To authorize States to conduct demonstration projects designed to improve the provision of child welfare, foster care, and adoption assistance services.

Amends part E (Foster Care and Adoption Assistance) of title IV of the Social Security Act to require the Secretary of Health and Human Services to make grants to up to ten States for the conduct of demonstration projects for at least five years designed to: (1) provide extensive assistance to families which have problems that may lead to the removal of a child from the family; (2) promote the treatment of family problems so that children who have been temporarily removed from their family may be reunified with their family within two years of such removal; (3) facilitate the timely and permanent placement of abandoned babies and children who are in foster care; or (4) address any combination of such matters and other child welfare services issues. Details the information and assurances required to be included in State applications to conduct such projects. Authorizes each State which receives project grants to use such funds to improve the provision of child welfare, foster care, and adoption assistance services in any manner it deems appropriate.

Provides for the evaluation of such demonstration projects.

Makes part B (Child-Welfare Services) and the section of part E of title IV not added by this Act inapplicable to a State while it is conducting such a demonstration project.