subtitle A--Eligibility Restrictions
Sec. 201. Denial of SSI benefits for 10 years to individuals found to have
fraudulently misrepresented residence in order to obtain
benefits simultaneously in 2 or more States.
Sec. 202. Denial of SSI benefits for fugitive felons and probation and parole
violators.
Sec. 203. Treatment of prisoners.
Sec. 204. Effective date of application for benefits.
Subtitle B--Benefits for Disabled Children
Sec. 211. Definition and eligibility rules.
Sec. 212. Eligibility redeterminations and continuing disability reviews.
Sec. 213. Additional accountability requirements.
Sec. 214. Reduction in cash benefits payable to institutionalized individuals
whose medical costs are covered by private insurance.
Sec. 215. Regulations.
Subtitle C--Additional Enforcement Provision
Sec. 221. Installment payment of large past-due supplemental security income
benefits.
Sec. 222. Regulations.
Subtitle D--Studies Regarding Supplemental Security Income Program
Sec. 231. Annual report on the supplemental security income program.
Sec. 232. Study by General Accounting Office.
TITLE III--CHILD SUPPORT
Sec. 300. Reference to Social Security Act.
Subtitle A--Eligibility for Services; Distribution of Payments
Sec. 301. State obligation to provide child support enforcement services.
Sec. 302. Distribution of child support collections.
Sec. 303. Privacy safeguards.
Sec. 304. Rights to notification of hearings.
Subtitle B--Locate and Case Tracking
Sec. 311. State case registry.
Sec. 312. Collection and disbursement of support payments.
Sec. 313. State directory of new hires.
Sec. 314. Amendments concerning income withholding.
Sec. 315. Locator information from interstate networks.
Sec. 316. Expansion of the Federal Parent Locator Service.
Sec. 317. Collection and use of Social Security numbers for use in child
support enforcement.
Subtitle C--Streamlining and Uniformity of Procedures
Sec. 321. Adoption of uniform State laws.
Sec. 322. Improvements to full faith and credit for child support orders.
Sec. 323. Administrative enforcement in interstate cases.
Sec. 324. Use of forms in interstate enforcement.
Sec. 325. State laws providing expedited procedures.
Subtitle D--Paternity Establishment
Sec. 331. State laws concerning paternity establishment.
Sec. 332. Outreach for voluntary paternity establishment.
Sec. 333. Cooperation by applicants for and recipients of part A assistance.
Subtitle E--Program Administration and Funding
Sec. 341. Performance-based incentives and penalties.
Sec. 342. Federal and State reviews and audits.
Sec. 343. Required reporting procedures.
Sec. 344. Automated data processing requirements.
Sec. 345. Technical assistance.
Sec. 346. Reports and data collection by the Secretary.
Subtitle F--Establishment and Modification of Support Orders
Sec. 351. Simplified process for review and adjustment of child support
orders.
Sec. 352. Furnishing consumer reports for certain purposes relating to child
support.
Sec. 353. Nonliability for financial institutions providing financial records
to State child support enforcement agencies in child support
cases.
Subtitle G--Enforcement of Support Orders
Sec. 361. Internal Revenue Service collection of arrearages.
Sec. 362. Authority to collect support from Federal employees.
Sec. 363. Enforcement of child support obligations of members of the Armed
Forces.
Sec. 364. Voiding of fraudulent transfers.
Sec. 365. Work requirement for persons owing past-due child support.
Sec. 366. Definition of support order.
Sec. 367. Reporting arrearages to credit bureaus.
Sec. 368. Liens.
Sec. 369. State law authorizing suspension of licenses.
Sec. 370. Denial of passports for nonpayment of child support.
Sec. 371. International support enforcement.
Sec. 372. Financial institution data matches.
Sec. 373. Enforcement of orders against paternal or maternal grandparents in
cases of minor parents.
Sec. 374. Nondischargeability in bankruptcy of certain debts for the support
of a child.
Sec. 375. Child support enforcement for Indian tribes.
Subtitle H--Medical Support
Sec. 381. Correction to ERISA definition of medical child support order.
Sec. 382. Enforcement of orders for health care coverage.
Subtitle I--Enhancing Responsibility and Opportunity for Non-Residential
Parents
Sec. 391. Grants to States for access and visitation programs.
Subtitle J--Effective Dates and Conforming Amendments
Sec. 395. Effective dates and conforming amendments.
TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS
Sec. 400. Statements of national policy concerning welfare and immigration.
Subtitle A--Eligibility for Federal Benefits
Sec. 401. Aliens who are not qualified aliens ineligible for Federal public
benefits.
Sec. 402. Limited eligibility of qualified aliens for certain Federal
programs.
Sec. 403. Five-year limited eligibility of qualified aliens for Federal
means-tested public benefit.
Sec. 404. Notification and information reporting.
Subtitle B--Eligibility for State and Local Public Benefits Programs
Sec. 411. Aliens who are not qualified aliens or nonimmigrants ineligible for
State and local public benefits.
Sec. 412. State authority to limit eligibility of qualified aliens for State
public benefits.
Subtitle C--Attribution of Income and Affidavits of Support
Sec. 421. Federal attribution of sponsor's income and resources to alien.
Sec. 422. Authority for States to provide for attribution of sponsors income
and resources to the alien with respect to State programs.
Sec. 423. Requirements for sponsor's affidavit of support.
Subtitle D--General Provisions
Sec. 431. Definitions.
Sec. 432. Verification of eligibility for Federal public benefits.
Sec. 433. Statutory construction.
Sec. 434. Communication between State and local government agencies and the
Immigration and Naturalization Service.
Sec. 435. Qualifying quarters.
Subtitle E--Conforming Amendments Relating to Assisted Housing
Sec. 441. Conforming amendments relating to assisted housing.
Subtitle F--Earning Income Credit Denied to Unauthorized Employees
Sec. 451. Earned income credit denied to individuals not authorized to be
employed in the United States.
TITLE V--CHILD PROTECTION
Sec. 501. Authority of States to make foster care maintenance payments on
behalf of children in any private child care institution.
Sec. 502. Extension of enhanced match for implementation of statewide
automated child welfare information systems.
Sec. 503. National random sample study of child welfare.
Sec. 504. Redesignation of section 1123.
Sec. 505. Kinship care.
TITLE VI--CHILD CARE
Sec. 601. Short title and references.
Sec. 602. Goals.
Sec. 603. Authorization of appropriations and entitlement authority.
Sec. 604. Lead agency.
Sec. 605. Application and plan.
Sec. 606. Limitation on State allotments.
Sec. 607. Activities to improve the quality of child care.
Sec. 608. Repeal of early childhood development and before- and after-school
care requirement.
Sec. 609. Administration and enforcement.
Sec. 610. Payments.
Sec. 611. Annual report and audits.
Sec. 612. Report by the Secretary.
Sec. 613. Allotments.
Sec. 614. Definitions.
Sec. 615. Effective date.
TITLE VII--CHILD NUTRITION PROGRAMS
Subtitle A--National School Lunch Act
Sec. 701. State disbursement to schools.
Sec. 702. Nutritional and other program requirements.
Sec. 703. Free and reduced price policy statement.
Sec. 704. Special assistance.
Sec. 705. Miscellaneous provisions and definitions.
Sec. 706. Summer food service program for children.
Sec. 707. Commodity distribution.
Sec. 708. Child and adult care food program.
Sec. 709. Pilot projects.
Sec. 710. Reduction of paperwork.
Sec. 711. Information on income eligibility.
Sec. 712. Nutrition guidance for child nutrition programs.
Subtitle B--Child Nutrition Act of 1966
Sec. 721. Special milk program.
Sec. 722. Free and reduced price policy statement.
Sec. 723. School breakfast program authorization.
Sec. 724. State administrative expenses.
Sec. 725. Regulations.
Sec. 726. Prohibitions.
Sec. 727. Miscellaneous provisions and definitions.
Sec. 728. Accounts and records.
Sec. 729. Special supplemental nutrition program for women, infants, and
children.
Sec. 730. Cash grants for nutrition education.
Sec. 731. Nutrition education and training.
Subtitle C--Miscellaneous Provisions
Sec. 741. Coordination of school lunch, school breakfast, and summer food
service programs.
Sec. 742. Requirements relating to provision of benefits based on
citizenship, alienage, or immigration status under the
National School Lunch Act, the Child Nutrition Act of 1966,
and certain other acts.
TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION
Subtitle A--Food Stamp Program
Sec. 801. Definition of certification period.
Sec. 802. Definition of coupon.
Sec. 803. Treatment of children living at home.
Sec. 804. Adjustment of thrifty food plan.
Sec. 805. Definition of homeless individual.
Sec. 806. State option for eligibility standards.
Sec. 807. Earnings of students.
Sec. 808. Energy assistance.
Sec. 809. Deductions from income.
Sec. 810. Vehicle allowance.
Sec. 811. Vendor payments for transitional housing counted as income.
Sec. 812. Simplified calculation of income for the self-employed.
Sec. 813. Doubled penalties for violating food stamp program requirements.
Sec. 814. Disqualification of convicted individuals.
Sec. 815. Disqualification.
Sec. 816. Caretaker exemption.
Sec. 817. Employment and training.
Sec. 818. Food stamp eligibility.
Sec. 819. Comparable treatment for disqualification.
Sec. 820. Disqualification for receipt of multiple food stamp benefits.
Sec. 821. Disqualification of fleeing felons.
Sec. 822. Cooperation with child support agencies.
Sec. 823. Disqualification relating to child support arrears.
Sec. 824. Work requirement.
Sec. 825. Encouragement of electronic benefit transfer systems.
Sec. 826. Value of minimum allotment.
Sec. 827. Benefits on recertification.
Sec. 828. Optional combined allotment for expedited households.
Sec. 829. Failure to comply with other means-tested public assistance
programs.
Sec. 830. Allotments for households residing in centers.
Sec. 831. Condition precedent for approval of retail food stores and
wholesale food concerns.
Sec. 832. Authority to establish authorization periods.
Sec. 833. Information for verifying eligibility for authorization.
Sec. 834. Waiting period for stores that fail to meet authorization criteria.
Sec. 835. Operation of food stamp offices.
Sec. 836. State employee and training standards.
Sec. 837. Exchange of law enforcement information.
Sec. 838. Expedited coupon service.
Sec. 839. Withdrawing fair hearing requests.
Sec. 840. Income, eligibility, and immigration status verification systems.
Sec. 841. Investigations.
Sec. 842. Disqualification of retailers who intentionally submit falsified
applications.
Sec. 843. Disqualification of retailers who are disqualified under the WIC
program.
Sec. 844. Collection of overissuances.
Sec. 845. Authority to suspend stores violating program requirements pending
administrative and judicial review.
Sec. 846. Expanded criminal forfeiture for violations.
Sec. 847. Limitation on Federal match.
Sec. 848. Standards for administration.
Sec. 849. Work supplementation or support program.
Sec. 850. Waiver authority.
Sec. 851. Response to waivers.
Sec. 852. Employment initiatives program.
Sec. 853. Reauthorization.
Sec. 854. Simplified food stamp program.
Sec. 855. Study of the use of food stamps to purchase vitamins and minerals.
Sec. 856. Deficit reduction.
Subtitle B--Commodity Distribution Programs
Sec. 871. Emergency food assistance program.
Sec. 872. Food bank demonstration project.
Sec. 873. Hunger prevention programs.
Sec. 874. Report on entitlement commodity processing.
Subtitle C--Electronic Benefit Transfer Systems
Sec. 891. Provisions to encourage electronic benefit transfer systems.
TITLE IX--MISCELLANEOUS
Sec. 901. Appropriation by State legislatures.
Sec. 902. Sanctioning for testing positive for controlled substances.
Sec. 903. Elimination of housing assistance with respect to fugitive felons
and probation and parole violators.
Sec. 904. Sense of the Senate regarding the inability of the noncustodial
parent to pay child support.
Sec. 905. Establishing national goals to prevent teenage pregnancies.
Sec. 906. Sense of the Senate regarding enforcement of statutory rape laws.
Sec. 907. Provisions to encourage electronic benefit transfer systems.
Sec. 908. Reduction of block grants to States for social services; use of
vouchers.
Sec. 909. Rules relating to denial of earned income credit on basis of
disqualified income.
Sec. 910. Modification of adjusted gross income definition for earned income
credit.
Sec. 911. Fraud under means-tested welfare and public assistance programs.
Sec. 912. Abstinence education.
Sec. 913. Change in reference.
TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
SEC. 101. FINDINGS.
The Congress makes the following findings:
(1) Marriage is the foundation of a successful society.
(2) Marriage is an essential institution of a successful society
which promotes the interests of children.
(3) Promotion of responsible fatherhood and motherhood is integral to
successful child rearing and the well-being of children.
(4) In 1992, only 54 percent of single-parent families with children
had a child support order established and, of that 54 percent, only about
one-half received the full amount due. Of the cases enforced through the
public child support enforcement system, only 18 percent of the caseload
has a collection.
(5) The number of individuals receiving aid to families with
dependent children (in this section referred to as "AFDC") has more than
tripled since 1965. More than two-thirds of these recipients are
children. Eighty-nine percent of children receiving AFDC benefits now
live in homes in which no father is present.
(A)(i) The average monthly number of children receiving AFDC
benefits--
(I) was 3,300,000 in 1965;
(II) was 6,200,000 in 1970;
(III) was 7,400,000 in 1980; and
(IV) was 9,300,000 in 1992.
(ii) While the number of children receiving AFDC benefits
increased nearly threefold between 1965 and 1992, the total number of
children in the United States aged 0 to 18 has declined by 5.5
percent.
(B) The Department of Health and Human Services has estimated
that 12,000,000 children will receive AFDC benefits within 10 years.
(C) The increase in the number of children receiving public
assistance is closely related to the increase in births to unmarried
women. Between 1970 and 1991, the percentage of live births to
unmarried women increased nearly threefold, from 10.7 percent to 29.5
percent.
(6) The increase of out-of-wedlock pregnancies and births is well
documented as follows:
(A) It is estimated that the rate of nonmarital teen pregnancy
rose 23 percent from 54 pregnancies per 1,000 unmarried teenagers in
1976 to 66.7 pregnancies in 1991. The overall rate of nonmarital
pregnancy rose 14 percent from 90.8 pregnancies per 1,000 unmarried
women in 1980 to 103 in both 1991 and 1992. In contrast, the overall
pregnancy rate for married couples decreased 7.3 percent between 1980
and 1991, from 126.9 pregnancies per 1,000 married women in 1980 to
117.6 pregnancies in 1991.
(B) The total of all out-of-wedlock births between 1970 and 1991
has risen from 10.7 percent to 29.5 percent and if the current trend
continues, 50 percent of all births by the year 2015 will be out-of-
wedlock.
(7) An effective strategy to combat teenage pregnancy must address
the issue of male responsibility, including statutory rape culpability
and prevention. The increase of teenage pregnancies among the youngest
girls is particularly severe and is linked to predatory sexual practices
by men who are significantly older.
(A) It is estimated that in the late 1980's, the rate for girls
age 14 and under giving birth increased 26 percent.
(B) Data indicates that at least half of the children born to
teenage mothers are fathered by adult men. Available data suggests
that almost 70 percent of births to teenage girls are fathered by men
over age 20.
(C) Surveys of teen mothers have revealed that a majority of such
mothers have histories of sexual and physical abuse, primarily with
older adult men.
(8) The negative consequences of an out-of-wedlock birth on the
mother, the child, the family, and society are well documented as
follows:
(A) Young women 17 and under who give birth outside of marriage
are more likely to go on public assistance and to spend more years on
welfare once enrolled. These combined effects of "younger and longer"
increase total AFDC costs per household by 25 percent to 30 percent
for 17-year-olds.
(B) Children born out-of-wedlock have a substantially higher risk
of being born at a very low or moderately low birth weight.
(C) Children born out-of-wedlock are more likely to experience
low verbal cognitive attainment, as well as more child abuse, and
neglect.
(D) Children born out-of-wedlock were more likely to have lower
cognitive scores, lower educational aspirations, and a greater
likelihood of becoming teenage parents themselves.
(E) Being born out-of-wedlock significantly reduces the chances
of the child growing up to have an intact marriage.
(F) Children born out-of-wedlock are 3 times more likely to be on
welfare when they grow up.
(9) Currently 35 percent of children in single-parent homes were born
out-of-wedlock, nearly the same percentage as that of children in single-
parent homes whose parents are divorced (37 percent). While many parents
find themselves, through divorce or tragic circumstances beyond their
control, facing the difficult task of raising children alone,
nevertheless, the negative consequences of raising children in single-
parent homes are well documented as follows:
(A) Only 9 percent of married-couple families with children under
18 years of age have income below the national poverty level. In
contrast, 46 percent of female-headed households with children under
18 years of age are below the national poverty level.
(B) Among single-parent families, nearly 1/2 of the mothers who
never married received AFDC while only 1/5 of divorced mothers
received AFDC.
(C) Children born into families receiving welfare assistance are
3 times more likely to be on welfare when they reach adulthood than
children not born into families receiving welfare.
(D) Mothers under 20 years of age are at the greatest risk of
bearing low birth weight babies.
(E) The younger the single-parent mother, the less likely she is
to finish high school.
(F) Young women who have children before finishing high school
are more likely to receive welfare assistance for a longer period of
time.
(G) Between 1985 and 1990, the public cost of births to teenage
mothers under the aid to families with dependent children program,
the food stamp program, and the medicaid program has been estimated
at $120,000,000,000.
(H) The absence of a father in the life of a child has a negative
effect on school performance and peer adjustment.
(I) Children of teenage single parents have lower cognitive
scores, lower educational aspirations, and a greater likelihood of
becoming teenage parents themselves.
(J) Children of single-parent homes are 3 times more likely to
fail and repeat a year in grade school than are children from intact
2-parent families.
(K) Children from single-parent homes are almost 4 times more
likely to be expelled or suspended from school.
(L) Neighborhoods with larger percentages of youth aged 12
through 20 and areas with higher percentages of single-parent
households have higher rates of violent crime.
(M) Of those youth held for criminal offenses within the State
juvenile justice system, only 29.8 percent lived primarily in a home
with both parents. In contrast to these incarcerated youth, 73.9
percent of the 62,800,000 children in the Nation's resident
population were living with both parents.
(10) Therefore, in light of this demonstration of the crisis in our
Nation, it is the sense of the Congress that prevention of out-of-wedlock
pregnancy and reduction in out-of-wedlock birth are very important
Government interests and the policy contained in part A of title IV of
the Social Security Act (as amended by section 103(a) of this Act) is
intended to address the crisis.
SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in this title an
amendment is expressed in terms of an amendment to or repeal of a section or
other provision, the reference shall be considered to be made to that section
or other provision of the Social Security Act.
SEC. 103. BLOCK GRANTS TO STATES.
(a) In General.--Part A of title IV (42 U.S.C. 601 et seq.) is amended--
(1) by striking all that precedes section 418 (as added by section
603(b)(2) of this Act) and inserting the following:
"PART A--BLOCK GRANTS TO STATES FOR TEMPORARY
ASSISTANCE FOR NEEDY FAMILIES
"SEC. 401. PURPOSE.
"(a) In General.--The purpose of this part is to increase the flexibility
of States in operating a program designed to--
"(1) provide assistance to needy families so that children may be
cared for in their own homes or in the homes of relatives;
"(2) end the dependence of needy parents on government benefits by
promoting job preparation, work, and marriage;
"(3) prevent and reduce the incidence of out-of-wedlock pregnancies
and establish annual numerical goals for preventing and reducing the
incidence of these pregnancies; and
"(4) encourage the formation and maintenance of two-parent families.
"(b) No Individual Entitlement.--This part shall not be interpreted to
entitle any individual or family to assistance under any State program funded
under this part.
"SEC. 402. ELIGIBLE STATES; STATE PLAN.
"(a) In General.--As used in this part, the term 'eligible State' means,
with respect to a fiscal year, a State that, during the 2-year period
immediately preceding the fiscal year, has submitted to the Secretary a plan
that the Secretary has found includes the following:
"(1) Outline of family assistance program.--
"(A) General provisions.--A written document that outlines how
the State intends to do the following:
"(i) Conduct a program, designed to serve all political
subdivisions in the State (not necessarily in a uniform manner),
that provides assistance to needy families with (or expecting)
children and provides parents with job preparation, work, and
support services to enable them to leave the program and become
self-sufficient.
"(ii) Require a parent or caretaker receiving assistance
under the program to engage in work (as defined by the State)
once the State determines the parent or caretaker is ready to
engage in work, or once the parent or caretaker has received
assistance under the program for 24 months (whether or not
consecutive), whichever is earlier.
"(iii) Ensure that parents and caretakers receiving
assistance under the program engage in work activities in
accordance with section 407.
"(iv) Take such reasonable steps as the State deems necessary
to restrict the use and disclosure of information about
individuals and families receiving assistance under the program
attributable to funds provided by the Federal Government.
"(v) Establish goals and take action to prevent and reduce
the incidence of out-of-wedlock pregnancies, with special
emphasis on teenage pregnancies, and establish numerical goals
for reducing the illegitimacy ratio of the State (as defined in
section 403(a)(2)(B)) for calendar years 1996 through 2005.
"(vi) Conduct a program, designed to reach State and local
law enforcement officials, the education system, and relevant
counseling services, that provides education and training on the
problem of statutory rape so that teenage pregnancy prevention
programs may be expanded in scope to include men.
"(B) Special provisions.--
"(i) The document shall indicate whether the State intends to
treat families moving into the State from another State
differently than other families under the program, and if so, how
the State intends to treat such families under the program.
"(ii) The document shall indicate whether the State intends
to provide assistance under the program to individuals who are
not citizens of the United States, and if so, shall include an
overview of such assistance.
"(iii) The document shall set forth objective criteria for
the delivery of benefits and the determination of eligibility and
for fair and equitable treatment, including an explanation of how
the State will provide opportunities for recipients who have been
adversely affected to be heard in a State administrative or
appeal process.
"(iv) Not later than 1 year after the date of enactment of
this Act, unless the chief executive officer of the State opts
out of this provision by notifying the Secretary, a State shall,
consistent with the exception provided in section 407(e)(2),
require a parent or caretaker receiving assistance under the
program who, after receiving such assistance for 2 months is not
exempt from work requirements and is not engaged in work, as
determined under section 407(c), to participate in community
service employment, with minimum hours per week and tasks to be
determined by the State.
"(2) Certification that the state will operate a child support
enforcement program.--A certification by the chief executive officer of
the State that, during the fiscal year, the State will operate a child
support enforcement program under the State plan approved under part D.
"(3) Certification that the state will operate a foster care and
adoption assistance program.--A certification by the chief executive
officer of the State that, during the fiscal year, the State will operate
a foster care and adoption assistance program under the State plan
approved under part E, and that the State will take such actions as are
necessary to ensure that children receiving assistance under such part
are eligible for medical assistance under the State plan under title XIX.
"(4) Certification of the administration of the program.--A
certification by the chief executive officer of the State specifying
which State agency or agencies will administer and supervise the program
referred to in paragraph (1) for the fiscal year, which shall include
assurances that local governments and private sector organizations--
"(A) have been consulted regarding the plan and design of welfare
services in the State so that services are provided in a manner
appropriate to local populations; and
"(B) have had at least 45 days to submit comments on the plan and
the design of such services.
"(5) Certification that the state will provide indians with equitable
access to assistance.--A certification by the chief executive officer of
the State that, during the fiscal year, the State will provide each
member of an Indian tribe, who is domiciled in the State and is not
eligible for assistance under a tribal family assistance plan approved
under section 412, with equitable access to assistance under the State
program funded under this part attributable to funds provided by the
Federal Government.
"(6) Certification of standards and procedures to ensure against
program fraud and abuse.--A certification by the chief executive officer
of the State that the State has established and is enforcing standards
and procedures to ensure against program fraud and abuse, including
standards and procedures concerning nepotism, conflicts of interest among
individuals responsible for the administration and supervision of the
State program, kickbacks, and the use of political patronage.
"(7) Optional certification of standards and procedures to ensure
that the state will screen for and identify domestic violence.--
"(A) In general.--At the option of the State, a certification by
the chief executive officer of the State that the State has
established and is enforcing standards and procedures to--
"(i) screen and identify individuals receiving assistance
under this part with a history of domestic violence while
maintaining the confidentiality of such individuals;
"(ii) refer such individuals to counseling and supportive
services; and
"(iii) waive, pursuant to a determination of good cause,
other program requirements such as time limits (for so long as
necessary) for individuals receiving assistance, residency
requirements, child support cooperation requirements, and family
cap provisions, in cases where compliance with such requirements
would make it more difficult for individuals receiving assistance
under this part to escape domestic violence or unfairly penalize
such individuals who are or have been victimized by such
violence, or individuals who are at risk of further domestic
violence.
"(B) Domestic violence defined.--For purposes of this paragraph,
the term 'domestic violence' has the same meaning as the term
'battered or subjected to extreme cruelty', as defined in section
408(a)(7)(C)(iii).
"(b) Public Availability of State Plan Summary.--The State shall make
available to the public a summary of any plan submitted by the State under
this section.
"SEC. 403. GRANTS TO STATES.
"(a) Grants.--
"(1) Family assistance grant.--
"(A) In general.--Each eligible State shall be entitled to
receive from the Secretary, for each of fiscal years 1996, 1997,
1998, 1999, 2000, 2001, and 2002, a grant in an amount equal to the
State family assistance grant.
"(B) State family assistance grant defined.--As used in this
part, the term 'State family assistance grant' means the greatest
of--
"(i) 1/3 of the total amount required to be paid to the
State under former section 403 (as in effect on September 30,
1995) for fiscal years 1992, 1993, and 1994 (other than with
respect to amounts expended by the State for child care under
subsection (g) or (i) of former section 402 (as so in effect));
"(ii)(I) the total amount required to be paid to the State
under former section 403 for fiscal year 1994 (other than with
respect to amounts expended by the State for child care under
subsection (g) or (i) of former section 402 (as so in effect));
plus
"(II) an amount equal to 85 percent of the amount (if any) by
which the total amount required to be paid to the State under
former section 403(a)(5) for emergency assistance for fiscal year
1995 exceeds the total amount required to be paid to the State
under former section 403(a)(5) for fiscal year 1994, if, during
fiscal year 1994 or 1995, the Secretary approved under former
section 402 an amendment to the former State plan with respect to
the provision of emergency assistance; or
"(iii) 4/3 of the total amount required to be paid to the
State under former section 403 (as in effect on September 30,
1995) for the 1st 3 quarters of fiscal year 1995 (other than with
respect to amounts expended by the State under the State plan
approved under part F (as so in effect) or for child care under
subsection (g) or (i) of former section 402 (as so in effect)),
plus the total amount required to be paid to the State for fiscal
year 1995 under former section 403(l) (as so in effect).
"(C) Total amount required to be paid to the state under former
section 403 defined.--As used in this part, the term 'total amount
required to be paid to the State under former section 403' means,
with respect to a fiscal year--
"(i) in the case of a State to which section 1108 does not
apply, the sum of--
"(I) the Federal share of maintenance assistance
expenditures for the fiscal year, before reduction pursuant
to subparagraph (B) or (C) of section 403(b)(2) (as in effect
on September 30, 1995), as reported by the State on ACF Form
231;
"(II) the Federal share of administrative expenditures
(including administrative expenditures for the development of
management information systems) for the fiscal year, as
reported by the State on ACF Form 231;
"(III) the Federal share of emergency assistance
expenditures for the fiscal year, as reported by the State on
ACF Form 231;
"(IV) the Federal share of expenditures for the fiscal
year with respect to child care pursuant to subsections (g)
and (i) of former section 402 (as in effect on September 30,
1995), as reported by the State on ACF Form 231; and
"(V) the Federal obligations made to the State under
section 403 for the fiscal year with respect to the State
program operated under part F (as in effect on September 30,
1995), as determined by the Secretary, including additional
obligations or reductions in obligations made after the close
of the fiscal year; and
"(ii) in the case of a State to which section 1108 applies,
the lesser of--
"(I) the sum described in clause (i); or
"(II) the total amount certified by the Secretary under
former section 403 (as in effect during the fiscal year) with
respect to the territory.
"(D) Information to be used in determining amounts.--
"(i) For fiscal years 1992 and 1993.--
"(I) In determining the amounts described in subclauses
(I) through (IV) of subparagraph (C)(i) for any State for
each of fiscal years 1992 and 1993, the Secretary shall use
information available as of April 28, 1995.
"(II) In determining the amount described in subparagraph
(C)(i)(V) for any State for each of fiscal years 1992 and
1993, the Secretary shall use information available as of
January 6, 1995.
"(ii) For fiscal year 1994.--In determining the amounts
described in subparagraph (C)(i) for any State for fiscal year
1994, the Secretary shall use information available as of April
28, 1995.
"(iii) For fiscal year 1995.--
"(I) In determining the amount described in subparagraph
(B)(ii)(II) for any State for fiscal year 1995, the Secretary
shall use the information which was reported by the States
and estimates made by the States with respect to emergency
assistance expenditures and was available as of August 11,
1995.
"(II) In determining the amounts described in subclauses
(I) through (III) of subparagraph (C)(i) for any State for
fiscal year 1995, the Secretary shall use information
available as of October 2, 1995.
"(III) In determining the amount described in
subparagraph (C)(i)(IV) for any State for fiscal year 1995,
the Secretary shall use information available as of February
28, 1996.
"(IV) In determining the amount described in subparagraph
(C)(i)(V) for any State for fiscal year 1995, the Secretary
shall use information available as of October 5, 1995.
"(E) Appropriation.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are appropriated for
fiscal years 1996, 1997, 1998, 1999, 2000, 2001, and 2002 such sums
as are necessary for grants under this paragraph.
"(2) Bonus to reward decrease in illegitimacy.--
"(A) In general.--Each eligible State shall be entitled to
receive from the Secretary a grant for each bonus year for which the
State demonstrates a net decrease in out-of-wedlock births.
"(B) Amount of grant.--
"(i) If 5 eligible states.--If there are 5 eligible States
for a bonus year, the amount of the grant shall be $20,000,000.
"(ii) If fewer than 5 eligible states.--If there are fewer
than 5 eligible States for a bonus year, the amount of the grant
shall be $25,000,000.
"(C) Definitions.--As used in this paragraph:
"(i) Eligible state.--
"(I) In general.--The term 'eligible State' means a State
that the Secretary determines meets the following
requirements:
"(aa) The State demonstrates that the number of out-
of-wedlock births that occurred in the State during the
most recent 2-year period for which such information is
available decreased as compared to the number of such
births that occurred during the previous 2-year period,
and the magnitude of the decrease for the State for the
period is not exceeded by the magnitude of the
corresponding decrease for 5 or more other States for the
period.
"(bb) The rate of induced pregnancy terminations in
the State for the fiscal year is less than the rate of
induced pregnancy terminations in the State for fiscal
year 1995.
"(II) Disregard of changes in data due to changed
reporting methods.--In making the determination required by
subclause (I), the Secretary shall disregard--
"(aa) any difference between the number of out-of-
wedlock births that occurred in a State for a fiscal year
and the number of out-of-wedlock births that occurred in
a State for fiscal year 1995 which is attributable to a
change in State methods of reporting data used to
calculate the number of out-of-wedlock births; and
"(bb) any difference between the rate of induced
pregnancy terminations in a State for a fiscal year and
such rate for fiscal year 1995 which is attributable to a
change in State methods of reporting data used to
calculate such rate.
"(ii) Bonus year.--The term 'bonus year' means fiscal years
1999, 2000, 2001, and 2002.
"(D) Appropriation.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are appropriated for
fiscal years 1999 through 2002, such sums as are necessary for grants
under this paragraph.
"(3) Supplemental grant for population increases in certain states.--
"(A) In general.--Each qualifying State shall, subject to
subparagraph (F), be entitled to receive from the Secretary--
"(i) for fiscal year 1998 a grant in an amount equal to 2.5
percent of the total amount required to be paid to the State
under former section 403 (as in effect during fiscal year 1994)
for fiscal year 1994; and
"(ii) for each of fiscal years 1999, 2000, and 2001, a grant
in an amount equal to the sum of--
"(I) the amount (if any) required to be paid to the State
under this paragraph for the immediately preceding fiscal
year; and
"(II) 2.5 percent of the sum of--
"(aa) the total amount required to be paid to the
State under former section 403 (as in effect during
fiscal year 1994) for fiscal year 1994; and
"(bb) the amount (if any) required to be paid to the
State under this paragraph for the fiscal year preceding
the fiscal year for which the grant is to be made.
"(B) Preservation of grant without increases for states failing
to remain qualifying states.--Each State that is not a qualifying
State for a fiscal year specified in subparagraph (A)(ii) but was a
qualifying State for a prior fiscal year shall, subject to
subparagraph (F), be entitled to receive from the Secretary for the
specified fiscal year, a grant in an amount equal to the amount
required to be paid to the State under this paragraph for the most
recent fiscal year for which the State was a qualifying State.
"(C) Qualifying state.--
"(i) In general.--For purposes of this paragraph, a State is
a qualifying State for a fiscal year if--
"(I) the level of welfare spending per poor person by the
State for the immediately preceding fiscal year is less than
the national average level of State welfare spending per poor
person for such preceding fiscal year; and
"(II) the population growth rate of the State (as
determined by the Bureau of the Census) for the most recent
fiscal year for which information is available exceeds the
average population growth rate for all States (as so
determined) for such most recent fiscal year.
"(ii) State must qualify in fiscal year 1997.--
Notwithstanding clause (i), a State shall not be a qualifying
State for any fiscal year after 1998 by reason of clause (i) if
the State is not a qualifying State for fiscal year 1998 by
reason of clause (i).
"(iii) Certain states deemed qualifying states.--For purposes
of this paragraph, a State is deemed to be a qualifying State for
fiscal years 1998, 1999, 2000, and 2001 if--
"(I) the level of welfare spending per poor person by the
State for fiscal year 1994 is less than 35 percent of the
national average level of State welfare spending per poor
person for fiscal year 1994; or
"(II) the population of the State increased by more than
10 percent from April 1, 1990 to July 1, 1994, according to
the population estimates in publication CB94-204 of the
Bureau of the Census.
"(D) Definitions.--As used in this paragraph:
"(i) Level of welfare spending per poor person.--The term
'level of State welfare spending per poor person' means, with
respect to a State and a fiscal year--
"(I) the sum of--
"(aa) the total amount required to be paid to the
State under former section 403 (as in effect during
fiscal year 1994) for fiscal year 1994; and
"(bb) the amount (if any) paid to the State under
this paragraph for the immediately preceding fiscal year;
divided by
"(II) the number of individuals, according to the 1990
decennial census, who were residents of the State and whose
income was below the poverty line.
"(ii) National average level of state welfare spending per
poor person.--The term 'national average level of State welfare
spending per poor person' means, with respect to a fiscal year,
an amount equal to--
"(I) the total amount required to be paid to the States
under former section 403 (as in effect during fiscal year
1994) for fiscal year 1994; divided by
"(II) the number of individuals, according to the 1990
decennial census, who were residents of any State and whose
income was below the poverty line.
"(iii) State.--The term 'State' means each of the 50 States
of the United States and the District of Columbia.
"(E) Appropriation.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are appropriated for
fiscal years 1998, 1999, 2000, and 2001 such sums as are necessary
for grants under this paragraph, in a total amount not to exceed
$800,000,000.
"(F) Grants reduced pro rata if insufficient appropriations.--If
the amount appropriated pursuant to this paragraph for a fiscal year
is less than the total amount of payments otherwise required to be
made under this paragraph for the fiscal year, then the amount
otherwise payable to any State for the fiscal year under this
paragraph shall be reduced by a percentage equal to the amount so
appropriated divided by such total amount.
"(G) Budget scoring.--Notwithstanding section 257(b)(2) of the
Balanced Budget and Emergency Deficit Control Act of 1985, the
baseline shall assume that no grant shall be made under this
paragraph after fiscal year 2001.
"(4) Bonus to reward high performance states.--
"(A) In general.--The Secretary shall make a grant pursuant to
this paragraph to each State for each bonus year for which the State
is a high performing State.
"(B) Amount of grant.--
"(i) In general.--Subject to clause (ii) of this
subparagraph, the Secretary shall determine the amount of the
grant payable under this paragraph to a high performing State for
a bonus year, which shall be based on the score assigned to the
State under subparagraph (D)(i) for the fiscal year that
immediately precedes the bonus year.
"(ii) Limitation.--The amount payable to a State under this
paragraph for a bonus year shall not exceed 5 percent of the
State family assistance grant.
"(C) Formula for measuring state performance.--Not later than 1
year after the date of the enactment of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996, the Secretary, in
consultation with the National Governors' Association and the
American Public Welfare Association, shall develop a formula for
measuring State performance in operating the State program funded
under this part so as to achieve the goals set forth in section
401(a).
"(D) Scoring of state performance; setting of performance
thresholds.--For each bonus year, the Secretary shall--
"(i) use the formula developed under subparagraph (C) to
assign a score to each eligible State for the fiscal year that
immediately precedes the bonus year; and
"(ii) prescribe a performance threshold in such a manner so
as to ensure that--
"(I) the average annual total amount of grants to be made
under this paragraph for each bonus year equals $200,000,000;
and
"(II) the total amount of grants to be made under this
paragraph for all bonus years equals $1,000,000,000.
"(E) Definitions.--As used in this paragraph:
"(i) Bonus year.--The term 'bonus year' means fiscal years
1999, 2000, 2001, 2002, and 2003.
"(ii) High performing state.--The term 'high performing
State' means, with respect to a bonus year, an eligible State
whose score assigned pursuant to subparagraph (D)(i) for the
fiscal year immediately preceding the bonus year equals or
exceeds the performance threshold prescribed under subparagraph
(D)(ii) for such preceding fiscal year.
"(F) Appropriation.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are appropriated for
fiscal years 1999 through 2003 $1,000,000,000 for grants under this
paragraph.
"(b) Contingency Fund.--
"(1) Establishment.--There is hereby established in the Treasury of
the United States a fund which shall be known as the 'Contingency Fund
for State Welfare Programs' (in this section referred to as the 'Fund').
"(2) Deposits into fund.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are appropriated for
fiscal years 1997, 1998, 1999, 2000, and 2001 such sums as are necessary
for payment to the Fund in a total amount not to exceed $2,000,000,000.
"(3) Grants.--
"(A) Provisional payments.--If an eligible State submits to the
Secretary a request for funds under this paragraph during an eligible
month, the Secretary shall, subject to this paragraph, pay to the
State, from amounts appropriated pursuant to paragraph (2), an amount
equal to the amount of funds so requested.
"(B) Payment priority.--The Secretary shall make payments under
subparagraph (A) in the order in which the Secretary receives
requests for such payments.
"(C) Limitations.--
"(i) Monthly payment to a state.--The total amount paid to a
single State under subparagraph (A) during a month shall not
exceed 1/12 of 20 percent of the State family assistance grant.
"(ii) Payments to all states.--The total amount paid to all
States under subparagraph (A) during fiscal years 1997 through
2001 shall not exceed the total amount appropriated pursuant to
paragraph (2).
"(4) Annual reconciliation.--Notwithstanding paragraph (3), at the
end of each fiscal year, each State shall remit to the Secretary an
amount equal to the amount (if any) by which the total amount paid to the
State under paragraph (3) during the fiscal year exceeds--
"(A) the Federal medical assistance percentage for the State for
the fiscal year (as defined in section 1905(b), as in effect on
September 30, 1995) of the amount (if any) by which--
"(i) if the Secretary makes a payment to the State under
section 418(a)(2) in the fiscal year--
"(I) the expenditures under the State program funded
under this part for the fiscal year, excluding any amounts
made available by the Federal Government (except amounts paid
to the State under paragraph (3) during the fiscal year that
have been expended by the State) and any amounts expended by
the State during the fiscal year for child care; exceeds
"(II) historic State expenditures (as defined in section
409(a)(7)(B)(iii)), excluding the expenditures by the State
for child care under subsection (g) or (i) of section 402 (as
in effect during fiscal year 1994) for fiscal year 1994 minus
any Federal payment with respect to such child care
expenditures; or
"(ii) if the Secretary does not make a payment to the State
under section 418(a)(2) in the fiscal year--
"(I) the expenditures under the State program funded
under this part for the fiscal year (excluding any amounts
made available by the Federal Government, except amounts paid
to the State under paragraph (3) during the fiscal year that
have been expended by the State); exceeds
"(II) historic State expenditures (as defined in section
409(a)(7)(B)(iii)); multiplied by
"(B) 1/12 times the number of months during the fiscal year for
which the Secretary makes a payment to the State under this
subsection.
"(5) Eligible month.--As used in paragraph (3)(A), the term 'eligible
month' means, with respect to a State, a month in the 2-month period that
begins with any month for which the State is a needy State.
"(6) Needy state.--For purposes of paragraph (5), a State is a needy
State for a month if--
"(A) the average rate of--
"(i) total unemployment in such State (seasonally adjusted)
for the period consisting of the most recent 3 months for which
data for all States are published equals or exceeds 6.5 percent;
and
"(ii) total unemployment in such State (seasonally adjusted)
for the 3-month period equals or exceeds 110 percent of such
average rate for either (or both) of the corresponding 3-month
periods ending in the 2 preceding calendar years; or
"(B) as determined by the Secretary of Agriculture (in the
discretion of the Secretary of Agriculture), the monthly average
number of individuals (as of the last day of each month)
participating in the food stamp program in the State in the then most
recently concluded 3-month period for which data are available
exceeds by not less than 10 percent the lesser of--
"(i) the monthly average number of individuals (as of the
last day of each month) in the State that would have participated
in the food stamp program in the corresponding 3-month period in
fiscal year 1994 if the amendments made by titles IV and VIII of
the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 had been in effect throughout fiscal year 1994; or
"(ii) the monthly average number of individuals (as of the
last day of each month) in the State that would have participated
in the food stamp program in the corresponding 3-month period in
fiscal year 1995 if the amendments made by titles IV and VIII of
the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 had been in effect throughout fiscal year 1995.
"(7) Other terms defined.--As used in this subsection:
"(A) State.--The term 'State' means each of the 50 States of the
United States and the District of Columbia.
"(B) Secretary.--The term 'Secretary' means the Secretary of the
Treasury.
"(8) Annual reports.--The Secretary shall annually report to the
Congress on the status of the Fund.
"SEC. 404. USE OF GRANTS.
"(a) General Rules.--Subject to this part, a State to which a grant is
made under section 403 may use the grant--
"(1) in any manner that is reasonably calculated to accomplish the
purpose of this part, including to provide low income households with
assistance in meeting home heating and cooling costs; or
"(2) in any manner that the State was authorized to use amounts
received under part A or F, as such parts were in effect on September 30,
1995.
"(b) Limitation on Use of Grant for Administrative Purposes.--
"(1) Limitation.--A State to which a grant is made under section 403
shall not expend more than 15 percent of the grant for administrative
purposes.
"(2) Exception.--Paragraph (1) shall not apply to the use of a grant
for information technology and computerization needed for tracking or
monitoring required by or under this part.
"(c) Authority To Treat Interstate Immigrants Under Rules of Former
State.--A State operating a program funded under this part may apply to a
family the rules (including benefit amounts) of the program funded under this
part of another State if the family has moved to the State from the other
State and has resided in the State for less than 12 months.
"(d) Authority To Use Portion of Grant for Other Purposes.--
"(1) In general.--A State may use not more than 30 percent of the
amount of any grant made to the State under section 403(a) for a fiscal
year to carry out a State program pursuant to any or all of the following
provisions of law:
"(A) Title XX of this Act.
"(B) The Child Care and Development Block Grant Act of 1990.
"(2) Limitation on amount transferable to title xx programs.--
Notwithstanding paragraph (1), not more than 1/3 of the total amount
paid to a State under this part for a fiscal year that is used to carry
out State programs pursuant to provisions of law specified in paragraph
(1) may be used to carry out State programs pursuant to title XX.
"(3) Applicable rules.--
"(A) In general.--Except as provided in subparagraph (B) of this
paragraph, any amount paid to a State under this part that is used to
carry out a State program pursuant to a provision of law specified in
paragraph (1) shall not be subject to the requirements of this part,
but shall be subject to the requirements that apply to Federal funds
provided directly under the provision of law to carry out the
program, and the expenditure of any amount so used shall not be
considered to be an expenditure under this part.
"(B) Exception relating to title xx programs.--All amounts paid
to a State under this part that are used to carry out State programs
pursuant to title XX shall be used only for programs and services to
children or their families whose income is less than 200 percent of
the income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved.
"(e) Authority to Reserve Certain Amounts for Assistance.--A State may
reserve amounts paid to the State under this part for any fiscal year for the
purpose of providing, without fiscal year limitation, assistance under the
State program funded under this part.
"(f) Authority to Operate Employment Placement Program.--A State to which
a grant is made under section 403 may use the grant to make payments (or
provide job placement vouchers) to State-approved public and private job
placement agencies that provide employment placement services to individuals
who receive assistance under the State program funded under this part.
"(g) Implementation of Electronic Benefit Transfer System.--A State to
which a grant is made under section 403 is encouraged to implement an
electronic benefit transfer system for providing assistance under the State
program funded under this part, and may use the grant for such purpose.
"(h) Use of Funds for Individual Development Accounts.--
"(1) In general.--A State to which a grant is made under section 403
may use the grant to carry out a program to fund individual development
accounts (as defined in paragraph (2)) established by individuals
eligible for assistance under the State program funded under this part.
"(2) Individual development accounts.--
"(A) Establishment.--Under a State program carried out under
paragraph (1), an individual development account may be established
by or on behalf of an individual eligible for assistance under the
State program operated under this part for the purpose of enabling
the individual to accumulate funds for a qualified purpose described
in subparagraph (B).
"(B) Qualified purpose.--A qualified purpose described in this
subparagraph is 1 or more of the following, as provided by the
qualified entity providing assistance to the individual under this
subsection:
"(i) Postsecondary educational expenses.--Postsecondary
educational expenses paid from an individual development account
directly to an eligible educational institution.
"(ii) First home purchase.--Qualified acquisition costs with
respect to a qualified principal residence for a qualified first-
time homebuyer, if paid from an individual development account
directly to the persons to whom the amounts are due.
"(iii) Business capitalization.--Amounts paid from an
individual development account directly to a business
capitalization account which is established in a federally
insured financial institution and is restricted to use solely for
qualified business capitalization expenses.
"(C) Contributions to be from earned income.--An individual may
only contribute to an individual development account such amounts as
are derived from earned income, as defined in section 911(d)(2) of
the Internal Revenue Code of 1986.
"(D) Withdrawal of funds.--The Secretary shall establish such
regulations as may be necessary to ensure that funds held in an
individual development account are not withdrawn except for 1 or more
of the qualified purposes described in subparagraph (B).
"(3) Requirements.--
"(A) In general.--An individual development account established
under this subsection shall be a trust created or organized in the
United States and funded through periodic contributions by the
establishing individual and matched by or through a qualified entity
for a qualified purpose (as described in paragraph (2)(B)).
"(B) Qualified entity.--As used in this subsection, the term
'qualified entity' means--
"(i) a not-for-profit organization described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code; or
"(ii) a State or local government agency acting in
cooperation with an organization described in clause (i).
"(4) No reduction in benefits.--Notwithstanding any other provision
of Federal law (other than the Internal Revenue Code of 1986) that
requires consideration of 1 or more financial circumstances of an
individual, for the purpose of determining eligibility to receive, or the
amount of, any assistance or benefit authorized by such law to be
provided to or for the benefit of such individual, funds (including
interest accruing) in an individual development account under this
subsection shall be disregarded for such purpose with respect to any
period during which such individual maintains or makes contributions into
such an account.
"(5) Definitions.--As used in this subsection--
"(A) Eligible educational institution.--The term 'eligible
educational institution' means the following:
"(i) An institution described in section 481(a)(1) or 1201(a)
of the Higher Education Act of 1965 (20 U.S.C. 1088(a)(1) or
1141(a)), as such sections are in effect on the date of the
enactment of this subsection.
"(ii) An area vocational education school (as defined in
subparagraph (C) or (D) of section 521(4) of the Carl D. Perkins
Vocational and Applied Technology Education Act (20 U.S.C.
2471(4))) which is in any State (as defined in section 521(33) of
such Act), as such sections are in effect on the date of the
enactment of this subsection.
"(B) Post-secondary educational expenses.--The term 'post-
secondary educational expenses' means--
"(i) tuition and fees required for the enrollment or
attendance of a student at an eligible educational institution,
and
"(ii) fees, books, supplies, and equipment required for
courses of instruction at an eligible educational institution.
"(C) Qualified acquisition costs.--The term 'qualified
acquisition costs' means the costs of acquiring, constructing, or
reconstructing a residence. The term includes any usual or reasonable
settlement, financing, or other closing costs.
"(D) Qualified business.--The term 'qualified business' means any
business that does not contravene any law or public policy (as
determined by the Secretary).
"(E) Qualified business capitalization expenses.--The term
'qualified business capitalization expenses' means qualified
expenditures for the capitalization of a qualified business pursuant
to a qualified plan.
"(F) Qualified expenditures.--The term 'qualified expenditures'
means expenditures included in a qualified plan, including capital,
plant, equipment, working capital, and inventory expenses.
"(G) Qualified first-time homebuyer.--
"(i) In general.--The term 'qualified first-time homebuyer'
means a taxpayer (and, if married, the taxpayer's spouse) who has
no present ownership interest in a principal residence during the
3-year period ending on the date of acquisition of the principal
residence to which this subsection applies.
"(ii) Date of acquisition.--The term 'date of acquisition'
means the date on which a binding contract to acquire, construct,
or reconstruct the principal residence to which this subparagraph
applies is entered into.
"(H) Qualified plan.--The term 'qualified plan' means a business
plan which--
"(i) is approved by a financial institution, or by a
nonprofit loan fund having demonstrated fiduciary integrity,
"(ii) includes a description of services or goods to be sold,
a marketing plan, and projected financial statements, and
"(iii) may require the eligible individual to obtain the
assistance of an experienced entrepreneurial advisor.
"(I) Qualified principal residence.--The term 'qualified
principal residence' means a principal residence (within the meaning
of section 1034 of the Internal Revenue Code of 1986), the qualified
acquisition costs of which do not exceed 100 percent of the average
area purchase price applicable to such residence (determined in
accordance with paragraphs (2) and (3) of section 143(e) of such
Code).
"(i) Sanction Welfare Recipients for Failing To Ensure That Minor
Dependent Children Attend School.--A State to which a grant is made under
section 403 shall not be prohibited from sanctioning a family that includes
an adult who has received assistance under any State program funded under
this part attributable to funds provided by the Federal Government or under
the food stamp program, as defined in section 3(h) of the Food Stamp Act of
1977, if such adult fails to ensure that the minor dependent children of such
adult attend school as required by the law of the State in which the minor
children reside.
"(j) Requirement for High School Diploma or Equivalent.--A State to which
a grant is made under section 403 shall not be prohibited from sanctioning a
family that includes an adult who is older than age 20 and younger than age
51 and who has received assistance under any State program funded under this
part attributable to funds provided by the Federal Government or under the
food stamp program, as defined in section 3(h) of the Food Stamp Act of 1977,
if such adult does not have, or is not working toward attaining, a secondary
school diploma or its recognized equivalent unless such adult has been
determined in the judgment of medical, psychiatric, or other appropriate
professionals to lack the requisite capacity to complete successfully a
course of study that would lead to a secondary school diploma or its
recognized equivalent.
"SEC. 405. ADMINISTRATIVE PROVISIONS.
"(a) Quarterly.--The Secretary shall pay each grant payable to a State
under section 403 in quarterly installments, subject to this section.
"(b) Notification.--Not later than 3 months before the payment of any
such quarterly installment to a State, the Secretary shall notify the State
of the amount of any reduction determined under section 412(a)(1)(B) with
respect to the State.
"(c) Computation and Certification of Payments to States.--
"(1) Computation.--The Secretary shall estimate the amount to be paid
to each eligible State for each quarter under this part, such estimate to
be based on a report filed by the State containing an estimate by the
State of the total sum to be expended by the State in the quarter under
the State program funded under this part and such other information as
the Secretary may find necessary.
"(2) Certification.--The Secretary of Health and Human Services shall
certify to the Secretary of the Treasury the amount estimated under
paragraph (1) with respect to a State, reduced or increased to the extent
of any overpayment or underpayment which the Secretary of Health and
Human Services determines was made under this part to the State for any
prior quarter and with respect to which adjustment has not been made
under this paragraph.
"(d) Payment Method.--Upon receipt of a certification under subsection
(c)(2) with respect to a State, the Secretary of the Treasury shall, through
the Fiscal Service of the Department of the Treasury and before audit or
settlement by the General Accounting Office, pay to the State, at the time or
times fixed by the Secretary of Health and Human Services, the amount so
certified.
"SEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS.
"(a) Loan Authority.--
"(1) In general.--The Secretary shall make loans to any loan-eligible
State, for a period to maturity of not more than 3 years.
"(2) Loan-eligible state.--As used in paragraph (1), the term 'loan-
eligible State' means a State against which a penalty has not been
imposed under section 409(a)(1).
"(b) Rate of Interest.--The Secretary shall charge and collect interest
on any loan made under this section at a rate equal to the current average
market yield on outstanding marketable obligations of the United States with
remaining periods to maturity comparable to the period to maturity of the
loan.
"(c) Use of Loan.--A State shall use a loan made to the State under this
section only for any purpose for which grant amounts received by the State
under section 403(a) may be used, including--
"(1) welfare anti-fraud activities; and
"(2) the provision of assistance under the State program to Indian
families that have moved from the service area of an Indian tribe with a
tribal family assistance plan approved under section 412.
"(d) Limitation on Total Amount of Loans to a State.--The cumulative
dollar amount of all loans made to a State under this section during fiscal
years 1997 through 2002 shall not exceed 10 percent of the State family
assistance grant.
"(e) Limitation on Total Amount of Outstanding Loans.--The total dollar
amount of loans outstanding under this section may not exceed $1,700,000,000.
"(f) Appropriation.--Out of any money in the Treasury of the United
States not otherwise appropriated, there are appropriated such sums as may be
necessary for the cost of loans under this section.
"SEC. 407. MANDATORY WORK REQUIREMENTS.
"(a) Participation Rate Requirements.--
"(1) All families.--A State to which a grant is made under section
403 for a fiscal year shall achieve the minimum participation rate
specified in the following table for the fiscal year with respect to all
families receiving assistance under the State program funded under this
part:
The minimum
participation
"If the fiscal year is: rate is:
1997........................................ 25
1998........................................ 30
1999........................................ 35
2000........................................ 40
2001........................................ 45
2002 or thereafter.......................... 50.
"(2) 2-parent families.--A State to which a grant is made under
section 403 for a fiscal year shall achieve the minimum participation
rate specified in the following table for the fiscal year with respect to
2-parent families receiving assistance under the State program funded
under this part:
The minimum
participation
"If the fiscal year is: rate is:
1997........................................ 75
1998........................................ 75
1999 or thereafter.......................... 90.
"(b) Calculation of Participation Rates.--
"(1) All families.--
"(A) Average monthly rate.--For purposes of subsection (a)(1),
the participation rate for all families of a State for a fiscal year
is the average of the participation rates for all families of the
State for each month in the fiscal year.
"(B) Monthly participation rates.--The participation rate of a
State for all families of the State for a month, expressed as a
percentage, is--
"(i) the number of families receiving assistance under the
State program funded under this part that include an adult or a
minor child head of household who is engaged in work for the
month; divided by
"(ii) the amount by which--
"(I) the number of families receiving such assistance
during the month that include an adult or a minor child head
of household receiving such assistance; exceeds
"(II) the number of families receiving such assistance
that are subject in such month to a penalty described in
subsection (e)(1) but have not been subject to such penalty
for more than 3 months within the preceding 12-month period
(whether or not consecutive).
"(2) 2-parent families.--
"(A) Average monthly rate.--For purposes of subsection (a)(2),
the participation rate for 2-parent families of a State for a fiscal
year is the average of the participation rates for 2-parent families
of the State for each month in the fiscal year.
"(B) Monthly participation rates.--The participation rate of a
State for 2-parent families of the State for a month shall be
calculated by use of the formula set forth in paragraph (1)(B),
except that in the formula the term 'number of 2-parent families'
shall be substituted for the term 'number of families' each place
such latter term appears.
"(3) Pro rata reduction of participation rate due to caseload
reductions not required by federal law.--
"(A) In general.--The Secretary shall prescribe regulations for
reducing the minimum participation rate otherwise required by this
section for a fiscal year by the number of percentage points equal to
the number of percentage points (if any) by which--
"(i) the average monthly number of families receiving
assistance during the immediately preceding fiscal year under the
State program funded under this part is less than
"(ii) the average monthly number of families that received
aid under the State plan approved under part A (as in effect on
September 30, 1995) during fiscal year 1995.
The minimum participation rate shall not be reduced to the extent
that the Secretary determines that the reduction in the number of
families receiving such assistance is required by Federal law.
"(B) Eligibility changes not counted.--The regulations required
by subparagraph (A) shall not take into account families that are
diverted from a State program funded under this part as a result of
differences in eligibility criteria under a State program funded
under this part and eligibility criteria under the State program
operated under the State plan approved under part A (as such plan and
such part were in effect on September 30, 1995). Such regulations
shall place the burden on the Secretary to prove that such families
were diverted as a direct result of differences in such eligibility
criteria.
"(4) State option to include individuals receiving assistance under a
tribal family assistance plan.--For purposes of paragraphs (1)(B) and
(2)(B), a State may, at its option, include families in the State that
are receiving assistance under a tribal family assistance plan approved
under section 412.
"(5) State option for participation requirement exemptions.--For any
fiscal year, a State may, at its option, not require an individual who is
a single custodial parent caring for a child who has not attained 12
months of age to engage in work, and may disregard such an individual in
determining the participation rates under subsection (a) for not more
than 12 months.
"(c) Engaged in Work.--
"(1) General rules.--
"(A) All families.--For purposes of subsection (b)(1)(B)(i), a
recipient is engaged in work for a month in a fiscal year if the
recipient is participating in work activities for at least the
minimum average number of hours per week specified in the following
table during the month, not fewer than 20 hours per week of which are
attributable to an activity described in paragraph (1), (2), (3),
(4), (5), (6), (7), (8), or (12) of subsection (d), subject to this
subsection:
The minimum
"If the month is average number of
in fiscal year: hours per week is:
1997...................................... 20
1998...................................... 20
1999...................................... 25
2000 or thereafter........................ 30.
"(B) 2-parent families.--For purposes of subsection (b)(2)(B), an
individual is engaged in work for a month in a fiscal year if--
"(i) the individual is making progress in work activities for
at least 35 hours per week during the month, not fewer than 30
hours per week of which are attributable to an activity described
in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of
subsection (d), subject to this subsection; and
"(ii) if the family of the individual receives federally-
funded child care assistance and an adult in the family is not
disabled or caring for a severely disabled child, the
individual's spouse is making progress in work activities during
the month, not fewer than 20 hours per week of which are
attributable to an activity described in paragraph (1), (2), (3),
(4), (5), or (7) of subsection (d).
"(2) Limitations and special rules.--
"(A) Number of weeks for which job search counts as work.--
"(i) Limitation.--Notwithstanding paragraph (1) of this
subsection, an individual shall not be considered to be engaged
in work by virtue of participation in an activity described in
subsection (d)(6) of a State program funded under this part,
after the individual has participated in such an activity for 6
weeks (or, if the unemployment rate of the State is at least 50
percent greater than the unemployment rate of the United States,
12 weeks), or if the participation is for a week that immediately
follows 4 consecutive weeks of such participation.
"(ii) Limited authority to count less than full week of
participation.--For purposes of clause (i) of this subparagraph,
on not more than 1 occasion per individual, the State shall
consider participation of the individual in an activity described
in subsection (d)(6) for 3 or 4 days during a week as a week of
participation in the activity by the individual.
"(B) Single parent with child under age 6 deemed to be meeting
work participation requirements if parent is engaged in work for 20
hours per week.--For purposes of determining monthly participation
rates under subsection (b)(1)(B)(i), a recipient in a 1-parent family
who is the parent of a child who has not attained 6 years of age is
deemed to be engaged in work for a month if the recipient is engaged
in work for an average of at least 20 hours per week during the
month.
"(C) Teen head of household who maintains satisfactory school
attendance deemed to be meeting work participation requirements.--For
purposes of determining monthly participation rates under sub-section
(b)(1)(B)(i), a recipient who is a single head of household and has
not attained 20 years of age is deemed, subject to subparagraph (D)
of this paragraph, to be engaged in work for a month in a fiscal year
if the recipient--
"(i) maintains satisfactory attendance at secondary school or
the equivalent during the month; or
"(ii) participates in education directly related to
employment for at least the minimum average number of hours per
week specified in the table set forth in paragraph (1)(A) of this
subsection.
"(D) Number of persons that may be treated as engaged in work by
virtue of participation in vocational education activities or being a
teen head of household who maintains satisfactory school
attendance.--For purposes of determining monthly participation rates
under paragraphs (1)(B)(i) and (2)(B) of subsection (b), not more
than 20 percent of individuals in all families and in 2-parent
families may be determined to be engaged in work in the State for a
month by reason of participation in vocational educational training
or deemed to be engaged in work by reason of subparagraph (C) of this
paragraph.
"(d) Work Activities Defined.--As used in this section, the term 'work
activities' means--
"(1) unsubsidized employment;
"(2) subsidized private sector employment;
"(3) subsidized public sector employment;
"(4) work experience (including work associated with the refurbishing
of publicly assisted housing) if sufficient private sector employment is
not available;
"(5) on-the-job training;
"(6) job search and job readiness assistance;
"(7) community service programs;
"(8) vocational educational training (not to exceed 12 months with
respect to any individual);
"(9) job skills training directly related to employment;
"(10) education directly related to employment, in the case of a
recipient who has not received a high school diploma or a certificate of
high school equivalency;
"(11) satisfactory attendance at secondary school or in a course of
study leading to a certificate of general equivalence, in the case of a
recipient who has not completed secondary school or received such a
certificate; and
"(12) the provision of child care services to an individual who is
participating in a community service program.
"(e) Penalties Against Individuals.--
"(1) In general.--Except as provided in paragraph (2), if an
individual in a family receiving assistance under the State program
funded under this part refuses to engage in work required in accordance
with this section, the State shall--
"(A) reduce the amount of assistance otherwise payable to the
family pro rata (or more, at the option of the State) with respect to
any period during a month in which the individual so refuses; or
"(B) terminate such assistance,
subject to such good cause and other exceptions as the State may
establish.
"(2) Exception.--Notwithstanding paragraph (1), a State may not
reduce or terminate assistance under the State program funded under this
part based on a refusal of an individual to work if the individual is a
single custodial parent caring for a child who has not attained 6 years
of age, and the individual proves that the individual has a demonstrated
inability (as determined by the State) to obtain needed child care, for 1
or more of the following reasons:
"(A) Unavailability of appropriate child care within a reasonable
distance from the individual's home or work site.
"(B) Unavailability or unsuitability of informal child care by a
relative or under other arrangements.
"(C) Unavailability of appropriate and affordable formal child
care arrangements.
"(f) Nondisplacement in Work Activities.--
"(1) In general.--Subject to paragraph (2), an adult in a family
receiving assistance under a State program funded under this part
attributable to funds provided by the Federal Government may fill a
vacant employment position in order to engage in a work activity
described in subsection (d).
"(2) No filling of certain vacancies.--No adult in a work activity
described in subsection (d) which is funded, in whole or in part, by
funds provided by the Federal Government shall be employed or assigned--
"(A) when any other individual is on layoff from the same or any
substantially equivalent job; or
"(B) if the employer has terminated the employment of any regular
employee or otherwise caused an involuntary reduction of its
workforce in order to fill the vacancy so created with an adult
described in paragraph (1).
"(3) Grievance procedure.--A State with a program funded under this
part shall establish and maintain a grievance procedure for resolving
complaints of alleged violations of paragraph (2).
"(4) No preemption.--Nothing in this subsection shall preempt or
supersede any provision of State or local law that provides greater
protection for employees from displacement.
"(g) Sense of the Congress.--It is the sense of the Congress that in
complying with this section, each State that operates a program funded under
this part is encouraged to assign the highest priority to requiring adults in
2-parent families and adults in single-parent families that include older
preschool or school-age children to be engaged in work activities.
"(h) Sense of the Congress That States Should Impose Certain Requirements
on Noncustodial, Nonsupporting Minor Parents.--It is the sense of the
Congress that the States should require noncustodial, nonsupporting parents
who have not attained 18 years of age to fulfill community work obligations
and attend appropriate parenting or money management classes after school.
"(i) Review of Implementation of State Work Programs.--During fiscal year
1999, the Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate shall hold hearings and engage in other
appropriate activities to review the implementation of this section by the
States, and shall invite the Governors of the States to testify before them
regarding such implementation. Based on such hearings, such Committees may
introduce such legislation as may be appropriate to remedy any problems with
the State programs operated pursuant to this section.
"SEC. 408. PROHIBITIONS; REQUIREMENTS.
"(a) In General.--
"(1) No assistance for families without a minor child.--A State to
which a grant is made under section 403 shall not use any part of the
grant to provide assistance to a family--
"(A) unless the family includes--
"(i) a minor child who resides with a custodial parent or
other adult caretaker relative of the child; or
"(ii) a pregnant individual; and
"(B) if the family includes an adult who has received assistance
under any State program funded under this part attributable to funds
provided by the Federal Government, for 60 months (whether or not
consecutive) after the date the State program funded under this part
commences (unless an exception described in subparagraph (B), (C), or
(D) of paragraph (7) applies).
"(2) Reduction or elimination of assistance for noncooperation in
establishing paternity or obtaining child support.--If the agency
responsible for administering the State plan approved under part D
determines that an individual is not cooperating with the State in
establishing paternity or in establishing, modifying, or enforcing a
support order with respect to a child of the individual, and the
individual does not qualify for any good cause or other exception
established by the State pursuant to section 454(29), then the State--
"(A) shall deduct from the assistance that would otherwise be
provided to the family of the individual under the State program
funded under this part an amount equal to not less than 25 percent of
the amount of such assistance; and
"(B) may deny the family any assistance under the State program.
"(3) No assistance for families not assigning certain support rights
to the state.--
"(A) In general.--A State to which a grant is made under section
403 shall require, as a condition of providing assistance to a family
under the State program funded under this part, that a member of the
family assign to the State any rights the family member may have (on
behalf of the family member or of any other person for whom the
family member has applied for or is receiving such assistance) to
support from any other person, not exceeding the total amount of
assistance so provided to the family, which accrue (or have accrued)
before the date the family leaves the program, which assignment, on
and after the date the family leaves the program, shall not apply
with respect to any support (other than support collected pursuant to
section 464) which accrued before the family received such assistance
and which the State has not collected by--
"(i) September 30, 2000, if the assignment is executed on or
after October 1, 1997, and before October 1, 2000; or
"(ii) the date the family leaves the program, if the
assignment is executed on or after October 1, 2000.
"(B) Limitation.--A State to which a grant is made under section
403 shall not require, as a condition of providing assistance to any
family under the State program funded under this part, that a member
of the family assign to the State any rights to support described in
subparagraph (A) which accrue after the date the family leaves the
program.
"(4) No assistance for teenage parents who do not attend high school
or other equivalent training program.--A State to which a grant is made
under section 403 shall not use any part of the grant to provide
assistance to an individual who has not attained 18 years of age, is not
married, has a minor child at least 12 weeks of age in his or her care,
and has not successfully completed a high-school education (or its
equivalent), if the individual does not participate in--
"(A) educational activities directed toward the attainment of a
high school diploma or its equivalent; or
"(B) an alternative educational or training program that has been
approved by the State.
"(5) No assistance for teenage parents not living in adult-supervised
settings.--
"(A) In general.--
"(i) Requirement.--Except as provided in subparagraph (B), a
State to which a grant is made under section 403 shall not use
any part of the grant to provide assistance to an individual
described in clause (ii) of this subparagraph if the individual
and the minor child referred to in clause (ii)(II) do not reside
in a place of residence maintained by a parent, legal guardian,
or other adult relative of the individual as such parent's,
guardian's, or adult relative's own home.
"(ii) Individual described.-- For purposes of clause (i), an
individual described in this clause is an individual who--
"(I) has not attained 18 years of age; and
"(II) is not married, and has a minor child in his or her
care.
"(B) Exception.--
"(i) Provision of, or assistance in locating, adult-
supervised living arrangement.--In the case of an individual who
is described in clause (ii), the State agency referred to in
section 402(a)(4) shall provide, or assist the individual in
locating, a second chance home, maternity home, or other
appropriate adult-supervised supportive living arrangement,
taking into consideration the needs and concerns of the
individual, unless the State agency determines that the
individual's current living arrangement is appropriate, and
thereafter shall require that the individual and the minor child
referred to in subparagraph (A)(ii)(II) reside in such living
arrangement as a condition of the continued receipt of assistance
under the State program funded under this part attributable to
funds provided by the Federal Government (or in an alternative
appropriate arrangement, should circumstances change and the
current arrangement cease to be appropriate).
"(ii) Individual described.--For purposes of clause (i), an
individual is described in this clause if the individual is
described in subparagraph (A)(ii), and--
"(I) the individual has no parent, legal guardian, or
other appropriate adult relative described in subclause (II)
of his or her own who is living or whose whereabouts are
known;
"(II) no living parent, legal guardian, or other
appropriate adult relative, who would otherwise meet
applicable State criteria to act as the individual's legal
guardian, of such individual allows the individual to live in
the home of such parent, guardian, or relative;
"(III) the State agency determines that--
"(aa) the individual or the minor child referred to
in subparagraph (A)(ii)(II) is being or has been
subjected to serious physical or emotional harm, sexual
abuse, or exploitation in the residence of the
individual's own parent or legal guardian; or
"(bb) substantial evidence exists of an act or
failure to act that presents an imminent or serious harm
if the individual and the minor child lived in the same
residence with the individual's own parent or legal
guardian; or
"(IV) the State agency otherwise determines that it is in
the best interest of the minor child to waive the requirement
of subparagraph (A) with respect to the individual or the
minor child.
"(iii) Second-chance home.--For purposes of this
subparagraph, the term 'second-chance home' means an entity that
provides individuals described in clause (ii) with a supportive
and supervised living arrangement in which such individuals are
required to learn parenting skills, including child development,
family budgeting, health and nutrition, and other skills to
promote their long-term economic independence and the well-being
of their children.
"(6) No medical services.--
"(A) In general.--A State to which a grant is made under section
403 shall not use any part of the grant to provide medical services.
"(B) Exception for prepregnancy family planning services.--As
used in subparagraph (A), the term 'medical services' does not
include prepregnancy family planning services.
"(7) No assistance for more than 5 years.--
"(A) In general.--A State to which a grant is made under section
403 shall not use any part of the grant to provide assistance to a
family that includes an adult who has received assistance under any
State program funded under this part attributable to funds provided
by the Federal Government, for 60 months (whether or not consecutive)
after the date the State program funded under this part commences,
subject to this paragraph.
"(B) Minor child exception.--In determining the number of months
for which an individual who is a parent or pregnant has received
assistance under the State program funded under this part, the State
shall disregard any month for which such assistance was provided with
respect to the individual and during which the individual was--
"(i) a minor child; and
"(ii) not the head of a household or married to the head of a
household.
"(C) Hardship exception.--
"(i) In general.--The State may exempt a family from the
application of subparagraph (A) by reason of hardship or if the
family includes an individual who has been battered or subjected
to extreme cruelty.
"(ii) Limitation.--The number of families with respect to
which an exemption made by a State under clause (i) is in effect
for a fiscal year shall not exceed 20 percent of the average
monthly number of families to which assistance is provided under
the State program funded under this part.
"(iii) Battered or subject to extreme cruelty defined.--For
purposes of clause (i), an individual has been battered or
subjected to extreme cruelty if the individual has been subjected
to--
"(I) physical acts that resulted in, or threatened to
result in, physical injury to the individual;
"(II) sexual abuse;
"(III) sexual activity involving a dependent child;
"(IV) being forced as the caretaker relative of a
dependent child to engage in nonconsensual sexual acts or
activities;
"(V) threats of, or attempts at, physical or sexual
abuse;
"(VI) mental abuse; or
"(VII) neglect or deprivation of medical care.
"(D) Disregard of months of assistance received by adult while
living on an indian reservation or in an alaskan native village with
50 percent unemployment.--In determining the number of months for
which an adult has received assistance under the State program funded
under this part, the State shall disregard any month during which the
adult lived on an Indian reservation or in an Alaskan Native village
if, during the month--
"(i) at least 1,000 individuals were living on the
reservation or in the village ; and
"(ii) at least 50 percent of the adults living on the
reservation or in the village were unemployed.
"(E) Rule of interpretation.--Subparagraph (A) shall not be
interpreted to require any State to provide assistance to any
individual for any period of time under the State program funded
under this part.
"(F) Rule of interpretation.--This part shall not be interpreted
to prohibit any State from expending State funds not originating with
the Federal Government on benefits for children or families that have
become ineligible for assistance under the State program funded under
this part by reason of subparagraph (A).
"(8) Denial of assistance for 10 years to a person found to have
fraudulently misrepresented residence in order to obtain assistance in 2
or more states.--A State to which a grant is made under section 403 shall
not use any part of the grant to provide cash assistance to an individual
during the 10-year period that begins on the date the individual is
convicted in Federal or State court of having made a fraudulent statement
or representation with respect to the place of residence of the
individual in order to receive assistance simultaneously from 2 or more
States under programs that are funded under this title, title XIX, or the
Food Stamp Act of 1977, or benefits in 2 or more States under the
supplemental security income program under title XVI. The preceding
sentence shall not apply with respect to a conviction of an individual,
for any month beginning after the President of the United States grants a
pardon with respect to the conduct which was the subject of the
conviction.
"(9) Denial of assistance for fugitive felons and probation and
parole violators.--
"(A) In general.--A State to which a grant is made under section
403 shall not use any part of the grant to provide assistance to any
individual who is--
"(i) fleeing to avoid prosecution, or custody or confinement
after conviction, under the laws of the place from which the
individual flees, for a crime, or an attempt to commit a crime,
which is a felony under the laws of the place from which the
individual flees, or which, in the case of the State of New
Jersey, is a high misdemeanor under the laws of such State; or
"(ii) violating a condition of probation or parole imposed
under Federal or State law.
The preceding sentence shall not apply with respect to conduct of an
individual, for any month beginning after the President of the United
States grants a pardon with respect to the conduct.
"(B) Exchange of information with law enforcement agencies.--If a
State to which a grant is made under section 403 establishes
safeguards against the use or disclosure of information about
applicants or recipients of assistance under the State program funded
under this part, the safeguards shall not prevent the State agency
administering the program from furnishing a Federal, State, or local
law enforcement officer, upon the request of the officer, with the
current address of any recipient if the officer furnishes the agency
with the name of the recipient and notifies the agency that--
"(i) the recipient--
"(I) is described in subparagraph (A); or
"(II) has information that is necessary for the officer
to conduct the official duties of the officer; and
"(ii) the location or apprehension of the recipient is within
such official duties.
"(10) Denial of assistance for minor children who are absent from the
home for a significant period.--
"(A) In general.--A State to which a grant is made under section
403 shall not use any part of the grant to provide assistance for a
minor child who has been, or is expected by a parent (or other
caretaker relative) of the child to be, absent from the home for a
period of 45 consecutive days or, at the option of the State, such
period of not less than 30 and not more than 180 consecutive days as
the State may provide for in the State plan submitted pursuant to
section 402.
"(B) State authority to establish good cause exceptions.--The
State may establish such good cause exceptions to subparagraph (A) as
the State considers appropriate if such exceptions are provided for
in the State plan submitted pursuant to section 402.
"(C) Denial of assistance for relative who fails to notify state
agency of absence of child.--A State to which a grant is made under
section 403 shall not use any part of the grant to provide assistance
for an individual who is a parent (or other caretaker relative) of a
minor child and who fails to notify the agency administering the
State program funded under this part of the absence of the minor
child from the home for the period specified in or provided for
pursuant to subparagraph (A), by the end of the 5-day period that
begins with the date that it becomes clear to the parent (or
relative) that the minor child will be absent for such period so
specified or provided for.
"(11) Medical assistance required to be provided for certain families
having earnings from employment or child support.--
"(A) Earnings from employment.--A State to which a grant is made
under section 403 and which has a State plan approved under title XIX
shall provide that in the case of a family that is treated (under
section 1931(b)(1)(A) for purposes of title XIX) as receiving aid
under a State plan approved under this part (as in effect on July 16,
1996), that would become ineligible for such aid because of hours of
or income from employment of the caretaker relative (as defined under
this part as in effect on such date) or because of section
402(a)(8)(B)(ii)(II) (as so in effect), and that was so treated as
receiving such aid in at least 3 of the 6 months immediately
preceding the month in which such ineligibility begins, the family
shall remain eligible for medical assistance under the State's plan
approved under title XIX for an extended period or periods as
provided in section 1925 or 1902(e)(1) (as applicable), and that the
family will be appropriately notified of such extension as required
by section 1925(a)(2).
"(B) Child support.--A State to which a grant is made under
section 403 and which has a State plan approved under title XIX shall
provide that in the case of a family that is treated (under section
1931(b)(1)(A) for purposes of title XIX) as receiving aid under a
State plan approved under this part (as in effect on July 16, 1996),
that would become ineligible for such aid as a result (wholly or
partly) of the collection of child or spousal support under part D
and that was so treated as receiving such aid in at least 3 of the 6
months immediately preceding the month in which such ineligibility
begins, the family shall remain eligible for medical assistance under
the State's plan approved under title XIX for an extended period or
periods as provided in section 1931(c)(1).
"(b) Individual Responsibility Plans.--
"(1) Assessment.--The State agency responsible for administering the
State program funded under this part shall make an initial assessment of
the skills, prior work experience, and employability of each recipient of
assistance under the program who--
"(A) has attained 18 years of age; or
"(B) has not completed high school or obtained a certificate of
high school equivalency, and is not attending secondary school.
"(2) Contents of plans.--
"(A) In general.--On the basis of the assessment made under
subsection (a) with respect to an individual, the State agency, in
consultation with the individual, may develop an individual
responsibility plan for the individual, which--
"(i) sets forth an employment goal for the individual and a
plan for moving the individual immediately into private sector
employment;
"(ii) sets forth the obligations of the individual, which may
include a requirement that the individual attend school, maintain
certain grades and attendance, keep school age children of the
individual in school, immunize children, attend parenting and
money management classes, or do other things that will help the
individual become and remain employed in the private sector;
"(iii) to the greatest extent possible is designed to move
the individual into whatever private sector employment the
individual is capable of handling as quickly as possible, and to
increase the responsibility and amount of work the individual is
to handle over time;
"(iv) describes the services the State will provide the
individual so that the individual will be able to obtain and keep
employment in the private sector, and describe the job counseling
and other services that will be provided by the State; and
"(v) may require the individual to undergo appropriate
substance abuse treatment.
"(B) Timing.--The State agency may comply with paragraph (1) with
respect to an individual--
"(i) within 90 days (or, at the option of the State, 180
days) after the effective date of this part, in the case of an
individual who, as of such effective date, is a recipient of aid
under the State plan approved under part A (as in effect
immediately before such effective date); or
"(ii) within 30 days (or, at the option of the State, 90
days) after the individual is determined to be eligible for such
assistance, in the case of any other individual.
"(3) Penalty for noncompliance by individual.--In addition to any
other penalties required under the State program funded under this part,
the State may reduce, by such amount as the State considers appropriate,
the amount of assistance otherwise payable under the State program to a
family that includes an individual who fails without good cause to comply
with an individual responsibility plan signed by the individual.
"(4) State discretion.--The exercise of the authority of this
subsection shall be within the sole discretion of the State.
"(c) Nondiscrimination Provisions.--The following provisions of law shall
apply to any program or activity which receives funds provided under this
part:
"(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.).
"(2) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).
"(3) The Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.).
"(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et
seq.).
"(d) Aliens.--For special rules relating to the treatment of aliens, see
section 402 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996.
"SEC. 409. PENALTIES.
"(a) In General.--Subject to this section:
"(1) Use of grant in violation of this part.--
"(A) General penalty.--If an audit conducted under chapter 75 of
title 31, United States Code, finds that an amount paid to a State
under section 403 for a fiscal year has been used in violation of
this part, the Secretary shall reduce the grant payable to the State
under section 403(a)(1) for the immediately succeeding fiscal year
quarter by the amount so used.
"(B) Enhanced penalty for intentional violations.--If the State
does not prove to the satisfaction of the Secretary that the State
did not intend to use the amount in violation of this part, the
Secretary shall further reduce the grant payable to the State under
section 403(a)(1) for the immediately succeeding fiscal year quarter
by an amount eq