160
measure the performance of a State in fiscal 
year 2003 or 2004 (as the case may be) 
using the job entry rate, job retention rate, 
and earnings gain rate components of the 
formula 
developed 
under 
section 
403(a)(4)(C) as in effect immediately before 
the effective date of this paragraph. 
‘‘(D) DETERMINATION OF STATE PERFORM-
ANCE.—For each bonus year, the Secretary 
shall—
‘‘(i) use the formula developed under 
subparagraph (C) to determine the perform-
ance of each eligible State for the fiscal year 
that precedes the bonus year; and 
‘‘(ii) prescribe performance standards 
in such a manner so as to ensure that—
‘‘(I) the average annual total 
amount of grants to be made under 
this paragraph for each bonus year 
equals $100,000,000; and 
‘‘(II) the total amount of grants to 
be made under this paragraph for all 
bonus years equals $600,000,000. 
‘‘(E) DEFINITIONS.—In this paragraph:
161
‘‘(i) BONUS
YEAR.—The term ‘bonus 
year’ means each of fiscal years 2004 
through 2009. 
‘‘(ii) 
EMPLOYMENT
ACHIEVEMENT 
STATE.—The term ‘employment achievement 
State’ means, with respect to a bonus year, 
an eligible State whose performance deter-
mined pursuant to subparagraph (D)(i) for 
the fiscal year preceding the bonus year 
equals or exceeds the performance standards 
prescribed under subparagraph (D)(ii) for 
such preceding fiscal year. 
‘‘(F) APPROPRIATION.—Out of any money 
in the Treasury of the United States not other-
wise appropriated, there are appropriated for the 
period of fiscal years 2004 through 2009, 
$600,000,000 for grants under this paragraph. 
‘‘(G) GRANTS
FOR
TRIBAL
ORGANIZA-
TIONS.—This paragraph shall apply with respect 
to tribal organizations in the same manner in 
which this paragraph applies with respect to 
States. In determining the criteria under which 
to make grants to tribal organizations under this 
paragraph, the Secretary shall consult with trib-
al organizations.’’.
162
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on October 1, 2003. 
SEC. 106. CONTINGENCY FUND. 
(a) CONTINGENCY FUNDING AVAILABLE
TO NEEDY 
STATES.—Section 403(b) (42 U.S.C. 603(b)) is amended—
(1) by striking paragraphs (1) through (3) and 
inserting the following: 
‘‘(1) CONTINGENCY FUND GRANTS.—
‘‘(A) PAYMENTS.—Subject to subparagraph 
(C), and out of funds appropriated under sub-
paragraph (E), each State shall receive a contin-
gency fund grant for each eligible month in 
which the State is a needy State under para-
graph (3). 
‘‘(B) MONTHLY CONTINGENCY FUND GRANT 
AMOUNT.—For each eligible month in which a 
State is a needy State, the State shall receive a 
contingency fund grant equal to the product of—
‘‘(i) the applicable percentage (as de-
fined under subparagraph (D)(i)) of the ap-
plicable benefit level (as defined in subpara-
graph (D)(ii)); and 
‘‘(ii) the amount by which the total 
number of families that received assistance 
under the State program funded under this
163
part in the most recently concluded 3-month 
period for which data are available from the 
State exceeds a 5-percent increase in the 
number of such families in the cor-
responding 3-month period in either of the 
2 most recent preceding fiscal years and 
that was due, in large measure, to economic 
conditions rather than State policy changes. 
‘‘(C) LIMITATION.—The total amount paid 
to a single State under subparagraph (A) during 
a fiscal year shall not exceed the amount equal 
to 10 percent of the State family assistance grant 
(as defined under subparagraph (B) of subsection 
(a)(1)). 
‘‘(D) DEFINITIONS.—In this paragraph: 
‘‘(i) APPLICABLE
PERCENTAGE.—The 
term ‘applicable percentage’ means the Fed-
eral medical assistance percentage for the 
State (as defined in section 1905(b)). 
‘‘(ii) APPLICABLE BENEFIT LEVEL.—
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), the term ‘applicable 
benefit level’ means the amount equal 
to the maximum cash assistance grant 
for a family consisting of 3 individuals
164
under the State program funded under 
this part. 
‘‘(II) RULE
FOR
STATES
WITH 
MORE
THAN
MAXIMUM
LEVEL.—In 
the case of a State that has more than 
1 maximum cash assistance grant level 
for families consisting of 3 individuals, 
the basic assistance cost shall be the 
amount equal to the maximum cash 
assistance grant level applicable to the 
largest number of families consisting of 
individuals 
receiving 
assistance 
under the State program funded under 
this part. 
‘‘(E) APPROPRIATION.—Out of any money 
in the Treasury of the United States not other-
wise appropriated, there is appropriated for the 
period of fiscal years 2004 through 2008, such 
sums as are necessary for making contingency 
fund grants under this subsection in a total 
amount not to exceed $2,000,000,000.’’; 
(2) by redesignating paragraph (4) as para-
graph (2); and 
(3) in paragraph (2), as so redesignated—