69–010 

Calendar No. 972 

110TH CONGRESS REPORT " ! SENATE 2d Session 110–467 

IMPROVED ADOPTION INCENTIVES AND RELATIVE 

GUARDIANSHIP SUPPORT ACT OF 2008 

SEPTEMBER 16, 2008.—Ordered to be printed 

Mr. BAUCUS, from the Committee on Finance, 

submitted the following 

R E P O R T 

[To accompany S. 3038] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Finance, to which was referred the bill (S. 

3038) to amend part E of title IV of the Social Security Act to extend the adoption incentives program, to authorize States to establish a relative guardianship program, to promote the adoption of 

children with special needs, and for other purposes, reports favorably thereon with an amendment in the nature of a substitute and 

recommends the bill, as amended, do pass. 

I. BACKGROUND 

Child Welfare Services 

The Child Welfare Services program was established in 1935— 

as part of the original Social Security Act (P.L. 74–271)—to provide 

grants to State agencies for the ‘‘protection and care of homeless, 

dependent, and neglected children, and children in danger of becoming delinquent’’ and for ‘‘developing State services for the encouragement and assistance of adequate methods of community 

child welfare organization.’’ Child Welfare Services funding is authorized on a discretionary basis and is distributed, by formula, to 

States, territories, and tribes. The program authorization has been 

amended numerous times and is currently included in the Social 

Security Act as part of Title IV–B, subpart 1, under which competitive grants for child welfare training and support for some child 

welfare related research projects are also authorized. The Child 

and Family Services Improvement Act of 2006 (P.L. 109–288) clariVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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fied the purposes of that subpart as being to ‘‘promote State flexibility in the development and expansion of a coordinated child and 

family services program that utilizes community based agencies 

and ensures all children are raised in safe, loving families’’ by— 

protecting and promoting the welfare of all children and preventing 

their neglect, abuse, or exploitation; supporting at-risk families to 

allow children to remain safely in their own homes, or to return 

safely to those homes; promoting the safety, permanence and wellbeing of children in foster care and in adoptive homes; and providing training, professional development and support to ensure a 

well-qualified child welfare workforce. 

Title IV–E foster care and adoption assistance 

Federal support for children placed in foster care was first authorized on a temporary open-ended entitlement basis in 1961 (P.L. 

87–31) as part of the prior law cash welfare program, Aid to Dependent Children (ADC). The 1961 law gave States the option to 

seek reimbursement for a part of the cost of maintaining in foster 

care any child who had been eligible for cash assistance in his or 

her home but who—because of a judicial determination that the 

home was ‘‘contrary to the welfare’’ of the child—needed to be removed to foster care. One year later, as part of the Public Welfare 

Amendments of 1962, Congress renamed the cash welfare program, 

Aid to Families with Dependent Children (AFDC), and authorized 

reimbursement of eligible State foster care costs on a permanent 

basis (P.L. 87–543). The Social Security Amendment of 1967 (P.L. 

90–248, enacted in January 1968) required States, as part of the 

AFDC (cash welfare) program, to provide foster care support to eligible children, and it broadened eligibility for Federal foster care 

assistance to include any child who would have been eligible for 

AFDC assistance in his or her own home if an application had been 

made on the child’s behalf. 

Eligibility for Title IV–E. In 1980, the Adoption Assistance and 

Child Welfare Act (P.L. 96–272) created Title IV–E of the Social Security Act to continue, on an independent basis, open-ended Federal reimbursement of a part of all eligible State foster care costs, 

and to newly authorize open-ended Federal reimbursement to 

States for a part of the cost of providing monthly subsidies for eligible adopted children who are determined by the State to have ‘‘special needs.’’ The new Title IV–E program, however, retained the eligibility link to the cash welfare program by limiting Federal eligibility for both foster care and (in most cases) adoption assistance 

to children who were removed from homes in which they were (or 

would have been if application had been made) eligible for cash 

welfare under the AFDC program. With the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, 

P.L. 104–193) Congress repealed the AFDC program (replacing it 

with Temporary Assistance to Needy Families, TANF). At the same 

time, it maintained the prior law AFDC eligibility rules for purposes of determining a child’s eligibility for Federal foster care or 

adoption assistance under Title IV–E, and those rules (as they existed on July 16, 1996) continue to apply today. 

Placement with Relatives and Legal Guardianship. Amendments 

to the Child Welfare Services (Title IV–B, Subpart 1) and foster 

care programs that were made as part of the same 1980 law that 


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created Title IV–E (P.L. 96–272) sought to reduce unnecessary entries to foster care and to ensure, primarily through case planning 

and review, that a child’s stay in foster care was temporary. In 

1994 (P.L. 103–432), Congress authorized the U.S. Department of 

Health and Human Services (HHS) to waive requirements under 

Title IV–E or Title IV–B to enable States to demonstrate alternative ways of providing effective child welfare services to children 

and their families. Under this authority, as many as 12 States 

have, or are implementing, assisted guardianship programs that 

provide subsidies (using Title IV–E funds) to children who leave 

foster care for placement with legal (primarily relative) guardians. 

In 1996, PRWORA (P.L. 104–193) amended the Title IV–E foster 

care program to require that States ‘‘consider giving preference to 

an adult relative over a non-related caregiver when determining a 

placement for a child’’ in foster care—provided that the relative 

caregiver meets all relevant safety standards for the child’s protection. In 1997, the Adoption and Safe Families Act (ASFA, P.L. 105– 

89) again amended the Title IV–E foster care program to clearly establish that States must make safety the pre-eminent concern of all 

child welfare decision-making and it required them to take other 

actions intended to expedite a child’s placement in an appropriate 

permanent living arrangement. ASFA established that for any 

child for whom returning home was not appropriate, the State 

must seek to place the child with an adoptive family, a legal guardian, a ‘‘fit and willing’’ relative, or, if none of these options is in the 

child’s best interest, in another planned permanent living arrangement. As amended by ASFA, a ‘‘legal guardian’’ is defined in Title 

IV–E as the caretaker in a ‘‘legal guardianship,’’ which is defined 

as ‘‘a judicially created relationship between child and caretaker 

which is intended to be permanent and self-sustaining as evidenced 

by the transfer to the caretaker of the following parental rights 

with respect to the child: protection, education, care and control of 

the person, custody of the person, and decisionmaking.’’ After expanding and renewing the authority for HHS to grant new child 

welfare waivers, Congress permitted it to expire at the end of 

March 2006. However, States with previously approved waivers to 

operate demonstration programs may continue to operate under 

those waivers (generally for a limited time) and some States continued to provide assisted guardianship with Title IV–E dollars under 

this authority. 

Adoption incentives 

As part of encouraging States to find permanent homes for children in foster care who cannot return to their birth parents, ASFA 

(P.L. 105–89) established the Adoption Incentives program in Section 473A of the Social Security Act. The program provides a bonus 

to the State child welfare agency when it increases the number of 

children it places out of foster care and into adoptive families. 

States receive an enhanced bonus amount if the child is determined to have ‘‘special needs.’’ The Adoption Promotion Act of 2003 

(P.L. 108–145) amended the program to provide separate bonuses 

to States for increasing the number of older children (age nine or 

above) who are placed out of foster care and into adoptive families. 


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Independent living 

In recognition of research demonstrating the many unmet needs 

of youth who upon reaching the State age of majority are legally 

‘‘emancipated’’ from foster care custody (typically at age 18), Congress, in 1986 (P.L. 99–272), authorized a new capped entitlement 

to States for provision of independent living services to such youth 

before their exit from foster care. Youth were eligible for these 

services if they were between the ages 16 to 18 and met all the 

Title IV–E foster care eligibility criteria. In 1988, P.L. 100–647 expanded independent living program eligibility to include funding 

for services to youth who did not meet the Title IV–E eligibility criteria and to permit States to provide services to youth for up to 6 

months after their emancipation from foster care (P.L. 100–647). 

That same 1988 law also amended the Title IV–E foster care program to stipulate that, ‘‘where appropriate,’’ for any child in foster 

care who is at least age 16, the State must include in the child’s 

required case plan a written description of the ‘‘programs and services which will help such child prepare for the transition from foster care to independent living.’’ In 1990, P.L. 101–508 further provided that States could use these funds to offer services to youth 

who had emancipated from foster care until their 21st birthday. As 

research continued to demonstrate poor outcomes for children 

emancipating from foster care, the Chafee Foster Care Independence Act (P.L. 106–169) doubled the program’s annual entitlement 

to $140 million and made other changes intended to ensure that 

State child welfare agencies and foster youth planned for and 

achieved independent living. As part of the Promoting Safe and 

Stable Families Amendments of 2001 (P.L. 107–133), Congress authorized discretionary funding for Education and Training Vouchers to enable youth who leave foster care without a permanent 

home (or those adopted from foster care at age 16 or older) to receive vouchers worth up to $5,000 annually to attend college or an 

equivalent post-secondary education training program. 

II. CHAIRMAN’S SUBSTITUTE TO S. 3038, THE ‘‘IMPROVED ADOPTION AND RELATIVE GUARDIANSHIP 

SUPPORT ACT OF 2008’’ 

PROMOTING ADOPTION

Adoption incentives 

The Committee finds that the Adoption Incentive Program has 

successfully increased the number of adoptions and should be extended and improved. The Committee bill includes an updated and 

improved extension of the Adoption Incentive Program through FY 

2013. 

Adoption Assistance 

The Committee finds that more should be done to increase the 

number of adoptions out of foster care. Under current law, to qualify for Federal adoption assistance a child must meet the income 

eligibility requirement for the former Aid to Families with Dependent Children (AFDC). Since AFDC was eliminated in 1996 as part 

of the Personal Responsibility and Work Opportunity Act 

(PRWORA), commonly known as welfare reform, the Committee 


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finds that it is an inappropriate eligibility factor for Federal Adoption Assistance. Therefore, the Committee bill phases out the Aid 

to Families with Dependent Children (AFDC) income eligibility 

standard. 

TRIBAL ACCESS

The Committee finds that tribes, tribal consortia, and tribal organizations may provide higher quality and more culturally appropriate care for Indian children. Therefore, the Committee bill allows qualified tribes, tribal consortia, and tribal organizations the 

authority to administer tribal foster care and adoption assistance 

programs for Indian children and to receive direct Federal funding 

for that purpose. To ensure the success of Federal administration 

and tribal implementation of this new authority the committee provides for the establishment of a child welfare resource center solely 

dedicated to improving outcomes for Indian children whether 

served by tribes or States. 

GUARDIANSHIP

The Committee finds that child welfare waivers and several academic studies have demonstrated that children in guardianship 

and kinship placements tend to experience fewer placements and 

have school stability. The Committee finds that surveys also show 

that children are more likely to report liking their placement and 

wanting it to become their permanent placement. Children also are 

less likely to run away. The Committee finds that in addition to the 

benefits of a permanency option for children, a guardianship option 

for States would reduce administrative oversight and caseworker 

visits which would reduce Federal payments for States. The Committee notes that no child would be eligible for a Federal guardianship payment that is not currently eligible for the entitlement provided for under Title IV–E of the Social Security Act. Therefore, 

the Committee bill allows States to receive Federal reimbursement, 

at a level not to exceed the foster care maintenance payment, for 

children eligible for assistance under Title IV–E of the Social Security Act who are placed with a relative in a guardianship arrangement. 

FOSTER CARE

The Committee finds that approximately 20,000 youth age out of 

foster care each year. The Committee notes that the Midwest Evaluation of the Adult Functioning of Former Foster Youth has 

tracked outcomes for a sample of youth. The Committee notes that 

the study has found that still being in care, as opposed to having 

left care, and having certain other characteristics (i.e., having aspirations to graduate from college, feeling close to at least one family 

member, and expressing satisfaction with their experience in foster 

care) more than doubled the odds of the teen working or being in 

school at age 19. Therefore the Committee bill will encourage 

States to continue support and assistance for youth up to age 21 

for youth involved in education, training or employment. Youth 

with medical problems or disability can also stay in care. States 

will also be required to help youth prior to their emancipation to 


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develop a transition plan to outline options for education, training, 

housing, health care and the range of supports. 

It is the view of the Committee that the Committee bill will promote the goals of permanency in a range of ways including adoption, guardianship and kinship care. The Committee finds that the 

Committee bill provides that for youth who do not gain permanency, States will be encouraged to continue support beyond age 18 

to promote better outcomes on education, training and employment. 

III. SECTION-BY-SECTION ANALYSIS 

Committee Bill (S. 3038 as approved September 10, 2008) 

TITLE I—EXTENSION AND IMPROVEMENT OF ADOPTION 

INCENTIVES 

SECTION 101—EXTENSION OF ADOPTION INCENTIVES PROGRAM

5-year extension 

CURRENT LAW

Provides that a State may be eligible for Adoption Incentive 

awards for increasing the number of children who are adopted out 

of foster care in each of FY1998–FY2007. Authorizes appropriations 

of $43 million in each of FY2004–FY2008 to make those awards, 

and stipulates that funds appropriated for Adoption Incentives may 

not be expended after FY2008. As a condition of eligibility for these 

awards, in each of FY2001–FY2007, requires States to provide 

health insurance coverage to any child who has special needs (as 

determined by the State) and for whom the State has an adoption 

assistance agreement in place. Requires the U.S. Department of 

Health and Human Services (HHS) to use State-reported data to 

determine the number of incentive eligible adoptions that the State 

has finalized for each of FY2002–FY2007. 

COMMITTEE BILL

The Committee Bill provides that States may be eligible for 

Adoption Incentive awards for adoptions finalized in each of 

FY2008–FY2012. The Committee Bill extends the funding authorization for the Adoption Incentive Program for five years (through 

FY2013) at the current annual authorization level ($43 million) 

and provides that funds appropriated for Adoption Incentives may 

not be expended after FY2013. Further, the Committee Bill extends 

to each fiscal year the current State eligibility criteria regarding 

provision of health insurance for special needs adoptees and the requirement for HHS to determine the number of adoptions eligible 

under the program by State. 

Additional incentive payment for exceeding the highest ever foster 

child adoption rate 

CURRENT LAW

States may earn Adoption Incentive awards if they increase the 

number of children who are adopted out of foster care. 


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COMMITTEE BILL

In addition, the Committee Bill permits States to earn an Adoption Incentive award for an increase in their rate of foster child 

adoptions. Awards for an increase in the rate of these adoptions are 

made available in any year beginning with FY2009, provided that 

funds appropriated for Adoption Incentives exceed the amount 

needed to make any awards earned for increases in the number of 

adoptions. 

Under the Committee Bill, a State’s foster child adoption rate 

would be determined by dividing the number of foster child adoptions finalized in the State in a given fiscal year by the number of 

children in that State’s foster care caseload on the last day of the 

previous year. (For example: If a State finalizes 150 adoptions in 

a given fiscal year and on the last day of the previous fiscal year 

it had 1,500 children in its foster care caseload, its foster child 

adoption rate for the given fiscal year is 10 percent.) A State earns 

an award if it achieves a foster child adoption rate that is above 

its ‘‘highest ever foster child adoption rate’’—meaning the highest 

foster child adoption rate that the State achieved in any year beginning with FY1998 and before the award year. The amount of 

this award would be equal to $1,000 multiplied by the number of 

adoptions that occurred as a result of the State exceeding its highest ever foster child adoption rate (and holding the foster care caseload constant). (For example: If the State in the example above had 

previously achieved a highest ever foster child adoption rate of 9 

percent, then, when it achieved the rate of 10 percent, its award 

for this increased rate would be calculated as follows: Multiplying 

that highest rate (9 percent) by the 1,500 children in its caseload 

on the last day of the fiscal year prior to the award year, subtracting this number (135) from the actual number of foster child 

adoptions achieved in the award year (150) and multiplying the difference (15) by $1,000 to determine the award amount of $15,000.) 

The Committee Bill permits HHS to make pro rata adjustments to 

these amounts if funds appropriated are insufficient to cover the 

full awards earned. 

Increase in incentive payments for special needs adoptions and 

older child adoptions 

CURRENT LAW

A State earns Adoption Incentive awards for increasing the number of adoptions out of foster care in the following amounts: $4,000 

for each foster child adoption that is above its base number of 

adoptions in this category; $4,000 for each adoption of a child from 

foster care who is age 9 or older that is above its base number of 

adoptions in this category; and (provided the State has also earned 

either a foster child or older child adoption award), $2,000 for each 

special needs adoption of a child (who is under the age of 9) that 

is above its base number of adoptions in this category. 

COMMITTEE BILL

The Committee Bill raises the award amount for each increase 

in older child adoption to $8,000, and for adoption of a child with 

special needs (who is under age 9) to $3,000. (The Committee Bill 


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maintains the current law award of $4,000 for each increase in foster child adoptions overall.) 

Updating of fiscal year used in determining base number of adoptions 

CURRENT LAW

A State has a ‘‘base number’’ of adoptions for each category of 

adoptions under which it may earn an Adoption Incentive award— 

foster child adoptions, older child adoptions and adoptions of special needs children (who are under the age of 9). Those base numbers are equal to the number of adoptions the State finalized in 

each of those categories in FY2002 OR any year after that in which 

it achieved a higher number. 

COMMITTEE BILL

The Committee Bill establishes the base number of adoptions as 

the number of adoptions achieved by a State in each Adoption Incentive category (foster child, older child, and special needs children under age 9) by that State in FY2007. 

24-month availability of payments to states 

CURRENT LAW

States may spend Adoption Incentive awards in the fiscal year 

for which they are awarded and in the following fiscal year. 

COMMITTEE BILL

The Committee Bill gives States 24 months, beginning with the 

month in which the awards are made, to spend these funds. 

SECTION 102—PROMOTION OF ADOPTION OF CHILDREN WITH

SPECIAL NEEDS

Elimination of eligibility based on AFDC and SSI income standards 

CURRENT LAW

A child who has ‘‘special needs’’ (as determined by each State) is 

eligible for Federal adoption assistance if the child meets the requirements of at least one of the following eligibility pathways: 

(1) AFDC: The child was removed from the home of a parent or 

other relative under a voluntary placement agreement or because 

a judge found the home of the parent or other relative to be ‘‘contrary to the welfare’’ of that child, AND, if while living in that 

home, the child would have met all income, family structure, and 

other eligibility requirements necessary to be determined a ‘‘needy’’ 

child under the Aid to Families with Dependent Children (AFDC) 

program (as that program existed on July 16, 1996). 

(2) SSI: The child meets all the eligibility criteria for Supplemental Security Income (SSI), including those related to income 

and medical/physical disability. 

(3) Child of a minor parent: The child lives with his/her minor 

parent who is in foster care, and the minor parent meets either the 

AFDC or SSI eligibility criteria and is receiving Federal foster care 


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maintenance payments that includes funds to cover costs of the 

child. 

COMMITTEE BILL

The Committee Bill removes all income and resource tests included in each of these eligibility pathways. Further, with regard 

to the child’s removal from his/her home (under the current AFDC 

eligibility pathway) the Committee Bill requires a State to make 

the determination that continuation of the child in the home would 

be contrary to the safety or welfare of the child and permits the 

State to make this determination pursuant to its own criteria, 

which may or may not require this determination to be made by 

a judge. 

Eligibility if initial adoption fails 

CURRENT LAW

If a child was eligible for Federal adoption assistance in a previous adoption, ensures continued eligibility for this assistance in 

a subsequent adoption provided the child is determined by the 

State to have special needs and is available for adoption because 

the previous adoption was dissolved (with adoptive parents’ rights 

terminated) or because the adoptive parents died. This provision 

was included in the Adoption and Safe Families Act and became 

effective for any child adopted on or after October 1, 1997. 

COMMITTEE BILL

The Committee Bill extends this same provision to any child 

whose adoption occurred before the October 1, 1997 effective date 

of the Adoption and Safe Families Act and who would have been 

found eligible if the ASFA provision was enacted at that time. 

Exception (related to intercountry adoption) 

CURRENT LAW

Children adopted in another country, or who are brought to this 

country for the purposes of adoption (i.e., intercountry adoptees) 

may not be categorically excluded from Federal adoption assistance. However, they are generally found ineligible for monthly Federal adoption assistance because they do not meet the eligibility 

criteria for Federal adoption assistance. (For example, they can not 

meet the requirements of the prior law AFDC program, which was 

a domestic program and available only to children living in this 

country.) At the same time, the adoptive parents of an intercountry 

adoptee may claim reimbursement of non-recurring adoption expenses (up to $2,000) if the State determines that the intercountry 

adoptee has special needs and the adoptive parents request the 

payment before the adoption is finalized. 

COMMITTEE BILL

In general, the Committee Bill makes intercountry adoptees categorically ineligible for Federal adoption assistance of any kind— 

that is, they may not be eligible for monthly assistance payments 

nor for payment of non-recurring adoption expenses. However, an 

intercountry adoptee who the State determines to have special 


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needs and who is placed in foster care because the initial intercountry adoption failed (as determined by the State) may be eligible for Federal adoption assistance. 

Requirement for use of State savings 

CURRENT LAW

Not applicable. 

COMMITTEE BILL

The Committee Bill provides that any State savings that may be 

achieved because of the expanded Federal eligibility for adoption 

assistance permitted by the Committee Bill must be spent on child 

welfare purposes. 

Determination of a child with special needs 

CURRENT LAW

A child is considered to have ‘‘special needs’’ if the State determines that: (1) the child cannot or should not be returned to his/ 

her home; (2) because of a factor defined by the State and specific 

to the child—e.g., the child’s age, race/ethnicity, membership in a 

sibling group, physical, mental or emotional disabilities or medical 

conditions—he or she is unlikely to be adopted without provision 

of medical assistance or adoption assistance; and (3) it has made 

efforts (unless this is against the best interests of the child) to 

place the child for adoption without providing medical or adoption 

assistance on the child’s behalf, but these efforts have been unsuccessful. 

COMMITTEE BILL

The Committee Bill provides that a State must consider any 

child who meets all the medical or disability requirements related 

to eligibility for SSI to be a child with special needs (provided that 

the State has also determined that the child cannot or should not 

be returned home and the State has tried unsuccessfully to place 

the child for adoption without medical or adoption assistance). 

EFFECTIVE DATE

In general, the Committee Bill makes the provisions of this section, ‘‘Promotion of Adoption of Children with Special Needs,’’ effective with FY2013 and applicable only to adoption assistance agreements entered into on or after the first day of that fiscal year (October 1, 2012). However, the Committee Bill phases in earlier implementation of these amendments for children who have attained 

a certain age. Specifically, it stipulates that the amendments of the 

section apply beginning with the first day of FY2011 (October 1, 

2010) for any adoption assistance agreement entered into during 

that year that is done on behalf of a child who is 12 years of age 

or older on the date the agreement is executed; and that it applies 

as of the first day of FY2012 (October 1, 2011) for any adoption assistance agreement entered into during that year that is done on 

behalf of a child who is 6 years of age or older on the date the 

agreement is executed. 


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TITLE II—SUPPORT FOR RELATIVE GUARDIANSHIP 

SECTION 201—RELATIVE GUARDIANSHIP ASSISTANCE PAYMENTS FOR

CHILDREN

Option for States to enhance and subsidize a relative guardianship 

program 

CURRENT LAW

Under Title IV–E of the Social Security Act, States with an approved foster care and adoption assistance plan are entitled to receive Federal reimbursement for a part of the cost of providing foster care and adoption assistance to every eligible child. 

COMMITTEE BILL

The Committee Bill provides that any State that elects to offer 

relative guardianship assistance under its Title IV–E foster care 

and adoption assistance plan is additionally entitled to Federal 

support for a part of the cost of providing this assistance on behalf 

of each eligible child. 

Requirements 

CURRENT LAW

No provision. 

COMMITTEE BILL

Relative Guardianship Agreements: The Committee Bill provides 

that to receive this Federal support, a State must negotiate and 

enter into a written and binding agreement with the relative 

guardian of an eligible child that at a minimum, specifies: (1) the 

amount of each relative guardianship assistance payment and how 

it will be provided; (2) additional services and assistance that the 

child and relative guardian will be eligible for under the agreement; (3) the procedure the relative guardian may use to apply for 

additional services (if agreed to); and (4) that the State will pay up 

to $2,000 of the non-recurring expenses associated with obtaining 

legal guardianship of the child. 

Interstate Application: The Committee Bill provides that a relative guardianship assistance agreement must remain in effect regardless of the State in which the relative guardian resides. 

Federal Reimbursement of Nonrecurring Expenses: The Committee Bill stipulates that the Federal government must pay onehalf (50 percent) of a State’s cost of covering nonrecurring guardianship expenses (up to $2,000). 

Relative Guardianship Assistance Payments: The Committee Bill 

provides that the amount of a child’s relative guardianship assistance payment must be based on a consideration of the circumstances of the relative and the needs of the child, but must not 

be less than the amount the State would pay on behalf of the child 

if he or she was adopted, nor can it be more than the amount the 

State would pay on the child’s behalf if the child remained in a foster family home. The amount of the relative guardianship assistance payment may be readjusted periodically, with the concurrence 


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of the relative guardian, depending upon changes in the circumstances of the relative guardian or the needs of the child. 

Child’s Eligibility for a Relative Guardianship Assistance Payment: Under the Committee Bill, a child is eligible for a Federal 

relative guardianship assistance payment if the State agency determines that: (1) in the month before the legal guardianship was established the child was in foster care and eligible for a Federal foster care maintenance payment; (2) being returned home or adopted 

are not appropriate permanency options for the child and, in the 

case of a child for whom removal from the home was associated primarily with parental substance abuse and addiction, that attempts 

to engage the family in residential, comprehensive family treatment programs are inappropriate or have been unsuccessful, or 

such programs are unavailable; (3) the child demonstrates a strong 

attachment to the relative guardian; (4) the relative guardian has 

a strong commitment to caring for the child and satisfies other requirements (specified below); and (5) if the child is age 14 or older, 

the child has been consulted about the relative guardianship arrangement. 

Requirements for Relative Guardians: Under the Committee Bill, 

a relative guardian must: (1) be a grandparent or other relative of 

the child on whose behalf the relative guardianship assistance payment is being made; (2) have satisfied the same criminal background and child abuse and neglect registry checks that are required of prospective foster and adoptive parents of children on 

whose behalf Federal foster care or adoption assistance payments 

are made; (3) have met the State’s licensing requirements for a foster family home; and (4) assume legal guardianship of the child 

and commit to caring for the child on a permanent basis. 

Treatment of Siblings: The Committee Bill provides that a child 

who meets the eligibility requirements for Federal relative guardianship assistance payments must be placed in the same relative 

guardianship arrangement with any sibling(s), unless it can be 

shown that this is inappropriate, and, further that Federal relative 

guardianship assistance payments may be paid for each sibling 

placed in the same relative guardianship arrangement. 

Payments to States 

CURRENT LAW

States are entitled to receive Federal reimbursement of 75 percent of their cost of providing short-term training to eligible individuals (including current and prospective foster and adoptive parents and staff of certain child care institutions) provided those individuals care for children who are eligible for Federal foster care or 

adoption assistance. 

Every State has a Federal Medical Assistance Percentage 

(FMAP) that is calculated annually and may range from 50 percent 

(for higher per capita income States) to 83 percent (for lower per 

capita income States). 

COMMITTEE BILL

Under the Committee Bill, States are additionally entitled to 

Federal reimbursement of 75 percent of the cost of providing shortterm training for current or prospective relative guardians, proVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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vided those relative guardians care for children receiving Federal 

foster care, relative guardianship assistance, or adoption assistance. 

Under the Committee Bill, States are entitled to Federal reimbursement at their FMAP for the cost of providing relative guardianship assistance payments to eligible children. 

Incentive payments for relative guardianship placement 

CURRENT LAW

Funds are authorized to be appropriated for Adoption Incentives 

to States that increase the number of children adopted out of foster 

care. 

COMMITTEE BILL

The Committee Bill requires HHS to make Relative Guardianship Incentive Awards in any fiscal year in which the funds appropriated for the Adoption Incentive program exceeds the amount 

needed to provide all adoption-related awards earned by the States 

under that program. In the first year that a State establishes a relative guardianship assistance program (under Title IV–E), the 

Committee Bill provides that the State’s relative guardianship incentive award is equal to the total number of relative guardianship 

assistance agreements it enters into during that year multiplied by 

$1,000. In any succeeding year, the award amount is equal to 

$1,000 multiplied by any increase in the number of relative guardianship assistance agreements that a State entered into that is 

above its ‘‘base number’’ of such agreements. A State’s base number 

of relative guardianship assistance agreements is equal to the highest number of those agreements it enters into in any year before 

the award year. HHS may make pro rata adjustments to these 

award amounts if funds appropriated are insufficient to cover the 

full awards earned. 

Conforming amendment (use of funds) 

CURRENT LAW

States may only spend Adoption Incentive awards for provision 

to children and families of any service (including post-adoption 

services) that is now authorized under Title IV–B (Child and Family Services) and Title IV–E (Foster Care and Adoption Assistance) 

of the Social Security Act. 

COMMITTEE BILL

The Committee Bill maintains the current provisions for use of 

Adoption Incentive funds while explicitly adding that ‘‘relative navigator and support services’’ may also be funded by the awards. 

Maintaining eligibility for adoption assistance and Medicaid 

CURRENT LAW

Children who are eligible for adoption assistance or for Federal 

foster care maintenance payments are categorically eligible for 

Medicaid. 


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14 

COMMITTEE BILL

Medicaid eligibility: The Committee Bill ensures that children 

who move to Federal relative guardianship assistance—all of whom 

must by definition have been eligible for Federal foster care assistance—maintain their eligibility for Medicaid. 

Adoption Assistance eligibility: The Committee Bill separately 

provides that for purposes of determining a child’s eligibility for 

Federal adoption assistance, any child who has received Federal 

relative guardianship assistance payments, and who is determined 

by the State to have special needs, must be eligible for Federal 

adoption assistance. The Committee Bill stipulates that the State 

must make payments of nonrecurring adoption expenses to the 

adoptive parents of such a child. 

Eligibility for independent living services and education and training vouchers for children who exit foster care for relative guardianship or adoption after age 16 

CURRENT LAW

Under the Chafee Foster Care Independence Program, States design and conduct independent living programs to help youth who 

are expected to remain in foster care until their 18th birthday, and 

those who have aged out of foster care (up to age 21) to transition 

to independent adulthood. Also authorizes Education and Training 

Vouchers for these same youth to attend college (or an equivalent 

level training program) and provides that any youth who is adopted 

from foster care after his/her 16th birthday is eligible for Education 

and Training Vouchers. 

COMMITTEE BILL

The Committee Bill also permits States to design and provide 

Chafee independent living services for any youth who leaves foster 

care after his/her 16th birthday for adoption or relative guardianship. The Committee Bill further extends eligibility for Education 

and Training Vouchers to any youth who leaves foster care for relative guardianship after his/her 16th birthday. 

Notice requirements 

CURRENT LAW

Provides that a State must ‘‘consider’’ giving preference to an 

adult relative over a non-related caregiver when determining the 

placement of a child, if the adult relative meets State child protection standards. 

COMMITTEE BILL

Notice to relatives of child’s removal from parental custody: The 

Committee Bill additionally requires the State child welfare agency 

to ‘‘exercise due diligence’’ to identify any adult grandparents or 

other adult relatives of a child within 60 days of a child’s removal 

from parental custody. It also requires the State to give these relatives notice of the imminent or recent removal of the child and to 

explain the relative’s options to participate in the child’s care and 

placement—including a description of State licensing requirements 


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and associated supports and benefits, and how to enter into a relative guardianship assistance agreement (provided the State has 

opted to provide this kind of assistance). The Committee Bill permits exceptions to this notice requirement due to family or domestic violence. 

Notice to non-parent caregivers of children receiving TANF benefits: The Committee Bill also requires the State child welfare agency to give notice of these same care and placement options to any 

non-parent relative caretaker who, after an interaction with the 

child welfare agency, is providing a home for a child receiving Temporary Assistance to Needy Families (TANF) benefits. 

TANF penalty for failure to provide notice 

CURRENT LAW

Under the TANF block grant (Title IV–A of the Social Security 

Act), States are entitled to receive an annual grant for family assistance. The amount of this grant may be reduced if HHS determines that the State has failed to comply with certain Federal requirements related to the receipt and use of the funds. A State may 

avoid such a penalty if it can show reasonable cause for the noncompliance, or if it enters into a corrective compliance plan with 

HHS. 

COMMITTEE BILL

The Committee Bill requires HHS to reduce the amount of a 

State’s TANF grant if it determines that the State is not complying 

with the notice provisions for non-parent caretakers of children receiving TANF benefits. If a non-complying State cannot give reasonable cause or does not enter into a corrective compliance plan 

with HHS, the penalty amount must be based on the State’s degree 

of noncompliance. However, it must be no less than 1 percent nor 

more than 3.5 percent of the State’s total TANF family assistance 

grant. 

Notice requirements (adoption tax credit) 

CURRENT LAW

The Internal Revenue Code permits taxpayers who adopt a child 

to claim a tax credit for all qualifying adoption costs up to the maximum credit. (The maximum credit was equal to $11,390 in tax 

year 2007.) It also provides that any taxpayer who adopts a child 

meeting the State’s definition of ‘‘special needs’’ may claim the full 

credit amount (without having to show any qualifying costs). 

COMMITTEE BILL

The Committee Bill requires States to provide information to prospective adoptive parents about their potential eligibility for the 

Federal adoption tax credit, including the fact that if they adopt a 

special needs child, they may receive the maximum credit without 

having to show any qualifying adoption costs. 


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Case plan requirements 

CURRENT LAW

Every child in foster care must have a written case plan. 

COMMITTEE BILL

The Committee Bill requires that if the permanency goal for a 

child in foster care is placement with a relative guardian who is 

to receive a Federal relative guardianship assistance payment on 

the child’s behalf, that child’s case plan must describe—(1) the 

steps the agency has taken to determine that it is not appropriate 

for the child to return home or be adopted; (2) the reasons why a 

permanent placement with a fit and willing relative through a relative guardianship assistance arrangement is in the child’s best interests; (3) the ways in which the child meets the eligibility requirements for relative guardianship assistance payments; (4) the 

efforts the agency has made to discuss adoption by the child’s relative guardian and, if the relative guardian chose not to pursue 

adoption, the reasons why this is so; and (5) the efforts made by 

the State agency to secure the consent of the child’s parent(s) to 

the relative guardianship assistance arrangement (or the reason 

why those efforts were not made). 

Requirement to conduct criminal records and child abuse and neglect registry checks 

CURRENT LAW

States are required to conduct fingerprint-based FBI checks of 

prospective foster and adoptive parents and must also conduct 

child abuse registry checks of any prospective foster or adoptive 

parents, as well as any other adult living in the home. A State may 

not approve the placement of a child for whom Federal foster care 

or adoption assistance is claimed with any individual for whom the 

criminal record check reveals certain felony convictions. 

COMMITTEE BILL

The Committee Bill would require these same criminal background checks, child abuse and neglect registry checks, and placement approval procedures for prospective relative guardians. 

EFFECTIVE DATE

The Committee Bill makes the amendments in this section, ‘‘Relative Guardianship Assistance Payments for Children,’’ effective on 

October 1, 2008, and applicable only to relative guardianship assistance agreements made on or after that date. 

SECTION 202—DEMONSTRATION PROJECTS REGARDING LICENSING

OF IMMEDIATE RELATIVE FOSTER PARENTS

CURRENT LAW

No provision. 


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17 

COMMITTEE BILL

The Committee Bill requires HHS to establish not more than 10 

demonstration projects (at least 2 in rural States, 1 in a State 

where counties primarily administer the Title IV–E foster care program, and 1 in a tribe that directly operates a Title IV–E foster 

care program) to determine the extent to which flexibility in the 

application of licensing standards for the homes of immediate relative foster parents results in improved well-being and permanency 

outcomes for children in foster care. A State (including any of the 

50 States or the District of Columbia) or tribe selected to conduct 

such a demonstration (under the Title IV–E foster care program) 

may modify the extent to which the home of an immediate foster 

parent relative (grandparent, aunt, uncle or adult sibling) meets 

any of the State’s foster family home licensing standards that concern—(1) the number or size of bedrooms in the home (with appropriate safeguards for age and sex of the children); (2) the number 

of bathrooms in the home (with appropriate safeguards for age and 

sex of the children); and (3) the overall square footage of the home. 

The Committee Bill requires that the licensing demonstrations 

must begin no later than one year after the date of the bill’s enactment and must be conducted for two years. It also requires, that, 

not later than one year after completion of the projects, HHS must 

submit to the Senate Finance and House Ways and Means Committees a report that evaluates the impact of the projects on the 

well-being of children in foster care and on their permanency outcomes—which must be based on the State’s performance before the 

demonstration compared to its performance during the demonstration. The report must also include any recommendations for administrative or legislative action HHS determines to be appropriate. 

SECTION 203—GRANTS TO CARRY OUT KINSHIP NAVIGATOR

PROGRAMS

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill appropriates $5 million in each of FY2009– 

FY2013 to fund competitive grants to (1) establish kinship navigator programs in States, large metropolitan areas and tribal 

areas; and (2) promote effective partnerships among public and private agencies to more effectively serve kinship care families. The 

Committee Bill requires grantees to use funds received under the 

grant program to establish information and referral systems that 

link kinship caregivers to the full range of supports available to 

them; conduct outreach activities in collaboration with other relevant organizations to link kinship care families to the kinship 

navigator program; prepare, distribute, and updating kinship care 

resource guides, websites or other relevant outreach materials; and 

promote partnerships between public and private agencies to help 

those agencies better meet the needs of kinship care families and 

to familiarize them with the special needs of those families. Additional activities that the Committee Bill permits grant funds to be 

used for include establishment and support of a ‘‘kinship care omVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00017 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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budsman,’’ as well as, to provide support for ‘‘other activities’’ designed to assist caregivers in obtaining benefits and services and 

those intended to improve their care giving. 

As provided by the Committee Bill, entities eligible to apply for 

kinship navigator grants are tribal organizations, and public or private agencies of a State, or those serving a large metropolitan area, 

that have experience addressing the needs of kinship caregivers or 

children. The Committee Bill requires entities seeking kinship navigator grant funds to include specific information in their grant application concerning planning for, providing, and reporting on services and activities under the kinship navigator program. It further 

stipulates that any grant funds received must not generally be 

used to provide direct services to children or their kinship caregivers. And also that not more than 50 percent of any non-Federal 

share of the program costs, may be provided by grantees in-kind 

and fairly evaluated (including plant, equipment, or services). 

The Committee Bill provides that the kinship navigator grants 

are to be administered by the Administration for Children and 

Families (ACF) within the HHS and that in doing so ACF must periodically consult with the Administration on Aging (of HHS). In 

addition, the Committee Bill stipulates that ACF must use no less 

than 50 percent of the funds appropriated for kinship navigator 

programs to award grants to State agencies and, also requires ACF 

to give preference for grants to applicants that demonstrate the capacity to offer the full range of services and activities for which 

funds may be used. As part of a final report to ACF on services and 

activities funded by the grant, a grantee must describe to ACF its 

plans for continuing the kinship navigator program after the expiration of the Federal grant. ACF would be permitted to reserve up 

to 1 percent of any of the funds appropriated to provide technical 

assistance to grantees related to the purposes of the kinship navigator program. The Committee Bill establishes this grant authority 

and funding in a new Section 427 of the Social Security Act. 

SECTION 204—AUTHORITY FOR COMPARISONS AND DISCLOSURES OF

INFORMATION IN THE FEDERAL PARENT LOCATOR SERVICE FOR

CHILD WELFARE, FOSTER CARE AND ADOPTION ASSISTANCE PURPOSES

CURRENT LAW

The Federal Parent Locator Service (FPLS) is a national computerized locator system that consists of the National Directory of New 

Hires and the Federal Child Support Case Registry. It also can provide access to certain information stored in other agencies including the Internal Revenue Service, the Social Security Administration, the Department of Veterans Affairs, the Department of Defense, the Federal Bureau of Investigation, the National Personnel 

Records Center and the State Employment Securities Agencies. 

HHS is required to compare information in the multiple components of the FPLS to find instances in which a comparison reveals 

a match to an individual, and to disclose such information (e.g., addresses and employer information) to the agencies that administer 

Child Support Enforcement (under Title IV–D) and the Temporary 

Assistance for Needy Families (TANF) block grant (under Title IV– 

A). HHS is permitted to make these comparisons to the extent, and 


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with the frequency, it determines to be effective in assisting States 

in administering those programs. 

COMMITTEE BILL

The Committee Bill additionally requires HHS to provide this 

same assistance to State child welfare agencies (that administer 

programs under Title IV–B or Title IV–E). 

TITLE III—TRIBAL FOSTER CARE AND ADOPTION ACCESS 

SECTION 301—EQUITABLE ACCESS FOR FOSTER CARE AND ADOPTION

SERVICES FOR INDIAN CHILDREN IN TRIBAL AREAS

Authority for direct payment of Federal Title IV–E funds for programs operated by Indian tribal organizations 

CURRENT LAW

States with a Title IV–E foster care and adoption assistance plan 

that is approved by HHS are entitled to receive Federal reimbursement for eligible costs associated with operating those programs. 

Tribes are not permitted to submit such a plan to HHS and may 

not receive direct Federal funding under Title IV–E. 

COMMITTEE BILL

The Committee Bill establishes direct access to tribes for Federal 

foster care and adoption assistance funding by permitting an Indian tribe, tribal organization, or tribal consortium to submit a 

Title IV–E foster care and adoption assistance plan to HHS for approval. The Committee Bill creates a new Section 479B of the Social Security Act, which sets out the following law with regard to 

the tribal foster care and adoption assistance programs: 

Definitions 

CURRENT LAW

The Indian Self Determination and Education Assistance Act 

(Section 4) defines an Indian tribe as any Federally recognized 

band, nation, or other organized group or community (including 

certain Alaska Native Villages or regional or village corporations) 

that is recognized as eligible for the special programs and services 

provided by the United States to Indians because of their status as 

Indians. And it defines a ‘‘tribal organization’’ as the recognized 

governing body of any Indian tribe. 

COMMITTEE BILL

The Committee Bill defines ‘‘Indian tribe’’ and ‘‘tribal organization’’ as they are defined in the Indian Self Determination and Assistance Act. 

Authority 

CURRENT LAW

No provision. 


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COMMITTEE BILL

Unless explicitly spelled out differently in the tribal provisions of 

Title IV–E (which the Committee Bill creates in Section 479B), the 

Committee Bill makes all aspects of Title IV–E applicable to any 

Indian tribe, tribal organization, or tribal consortium, in the same 

manner as they apply to States, provided that the tribal entity is 

operating a Title IV–E foster care and adoption assistance program 

under a plan approved by HHS. 

Plan requirements 

CURRENT LAW

A State’s Title IV–E foster care and adoption assistance plan 

must meet numerous requirements, which are specified in Section 

471 of the Social Security Act. Among these are requirements related to provision of foster care and adoption assistance to eligible 

children and Statewide operation of the program. Under Federal 

regulations States may not use affadavits or nunc pro tunc orders 

to retroactively establish that a child’s removal from his or her 

home was a result of a judicial determination that the home was 

‘‘contrary to the welfare’’ of that child. Further, as part of seeking 

Federal reimbursement for the foster care and adoption assistance 

program, States are required by Federal regulation to have an 

HHS-approved cost allocation plan that details the costs that will 

be assigned to the program and how Federal reimbursement will 

be sought. States are not permitted to claim Title IV–E costs based 

on in-kind expenditures from third party sources. 

COMMITTEE BILL

The Committee Bill requires an eligible tribal entity seeking to 

operate a Federal foster care and adoption assistance plan to submit a plan for approval to HHS that meets the requirements of 

Section 471 with the following modifications and addition. 

Financial Management: An Indian tribe, tribal organization, or 

tribal consortium seeking to operate a foster care and adoption assistance program must include in its plan evidence that that it has 

not had any uncorrected significant or material audit exceptions 

under Federal grants or contracts that directly relate to the administration of social services for the 3-year period before the date on 

which it submits the plan. 

Service Area: The tribal entity’s plan must also describe the service area or areas and populations to be served under that plan and 

include an assurance that the plan will be in effect in all those 

areas and for all populations to be served. 

Eligibility: The tribal entity’s plan must include an assurance 

that it will make foster care maintenance payments, adoption assistance payments, and (at the option of the tribal entity) relative 

guardianship assistance payments only on behalf of children who 

meet the Federal eligibility requirements. The Committee Bill further specifies that the AFDC rules that apply for a child that will 

be served under a tribal plan are the same rules that applied in 

the State in which the child resided when he or she was removed 

from the home. Further, for only the first 12 months in which a 

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ance program under a plan approved by HHS, the tribe may use 

either affidavits or nunc pro tunc orders to retroactively verify that 

a child’s removal from his/her home occurred because of a judge’s 

determination that the home was contrary to the welfare of the 

child. 

In-Kind Expenditure Claims: For FY2010 through FY2014 only, 

the tribal entity’s plan must include a list of the in-kind expenditures and their third party sources that the tribal entity may claim 

for purposes of seeking Federal reimbursement of administrative 

costs under the foster care and adoption assistance plan, including 

training costs. The Committee Bill prohibits any interpretation of 

its tribal in-kind claiming rules that would prevent a tribal entity 

from making an in-kind expenditure claim that a State with an 

HHS-approved foster care and adoption assistance plan can make. 

After this stipulation, the Committee Bill establishes the following 

special rules related to in-kind expenditures from third party 

sources for tribal entities operating an HHS-approved foster care 

and adoption assistance plan: (1) For expenditures in FY2010 and 

FY2011, a tribal entity may claim not more than 25 percent of its 

total foster care and adoption assistance program administrative 

costs (excluding training costs) and not more than 12 percent of its 

total program training costs, as in-kind expenditures from third 

party sources. (2) For expenditures in FY2010 and FY2011, with 

regard to training costs only, the third party sources of the in-kind 

expenditures must be listed in the tribal entity’s plan and those 

sources must be limited to one or more of the following entities: a 

State or local government, a tribal entity other than the one making the claim under Title IV–E, a public institution of higher education, a tribal college or university, and a private charitable organization. (3) In general, for expenditures in FY2012, FY2013, and 

FY2014, a tribal entity may only claim reimbursement for in-kind 

expenditures from third party sources in accordance with regulations promulgated by HHS and those regulations must specify the 

allowable third party sources and the applicable share of tribal program costs that may be made as in-kind expenditures of third 

party sources. However, a tribal entity with a foster care and adoption assistance program plan that was approved by HHS for 

FY2010 or FY2011 must not be required to comply with any regulations on this issue before the first day of FY2013. (4) If HHS does 

not produce regulations on tribal claiming of in-kind expenditures 

from third party sources by FY2013, and no legislation has been 

enacted specifying otherwise, then for FY2012, FY2013 and 

FY2014, the special rules that applied for FY2010 and FY2011 

claims apply. However, beginning in FY2015, no claims for in-kind 

expenditures from third party sources may be made by any tribal 

entity (unless a State could make such a claim). 

Clarification of tribal authority to establish standards for tribal foster family homes and tribal child care institutions 

CURRENT LAW

Each State is required, as a part of its foster care and adoption 

assistance program, to designate or create an authority (or authorities) to establish standards for licensing or approving any foster 


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family homes or child care institution that receives Federal Title 

IV–E or Title IV–B funds for the care of a foster child. 

COMMITTEE BILL

The Committee Bill clarifies that in complying with this requirement, the Indian tribe, tribal organization, or tribal consortium 

must establish a tribal authority (or authorities), which are responsible to maintain tribal standards for tribal foster family homes 

and tribal child care institutions. 

Consortium 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill provides that participating Indian tribes or 

tribal organizations of a tribal consortium may develop and submit 

a single Title IV–E foster care and adoption assistance plan that 

meets the requirements for HHS approval. 

Determination of Federal Medical Assistance Percentage for foster 

care maintenance and adoption assistance payments 

CURRENT LAW

In general, each State has a Federal Medical Assistance Percentage (FMAP)—sometimes called the ‘‘Medicaid matching rate’’— 

which is used to determine the share of a State’s eligible foster care 

maintenance and adoption assistance payments that will be reimbursed by the Federal Government. A State’s FMAP may range 

from 50 percent (for States with highest per capita income) to 83 

percent (for States with lowest per capita income). 

COMMITTEE BILL

The Committee Bill provides that the per capita income of the 

service population of a tribal entity operating a plan under Title 

IV–E must be used to determine that tribal entity’s Federal reimbursement rate (or FMAP) for foster care maintenance, adoption 

assistance, and relative guardianship assistance payments. However, in no case may the reimbursement rate of the tribal entity 

be less then the FMAP of any State in which it is located. Further, 

HHS must consider any information submitted by a tribal entity as 

relevant to the calculation of that tribal entity’s per capita income. 

Non-application to cooperative agreements and contracts 

CURRENT LAW

States that operate Title IV–E foster care and adoption assistance programs may enter into agreements with other public agencies to provide foster care to children. (As of March 2008, there 

were approximately 86 tribal-State Title IV–E agreements in effect, 

involving 11 States.) 


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COMMITTEE BILL

The Committee Bill provides that any cooperative agreement or 

contract entered into between a State and tribal entity for the administration of foster care and adoption assistance program, or 

payment of funds under Title IV–E, must remain in full force and 

effect upon enactment of the Committee Bill (subject to the right 

of either party to revoke or modify the agreement according to the 

terms of the agreement). The Committee Bill also prohibits any interpretation of its provisions of its section related to ‘‘Tribal Access 

to Foster Care and Adoption’’ that affects the authority of a tribal 

entity and a State to enter into a cooperative agreement or contract 

for the administration of foster care and adoption assistance program or payment of Title IV–E funds. 

Rule of construction (application of Medicaid eligibility) 

CURRENT LAW

Children who are eligible for assistance under the Title IV–E foster care and adoption assistance program are made categorically eligible for Medicaid. 

COMMITTEE BILL

The Committee Bill ensures that categorical eligibility for Medicaid continues to be available to children who are eligible for a 

Federal foster care maintenance payment, adoption assistance payment, or relative guardianship assistance payment under a tribal 

entity’s Title IV–E foster care and adoption assistance plan approved by HHS. 

Conforming amendment (eligibility of children under tribal care 

and placement) 

CURRENT LAW

To be eligible to receive Federal foster care assistance, a child’s 

care and placement must be the responsibility of (1) the State child 

welfare agency, which administers the Title IV–E foster care and 

adoption assistance program, or (2) any other public agency with 

which the State child welfare agency has an agreement. 

COMMITTEE BILL

The Committee Bill additionally permits eligibility for any child 

whose care and placement is the responsibility of an Indian tribe, 

tribal organization, or tribal consortium that has a Title IV–E foster care and adoption assistance plan approved by HHS. 

John H. Chafee Foster Care Independence Program 

CURRENT LAW

States receive a share of capped mandatory funding to provide 

independent living services to youth who are expected to remain in 

foster care until their 18th birthday and to youth who have emancipated from foster care (until their 21st birthday). They also receive a share of any discretionary appropriations provided for Education and Training Vouchers to support the postsecondary education (or comparable training) of older foster youth. A State must 


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apply to receive funding under the Chafee Foster Care Independence Program and must meet certain planning requirements and 

certifications as a part of the applications. HHS must pay to each 

State, the lesser of 80 percent of its Chafee Program cost (including 

those for Education and Training Vouchers) or the State’s full allotment under these funding streams. A State’s allotment of funds out 

of the mandatory Chafee funding ($140 million annually) is based 

on its relative share of the national foster child population, except 

that no State may receive less then $500,000 or the amount of 

funding they received for independent living services in FY1998. A 

State’s allotment of any discretionary funding appropriated for 

Education and Training Vouchers (FY2008 funding = $45 million) 

is based entirely on its relative share of the national foster care 

caseload. 

COMMITTEE BILL

The Committee Bill provides that the Title IV–E provisions related to the Chafee Foster Care Independence Program (including 

the associated Education and Training Vouchers) do not apply to 

tribes except as described in the Committee Bill. 

Application of Chafee Foster Care Independence Program to 

Tribes: An Indian tribe, tribal organization, or tribal consortium 

with a Title IV–E foster care and adoption assistance plan approved by HHS, or one that is receiving funding to provide foster 

care pursuant to a tribal-State Title IV–E agreement or contract, 

may apply directly to HHS for an allotment of Chafee Foster Care 

Independence Program funds and/or Education and Training 

Voucher funds. The tribal entity’s application must include a plan 

for providing independent living services that satisfies the planning 

and certification requirements made of States that HHS determines appropriate for the tribal entity. In addition, the application 

must describe the tribal entity’s consultation process with all relevant State(s). In particular, it must include the results of the consultation with regard to determining Indian children’s eligibility for 

benefits and services under a tribal entity’s program and the process for ensuring continuity of benefits and services for children who 

will transition from State-planned independent living benefits and 

services to tribal-planned independent living benefits and services. 

Payment and Allotment: The Committee Bill requires HHS to 

make payments to each tribal entity with an approved application 

in the same manner that it makes these payments to States, unless 

the agency determines that another manner is more appropriate. 

(However, in no case may a tribal entity receive less than 80 percent of its program costs.) The allotment amount for each tribal entity is based on the share of children in the tribal entity’s foster 

care population relative to the total number of children in foster 

care in the State (whether under the care and placement responsibility of the State or of any tribal entity in the State with an approved application for general Chafee independent living funds 

and/or Education and Training Voucher funds. (For example if 

there are 1,000 children in foster care in the State and 50 of those 

children are in the tribal entity’s care and placement responsibility, 

then 5 percent of the State allotment of Chafee and/or Education 

and Training Voucher funds must be allotted to the tribal entity.) 

The Committee Bill provides that any allotment amount for a tribVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00024 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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al entity under the general Chafee program and/or Education and 

Training Vouchers program must be considered a part of a State’s 

allotment of those program funds. 

State and tribal cooperation 

CURRENT LAW

There is no foster care and adoption assistance State plan requirement (under Title IV–E) that a State and tribe must cooperate 

in the provision of services to eligible children. Under the Chafee 

Foster Care Independence Program, however, a State must certify 

that it has consulted with each Indian tribe located within its borders about its planned independent living programs, that efforts to 

coordinate the programs with these tribe(s) have been made, and 

that the benefits and services it provides under the programs will 

be made available to Indian children in the State on the same basis 

as to other children. 

COMMITTEE BILL

The Committee Bill requires a State, as part of its Title IV–E 

foster care and adoption assistance plan, to provide that it will negotiate in good faith with any Indian tribe, tribal organization, or 

tribal consortium that asks to develop an agreement with the State 

under which (1) Federal (Title IV–E) payments would be available 

for children who are under tribal authority and who are placed for 

adoption, in foster family homes licensed by tribes, or with relative 

guardians; and (2) the tribe, organization, or consortium also has 

access to Federal Title IV–E resources for related program administration, training, and data costs. 

In addition to the current certification related to Indian tribes, 

the Committee Bill requires a State as part of its application for 

Chafee Foster Care Independence Program funds to further certify 

that it will negotiate in good faith with any Indian tribe, tribal organization, or tribal consortium that does not receive a direct allotment of Federal funding under the program, but which seeks to develop an agreement of contract with the State to administer, supervise, or oversee Chafee independent living services for eligible children under tribal authority and to receive an appropriate portion 

of the State’s allotment for this purpose. 

Rule of construction 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill prohibits any interpretation of its provisions 

on ‘‘Tribal Foster Care and Adoption Access’’ that permits termination of funding to any Indian or Indian family receiving foster 

care or adoption assistance payments on a child’s behalf, if those 

payments are being received as of the date of enactment of the bill 

and the State is claiming Federal reimbursement for a part of 

those payments. This rule of construction must remain true without regard to whether a cooperative agreement between the State 

and the tribe is in effect on the date of the bill’s enactment or 


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whether the tribal entity chooses, after the date of enactment, to 

directly operate a Title IV–E foster care and adoption assistance 

program. 

The Committee Bill further prohibits any interpretation of its 

Tribal Foster Care and Adoption Access provisions that affects the 

responsibility of a State as part of its Title IV–E foster care and 

adoption assistance plan to provide Federal foster care maintenance payments, adoption assistance payments, and if it elects, relative guardianship assistance payments, for Indian children who 

are eligible for such payments and who are not otherwise being 

served by a tribal entity (either pursuant to a cooperative agreement with the State or under an HHS-approved foster care and 

adoption assistance plan of the tribal entity). Neither may it be interpreted as affecting the responsibility of a State to administer, 

supervise or oversee independent living programs under the Chafee 

Foster Care Independence Program on behalf of eligible Indian 

children who are not otherwise being served by a tribal entity with 

an approved Chafee plan or under a cooperative agreement or contract with the State. 

Regulations 

CURRENT LAW

No provisions. 

COMMITTEE BILL

General Regulations: Except with regard to the in-kind claiming 

provisions (see below), the Committee Bill requires HHS to consult 

with Indian tribes, tribal organizations, tribal consortia and affected States and, within one year of their enactment, to promulgate interim final regulations to carry out the Tribal Foster Care 

and Adoption Access provisions of the Committee Bill. These regulations must include procedures that ensure that a transfer of a 

child from State care and placement responsibility to tribal care 

and responsibility (whether under that tribal entity’s foster care 

and adoption assistance plan approved by HHS or via a cooperative 

agreement with a State) affects neither that child’s eligibility for 

Medicaid nor his or her eligibility for Federal payments or any 

services under Title IV–E. 

Regulations for In-Kind Expenditures: Not later than September 

30, 2010, the Committee Bill requires HHS, in consultation with 

Indian tribes, tribal organizations, and tribal consortia, to promulgate interim final regulations to specify the types of in-kind expenditures, and the third-party sources for such in-kind expenditures, that may be claimed by tribal entities operating an approved 

foster care and adoption assistance plan under Title IV–E. Those 

regulations must also specify the share of non-Federal Title IV–E 

funds that tribal entities may claim as in-kind expenditures from 

third-party sources for purposes of receiving Federal reimbursement of Title IV–E administrative costs, including training costs. 

The Committee Bill adds that the regulations regarding in-kind expenditures may not be in effect before the first day of FY2011 (October 1, 2010). Finally, the Committee Bill includes a ‘‘Sense of the 

Senate’’ that if HHS fails to formally publish these required regulations, Congress should enact legislation to specify the in-kind exVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00026 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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penditures from third-party sources, and the share of non-Federal 

program costs those expenditures may represent and that tribal entities operating an HHS-approved foster care and adoption assistance program may claim. 

EFFECTIVE DATE

The Tribal Foster Care and Adoption Access section of the Committee Bill is effective as of the first day of FY2010 (October 1, 

2009), without regard to whether the regulations required by the 

section have been promulgated by that date. 

SECTION 302—GRANTS TO STATES THAT SUCCESSFULLY COLLABO- RATE WITH AND SUPPORT TRIBES TO IMPROVE PERMANENCY OUT- COMES FOR INDIAN CHILDREN

CURRENT LAW

States are required as part of their plan for Child Welfare Services (Title IV–B, subpart 1) to consult with tribal organizations and 

to describe the specific measures taken to comply with the Indian 

Child Welfare Act. Under the Chafee Foster Care Independence 

Program (Section 477), States must certify that they have consulted with and sought to cooperate with tribes in the provision of 

independent living services. 

COMMITTEE BILL

Grant Authority and Definition of Indian Children: The Committee Bill creates a new Section 479C of the Social Security Act 

that requires HHS, in each of FY2010 through FY2014, to make 

grants to States that successfully collaborate with tribes to improve 

the services and permanency outcomes for Indian children and 

their families. For purposes of this grant, Indian children are defined as those children who are members of, enrolled in, or affiliated with a tribe, OR children who are eligible for membership, enrollment, or affiliation with a tribe. 

Eligible States: The Committee Bill provides that any State seeking a Successful Collaboration and Tribal Support grant must submit to HHS the following (in the manner and form requested by 

the agency): (1) Evidence of collaboration by the State with Indian 

tribes, tribal organizations, or tribal consortia to plan for and ensure access to services and supports for Indian children and their 

families. At a minimum this must include evidence of consultation 

with tribal organizations and specific measures taken to comply 

with the Indian Child Welfare Act (as now required under Title 

IV–B), and evidence of the consultation and good faith negotiation 

efforts required under the State foster care and adoption assistance 

plan (as added by the Committee Bill) and the State application for 

the Chafee Foster Care Independence Program (as amended by the 

Committee Bill); (2) Evidence that the State has obtained from 

HHS, or is engaged in accessing technical assistance (including 

through the National Child Welfare Resource Center for Tribes, established in the Committee Bill) to improve services and permanency outcomes for Indian children and their families through improved identification of Indian children, increased recruitment of 

Indian foster family homes, and improved rates of family reunification, legal or relative guardianships, or adoptive homes; and (3) 


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Evidence of improved outcomes for Indian children and their families and any other data HHS may require for verification that an 

improvement, appropriate for Indian children and their families, 

has been achieved. 

Amount of Grant: The Committee Bill provides that based on this 

evidence, every State found eligible by HHS for a Successful Collaboration and Tribal Support Grant (in a given grant year) must 

receive a portion of the total grant funding provided. And that the 

amount for each eligible State must be based on the number of Indian children in the State relative to the number of Indian children 

in all of the States found to be eligible for a Successful Collaboration and Tribal Support grant. 

Appropriation: The Committee Bill appropriates $5 million to 

HHS to make these grants in each of FY2010 through FY2014. 

SECTION 303—ESTABLISHMENT OF NATIONAL CHILD WELFARE

RESOURCE CENTER FOR TRIBES

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill creates a new Section 479D of the Social Security Act that requires HHS to establish a National Child Welfare 

Resource Center for Tribes that is ‘‘specifically and exclusively’’ 

dedicated to meeting the needs of Indian tribes, tribal organizations, tribal consortia and States in improving services and permanency outcomes for Indian children and their families. 

The Committee Bill provides that this resource center must—(1) 

provide information, advice, educational materials, and technical 

assistance to Indian tribes and tribal organizations regarding the 

types of services, administrative functions, data collection, program 

management, and reporting that are provided for under the child 

and family services programs of Title IV–B and the foster care and 

adoption assistance program of Title IV–E; (2) assist and provide 

technical information to tribes, organization or consortia seeking to 

operate programs under Title IV–B or Title IV–E; and (3) assist 

and provide technical assistance to those tribal entities and States 

seeking to develop cooperative agreements under Title IV–E or to 

meet the requirements (included in Title IV–B or Title IV–E) that 

are related to State and tribal consultation or good faith negotiations (as added by the Committee Bill). 

The Committee Bill permits HHS to directly establish the National Child Welfare Resource Center for Tribes, or to establish it 

through a grant or contract with a public or private organization 

that is knowledgable in the field of Indian tribal affairs and child 

welfare. The Committee Bill appropriates $1 million in each of 

FY2009 through FY2013 for this resource center. 


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TITLE IV—SUPPORT FOR OLDER CHILDREN IN FOSTER 

CARE AND OTHER PROVISIONS 

SECTION 401—STATE OPTION FOR CHILDREN IN FOSTER CARE OR IN

AN ADOPTIVE OR RELATIVE GUARDIANSHIP PLACEMENT AFTER ATTAINING AGE 18 

Definition of child 

CURRENT LAW

There is no definition of ‘‘child’’ for purposes of the child welfare 

programs authorized under Title IV–E or Title IV–B of the Social 

Security Act. In general, a child may no longer be eligible for Federal foster care maintenance payments or adoption assistance payments once he or she has attained 18 years of age. However, in the 

case of a foster care maintenance payment, a child who at his or 

her 18th birthday is still a fulltime high school student (and who 

can reasonably be expected to complete this degree) may remain eligible until his or her 19th birthday. Further, in the case of a child 

on whose behalf adoption assistance payments are being made, if 

a State determines that the child has a ‘‘mental or physical handicap’’ that warrants continued assistance, it may continue to provide 

these payments until the child’s 21st birthday. 

COMMITTEE BILL

The Committee Bill defines a child, for purposes of Title IV–E or 

Title IV–B, as an individual who has not reached his or her 18th 

birthday—except for certain individuals (as described in the following sentences). The Committee Bill permits States to define as 

a ‘‘child,’’—and thus to provide Federal foster care maintenance 

payments, adoption assistance payments, and/or relative guardianship payments to—otherwise eligible individuals who have reached 

their 18th birthdays but who have not yet reached their 19th, 20th 

or 21st birthday (whichever highest age the State chooses). The 

Committee Bill provides, however that to be eligible for continued 

adoption assistance or relative guardianship assistance agreements 

under this definition, the child must have been adopted or placed 

in guardianship out of foster after reaching his/her 16th birthday. 

Further, to be defined as a ‘‘child’’ (and thus to remain eligible for 

Federal foster care maintenance, adoption assistance, or relative 

guardianship assistance payments) after reaching his or her 18th 

birthday, the individual must be—(1) completing high school; (2) 

enrolled in college (or equivalent vocational education); (3) participating in a program or activity designed to promote employment or 

remove barriers to employment; (4) employed at least 80 hours per 

month; or (5) determined by the State to be ‘‘particularly vulnerable’’ or ‘‘a high-risk individual.’’ 

Conforming amendment to definition of child care institution 

CURRENT LAW

To be eligible for Federal foster care maintenance payments, a 

child must be living in a foster family home or in a ‘‘child-care institution.’’ 


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COMMITTEE BILL

The Committee Bill amends the definition of ‘‘child care institution’’ to include—but only in the case of a child in foster care who 

is at least 18 years of age—a ‘‘supervised setting in which the individual is living independently’’ in accordance with the conditions 

that HHS must establish in regulation. 

Conforming amendments to age limits applicable to children eligible for adoption assistance ore relative guardianship 

CURRENT LAW

Prohibits payment of Federal adoption assistance to any child 

who has reached age 18, unless the State determines that the assistance is warranted due to the child’s physical or mental handicap. Further prohibits payment of Federal adoption assistance on 

behalf of a child, if the State determines that the parents are no 

longer legally responsible for the child or the child is no longer receiving support from the parents. Parents who are receiving adoption assistance on behalf of a child are required to keep the State 

or local child welfare agency informed of circumstances that would 

make them ineligible to receive further adoption assistance on the 

child’s behalf or which would make them eligible to receive adoption assistance payments for the child in a different amount. 

COMMITTEE BILL

In general, the Committee Bill restates all of these provisions so 

that they also apply to relative guardianship payments (or to relative guardians as applicable). However, consistent with the new 

definition of child, the Committee Bill also notes that a State may 

elect to provide adoption assistance and relative guardianship assistance payments to a child after his or her 18th birthday (and before his/her 21st birthday) consistent with the rules described 

above (see ‘‘Definition of Child’’). 

EFFECTIVE DATE

The Committee Bill makes the provisions related to the ‘‘State 

Option for Children in Foster Care or in Adoptive or Relative 

Guardianship After Attaining Age 18’’ effective with the first day 

of FY2011 (October 1, 2010). 

SECTION 402—TRANSITION PLAN FOR CHILDREN AGING OUT OF

FOSTER CARE

CURRENT LAW

A State is required to have in place a case review system for 

each child in foster care to, among other things, periodically review 

the child’s status in foster care and to develop and carry out a permanency plan for the child. 

COMMITTEE BILL

The Committee Bill amends the definition of a case review system to require that—during the 90-day period immediately before 

a child legally emancipates (whether during that period the child 

is receiving a foster care maintenance payment, or benefits or servVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00030 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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ices under Section 477)—the child’s caseworker, and other representatives as appropriate, must help the child develop a personal 

transition plan. The plan must be as detailed as the child chooses 

and include specific options on housing, health insurance, education, local opportunities for mentoring, continuing support services, work force supports and employment services. 

EFFECTIVE DATE

In general, the amendments made regarding a ‘‘Transition Plan 

for Children Aging Out of Foster Care’’ are effective on October 1, 

2008. However HHS may delay required compliance for any State 

that it determines must enact legislation (other then legislation to 

appropriate funds) to meet this additional requirement. 

SECTION 403—EDUCATIONAL STABILITY

Educational stability 

CURRENT LAW

A State is required to maintain an individual written case plan 

for each child in foster care. Among other things, this case plan 

must include the child’s health and education records with an assurance that the child’s placement in foster care takes into account 

proximity to the school in which the child is enrolled at the time 

of the placement. 

COMMITTEE BILL

The Committee Bill maintains all of these current law requirements but additionally requires the State child welfare agency to 

include in each child’s case plan an assurance that it has coordinated with local educational agencies to ensure that the child remains in the school where he/she is enrolled at the time of placement into foster care OR, if remaining in that school is not in the 

child’s best interests, assurances that the State child welfare agency and the local educational agencies provide immediate and appropriate enrollment in a new school, with all of the educational 

records of the child provided to that school. 

Transportation to school of origin 

CURRENT LAW

Under Title IV–E, States are entitled to receive Federal reimbursement at their Federal Medical Assistance Percentage (FMAP), 

which ranges from 50 percent in States with the highest per capita 

incomes to 83 percent in States with the lowest per capita income, 

for the cost of providing foster care maintenance payments on behalf of an eligible child. The definition of a ‘‘foster care maintenance payment’’ includes payments for ‘‘food, clothing, shelter, 

daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, and reasonable travel to 

the child’s home for visitation.’’ 

States are also entitled to receive Federal reimbursement of 50 

percent of their costs related to the ‘‘proper and efficient’’ administration of their Title IV–E foster care program. (HHS has recently 

provided guidance to States indicating that transportation of a 


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child in foster care to and from his/her school of origin is a Title 

IV–E administrative function and, thus, that 50 percent of the 

costs of this transportation may be claimed as a Title IV–E administrative cost. 

COMMITTEE BILL

The Committee Bill would amend the definition of ‘‘foster care 

maintenance payment’’ to permit States to claim reimbursement 

(for eligible children), at their FMAP, for the cost of ‘‘reasonable 

travel for the child to remain in the school in which the child is 

enrolled at the time of placement’’ in foster care. 

Educational attendance 

CURRENT LAW

The law requires each child on whose behalf Federal foster care 

maintenance payments or adoption assistance payments are made 

to meet certain Federal eligibility requirements. 

COMMITTEE BILL

The Committee Bill adds a new condition of eligibility for Federal 

foster care maintenance payments, adoption assistance payments, 

or relative guardianship assistance payments (as authorized by the 

Committee Bill). The Committee Bill requires a State to provide assurances that each child who has reached the minimum age of compulsory school attendance in his/her State and who is receiving a 

foster care maintenance payment, adoption assistance payment, or 

relative guardianship payment is a full-time elementary or secondary school student, or has completed high school. The Committee Bill defines a full-time elementary or secondary school student to include a child who is enrolled at a secondary, or elementary school, or one who is receiving home school instruction or participating in independent study, provided that enrollment, home 

schooling or independent study is done in accordance with the law 

of the State or relevant jurisdiction. Finally, the Committee Bill defines a full-time elementary and secondary student to include children who are incapable of attending school on a full-time basis due 

to a medical condition, if this fact is supported by regularly updated information in the child’s required case plan. 

EFFECTIVE DATE

The Committee Bill makes the provisions of the section on ‘‘Educational Stability’’ effective on the first day of FY2009 (October 1, 

2008). However, HHS may delay required compliance for any State 

that it determines must enact legislation (other then legislation to 

appropriate funds) to meet this additional requirement. 


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TITLE V—REVENUE PROVISIONS 

SECTION 501—CLARIFICATION OF UNIFORM DEFINITION OF CHILD

Child must be younger than claimant 

CURRENT LAW

The Internal Revenue Code provides a uniform definition of 

‘‘qualifying child for purposes of the dependency exemption, the 

child credit, the earned income credit, the dependent care credit, 

and head of household filing status. There are four basic criteria 

to determine if an individual is the qualifying child of a taxpayer: 

(1) the individual must have a specific relationship to the taxpayer 

(son, daughter, foster child, stepchild, brother, sister, stepbrother, 

stepsister, half brother, half sister, or descendant of any of them); 

(2) the individual must be less than 19 years of age at the end of 

the year, unless the individual is a full-time student, in which case 

the individual must be less than 24 at the end of the year; (3) the 

individual must have lived with the taxpayer for more than onehalf the tax year; and (4) the individual must not have provided 

more than one-half of his or her own support for the tax year. 

There is no current law requirement that a qualifying child of a 

taxpayer be younger than the taxpayer. 

COMMITTEE BILL

The Committee Bill provides that for an individual to be the 

qualifying child of a taxpayer, the child must (in addition to meeting the current law age requirements) be younger than the taxpayer. 

Marital status of the child 

CURRENT LAW

There is no requirement in the Internal Revenue Code that an 

individual be unmarried to be the qualifying child of a taxpayer. 

COMMITTEE BILL

The Committee Bill provides that for an individual to be the 

qualifying child of a taxpayer, the individual must have not filed 

a joint tax return with another taxpayer, other than to file a refund 

claim. 

Child credit available only if qualifying child is dependent of the 

taxpayer 

CURRENT LAW

The Internal Revenue Code provides that a taxpayer may claim a child tax credit (of up to $1,000) for each qualifying child of the 

taxpayer. There is no requirement that the qualifying child be a dependent of the taxpayer. 

COMMITTEE BILL

The Committee Bill requires that for purposes of claiming the 

child tax credit a qualifying child must be a dependent of the taxpayer. 


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Persons other than parents claiming qualifying child 

CURRENT LAW

Under the Internal Revenue Code, the following rules apply with 

regard to who may claim an individual as a qualifying child: (1) In 

cases where the individual is claimed as the qualifying child of two 

or more taxpayers, the individual is the qualifying child of the parent; (2) If both taxpayers claiming the individual as a qualifying 

child are the individual’s parents, the individual is claimed as the 

qualifying child of the parent the individual resided with the longest during the tax year; (3) If the individual resided with both parents for the same amount of time, the individual is the qualifying 

child of the parent with the higher adjusted gross income; (4) If 

neither of the taxpayers claiming the individual as a qualifying 

child are the individual’s parents, the individual is the qualifying 

child of the taxpayer with the highest adjusted gross income. 

COMMITTEE BILL

The Committee Bill provides that for an individual to be claimed 

as the qualifying child of a taxpayer who is not the individual’s 

parent, the taxpayer must have an adjusted gross income that is 

higher than the highest adjusted gross income of each of the individual’s parents. 

EFFECTIVE DATE

The Committee Bill makes the amendments in this section related to ‘‘Clarification of Uniform Definition of Child,’’ effective 

with tax year 2009 (beginning after December 31, 2008). 

SECTION 502—COLLECTION OF UNEMPLOYMENT COMPENSATION

DEBTS RESULTING FROM FRAUD

Collection of unemployment compensation debts resulting from 

fraud 

CURRENT LAW

Section 6402 of the Internal Revenue Code (I.R.C.) allows the 

Treasury Department to credit overpayments (and interest) against 

any liability with respect to an internal revenue tax on the part of 

the person who made the overpayment (subject to credits against 

estimated tax under certain circumstances. These circumstances 

are the following: to offset past-due child support payments that 

have been assigned to the State; collection of debts owed to Federal 

agencies; and collection of past-due and legally enforceable State 

income tax obligations). 

COMMITTEE BILL

The Committee Bill allows the Treasury Department, under certain circumstances, to reduce any Federal income tax overpayments by the collection of covered State unemployment compensation (UC) debts if the debt is on account of fraud and to pay the 

State by the amount of such debts. The Treasury Department 

would notify the State of such person’s name, taxpayer identification number, address, and the amount collected. The Treasury Department would also notify the person making such overpayment 


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that the overpayment had been reduced by an amount necessary 

to satisfy a covered unemployment compensation debt. If an offset 

is made to a joint return, the notice would include information related to the rights of a spouse of a person subject to such an offset. 

The Committee Bill sets the priority order of the reductions as: 

internal revenue tax liability; past due child support; Federal agency debt; and, finally, the collection of past-due and legally enforceable State income tax obligations and covered UC debts on account 

of fraud. The reductions would occur before any such overpayment 

would be credited to future Federal internal revenue tax. 

The Committee Bill requires that the reduction on account of UC 

debt apply only to those persons whose address shown on the Federal return is an address within the State seeking the offset. 

The Committee Bill requires that States must: 

• notify the individual of the debt by certified mail with return receipt; 

• allow 60 days for the individual to present evidence that 

the individual does not have a legally enforceable debt that is 

due to fraud; 

• consider the evidence presented by the individual; and 

• satisfy such other conditions as the Treasury Department 

may prescribe to ensure that the determination is valid and 

that the State has made reasonable efforts to obtain payment 

of such covered UC debt. 

The Committee Bill defines covered UC debt to be any of the following items: past-due debt for erroneous payment of UC due to 

fraud which has become final under the State’s law and which remains uncollected; contributions due to the State’s unemployment 

fund on account of fraud; and, any penalties and interest assessed 

on such debt. 

The Committee Bill allows the Treasury Department to issue 

regulations on the time and manner for States to submit notices of 

UC debts due to fraud. These regulations would be authorized to 

include: 

• the setting of a minimum amount of debt for the reduction 

procedure to be applied; 

• a required fee paid to the Treasury for the cost of applying 

such reduction procedure and used to reimburse the appropriations account that bore the cost of applying such procedure; 

and 

• a requirement that States submit notices of covered UC 

debt to the Treasury Department via the Labor Department in 

accordance with procedures established by the Labor Department where the procedures may require States to pay a fee to 

the Labor Department; those fees may be deducted from 

amounts collected and used to reimburse the appropriations account that bore the cost of collecting the notices of covered UC 

debt. 

The Committee Bill requires that erroneous payments to the 

State must be promptly paid back to the Treasury. 


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36 

Disclosure of certain information to States requesting refund offsets 

for legally enforceable State unemployment compensation debt 

resulting from fraud 

CURRENT LAW

Paragraph (3) of section 6103(a) of the I.R.C. describes the confidentiality and disclosure of Federal tax returns and return information. Paragraph (3) of section 6103(a) requires returns and return information to be confidential. Among other items, Section 

6103 authorizes the conditions under which authorized persons, 

employees, or officers (who are not Department of the Treasury officers or employees) may have access to Federal tax returns or return information. 

COMMITTEE BILL

The Committee Bill allows the disclosure of information to officers and employees of the Department of Labor for purposes of facilitating the exchange of data in connection with a request made 

under its proposed changes in section 6402 of the I.R.C. The Committee Bill also allows access to the information to the Department 

of Labor’s agents who maintain and provide technological support 

to the Department of Labor’s Interstate Connection Network 

(ICON) solely for the purpose of providing such maintenance and 

support. 

Expenditures from the State fund 

CURRENT LAW

Paragraph (4) of section 3304(a) of the I.R.C requires that all 

money withdrawn from a State’s account in the Federal Unemployment Trust Fund be used solely for the payment of UC benefits. 

Exceptions to this include sums erroneously paid into the fund and 

refunds paid in accordance with the provisions of section 3305(b). 

Other exceptions include (a) the amount of employee payments into 

the unemployment fund of a State used in the payment of cash 

benefits to individuals with respect to their disability, exclusive of 

administration expenses, (b) certain expenses incurred by the State 

for administration of its unemployment compensation law and public employment offices, (c) deduction of health insurance payments 

and for tax withholding, (d) repayment of overpayments as provided in section 303(g) of the Social Security Act, (e) payment for 

short-time compensation under a plan approved by the Secretary of 

Labor, and (f) the self-employed assistance program benefit. 

COMMITTEE BILL

The Committee Bill authorizes that the fees from collecting covered UC debt be deducted and that the penalties and interest from 

the collections be transferred to the appropriate State fund into 

which the State would have deposited such amounts had the person owing the debt paid such amounts directly to the State. The 

remainder of the collected UC debt is deposited into the appropriate State account within the Federal Unemployment Trust 

Fund. 


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Conforming amendments 

CURRENT LAW

Not applicable. 

COMMITTEE BILL

The Committee Bill amends section 6402 of the I.R.C. to reflect 

the changes created by the Committee Bill. 

EFFECTIVE DATE

The amendments made by the Committee Bill in the section, 

‘‘Collection of Unemployment Compensation Debts Resulting From 

Fraud,’’ apply to refunds payable on or after the date of its enactment. 

SECTION 503—INVESTMENT OF OPERATING CASH

CURRENT LAW

The Treasury Department is responsible for short-term management of excess Federal operating cash, which it can invest in shortterm obligations of the United States government or collateralized 

obligations of certain financial institutions that maintain Federal 

Treasury tax and loan accounts. The Treasury Department is not 

permitted to require the sale of obligations by a particular person, 

dealer, or financial institution. 

COMMITTEE BILL

In addition to the current investment options, the Committee Bill 

permits the Treasury Department to invest excess operating cash, 

for not more than 90 days, in repurchase agreements. The Committee Bill eliminates the provision that bars the Treasury Department from requiring the sale of obligations by a particular person, 

dealer, or financial institution. Finally, the Committee Bill requires 

the Treasury Department to submit to the Senate Finance and 

House Ways and Means Committees, for each fiscal year, a report 

detailing the investment of operating cash in obligations or repurchase agreements, the Department’s considerations of risks associated with those investments, and actions taken to manage those 

risks. 

EFFECTIVE DATE

The Committee Bill makes the amendments in this section, ‘‘Investment of Operating Cash,’’ effective with the first day of FY2009 

(October 1, 2008). 

III. VOTE OF THE COMMITTEE 

In compliance with paragraph 7(b) of rule XXVI of Standing 

Rules of the Senate, the following statements are made concerning 

the vote in the Committee’s consideration of the bill. 

Motion to report the bill 

The bill was ordered favorably reported by a unanimous voice 

vote on September 10, 2008. A quorum was present. No amendments were voted upon. 


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IV. REGULATORY IMPACT STATEMENT AND RELATED 

MATTERS 

A. REGULATORY IMPACT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following statement 

concerning the regulatory impact of the ‘‘Improved Adoption Incentives and Relative Guardianship Support Act of 2008.’’ 

IMPACT ON INDIVIDUALS AND BUSINESSES

This bill extends funding for adoption incentive awards; expands 

eligibility for Federal adoption assistance for children with special 

needs; establishes Federal support for States providing relative 

guardianship assistance; authorizes a demonstration project for 

States regarding the licensing of immediate relative foster family 

homes; appropriates funding for grants to support ‘‘Kinship Navigator’’ program. 

The bill also gives the Department of Health and Human Services (DHHS) the Authority to use the Federal Parent Locator Service for child welfare purposes; authorizes tribes to apply for direct 

Federal funding under Title IV–E of the Social Security Act; appropriates funds to establish a national child welfare resource center 

for tribes and for grants to States that successfully collaborate with 

tribes to improve outcomes for Indian children. The bill provides 

States an option to continue Federal support for children in placement after age eighteen (18) but up to age twenty-one (21); and authorizes additional activities on behalf of children in or leaving foster care. 

The bill clarifies the uniform definition of a child under the Internal Revenue Code. Authorizes collection of unemployment debts 

resulting from fraud and permits the Treasury Department to invest excess operating cash for not more than 90 days. 

These provisions do not impose any additional paperwork or regulatory burden on individuals or businesses. 

IMPACT ON PERSONAL PRIVACY

The bill provides for services to children and families. In the context of seeking assistance, families may be asked about personal 

circumstances. The bill should not increase the amount of personal 

information and paperwork required. 

V. COST ESTIMATE 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 15, 2008. 

Hon. MAX BAUCUS, 

Chairman, Committee on Finance, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the attached table summarizing the effects on direct spending and revenues of S. 3038, the Improved Adoption Incentives and 

Relative Guardianship Support Act of 2008, as ordered reported by 

the Committee on Finance on September 10, 2008. CBO and the 


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39 

Joint Committee on Taxation estimate that the effects of the bill 

on direct spending and revenues would reduce budget deficits by 

$856 million over the 2009–2013 period and by $7 million over the 

2009–2018 period. In addition, enacting the bill would increase discretionary spending by an estimated $175 million over the 2009– 

2013 period, subject to appropriation of the authorized amounts. 

Pursuant to section 311 of S. Con. Res. 70, CBO estimates that 

changes in direct spending and revenues from enacting S. 3038 

would cause an increase in the on-budget deficit greater than $5 

billion in at least one of the 10-year periods between 2018 and 

2057. 

CBO has reviewed the nontax provisions of the bill (titles I–IV 

and section 503) and determined that the bill would impose intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) because it would increase the stringency of conditions of assistance under the Foster Care and Adoption Assistance 

Programs. CBO estimates, however, that the costs to States to comply with the mandates would not exceed the threshold established 

in UMRA ($68 million in 2008, as adjusted by inflation). The 

nontax provisions contain no private-sector mandates as defined in 

UMRA. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Jonathan Morancy. 

Sincerely, 

PETER R. ORSZAG, Director. 

Attachment. 


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ESTIMATED EFFECTS ON DIRECT SPENDING AND REVENUES OF S. 3038, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON SEPTEMBER 1

By fiscal year, in millions of dollars— 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009– 2013 

CHANGES IN DIRECT SPENDING 

Promotion of Adoption: 

Estimated Budget Authority .................................................................. 0 0 5 30 95 196 309 437 580 739 131 Estimated Outlays ................................................................................. 0 0 5 27 88 184 295 421 562 719 120 

Uniform Definition of a Child 1

Estimated Budget Authority .................................................................. ¥6 ¥175 ¥167 ¥138 ¥142 ¥146 ¥150 ¥154 ¥159 ¥164 ¥628 

Estimated Outlays ................................................................................. ¥6 ¥175 ¥167 ¥138 ¥142 ¥146 ¥150 ¥154 ¥159 ¥164 ¥628 

Guardianship Assistance: 

Estimated Budget Authority .................................................................. 1 0 ¥7 ¥21 ¥40 ¥72 ¥116 ¥153 ¥191 ¥229 ¥67 

Estimated Outlays ................................................................................. 1 0 ¥6 ¥19 ¥37 ¥67 ¥110 ¥147 ¥185 ¥223 ¥60 

Extend Programs to Age 21: 

Estimated Budget Authority .................................................................. 0 0 35 66 84 106 106 104 101 97 184 Estimated outlays .................................................................................. 0 0 31 61 81 103 105 104 102 98 172 

Unemployment Compensation Debts 1

Estimated Budget Authority .................................................................. ¥11 ¥44 ¥58 ¥59 ¥59 ¥60 ¥60 ¥61 ¥62 ¥62 ¥231 

Estimated Outlays ................................................................................. ¥11 ¥44 ¥58 ¥59 ¥59 ¥60 ¥60 ¥61 ¥62 ¥62 ¥231 

Education: 

Estimated Budget Authority .................................................................. ¥41 ¥42 ¥44 ¥46 ¥48 ¥50 ¥52 ¥54 ¥57 ¥60 ¥221 

Estimated Outlays ................................................................................. ¥34 ¥42 ¥44 ¥46 ¥48 ¥50 ¥52 ¥54 ¥57 ¥60 ¥214 

Tribal Foster Care: 

Estimated Budget Authority .................................................................. 1 8 10 15 19 27 33 44 53 56 54 Estimated Outlays ................................................................................. 0 4 8 14 19 27 35 45 52 55 44 

Family Caregivers: 

Estimated Budget Authority .................................................................. 9 14 13 9 8 1 1 0 0 0 53 Estimated Outlays ................................................................................. 5 12 16 11 8 2 1 0 0 0 52 

Investment of Operating Cash: 

Estimated Budget Authority .................................................................. ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥50 

Estimated Outlays ................................................................................. ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥10 ¥50 

Total Changes in Direct Spending: 

Estimated Budget Authority .................................................................. ¥56 ¥249 ¥222 ¥155 ¥93 ¥7 60 153 255 368 ¥775 Estimated Outlays ................................................................................. ¥55 ¥255 ¥226 ¥159 ¥101 ¥17 56 145 243 354 ¥796 

CHANGES IN REVENUES 

Uniform Definition of a Child 1 ...................................................................... 1 23 36 31 32 34 35 37 38 40 123 


jbell on PROD1PC69 with REPORTS
Unemployment Compensation Debts .............................................................. 0 ¥1 ¥8 ¥20 ¥34 ¥44 ¥50 ¥52 ¥53 ¥53 ¥63 

Total Revenue Changes ......................................................................... 1 22 28 11 ¥2 ¥10 ¥15 ¥15 ¥15 ¥13 60 

NET BUDGETARY IMPACT 3

Estimated Increase or Decrease (-) in Deficits 2 .......................................... ¥56 ¥277 ¥254 ¥170 ¥99 ¥7 71 160 258 367 ¥856 

Note: Components may not sum to totals due to rounding. 1 Estimates prepared by the Joint Committee on Taxation; all other provisions estimated by the Congressional Budget Office. 2 Negative numbers reflect decreases in the deficit (or increases in the surplus); positive numbers reflect increases in the deficit (or decreases in the surplus). 3 In addition, enacting the bill would increase discretionary spending by an estimated $175 million over the 2009–2013 period, subject to appropriation of the authorized amounts. 

SOURCE: Congressional Budget Office and the Joint Committee on Taxation. 


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42 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

Pursuant to the requirements of paragraph 12 of rule XXVI of 

the Standing Rules of the Senate, changes in existing law made by 

the bill, as reported, are shown as follows (existing law proposed 

to be omitted is enclosed in black brackets, new matter is printed 

in italic, existing law in which no change is proposed is shown in 

roman): 

SOCIAL SECURITY ACT 

* * * * * * * 

TITLE IV—GRANTS TO STATES FOR AID AND 

SERVICES TO NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES 

Part A—BLOCK GRANTS TO STATES FOR TEMPORARY 

ASSISTANCE FOR NEEDY FAMILIES 

* * * * * * * 

PENALTIES

SEC. 409. (a) IN GENERAL.—Subject to this section: 

(1) USE OF GRANT IN VIOLATION OF THIS PART.— 

* * * * * * * 

(15) PENALTY FOR FAILURE TO ESTABLISH OR COMPLY WITH

WORK PARTICIPATION VERIFICATION PROCEDURES.— 

* * * * * * * 

(16) PENALTY FOR NONCOMPLIANCE WITH NOTICE REQUIREMENTS FOR RELATIVES UNDER PART E.— 

(A) IN GENERAL.—If the Secretary determines that a State 

to which a grant is made under section 403 in a fiscal year 

has not exercised the due diligence required under section 

471(a)(19)(C) during the fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) 

for the immediately succeeding fiscal year by an amount 

equal to not less than 1 percent and not more than 3.5 percent of the State family assistance grant. 

(B) PENALTY BASED ON SEVERITY OF FAILURE.—the Secretary shall impose reductions under subparagraph (A) 

with respect to a fiscal year based on the degree of noncompliance. 

Part B—CHILD AND FAMILY SERVICES 

Subpart 1—Child Welfare Services 

* * * * * * * 

LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS

SEC. 425. To carry out this subpart (other than sections 426, 427, 

and 429), there are authorized to be appropriated to the Secretary 


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43 

not more than $325,000,000 for each of fiscal years 2007 through 

2011. 

* * * * * * * 

SEC. 427. GRANTS TO CARRY OUT KINSHIP NAVIGATOR PROGRAMS. 

(a) PURPOSE.—The purposes of this section are— 

(1) to establish kinship navigator programs in States, large 

metropolitan areas, and tribal areas to assist kinship caregivers 

in navigating their way through programs and services, to help 

the caregivers learn about and obtain assistance to meet the 

needs of the children they are raising and their own needs; and 

(2) to promote effective partnerships among public and private agencies, including community-based and faith-based 

agencies, to help the agencies described in this paragraph more 

effectively and efficiently serve kinship care families and address the fragmentation that creates barriers to meeting the 

needs of those families. 

(b) DEFINITIONS.—In this section: 

(1) ASSISTANT SECRETARY.—The term ‘‘Assistant Secretary’’ 

means the Assistant Secretary for Children and Families of the 

Department of Health and Human Services. 

(2) LARGE METROPOLITAN AREA.—The term ‘‘large metropolitan area’’ means a metropolitan statistical area, as defined by 

the Bureau of the Census, with a population of not less than 

1,000,000. 

(3) METROPOLITAN AGENCY.—The term ‘‘metropolitan agency’’ 

means an agency serving a large metropolitan area, or a county 

or political subdivision of a large metropolitan area. 

(4) TRIBAL AREA.—The term ‘‘tribal area’’ means the area 

served by a tribal organization. 

(5) TRIBAL ORGANIZATION.—The term ‘‘tribal organization’’— 

(A) has the meaning given that term in section 479B(a); 

and 

(B) includes a consortium of tribal organizations described in subparagraph (A). 

(c) GRANTS.— (1) IN GENERAL.—The Assistant Secretary may make grants 

to eligible entities to pay for the Federal share (as determined 

by the Assistant Secretary) of the cost of carrying out kinship 

navigator programs. 

(2) ELIGIBLE ENTITIES.—To be eligible to receive a grant 

under this section, an entity shall be a State agency, metropolitan agency, or tribal organization, with experience in— 

(A) addressing the needs of kinship caregivers or children; and 

(B) connecting the children or caregivers with appropriate services and assistance, such as services and assistance provided by— 

(i) an area agency on aging under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.); or 

(ii) an agency with jurisdiction over child welfare, 

income-based financial assistance, human services, or 

health matters, or a public entity that links family resource and support programs, for the State, large metropolitan area, or Indian tribe involved. 


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44 

(3) ALLOCATION OF GRANTS.—Of the funds made available for 

grants under this section for each fiscal year, the Assistant Secretary shall use not less than 50 percent to make grants to State 

agencies. 

(d) NON-FEDERAL SHARE.—The non-Federal share of the cost may 

be provided in cash. Not more than 50 percent of the non-Federal 

share of the cost may be provided in kind, fairly evaluated, including plant, equipment, or services. 

(e) APPLICATIONS.— 

(1) IN GENERAL.—To be eligible to receive a grant under this 

section, an entity shall submit an application to the Assistant 

Secretary at such time, in such manner, and containing such 

information as the Assistant Secretary may require, including, 

at a minimum, the information described in paragraph (2). 

(2) CONTENTS.—The application shall include the following: 

(A) A description of the steps the entity will take during 

the first 6 months of the grant period to— 

(i) identify gaps in services for kinship care families 

in the State, large metropolitan area, or tribal area to 

be served and the specific activities that are needed to 

bridge the gaps; 

(ii) convene a group of partners to assist in the operation of the kinship navigator program funded through 

the grant; 

(iii) utilize or develop relevant technology; 

(iv) conduct outreach to kinship caregivers about the 

kinship navigator program; and 

(v) develop a plan for reaching kinship caregivers, 

ensuring that the caregivers can access the kinship 

navigator program, and following up to ensure that the 

caregivers actually receive necessary services and supports. 

(B) An assurance that the entity will provide at least the 

core activities specified in subparagraphs (A) and (B) of 

subsection (f)(2) for kinship care families through the kinship navigator program. 

(C) A description of the activities the entity expects to 

offer over the grant period and the entity’s initial projection 

of the number of children and kinship caregivers likely to 

be served. 

(D) A description of how the entity will involve in the 

planning and operation of the kinship navigator program, 

on an ongoing basis— 

(i) kinship caregivers; 

(ii) youth raised or being raised by kinship caregivers; 

(iii) representatives of kinship care support organizations; 

(iv) relevant government agencies (including agencies 

with jurisdiction over matters relating to aging, mental 

health, mental retardation or developmental disabilities, substance abuse treatment, criminal justice, 

health, youth services, human services, education, income-based financial assistance, child welfare, child 


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45 

custody, guardianship, adoption, or child support enforcement); 

(v)(I) not-for-profit service providers, including community-based and faith-based agencies; and 

(II) educational institutions; and 

(vi) other State or local agencies or systems that promote service coordination or provide information and 

referral services, including the entities that provide the 

2–1–1 or 3–1–1 information systems where applicable. 

(E) A description of— 

(i) how the entity will coordinate its activities with 

other State or local agencies or systems that promote 

service coordination or provide information and referral services for children, families, or older individuals, 

including the entities that provide the 2–1–1 or 3–1–1 

information systems where applicable, so as to avoid 

duplication of services and the fragmentation of services that prevents kinship care families from getting 

the help the families need; and 

(ii) how the entity will encourage regional cooperation among agencies, particularly agencies serving border communities that may cross jurisdictional lines, to 

ensure that kinship care families will get help. 

(F) An assurance that the entity will report at least annually to the Assistant Secretary, in a manner prescribed by 

the Assistant Secretary, to ensure comparability of data 

across States, on— 

(i) activities established with the funds made available through grants made under this section; 

(ii) the numbers and ages of the children and caregivers assisted through the grants; 

(iii) the types of the assistance provided; 

(iv) the outcomes achieved with the assistance; and 

(v) the barriers identified to meeting the needs of kinship care families and plans for addressing the barriers. 

(G) An assurance that the entity, not later than 3 months 

after the end of the final year of the grant period, will submit a final report to the Administration for Children and 

Families that describes— 

(i) the numbers and ages of the children and caregivers assisted through the grants; 

(ii) the types of assistance provided; 

(iii) the outcomes achieved with the assistance; 

(iv) the barriers to meeting the needs of kinship care 

families that were addressed through the grants; 

(v) the plans of the entity to continue the kinship 

navigator program after the grant period has ended; 

(vi) lessons learned during the grant period; and 

(vii) recommendations about the considerations that 

should be taken into account as the program carried 

out under this section is expanded throughout the 

United States. 

(3) PREFERENCE.—In awarding grants under this section, the 

Assistant Secretary shall give preference to agencies or organiVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00045 Fmt 6659 Sfmt 6603 E:\HR\OC\SR467.XXX SR467

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46 

zations that can demonstrate that the agencies and organizations will offer the full array of activities described in subsection (f)(2). 

(f) USE OF GRANT FUNDS.— (1) IN GENERAL.—An entity that receives a grant under this title 

may use the funds made available through the grant directly, 

or through grants or contracts with other public or private 

agencies, including community-based or faith-based agencies, 

that have experience in connecting kinship caregivers with appropriate services and assistance. 

(2) USE OF FUNDS.—An entity that receives a grant under this 

title may use the funds made available through the grant for 

activities that help to connect kinship caregivers with the services and assistance required to meet the needs of the children 

the caregivers are raising and their own needs, such as— 

(A) establishing and maintaining information and referral systems that— 

(i) assist, through toll free access that includes access 

to a live operator, kinship caregivers, kinship care service providers, kinship care support group facilitators, 

and others to learn about and link to— 

(I) local kinship care service providers, support 

groups, respite care programs, and special services 

for incarcerated parents; 

(II) eligibility and enrollment information for 

Federal, State, and local benefits, such as— 

(aa) education (including preschool, elementary, secondary, postsecondary, and special 

education); 

(bb) family support services, early intervention services, mental health services, substance 

abuse prevention and treatment services, services to address domestic violence problems, 

services to address HIV or AIDS, legal services, child support, housing assistance, and 

child care; 

(cc) the disability insurance benefits program established under title II; 

(dd) the program of block grants to States 

for temporary assistance for needy families established under part A; 

(ee) the supplemental security income program established under title XVI; 

(ff) the medicaid program established under 

title XIX; 

(gg) the State children’s health insurance 

program established under title XXI; 

(hh) the program of Federal payments for 

foster care and adoption assistance established 

under part E, including the program of relative guardianship assistance payments for 

children established under section 473(d); and 

(ii) the supplemental nutrition assistance 

program established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.); 


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47 

(III) relevant training to assist kinship caregivers in obtaining benefits and services and performing their caregiving activities; and 

(IV) relevant legal assistance and help in obtaining access to legal services, including access to 

legal aid service providers and statewide elder law 

hotlines; 

(ii) provide outreach to kinship care families, in collaboration with schools, pediatric care clinics, kinship 

care organizations, senior citizen centers, agencies with 

jurisdiction over child welfare or human services, and 

others to link the families to the kinship navigator program and to services and assistance; and 

(iii) establish, distribute, and regularly update kinship care resource guides, websites, or other relevant 

outreach materials; 

(B) promoting partnerships between public and private 

agencies, including community-based and faith-based agencies— 

(i) to help the agencies described in this paragraph 

more effectively and efficiently meet the needs of kinship care families; and 

(ii) to familiarize the agencies about the special 

needs of kinship care families, policies that affect their 

eligibility for a range of education, health, mental 

health, social, child care, and child welfare services, 

income-based financial assistance, legal assistance, 

and other services and benefits, and the means for 

making policies more supportive of kinship care families; 

(C) establishing and supporting a kinship care ombudsman who has the authority to actively intervene with State 

agency staff or service providers with which the State agency contracts to help ensure, through various appropriate 

means including working with individual families in an 

ongoing manner, that kinship caregivers get the services 

they need and for which they are eligible; and— 

(D) supporting other activities that are designed to assist 

kinship caregivers in obtaining benefits, services, and activities designed to improve their caregiving. 

(3) LIMITATION.—Except as provided in paragraph (2)(D), the 

entity may not use any of the funds made available through the 

grant for direct services to children in kinship care families or 

to kinship caregivers. 

(g) ADMINISTRATION OF THE PROGRAM.—In administering the program carried out under this section, the Assistant Secretary for 

Children and Families shall periodically consult with the Assistant 

Secretary for Aging of the Department of Health and Human Services. 

(h) RESERVATION.—The Assistant Secretary may reserve not more 

than 1 percent of the funds made available under this section for 

a fiscal year to provide technical assistance to the recipients of 

grants under this section related to the purposes of the grants. 

(i) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated to 


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48 

the Secretary for purposes of making grants under this section, 

$5,000,000 for each of fiscal years 2009 through 2013. 

Part D—Child Support and Establishment of Paternity 

* * * * * * * 

FEDERAL PARENT LOCATOR SERVICE

SEC. 453. (a) ESTABLISHMENT; PURPOSE.— 

* * * * * * * 

(j) INFORMATION COMPARISONS AND OTHER DISCLOSURES.— 

(1) * * * 

* * * * * * * 

(3) INFORMATION COMPARISONS AND DISCLOSURES OF INFORMATION IN ALL REGISTRIES FOR TITLE IV PROGRAM PURPOSES.— 

To the extent and with the frequency that the Secretary determines to be effective in assisting States to carry out their responsibilities under programs operated under this part, part B, 

part E, and programs funded under part A, the Secretary 

shall— 

* * * * * * * 

Part E—Federal Payments for Foster Care and Adoption 

Assistance 

* * * * * * * 

STATE PLAN FOR FOSTER CARE AND ADOPTION ASSISTANCE

SEC. 471. (a) In order for a State to be eligible for payments 

under this part, it shall have a plan approved by the Secretary 

which— 

(1) provides (A) for foster care maintenance payments in accordance with section 472 and for adoption assistance in accordance with section 473; and 

(B) at the option of the State, provides for relative guardianship assistance payments in accordance with subsection 

(d) of section 473; 

* * * * * * * 

(18) not later than January 1, 1997, provides that neither 

the State nor any other entity in the State that receives funds 

from the Federal Government and is involved in adoption or 

foster care placements may— 

(A) deny to any person the opportunity to become an 

adoptive or a foster parent, on the basis of the race, color, 

or national origin of the person, or of the child, involved; 

or 

(B) delay or deny the placement of a child for adoption 

or into foster care, on the basis of the race, color, or national origin of the adoptive or foster parent, or the child, 

involved; 

(19) provides øthat the State¿ ‘‘that— 

‘‘(A) the State’’; and 

(ii) by adding at the end the following: 


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49 

(B) within 60 days of the removal of the child from the 

custody of the child’s parent or parents, the State shall exercise due diligence to identify and provide notice to all 

adult grandparents and other adult relatives of the child 

(including any other adult relatives suggested by the parents), subject to exceptions due to family or domestic violence, that— 

(i) specifies that the child has been or is being removed from the custody of the child’s parent or parents; 

(ii) explains the options the relative has under Federal, State, and local law to participate in the child’s 

care and placement, including any options that may be 

lost by failing to respond to the notice; 

(iii) describes the requirements under paragraph (10) 

to become a foster family home and the additional 

services and supports that are available for children 

placed in such a home; and 

(iv) if the State has elected the option to make relative guardianship assistance payments under paragraph (1)(B), describes how the relative may enter into 

an agreement with the State under section 473(d) to receive such payments; and 

(C) with respect to any minor child (excluding minor 

heads of households and their spouses) receiving assistance 

under the State program funded under part A (or under a 

State program funded with qualified State expenditures (as 

defined in section 409(a)(7)(B)(i)) who is in the care of a 

nonparent caretaker relative as a result of interaction with 

the State agency responsible for administering the program 

authorized under this part, and who does not have a parent 

in the home, the State shall provide the nonparent caretaker relative with notice that— 

(i) explains the options the relative has under Federal, State, and local law to participate in the child’s 

care and placement, including any options that may be 

lost by failing to respond to the notice; 

(ii) describes the requirements under section 

471(a)(10) to become a foster family home and the additional services and supports that are available for 

children placed in such a home; and 

(iii) if the State has elected the option to make relative guardianship assistance payments under paragraph (1)(B), describes how the relative may enter into 

an agreement under section 473(d) with the State to receive such payments; shall consider giving preference 

to an adult relative over a non-related caregiver when 

determining a placement for a child, provided that the 

relative caregiver meets all relevant State child protection standards; 

(20)(A) unless an election provided for in subparagraph (B) 

is made with respect to the State, provides procedures for 

criminal records checks, including fingerprint-based checks of 

national crime information databases (as defined in section 

534(e)(3)(A) of title 28, United States Code), for any prospective 


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50 

øfoster or adoptive parent before the foster or adoptive parent 

may be finally approved for placement of a child regardless of 

whether foster care maintenance payments or adoption assistance payments¿ foster parent, adoptive parent, or relative 

guardian before the foster parent, adoptive parent, or relative 

guardian may be finally approved for placement of a child regardless of whether foster care maintenance payments, adoption 

assistance payments, or relative guardianship assistance payments are to be made on behalf of the child under the State 

plan under this part, including procedures requiring that— 

* * * * * * * 

(26) provides that— 

(A)(i) within 60 days after the State receives from another State a request to conduct a study of a home environment for purposes of assessing the safety and suitability of placing a child in the home, the State shall, directly or by contract— 

* * * * * * * 

(C) the State shall not impose any restriction on the 

ability of a State agency administering, or supervising the 

administration of, a State program operated under a State 

plan approved under this part to contract with a private 

agency for the conduct of a home study described in subparagraph (A); øand¿ 

(27) provides that, with respect to any child in foster care 

under the responsibility of the State under this part or part B 

and without regard to whether foster care maintenance payments are made under section 472 on behalf of the child, the 

State has in effect procedures for verifying the citizenship or 

immigration status of the childø.¿; 

(28) provides that the State will inform any individual who 

is adopting, or whom the State is made aware is considering 

adopting, a child who is in foster care under the responsibility 

of the State of the potential eligibility of the individual for a 

Federal tax credit under section 23 of the Internal Revenue 

Code of 1986 (without the need to document any adoption-related expenses, in the case of the adoption of a child with special needs (as defined in section 23(d)(3) of such Code); 

(29) provides that the State will negotiate in good faith with 

any Indian tribe, tribal organization or tribal consortium in the 

State that requests to develop an agreement with the State to 

provide for payments under this part on behalf of Indian children who are under the authority of the tribe, organization, or 

consortium, including foster care maintenance payments on behalf of children who are placed in tribally licensed foster family 

homes, adoption assistance payments, and, if the State has 

elected to provide such payments, relative guardianship assistance payments, and tribal access to resources for administration, training, and data collection under this part; and 

(30) provides assurances that each child who has attained the 

minimum age for compulsory school attendance under State 

law and with respect to whom there is eligibility for a payment 

under the State plan is a full-time elementary or secondary 

school student or has completed secondary school, and for purVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00050 Fmt 6659 Sfmt 6603 E:\HR\OC\SR467.XXX SR467

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51 

poses of this paragraph, the term ‘‘elementary or secondary 

school student’’ means, with respect to a child, that the child 

is— 

(A) enrolled (or in the process of enrolling) in an institution which provides elementary or secondary education, as 

determined under the law of the State or other jurisdiction 

in which the institution is located; 

(B) instructed in elementary or secondary education at 

home in accordance with a home school law of the State or 

other jurisdiction in which the home is located; 

(C) in an independent study elementary or secondary 

education program in accordance with the law of the State 

or other jurisdiction in which the program is located, which 

is administered by the local school or school district; or 

(D) incapable of attending school on a full-time basis due 

to the medical condition of the child, which incapability is 

supported by regularly updated information included in the 

case plan of the child. 

* * * * * * * 

FOSTER CARE MAINTENANCE PAYMENTS PROGRAM

SEC. 472. (a) IN GENERAL.— (1) ELIGIBILITY.—Each State with a plan approved under 

this part shall make foster care maintenance payments on behalf of each child who has been removed from the home of a 

relative specified in section 406(a) (as in effect on July 16, 

1996) into foster care if— 

* * * * * * * 

(2) REMOVAL AND FOSTER CARE PLACEMENT REQUIREMENTS.— The removal and foster care placement of a child meet the requirements of this paragraph if— 

* * * * * * * 

(B) the child’s placement and care are the responsibility 

of— 

(i) the State agency administering the State plan approved under section 471; øor¿ 

(ii) any other public agency with which the State 

agency administering or supervising the administration of the State plan has made an agreement which 

is in effect; øand¿ or 

(iii) an Indian tribe or a tribal organization (as defined in section 479B(a)) or a tribal consortium that 

has a plan approved under section 471 in accordance 

with section 479B; 

* * * * * * * 

(c) For the purposes of this part, (1) the term ‘‘foster family 

home’’ means a foster family home for children which is licensed 

by the State in which it is situated or has been approved, by the 

agency of such State having responsibility for licensing homes of 

this type, as meeting the standards established for such licensing; 

and (2) the term ‘‘child-care institution’’ means a private child-care 

institution, or a public child-care institution which accommodates 

no more than twenty-five children, which is licensed by the State 


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52 

in which it is situated or has been approved, by the agency of such 

State responsible for licensing or approval of institutions of this 

type, as meeting the standards established for such licensing, but 

the term shall not include detention facilities, forestry camps, 

training schools, or any other facility operated primarily for the detention of children who are determined to be delinquent, except, in 

the case of a child who has attained 18 years of age, the term shall 

include a supervised setting in which the individual is living independently, in accordance with such conditions as the Secretary shall 

establish in regulations. 

* * * * * * * 

ADOPTION ASSISTANCE PROGRAM

SEC. 473. (a)(1)(A) Each State having a plan approved under this 

part shall enter into adoption assistance agreements (as defined in 

section 475(3)) with the adoptive parents of children with special 

needs. 

* * * * * * * 

(2)(A) For purposes of paragraph (1)(B)(ii), a child meets the requirements of this paragraph if the child— 

ø(i)(I)(aa) was removed from the home of a relative specified 

in section 406(a) (as in effect on July 16, 1996) and placed in 

foster care in accordance with a voluntary placement agreement with respect to which Federal payments are provided 

under section 474 (or section 403, as such section was in effect 

on July 16, 1996), or in accordance with a judicial determination to the effect that continuation in the home would be contrary to the welfare of the child; and 

ø(bb) met the requirements of section 472(a)(3) with respect 

to the home referred to in item (aa) of this subclause 

ø(II) meets all of the requirements of title XVI with respect 

to eligibility for supplemental security income benefits; or 

ø(III) is a child whose costs in a foster family home or childcare institution are covered by the foster care maintenance 

payments being made with respect to the minor parent of the 

child as provided in section 475(4)(B); and 

ø(ii) has been determined by the State, pursuant to subsection (c) of this section, to be a child with special needs.¿ 

(i)(I) at the time of termination of parental rights was in the 

care of a public or licensed private child placement agency or 

Indian tribal organization pursuant to a voluntary placement 

agreement, relinquishment, or involuntary removal of the child 

from the home, and the State has determined, pursuant to criterion or criteria established by the State (which may, but need 

not, include a judicial determination), that continuation in the 

home would be contrary to the safety or welfare of such child; 

(II) meets all medical or disability requirements of title XVI 

with respect to eligibility for supplemental security income benefits; or 

(III) was residing in a foster family home or child care institution with the child’s minor parent, provided that the child’s 

minor parent was in such foster family home or child care institution pursuant to a voluntary placement agreement, relinquishment, or involuntary removal of the child from the home, 


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53 

and the State has determined, pursuant to criterion or criteria 

established by the State (which may, but need not, include judicial determination), that continuation in the home would be 

contrary to the safety or welfare of such child; and 

(ii) has been determined by the State, pursuant to subsection 

(c), to be a child with special needs. 

(B) Section 472(a)(4) shall apply for purposes of subparagraph (A) 

of this paragraph, in any case in which the child is an alien described in such section. 

ø(C) A child shall be treated as meeting the requirements of this 

paragraph for the purpose of paragraph (1)(B)(ii) if the child— 

ø(i) meets the requirements of subparagraph (A)(ii); 

ø(ii) was determined eligible for adoption assistance payments under this part with respect to a prior adoption; 

ø(iii) is available for adoption because— 

ø(I) the prior adoption has been dissolved, and the parental rights of the adoptive parents have been terminated; or 

ø(II) the child’s adoptive parents have died; and 

ø(iv) fails to meet the requirements of subparagraph (A) 

but would meet such requirements if— 

ø(I) the child were treated as if the child were in the 

same financial and other circumstances the child was in 

the last time the child was determined eligible for adoption 

assistance payments under this part; and 

ø(II) the prior adoption were treated as never having occurred.¿ 

(C) A child who meets the requirements of subparagraph (A)(ii), 

who was determined eligible for adoption assistance payments 

under this part with respect to a prior adoption (or who would have 

been determined eligible for such payments had the Adoption and 

Safe Families Act of 1997 been in effect at the time that such determination would have been made), and who is available for adoption 

because the prior adoption has been dissolved and the parental 

rights of the adoptive parents have been terminated or because the 

child’s adoptive parents have died, shall be treated as meeting the 

requirements of this paragraph for purposes of paragraph (1)(B)(ii). 

(3) The amount of the payments to be made in any case under 

clauses (i) and (ii) of paragraph (1)(B) shall be determined through 

agreement between the adoptive parents and the State or local 

agency administering the program under this section, which shall 

take into consideration the circumstances of the adopting parents 

and the needs of the child being adopted, and may be readjusted 

periodically, with the concurrence of the adopting parents (which 

may be specified in the adoption assistance agreement), depending 

upon changes in such circumstances. However, in no case may the 

amount of the adoption assistance payment made under clause (ii) 

of paragraph (1)(B) exceed the foster care maintenance payment 

which would have been paid during the period if the child with respect to whom the adoption assistance payment is made had been 

in a foster family home. 

ø(4) Notwithstanding the preceding paragraph, (A) no payment 

may be made to parents with respect to any child who has attained 

the age of eighteen (or, where the State determines that the child 

has a mental or physical handicap which warrants the continuation 


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54 

of assistance, the age of twenty-one), and (B) no payment may be 

made to parents with respect to any child if the State determines 

that the parents are no longer legally responsible for the support 

of the child or if the State determines that the child is no longer 

receiving any support from such parents. Parents who have been 

receiving adoption assistance payments under this section shall 

keep the State or local agency administering the program under 

this section informed of circumstances which would, pursuant to 

this subsection, make them ineligible for such assistance payments, 

or eligible for assistance payments in a different amount.¿ 

(4)(A) Notwithstanding any other provision of this section, a payment may not be made pursuant to this section to parents or relative guardians with respect to a child— 

(i) who has attained— 

(I) 18 years of age, or such greater age as the State may 

elect under section 475(8)(B)(iii); or 

(II) 21 years of age, if the State determines that the child 

has a mental or physical handicap which warrants the continuation of assistance; 

(ii) who has not attained 18 years of age, if the State determines that the parents or relative guardians, as the case may 

be, are no longer legally responsible for the support of the child; 

or 

(iii) if the State determines that the child is no longer receiving any support from the parents or relative guardians, as the 

case may be. 

(B) Parents or relative guardians who have been receiving adoption assistance payments or relative guardianship assistance payments under this section shall keep the State or local agency administering the program under this section informed of circumstances 

which would, pursuant to this subsection, make them ineligible for 

the payments, or eligible for the payments in a different amount. 

(6)(A) For purposes of paragraph (1)(B)(i), the term ‘‘nonrecurring 

adoption expenses’’ means reasonable and necessary adoption fees, 

court costs, attorney fees, and other expenses which are directly related to the legal adoption of a child with special needs and which 

are not incurred in violation of State or Federal law. 

(B) A State’s payment of nonrecurring adoption expenses under 

an adoption assistance agreement shall be treated as an expenditure made for the proper and efficient administration of the State 

plan for purposes of section 474(a)(3)(E). 

(7)(A) Notwithstanding any other provision of this subsection, no 

payment may be made to parents with respect to any child that— 

(i) would be considered a child with special needs under subsection (c); 

(ii) is not a citizen or resident of the United States; and 

(iii) was adopted outside of the United States or was brought 

into the United States for the purpose of being adopted. 

(B) Subparagraph (A) shall not be construed as prohibiting payments under this part for a child described in subparagraph (A) 

that is placed in foster care subsequent to the failure, as determined 

by the State, of the initial adoption of such child by the parents described in such subparagraph. 

(8) A State shall spend an amount equal to the amount of savings 

(if any) in State expenditures under this part resulting from the apVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00054 Fmt 6659 Sfmt 6603 E:\HR\OC\SR467.XXX SR467

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55 

plication of paragraph (2) on and after the effective date of the 

amendments to such paragraph made by section 102(a) of the Improved Adoption Incentives and Relative Guardianship Support Act 

of 2008 to provide to children or families any service (including 

post-adoption services) that may be provided under this part or part 

B. 

(9) A child on whose behalf relative guardianship assistance payments have been made under section 473(d) and who pursuant to 

subsection (c) has been determined to be a child with special needs, 

shall be eligible for adoption assistance as if no relative guardianship assistance agreement or payments had been made. The State 

shall make payments of nonrecurring adoption expenses under this 

section to the adoptive parents of such a child. 

(b)(1) For purposes of title XIX, any child who is described in 

paragraph (3) is deemed to be a dependent child as defined in section 406 (as in effect as of July 16, 1996) and deemed to be a recipient of aid to families with dependent children under part A of this 

title (as so in effect) in the State where such child resides. 

(2) For purposes of title XX, any child who is described in paragraph (3) is deemed to be a minor child in a needy family under 

a State program funded under part A of this title and deemed to 

be a recipient of assistance under such part. 

(3) A child described in this paragraph is any child— 

(A)(i) who is a child described in subsection (a)(2), and 

(ii) with respect to whom an adoption assistance agreement 

is in effect under this section (whether or not adoption assistance payments are provided under the agreement or are being 

made under this section), including any such child who has 

been placed for adoption in accordance with applicable State 

and local law (whether or not an interlocutory or other judicial 

decree of adoption has been issued), øor¿ 

(B) with respect to whom foster care maintenance payments 

are being made under section 472ø.¿ , or 

(C) with respect to whom relative guardianship assistance 

payments are being made under subsection (d). 

(4) For purposes of paragraphs (1) and (2), a child whose costs 

in a foster family home or child-care institution are covered by the 

foster care maintenance payments being made with respect to the 

child’s minor parent, as provided in section 475(4)(B), shall be considered a child with respect to whom foster care maintenance payments are being made under section 472. 

ø(c) For purposes of this section, a child shall not be considered 

a child with special needs unless— 

ø(1) the State has determined that the child cannot or should 

not be returned to the home of his parents; and 

ø(2) the State had first determined (A) that there exists with 

respect to the child a specific factor or condition (such as his 

ethnic background, age, or membership in a minority or sibling 

group, or the presence of factors such as medical conditions or 

physical, mental, or emotional handicaps) because of which it 

is reasonable to conclude that such child cannot be placed with 

adoptive parents without providing adoption assistance under 

this section or medical assistance under title XIX, and (B) that, 

except where it would be against the best interests of the child 

because of such factors as the existence of significant emotional 


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56 

ties with prospective adoptive parents while in the care of such 

parents as a foster child, a reasonable, but unsuccessful, effort 

has been made to place the child with appropriate adoptive 

parents without providing adoption assistance under this section or medical assistance under title XIX.¿ 

(c) For purposes of this section, a child shall not be considered a 

child with special needs unless— 

(1) the State has determined, pursuant to a criterion or criteria established by the State (which may, but need not, include 

a judicial determination), that the child cannot or should not 

be returned to the home of his parents; and 

(2) the State has determined— 

(A) that there exists with respect to the child a specific 

factor or condition (such as ethnic background, age, or 

membership in a minority or sibling group, or the presence 

of factors such as medical conditions or physical, mental, 

or emotional handicaps) because of which it is reasonable 

to conclude that the child cannot be placed with adoptive 

parents without providing adoption assistance under this 

section and medical assistance under title XIX; and 

(B) that except where it would be against the best interests of the child because of such factors as the existence of 

significant emotional ties with prospective adoptive parents 

while in the care of such parents as a foster child, a reasonable, but unsuccessful, effort has been made to place the 

child with appropriate adoptive parents without providing 

adoption assistance under this section or medical assistance under title XIX. 

A child who meets all medical or disability requirements of title XVI 

with respect to eligibility for supplemental security income benefits 

shall be deemed to be a child for whom the determination required 

by subparagraph (A) of paragraph (2) has been made. 

(d) RELATIVE GUARDIANSHIP ASSISTANCE PAYMENTS FOR CHIL- DREN.— 

(1) RELATIVE GUARDIANSHIP ASSISTANCE AGREEMENT.— (A) IN GENERAL—In order to receive payments under section 474(a)(5), a State shall— 

(i) negotiate and enter into a written, binding relative guardianship assistance agreement with the relative guardian of a child who meets the requirements 

of paragraph (3)(B); and 

(ii) provide the relative guardian with a copy of the 

agreement. 

(B) MINIMUM REQUIREMENTS.—The agreement shall 

specify, at a minimum— 

(i) the amount of, and manner in which, each relative guardianship assistance payment will be provided under the agreement; 

(ii) the additional services and assistance that the 

child and relative guardian will be eligible for under 

the agreement; 

(iii) the procedure by which the relative guardian 

may apply for additional services as needed, provided 

the agency and relative guardian agree on the additional services as specified in the agreement; and 


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57 

(iv) that the State will pay up to $2,000 of nonrecurring expenses associated with obtaining legal 

guardianship of the child. 

(C) INTERSTATE APPLICATION.—The agreement shall provide that the agreement shall remain in effect without regard to the State residency of the relative guardian. 

(D) FEDERAL REIMBURSEMENT OF NON-RECURRING EXPENSES.—A State’s payment of nonrecurring guardianship 

expenses under a relative guardianship assistance agreement in accordance with subparagraph (B) (iv) shall be 

treated as a direct expenditure made for the proper and efficient administration of the State plan for purposes of section 474(a)(3)(E). 

(2) RELATIVE GUARDIANSHIP ASSISTANCE PAYMENT.— 

(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

the relative guardianship assistance payment shall be 

based on consideration of the circumstances of the relative 

guardian and the needs of the child. 

(B) MINIMUM AND MAXIMUM PAYMENT.—A relative guardianship assistance payment shall not be less than the adoption assistance payment the State would have made on behalf of the child under an adoption assistance agreement 

entered into under subsection (a) and shall not exceed the 

foster care maintenance payment which would have been 

paid if the child had remained in a foster family home. 

(C) PERIODIC ADJUSTMENTS.—A relative guardianship 

assistance payment may be readjusted periodically, with 

the concurrence of the relative guardian (which may be 

specified in the relative guardianship assistance agreement), depending upon changes in the circumstances of the 

relative guardian and the needs of the child. 

(3) CHILD’S ELIGIBILITY FOR A RELATIVE GUARDIANSHIP ASSISTANCE PAYMENT.— 

(A) IN GENERAL.—A child is eligible for a relative guardianship assistance payment under this subsection if the 

State agency determines the following: 

(i) The child— 

(I) has been removed from his or her home pursuant to a voluntary placement agreement or as a 

result of a judicial determination to the effect that 

continuation in the home would be contrary to the 

welfare of the child; and 

(II) in the month prior to the establishment of 

the legal guardianship, is eligible for foster care 

maintenance payments under section 472. 

(ii)(I) Being returned home or adopted are not appropriate permanency options for the child. 

(II) In the case of a child who has been removed from 

the home for reasons primarily associated with parental substance abuse and addiction, attempts to engage 

the family in residential, comprehensive family treatment programs are inappropriate or have been unsuccessful or such programs are unavailable. 


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58 

(iii) The child demonstrates a strong attachment to 

the relative guardian and the relative guardian has a 

strong commitment to caring permanently for the child. 

(iv) The relative guardian satisfies the requirements 

of subparagraph (B). 

(v) With respect to a child who has attained 14 years 

of age, the child has been consulted regarding the relative guardianship arrangement. 

(B) REQUIREMENTS FOR RELATIVE GUARDIANS.—A relative 

guardian satisfies the requirements of this subparagraph if 

the relative— 

(i) is the grandparent or other relative of a child on 

whose behalf relative guardianship assistance payments are to be made; 

(ii) has satisfied the background checks required 

under section 471(a)(20); 

(iii) has met the State’s requirements established 

under section 471(a)(10) to be a foster family home; 

and 

(iv) assumes legal guardianship of such child and 

commits to caring for the child on a permanent basis. 

(C) TREATMENT OF SIBLINGS.—With respect to a child described in subparagraph (A) whose sibling or siblings are 

not so described— 

(i) the child and any sibling of the child shall be 

placed in the same relative guardianship arrangement 

unless it can be demonstrated that it is inappropriate 

to do so; and 

(ii) relative guardianship assistance payments may 

be paid for the child and each sibling so placed. 

ADOPTION INCENTIVE PAYMENTS

SEC. 473A. (a) GRANT AUTHORITY.—Subject to the availability of 

such amounts as may be provided in advance in appropriations 

Acts for this purpose, the Secretary shall make a grant to each 

State that is an incentive-eligible State for a fiscal year in an 

amount equal to the adoption incentive payment payable to the 

State under this section for the fiscal year, which shall be payable 

in the immediately succeeding fiscal year. 

(b) INCENTIVE-ELIGIBLE STATE.—A State is an incentive-eligible 

State for a fiscal year if— 

(1) the State has a plan approved under this part for the fiscal year; 

(2)(A) the number of foster child adoptions in the State during the fiscal year exceeds the base number of foster child 

adoptions for the State for the fiscal year; øor¿ 

(B) the number of older child adoptions in the State during the fiscal year exceeds the base number of older child 

adoptions for the State for the fiscal year; or 

(C) the State’s foster child adoption rate for the fiscal 

year exceeds the highest ever foster child adoption rate determined for the State; 

(3) the State is in compliance with subsection (c) for the fiscal year; 


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59 

(4) øin the case of fiscal years 2001 through 2007,¿ the State 

provides health insurance coverage to any child with special 

needs (as determined under section 473(c)) for whom there is 

in effect an adoption assistance agreement between a State 

and an adoptive parent or parents; and 

(5) the fiscal year is any of fiscal years ø1998 through 2007¿. 2008 through 2012. 

(c) DATA REQUIREMENTS.— (1) IN GENERAL.—A State is in compliance with this subsection for a fiscal year if the State has provided to the Secretary the data described in paragraph (2)— 

(A) for fiscal years 1995 through 1997 (or, if the first fiscal year for which the State seeks a grant under this section is after fiscal year 1998, the fiscal year that precedes 

such first fiscal year); and 

(B) for each succeeding fiscal year that precedes the fiscal year. 

(2) DETERMINATION OF NUMBERS OF ADOPTIONS BASED ON

AFCARS DATA.—The Secretary shall determine the numbers of 

foster child adoptions, of special needs adoptions that are not 

older child adoptions, and of older child adoptions in a State 

during øeach of fiscal years 2002 through 2007¿ a fiscal year, 

and the foster child adoption rate for the State for the fiscal 

year, for purposes of this section, on the basis of data meeting 

the requirements of the system established pursuant to section 

479, as reported by the State and approved by the Secretary 

by August 1 of the succeeding fiscal year. 

(3) NO WAIVER OF AFCARS REQUIREMENTS.—This section shall 

not be construed to alter or affect any requirement of section 

479 or of any regulation prescribed under such section with respect to reporting of data by States, or to waive any penalty 

for failure to comply with such a requirement. 

(d) ADOPTION INCENTIVE PAYMENT— (1) IN GENERAL.—Except as provided in øparagraph (2)¿ 

paragraphs (2) and (3), the adoption incentive payment payable to a State for a fiscal year under this section shall be 

equal to the sum of— 

(A) $4,000, multiplied by the amount (if any) by which 

the number of foster child adoptions in the State during 

the fiscal year exceeds the base number of foster child 

adoptions for the State for the fiscal year; 

(B) ø2,000¿ $3,000 multiplied by the amount (if any) by 

which the number of special needs adoptions that are not 

older child adoptions in the State during the fiscal year exceeds the base number of special needs adoptions that are 

not older child adoptions for the State for the fiscal year; 

and 

(C) ø4,000¿ $8,000 multiplied by the amount (if any) by 

which the number of older child adoptions in the State 

during the fiscal year exceeds the base number of older 

child adoptions for the State for the fiscal year. 

(2) PRO RATA ADJUSTMENT IF INSUFFICIENT FUNDS AVAIL- ABLE.—For any fiscal year, if the total amount of adoption incentive payments otherwise payable under øthis section¿ paragraph (1) for a fiscal year exceeds the amount appropriated 


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60 

pursuant to subsection (h) for the fiscal year, the amount of 

the adoption incentive payment payable to each State under 

øthis section¿ paragraph (1) for the fiscal year shall be— 

(A) the amount of the adoption incentive payment that 

would otherwise be payable to the State under øthis section¿ paragraph (1) for the fiscal year; multiplied by 

(B) the percentage represented by the amount so appropriated for the fiscal year, divided by the total amount of 

adoption incentive payments otherwise payable under 

øthis section¿ paragraph (1) for the fiscal year. 

(3) INCREASED INCENTIVE PAYMENT FOR EXCEEDING THE

HIGHEST EVER FOSTER CHILD ADOPTION RATE.— 

(A) IN GENERAL.—If— 

(i) for fiscal year 2009 or any fiscal year thereafter the total amount of adoption incentive payments payable under paragraph (1) is less than the 

amount appropriated under subsection (h) for the 

fiscal year; and 

(ii) a State’s foster child adoption rate for that 

fiscal year exceeds the highest ever foster child 

adoption rate determined for the State, 

then the adoption incentive payment otherwise determined 

under paragraph (1) for the State shall be increased, subject to subparagraph (C), by the amount determined for the 

State under subparagraph (B). 

(B) AMOUNT OF INCREASE.—For purposes of subparagraph (A), the amount determined under this subparagraph 

with respect to a State and a fiscal year is the amount 

equal to the product of— 

(i) $1,000; and 

(ii) the excess of— 

(I) the number of foster child adoptions in the 

State in the fiscal year; over 

(II) the product (rounded to the nearest whole 

number) of— 

(aa) the highest ever foster child adoption 

rate determined for the State; and 

(bb) the number of children in foster care 

under the supervision of the State on the last 

day of the preceding fiscal year. 

(C) PRO RATA ADJUSTMENT IF INSUFFICIENT FUNDS AVAILABLE.—For any fiscal year, if the total amount of increases 

in adoption incentive payments otherwise payable under 

this paragraph for a fiscal year exceeds the amount available for such increases for the fiscal year, the amount of the 

increase payable to each State under this paragraph for the 

fiscal year shall be— 

(i) the amount of the increase that would otherwise 

be payable to the State under this paragraph for the 

fiscal year; multiplied by 

(ii) the percentage represented by the amount so 

available for the fiscal year, divided by the total 

amount of increases otherwise payable under this paragraph for the fiscal year. 


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61 

(e) ø2-YEAR¿ 24-month AVAILABILITY OF INCENTIVE PAYMENTS.— Payments to a State under this section in a fiscal year shall remain 

available for use by the State øthrough the end of the succeeding 

fiscal year¿ for a period of 24 months beginning with the month in 

which the payments are made. 

(f) LIMITATIONS ON USE OF INCENTIVE PAYMENTS.—A State shall 

not expend an amount paid to the State under this section except 

to provide to children or families any service (including post-adoption services and relative navigator and support services) that may 

be provided under part B or E. Amounts expended by a State in 

accordance with the preceding sentence shall be disregarded in determining State expenditures for purposes of Federal matching 

payments under sections 424, 434, and 474. 

(g) DEFINITIONS.—As used in this section: 

(1) FOSTER CHILD ADOPTION.—The term ‘‘foster child adoption’’ means the final adoption of a child who, at the time of 

adoptive placement, was in foster care under the supervision 

of the State. 

(2) SPECIAL NEEDS ADOPTION.—The term ‘‘special needs adoption’’ means the final adoption of a child for whom an adoption 

assistance agreement is in effect under section 473. 

(3) BASE NUMBER OF FOSTER CHILD ADOPTIONS.—The term 

‘‘base number of foster child adoptions for a State’’ ømeans— 

ø(A) with respect to fiscal year 2003, the number of foster child adoptions in the State in fiscal year 2002; and 

ø(B) with respect to any subsequent fiscal year, the 

number of foster child adoptions in the State in the fiscal 

year for which the number is the greatest in the period 

that begins with fiscal year 2002 and ends with the fiscal 

year preceding that subsequent fiscal year.¿ 

means, with respect to any fiscal year, the number of foster 

child adoptions in the State in fiscal year 2007. 

(4) BASE NUMBER OF SPECIAL NEEDS ADOPTIONS THAT ARE

NOT OLDER CHILD ADOPTIONS.—The term ‘‘base number of special needs adoptions that are not older child adoptions for a 

State ømeans— 

ø(A) with respect to fiscal year 2003, the number of special needs adoptions that are not older child adoptions in 

the State in fiscal year 2002; and 

ø(B) with respect to any subsequent fiscal year, the 

number of special needs adoptions that are not older child 

adoptions in the State in the fiscal year for which the 

number is the greatest in the period that begins with fiscal 

year 2002 and ends with the fiscal year preceding that 

subsequent fiscal year.¿ means, with respect to any fiscal 

year, the number of special needs adoptions that are not 

older child adoptions in the State in fiscal year 2007. 

(5) Base number of older child adoptions.—The term 

‘‘base number of older child adoptions for a State’’ 

ømeans— 

ø(A) with respect to fiscal year 2003, the number of older 

child adoptions in the State in fiscal year 2002; and 

ø(B) with respect to any subsequent fiscal year, the 

number of older child adoptions in the State in the fiscal 

year for which the number is the greatest in the period 


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62 

that begins with fiscal year 2002 and ends with the fiscal 

year preceding that subsequent fiscal year.¿ means, with 

respect to any fiscal year, the number of older child adoptions in the State in fiscal year 2007. 

(6) OLDER CHILD ADOPTIONS.—The term ‘‘older child adoptions’’ means the final adoption of a child who has attained 9 

years of age if— 

(A) at the time of the adoptive placement, the child was 

in foster care under the supervision of the State; or (B) an 

adoption assistance agreement was in effect under section 

473 with respect to the child. 

(7) HIGHEST EVER FOSTER CHILD ADOPTION RATE.—The term 

‘‘highest ever foster child adoption rate’’ means, with respect to 

any fiscal year, the highest foster child adoption rate determined for any fiscal year in the period that begins with fiscal 

year 1998 and ends with the preceding fiscal year. 

(8) FOSTER CHILD ADOPTION RATE.—The term ‘‘foster child 

adoption rate’’ means, with respect to a State and a fiscal year, 

the percentage determined by dividing— 

(A) the number of foster child adoptions finalized in the 

State during the fiscal year; by 

(B) the number of children in foster care under the supervision of the State on the last day of the preceding fiscal 

year. 

(9) BASE NUMBER OF RELATIVE GUARDIANSHIP ASSISTANCE

AGREEMENTS.—The term ‘‘base number of relative guardianship 

assistance agreements’’ means, with respect to a fiscal year, the 

number of relative guardianship assistance agreements entered 

into under section 473(d) in the State in the fiscal year for 

which the number is the greatest in the period that begins with 

the first fiscal year in which the State establishes a relative 

guardianship assistance program under section 471(a)(1)(B) 

and ends with the preceding fiscal year. 

(h) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—— (1) IN GENERAL.—For grants under subsection (a), there are 

authorized to be appropriated to the Secretary— (A) $20,000,000 for fiscal year 1999; 

(B) $43,000,000 for fiscal year 2000; 

(C) $20,000,000 for each of fiscal years 2001 through 

2003, and 

(D) $43,000,000 for each of fiscal years 2004 through 

ø2008¿ 2013 

(2) AVAILABILITY.—Amounts appropriated under paragraph 

(1), or under any other law for grants under subsection (a), are 

authorized to remain available until expended, but not after 

fiscal year ø2008¿ 2013. 

* * * * * * * 

(j) INCENTIVE PAYMENTS FOR RELATIVE GUARDIANSHIP PLACE- MENTS.— 

(1) USE OF UNAWARDED ADOPTION INCENTIVE FUNDS TO MAKE

RELATIVE GUARDIANSHIP INCENTIVE PAYMENTS.—If in any fiscal 

year the total amount of adoption incentive payments payable 

under subsection (d) are less than the amount appropriated 

under subsection (h) for the fiscal year, States that have established a relative guardianship assistance program under secVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00062 Fmt 6659 Sfmt 6603 E:\HR\OC\SR467.XXX SR467

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63 

tion 471(a)(1)(B) shall be awarded, in addition to any adoption 

incentive payments made to such States under subsection (d), 

relative guardianship incentive payments from the portion of 

such amount that is in excess of the total amount of adoption 

incentive payments to be made under such subsection for such 

fiscal year. 

(2) PAYMENT AMOUNT.—Subject to paragraph (3), the relative 

guardianship incentive payment payable to a State for a fiscal 

year under this subsection shall be equal to— 

(A) in the case of the first fiscal year in which the State 

establishes a relative guardianship assistance program 

under section 471(a)(1)(B), the product of $1,000 and the 

number of relative guardianship assistance agreements entered into under section 473(d) in the State during that fiscal year; and 

(B) in the case of any succeeding fiscal year, the product of $1,000 and the amount (if any) by which the number of 

relative guardianship assistance agreements entered into 

under section 473(d) in the State for the fiscal year exceed 

the base number of relative guardianship assistance agreements in the State for the fiscal year. 

(3) PRO RATA ADJUSTMENT IF INSUFFICIENT FUNDS AVAIL- ABLE.—For any fiscal year, if the total amount of relative 

guardianship incentive payments otherwise payable under this 

subsection for a fiscal year exceeds the amount available for 

such payments for the fiscal year, the amount of the relative 

guardianship incentive payment payable to each State under 

this subsection for the fiscal year shall be— 

(A) the amount of the relative guardianship incentive 

payment that would otherwise be payable to the State 

under this subsection for the fiscal year; multiplied by 

(B) the percentage represented by the amount so available 

for the fiscal year, divided by the total amount of relative 

guardianship incentive payments otherwise payable under 

this section for the fiscal year. 

* * * * * * * 

PAYMENTS TO STATES; ALLOTMENTS TO STATES

SEC. 474. (a) For each quarter beginning after September 30, 

1980, each State which has a plan approved under this part shall 

be entitled to a payment equal to the sum of— 

* * * * * * * 

(3) subject to section 472(i) an amount equal to the sum of 

the following proportions of the total amounts expended during 

such quarter as found necessary by the Secretary for the provision of child placement services and for the proper and efficient 

administration of the State plan— 

* * * * * * * 

(B) 75 percent of so much of such expenditures (including travel and per diem expenses) are for the short-term 

training of current or prospective øfoster or adoptive parents and the members of the staff of State-licensed or 

State-approved child care institutions providing care to 


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foster and adopted children receiving assistance under this 

part, in ways that increase the ability of such current or 

prospective parents, staff members, and institutions to 

provide support and assistance to foster and adopted children,¿ foster parents, adoptive parents, or relative guardians and the members of the staff of State-licensed or Stateapproved child care institutions providing care to foster 

children, adoptive children, or children living with a relative guardian, who are receiving assistance under this 

part, in ways that increase the ability of such current or 

prospective parents, relative guardians, staff members, and 

institutions to provide support and assistance to foster children, adoptive children, or children living with a relative 

guardian, whether incurred directly by the State or by 

contract, 

* * * * * * * 

(4) an amount equal to the amount (if any) by which— 

(A) the lesser of— 

* * * * * * * 

(B) the total amount of any penalties assessed against 

the State under section 477(e) during the fiscal year in 

which the quarter occursø.¿; plus 

(5) an amount equal to the Federal medical assistance percentage (as defined in section 1905(b)) of the total amount expended during such quarter as relative guardianship assistance 

payments under section 473(d) pursuant to relative guardianship assistance agreements. 

* * * * * * * 

DEFINITIONS

SEC. 475. As used in this part or part B of this title: 

(1) The term ‘‘case plan’’ means a written document which 

includes at least the following: 

* * * * * * * 

(C) To the extent available and accessible, the health 

and education records of the child, including— 

(i) the names and addresses of the child’s health and 

educational providers; 

(ii) the child’s grade level performance; 

(iii) the child’s school record; 

ø(iv) assurances that the child’s placement in foster 

care takes into account proximity to the school in 

which the child is enrolled at the time of placement;¿ 

ø(v)¿(iv) a record of the child’s immunizations; 

ø(vi)¿(v) the child’s known medical problems; 

ø(vii)¿(vi) the child’s medications; and 

ø(viii)¿(vii) any other relevant health and education 

information concerning the child determined to be appropriate by the State agency. 

* * * * * * * 

(F) In the case of a child with respect to whom the permanency plan is placement with a relative and receipt of 


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relative guardianship assistance payments under section 

473(d), a description of— 

(i) the steps that the agency has taken to determine 

that it is not appropriate for the child to be returned 

home or adopted; 

(ii) the reasons why a permanent placement with a 

fit and willing relative through a relative guardianship 

assistance arrangement is in the child’s best interests; 

(iii) the ways in which the child meets the eligibility 

requirements for a relative guardianship assistance 

payment; 

(iv) the efforts the agency has made to discuss adoption by the child’s relative guardian who is to receive 

such payments as a more permanent alternative to 

legal guardianship and, in the case of such a relative 

guardian who has chosen not to pursue adoption, documentation of the reasons therefor; and 

(v) the efforts made by the State agency to secure the 

consent of the child’s parent or parents to the relative 

guardianship assistance arrangement, or the reasons 

why the efforts were not made. 

(G) A plan for ensuring the educational stability of the 

child while in foster care, including— 

(i) assurances that the placement of the child in foster care takes into account the appropriateness of the 

current educational setting and the proximity to the 

school in which the child is enrolled at the time of 

placement; and 

(ii)(I) an assurance that the State agency has coordinated with appropriate local educational agencies (as 

defined under section 9101 of the Elementary and Secondary Education Act of 1965) to ensure that the child 

remains in the school in which the child is enrolled at 

the time of placement; or 

(II) if remaining in such school is not in the best interests of the child, assurances by the State agency and 

the local educational agencies to provide immediate 

and appropriate enrollment in a new school, with all 

of the educational records of the child provided to the 

school. 

(2) in the 1st sentence of paragraph (4)(A)— 

* * * * * * * 

(4)(A) The term ‘‘foster care maintenance payments’’ means 

payments to cover the cost of (and the cost of providing) food, 

clothing, shelter, daily supervision, school supplies, a child’s 

personal incidentals, liability insurance with respect to a child, 

øand reasonable¿ reasonable travel to the child’s home for visitation. In the case of institutional care, such term shall include 

the reasonable costs of administration and operation of such 

institution as are necessarily required to provide the items described in the preceding sentence, and reasonable travel for the 

child to remain in the school in which the child is enrolled at 

the time of placement. 

* * * * * * * 


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(5) The term ‘‘case review system’’ means a procedure for assuring that— 

(A) each child has a case plan designed to achieve placement in a safe setting that is the least restrictive (most 

family like) and most appropriate setting available and in 

close proximity to the parents’ home, consistent with the 

best interest and special needs of the child, which— 

* * * * * * * 

(F) a child shall be considered to have entered foster 

care on the earlier of— 

(i) the date of the first judicial finding that the child 

has been subjected to child abuse or neglect; or 

(ii) the date that is 60 days after the date on which 

the child is removed from the home; øand¿ 

(G) the foster parents (if any) of a child and any 

preadoptive parent or relative providing care for the child 

are provided with notice of, and an opportunity to be heard 

in, any review or hearing to be held with respect to the 

child, except that this subparagraph shall not be construed 

to require that any foster parent, preadoptive parent, or 

relative providing care for the child be made a party to 

such a review or hearing solely on the basis of such notice 

and opportunity to be heardø.¿; and 

(H) during the 90-day period immediately prior to the 

date of the legal emancipation of a child, whether during 

that period foster care maintenance payments are being 

made on the child’s behalf or the child is receiving benefits 

or services under section 477, a caseworker on the staff of 

the State agency, and, as appropriate, other representatives 

of the child provide the child with assistance and support 

in developing a transition plan that is personalized at the 

direction of the child, includes specific options on housing, 

health insurance, education, local opportunities for mentors 

and continuing support services, and work force supports 

and employment services, and is as detailed as the child 

may elect. 

* * * * * * * 

(8)(A) Subject to subparagraph (B), the term ‘‘child’’ means 

an individual who has not attained 18 years of age. 

(B) At the option of a State, the term shall include an individual— 

(i)(I) who is in foster care under the responsibility of 

the State; 

(II) with respect to whom an adoption assistance 

agreement is in effect under section 473 if the child 

had attained 16 years of age before the agreement 

became effective; or 

(III) with respect to whom a relative guardianship assistance agreement is in effect under section 

473(d) if the child had attained 16 years of age before the agreement became effective; 

(ii) who has attained 18 years of age; 

(iii) who has not attained 19, 20, or 21 years of age, 

as the State may elect; and 


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(iv) who— 

(I) is completing secondary education or a program leading to an equivalent credential; 

(II) is enrolled in an institution which provides 

post-secondary or vocational education; 

(III) is participating in a program or activity designed to promote, or remove barriers to, employment; 

(IV) is employed for at least 80 hours per month; 

or 

(V) the State determines is particularly vulnerable or a high-risk individual. 

JOHN H. CHAFEE FOSTER CARE INDEPENDENCE PROGRAM

SEC. 477. (a) PURPOSE.—The purpose of this section is to provide 

States with flexible funding that will enable programs to be designed and conducted— 

(1) to identify children who are likely to remain in foster care 

until 18 years of age and to help these children make the transition to self-sufficiency by providing services such as assistance in obtaining a high school diploma, career exploration, vocational training, job placement and 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); 

* * * * * * * 

(5) to provide financial, housing, counseling, employment, 

education, and other appropriate support and services to 

former foster care recipients between 18 and 21 years of age 

to complement their own efforts to achieve self-sufficiency and 

to assure that program participants recognize and accept their 

personal responsibility for preparing for and then making the 

transition from adolescence to adulthood; øand¿ 

(6) to make available vouchers for education and training, including postsecondary training and education, to youths who 

have aged out of foster careø.¿; and 

(7) to provide the services referred to in this subsection to 

children who, after attaining 16 years of age, have left foster 

care for relative guardianship or adoption. 

(b) APPLICATIONS.— 

(1) IN GENERAL.—A State may apply for funds from its allotment under subsection (c) for a period of five consecutive fiscal 

years by submitting to the Secretary, in writing, a plan that 

meets the requirements of paragraph (2) and the certifications 

required by paragraph (3) with respect to the plan. 

* * * * * * * 

(3) CERTIFICATIONS.—The certifications required by this 

paragraph with respect to a plan are the following: 

(A) A certification by the chief executive officer of the 

State that the State will provide assistance and services to 

children who have left foster care because they have atVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00067 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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tained 18 years of age, and who have not attained 21 years 

of age. 

* * * * * * * 

(G) A certification by the chief executive officer of the 

State that each Indian tribe in the State has been consulted about the programs to be carried out under the 

plan; that there have been efforts to coordinate the program with such tribes; øand that¿ that benefits and services under the programs will be made available to Indian 

children in the State on the same basis as to other children in the Stateø.¿; and that the State will negotiate in 

good faith with any Indian tribe, tribal organization, or 

tribal consortium in the State that does not receive an allotment under subsection (j)(4) for a fiscal year and that requests to develop an agreement with the State to administer, supervise, or oversee the programs to be carried out 

under the plan with respect to the Indian children who are 

eligible for such programs and who are under the authority 

of the tribe, organization, or consortium and to receive from 

the State an appropriate portion of the State allotment 

under subsection (c) for the cost of such administration, supervision, or oversight. 

* * * * * * * 

(i) EDUCATIONAL AND TRAINING VOUCHERS.—The following conditions shall apply to a State educational and training voucher program under this section: 

(1) Vouchers under the program may be available to youths 

otherwise eligible for services under the State program under 

this section. 

(2) For purposes of the voucher program, youths adopted 

øfrom foster care after attaining age 16¿ or entering relative 

guardianship from foster care after attaining 16 years of age 

may be considered to be youths otherwise eligible for services 

under the State program under this section. 

* * * * * * * 

(j) AUTHORITY FOR AN INDIAN TRIBE, TRIBAL ORGANIZATION, OR

TRIBAL CONSORTIUM TO RECEIVE AN ALLOTMENT.— (1) IN GENERAL.—An Indian tribe, tribal organization, or 

tribal consortium with a plan approved under section 479B, or 

which is receiving funding to provide foster care under this part 

pursuant to a cooperative agreement or contract with a State, 

may apply for an allotment out of any funds authorized by 

paragraph (1) or (2) (or both) of subsection (h). 

(2) APPLICATION.—A tribe, organization, or consortium desiring an allotment under paragraph (1) shall submit an application to the Secretary to directly receive such allotment that includes a plan which— 

(A) satisfies such requirements of paragraphs (2) and (3) 

of subsection (b) as the Secretary determines are appropriate; 

(B) contains a description of the tribe’s, organization’s, or 

consortium’s consultation process regarding the programs 

to be carried out under the plan with each State for which 


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a portion of an allotment under subsection (c) would be redirected to the tribe, organization, or consortium; and 

(C) contains an explanation of the results of such consultation, particularly with respect to— 

(i) determining the eligibility for benefits and 

services of Indian children to be served under the 

programs to be carried out under the plan; and 

(ii) the process for consulting with the State in 

order to ensure the continuity of benefits and services for such children who will transition from receiving benefits and services under programs carried out under a State plan under subsection (b) 

(2) to receiving benefits and services under programs carried out under a plan under this subsection. 

(3) PAYMENTS.—The Secretary shall pay an Indian tribe, tribal organization, or tribal consortium with an application and 

plan approved under this subsection from the allotment determined for the tribe, organization, or consortium under paragraph (4) in the same manner as is provided in section 

474(a)(4) (and, where requested, and if funds are appropriated, 

section 474(e)) with respect to a State, or in such other manner 

as is determined appropriate by the Secretary, except that in no 

case shall an Indian tribe, a tribal organization, or a tribal 

consortium receive a lesser proportion of such funds than a 

State is authorized to receive under those sections. 

(4) ALLOTMENT.—From the amounts allotted to a State under 

subsection (c) for a fiscal year, the Secretary shall allot to each 

Indian tribe, tribal organization, or tribal consortium with an 

application and plan approved under this subsection for that 

fiscal year an amount equal to the tribal foster care ratio determined under paragraph (5) for the tribe, organization, or consortium multiplied by the allotment amount of the State within 

which the tribe, organization, or consortium is located. The allotment determined under this paragraph is deemed to be a 

part of the allotment determined under section 477(c) for the 

State in which the Indian tribal organization, or tribal consortium is located. 

(5) TRIBAL FOSTER CARE RATIO.—For purposes of paragraph 

(4), the tribal foster care ratio means, with respect to an Indian 

tribe, tribal organization, or tribal consortium, the ratio of— 

(A) the number of children in foster care under the responsibility of the Indian tribe, tribal organization, or tribal consortium (either directly or under supervision of the 

State), in the most recent fiscal year for which the information is available; to 

(B) the sum of— 

(i) the total number of children in foster care 

under the responsibility of the State within which 

the Indian tribe, tribal organization, or tribal consortium is located; and 

(ii) the total number of children in foster care 

under the responsibility of all Indian tribes, tribal 

organizations, or tribal consortia in the State (eiVerDate Aug 31 2005 06:35 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00069 Fmt 6659 Sfmt 6603 E:\HR\OC\SR467.XXX SR467

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ther directly or under supervision of the State) that 

have a plan approved under this subsection. 

* * * * * * * 

SEC. 479A. ANNUAL REPORT. 

The Secretary, in consultation with Governors, State legislatures, 

State and local public officials responsible for administering child 

welfare programs, and child welfare advocates, shall— 

* * * * * * * 

SEC. 479B. PROGRAMS OPERATED BY INDIAN TRIBAL ORGANIZATIONS. 

(a) DEFINITIONS OF INDIAN TRIBE; TRIBAL ORGANIZATIONS.—In 

this section, the terms ‘‘Indian tribe’’ and ‘‘tribal organization’’ have 

the meanings given those terms in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b). 

(b) AUTHORITY.—Except as otherwise provided in this section, this 

part shall apply in the same manner as this part applies to a State 

to an Indian tribe, tribal organization, or tribal consortium that 

elects to operate a program under this part and has a plan approved by the Secretary under section 471 in accordance with this 

section. 

(c) PLAN REQUIREMENTS.— (1) IN GENERAL.—An Indian tribe, tribal organization, or 

tribal consortium that elects to operate a program under this 

part shall include with its plan submitted under section 471 the 

following: 

(A) FINANCIAL MANAGEMENT.—Evidence demonstrating 

that the tribe, organization, or consortium has not had any 

uncorrected significant or material audit exceptions under 

Federal grants or contracts that directly relate to the administration of social services for the 3-year period prior to 

the date on which the plan is submitted. 

(B) SERVICE AREAS AND POPULATIONS.—For purposes of 

complying with section 471(a)(3), a description of the service area or areas and populations to be served under the 

plan and an assurance that the plan shall be in effect in 

all service area or areas and for all populations served by 

the tribe, organization, or consortium. 

(C) ELIGIBILITY.— 

(i) IN GENERAL.—Subject to clause (ii), an assurance 

that the plan will provide— 

(I) foster care maintenance payments under section 472 only on behalf of children who satisfy the 

eligibility requirements of subsection (a) of that 

section; 

(II) adoption assistance payments under section 

473 pursuant to adoption assistance agreements 

only on behalf of children who satisfy the eligibility requirements for such payments under that 

section; and 

(III) at the option of the tribe, organization, or 

consortium, relative guardianship assistance payments in accordance with section 473(d) only on 

behalf of children who meet the requirements of 

paragraph (3)(B) of that section. 


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(ii) SATISFACTION OF FOSTER CARE ELIGIBILITY RE- QUIREMENTS.—For purposes of determining whether a 

child whose placement and care are the responsibility 

of an Indian tribe, tribal organization, or tribal consortium with a plan approved under section 471 in accordance with this section satisfies the requirements of 

section 472(a), the following shall apply: 

(I) USE OF AFFIDAVITS, ETC.—Only with respect 

to the first 12 months for which such plan is in effect, the requirement in paragraph (1) of section 

472(a) shall not be interpreted so as to prohibit the 

use of affidavits or nunc pro tunc orders as 

verification documents in support of the reasonable 

efforts and contrary to the welfare of the child judicial determinations required under that paragraph. 

(II) AFDC ELIGIBILITY REQUIREMENT.—The State 

plan approved under section 402 (as in effect on 

July 16, 1996) of the State in which the child resides at the time of removal from the home shall 

apply to the determination of whether the child 

satisfies paragraph (3) of section 472(a). 

(D) OPTION TO CLAIM IN-KIND EXPENDITURES FROM

THIRD-PARTY SOURCES FOR NON-FEDERAL SHARE OF ADMIN- ISTRATIVE AND TRAINING COSTS DURING INITIAL IMPLEMEN- TATION PERIOD.—Only for fiscal year quarters beginning 

after September 30, 2009, and before October 1, 2014, a list 

of the in-kind expenditures (which shall be fairly evaluated, 

and may include plants, equipment, administration, or 

services) and the third-party sources of such expenditures 

that the tribe, organization, or consortium may claim as 

part of the non-Federal share of administrative or training 

expenditures attributable to such quarters for purposes of 

receiving payments under section 474(a)(3). The Secretary 

shall permit a tribe, organization, or consortium to claim 

in-kind expenditures from third party sources for such purposes during such quarters subject to the following: 

(i) NO EFFECT ON AUTHORITY FOR TRIBES, ORGANIZA- TIONS, OR CONSORTIA TO CLAIM IN-KIND EXPENDITURES

TO THE SAME EXTENT STATES MAY CLAIM IN-KIND EXPENDITURES.—Nothing in this subparagraph shall be 

construed as preventing a tribe, organization, or consortium from claiming any in-kind expenditures for 

purposes of receiving payments under section 474(a) 

that a State with a plan approved under section 471(a) 

could claim for such purposes. 

(ii) FISCAL YEAR 2010 OR 2011.— 

‘‘(I) EXPENDITURES OTHER THAN FOR TRAINING.— 

With respect to amounts expended during a fiscal 

year quarter beginning after September 30, 2009, 

and before October 1, 2011, for which the tribe, organization, or consortium is eligible for payments 

under subparagraph (C), (D), or (E) of section 

474(a)(3), not more than 25 percent of such 

amounts may consist of in-kind expenditures from 


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72 

third-party sources specified in the list required 

under this subparagraph to be submitted with the 

plan. 

(I) TRAINING EXPENDITURES.—With respect to 

amounts expended during a fiscal year quarter beginning after September 30, 2009, and before October 1, 2011, for which the tribe, organization, or 

consortium is eligible for payments under subparagraph (A) or (B) of section 474(a)(3), not more than 

12 percent of such amounts may consist of in-kind 

expenditures from third-party sources that are 

specified in such list and described in subclause 

(III). 

(III) SOURCES DESCRIBED.—For purposes of subclause (II), the sources described in this subclause 

are the following: 

(aa) A State or local government. 

(bb) An Indian tribe, tribal organization, or 

tribal consortium other than the tribe, organization, or consortium submitting the plan. 

(cc) A public institution of higher education. 

(dd) A Tribal College or University (as defined in section 316 of the Higher Education 

Act of 1965 (20 U.S.C. 1059c)). 

(ee) A private charitable organization. 

(iii) FISCAL YEAR 2012, 2013, OR 2014.— 

(I) IN GENERAL.—Except as provided in subclause (II) and clause (v), with respect to amounts 

expended during any fiscal year quarter beginning 

after September 30, 2011, and before October 1, 

2014, for which the tribe, organization, or consortium is eligible for payments under any subparagraph of section 474(a)(3), the only in-kind expenditures from third-party sources that may be 

claimed by the tribe, organization, or consortium 

for purposes of determining the non-Federal share 

of such expenditures (without regard to whether 

the expenditures are specified on the list required 

under this subparagraph to be submitted with the 

plan) are in-kind expenditures that are specified in 

regulations promulgated by the Secretary under 

section 301(e)(2) of the Improved Adoption Incentives and Relative Guardianship Support Act of 

2008 and are from an applicable third-party 

source specified in such regulations, and do not exceed the applicable percentage for claiming such 

in-kind expenditures specified in the regulations. 

(II) TRANSITION PERIOD FOR EARLY APPROVED

TRIBES, ORGANIZATIONS, OR CONSORTIA.—Subject 

to clause (v), if the tribe, organization, or consortium is an early approved tribe, organization, or 

consortium (as defined in subclause (III)), the Secretary shall not require the tribe, organization, or 

consortium to comply with such regulations before 

October 1, 2013. Until the earlier of the date such 


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73 

tribe, organization, or consortium comes into compliance with such regulations or October 1, 2013, 

the limitations on the claiming of in-kind expenditures from third-party sources under clause (ii) 

shall continue to apply to such tribe, organization, 

or consortium (without regard to fiscal limitation) 

for purposes of determining the non-Federal share 

of amounts expended by the tribe, organization, or 

consortium during any fiscal year quarter that begins after September 30, 2011, and before such 

date of compliance or October 1, 2013, whichever 

is earlier. 

(III) DEFINITION OF EARLY APPROVED TRIBE, ORGANIZATION, OR CONSORTIUM.—For purposes of 

subclause (II), the term ‘‘early approved tribe, organization, or consortium’’ means an Indian tribe, 

tribal organization, or tribal consortium that had 

a plan approved under section 471 in accordance 

with this section for any quarter of fiscal year 2010 

or 2011. 

(iv) FISCAL YEAR 2015 AND THEREAFTER.—Subject to 

clause (v), with respect to amounts expended during 

any fiscal year quarter beginning after September 30, 

2014, for which the tribe, organization, or consortium 

is eligible for payments under any subparagraph of 

section 474(a)(3), in-kind expenditures from third-party 

sources may be claimed for purposes of determining the 

non-Federal share of expenditures under any subparagraph of section 474(a)(3) only in accordance with the 

regulations promulgated by the Secretary under section 

301(e)(2) of the Improved Adoption Incentives and Relative Guardianship Support Act of 2008. 

(v) CONTINGENCY RULE.—If at the time expenditures 

are made for a fiscal year quarter beginning after September 30, 2011, and before October 1, 2014, for which 

a tribe, organization, or consortium may receive payments for under section 474(a)(3), no regulations required to be promulgated under section 301(e) (2) of the 

Improved Adoption Incentives and Relative Guardianship Support Act of 2008 are in effect, and no legislation has been enacted specifying otherwise— 

(I) in the case of any quarter of fiscal year 2012, 

2013, or 2014, the limitations on claiming in-kind 

expenditures from third-party sources under clause 

(ii) shall apply (without regard to fiscal limitation) 

for purposes of determining the non-Federal share 

of such expenditures; and 

(II) in the case of any quarter of fiscal year 2015 

or any fiscal year thereafter, no tribe, organization, 

or consortium may claim in-kind expenditures 

from third-party sources for purposes of determining the non-Federal share of such expenditures 

if a State with a plan approved under section 

471(a) could not claim in-kind expenditures from 

third-party sources for such purposes. 


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(2) CLARIFICATION OF TRIBAL AUTHORITY TO ESTABLISH

STANDARDS FOR TRIBAL FOSTER FAMILY HOMES AND TRIBAL

CHILD CARE INSTITUTIONS.—For purposes of complying with 

section 471(a)(10), an Indian tribe, tribal organization, or tribal 

consortium shall establish and maintain a tribal authority or 

authorities which shall be responsible for establishing and 

maintaining tribal standards for tribal foster family homes and 

tribal child care institutions. 

(3) CONSORTIUM.—The participating Indian tribes or tribal 

organizations of a tribal consortium may develop and submit a 

single plan under section 471 that meets the requirements of 

this section. 

(d) DETERMINATION OF FEDERAL MEDICAL ASSISTANCE PERCENTAGE FOR FOSTER CARE MAINTENANCE AND ADOPTION ASSISTANCE

PAYMENTS.— 

(1) PER CAPITA INCOME.—For purposes of determining the 

Federal medical assistance percentage applicable to an Indian 

tribe, a tribal organization, or a tribal consortium under paragraphs (1), (2), and (5) of section 474(a), the calculation of the 

per capita income of the Indian tribe, tribal organization, or 

tribal consortium shall be based upon the service population of 

the Indian tribe, tribal organization, or tribal consortium, except that in no case shall an Indian tribe, a tribal organization, 

or a tribal consortium receive less than the Federal medical assistance percentage for any State in which the tribe, organization, or consortium is located. 

(2) CONSIDERATION OF OTHER INFORMATION.—Before making 

a calculation under paragraph (1), the Secretary shall consider 

any information submitted by an Indian tribe, a tribal organization, or a tribal consortium that the Indian tribe, tribal organization, or tribal consortium considers relevant to making the 

calculation of the per capita income of the Indian tribe, tribal 

organization, or tribal consortium. 

(e) NONAPPLICATION TO COOPERATIVE AGREEMENTS AND CONTRACTS.—Any cooperative agreement or contract entered into between an Indian tribe, a tribal organization, or a tribal consortium 

and a State for the administration or payment of funds under this 

part that is in effect as of the date of enactment of this section shall 

remain in full force and effect, subject to the right of either party 

to the agreement or contract to revoke or modify the agreement or 

contract pursuant to the terms of the agreement or contract. Nothing 

in this section shall be construed as affecting the authority for an 

Indian tribe, a tribal organization, or a tribal consortium and a 

State to enter into a cooperative agreement or contract for the administration or payment of funds under this part. 

(f) JOHN H. CHAFEE FOSTER CARE INDEPENDENCE PROGRAM.— 

Except as provided in section 477(j), subsection (b) of this section 

shall not apply with respect to the John H. Chafee Foster Care Independence Program established under section 477 (or with respect to 

payments made under section 474(a)(4) or grants made under section 474(e)). 

(g) RULE OF CONSTRUCTION.—Nothing in this section shall be 

construed as affecting the application of subsection (h) of section 

472 to a child on whose behalf payments are paid under such section, or the application of subsection (b) of section 473 to a child on 


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75 

whose behalf payments are made under that section pursuant to an 

adoption assistance agreement or a relative guardianship assistance 

agreement, by an Indian tribe, tribal organization, or tribal consortium that elects to operate a foster care and adoption assistance program in accordance with this section. 

SEC. 479C. GRANTS TO STATES THAT SUCCESSFULLY COLLABORATE 

WITH AND SUPPORT TRIBES TO IMPROVE PERMANENCY 

OUTCOMES FOR INDIAN CHILDREN. 

(a) DEFINITIONS.—In this section: 

(1) GRANT YEAR.—The term ‘‘grant year’’ means each of fiscal 

years 2010, 2011, 2012, 2013, and 2014. 

(2) INDIAN CHILDREN.—The term ‘‘Indian children’’ means 

children who are members of, enrolled in, or affiliated with, or 

eligible for membership, enrollment, or affiliation with, an Indian tribe. 

(3) INDIAN TRIBE, TRIBAL ORGANIZATION, TRIBAL CONSOR- TIUM.—The terms ‘‘Indian tribe, tribal organization, and tribal 

consortium’’ have the meaning given those terms in section 

479B(a). 

(4) STATE.—The term ‘‘State’’ means any of the 50 States or 

the District of Columbia with State plans approved under part 

B and this part that elect to apply for a grant under this section. 

(5) SUCCESSFUL COLLABORATION AND TRIBAL SUPPORT

STATE.—The term ‘‘Successful Collaboration and Tribal Support State’’ means, with respect to any grant year, a State that 

the Secretary determines has demonstrated significant evidence 

of successful collaboration and Tribal support (as determined 

under subsection (c)) for the fiscal year preceding the grant 

year. 

(b) GRANTS.—The Secretary shall make a grant pursuant to this 

paragraph to each State for each grant year for which the Secretary 

determines that the State is a Successful Collaboration and Tribal 

Support State. 

(c) SIGNIFICANT EVIDENCE OF SUCCESSFUL COLLABORATION AND

TRIBAL SUPPORT.— 

(1) IN GENERAL.—For purposes of subsection (a)(5), significant evidence of successful collaboration and Tribal support 

shall be demonstrated through submission by a State of the following evidence to the Secretary: 

(A) Evidence of collaboration by the State with an Indian 

tribe, tribal organization, or tribal consortium to plan for 

and ensure access to services and supports for Indian children and their families which includes, at a minimum, evidence of the measures and activities required under sections 422(b)(9), 471(a)(29), and 477(b)(3)(G). 

(B) Evidence that the State has obtained from the Secretary, or is engaged in accessing (including through the 

National Child Welfare Resource Center for Tribes established under section 479D), technical assistance to improve 

services and permanency outcomes for Indian children and 

their families, such as through improved identification of 

Indian children, increased recruitment of Indian foster 

family homes, and, consistent with the requirements of the 

Indian Child Welfare Act of 1978 (25 U.S.C. 1901 et seq.), 


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improved rates of family reunification, legal or relative 

guardianships, or adoptive homes. 

(C) Evidence of improved outcomes for Indian children 

and their families and such other data as the Secretary 

may require to verify that an improvement in outcomes appropriate for Indian children and their families have been 

achieved. 

(2) FORM AND MANNER.—The Secretary shall establish the 

form and manner in which a State that elects to apply for a 

grant under this section shall submit the evidence described in 

each subparagraph of paragraph (1). To the extent practicable, 

the requirements for such evidence shall be consistent with data 

requirements under the Indian Child Welfare Act of 1978 (25 

U.S.C. 1901 et seq.). 

(d) AMOUNT OF GRANT.—The amount of the grant payable under 

this section to a Successful Collaboration and Tribal Support State 

for a grant year is equal to the product of— 

(1) the amount appropriated under subsection (e) for that 

year; and 

(2) the ratio of— 

(A) the number of Indian children in t he State (as determined for purposes of making payments under section 428; 

to 

(B) the sum of the number of such children determined 

for all Successful Collaboration and Tribal Support States 

for the grant year. 

(e) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated to 

the Secretary for purposes of making payments under this section, 

$5,000,000 for each of fiscal years 2010 through 2014. 

SEC. 479D. NATIONAL CHILD WELFARE RESOURCE CENTER FOR 

TRIBES. 

(a) ESTABLISHMENT.—The Secretary shall establish a National 

Child Welfare Resource Center for Tribes that is— 

(1) specifically and exclusively dedicated to meeting the needs 

of Indian tribes, tribal organizations, (as defined in section 

479B(a)), tribal consortia, and States in improving services and 

permanency outcomes for Indian children and their families 

through the provision of assistance described in subsection (b); 

and 

(2) not part of any existing national child welfare resource 

center. 

(b) ASSISTANCE PROVIDED.— 

(1) IN GENERAL.—The National Child Welfare Resource Center for Tribes shall— 

(A) provide information, advice, educational materials, 

and technical assistance to Indian tribes and tribal organizations with respect to the types of services, administrative 

functions, data collection, program management, and reporting that are provided for under State plans under part 

B and this part; and 

(B) assist and provide technical assistance to— 

(i) Indian tribes, tribal organizations, and tribal consortia seeking to operate a program under part B or 


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77 

this part through direct application to the Secretary 

under section 479B; and 

(ii) Indian tribes, tribal organizations, tribal consortia, and States seeking to develop cooperative agreements to provide for payments under this part or satisfy the requirements of section 422(b)(9), 471(a)(29), or 

477(b)(3)(G). 

(2) IMPLEMENTATION AUTHORITY.—The Secretary 

may provide the assistance described in paragraph (1) 

either directly or through a grant or contract with public or private organizations knowledgeable and experienced in the field of Indian tribal affairs and child 

welfare. 

(c) APPROPRIATIONS.—There is appropriated to the Secretary, out 

of any money in the Treasury of the United States not otherwise appropriated, $1,000,000 for each of fiscal years 2009 through 2013 to 

carry out this section. 

* * * * * * * 

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

* * * * * * * 

EFFECT OF FAILURE TO CARRY OUT STATE PLAN

SEC. 1130A. In an action brought to enforce a provision of the Social Security Act, such provision is not to be deemed unenforceable 

because of its inclusion in a section of the Act requiring a State 

plan or specifying the required contents of a State plan. This section is not intended to limit or expand the grounds for determining 

the availability of private actions to enforce State plan requirements other than by overturning any such grounds applied in 

Suter v. Artist M., 112 S. Ct. 1360 (1992), but not applied in prior 

Supreme Court decisions respecting such enforceability: Provided, 

however, That this section is not intended to alter the holding in 

Suter v. Artist M. that section 471(a)(15) of the Act is not enforceable in a private right of action. 

SEC. 1130B. DEMONSTRATION PROJECTS REGARDING LICENSING OF 

IMMEDIATE RELATIVE FOSTER PARENTS. 

(a) DEFINITIONS.—In this section: 

(1) CHILDREN IN FOSTER CARE.—The term ‘‘children in foster 

care’’ means children who are placed in foster family homes receiving funds under part B or E of title IV. 

(2) DEMONSTRATION PROJECTS.—The term ‘‘demonstration 

projects’’ means the projects conducted under this section. 

(3) DIRECTLY FUNDED TRIBAL IV–E PROGRAM.—The term ‘‘directly funded tribal IV–E program’’ means a program established under section 479B by an Indian tribe, tribal organization, or tribal consortium (as defined in subsection (a) of such 

section). 

(4) IMMEDIATE RELATIVE FOSTER PARENT.—The term ‘‘immediate relative foster parent’’ means, with respect to a child in 


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foster care, a foster parent of the child who is an adult sibling, 

grandparent, aunt, or uncle of the child. 

(5) STATE.—The term ‘‘State’’ means any of the 50 States or 

the District of Columbia with a State plan approved under section 471(a). 

(b) ESTABLISHMENT.—The Secretary shall establish not more than 

10 demonstration projects to determine the extent to which flexibility 

in the application of certain licensing standards to foster family 

homes of immediate relative foster parents results in improved wellbeing and permanency outcomes for children in foster care. 

(c) REQUIREMENTS.— (1) NUMBER OF PROJECTS.—Of the demonstration projects 

conducted under this section, at least—— 

‘‘(A) 2 projects shall be conducted in States with a large 

number of rural areas, as determined by the Secretary; 

(B) 1 project shall be conducted in a State in which the 

State plan under this part is administered by a political 

subdivision of the State; and 

(2) 1 project shall be conducted by a directly funded tribal IV–E program 

(2) APPLICATION TO CERTAIN LICENSING STANDARDS.—For 

purposes of placing a child in foster care in the home of an immediate relative foster parent of the child, and determining 

whether the home satisfies standards established by a State or 

directly funded tribal IV–E program for purposes of complying 

with section 471(a)(10), a State or directly funded tribal IV–E 

program selected to conduct a demonstration project under this 

section may modify the extent to which the home is required to 

comply with any or all of the following standards in order to 

be a licensed foster family home for the child: 

(A) Standards relating to the number or size of bedrooms 

in the home, but only if the State or tribal program applies 

appropriate safeguards for age and gender. 

(B) Standards relating to the number of bathrooms in the 

home, but only if the State or tribal program applies appropriate safeguards for age and gender. 

(C) Standards relating to overall square footage of the 

home. 

(3) IMPLEMENTATION; DURATION.—The demonstration projects 

shall— 

(A) begin not later than 1 year after the date of enactment of this section; and 

(B) be conducted for a 2-year period. 

(d) REPORT.—Not later than 1 year after the date on which the 

projects are completed, the Secretary shall submit to the Committee 

on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that— 

(1) evaluates, with respect to each State or directly funded 

tribal IV–E program conducting a project, the impact of the 

projects on the well-being of children in foster care and the extent to which the projects result in improved permanency outcomes for children in foster care, based on the past performance 

of the State (or, in the case of a directly funded tribal IV–E program, based on the past performance of each State in which the 

program is conducted); and 


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(2) includes such recommendations for administrative or legislative action as the Secretary determines appropriate. 

* * * * * * * 

INTERNAL REVENUE CODE OF 1986 

* * * * * * * 

Subtitle A—Income Taxes 

CHAPTER 1—NORMAL TAXES AND SURTAXES 

Subchapter A—Determination of Tax Liability 

PART IV—CREDITS AGAINST TAX 

Subpart A—Nonrefundable Personal Credits 

* * * * * * * 

SEC. 24. CHILD TAX CREDIT. 

(a) ALLOWANCE OF CREDIT.—There shall be allowed as a credit 

against the tax imposed by this chapter for the taxable year with 

respect to each qualifying child of the taxpayer for which the taxpayer is allowed a deduction under section 151 an amount equal to $1,000. 

* * * * * * * 

Subchapter B—Computation of Taxable Income 

PART V—DEDUCTIONS FOR PERSONAL EXEMPTIONS 

* * * * * * * 

SEC. 152. DEPENDENT DEFINED. 

* * * * * * * 

(c) QUALIFYING CHILD.—For purposes of this section— 

(1) IN GENERAL.—The term ‘‘qualifying child’’ means, with respect to any taxpayer for any taxable year, an individual— 

(A) who bears a relationship to the taxpayer described in 

paragraph (2), 

(B) who has the same principal place of abode as the 

taxpayer for more than one-half of such taxable year, 

(C) who meets the age requirements of paragraph (3), 

øand¿ 

(D) who has not provided over one-half of such individual’s own support for the calendar year in which the taxable year of the taxpayer beginsø.¿, and 

(E) who has not filed a joint return (other than only for 

a claim of refund) with the individual’s spouse under section 6013 for the taxable year beginning in the calendar 

year in which the taxable year of the taxpayer begins. 

* * * * * * * 

(2) RELATIONSHIP.—For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this 

paragraph if such individual is— 


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(A) a child of the taxpayer or a descendant of such a 

child, or 

(B) a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any such relative. 

(3) AGE REQUIREMENTS.— (A) IN GENERAL.—For purposes of paragraph (1)(C), an 

individual meets the requirements of this paragraph if 

such individual is younger than the taxpayer claiming such 

individual as a qualifying child and— 

* * * * * * * 

(4) SPECIAL RULE RELATING TO 2 OR MORE øCLAIMING¿ WHO

CAN CLAIM THE SAME QUALIFYING CHILD.— 

(A) IN GENERAL.—øExcept as provided in subparagraph 

(B), if (but for this paragraph) an individual may be and 

is claimed as a qualifying child by 2 or more taxpayers¿ 

Except as provided in subparagraphs (B) and (C), if (but 

for this paragraph) an individual may be claimed as a 

qualifying child by 2 or more taxpayers for a taxable year 

beginning in the same calendar year, such individual shall 

be treated as the qualifying child of taxpayer who is— 

(i) a parent of the individual, or 

* * * * * * * 

(C) NO PARENT CLAIMING QUALIFYING CHILD.—If the parents of an individual may claim such individual as a 

qualifying child but no parent so claims the individual, 

such individual may be claimed as the qualifying child of 

another taxpayer but only if the adjusted gross income of 

such taxpayer is higher than the highest adjusted gross income of any parent of the individual. 

Subtitle F—Procedure and Administration 

CHAPTER 61—INFORMATION AND RETURNS 

Subchapter B—Miscellaneous Provisions 

* * * * * * * 

SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN INFORMATION 

(a) GENERAL RULE.—Returns and return information shall be 

confidential, and except as authorized by this title— 

(1) no officer or employee of the United States, 

(2) no officer or employee of any State, any local law enforcement agency receiving information under subsection (i)(7)(A), 

any local child support enforcement agency, or any local agency 

administering a program listed in subsection (1)(7)(D) who has 

or had access to returns or return information under this section, and (3) no other person (or officer or employee thereof) 

who has or had access to returns or return information under 

subsection (e) (1)(D)(iii), paragraph (6), (10), (12), (16), (19), or 

(20) of subsection (1), paragraph (2) or (4)(B) of subsection (m), 

or subsection (n), 

shall disclose any return or return information obtained by him in 

any manner in connection with his service as such an officer or an 


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employee or otherwise or under the provisions of this section. For 

purposes of this subsection, the term ‘‘officer or employee’’ includes 

a former officer or employee. 

* * * * * * * 

(10) Disclosure of certain information to agencies requesting 

a reduction under subsection ø(c), (d) or (e)¿ (c), (d), (e) or (f) 

of section 6402. 

(A) RETURN INFORMATION FROM INTERNAL REVENUE

SERVICE.—The Secretary may, upon receiving a written request, disclose to officers and employees of any agency 

seeking a reduction under subsection ø(c), (d), or (e)¿ (c), 

(d), (e) or (f) of section 6402, to officers and employees of 

the Department of Labor for purposes of facilitating the exchange of data in connection with a request made under 

subsection (f)(5) of section 6402, and to officers and employees of the Department of the Treasury. 

(B)(i) RESTRICTION ON USE OF DISCLOSED INFORMATION.—Any officers and employees of an agency receiving 

return information under subparagraph (A) shall use such 

information only for the purposes of, and to the extent necessary in, establishing appropriate agency records, locating 

any person with respect to whom a reduction under subsection ø(c), (d), or (e)¿ (c), (d), (e) or (f) of section 6402 is 

sought for purposes of collecting the debt with respect to 

which the reduction is sought, or in the defense of any litigation or administrative procedure ensuing from a reduction made under subsection ø(c), (d), or (e)¿ (c), (d), (e) or 

(f) of section 6402. 

(ii) Notwithstanding clause (i), return information disclosed to officers and employees of the Department of Labor 

may be accessed by agents who maintain and provide technological support to the Department of Labor’s Interstate 

Connection Network (ICON) solely for the purpose of providing such maintenance and support. 

* * * * * * * 

(p) PROCEDURE AND RECORDKEEPING.— 

(1) MANNER, TIME, AND PLACE OF INSPECTIONS.— 

* * * * * * * 

(4) SAFEGUARDS.—Any Federal agency described in subsection (h)(2), (h)(5), (i)(1), (2), (3), (5), or (7), (j)(1), (2), or (5), 

(k)(8), (1)(1), (2), (3), (5), (10), (11), (13), (14), or (17) or (o)(1), 

the Government Accountability Office, the Congressional Budget Office, or any agency, body, or commission described in subsection (d), (i)(3)(B)(i) or 7(A)(ii), or (l)(6), (7), (8), (9), (12), (15), 

or (16) or any other person described in subsection ø(l)(16),¿ 

(l)(10), (16), (18), (19), or (20) shall, as a condition for receiving 

returns or return information— 

* * * * * * * 

(F) UPON COMPLETION OF USE OF SUCH RETURNS OR RETURN INFORMATION.— 

(i) in the case of an agency, body, or commission described in subsection (d), (i)(3)(B)(i), or (l)(6), (7), (8), 

(9), or (16), or any other person described in subVerDate Aug 31 2005 07:00 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00081 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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section ø(l)(16),¿ (l)(10), (16), (18), (19), or (20) return 

to the Secretary such returns or return information 

(along with any copies made therefrom) or make such 

returns or return information undisclosable in any 

manner and furnish a written report to the Secretary 

describing such manner, 

* * * * * * * 

(iii) in the case of the Department of Health and 

Human Services for purposes of subsection (m)(6), destroy all such return information upon completion of 

its use in providing the notification for which the information was obtained, so as to make such information undisclosable; except that the conditions of subparagraphs (A), (B), (C), (D), and (E) shall cease to 

apply with respect to any return or return information 

if, and to the extent that, such return or return information is disclosed in the course of any judicial or administrative proceeding and made a part of the public 

record thereof. If the Secretary determines that any 

such agency, body, or commission, including an agency 

or any other person described in subsection ø(l)(16),¿ 

(l)(10), (16), (18), (19), or (20), or the Government Accountability Office or the Congressional Budget Office, 

has failed to, or does not, meet the requirements of 

this paragraph, he may, after any proceedings for review established under paragraph (7), take such actions as are necessary to ensure such requirements 

are met, including refusing to disclose returns or return information to such agency, body, or commission, 

including an agency or any other person described in 

subsection ø(l)(16),¿ (l)(10), (16), (18), (19), or (20), or 

the Government Accountability Office or the Congressional Budget Office, until he determines that such requirements have been or will be met. In the case of 

any agency which receives any mailing address under 

paragraph (2), (4), (6), or (7) of subsection (m) and 

which discloses any such mailing address to any agent 

or which receives any information under paragraph 

(6)(A), (10), (12)(B), or (16) of subsection (l) and which 

discloses any such information to any agent, or any 

person including an agent described in subsection 

ø(l)(16),¿ (l)(10) or (16) paragraph shall apply to such 

agency and each such agent or other person (except 

that, in the case of an agent, or any person 11 including an agent described in subsection ø(l)(16),¿ (l)(10) 

or (16) any report to the Secretary or other action with 

respect to the Secretary shall be made or taken 

through such agency). For purposes of applying this 

paragraph in any case to which subsection (m)(6) applies, the term ‘‘return information’’ includes related 

blood donor records (as defined in section 1141(h)(2) of 

the Social Security Act). 

* * * * * * * 


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Subtitle C—Employment Taxes 

CHAPTER 23—FEDERAL UNEMPLOYMENT TAX ACT 

* * * * * * * 

SEC. 3304. APPROVAL OF STATE LAWS 

(a) REQUIREMENTS.—The Secretary of Labor shall approve any 

State law submitted to him, within 30 days of such submission, 

which he finds provides that— 

(1) all compensation is to be paid through public employment 

offices or such other agencies as the Secretary of Labor may 

approve; 

* * * * * * * 

(4) all money withdrawn from the unemployment fund of the 

State shall be used solely in the payment of unemployment 

compensation, exclusive of expenses of administration, and for 

refunds of sums erroneously paid into such fund and refunds 

paid in accordance with the provisions of section 3305(b); except that— 

(A) an amount equal to the amount of employee payments into the unemployment fund of a State may be used 

in the payment of cash benefits to individuals with respect 

to their disability, exclusive of expenses of administration; 

* * * * * * * 

(E) amounts may be withdrawn for the payment of 

short-time compensation under a plan approved by the 

Secretary of Labor; øand¿ 

(F) amounts may be withdrawn for the payment of allowances under a self-employment assistance program (as 

defined in section 3306(t); and 

(G) with respect to amounts of covered unemployment 

compensation debt (as defined in section 6402(f)(4)) collected under section 6402(f)— 

(i) amounts may be deducted to pay any fees authorized under such section; and 

(ii) the penalties and interest described in section 

6402(f)(4)(B) may be transferred to the appropriate 

State fund into which the State would have deposited 

such amounts had the person owing the debt paid such 

amounts directly to the State; 

* * * * * * * 

Subtitle F—Procedure and Administration 

CHAPTER 65—ABATEMENTS, CREDITS, AND REFUNDS 

Subchapter A—Procedure in General 

* * * * * * * 

SEC. 6402. AUTHORITY TO MAKE CREDITS OR REFUNDS. 

(a) GENERAL RULE.—In the case of any overpayment, the Secretary, within the applicable period of limitations, may credit the 

amount of such overpayment, including any interest allowed thereVerDate Aug 31 2005 07:00 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00083 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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on, against any liability in respect of an internal revenue tax on 

the part of the person who made the overpayment and shall, subject to subsections ø(c), (d), and (e)¿ (c), (d), (e), and (f) refund any 

balance to such person. 

(b) CREDITS AGAINST ESTIMATED TAX.— 

* * * * * * * 

(d) COLLECTION OF DEBTS OWED TO FEDERAL AGENCIES.— 

(1) IN GENERAL.— 

* * * * * * * 

(2) PRIORITIES FOR OFFSET.—Any overpayment by a person 

shall be reduced pursuant to this subsection after such overpayment is reduced pursuant to subsection (c) with respect to 

past-due support collected pursuant to an assignment under 

section 402(a)(26) (!1) of the Social Security Act øand before 

such overpayment is reduced pursuant to subsection (e)¿ and 

before such overpayment is reduced pursuant to subsections (e) 

and (f) and before such overpayment is credited to the future 

liability for tax of such person pursuant to subsection (b). If the 

Secretary receives notice from a Federal agency or agencies of 

more than one debt subject to paragraph (1) that is owed by 

a person to such agency or agencies, any overpayment by such 

person shall be applied against such debts in the order in 

which such debts accrued. 

* * * * * * * 

(e) COLLECTION OF PAST-DUE, LEGALLY ENFORCEABLE STATE INCOME TAX OBLIGATIONS.— 

(1) IN GENERAL.— 

* * * * * * * 

(3) PRIORITIES FOR OFFSET.—Any overpayment by a person 

shall be reduced pursuant to this subsection— 

(A) after such overpayment is reduced pursuant to— 

(i) subsection (a) with respect to any liability for any 

internal revenue tax on the part of the person who 

made the overpayment; 

(ii) subsection (c) with respect to past-due support; 

and 

(iii) subsection (d) with respect to any past-due, legally enforceable debt owed to a Federal agency; and 

(B) before such overpayment is credited to the future liability for any Federal internal revenue tax of such person 

pursuant to subsection (b). 

If the Secretary receives notice from one or more agencies of the 

State of more than one debt subject to paragraph (1) or subsection 

(f) that is owed by such person to such an agency, any overpayment 

by such person shall be applied against such debts accrued. 

* * * * * * * 

(f) COLLECTION OF UNEMPLOYMENT COMPENSATION DEBTS RESULTING FROM FRAUD.— 

(1) IN GENERAL. Upon receiving notice from any State that a 

named person owes a covered unemployment compensation debt 

to such State, the Secretary shall, under such conditions as may 

be prescribed by the Secretary— 


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(A) reduce the amount of any overpayment payable to 

such person by the amount of such covered unemployment 

compensation debt; 

(B) pay the amount by which such overpayment is reduced under subparagraph (A) to such State and notify 

such State of such person’s name, taxpayer identification 

number, address, and the amount collected; and 

(C) notify the person making such overpayment that the 

overpayment has been reduced by an amount necessary to 

satisfy a covered unemployment compensation debt. 

If an offset is made pursuant to a joint return, the notice under 

subparagraph (C) shall include information related to the rights of 

a spouse of a person subject to such an offset. 

(2) PRIORITIES FOR OFFSET.—Any overpayment by a person 

shall be reduced pursuant to this subsection— 

(A) after such overpayment is reduced pursuant to— 

(i) subsection (a) with respect to any liability for any 

internal revenue tax on the part of the person who 

made the overpayment; 

(ii) subsection (c) with respect to past-due support; 

and 

(iii) subsection (d) with respect to any past-due, legally enforceable debt owed to a Federal agency; and 

(B) before such overpayment is credited to the future liability for any Federal internal revenue tax of such person 

pursuant to subsection (b). 

If the Secretary receives notice from a State or States of more than 

one debt subject to paragraph (1) or subsection (e) that is owed by 

a person to such State or States, any overpayment by such person 

shall be applied against such debts in the order in which such debts 

accrued. 

(3) OFFSET PERMITTED ONLY AGAINST RESIDENTS OF STATE

SEEKING OFFSET.—Paragraph (1) shall apply to an overpayment 

by any person for a taxable year only if the address shown on 

the Federal return for such taxable year of the overpayment is 

an address within the State seeking the offset. 

(4) NOTICE; CONSIDERATION OF EVIDENCE.—No State may 

take action under this subsection until such State— 

(A) notifies by certified mail with return receipt the person owing the covered unemployment compensation debt 

that the State proposes to take action pursuant to this section; 

(B) provides such person at least 60 days to present evidence that all or part of such liability is not legally enforceable or due to fraud; 

(C) considers any evidence presented by such person and 

determines that an amount of such debt is legally enforceable and due to fraud; and 

(D) satisfies such other conditions as the Secretary may 

prescribe to ensure that the determination made under subparagraph (C) is valid and that the State has made reasonable efforts to obtain payment of such covered unemployment compensation debt. 

(5) COVERED UNEMPLOYMENT COMPENSATION DEBT.—For purposes of this subsection, the term ‘‘covered unemployment comVerDate Aug 31 2005 07:05 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00085 Fmt 6659 Sfmt 6603 E:\HR\OC\SR467.XXX SR467

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pensation debt’’ means a debt which resulted from a judgment 

rendered by a court of competent jurisdiction and which is no 

longer subject to judicial review in an amount equal to— 

(A) a past-due debt for erroneous payment of unemployment compensation due to fraud which has become final 

under the law of a State certified by the Secretary of Labor 

pursuant to section 3304 and which remains uncollected; 

(B) contributions due to the unemployment fund of a 

State for which the State has determined the person to be 

liable due to fraud; and 

(C) any penalties and interest assessed on such debt. 

(6) REGULATIONS.— 

(A) IN GENERAL.—The Secretary may issue regulations 

prescribing the time and manner in which States must submit notices of covered unemployment compensation debt 

and the necessary information that must be contained in or 

accompany such notices. The regulations may specify the 

minimum amount of debt to which the reduction procedure 

established by paragraph (1) may be applied. 

(B) FEE PAYABLE TO SECRETARY.—The regulations may 

require States to pay a fee to the Secretary, which may be 

deducted from amounts collected, to reimburse the Secretary for the cost of applying such procedure. Any fee paid 

to the Secretary pursuant to the preceding sentence shall be 

used to reimburse appropriations which bore all or part of 

the cost of applying such procedure. 

(C) SUBMISSION OF NOTICES THROUGH SECRETARY OF

LABOR.—The regulations may include a requirement that 

States submit notices of covered unemployment compensation debt to the Secretary via the Secretary of Labor in accordance with procedures established by the Secretary of 

Labor. Such procedures may require States to pay a fee to 

the Secretary of Labor to reimburse the Secretary of Labor 

for the costs of applying this subsection. Any such fee shall 

be established in consultation with the Secretary of the 

Treasury. Any fee paid to the Secretary of Labor may be deducted from amounts collected and shall be used to reimburse the appropriation account which bore all or part of 

the cost of applying this subsection. 

(7) ERRONEOUS PAYMENT TO STATE.—Any State receiving notice from the Secretary that an erroneous payment has been 

made to such State under paragraph (1) shall pay promptly to 

the Secretary, in accordance with such regulations as the Secretary may prescribe, an amount equal to the amount of such 

erroneous payment (without regard to whether any other 

amounts payable to such State under such paragraph have been 

paid to such State). 

ø(f)¿(g) REVIEW OF REDUCTIONS.—No court of the United States 

shall have jurisdiction to hear any action, whether legal or equitable, brought to restrain or review a reduction authorized by subsection ø(c), (d), or (e)¿(c), (d), (e), or (f). No such reduction shall 

be subject to review by the Secretary in an administrative proceeding. No action brought against the United States to recover the 

amount of any such reduction shall be considered to be a suit for 

refund of tax. This subsection does not preclude any legal, equiVerDate Aug 31 2005 07:05 Sep 20, 2008 Jkt 069010 PO 00000 Frm 00086 Fmt 6659 Sfmt 6602 E:\HR\OC\SR467.XXX SR467

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table, or administrative action against the Federal agency or State 

to which the amount of such reduction was paid or any such action 

against the Commissioner of Social Security which is otherwise 

available with respect to recoveries of overpayments of benefits 

under section 204 of the Social Security Act. 

ø(g)¿(h) FEDERAL AGENCY.—For purposes of this section, the 

term ‘‘Federal agency’’ means a department, agency, or instrumentality of the United States, and includes a Government corporation 

(as such term is defined in section 103 of title 5, United States 

Code). 

ø(h)¿(i) TREATMENT OF PAYMENTS TO STATES.—The Secretary 

may provide that, for purposes of determining interest, the payment of any amount withheld under øsubsection (c) or 

(e)¿subsection (c), (e), or (f) to a State shall be treated as a payment 

to the persons making the overpayment. 

ø(i)¿(j) CROSS REFERENCE.—For procedures relating to agency 

notification of the Secretary, see section 3721 of title 31, United 

States Code. 

ø(j)¿(k) REFUNDS TO CERTAIN FIDUCIARIES OF INSOLVENT MEMBERS OF AFFILIATED GROUPS.—Notwithstanding any other provision of law, in the case of an insolvent corporation which is a member of an affiliated group of corporations filing a consolidated return for any taxable year and which is subject to a statutory or 

court-appointed fiduciary, the Secretary may by regulation provide 

that any refund for such taxable year may be paid on behalf of 

such insolvent corporation to such fiduciary to the extent that the 

Secretary determines that the refund is attributable to losses or 

credits of such insolvent corporation. 

ø(k)¿(l) EXPLANATION OF REASON FOR REFUND DISALLOWANCE.— 

In the case of a disallowance of a claim for refund, the Secretary 

shall provide the taxpayer with an explanation for such disallowance. 

* * * * * * * 

TITLE 31—MONEY AND FINANCE 

SUBTITLE I—GENERAL 

CHAPTER 3—DEPARTMENT OF THE TREASURY 

SUBCHAPTER II—ADMINISTRATIVE 

* * * * * * * 

øSEC. 323. INVESTMENT OF OPERATING CASH 

ø(a) To manage United States cash, the Secretary of the Treasury may invest any part of the operating cash of the Treasury for 

not more than 90 days. Investments may be made in obligations 

of— 

ø(1) depositories maintaining Treasury tax and loan accounts 

secured by pledged collateral acceptable to the Secretary; and 

ø(2) the United States Government. 

(b) Subsection (a) of this section does not— 

ø(1) require the Secretary to invest a cash balance held in 

a particular account; or 


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88 

ø(2) permit the Secretary to require the sale of obligations by 

a particular person, dealer, or financial institution. 

ø(c) The Secretary shall consider the prevailing market in 

prescribing rates of interest for investments under subsection 

(a)(1) of this section.¿ 

SEC. 323. INVESTMENT OF OPERATING CASH 

(a) To manage United States cash, the Secretary of the Treasury 

may invest any part of the operating cash of the Treasury for not 

more than 90 days. The Secretary may invest the operating cash of 

the Treasury in— 

(1) obligations of depositories maintaining Treasury tax and 

loan accounts secured by pledged collateral acceptable to the 

Secretary; 

(2) obligations of the United States Government; and 

(3) repurchase agreements with parties acceptable to the Secretary. 

(b) Subsection (a) of this section does not require the Secretary to 

invest a cash balance held in a particular account. 

(c) The Secretary shall consider the prevailing market in prescribing rates of interest for investments under subsection (a)(1) of 

this section. 

(d)(1) The Secretary of the Treasury shall submit each fiscal year 

to the appropriate committees a report detailing the investment of 

operating cash under subsection 

(a) for the preceding fiscal year. The report shall describe the Secretary’s consideration of risks associated with investments and the 

actions taken to manage such risks. 

(2) For purposes of paragraph (1), the term ‘‘appropriate committees’’ means the Committee on Ways and Means of the House 

of Representatives and the Committee on Finance of the Senate.’’ 

* * * * * * * 

Æ 


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