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Committee Reports

106th Congress (1999-2000)

House Report 106-182 - Part 1

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FOSTER CARE INDEPENDENCE ACT OF 1999

69-006

106TH CONGRESS

Rept. 106-182

HOUSE OF REPRESENTATIVES

1st Session

Part 1
FOSTER CARE INDEPENDENCE ACT OF 1999

June 10, 1999- Ordered to be printed
Mr. ARCHER, from the Committee on Ways and Means, submitted the following
REPORT
[To accompany H.R. 1802]
[Including cost estimate of the Congressional Budget Office]

CONTENTS Page
I. Introduction 18
A. Purpose and Summary
18
B. Background and Need for Legislation
19
C. Legislative History
19
II. Explanation of Provisions 20
III. Vote of The Committee 45
IV. Budget Effects of The Bill 45
A. Committee Estimate of Budgetary Effects
45
B. Statement Regarding New Budget Authority And Tax Expenditures
45
C. Cost Estimate Prepared by The Congressional Budget Office
45
V. Other Matters Required to Be Discussed Under The Rules of The House 58
A. Committee Oversight Findings And Recommendations
58
B. Summary of Findings And Recommendations of The Government Reform And Oversight Committee
58
C. Constitutional Authority Statement
58
VI. Changes in Existing Law Made by The Bill, as Reported 59

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

Sec. 1. Short title; table of contents.
TITLE I--IMPROVED INDEPENDENT LIVING PROGRAM
Subtitle A--Improved Independent Living Program
Sec. 101. Improved independent living program.
Subtitle B--Related Foster Care Provision
Sec. 111. Increase in amount of assets allowable for children in foster care.
Subtitle C--Medicaid Amendments
Sec. 121. State option of medicaid coverage for adolescents leaving foster care.
TITLE II--SSI FRAUD PREVENTION
Subtitle A--Fraud Prevention and Related Provisions
Sec. 201. Liability of representative payees for overpayments to deceased recipients.
Sec. 202. Recovery of overpayments of SSI benefits from lump sum SSI benefit payments.
Sec. 203. Additional debt collection practices.
Sec. 204. Requirement to provide State prisoner information to Federal and federally assisted benefit programs.
Sec. 205. Rules relating to collection of overpayments from individuals convicted of crimes.
Sec. 206. Treatment of assets held in trust under the SSI program.
Sec. 207. Disposal of resources for less than fair market value under the SSI program.
Sec. 208. Administrative procedure for imposing penalties for false or misleading statements.
Sec. 209. Exclusion of representatives and health care providers convicted of violations from participation in social security programs.
Sec. 210. State data exchanges.
Sec. 211. Study on possible measures to improve fraud prevention and administrative processing.
Sec. 212. Annual report on amounts necessary to combat fraud.
Sec. 213. Computer matches with medicare and medicaid institutionalization data.
Sec. 214. Access to information held by financial institutions.
Subtitle B--Benefits for Filipino Veterans of World War II
Sec. 251. Provision of reduced SSI benefit to certain individuals who provided service to the Armed Forces of the United States in the Philippines during World War II after they move back to the Philippines.
TITLE III--CHILD SUPPORT
Sec. 301. Elimination of hold harmless provision for State share of distribution of collected child support.
TITLE IV--TECHNICAL CORRECTIONS
Sec. 401. Technical corrections relating to amendments made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

TITLE I--IMPROVED INDEPENDENT LIVING PROGRAM

Subtitle A--Improved Independent Living Program

SEC. 101. IMPROVED INDEPENDENT LIVING PROGRAM.

`SEC. 477. INDEPENDENT LIVING PROGRAM.

retention, training in daily living skills, training in budgeting and financial management skills, substance abuse prevention, and preventive health activities (including smoking avoidance, nutrition education, and pregnancy prevention);

(b), the Secretary shall assess a penalty against the State in an amount equal to not less than 1 percent and not more than 5 percent of the amount of the allotment.

Subtitle B--Related Foster Care Provision

SEC. 111. INCREASE IN AMOUNT OF ASSETS ALLOWABLE FOR CHILDREN IN FOSTER CARE.

Subtitle C--Medicaid Amendments

SEC. 121. STATE OPTION OF MEDICAID COVERAGE FOR ADOLESCENTS LEAVING FOSTER CARE.

TITLE II--SSI FRAUD PREVENTION

Subtitle A--Fraud Prevention and Related Provisions

SEC. 201. LIABILITY OF REPRESENTATIVE PAYEES FOR OVERPAYMENTS TO DECEASED RECIPIENTS.

SEC. 202. RECOVERY OF OVERPAYMENTS OF SSI BENEFITS FROM LUMP SUM SSI BENEFIT PAYMENTS.

SEC. 203. ADDITIONAL DEBT COLLECTION PRACTICES.

SEC. 204. REQUIREMENT TO PROVIDE STATE PRISONER INFORMATION TO FEDERAL AND FEDERALLY ASSISTED BENEFIT PROGRAMS.

SEC. 205. RULES RELATING TO COLLECTION OF OVERPAYMENTS FROM INDIVIDUALS CONVICTED OF CRIMES.

SEC. 206. TREATMENT OF ASSETS HELD IN TRUST UNDER THE SSI PROGRAM.

`TRUSTS

from the earnings or additions could be made to or for the benefit of the individual.'.

SEC. 207. DISPOSAL OF RESOURCES FOR LESS THAN FAIR MARKET VALUE UNDER THE SSI PROGRAM.

SEC. 208. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR FALSE OR MISLEADING STATEMENTS.

`SEC. 1129A. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR FALSE OR MISLEADING STATEMENTS.

SEC. 209. EXCLUSION OF REPRESENTATIVES AND HEALTH CARE PROVIDERS CONVICTED OF VIOLATIONS FROM PARTICIPATION IN SOCIAL SECURITY PROGRAMS.

`EXCLUSION OF REPRESENTATIVES AND HEALTH CARE PROVIDERS CONVICTED OF VIOLATIONS FROM PARTICIPATION IN SOCIAL SECURITY PROGRAMS

SEC. 210. STATE DATA EXCHANGES.

SEC. 211. STUDY ON POSSIBLE MEASURES TO IMPROVE FRAUD PREVENTION AND ADMINISTRATIVE PROCESSING.

SEC. 212. ANNUAL REPORT ON AMOUNTS NECESSARY TO COMBAT FRAUD.

SEC. 213. COMPUTER MATCHES WITH MEDICARE AND MEDICAID INSTITUTIONALIZATION DATA.

SEC. 214. ACCESS TO INFORMATION HELD BY FINANCIAL INSTITUTIONS.

Subtitle B--Benefits for Filipino Veterans of World War II

SEC. 251. PROVISION OF REDUCED SSI BENEFIT TO CERTAIN INDIVIDUALS WHO PROVIDED SERVICE TO THE ARMED FORCES OF THE UNITED STATES IN THE PHILIPPINES DURING WORLD WAR II AFTER THEY MOVE BACK TO THE PHILIPPINES.

Chief, Southwest Pacific Area, or other competent military authority in the Army of the United States; and

TITLE III--CHILD SUPPORT

SEC. 301. ELIMINATION OF HOLD HARMLESS PROVISION FOR STATE SHARE OF DISTRIBUTION OF COLLECTED CHILD SUPPORT.

TITLE IV--TECHNICAL CORRECTIONS

SEC. 401. TECHNICAL CORRECTIONS RELATING TO AMENDMENTS MADE BY THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996.

I. INTRODUCTION

A. PURPOSE AND SCOPE

The Foster Care Independence Act of 1999 provides States with more funding and greater flexibility in carrying out programs designed to help children make the transition from foster care to self-sufficiency. The SSI Fraud Prevention provisions in Title II are designed to combat fraud in, and to improve the administration of the programs under Titles II (especially the disability program) and XVI of the Social Security Act, and to continue SSI benefits to Filipino veterans of the U.S. armed forces during World War II who move back to the Philippines. Title III contains a change in Federal funding of the Child Support Enforcement program eliminating the hold harmless provision that guarantees States a share of child support collections that are retained by the State at least equal to the share retained in 1995. Title IV of the bill contains several technical amendments to the 1996 welfare reform law (P.L. 104-193).

B. BACKGROUND AND NEED FOR LEGISLATION

The Federal Government now provides States with about $70 million per year to conduct programs for adolescents leaving foster care that are designed to help them establish independent living. Research and numerous reports from States conducting these programs indicate that adolescents leaving foster care do not fare well. As compared with other adolescents and young adults their age, they are more likely to quit school, to be unemployed, to be on welfare, to have mental health problems, to be parents outside marriage, to be arrested, to be homeless, and to be the victims of violence and other crimes.

After conducting hearings, talking with program administrators and adolescents who are in foster care and who have left foster care, and reviewing research and program information, the Committee prepared reform legislation. The central feature of the legislation would provide States with both a new framework and new resources to improve and expand their programs for adolescents likely to stay in foster care until age 18 and for young adults who have left foster care and are attempting to further their education or to work. States must make their own decisions about the optimum allocation of their funds between adolescents still in foster care and those who have left foster care, but the Committee expects that States will provide a fair share of their resources for young people who have aged out of foster care. The legislation would encourage States to provide Medicaid health insurance to 18, 19, and 20 year olds who have left foster care.

After two years of testimony, meetings with officials from the Social Security Administration and the General Accounting Office (GAO), and extensive consultations with groups interested in children's issues, the Committee has developed, on a bipartisan basis and in full cooperation with the Administration, legislation that would reduce fraud and administrative problems in both the Supplemental Security Income (SSI) program and the disability program conducted as part of the Social Security program. The SSI program has been on the General Accounting Office's list of programs that are at high risk for fraud and abuse. That this legislation addresses the concerns raised by GAO is indicated by the Congressional Budget Office estimate that the Committee bill will save taxpayers nearly a quarter of a billion dollars over 5 years.

C. LEGISLATIVE HISTORY

Committee bill

H.R. 1802 was introduced on May 13, 1999 by Chairman Nancy Johnson and ranking member, Ben Cardin of the Subcommittee on Human Resources. The Subcommittee on Human Resources considered H.R. 1802 and ordered it favorably reported to the full Committee, as amended, on May 20, 1999 by a voice vote, with a quorum present. The full Committee on Ways and Means considered the Subcommittee reported bill on May 26, 1999 and ordered it favorably reported, as amended, on Wednesday, May 26, 1999, by voice vote.

Legislative hearings

The Subcommittee on Human Resources held a hearing on May 13, 1999, to receive comments on H.R. 1802, the bipartisan legislation written by Chairman Johnson and Mr. Cardin. Testimony at the hearing was presented by scholars, program administrators, foundation executives, a Member of Congress, and individuals participating in programs designed to help adolescents in foster care achieve self-sufficiency through employment or post-secondary education. The Subcommittee also conducted a hearing on March 9, 1999, which included testimony from the Administration, child advocacy groups, program administrators, and former foster children.

The Committee bill also includes extensive provisions addressed to reducing fraud and abuse in the Supplemental Security Income (SSI) program. The Subcommittee on Human Resources held hearings on SSI fraud and abuse on April 21, 1998 and on February 3, 1999, which included testimony from Members of Congress, the Administration, a former Social Security claims

representative, organizations representing citizens with disabilities, and an organization representing Filipino veterans. On February 10, 1999, the Subcommittee ordered favorably reported to the full Committee on Ways and Means, as amended, H.R. 631, the `SSI Fraud Prevention Act of 1999,' which is now included as Title II of H.R. 1802, the `Foster Care Independence Act of 1999.'

II. EXPLANATION OF PROVISIONS

1. SHORT TITLE

Present law

No provision.

Explanation of provision

This Act may be cited as the `Foster Care Independence Act of 1999'.

Reason for change

Not applicable.

TITLE I. IMPROVED INDEPENDENT LIVING PROGRAM

SUBTITLE A: IMPROVED INDEPENDENT LIVING PROGRAM

1. FINDINGS

Present law

No provision.

Explanation of provision

The Committee bases its legislative proposal on four major findings. First, despite the fact that States must make reasonable efforts to reunify abused and neglected children with their families and, if this is not possible, must make reasonable efforts to place these children with adoptive families, some children may be neither reunified nor adopted. Such children should be enrolled in Independent Living programs designed by State and local governments to prepare them for employment, postsecondary education, and successful management of adult responsibilities. Second, about 20,000 adolescents leave foster care each year because they reach age 18. Third, adolescents leaving foster care have significant difficulty making the transition to independent living; they show high rates of homelessness, nonmarital childbearing, poverty, and delinquent or criminal behavior; they are also frequent targets of crime and physical assaults. Fourth, State and local governments, with financial support from the Federal government, should offer a program of education, training, employment, and financial support to young adults leaving foster care, with participation beginning long before high school graduation and continuing, as needed, until the young adult reaches age 21.

Reason for Change

The Committee includes these findings so that interested parties will be informed about the facts and issues that prompted the Committee to create an expanded and reformed Independent Living program.

2. PURPOSE

Present law

Payments are made under this section for the purpose of assisting States and localities in establishing and carrying out programs to help foster children make the transition from foster care to independent living. Eligible children must be at least 16 years old, and include: (1) children receiving foster care maintenance payments under Title IV-E (including those no longer eligible for Title IV-E because they have accumulated assets of up to $5,000); (2) at State option, other foster children under State responsibility; and (3) at State option, former foster children who are not yet 21 years old.

Explanation of provision

The purpose of the Independent Living Program is to provide States with funding to: (1) identify children likely to remain in foster care until age 18 and prepare them for transition to self-sufficiency by providing job preparation and preparation for post-secondary education; (2) help these adolescents receive the education, training, and services necessary to obtain employment; (3) help these adolescents prepare for postsecondary training and education; (4) provide personal and emotional support to these adolescents by use of mentors; and (5) provide financial, housing, and other assistance to former foster care recipients between ages 18 and 21 to complement their own efforts to achieve self-sufficiency.

Reason for change

The purposes of this legislation are specified in detail because they control how funds can be spent by States. Early identification of children who might remain in foster care until age 18, the first purpose of the bill, is essential if States are to develop programs that help these adolescents prepare for independence by age 18. The second and third purposes of preparing the adolescents for either (or both) work or post-secondary education are widely agreed by professionals, advocates, and researchers to be the major goals of all Independent Living programs. Unless adolescents in foster care are prepared either to work or enter post-secondary education, there is little hope that they will achieve independence and self-sufficiency. The fourth purpose of providing personal and emotional support through the use of mentors was revealed in testimony

before the Committee to be one of the most important, yet least achieved, goals of Independent Living programs. Without the personal support and advice, especially in times of trouble, that only a trusted adult can supply, adolescents will have a more difficult time mastering the transitions required to achieve independence. The final purpose of providing services to adolescents that are 18, 19, and 20 years old is included because the Committee believes nearly all young people who emancipate from foster care will continue to need help and guidance as they attempt to make the transition to self support.

3. APPLICATIONS

Present law

To receive funds under this section for any fiscal year, the State must submit to the Secretary of the Department of Health and Human Services (HHS), by February 1 of the preceding year, a description of the program, together with satisfactory assurances that the program will be operated in an effective and efficient manner and meet the requirements of this section.

Explanation of provision

States may apply for their allotment of funds for 5 years by submitting a written plan. The plan must specify which State agency will administer the Program. It must also include a description of how the State will: design and deliver programs to achieve the purposes of this section; ensure that all political subdivisions in the State are served; ensure that programs serve children of various ages and at various stages of achieving independence; involve the public and private sectors in helping adolescents in foster care achieve independence; use objective criteria to determine eligibility for benefits and services and ensure fair and equitable treatment; and cooperate in national evaluations of program effects. The plan must also contain certifications by the chief executive officer of the State that: services will be provided to young people who have left foster care but not attained age 21; not more than 30 percent of State funds will be spent on room and board for children who have left foster care and are between 18 and 21 years of age; no Federal money will be spent for room and board for children who are not yet 18; the State will provide training to foster parents to help children prepare for independent living; the State has consulted widely with public and private organizations to develop its plan and members of the public had at least 30 days to submit comments on the plan; the State will coordinate its Independent Living Program with other Federal and State programs for youth; Indian tribes in the State have been informed about the program, given an opportunity to comment on the plan, and will receive benefits and services under the program on the same basis as other children in the State; the State will ensure that adolescents accept personal responsibility for preparing for independence; the State has established procedures to prevent fraud and abuse in the program. The Secretary must approve a State plan if it has been submitted before June 30 of the calendar year in which the program begins and contains the explanations and certifications outlined above. States may at any time change their plan, but all changes must be consistent with Federal requirements for the Independent Living program and must be submitted to the Secretary within 30 days of implementation. Each State must make its plan and a brief summary of the plan available to the public.

Reason for change

The application procedure for Independent Living funds is changed for several reasons. First, to reduce administrative burden on both the States and the Federal government, we require updated proposals to be submitted by States only every 5 years. States may, however, amend their program at any time as long as they inform the Secretary within 30 days. Second, the Committee emphasizes the importance of States keeping the Secretary informed about the specific features of their program. This information is essential so that interested parties will know the types of programs receiving public support and for the purpose of program evaluation. Third, States must inform the public about their proposal and give the public time to react because interested parties have a right to be heard on the design of public programs. Fourth, States must agree to participate in the national evaluation to be conducted by the Secretary should their State program, or any substate program, be selected for inclusion in the evaluation. Fifth, States must include several certifications in their application. The certification is a method of expressing Federal intent to the States without being excessively prescriptive in telling States the specific types of programs they should conduct. In each of these certifications, the Committee expects States to pay due consideration to our concerns and to respond accordingly while developing and implementing their program. The certifications concern program features and goals about which there is substantial agreement among Members of Congress, program administrators at both the national and State level, and children's advocates. Finally, to ensure State flexibility in designing and implementing their Independent Living program, the Committee requires the Secretary to approve plans if they are complete and submitted in timely fashion.

4. ALLOTMENTS TO STATES

Present law

Federal funds ($70 million annually) are allocated among States on the basis of the average number of children in each State who received foster care maintenance payments under Title IV-E in fiscal year 1984, as compared with the total number of such children in all States. If a State does not submit the required program description and assurances by February 1 of the preceding fiscal year, the Secretary reallocates that State's share of funds for a particular fiscal year to one or more other States on the basis of relative need.

Explanation of provision

Each year, of the $140 million appropriated for this program, $2.1 million is set aside for program evaluation and technical assistance. The remaining $137.9 million is divided among the States in proportion to the number of children in each State who reside in foster care divided by the total number of children in the nation who reside in foster care. However, no State can receive less money than it received under the previous Independent Living program. Any funds allotted to a State in a given fiscal year that are not payable to the State are allotted to the other States in the next fiscal year using the same distribution formula as the formula for the basic State allotment.

Reason for change

The biggest change in this provision is that the amount of money available to States to conduct their Independent Living programs is approximately doubled. Based on research, testimony, and the direct experience of many observers, States simply do not now have enough funds to mount effective Independent Living programs. Moreover, States need additional funds because under the terms of this legislation, they must continue to help young people after they leave foster care and until they reach age 21. Money is set aside for evaluation because there is universal agreement that there is no scientific information available on whether programs have an impact on any of several outcomes such as high school graduation, enrollment in post-secondary education, employment, marriage, nonmarital births, or delinquent or criminal behavior.

The legislation updates the formula used to distribute funds by basing the calculation each year on the fraction of all children residing in foster care in the nation who reside in each State. The Secretary of HHS will use data from the most recent available year in making this calculation. Distributing Independent Living funds in proportion to a State's share of the nation's foster care caseload is based on the assumption that this number is highly correlated with the number of children aging out of foster care. The number of children in foster care in each State is also an appropriate datum to use because it is one of the few reliable child protection statistics available from every State.

5. USE OF FUNDS

Present law

Funds may be used to enable States to: help adolescents obtain a high school diploma or equivalent or receive vocational training; provide training in daily living skills, budgeting, locating and maintaining housing, and career planning; provide for individual and group counseling; integrate and coordinate otherwise available services; establish outreach programs to attract eligible participants; provide each participant with a written transitional independent living plan, based on an individual needs assessment and incorporated into the participant's foster care case plan; and provide participants with other services and assistance to improve their transition to independent living. Payments to States are in addition to amounts otherwise payable under Title IV-E, and must supplement and not replace any other funds available for the same general purposes. Funds may not be used to provide room or board.

Explanation of provision

Funds may be used in any manner that is reasonably calculated to accomplish the purpose of the Independent Living program (see `Purpose' above). Payments to States are in addition to amounts otherwise payable under Title IV-E. Funds must be used to supplement not supplant other funds available for the same general purpose in the State. Funds may not be used to provide room and board for children under age 18. However, States may use up to 30 percent of their funds to provide room and board for adolescents of ages 18, 19, and 20.

Reason for change

Unlike previous law, the Committee makes no attempt to enumerate the specific activities that are a legal use of funds under the Independent Living program. Rather, the Committee bill specifies the purposes of the program and leaves decisions about means up to State and local governments. In a nation as large and diverse as the United States, this approach makes more sense than trying to impose a single approach on every jurisdiction in the country. Furthermore, the Committee has observed that when States and localities design their own programs, they seem to be more committed to making sure the program is aggressively implemented and achieves its intended purposes. Unlike previous law, we are allowing States to use a portion of their money to pay for room and board for young people over age 18. We have made this change because consultation with program administrators and social workers revealed that housing support is one of the greatest needs of these young adults. The Committee strongly recommends that States use this new authority to provide partial subsidies for limited time periods to help these young people get established.

6. PENALTIES

Present law

No specific provision.

Explanation of provision

States are subject to penalty if they misuse funds or if they fail to submit the annual data report (see below). The penalty is loss of between 1 percent and 5 percent of a State's annual allotment based on the degree of noncompliance as judged by the Secretary.

Reason for change

Although States are given great flexibility under the Committee bill, there are two matters about which the Committee does not intend to grant flexibility. Specifically, States must keep the Federal government informed about their use of Federal dollars and they must submit annual data reports. The framework of our grant approach is that the Federal government will specify goals, provide funds, and encourage great flexibility of means, but in return the Committee expects States to use the money for its intended purpose, to keep us informed of the specific characteristics of their programs, and to supply information about outcomes. Not only is this approach a reasonable compromise between excessive Federal authority and a total lack of accountability, but descriptive information about program characteristics and outcomes is essential if the nation is to create intervention programs that provide effective assistance to these vulnerable young people. Moreover, the level of penalties ranges from modest to moderate so States that commit minor errors will incur penalties as low as 1 percent while States that commit repeated or serious infractions can be penalized as much as 5 percent. The Committee is confident the Secretary will use good judgment in selecting an appropriate level of penalty for each case.

7. DATA COLLECTION AND PERFORMANCE

Present law

By January 1 following the end of each fiscal year, each State must submit a report to the Secretary on programs funded during the fiscal year. The report must contain information necessary to provide an accurate description of the program, a complete record of the purposes for which funds were spent, and the extent to which the expenditure of funds succeeded in accomplishing the program's purpose.

Explanation of provision

The Secretary, in consultation with State and local officials, child welfare advocates, members of Congress, researchers, and others will develop outcome measures (including measures of education, employment, avoidance of dependency, homelessness, nonmarital childbirth, and high-risk behaviors) that can be used to assess State performance as well as data elements needed to track the number and characteristics of children receiving services under the Program, the type and quantity of services being provided, and State performance on outcome measures. The Secretary must also develop and implement a plan to collect the information. Within 12 months after enactment of this section, the Secretary must submit to the Committees on Ways and Means and Finance a report detailing the plans and a timetable for collecting State data.

Reason for change

The Committee originally intended to specify a detailed set of program and performance measures that States would be required to report annually. After consultation with experts and State welfare officials as represented by the American Public Human Services Administration, however, we decided to allow the Secretary to develop the final set of measures in consultation with Congress, researchers, State officials, and others. In this way, a wider audience can be consulted and the statute will permit adequate flexibility in developing the original set of measures as well as in adopting changes that may be needed in the future. Among other requirements, the most important is that States report outcome measures such as high school graduation, post-secondary education, employment, delinquency and crime, nonmarital births, and others. The Committee expects that the new data system will be put in place as quickly as possible so Congress can begin learning about State programs.

8. EVALUATIONS

Present law

By July 1, 1988, the Secretary was required to submit to Congress an interim report on activities conducted under this section; and by March 1, 1989, the Secretary was required to submit an evaluation of the use of independent living funds by States, containing a detailed description of the number and characteristics of participants, the activities conducted, the results achieved, and plans and recommendations for the future.

Explanation of provision

The Secretary must conduct evaluations of selected State programs that she judges to be innovative or of potential national significance. Evaluations must include information on program effects and must be based on rigorous scientific methods. A total of $2.1 million is available to the Secretary each year for evaluation and technical assistance. Outside evaluators may be used.

Reason for change

The Committee is granting extensive authority to the Secretary to design and conduct high quality evaluations. The Committee wants to know, first, whether States and localities can mount successful programs that increase post-secondary education and employment, that reduce levels of delinquency and crime, that reduce poverty, that reduce nonmarital births, and that produce other desirable outcomes identified by the Secretary, researchers, State officials, and others. Second, if good outcomes can be achieved, the Committee wants to know the program characteristics associated with these outcomes. To achieve these ends, the Secretary, either directly or by hiring outside evaluators, should identify potentially successful programs that hold promise for producing good outcomes and carefully evaluate these programs over a period of several years. Although the Secretary enjoys complete flexibility as to which programs to evaluate and for how many years, the Committee expects her to follow program graduates for several years and to obtain longitudinal data on their life situation. These data include, in addition to the measures mentioned above, marriage and divorce, cohabitation, stability of employment, number of children, income, use of welfare, and other measures selected by the Secretary in consultation with others. The Committee strongly urges the Secretary to decide who will conduct the evaluation, to select projects, to design the evaluation, and to begin collecting data within 18 months of passage.

9. PAYMENTS TO STATES

Present law

States are entitled to their share of $70 million annually, of which the first $45 million is defined as the `basic ceiling' (100% Federal funding) and the remaining $25 million is defined as the `additional ceiling' (50% Federal funding). Payments are made on an estimated basis in advance, are adjusted subsequently to account for errors in estimates, and must be spent by the State in the fiscal year for which they are paid or in the succeeding fiscal year.

Explanation of provision

States are entitled to payments based on the $137.9 million provided annually. States must provide a 20 percent match using State money. Payments are made quarterly. Federal payments are reduced in proportion to the amount by which States fail to provide their entire 20 percent match. Penalties assessed against a State are subtracted from their payments.

Reason for change

As explained previously, the Committee bill repeals the outdated and complicated method of distributing funds called for under current law by a straightforward method based on each State's share of the nation's foster care caseload using the most recent year for which reliable data are available. Given the doubling of the Federal government's financial commitment to this program, it seems reasonable to require States to provide a modest level of matching payments. If States do not put up the entire 20 percent match in a given year, the Secretary must proportionately adjust their Federal payment downward and then distribute the unused funds among the other States. In this way, only States that show a commitment to the program by using their own money will receive the maximum amount of Federal support.

10. REGULATIONS

Present law

The Secretary was required to promulgate final regulations to implement this section within 60 days of its enactment on April 7, 1986.

Explanation of provision

The Secretary must publish regulations within 12 months of enactment.

Reason for change

The Committee makes no assumptions about what specific regulations will be necessary. As in nearly all of the programs under our jurisdiction, we are confident the Secretary will develop any regulations that are necessary and will provide Congress and others with the opportunity to comment on an initial draft of such regulations.

11. SENSE OF THE CONGRESS

Present law

No provision.

Explanation of provision

States should provide Medicaid coverage to 18, 19, and 20 year olds who have been emancipated from foster care.

Reason for change

Because this group of young adults has higher than average needs for medical care, and especially for mental health services, the Committee wants States to cover as many 18, 19, and 20 year olds with Medicaid health insurance as possible. To provide States with more flexibility in fashioning these coverages, we have requested that the Commerce Committee amend the Medicaid statute so that States could cover various subgroups of these 18, 19, and 20 year olds (see Subtitle B below).

SUBTITLE B: RELATED FOSTER CARE PROVISION

SEC. 111. INCREASE IN AMOUNT OF ASSETS ALLOWABLE FOR CHILDREN IN FOSTER CARE

Present law

Foster care maintenance payments under Title IV-E may be made on behalf of otherwise eligible children who are removed from families that would have been eligible for Aid to Families with Dependent Children (AFDC) as it operated in their State on July 16, 1996. Under AFDC, families could not accumulate assets in excess of $1,000.

Explanation of provision

The Committee provision allows children to receive Federal foster care payments if they have resources of not more than $10,000.

Reason for change

Children in foster care have a special need for resources. Unlike children reared in families, these children often have little or no support from relatives. Thus, when they turn age 18 and are no longer eligible for government foster care payments, they are on their own. Under current law, these adolescents cannot accumulate more than $1,000 in assets and still remain eligible for Federal foster care payments. The Committee believes children in foster care should be allowed to accumulate a much higher level of assets to prepare for the day when they must support themselves. Thus, we are increasing the asset limit to $10,000.

SUBTITLE C: MEDICAID AMENDMENTS (WITHIN THE JURISDICTION OF THE COMMITTEE ON COMMERCE)

SEC. 121. STATE OPTION OF MEDICAID COVERAGE FOR ADOLESCENTS LEAVING FOSTER CARE

Present law

States have a variety of optional coverages under the Medicaid program, one of which is that they can cover young adults who are 18, 19 or 20 years old. However, States are limited in their ability to cover certain subgroups, such as former foster children, within each age group. Thus, in many States once adolescents leave foster care, they may no longer be eligible for Medicaid.

Explanation of provision

States will have the option of giving Medicaid coverage to former foster care children who are ages 18, 19, or 20. In addition, States could use means-testing to provide coverage only to youth who had income and resources established by each State as permitted under Section 1931(b) of current Medicaid law. Eligibility for Medicaid could also be limited to 18, 19, or 20 year olds who received support before their 18th birthday from the Federal program for Foster Care and Adoption Assistance.

Reason for change

Most young people are healthy and therefore may not use health care services. However, research shows that adolescents leaving foster care have significantly more health needs than other adolescents. Both testimony received by the Committee and research show that these adolescents are especially in need of mental health services. Thus, the Committee believes that young people leaving foster care should be covered by health insurance. However, the $350 million (over 5 years) pricetag of mandatory coverage cannot be supported by the financing mechanisms available to the Committee. As a result, the Committee bill makes Medicaid coverage optional for former foster care children.

However, to increase the probability that States will offer such coverage, we have requested that the Commerce Committee amend the Medicaid statute to permit States to cover only 18, 19, or 20 year olds who had been emancipated from foster care. Even within this group, States would be permitted to use means testing to offer care only to the poorest adolescents or to offer Medicaid only to children who received support from the Federal foster care program under Title IV-E of the Social Security Act (about half of all children emancipating from foster care).

Rough estimates indicate that there are about 65,000 young adults who are 18, 19, or 20 years old and have emancipated from foster care. About 40,000 of them now are eligible for coverage under various Medicaid options available to States; CBO estimates that of these 40,000 young people, about 22,000 actually are receiving Medicaid coverage. Under the Committee provision of creating a State option to provide coverage while simultaneously allowing States to cover only those aging out of foster care and even to cover certain subgroups within these age categories, the number of eligible young people is estimated to rise to 54,000 and of these, about 41,000 will actually receive coverage. In other words, the Committee bill increases actual coverage by around 19,000 young adults, from 22,000 to 41,000.

TITLE II. SSI FRAUD PREVENTION

SUBTITLE A: FRAUD PREVENTION AND RELATED PROVISIONS

SEC. 201. LIABILITY OF REPRESENTATIVE PAYEES FOR OVERPAYMENTS TO DECEASED RECIPIENTS

Present law

SSI regulations state that representative payees must report the death of the SSI recipient they represent as well as the death of anyone living in the household of the person they represent. The law and regulations are silent with respect to what happens to the representative payee if she fails to report this information.

Explanation of provision

Representative payees in either the SSI or Social Security programs who do not return payments made after the death of a beneficiary must be held liable for repayment.

Reason for change

Individuals who willingly accept money that is not legally theirs by cashing checks intended for deceased recipients have both a legal and an ethical responsibility to repay the money.

SEC. 202. RECOVERY OF OVERPAYMENTS OF SSI BENEFITS FROM LUMP SUM SSI BENEFIT PAYMENTS

Present law

SSI law limits the recovery by the Social Security Administration of overpayments made to SSI recipients. The amount of recovery in any month is limited to the lesser of: (1) the amount of the benefit for that month, or (2) an amount equal to 10 percent of the countable income (including the SSI payment) of the individual or couple for that month. This limitation does not apply if there is fraud, willful misrepresentation, or concealment of information in connection with the overpayment. The recipient may request a higher or lower rate at which benefits may be withheld to recover the overpayment.

The Commissioner of Social Security may waive recovery of an overpayment if the overpaid individual was without fault in connection with the overpayment and adjustment or recovery of the overpayment would either defeat the purpose of the SSI program, be against equity and good conscience, or impede efficient or effective administration of the SSI program due to the small amount involved.

Explanation of provision

The Social Security Administration must offset lump sums by at least 50 percent to recover prior SSI overpayments, subject to existing waiver authority.

Reason for change

Individuals who accept overpayments should be held accountable for repaying all the money that is in excess of the correct amount of their benefits. Offsetting lump-sum payments by at least 50 percent is an efficient way to collect this money owed to Social Security taxpayers. Moreover, lump sum payments often provide recipients with substantial sums of money at one time, thereby easing the burden of making a sizable payment on the money they owe the Social Security Administration.

SEC. 203. ADDITIONAL DEBT COLLECTION PRACTICES

Present law

The primary methods by which repayment of overpayments are obtained from persons no longer receiving SSI are voluntary repayment agreements, offsets against Social Security (Title II) benefits, and offsets against a person's Federal income taxes.

Explanation of provision

SSA may use credit bureau reports, debt collection (including by private debt collection agencies), state and Federal intercepts, and other means deemed effective by the SSA Commissioner to facilitate collection of overpayments.

Reason for change

Although offsetting debts against Social Security is a worthwhile collection method, many people who owe money to the Supplemental Security Income program do not receive Social Security benefits. Therefore, the legislation provides for the additional collection methods now available under the Social Security programs. The methods included here have proven effective in other programs, especially the child support enforcement program.

SEC. 204. REQUIREMENT TO PROVIDE STATE PRISONER INFORMATION TO FEDERAL AND FEDERALLY ASSISTED BENEFIT PROGRAMS

Present law

The 1996 welfare reform law (P.L. 104-193) stipulates that the Commissioner of Social Security must enter into a contract with any interested State or local institution (prison, jail, mental hospital, etc.), under which the institution must provide to the Commissioner on a monthly basis the names, Social Security numbers, dates of birth, and other information concerning the residents of the institution. This information is used to help the Commissioner enforce the `prohibition of payments to residents of public institutions' rule. If fraudulent SSI payments are discovered by matching the prisoner information with the SSI rolls, the Commissioner must pay the reporting institution up to $400 for each inmate if the information is provided to the Commissioner within 30 days after such individual becomes a resident or up to $200 for each resident if the information is provided after 30 days but within 90 days of the person becoming a resident.

The 1996 law also authorizes the Commissioner of Social Security to provide, on a reimbursable basis, information obtained pursuant to the agreements to any Federal or Federally-assisted cash, food, or medical assistance program for eligibility purposes.

Explanation of provision

SSA must share its prisoner database with other Federal departments and agencies to prevent the continued payment of other fraudulent benefits (e.g. food stamps, veterans' benefits, unemployment, and education aid) to prisoners.

Reason for change

The prisoner provisions of the 1996 welfare reform law have generated savings greatly in excess of those estimated by the Congressional Budget Office, in part because a surprising number of prisoners had managed to obtain SSI benefits. There is not good information on how many prisoners receive other Federal benefits, but it is likely that many do. The SSA database on prisoners, which will eventually include fugitive felons as well, could be used to find out how many prisoners are receiving benefits for which they are not qualified, to terminate these benefits, and perhaps to save substantial sums of money.

SEC. 205. RULES RELATING TO COLLECTION OF OVERPAYMENTS FROM INDIVIDUALS CONVICTED OF CRIMES

Present law

The Commissioner of Social Security may waive recovery of an overpayment if the overpaid individual was without fault in connection with the overpayment and adjustment or recovery of the overpayment would either defeat the purpose of the SSI program, be against equity and good conscience, or impede efficient or effective administration of the SSI program due to the small amount involved.

Explanation of provision

Individuals must repay overpayments arising from their status as fugitives and prisoners (thus, SSA may not grant them a hardship waiver of collections). Failure by fugitives or past prisoners to disclose to SSA at the time of reapplication their prior receipt of benefits while a prisoner or a fugitive, or to agree to and abide by a repayment schedule that provides for at least a 10 percent monthly offset of their current benefits, will result in a 10 year loss of eligibility. SSA must continue overpayment collection efforts while prisoners are in jail.

Reason for change

Prisoners who receive Social Security payments or SSI payments are deliberately breaking the law. There is no justification for providing a waiver to allow them to avoid repaying the taxpayers who support the Social Security trust fund or the general revenues that pay SSI benefits. Moreover, if such prisoners apply for Social Security or SSI in the future, there should be a well-defined arrangement stipulating how the debt will be repaid. If the former prisoner knowingly fails to notify SSA that they owe money to the system or fails to agree to a repayment schedule, a sharp penalty should result.

SEC. 206. TREATMENT OF ASSETS HELD IN TRUST UNDER THE SSI PROGRAM

Present law

SSI regulations define resources as cash or other liquid assets, or any real or personal property (with some exceptions such as the value of a residence) that an individual (or spouse) owns and could convert to cash to be used for support and maintenance (i.e., for food, clothing, or shelter). Assets placed in a trust in which individuals have no ownership and to which they have no access no longer meet the definition of a resource for SSI purposes. Thus, such a trust is not counted as a resource in determining SSI eligibility.

In addition, the 1996 welfare reform law (P.L. 104-193) requires that parents establish an account for children who receive large past-due SSI payments. The account is to be disregarded in determining SSI eligibility (i.e., not counted as a resource or income) and to be used only for such purposes as education, job skills training, personal needs assistance, special equipment, housing modification, medical treatment, therapy or rehabilitation, or any other item or service deemed appropriate by the Commissioner of Social Security.

Explanation of provision

Trusts would be considered a resource in determining SSI eligibility (subject to recipient protections similar to those currently required under Medicaid law).

Reason for change

A principle underlying virtually all Federal welfare programs is that recipients meet a test of low income and low assets. This income and asset determination is essential because the very justification for welfare programs is that they provide assistance to people who lack income and resources. Thus, to allow individuals to protect resources in a trust that could be used to meet their needs violates the principle of welfare. There is also an issue of horizontal equity here because Medicaid, one of the biggest and most important welfare programs, requires that assets held in trust be counted as a resource. The Committee provision is especially fair because exemptions, like those in Medicaid law, are included.

SEC. 207. DISPOSAL OF RESOURCES FOR LESS THAN FAIR MARKET VALUE UNDER THE SSI PROGRAM

Present law

SSI law requires the Commissioner of Social Security to inform SSI applicants and recipients that Medicaid law provides for a period of ineligibility of Medicaid benefits for individuals who dispose of resources for less than fair market value. (P.L. 100-360, enacted in 1988, repealed the SSI provision that required that the uncompensated value of resources transferred for less than fair market value be counted for 24 months after disposal in determining whether the individual meets the SSI resource requirements.)

Medicaid law stipulates that States are required to determine whether an institutionalized individual transferred resources for less than fair market value within the previous 36 months. If such a transfer has occurred, the individual may be ineligible for certain Medicaid services (i.e., Medicaid-covered home, nursing home, or community-based services) for up to 36 months. The period of ineligibility for covered services is equal to the uncompensated value of the transferred resource divided by the average monthly cost of nursing services as determined by the State.

Explanation of provision

SSI applicants that have disposed of resources for less than fair market value within 36 months before application will have their benefit reduced for the period of time equal to the uncompensated value of the transferred resource divided by the maximum monthly SSI benefit and any State supplementary payments. The maximum length of benefit loss is 36 months.

Reason for change

The logic of this provision is similar to that for trusts; namely, that a basic principle of all Federal welfare programs is that benefits are reserved for those who have limited income and resources. If individuals deliberately dispose of valuable assets at less than their fair market value `often by `selling' them to friends or relatives--in order to meet the assets test for a Federal welfare program, that individual should not be allowed to participate in the welfare program until taxpayers have been compensated for an amount equal to the difference between the amount for which the individual disposed of the asset and the fair market value of the asset. Again, similar to the case of trusts, equity issues are also involved here because Medicaid law already contains a provision protecting taxpayers against applicants who dispose of assets for less than fair market value.

SEC. 208. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR FALSE OR MISLEADING STATEMENTS

Present law

Social Security and SSI law stipulate that anyone who knowingly and willfully makes or causes to be made any false statements or misrepresentations in applying for or continuing to receive Social Security or SSI payments shall be fined under Title 18 of the U.S. Code, imprisoned for not more than 5 years, or both.

Federal law also provides that any person who makes, or causes to be made, a statement or representation of a material fact for use in any initial or continuing review of an individual's eligibility for Social Security (Title II) or SSI benefits that the person knows or should know is false or misleading or omits a material fact or makes such a statement with knowing disregard for the truth is subject to a civil penalty of not more than $5,000 for each such statement or representation plus up to twice the value of the amount paid fraudulently.

Explanation of provision

This provision creates a new SSA administrative procedure designed to penalize individuals who have provided false or misleading information to SSA in order to qualify for benefits, especially in cases now considered to involve overpayments too small to take to court. The new

procedure would apply to false or misleading statements in either the SSI program (Title XVI) or the various Social Security benefits paid under Title II. If individuals have attempted to gain or increase benefits through false or misleading statements, they could be barred from eligibility, with increasing penalties (6 months of ineligibility for first offense, 12 months for second, 24 months for third). Recipients who lose their benefits due to this new procedure retain any Medicaid or Medicare benefits to which they are entitled, and individuals may appeal adverse decisions.

Reason for change

There are a moderate number of cases in which applicants or recipients for Social Security benefits or SSI appear to have made false or misleading statements. In many of these cases, the amount of benefit overpayment is too small to justify a court proceeding. This new administrative procedure will make it possible for SSA officials to efficiently impose penalties in these cases by withholding benefits. The right of individuals to appeal these decisions is assured in the statute.

SEC. 209. EXCLUSION OF REPRESENTATIVES AND HEALTH CARE PROVIDERS CONVICTED OF VIOLATIONS FROM PARTICIPATION IN SOCIAL SECURITY PROGRAMS

Present law

No provision. However, Federal law bars individuals and entities that are convicted of fraud under Federal or State law in connection with Medicare or State health care programs from future participation in those programs.

Federal law also provides that any person who makes, or causes to be made, a statement or representation of a material fact for use in any initial or continuing review of an individual's eligibility for Social Security (Title II) or SSI (Title XVI) benefits that the person knows or should know is false or misleading or incomplete with knowing disregard for the truth is subject to a civil penalty of not more than $5,000 for each such statement or representation plus up to twice the value of the amount paid fraudulently.

Explanation of provision

Representatives and health care providers convicted of fraud involving SSI eligibility determinations are barred from further program participation for at least 5 years (10 years for a second conviction; permanently for a third).

Reason for change

Professionals and others who play a role in helping individuals apply for Social Security and SSI have a special responsibility to maintain high standards of truthfulness. The evidence, opinion, advice, and recommendations they provide are often crucial in the eligibility determination process. Thus, any such representative or health care provider who gives false or misleading information or otherwise commits fraud as part of eligibility determination must be subject to serious penalties. This is especially the case since experience shows that some of these individuals commit fraud in many cases, thereby resulting in substantial sums of money being paid fraudulently to numerous recipients. Excluding these individuals from participating in the eligibility determination process for many years is therefore entirely justified. The amendment contains provision for review and appeal of these decisions.

SEC 210. STATE DATA EXCHANGES

Present law

No provision.

Explanation of provision

To facilitate data sharing with States, SSA standards on data privacy are deemed to meet all State standards for sharing data.

Reason for change

The exchange of information stored in government data bases is one of the most fundamental and important approaches to fraud detection and reduction. To ensure that the Federal government has access to information in State data bases for the purpose of fraud detection, Federal rules on data safeguards, which are quite stringent, are assumed to meet the protections provided by State rules. In addition to facilitating the exchange of information between States and the Federal government, this provision gives legal protection to the State organizations and individuals who respond to Federal requests for data.

SEC 211. STUDY ON POSSIBLE MEASURES TO IMPROVE FRAUD PREVENTION AND ADMINISTRATIVE PROCESSING

Present law

No provision.

Explanation of provision

The SSA Commissioner, in consultation with the SSA Inspector General and the Attorney General, must study and report to the Committees on Ways and Means and Finance within a year on legislative and administrative reforms to prevent SSI/DI fraud, and on administrative reforms that would improve the timely processing of income changes reported by recipients.

Reason for change

In meetings between SSA staff, the SSA Inspector General's staff, and staff of the Committee

on Ways and Means, as well as in testimony presented to the Committee by the Inspector General, it is clear that SSA and the Inspector General are constantly generating ideas about ways to combat fraud. In fact, most of the provisions of this legislation originated with SSA or the Inspector General. Inevitably, given the rigors of the legislative process, some of the ideas they have already generated were not incorporated into this legislation. The purpose of this provision is to capture these and new ideas and provide the Committee with another opportunity to determine whether some of them can be enacted by Congress to reduce fraud and abuse in the nation's primary disability program. In addition, the Committee has received testimony expressing the concern that some overpayments may be due to reported income changes not being processed by SSA in a timely fashion. The Committee is interested in SSA's recommendations about how this problem might be addressed.

SEC. 212. ANNUAL REPORT ON AMOUNTS NECESSARY TO COMBAT FRAUD

Present law

No provision.

Explanation of provision

The Commissioner must include in the annual SSA budget an itemization of the funds needed to combat SSI/DI fraud by applicants and beneficiaries.

Reason for change

In considering the SSA budget, Congress should always have specific information on how much SSA intends to spend on anti-fraud activities. Further, if SSA thinks additional funds are needed to finance opportunities to further reduce fraud, Congress should have the opportunity to consider providing additional funds for this purpose. This approach of appropriating additional administrative funds so that an SSA activity can produce additional savings has already worked well in the case of continuing disability reviews in the SSI program. There is no reason it cannot work just as well in the case of fraud.

SEC. 213. COMPUTER MATCHES WITH MEDICARE AND MEDICAID INSTITUTIONALIZATION DATA

Present law

No provision. However, SSI recipients, or their representative payees, are required to report to SSA any change in the recipient's status (e.g., income, resources, living arrangements) that may affect the amount of benefits to which the recipient is entitled. Beginning October 1, 1995, Federal law required each administrator of a nursing home, extended care facility, or intermediate care facility to report to SSA the admission of any SSI recipient within two weeks of the recipient's admission, so that SSA can make timely adjustments in the amount of the recipient's SSI benefit.

Explanation of provision

SSA must conduct periodic comparisons between Medicaid and Medicare data and SSI rolls to ensure that nursing home residents are not receiving incorrect benefits.

Reason for change

There is already considerable savings in the SSI program from the reduction in cash benefits that occurs when recipients enter an institution. However, SSA either does not know about every SSI recipient who enters an institution or SSA does not find out about the admission until several months after it has occurred. Thus, more effective and rapid means of informing SSA about SSI recipients who enter institutions will produce still greater savings.

SEC. 214. ACCESS TO INFORMATION HELD BY FINANCIAL INSTITUTIONS

Present law

No provision.

Explanation of provision

As a condition of eligibility, applicants for or recipients of SSI may be required to authorize SSA to obtain financial information from banks, savings and loan companies, and other financial institutions that will assist in determining the individual's eligibility for and amount of benefits.

Reason for change

This provision may improve the amount and timeliness of information available to SSA to determine the total amount of resources available to applicants and recipients. More complete information on which to base eligibility determinations will ensure that only people who actually meet SSI requirements are awarded benefits.

SUBTITLE B: BENEFITS FOR FILIPINO VETERANS OF WORLD WAR II

SEC. 251. PROVISION OF REDUCED SSI BENEFIT TO CERTAIN INDIVIDUALS WHO PROVIDED SERVICE TO THE ARMED FORCES OF THE UNITED STATES IN THE PHILIPPINES DURING WORLD WAR II AFTER THEY MOVE BACK TO THE PHILIPPINES

Present law

Section 107 of P.L. 79-301, enacted February 18, 1946, provides that service in the armed forces of the Commonwealth of the Philippines, or the Philippine Scouts `. . . shall not be deemed to be or to have been service [in U.S. Armed Forces] for the purposes of any law . . .'. Thus, Filipino veterans are not qualified for most veterans' benefits, including pensions. Many do receive SSI payments as elderly or disabled citizens or qualified aliens. Currently, the SSI

maximum benefit is equal to $500 per month (the VA pension benefit is equal to $731 per month). Individuals can receive SSI benefits overseas only if they are a resident of the Northern Mariana Islands, a child of a person in the military stationed outside the United States, or a student temporarily studying abroad.

Explanation of provision

Certain Filipino veterans of the U.S. armed forces in World War II would be eligible for continued SSI benefits, even if they moved back to the Philippines. Such veterans would, however, receive a benefit equal to 75 percent of their regular SSI benefit.

Reason for change

According to information made available to the Committee through testimony and personal correspondence, there are many Filipino veterans of World War II now drawing SSI benefits who would like to spend their few remaining years at home in the Philippines. However, under current law they are not allowed to receive SSI unless they continue to reside in the U.S. Because these Filipinos fought for the United States in World War II, and because they are willing to accept a slightly smaller benefit (25 percent reduction) if they return to the Philippines, the Committee is willing to make an exception to the general rule that only residents of the U.S. can receive SSI benefits. This opportunity is strictly limited, however, only to those currently receiving SSI benefits and only to veterans of World War II.

TITLE III. CHILD SUPPORT

SEC. 301. ELIMINATION OF HOLD HARMLESS PROVISION FOR STATE SHARE OF DISTRIBUTION OF COLLECTED CHILD SUPPORT

Present law

The share of child support collections retained by each State in a fiscal year must be equal to or greater than the amount it retained in FY 1995. Following the end of each fiscal year, the Office of Child Support Enforcement compares each State's share of child support collections for that year to the State share reported for FY 1995. If the current year State share is greater than the 1995 State share, no further action is taken. If the 1995 State share is greater than the current year State share, a child support enforcement `hold harmless' grant award is issued to the State for the difference.

Explanation of provision

The provision in Federal law is repealed that requires the Federal government to ensure that States receive at least as much money each year as the amount they obtained in 1995 from retained child support collections.

Reason for change

The Child Support Enforcement program was authorized by Congress in 1975 primarily to collect money from fathers whose children were on welfare and thereby received support from taxpayers. Over the years, the child support program has been broadened to include enforcement of most child support cases, regardless of current or previous welfare status.

Table 1 summarizes information about how the child support program is financed. The first three columns show the three primary sources of revenue that finance the State programs. The first column is administrative reimbursements from the Federal government. Nearly all authorized State expenditures on child support program activities are reimbursed at the rate of 66 percent by the Federal Government (a few are financed at 80 percent or 90 percent). The second column is the State share of retained child support collections; this category includes both payments by noncustodial parents while the custodial parent and children are receiving welfare payments and certain payments on arrearages after the family has left the welfare rolls. In former welfare cases, collections on arrearages are split, in accord with a complicated set of rules, between State government, the Federal government, and the family. The 1996 State share of retained collections is the information presented in the second column. The third column is Federal incentive payments to States. Based on legislation enacted in 1998, the new terms of Federal incentive payments are now being implemented. When fully implemented, States will be provided with higher payments based on their performance in establishing paternity, establishing support orders, collections on both current payments and arrearages, and cost-effectiveness. The new incentive system was constructed in such a way that States in aggregate were estimated to receive the same total amount of money that they received under the previous incentive system. 

TABLE 1- FINANCING OF THE FEDERAL/STATE CHILD SUPPORT ENFORCEMENT PROGRAM,  FISCAL YEAR 1996
[In thousands of dollars]
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
State                                      State income                                                       State administrative expenditures (costs) State net Collections-to-costs ratio 
                        Federal administrative payments State share of collections Federal incentive payments                                                                                
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   Alabama                                      $31,161                     $5,737                     $3,548                                   $46,314  ($5,868)                       3.41 
   Alaska                                        11,517                      8,085                      2,973                                    17,439     5,136                       3.31 
   Arizona                                       31,177                      6,647                      3,842                                    46,909   (5,244)                       2.41 
   Arkansas                                      19,048                      4,163                      3,195                                    28,669   (2,263)                       2.77 
   California                                   293,731                    222,548                     66,752                                   437,991   145,040                       2.36 
   Colorado                                      25,399                     15,001                      5,590                                    38,361     7,628                       2.82 
   Connecticut                                   29,035                     12,645                      7,086                                    43,027     5,740                       2.91 
   Delaware                                       9,941                      3,393                      1,112                                    14,168       279                       2.50 
   District of Columbia                           7,731                      2,526                      1,103                                    11,696     (336)                       2.38 
   Florida                                       86,999                     30,216                     13,501                                   131,363     (647)                       3.13 
   Georgia                                       45,496                     16,780                     15,110                                    68,505     8,881                       3.92 
   Guam                                           1,744                        289                        281                                     2,624     (310)                       2.57 
   Hawaii                                        16,113                      5,396                      1,758                                    23,907     (640)                       2.18 
  Idaho                                          12,535                      2,942                      1,961                                    18,928   (1,490)                       2.32 
   Illinois                                      68,905                     28,513                     10,691                                   103,803     4,304                       2.41 
   Indiana                                       21,416                     14,186                      7,658                                    30,091    13,170                       6.54 
   Iowa                                          19,209                     12,911                      6,319                                    29,048     9,391                       5.23 
   Kansas                                        12,296                     10,704                      5,265                                    18,489     9,776                       5.82 
   Kentucky                                      27,927                      9,646                      5,514                                    42,210       877                       3.43 
   Louisiana                                     23,058                      6,266                      4,270                                    34,495     (900)                       4.16 
  Maine                                          10,224                      9,459                      4,907                                    15,435     9,155                       4.05 
   Maryland                                      43,688                     19,120                      6,540                                    66,017     3,332                       4.36 
   Massachusetts                                 40,626                     30,494                      9,828                                    61,286    19,662                       4.05 
   Michigan                                      94,572                     60,098                     22,323                                   143,132    33,860                       6.63 
   Minnesota                                     48,457                     25,680                      9,017                                    73,195     9,960                       4.36 
   Mississippi1                                   9,522                      3,959                      3,553                                    29,463   (2,430)                       2.87 
   Missouri                                      52,173                     22,161                      9,635                                    74,419     9,549                       3.75 
   Montana                                        8,038                      2,122                      1,326                                    12,120     (634)                       2.42 
   Nebraska                                      20,007                      3,964                      1,750                                    30,179   (4,457)                       3.16 
   Nevada                                        14,782                      3,737                      2,279                                    22,346   (1,548)                       2.53 
   New Hampshire                                  9,377                      4,518                      1,539                                    14,091     1,343                       3.42 
   New Jersey                                    73,147                     39,238                     12,698                                   110,735    14,348                       4.52 
   New Mexico                                    15,914                      1,344                        975                                    21,129   (2,896)                       1.43 
   New York                                     115,020                     79,891                     28,461                                   174,183    49,188                       4.03 
   North Carolina                                59,282                     20,653                     10,732                                    89,147     1,521                       2.94 
   North Dakota                                   4,352                      1,662                        990                                     6,563       441                       4.34 
   Ohio                                         106,594                     41,141                     17,008                                   161,618     3,125                       6.07 
   Oklahoma                                      16,968                      6,674                      3,666                                    24,040     3,269                       3.06 
   Oregon                                        21,129                     10,544                      5,480                                    31,874     5,278                       5.60 
   Pennsylvania                                  82,784                     49,576                     18,619                                   123,808    27,171                       7.74 
   Puerto Rico                                   19,504                        291                        372                                    28,569   (8,401)                       4.44 
   Rhode Island                                   5,451                      6,839                      3,262                                     8,251     7,300                       4.31 
   South Carolina                                23,296                      6,797                      4,154                                    35,100     (853)                       3.37 
   South Dakota                                   3,173                      1,936                      1,399                                     4,770     1,738                       5.87 
   Tennessee                                     26,165                     10,195                      5,328                                    39,342     2,347                       4.06 
  Texas                                          96,614                     32,915                     15,873                                   144,984       418                       3.71 
   Utah                                          19,497                      5,136                      3,217                                    29,170   (1,321)                       2.66 
   Vermont                                        4,467                      2,602                      1,346                                     6,701     1,714                       3.79 
   Virgin Islands                                 1,597                         94                         67                                     2,418     (660)                       2.25 
   Virginia                                      40,844                     18,475                      5,988                                    61,507     3,800                       4.18 
   Washington                                    76,319                     49,348                     16,449                                   115,322    26,795                       3.53 
   West Virginia                                 15,578                      3,230                      2,065                                    23,358   (2,484)                       3.61 
   Wisconsin                                     50,394                     19,115                     10,659                                    74,058     6,110                       5.94 
   Wyoming                                        5,575                      1,835                        647                                     8,455     (398)                       2.96 
Nationwide                                    2,039,569                  1,013,437                    409,681                                 3,054,821   407,866                       3.93 
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These three sources of funding produced a total of $3.46 billion for States in 1996, the most recent year for which complete data are available. Because States spent only $3.05 billion conducting their child support programs in that year, they enjoyed a positive net revenue flow of nearly $408 million. Indeed, as shown in Table 2, States have enjoyed a positive net revenue flow every year the child support program has been in operation. By contrast, the Federal government has always paid more money into the program than it has received back. In 1996, for example, while States were clearing over $400 million on the program, the Federal government invested a net total of $1.152 billion in the program (Table 2). 

TABLE 2- FEDERAL AND STATE SHARE OF CHILD SUPPORT `SAVINGS,' FISCAL YEARS 1979-96
[In millions of dollars]
------------------------------------------------------------------------------------------------------------------------
Fiscal year        Federal share of child support savings 1  State share of child support savings Net public savings 1  
------------------------------------------------------------------------------------------------------------------------
1979                                                    -$43                                 $244                  $201 
1980                                                    -103                                  230                   127 
1981                                                    -128                                  261                   133 
1982                                                    -148                                  307                   159 
1983                                                    -138                                  312                   174 
1984                                                    -105                                  366                   260 
1985                                                    -231                                  317                    86 
1986                                                    -264                                  274                     9 
1987                                                    -337                                  342                     5 
1988                                                    -355                                  381                    26 
1989                                                    -480                                  403                   -77 
1990                                                    -528                                  338                  -190 
1991                                                    -586                                  385                  -201 
1992                                                    -605                                  434                  -170 
1993                                                    -740                                  462                  -278 
1994                                                    -978                                  482                  -496 
1995                                                  -1,274                                  421                  -853 
1996 (preliminary)                                    -1,152                                  407                  -745 
------------------------------------------------------------------------------------------------------------------------

The Committee does not argue that the Federal investment in child support enforcement lacks merit. On the contrary, the Committee believes these Federal dollars are wisely invested. To take 1996 as an example, the net sum of $1.152 billion invested in this program by the Federal government produced total child support collections of over $12 billion, most of which went to families to support children. The Committee does argue, however, that there should be a more equal sharing of program costs between the Federal government and the States. Those who oppose this view must explain why the Federal government should always spend more on the program than the States. The Committee proposal on the hold harmless provision moves in this direction by reducing Federal spending by about $50 million in the early years, with a gradual decline to $15 million in the 10th year. This amount is much lower than the positive net revenue flow enjoyed by States in 1996.

Because States were concerned that they would lose money by transferring part of the State share of collections to families leaving welfare, the Committee agreed to a provision that, when fully implemented, had the effect of allowing States and the Federal government to retain approximately half of the collections on arrearages and the family to receive approximately half of the collections on arrearages (current support payments go entirely to the family once the family leaves welfare). In this way, the loss of revenue to States would be cut by approximately half. Furthermore, States were relieved of the obligation to pay the first $50 of child support to families while they are on welfare. Given the profitability of the child support program to the States, this compromise was disputed by many Members of the Committee because, in their view, States could afford to spend some of their positive cash flow on families leaving welfare. Nonetheless, the Committee agreed to this part of the compromise.

Despite this compromise, States still insisted on a guarantee that if their share of collections declined at all, relative to 1995, the Federal government would make up the difference through the hold harmless provision. Although strongly disputed by the Committee, the hold harmless provision became part of the welfare reform legislation.

The Committee argument that States can afford to share more collections with welfare families has been greatly strengthened since enactment of the 1996 welfare reform law because States have experienced substantial declines in welfare enrollment. Given that the 1996 legislation provided States with fixed Federal funding through the Temporary Assistance for Needy Families (TANF) block grant, these declining welfare caseloads are now resulting in large TANF surpluses for States. According to the Congressional Budget Office, by the end of fiscal year 1999 States will have over $6 billion ($3 billion of which has been obligated) in unused TANF funds. By the end of 2003, under CBO projections the TANF surplus will grow to more than $24 billion. Thus, even if States do lose a share of their collections in welfare cases because the new Federal rule requires them to share part of the collections with families leaving welfare, the State loss is being more than offset by State savings in welfare expenditures.

A broader issue in play here is the impact of the current decline in the welfare rolls on child support financing. Given that the typical state gets about 30 percent of the money it uses to run its child support program from retained collections in welfare cases (see Table 1), changes in the welfare caseload may be portentous for the future financing of State child support programs. In the long run, fewer welfare cases may mean lower collections and therefore a hole in State child support budgets. On the other hand, the 1996 welfare reform law made major changes in the child support program that are expected to substantially increase collections and efficiency. These two developments associated with welfare reform--the declining welfare caseload and the increased effectiveness of the child support program--may be offsetting to some degree. CBO expects increased child support effectiveness to result in collection increases and other performance improvements that will lead to a decline in the amount by which retained collections in 1995 exceed those in future years (recall that their projection is that from a high of $50 million in 2000, the difference will decline to $15 million in 2009).

In any case, the hold harmless provision was not designed to hold States harmless against declines in the welfare rolls; it was designed exclusively to hold States harmless against losses due to splitting collections with families. In this regard, it is important to note that some States received hold harmless payments before they implemented the new family first distribution scheme. Regardless of what is done about the hold harmless provision, many States may face issues over the next several years in the way they finance their child support program.

States have also argued that the hold harmless provision is a fundamental part of the agreement on welfare reform between the States and Federal government. But this view is questionable. Child Support Enforcement is separate from TANF in the Federal statutes, State statutes, Federal administration, and State administration. Although related, they are clearly separate and distinct programs. Moreover, during negotiations between Congress and the governors on the 1996 welfare reform law, the hold harmless provision was negotiated separately from welfare reform.

TITLE IV. TECHNICAL CORRECTIONS

Present law

Not applicable.

Explanation of provision

This section contains miscellaneous technical amendments to the 1996 welfare reform law.

Reason for change

The purpose of these technical amendments is to correct minor errors or inconsistencies in Title IV-A of the Social Security Act.

III. VOTE OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of the House of Representatives, the following statements are made concerning the vote of the Committee in its consideration of the bill, H.R. 1802.

MOTION TO REPORT THE BILL

The bill, H.R. 1802, as introduced, was ordered favorably reported by voice vote on May 26, 1999, with a quorum present.

IV. BUDGET EFFECTS OF THE BILL

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d)(2) rule XIII of the Rules of the House of Representatives, the following statement is made:

The Committee agrees with the estimate prepared by the Congressional Budget Office (CBO) which is included below.

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the House of Representatives, the Committee states that although the Committee bill results in increased budget authority, the bill provides for savings in budget authority so that the entire bill is deficit neutral over 5 years. The bill contains no new tax expenditures.

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

In compliance with clause 3(c)(3) rule XIII of the Rules of the House of Representatives requiring a cost estimate prepared by the Congressional Budget Office (CBO), the follow report prepared by CBO is provided.

U.S. Congress,

Congressional Budget Office,

Washington, D.C. June 9, 1999.

Hon. BILL ARCHER,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1802, the Foster Care Independence Act of 1999.

If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contacts are Sheila Dacey, Eric Rollins, Dorothy Rosenbaum, and Jeanne De Sa.

Sincerely,

Barry B. Anderson,

(For Dan L. Crippen, Director).

Enclosure.

H.R. 1802--Foster Care Independence Act of 1999

Summary: H.R. 1802 would increase funding for the Independent Living program that assists foster care children and would give states a new option for providing health coverage for former foster children through the Medicaid program. Other provisions in the bill would improve payment accuracy and reduce fraud in the Supplemental Security Income (SSI) and Social Security Disability Insurance (DI) programs and reduce federal payments to states under the child support program.

CBO estimates that this bill would increase discretionary spending by $7 million over the 2000-2004 period due to higher administrative expenses for the Social Security Administration (SSA). H.R. 1802 would also reduce direct spending by $5 million over the same period. The bill would increase spending in the Foster Care and Medicaid programs by $291 million and $195 million, respectively. These increases would be offset by reduced spending in the child support ($230 million), SSI ($125 million), Medicaid ($118 million), Food Stamp ($3 million), and State Children's Health Insurance ($15 million) programs. H.R. 1802 would not have a significant impact on DI spending. Because the bill would affect direct spending, pay-as-you-go procedures would apply.

Section 4 of the Unfunded Mandates Reform Act (UMRA) excludes from the application of that act any provisions that relate to the Old-Age, Survivors, and Disability Insurance (OASDI) program under title II of the Social Security Act. CBO has determined that the provisions of this bill that affect the DI program fall within that exclusion.

Section 210 of the bill would deem certain requests for information from the Commissioner of Social Security as meeting state privacy requirements, thus preempting state law. This preemption would be a mandate as defined in UMRA, but it would not affect the budgets of state, local, or tribal governments. The remainder of the bill contains no intergovernmental mandates as defined by UMRA, but state, local, and tribal governments would be affected by federal assistance, changes in enrollment for Medicaid and SSI, and a reduction in funding associated with child support. The bill contains no private-sector mandates as defined in UMRA.

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 1802 is shown in Table 1.

The costs of this legislation fall within budget functions 550 (health) and 600 (income security). This estimate assumes that H.R. 1802 is enacted by September 1999. 

TABLE 1: ESTIMATED BUDGETARY EFFECTS OF H.R. 1802
----------------------------------------------------------------------------------------------------------------------------
                                             By fiscal year, in millions of dollars                                         
                                                                               1999    2000    2001    2002    2003    2004 
----------------------------------------------------------------------------------------------------------------------------
Spending Subject to Appropriations                                                                                          
Baseline: SSI Administration                                                  2,434   2,499   2,509   2,590   2,671   2,754 
Proposed changes: SSI Administration                                              0       1       1       3       1       1 
Spending under H.R. 1802: SSI Administration                                  2,434   2.500   2.510   2,593   2,672   2,755 
Direct Spending                                                                                                             
Baseline:                                                                                                                   
Foster care and adoption assistance                                           4,841   5,296   5,768   6,253   6,751   7,255 
Supplemental security income                                                 28,179  29,625  31,258  33,005  34,826  36,766 
Medicaid                                                                    107,484 116,578 124,841 134,927 146,073 159,094 
State Children Health Insurance Program                                         800   2,000   3,000   3,900   4,017   4,138 
Child support enforcement                                                     2,486   2,792   2,980   3,229   3,574   3,854 
Food stamps                                                                  20,353  21,439  22,480  23,314  23,985  24,687 
Total                                                                       164,143 177,730 190,327 204,628 219,226 235,794 
Proposed changes:                                                                                                           
Foster care and adoption assistance                                               0      13      58      73      73      74 
Supplemental security income                                                      0      1       -3     -42     -40     -40 
Medicaid                                                                          0       5      13       0      25      34 
State Children Health Insurance Program                                           0      -1      -2      -3      -4      -5 
Child support enforcement                                                         0     -50     -50     -45     -45     -40 
Food stamps                                                                       0       0      1       -1      -1      -1 
Total                                                                             0     -33      16     -18       8      22 
Spending under H.R. 1802:                                                                                                   
Foster care and adoption assistance                                           4,841   5,309   5,826   6,326   6,824   7,329 
Supplemental security income                                                 28,179  29,625  31,255  32,963  34,786  36,726 
Medicaid                                                                    107,484 116,583 124,854 134,927 146,098 159,128 
State Children Health Insurance Program                                         800   1,999   2,998   3,897   4,013   4,133 
Child support enforcement                                                     2,486   2,742   2,930   3,184   3,529   3,814 
Food stamps                                                                  20,353  21,439  22,480  23,313  23,984  24,686 
Total                                                                       164,143 177,697 190,343 204,610 219,234 235,816 
----------------------------------------------------------------------------------------------------------------------------

BASIS OF ESTIMATE

Discretionary spending

CBO estimates that H.R. 1802 would increase discretionary spending by $7 million over the 2000-2004 period due to higher administrative expenses for SSA.

Period of Ineligibility for Certain Asset Transfers- Section 207 of the bill would impose a period of ineligibility on SSI applicants who dispose of resources for less than fair market value. CBO estimates that SSA would have to investigate about 4,300 applicants annually under this provision and that each investigation would cost about $200. The number of investigations is higher than the number of applicants that would actually be made ineligible (which CBO estimates would be about 2,800) because not all investigations would result in a period of ineligibility. CBO estimates that these investigations would increase SSA's administrative expenses by about $850,000 annually over the 2000-2004 period. The effects of this provision on direct spending are discussed below.

Study on Additional Fraud Measures- Section 211 of the bill would require SSA to conduct a study on the need for additional measures to prevent fraud in the SSI and DI programs. This study would have to be completed within one year of the bill's enactment. Based on discussions with SSA about the number of people needed to conduct the study, CBO estimates that this provision would increase SSA's administrative expenses by $550,000 in 2000.

Allow Monitoring of Bank Accounts- Section 214 of the bill would authorize SSA to monitor the bank accounts of SSI recipients to check for unreported assets. This provision would replace a data match that SSA currently conducts using tax information. CBO estimates that this new monitoring system would not be in place until 2002, and that the additional investigations generated by this monitoring would increase SSA administrative expenses by $2 million in 2002 and about $350,000 annually in 2003 and 2004. The figure for 2002 is higher because the shift to the new monitoring system would result in a one-time speeding up of detections. The direct spending effects of this provision are also discussed below.

Direct spending

Title I: Improved Independent Living Program- Title I of H.R. 1802 would modify and expand funding for the Independent Living program, permit children in foster care to hold larger amounts of assets, and allow states to create a new Medicaid eligibility category for children who have reached age 18 and are no longer eligible for foster care. The estimated effects of title I on direct spending are shown in Table 2. 

TABLE 2: ESTIMATED DIRECT SPENDING EFFECTS OF TITLE I OF H.R. 1802
--------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          By fiscal year, in millions of dollars                                  
                                                                                                            2000 2001 2002 2003 2004 5-year total 
--------------------------------------------------------------------------------------------------------------------------------------------------
Improved Independent Living Program: Foster care and adoption assistance:                                                                         
Budget authority                                                                                              70   70   70   70   70          350 
Outlays                                                                                                       10   55   70   70   70          275 
Increased allowable assets: Foster care and adoption assistance:                                                                                  
Budget authority                                                                                               3    3    3    3    4           16 
Outlays                                                                                                        3    3    3    3    4           16 
State option for Medicaid coverage:                                                                                                               
Medicaid:                                                                                                                                         
Budget authority                                                                                               5   20   40   60   70          195 
Outlays                                                                                                        5   20   40   60   70          195 
S-CHIP:                                                                                                                                           
Budget authority                                                                                               0    0    0    0    0            0 
Outlays                                                                                                       -1   -2   -3   -4   -5          -15 
Total:                                                                                                                                            
Budget authority                                                                                              78   93  113  133  144          561 
Outlays                                                                                                       17   76  110  129  139          471 
--------------------------------------------------------------------------------------------------------------------------------------------------

Improved Independent Living Program. Section 101 would provide states with more funding and greater flexibility to carry out the Independent Living program.

The Independent Living program provides services to older foster children and former foster children to help them successfully make the transition from foster care to life on their own. The Independent Living program is an entitlement to states capped at $70 million annually. Funds are allocated to states on the basis of each state's share of children receiving federal foster care assistance under title IV-E in 1984. States are required to provide a dollar-for-dollar match for federal funds received above their share of the first $45 million. Activities authorized under the Independent Living program include vocational training, training in daily living skills, and other services designed to improve the transition to independent living.

Section 101 would raise the cap on Independent Living funding from $70 million to $140 million annually. The old matching formula would be replaced by one that requires states to provide one dollar for every four federal dollars. Funds would be allocated to states on the basis of each state's share of the number of children in foster care in the most recent year that data is available. However, no state's funding could fall below its 1998 level. Any unused funds would be reallocated to other states. The Secretary of Health and Human Services would reserve 1.5 percent of the $140 million for evaluation, technical assistance, performance measurement, and data collection. States would be allowed to use up to 30 percent of their allotments for room and board expenses for former foster children between 18 and 21 years old.

Section 101 would provide additional funding totaling $350 million in fiscal years 2000 through 2004; CBO estimates that outlays would amount to $275 million over that period. CBO assumes that states would spend the increased funding at the same rate that they currently spend Independent Living funds.

Increased Allowable Assets. Section 111 would raise the limit on the amount of assets a child would have while remaining eligible for federal foster care assistance. Under current law children are eligible for federal foster care assistance if the family from which the child was removed would have been eligible for the Aid to Families with Dependent Children (AFDC) program as it was on June 1, 1995. To be eligible for AFDC, a family could not have more than $1,000 in assets. This provision would allow children in foster care to have up to $10,000 in assets and retain eligibility for federal foster care assistance.

CBO estimates that 1 percent of children in Independent Living programs have between $1,000 and $10,000 in assets and thus would be made newly eligible for federal foster care assistance. While any child in foster care might have assets that exceed $1,000, we estimated that the older children participating in Independent Living programs are the most likely to have higher assets. No administrative data or survey data record the assets of children in foster care. The estimate is based on conversations with national experts and state officials. CBO estimates that about half of the children in Independent Living programs, 45,000 children, would not currently be eligible for federal foster care assistance and that this provision would make 1 percent of them, 450 children, newly eligible for federal foster care payments. The federal government would spend $3 million more in 2000 based on an average annual federal cost of $7,000. That cost would rise to $4 million by 2004, as both foster care caseloads and average benefit amounts increased, for a total cost of $16 million over the 2000-2004 period.

State Option for Medicaid Coverage. Section 121 of H.R. 1802 would allow states to provide Medicaid eligibility to former foster children until their 21st birthday. CBO estimates that the provision would increase federal Medicaid outlays by $5 million in 2000 and $195 million over the 2000-2004 period. Savings amounting to $15 million over the same period would occur in the State Children's Health Insurance Program (S-CHIP).

Children who receive federally-funded foster care are automatically eligible for Medicaid. Most children who receive state-funded foster care also are eligible for Medicaid. Automatic Medicaid eligibility ends when foster care ends--typically on the child's 18th birthday. Based on state-reported data on the number of children in foster care, CBO estimates that in 1998 there were 65,000 people who were 18, 19, or 20 years old, had received foster care on their 18th birthday, and were no longer receiving foster care. CBO projects this figure will rise to 80,000 by 2004.

Under current law there are several pathways to eligibility for young adults who have reached age 18 and are no longer eligible for foster care. They are eligible for Medicaid if they are disabled and receive SSI, or if they are a low-income parent and meet the state's welfare-related Medicaid eligibility criteria. In addition, 18 year-olds are eligible for Medicaid or S-CHIP if they meet the state's income criteria for those programs. Finally, states may cover children up to age 21 who would be eligible for cash welfare if they met the definition of dependent child. (This state option is often referred to as the Ribicoff provisions.) Based on conversations with state staff and available research on the circumstances of former foster children, CBO estimates that about 60 percent of former foster care children are eligible for Medicaid and that just over half of those who are eligible are currently enrolled. In 2004 this would correspond to 48,000 eligible individuals and 27,000 enrollees.

Under H.R. 1802, CBO estimates that both eligibility and participation among former foster care children would be higher. The bill would allow states to target eligibility to former foster children as a specific eligibility group. In addition, states could determine the income and resource limits that would apply or eliminate the means test altogether. CBO assumes that three-quarters of the states that have adopted the Ribicoff provisions and two-thirds of the other states would take up the option. Under the option, CBO assumes that the total proportion of former foster children who would be eligible would increase to 85 percent. CBO further assumes that states will enroll a larger proportion (75 percent) of eligibles by eliminating or raising the means test and by streamlining the eligibility process. In 2004 these assumptions result in 68,000 eligible individuals and 51,000 enrollees, or a net increase in enrollment of about 24,000.

Research and administrative data show that children who are in foster care have average medical costs that are two to five times higher than costs for other children who receive Medicaid. Higher average costs are largely, though not exclusively, attributable to greater mental health needs. Because many of the people with the greatest medical needs are likely already participating under current eligibility rules, and because former foster children may not seek as many services as foster children, CBO assumes average federal Medicaid costs per person would be twice the average for Medicaid children, or about $2,700 a year in 2004. Federal Medicaid costs for these new enrollees would total $65 million in 2004.

In addition, some 18 year-old former foster children are currently eligible for S-CHIP rather than Medicaid. Under the bill, if the state takes the option to expand eligibility to former foster children, those children would lose S-CHIP eligibility and would participate in Medicaid instead. Because not all states will have exhausted their S-CHIP funds, spending

for S-CHIP would be reduced by $5 million in 2004 and Medicaid spending would increase by a similar amount.

Title II: SSI Fraud Prevention- Title II primarily contains provisions aimed at improving payment accuracy and program integrity in the SSI program. Another provision would allow SSI recipients who served in certain Filipino military units during World War II to receive a reduced benefit if they move back to Philippines. The direct spending effects of title II are shown in Table 3. 

TABLE 3: ESTIMATED DIRECT SPENDING EFFECTS OF TITLE II OF H.R. 1802
--------------------------------------------------------------------------------------------------------------------------------------
                                                           Outlays by fiscal year, in millions of dollars                             
                                                                                                     2000 2002 2003 2004 5-year total 
--------------------------------------------------------------------------------------------------------------------------------------
Additional debt collection tools                         0                                              0   -5  -10  -10          -25 
Count certain trusts as resources                    ( 1 )                                          ( 1 )   -1   -1   -2           -4 
Period of ineligibility for certain asset transfers:                                                                                  
SSI                                                     -a                                             -2   -4   -6   -7          -19 
Medicaid                                                -a                                             -2   -5   -8  -10          -25 
Subtotal                                                -a                                             -4   -9  -14  -17          -44 
Allow monitoring of bank accounts:                                                                                                    
SSI                                                      0                                              0  -30  -21  -19          -70 
Medicaid                                                 0                                              0  -22  -18  -17          -60 
Subtotal                                                 0                                              0  -55  -39  -36         -130 
Benefit for Filipino veterans:                                                                                                        
SSI                                                      0                                             -1   -2   -2   -2           -7 
Medicaid                                                 0                                             -5  -10   -9   -9          -33 
Food stamps                                              0                                          ( 1 )   -1   -1   -1           -3 
Subtotal                                                 0                                             -6  -13  -12  -12          -43 
Total                                                ( 1 )                                            -10  -83  -76  -77         -246 
--------------------------------------------------------------------------------------------------------------------------------------

Additional Debt Collection Tools. Section 203 of the bill would allow SSA to use additional debt collection practices in recovering SSI overpayments. These practices include assessing interest and penalties on overpayments, reporting individuals who are slow to repay to credit bureaus, and contracting with private collection agencies. SSA already uses these debt collection practices for Social Security overpayments.

Under current law, SSA's primary method of recovering SSI overpayments is through benefit offsets. Individuals who have been overpaid and are receiving either SSI or Social Security can have up to 10 percent of their monthly benefits withheld until the overpayment has been recovered. SSA's ability to recover overpayments from individuals who are not receiving SSI or Social Security is much more limited. SSA can do little more than send these individuals repeated requests for repayments, usually with no results. As a final step after these requests have failed, SSA can ask the Treasury Department to withhold any tax refunds due to individuals who have been overpaid. However, most SSI recipients have sufficiently low incomes that they are not affected.

Like the tax refund offset, these new debt collection tools would be used only after the benefit offsets and requests for voluntary repayment have failed. These new tools would take a significant amount of time to implement and likely would not be available before fiscal year 2002. According to SSA, about $400 million in delinquent SSI debt is outstanding at any one time. SSA recovers about $60 million of this debt--15 percent--annually using current collection methods. CBO estimates that the additional debt collection tools in H.R. 1802 would allow SSA to recover an additional 2 to 2.5 percent of this delinquent debt. These additional collections would boost recoveries, which are considered offsetting receipts, by $25 million over the 2000-2004 period.

Count Certain Trusts as Resources. In order to qualify for SSI benefits, an individual's total resources must fall within certain limits. For SSI purposes, the term `resources' includes most types of assets but excludes certain items like a primary residence and a car. SSI also excludes assets that an individual has placed in an irrevocable trust. By comparison, assets placed in a revocable trust are considered resources since an individual can dissolve the trust and regain control over the assets.

Section 206 of the bill would count the assets that an individual places in an irrevocable trust as resources if the trust could still make payments for the individual's benefit. This new policy would apply only to trusts formed after December 31, 1999, and would incorporate exemptions for certain disabled individuals contained in a similar policy in the Medicaid program.

According to SSA, about 20,000 current SSI recipients have irrevocable trusts. Since turnover for the SSI caseload is about 10 percent annually, CBO assumes that the provision would affect about 2,000 new trusts each year. CBO assumed that 90 percent of trusts would meet one of the bill's exceptions and not be counted as resources. The exceptions apply primarily to disabled individuals, and research by SSA suggests that most trusts are held by disabled children and disabled adults. As a result, CBO estimates that about 200 individuals each year would be ineligible for SSI under this provision and that the resulting benefit savings would total $4 million over the 2000-2004 period.

Period of Ineligibility for Certain Asset Transfers. There is currently no penalty for individuals who transfer or sell assets for less than fair market value in order to meet SSI's asset restrictions. (SSI did penalize these transfers from 1981 to 1988, usually by imposing a two-year period of ineligibility.)

Section 207 of the bill would impose a period of ineligibility on SSI applicants who transfer assets for less than market value. The new SSI restrictions would be similar to those that already exist in the Medicaid program for individuals seeking institutional services, and would apply only to asset transfer taking place in the three-year period prior to application. The length of the period of ineligibility would vary according to the uncompensated value of the assets that were transferred but could not exceed 36 months. These new provisions would apply only to asset transfers taking place after enactment.

Based on a 1996 study by the General Accounting Office, CBO estimates that about 2,800 SSI applicants annually have transferred assets within the previous three years and would be subject to this provision. Initially, many applicants would not be affected since they transferred assets prior to the bill's enactment. However, about 5,300 people would be ineligible for SSI by 2004. CBO estimates that the resulting SSI benefit savings would total $19 million over the 2000-2004 period.

CBO estimates that the change in SSI treatment of asset transfers would also result in federal Medicaid savings of $25 million over the 2000-2004 period. CBO assumes that under the provision, about half of the individuals who lose SSI eligibility would also lose eligibility for Medicaid.

In some states, prohibitions or asset divestiture for noninstitutional care already prohibit SSI recipients who have transferred assets from receiving Medicaid. Although under current law the states must impose penalties for transferring assets on applicants who seek institutional services, states may apply the same criteria to applicants seeking noninstitutional services. In states where SSI eligibility does not automatically confer Medicaid eligibility, Medicaid beneficiaries who transferred resources to get SSI would not be affected by the policy. These states (known as 209(b) states) establish their own eligibility criteria for SSI-related Medicaid coverage. Additionally, in some states, individuals losing SSI would be eligible for state medically-needy programs, which allow beneficiaries to deplete their income and resources to Medicaid eligibility levels because of high medical expenses.

Per capita expenditures for those who would lose Medicaid eligibility are likely to be similar to expenses for acute and noninstitutional care services for current Medicaid beneficiaries--about $2,400 a year in 2000 for aged persons and $4,000 for disabled persons. CBO assumes that most people affected by the bill would be aged.

Allow Monitoring of Bank Accounts. Section 214 of the bill would allow SSA to obtain financial records for SSI recipients to ensure that they meet SSI's resource restrictions and remain eligible for benefits. SSA already has the authority to get a recipient's financial records, but only on a case-by-case basis and with the recipient's permission. This bill would require recipients to give their permission automatically or risk losing their eligibility. This would allow SSA to conduct periodic data matches with financial institutions to check for unreported assets.

SSA currently checks for unreported assets in bank accounts through a data match with the Internal Revenue Service (IRS) based on the information on form 1099, which is issued to individuals with interest income. SSA generally conducts this match in September or October each year, using IRS data for the previous tax (i.e., calendar) year. This means that recipients with unreported bank accounts may be overpaid for as much as 22 months before detection. And since the current match is based on form 1099, it does not cover SSI recipients with assets in non-interest-bearing accounts. Switching to periodic direct matches with financial institutions would allow SSA to obtain information on unreported assets in a more timely manner and monitor some non-interest-bearing accounts.

CBO estimates that under current law between 7,000 and 8,000 recipients annually lose their SSI eligibility as a result of the 1099-based match. Many of these individuals subsequently regain eligibility by spending down their assets to meet SSI's asset restrictions. Research by SSA suggests that over 40 percent of SSI recipients who are suspended for having excess resources return to the rolls within a year, and that about 60 percent of suspended recipients return within four years.

Based on discussions with SSA, CBO estimates that this provision would not be fully implemented until 2002. SSA will need at least two years to negotiate, develop, and test a

data-sharing protocol with the financial industry that would allow these periodic data matches. This match would be conducted primarily with large national and regional banks.

Starting in 2002, CBO estimates that an additional 6,000 SSI recipients would become ineligible under the new match. These additional suspensions would mostly represent a speeding up of detections that would have occurred later under the current matching process. Based on information from the Federal Reserve, CBO also assumes that total suspensions would increase by about 10 percent due to improve detection of non-interest-bearing accounts. By 2004, many suspended recipients would have returned to the SSI rolls, and CBO estimates that the number of additional suspended recipients would decline to about 3,500. Overall, CBO estimates that this provision would reduce spending on SSI benefits by $70 million over the 2000-2004 period.

CBO assumes that most people who lose SSI eligibility due to resources above the SSI limit would also be disqualified from Medicaid, since the Medicaid resource limit is usually the same as the SSI limit. At an average annual cost of $2,400 for aged individuals and $4,000 for disabled individuals in 2000, CBO estimates total Medicaid savings of $60 million over the 2000-2004 period.

Benefit for Filipino Veterans. Under current law, SSI recipients must usually live in the United States to remain eligible for benefits. Section 251 would allow recipients who served in certain Filipino military units during World War II to remain eligible even if they move back to the Philippines. Recipients who return to the Philippines would have their SSI benefit reduced by about 25 percent and would become ineligible for Medicaid or food stamps. This provision would apply only to Filipino veterans receiving SSI at the time of the bill's enactment and would take effect a year after enactment.

During World War II, the Philippines was still an American commonwealth. In 1941, President Roosevelt issued an executive order that attached the Commonwealth Army and other military units to the U.S. armed forces for the duration of the war. An estimated 200,000 Filipinos ultimately served in these units, and somewhere between 80,000 and 90,000 are still alive today.

Most of the Filipino veterans who are now receiving SSI probably came to the United States under a special provision of the Immigration Act of 1990 that allowed them to become naturalized citizens. According to the Immigration and Naturalization Service (INS), about 17,500 veterans have become citizens under this provision. However, veterans could naturalize in either the Philippines or the United States, and INS does not know how many veterans are in this country. CBO estimated that about 16,000 naturalized veterans are still alive and assumed that 80 percent of the veterans who naturalized are in the United States, and that half of them get SSI. The percentage of veterans on SSI should be high; virtually all veterans are well over 65 years old and those who spent most of their lives in the Philippines are probably poor. CBO also assumed that another 1,000 veterans who either arrived before 1990 or arrived after 1990 as noncitizens are also getting benefits. Overall, CBO estimated that about 7,300 Filipino veterans are currently receiving SSI benefits.

Filipino veterans who have little or no family in this country are most likely to take advantage of the reduced SSI benefit offered in H.R. 1802. Unfortunately, very little demographic information is available on the veterans in this country. CBO assumed that 20 percent of the veterans on SSI would return to the Philippines. Although expansions of benefits often attract additional people to the benefit rolls, that effect seems likely to be small for this particular proposal. Relative to current law, CBO estimates that this provision would reduce SSI outlays by $7 million over the 2000-2004 period. Since veterans who return to the Philippines would become ineligible for food stamps and Medicaid, this provision would also reduce spending in those programs by $3 million and $33 million, respectively, over the same period.

Title III: Child Support- Title III would eliminate the hold-harmless provision of the child support program. Under current law, federal and stage governments retain any child support collected on behalf of current recipients and certain support collected on behalf of former TANF recipients. Under the hold-harmless provision, the federal government guarantees that a state's amount of retained child support will not fall below the amount that it retained in fiscal year 1995. In 1999, the federal government made hold-harmless payments to 19 states, the District of Columbia, and Guam totaling $45 million. CBO projects hold-harmless payments will rise to $50 million in 2000 as child support collections fall and fall to $40 million by 2004 as collections grow slightly. Eliminating the hold harmless provision would save a total of $230 million over the 2000-2004 period.

Pay-as-you-go considerations: The provisions of H.R. 1802 would affect direct spending and thus be subject to pay-as-you-go procedures. The net changes in outlays and governmental receipts that are subject to pay-as-you-go procedures are shown in Table 4. For the purposes of enforcing pay-as-you-go procedures, only the effects in the budget year and the succeeding four years are counted. 

TABLE 4: ESTIMATED PAY-AS-YOU-GO EFFECTS OF H.R. 1802
--------------------------------------------------------------------------------------------------------
                    By fiscal year, in millions of dollars                                              
                                                      2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
--------------------------------------------------------------------------------------------------------
Changes in outlays                                     -33   16  -18    8   22   27   36   49   53   62 
Changes in receipts                                                                                     
(9)not applicable                                                                                       
--------------------------------------------------------------------------------------------------------

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

Exclusions

Section 4 of the Unfunded Mandates Reform Act excludes from the application of that act any provisions that relate to the Old-Age, Survivors, and Disability Insurance program under title II of the Social Security Act. CBO has determined that the provisions of this bill that affect the DI program fall within that exclusion.

Mandates

Under current law, the Commissioner of Social Security is authorized to request information from states in order to determine eligibility for Supplemental Security Income benefits. The bill would deem the standards of the Commissioner for the use, safeguarding, and disclosure of such information to meet the standards of state law and regulations. In doing so, the bill would preempt state laws and regulations and would be a mandate as defined in UMRA. CBO estimates that the mandate would not affect the budgets of state, local, or tribal governments because, although it would preempt state authority, states would not be required to take any action.

H.R. 1802 contains no private-sector mandates as defined in UMRA.

Other Impacts

Independent Living Program- The bill would raise the cap and change state matching rates for the Independent Living program. States are currently required to provide a 50-percent match in order to receive federal funds over $45 million. This entitlement is currently capped at $70 million annually. The bill would both raise the cap to $140 million annually (less 1.5 percent for federal administrative expenses) and institute a matching rate of 20 percent. These changes would result in additional funding to states of $68 million annually but they would be required to provide matching funds of $10 million more than they are currently spending.

Change in Asset Limitation for Foster Care- The bill would also increase the amount of assets a child could have while remaining eligible for federal foster care assistance. CBO estimates that this change would make 450 more children eligible for federal foster care assistance. States currently pay all of the foster care costs for these children. With the change in this bill, states would provide matching funds for foster care at their state Medicaid matching rate. Total state spending for these children thus would decline from $28 million to $12 million over the 2000-2004 period.

Supplemental Security Income- All but eight states provide some form of optional supplementation for recipients of SSI. Just as the proposed changes in the bill would result in savings to the federal government, state spending for supplemental SSI payments would also be reduced due to greater fraud prevention activities and longer periods of ineligibility for asset transfers. The bill also would allow Filipino veterans to receive reduced SSI benefits if they move to the Philippines. In those cases, state supplements (which are paid to residents) would cease. In total, CBO estimates that states would save approximately $17 million in state supplemental payments over the 2000-2004 period as a result of these changes.

Medicaid- The bill would allow states to extend Medicaid eligibility for former foster children aged 18 to 21 years old. Adopting such an option would increase state spending for Medicaid. It may be more expensive for states that currently cover 18 year-olds under S-CHIP because the match rate for S-CHIP is higher than that for Medicaid. CBO estimates that the net increase in state spending from this option over the 2000-2004 period would be $140 million for Medicaid and S-CHIP.

Title II of the bill would also make a number of changes to the SSI program that would affect Medicaid spending because in most states SSI receipt automatically confers Medicaid eligibility. The proposed changes to SSI regarding asset transfers, monitoring of bank accounts, and enrollment eligibility for Filipino veterans are estimated to save states approximately $90 million in Medicaid spending over the 2000-2004 period.

Child Support Hold-Harmless Provision- Under current law, states may retain a portion of child support collections in order to reimburse themselves for TANF payments they made for children that were owed child support. In cases where states have been unable to collect child support equal to the 1995 level, the federal government has provided funding to make up the difference. The bill would eliminate this guarantee, resulting in annual losses to states ranging from $40 million to $50 million annually and totaling $230 million over the 2000-2004 period.

Estimate prepared by: Federal Costs: Foster Care: Sheila Dacey; Supplemental Security Income: Eric Rollins; Medicaid: Dorothy Rosenbaum and Jeanne Da Sa; Impact on State, Local, and Tribal Governments: Leo Lex; Impact on the Private Sector: Theresa Devine.

Estimate approved by: Paul N. Van de Water, Assistant Director for Budget Analysis.

V. OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the House of Representatives, the Committee reports that the need for this legislation was confirmed by the oversight hearings of the Subcommittee on Human Resources. The hearings were as follows:

The Subcommittee on Human Resources held a hearing on May 13, 1999, to receive comments on H.R. 1802, the bipartisan legislation written by Chairman Johnson and Mr. Cardin. Testimony at the hearing was presented by scholars, program administrators, foundation executives, a Member of Congress, and adolescents participating in programs designed to help adolescents in foster care achieve self-sufficiency through employment or post-secondary education. The Subcommittee also conducted a hearing on March 9, 1999, which included testimony from the Administration, child advocacy groups, program administrators, and former foster children.

The Committee bill also includes extensive provisions addressed to reducing fraud and abuse in the Supplemental Security Income (SSI) program. The Subcommittee on Human Resources held a hearing on SSI fraud and abuse on February 3, 1999, which included testimony from Members of Congress, the Administration, and organizations representing citizens with disabilities and Filipino veterans. On February 10, 1999, the Subcommittee ordered favorably reported to the full Committee on Ways and Means, as amended, H.R. 631, the `SSI Fraud Prevention Act of 1999,' which is now included as Title II of H.R. 1802, the `Foster Care Independence Act of 1999.'

In the 105th Congress, the Subcommittee on Human Resources held a hearing on SSI fraud and abuse, on April 21, 1998, which included testimony from Members of Congress, the Administration, and a former Social Security claims representative.

B. SUMMARY OF FINDINGS AND RECOMMENDATIONS OF THE GOVERNMENT REFORM AND OVERSIGHT COMMITTEE

In compliance with clause 3(c)(4) rule XIII of the Rules of the House of Representatives, the Committee states that no oversight findings or recommendations have been submitted to the Committee on Government Reform and Oversight regarding the subject of the bill.

C. CONSTITUTIONAL AUTHORITY STATEMENT

With respect to clause 3(d)(1) of rule XIII of the Rules of the House of Representatives, relating to Constitutional Authority, the Committee states that the Committee's action in reporting the bill is derived from Article I of the Constitution, Section 8 (`The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and to provide for * * * the general Welfare of the United States * * *').

VI. CHANGES IN EXISTING LAWS MADE BY THE BILL, AS REPORTED

SOCIAL SECURITY ACT

* * * * * * *

TITLE II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS

* * * * * * *

AGE AND SURVIVORS INSURANCE BENEFIT PAYMENTS

OLD AGE INSURANCE BENEFITS

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

OVERPAYMENTS AND UNDERPAYMENTS

* * * * * * *

as in effect immediately after the enactment of the Debt Collection Improvement Act of 1996.

* * * * * * *

TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES

SEC. 402. ELIGIBLE STATES; STATE PLAN.

* * * * * * *

* * * * * * *

SEC. 404. USE OF GRANTS.

* * * * * * *

* * * * * * *

SEC. 409. PENALTIES.

* * * * * * *

(aa) the expenditures exceed the amount expended under the State or local program in the fiscal year most recently ending before the date of the enactment of this [Struck out->][ part ][<-Struck out] section; or

* * * * * * *

SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

* * * * * * *

* * * * * * *

SEC. 416. ADMINISTRATION.

consistent with sections 3502 and 3595 of title 5, United States Code, to reduce the full-time equivalent positions within the Department of Health and Human Services by 245 full-time equivalent positions related to the program converted into a block grant under the amendments made by section 103 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, and by 60 full-time equivalent managerial positions in the Department.

* * * * * * *

SEC. 431. DEFINITIONS.

* * * * * * *

* * * * * * *

DUTIES OF THE SECRETARY

* * * * * * *

* * * * * * *

STATE PLAN FOR CHILD AND SPOUSAL SUPPORT

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

pursuant to a plan approved under this part shall be distributed as follows:

(aa) * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

REQUIREMENT OF STATUTORILY PRESCRIBED PROCEDURES TO IMPROVE EFFECTIVENESS OF CHILD SUPPORT ENFORCEMENT

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

STATE PLAN FOR FOSTER CARE AND ADOPTION ASSISTANCE

* * * * * * *

* * * * * * *

FOSTER CARE MAINTENANCE PAYMENTS PROGRAM

* * * * * * *

combined value of not more than $1,000 (or such lower amount as the State may determine for purposes of such section 402(a)(7)(B)).

* * * * * * *

PAYMENTS TO STATES; ALLOTMENTS TO STATES

* * * * * * *

* * * * * * *

[Struck out->][ INDEPENDENT LIVING INITIATIVES ][<-Struck out]

SEC. 477. INDEPENDENT LIVING PROGRAM.

who have left foster care and have attained 18 years of age but not 21 years of age.

assistance, performance measurement, and data collection activities related to this section, directly or through grants, contracts, or cooperative agreements with appropriate entities.

* * * * * * *

TITLE VII--ADMINISTRATION

* * * * * * *

* * * * * * *

BUDGETARY MATTERS

* * * * * * *

TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIMPLIFICATION

* * * * * * *

SEC. 1129A. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR FALSE OR MISLEADING STATEMENTS.

* * * * * * *

INCOME AND ELIGIBILITY VERIFICATION SYSTEM

* * * * * * *

the safety of the employee or compromise an ongoing investigation or intelligence mission;

* * * * * * *

EXCLUSION OF REPRESENTATIVES AND HEALTH CARE PROVIDERS CONVICTED OF VIOLATIONS FROM PARTICIPATION IN SOCIAL SECURITY PROGRAMS

* * * * * * *

TITLE XVI--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED

* * * * * * *

PART A--DETERMINATION OF BENEFITS

ELIGIBILITY FOR AND AMOUNT OF BENEFITS

DEFINITION OF ELIGIBLE INDIVIDUAL

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

* * * * * * *

INCOME

MEANING OF INCOME

* * * * * * *

* * * * * * *

RESOURCES

EXCLUSIONS FROM RESOURCES

* * * * * * *

[Struck out->][ NOTIFICATION OF MEDICAID POLICY RESTRICTING ELIGIBILITY OF INSTITUTIONALIZED INDIVIDUALS FOR BENEFITS BASED ON ][<-Struck out] DISPOSAL OF RESOURCES FOR LESS THAN FAIR MARKET VALUE

* * * * * * *

TRUSTS

* * * * * * *

PART B--PROCEDURAL AND GENERAL PROVISIONS

PAYMENTS AND PROCEDURES

PAYMENT OF BENEFITS

OVERPAYMENTS AND UNDERPAYMENTS

* * * * * * *

* * * * * * *

* * * * * * *

APPLICATIONS AND FURNISHING OF INFORMATION

* * * * * * *

TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

* * * * * * *

STATE PLANS FOR MEDICAL ASSISTANCE

* * * * * * *

* * * * * * *

* * * * * * *

DEFINITIONS

* * * * * * *

* * * * * * *

-

SECTION 3701 OF TITLE 31, UNITED STATES CODE

Sec. 3701. Definitions and application

* * * * * * *

* * * * * * *

-

SECTION 344 OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

SEC. 344. AUTOMATED DATA PROCESSING REQUIREMENTS.

* * * * * * *



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