On 30 October 2000, President Clinton signed Public Law 106-395, the "Child Citizenship Act of 2000". This bill, which took effect on 27 February 2001, made two changes to the laws pertaining to naturalization.
* A child (under 18) -- natural or adopted -- of a US citizen, who is living in the US with his/her American parent as a permanent resident (i.e., "green card" holder), is automatically a US citizen, without any need to apply for naturalization. Children who already met these requirements as of 27 February 2001 became US citizens automatically on that date. This provision also means that a minor child of an alien permanent resident (or residents) automatically becomes a US citizen upon the naturalization of either parent.
* A child (again, under 18, and either natural or adopted) of a US citizen, who lives outside the US, can be naturalized if either a parent or grandparent has fulfilled a five-year US physical presence requirement (including at least two years after the parent's or grandparent's 14th birthday). The child (along with his/her American parent) must travel to the US in order to be naturalized, but this can be done on a temporary visit and need not involve immigration as a permanent resident. One key difference between this provision and a similar provision in Public Law 103-416 is that the child's parent or grandparent can now fulfill the US physical presence requirement after the child's birth. Under the 1994 law, US presence by the parent or grandparent after the child's birth was irrelevant.
Note, in both of these cases, that the child's US citizenship is not retroactive to his/her birth. Thus, there is still a difference between these situations and the "natural-born" cases provided for by INA 301 [8 USC § 1401].