"(10) provide that the State agency shall make available to applicants for receipients of aid or assistance under the plan at least those services to help them attain or retain capability for self-support or self-care which are prescribed by the Secretary; and include a description of the steps taken to assure, in the provision of these and any other services which the State agency makes available to individuals under the State plan, maximum utilization of other agencies providing similar or related services;

"(11) provide that no aid and no medical assistance for the aged will be furnished any individual under the plan with respect to any period with respect to which he is receiving assistance under the State plan approved under title I or aid under the State plan approved under title IV, X, or XIV; "(12) provide that, in determining whether an individual is blind, there shall be an examination by a physician skilled in the diseases of the eye or by an optometrist, whichever the individual may select;

"(13) include reasonable standards, consistent with the objectives of this title, for determining eligibility for and the extent of aid or assistance under the plan;

"(14) if the State plan includes aid to the aged, blind, or disabled, provide that the State agency shall, in determining need for such aid, take into consideration any other income and resources of an individual claiming aid to the aged, blind, or disabled, as well as any expenses reasonably attributable to the earning of any such income; except that, in making such determination with respect to any individual who is blind, the State agency shall disregard the first $85 per month of earned income plus onehalf of earned income in excess of $85 per month; and

"(15) if the State plan includes medical assistance for the aged

“(A) provide for inclusion of some institutional and some noninstitutional care and services;

"(B) provide that no enrollment fee, premium, or similar charge will be imposed as a condition of any individual's eligibility for medical assistance for the aged under the plan;

"(C) provide for inclusion, to the extent required by regulations prescribed by the Secretary, of provisions (conforming to such regulations) with respect to the furnishing of such assistance to individuals who are residents of the State but are absent therefrom; and

"(D) provide that no lien may be imposed against the property of any individual prior to his death on account of medical assistance for the aged paid or to be paid on his behalf under the plan (except pursuant to the judgment of a court on account of benefits incorrectly paid on behalf of such individual), and that there shall be no adjustment or recovery (except, after the death of such individual and his surviving spouse, if any, from such individual's estate) of any medical assistance for the aged correctly paid on behalf of such individual under the plan.

"(b) The Secretary shall approve any plan which fulfills the conditions specified in subsection (a), except that he shall not approve any plan which imposes, as a condition of eligibility for aid or assistance under the plan

"(1) an age requirement of more than sixty-five years; or

“(2) any residence requirement which (A) in the case of applicants for aid to the aged, blind, or disabled excludes any resident of the State who has resided therein for one year immediately preceding the application, and (B) in the case of applicants for medical assistance for the aged, excludes any individual who resides in the State; or

"(3) any citizenship requirement which excludes any citizen of the United States.

"(c) Nothing in this title shall be construed to permit a State to have in effect with respect to any period more than one State plan approved under this title.

"PAYMENTS TO STATES

"SEC. 1603. (a) From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has a plan approved under this title, for each quarter, beginning with the quarter commencing October 1, 1962

"(1) in the case of any State other than Puerto Rico, the Virgin Islands, and Guam, an amount equal to the sum of the following proportions of the

total amounts expended during such quarter as aid to the aged, blind, or disabled under the State plan (including expenditures for insurance premiums for medical or any other type of remedial care or the cost thereof)—

"(A) four-fifths of such expenditures, not counting so much of any expenditure with respect to any month as exceeds the product of $31 multiplied by the total number of recipients of such aid for such month (which total number, for purposes of this subsection, means (i) the number of individuals who received such aid in the form of money payments for such month, plus (ii) the number of other individuals with respect to whom expenditures were made in such month as aid to the aged, blind, or disabled in the form of medical or any other type of remedial care); plus

"(B) the Federal percentage (as defined in section 1101(a) (8)) of the amount by which such expenditures exceed the maximum which may be counted under clause (A), not counting so much of any expenditure with respect to any month as exceeds the product of $66 multiplied by the total number of recipients of aid to the aged, blind, or disabled for such month; plus

"(C) the larger of the following: (i) the Federal medical percentage (as defined in section 6(c)) of the amount by which such expenditures exceed the maximum which may be counted under clause (B), not counting so much of any expenditure with respect to any month as exceeds (I) the product of $81 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month, or (II) if smaller, the total expended as aid to the aged, blind, or disabled in the form of medical or any other type of remedial care with respect to such month plus the product of $66 multiplied by such total number of such recipients, or (ii) 15 per centum of the total of the sums expended during such quarter as aid to the aged, blind, or disabled under the State plan in the form of medical or any other type of remedial care, not counting so much of any expenditure with respect to any month as exceeds the product of $15 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month; "(2) in the case of Puerto Rico, the Virgin Islands, and Guam, an amount equal to

“(A) the Federal percentage of the total of the sums expended during such quarter as aid to the aged, blind, or disabled under the State plan (including expenditures for insurance premiums for medical or any other type of remedial care or the cost thereof), not counting so much of any expenditure with respect to any month as exceeds $35.50 multiplied by the total number of recipients of aid to the aged, blind, or disabled for such months; plus

"(B) the larger of the following amounts: (i) the Federal percentage of the amount by which such expenditures exceed the maximum which may be counted under clause (A), not counting so much of any expenditure with respect to any month as exceeds (I) the product of $43 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month, or (II) if smaller, the total expended as aid to the aged, blind, or disabled in the form of medical or any other type of remedial care with respect to such month plus the product of $35.50 multiplied by the total number of such recipients. or (ii) 15 per centum of the total of the sums expended during such quarter as aid to the aged, blind, or disabled under the State plan in the form of medical or any other type of remedial care, not counting so much of any expenditure with respect to any month as exceeds the product of $7.50 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month; and

"(3) in the case of any State, an amount equal to the Federal medical percentage (as defined in section 6(c)) of the total amounts expended during such quarter as medical assistance for the aged under the State plan (including expenditures for insurance premiums for medical or any other type of remedial care or the cost thereof); and

"(4) in the case of any State, an amount equal to the sum of the following proportions of the total amounts expended during such quarter as

found necessary by the Secretary of Health, Education, and Welfare for the proper and efficient administration of the State plan—

"(A) 75 per centum of such expenditures which are for

"(i) services which are prescribed pursuant to section 1602 (a) (10) and are provided (in accordance with the next sentence) to applicants for or recipients of aid or assistance under the plan to help them attain or retain capability for self-support or self-care, or "(ii) other services, specified by the Secretary as likely to prevent or reduce dependency, so provided to such applicants or recipients, or

"(iii) such of the services prescribed pursuant to section 1602 (a) (10), and of the services specified as provided in clause (ii), as the Secretary may specify as appropriate for individuals who, within such period or periods as the Secretary may prescribe, have been or are likely to become applicants for or recipients of aid or assistance under the plan, and which are provided to such individuals in accordance with the next sentence, or

"(iv) the training of personnel employed or preparing for employment by the State agency or by the local agency administering the plan in the political subdivision; plus

"(B) one-half of such expenditures (not included under subparagraph (A)) for services provided (in accordance with the next sentence) to individuals who are or, within such period or periods as the Secretary may prescribe, have been or are likely to become applicants for or recipients of aid or assistance under the plan; plus

"(C) one-half of the remainder of such expenditures.

The services referred to in paragraph (4) (A) and (B) of the preceding sentence shall include only—

"(5) services provided by the staff of the State agency, or of the local agency administering the State plan in the political subdivision, and

"(6) subject to limitations prescribed by the Secretary, services which in the judgment of the State agency cannot be as economically or as effectively provided by the staff of such State or local agency and are not otherwise reasonably available to individuals in need of them, and which are provided by the State agency by contract with nonprofit private agencies, and

"(7) subject to limitations prescribed by the Secretary, services which in the judgment of the State agency cannot be as economically or as effectively provided by the staff of such State or local agency and are not otherwise reasonably available to individuals in need of them, and which are provided, pursuant to agreement with the State agency, by the State health authority or the State agency or agencies administering or supervising the administration of the State plan approved under the Vocational Rehabilitation Act or by any other State agency which the Secretary may determine to be appropriate (whether provided by its staff or by contract with public (local) or nonprofit private agencies).

The portion of the amount expended for administration of the State plan to which such paragraph (4)(A) applies and the portion thereof to which paragraph (4) (B) and (C) of such sentence applies shall be determined in accordance with such methods and procedures as may be permitted by the Secretary. "(b) (1) Prior to the beginning of each quarter, the Secretary shall estimate the amounts to which a State will be entitled under subsection (a) for such quarter, such estimates to be based on (A) a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsection, and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than the State's proportionate share of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived and (B) such other investigation as the Secretary may find necessary.

"(2) The Secretary shall then pay, in such installments as he may determine, to the State the amount so estimated, reduced or increased to the extent of any overpayment or underpayment which the Secretary determines was made under this section (or section 3, 1003, or 1403) to such State for any prior quarter and

80118-62- -3

with respect to which adjustment has not already been made under this subsection (or subsection (b) of such section 3, 1003, or 1403).

"(3) The pro rata share to which the United States is equitably entitled, as determined by the Secretary, of the net amount recovered during any quarter by the State or any political subdivision thereof with respect to aid or assistance furnished under the State plan (or with respect to assistance or aid furnished under the State's plan approved under title I, X, or XIV of this Act), but excluding any amount of such assistance (or aid) recovered from the estate of a deceased recipient which is not in excess of the amount expended by the State or any political subdivision thereof for the funeral expenses of the deceased, shall be considered an overpayment to be adjusted under this subsection. "(4) Upon the making of any estimate by the Secretary under this subsection, any appropriations available for payments under this section shall be deemed obligated. "OPERATION OF STATE PLANS

"SEC. 1604. If the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan approved under this title, finds

"(1) that the plan has been so changed that it no longer complies with the provisions of section 1602; or

"(2) that in the administration of the plan there is a failure to comply substantially with any such provision;

the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, that payments will be limited to categories under or parts of the State plan not affected by such failure), until the Secretary is satisfied that there will no longer be any such failure to comply. Until he is so satisfied he shall make no further payments to such State (or shall limit payments to categories under or parts of the State plan not affected by such failure).

"DEFINITIONS

"SEC. 1605. (a) For the purposes of this title, the term 'aid to the aged, blind, or disabled' means money payments to, or medical care in behalf of, or any type of remedial care recognized under State law in behalf of, needy individuals who are sixty-five years of age or older, are blind, or are disabled, but does not include

"(1) any such payments to or care in behalf of any individual who is an inmate of a public institution (except as a patient in a medical institution) or any individual who is a patient in an institution for tuberculosis or mental diseases, or

"(2) any such payments to any individual who has been diagnosed as having tuberculosis or psychosis and is a patient in a medical institution as a result thereof, or

"(3) any such care in behalf of any individual, who is a patient in a medical institution as a result of a diagnosis that he has tuberculosis or psychosis, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for forty-two days. "(b) For purposes of this title, the term 'medical assistance for the aged' means payment of part or all of the cost of the following care and services for individuals who are sixty-five years of age or older and who are not recipients of aid to the aged, blind, or disabled but whose income and resources are insufficient to meet all of such cost

"(1) inpatient hospital services;

"(2) skilled nursing-home services;

"(3) physicians' services;

"(4) outpatient hospital or clinic services;

"(5) home health care services;

"(6) private duty nursing services;

"(7) physical therapy and related services;

"(8) dental services;

"(9) laboratory and X-ray services;

"(10) prescribed drugs, eyeglasses, dentures, and prosthetic devices;

"(11) diagnostic, screening, and preventive services; and

"(12) any other medical care or remedial care recognized under State law;

except that such term does not include any such payments with respect to"(A) care or services for any individual who is an inmate of a public institution (except as a patient in a medical institution) or any individual who is a patient in an institution for tuberculosis or mental diseases;

or

"(B) care or services for any individual, who is a patient in a medical institution as a result of a diagnosis of tuberculosis or psychosis, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for forty-two days."

(b) No payment may be made to a State under title I, X, or XIV of the Social Security Act for any period for which such State receives any payments under title XVI of such Act or any period thereafter.

(c) Section 1109 of such Act is amended by striking out "sections 2(a) (7), 402(a)(7), 1002 (a) (8), and 1402 (a) (8)" and inserting in lieu thereof "sections 2(a) (10) (A), 402(a) (7), 1002 (a) (8), 1402(a) (8), and 1602 (a) (14)” and by striking out "a State plan approved under title I, IV, X, or XIV" wherever it appears therein and inserting in lieu thereof "a State plan approved under title I, IV, X, XIV, or XVI”.

(d) Section 1111 of such Act is amended by striking out "and XIV" and inserting in lieu thereof "XIV, and XVI”.

(e) Section 618 of the Revenue Act of 1951 is amended by striking out "or XIV" and inserting in lieu thereof "XIV, or XVI (other than section 1603 (a) (3) thereof)".

PART E-MISCELLANEOUS AND TECHNICAL AMENDMENTS

REMOVAL OF LIMITATION ON TOTAL PUBLIC ASSISTANCE PAYMENTS TO PUERTO RICO, THE VIRGIN ISLANDS, AND GUAM

SEC. 151. Effective for fiscal years ending after June 30, 1962, section 1108 of the Social Security Act is amended by striking out the first sentence thereof.

RESPONSIBILITY FOR PLACEMENT AND FOSTER CARE OF DEPENDENT CHILDREN

SEC. 152. (a) Clause (2) of section 408(a) of the Social Security Act is amended to read "(2) for whose placement and care the State or local agency administering the State plan approved under section 402, or any other local public agency supervised by the State agency administering or supervising the administration of such State plan, is responsible,”.

(b) The last sentence of section 408 of such Act is amended by inserting before the period at the end thereof “or has been approved, by the State publicwelfare agency referred to in section 522(a), as meeting the standards established by such agency for foster family homes".

PAYMENTS TO RELATIVE OF CHILD WHEN CHILD IS DEPENDENT

SEC. 153. Section 406 (b) of the Social Security Act is amended by striking out "for any month" and by striking out "if money payments have been made under the State plan with respect to such child for such month".

FEDERAL PERCENTAGE FOR TERRITORIES

SEC. 154. (a) Subparagraph (A) of section 1101(a)(8) of the Social Security Act is amended by inserting "and shall be 50 per centum for Puerto Rico, the Virgin Islands, and Guam" after "65 per centum".

(b) Paragraph (2) of section 3(a) and clause (2) of sections 403 (a), 1003 (a), and 1403 (a) of such Act are each amended by striking out "one-half" wherever it appears and inserting in lieu thereof "the Federal percentage".

DEFINITIONS OF "STATE" AND "UNITED STATES"

SEC. 155. (a) Paragraph (1) of section 1101 (a) of the Social Security Act is amended by striking out "X, and XIV" and inserting in lieu thereof "X, XI, XIV, and XVI".

(b) Paragraph (2) of such section is amended by striking out", the District of Columbia, and the Commonwealth of Puerto Rico".