I
106TH CONGRESS
2D SESSION
H. R. 5292
To increase State flexibility in funding child protection programs, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 26, 2000
Mrs. JOHNSON of Connecticut introduced the following bill; which was referred
to the Committee on Ways and Means
A BILL
To increase State flexibility in funding child protection
programs, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Flexible Funding for
Child Protection Act of 2000’’.
TITLE I—FLEXIBLE FUNDING
DEMONSTRATIONS
SEC. 101. DEMONSTRATIONS OF FLEXIBLE FUNDING.
(a) IN GENERAL.—Section 1130A of the Social Secu-
rity Act (42 U.S.C. 1320a–10) is amended to read as fol-
lows:
‘‘SEC. 1130A. DEMONSTRATIONS OF FLEXIBLE FUNDING.
‘‘(a) PURPOSE.—The purpose of this section is to
provide for the conduct of demonstration projects to deter-
mine whether providing States with flexible funding for
child protection has an effect on caseload levels and en-
hances availability and use of services, efficiency of service
delivery, and child safety, permanency, and well-being.
‘‘(b) CONSOLIDATION OF GRANTS.—
‘‘(1) APPLICATIONS.—
‘‘(A) ELIGIBILITY.—A State may submit
to the Secretary an application to conduct a
demonstration project in accordance with this
subsection for 3 consecutive fiscal years with re-
spect to 1 or more categories of foster care ex-
penditures or adoption expenditures, unless sec-
tion 1123A requires Federal matching funds to
be withheld from the State.
‘‘(B) CONTENTS.—An application sub-
mitted by a State pursuant to this subsection
shall contain—
‘‘(i) an estimate of the State baseline
for each fiscal year covered by the applica-
tion;
‘‘(ii) a plan which—
‘‘(I) sets forth a detailed descrip-
tion of how the amounts provided to
the State under this subsection would
be used to help achieve the purpose of
this section, including a description of
each activity for which any of the
amounts would be expended;
‘‘(II) contains the assurances set
forth in section 422(b)(10);
‘‘(III) does not impair the entitle-
ment of any qualified child or family
to benefits under the State plan ap-
proved under part E of title IV; and
‘‘(IV) is consistent with any cor-
rective action plan that the State may
be implementing pursuant to section
1123A;
‘‘(iii) the categories of expenditure
that are to be included in the demonstra-
tion project; and
‘‘(iv) such other information as the
Secretary may require.
‘‘(2) APPROVAL OF APPLICATIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) of this paragraph, beginning October
1, 2001, the Secretary may approve an applica-
tion submitted by a State pursuant to para-
graph (1) if—
‘‘(i) the application includes the
agreement of the State and the Secretary
on—
‘‘(I) the amount of the State
baseline for each fiscal year covered
by the application; and
‘‘(II) the participation of the
State in any evaluation conducted
pursuant to this section; and
‘‘(ii) the conduct of the demonstration
project proposed by the application would
not—
‘‘(I) result in the State violating
any assurance set forth in section
422(b)(10);
‘‘(II) result in any impairment of
the entitlement of any qualified child
or family to benefits under the State
plan approved under part E of title
IV.
‘‘(B) LIMITATION.—The Secretary may
not approve more than 5 applications submitted
pursuant to this subsection.
‘‘(3) EFFECTS OF APPLICATION APPROVAL.—
‘‘(A) FIXED
PAYMENTS
TO
STATES
FOR
SELECTED
CATEGORIES
OF
IV-E
EXPENDI-
TURES.—
‘‘(i) IN GENERAL.—Subject to para-
graph (6) of this subsection, a State with
an approved application under this sub-
section shall be entitled to receive from the
Secretary, for each calendar quarter of
each fiscal year covered by the application,
an amount equal to 1⁄4 of the State base-
line agreed on by the State and the Sec-
retary for the fiscal year, in lieu of any
payment under paragraph (1), (2), or (3)
of section 474(a), or paragraph (1) or (2)
of section 474(b), with respect to the ex-
penditures of the State in the quarter in
the categories of expenditure specified in
the application.
‘‘(ii) TIMING; 
ADJUSTMENTS.—The
Secretary shall make a payment to a State
under clause (i) for a calendar quarter on
the 1st day of the quarter, the amounts re-
duced or increased to the extent of any
prior overpayment or underpayment which
the Secretary determines was made under
this subsection or section 474 to the State
for any prior quarter and with respect to
which adjustment has not been made
under this subsection or section 474.
‘‘(B) RELIEF FROM INCOME DETERMINA-
TIONS.—
‘‘(i) DURING PERIOD COVERED BY AP-
PLICATION.—
‘‘(I) IN
GENERAL.—During the
period covered by an approved appli-
cation of a State under this sub-
section, the State may determine the
eligibility of a child for foster care
maintenance payments under section
472 and may make such payments,
and may make adoption assistance
payments under section 473 with re-
spect to a child, without regard to any
income requirement, to the extent that
the foster care maintenance payments
or adoption assistance payments are
in a category of expenditure specified
in the application.
‘‘(II) DETERMINATIONS
RELAT-
ING
TO
ADOPTION
ASSISTANCE
FOR
STATES ELECTING NOT TO INCLUDE
ADOPTION EXPENDITURES IN APPLI-
CATION.—If an approved application
of a State under this subsection does
not apply with respect to any adoption
expenditure, the State may elect to re-
quire the Secretary, in lieu of apply-
ing any income requirement to the
families of the children with respect to
whom the State has made an adoption
expenditure in or after the period cov-
ered by the application and has sub-
mitted a claim under part E of title
IV for the expenditure, to consider
otherwise allowable adoption expendi-
tures of the State allowable under
such part in the same proportion as
the average annual percentage of chil-
dren with respect to whom State
adoption expenditures were allowed
under such part for the 3-year period
preceding the period covered by the
application.
‘‘(ii) OPTIONAL CONTINUATION.—Be-
fore the end of the period covered by an
approved application of a State under this
subsection, the State may make an irrev-
ocable election to require the Secretary, in
lieu of applying any income requirement to
the families of the children with respect to
whom the State has made a foster care ex-
penditure or an adoption expenditure after
the period and submitted a claim for the
expenditure under part E of title IV, to
consider otherwise allowable foster care ex-
penditures or adoption expenditures of the
State allowable under such part in the
same proportion as the average annual
percentage of children with respect to
whom State foster care expenditures or
adoption expenditures, as the case may be,
were allowed under such part for the 3-
year period preceding the period covered
by the application.
‘‘(C) LIMITATION ON USE OF FUNDS.—A
State may not use any amount paid to the
State under this subsection for a fiscal year, ex-
cept in accordance with the approved applica-
tion of the State under this subsection for the
fiscal year, subject to paragraph (4)(A).
‘‘(4) OTHER STATE OPTIONS.—
‘‘(A) NARROW SCOPE OF APPROVED APPLI-
CATION.—A State with an approved application
under this subsection may, at any time, elect to
have the approved application cease to apply to
any category of expenditure specified in the ap-
plication, beginning with any calendar quarter
remaining in the period covered by the applica-
tion.
‘‘(B) WITHDRAWAL.—Effective as of the
beginning of any calendar quarter remaining in
the period covered by an approved application
of a State under this subsection, the State may
withdraw from participation in activities under
this subsection, and this subsection (other than
paragraph (3)(B)(ii)) shall cease to apply to the
State, except with respect to any penalty re-
quired to be imposed at any time by reason of
conduct that occurred before the effective date
of the withdrawal.
‘‘(5) RENEWAL.—
‘‘(A) IN
GENERAL.—On agreement be-
tween a State and the Secretary as to the
amount of the State baseline for each year in
the 3-year period following the period covered
by an application approved under this sub-
section, the Secretary shall approve the renewal
of the application if the application contains
such other information as the Secretary may re-
quire.
‘‘(B) LIMITATION.—The Secretary may
not approve an application of a State under this
subsection, to the extent that the total number
of years covered by approved applications of the
State under this section would exceed 9.
‘‘(6) MAINTENANCE OF EFFORT.—
‘‘(A) REQUIREMENT.—If the Secretary de-
termines that the average of the historic ex-
penditure levels in effect with respect to a State
for 2 consecutive fiscal years covered by 1 or
more applications approved under this sub-
section exceeds the average of the total amounts
of qualified State expenditures in such fiscal
years:
‘‘(i) REDUCTION
OF
AMOUNTS
PAY-
ABLE
TO
STATE.—The 
total 
of 
the
amounts otherwise payable to the State
under this subsection or under paragraphs
(1), (2), and (3) of section 474(a) for each
quarter in the succeeding fiscal year shall
be reduced by an amount equal to 1⁄4 of
the excess.
‘‘(ii) ENHANCED
MAINTENANCE
OF
EFFORT REQUIREMENT FOR NEXT YEAR.—
The historic expenditure level otherwise in
effect for the succeeding fiscal year with
respect to the State shall be increased by
an amount equal to the excess.
‘‘(B) DEFINITIONS.—
‘‘(i) 
QUALIFIED
STATE
EXPENDI-
TURES.—In this paragraph, the term
‘qualified State expenditures’ means, with
respect to a fiscal year, the sum of—
‘‘(I) the total amount expended
for child welfare services during the
fiscal year by the child welfare agency
of the State and the child welfare
agencies of all political subdivisions of
the State, from Federal, State, or
local funds; and
‘‘(II) at the option of the State,
the amount (if any) by which the total
of the amounts expended for child
welfare services during the fiscal year
by other agencies of the State or of a
political subdivision of the State, from
Federal, State, or local funds, exceeds
the total of the amounts so expended
during fiscal year 1998.
‘‘(ii) CHILD WELFARE SERVICES EX-
PENDITURES.—
‘‘(I) IN GENERAL.—For purposes
of this paragraph, an amount shall be
considered to have been expended for
a child welfare service by an agency if
the amount is expended directly by
the agency, or by another entity under
contract with the agency, to provide,
or to cover any administrative cost re-
lated to the provision of, the service.
‘‘(II) PREVENTION
OF
DOUBLE
COUNTING.—Notwithstanding 
item
(aa) of this subclause, an amount that
is taken into account as a qualified
State expenditure for purposes of sec-
tion 409(a)(7) shall not be considered
a qualified State expenditure for pur-
poses of this paragraph.
‘‘(iii) 
HISTORIC
EXPENDITURE
LEVEL.—
‘‘(I) IN GENERAL.—In this para-
graph, the term ‘historic expenditure
level in effect for a fiscal year with re-
spect to a State’ means the total
amount expended for child welfare
services during fiscal year 1998 by the
child welfare agency of the State and
the child welfare agencies of all polit-
ical subdivisions of the State, from
Federal, State, or local funds, in-
creased by the inflation percentage in
effect for the fiscal year.
‘‘(II) INFLATION PERCENTAGE.—
For purposes of subclause (I), the in-
flation percentage in effect for a fiscal
year is the percentage (if any) by
which—
‘‘(aa) the average of the
Consumer Price Index (as de-
fined in section 1(f)(5) of the In-
ternal Revenue Code of 1986) for
the preceding fiscal year; exceeds
‘‘(bb) the average of the
Consumer Price Index (as so de-
fined) for fiscal year 1998.
‘‘(III) ADJUSTMENT
FOR
RE-
DUCED FEDERAL FUNDING OF CHILD
WELFARE SERVICES.—
‘‘(aa) IN
GENERAL.—The
historic expenditure level in effect
for a fiscal year with respect to a
State, as determined under sub-
clauses (I) and (II), shall be de-
creased by the amount (if any)
by which the total amount of
Federal funds available to the
State or any political subdivision
of the State for child welfare
services for the fiscal year is less
than the total amount of such
Federal funds that were ex-
pended by the State or any polit-
ical subdivision of the State for
child welfare services for fiscal
year 1998.
‘‘(bb) PENALTY
AMOUNTS
CONSIDERED
TO
BE
AVAIL-
ABLE.—For purposes of item
(aa), an amount withheld or re-
covered from a State in a fiscal
year by reason of a failure of the
State to comply with part B or E
of title IV or this paragraph shall
be considered to have been avail-
able to the State for the fiscal
year.
‘‘(c) TRANSFER OF FUNDS.—
‘‘(1) APPLICATIONS.—
‘‘(A) ELIGIBILITY.—A State may submit
to the Secretary an application to conduct a
demonstration project in accordance with this
subsection for 3 consecutive fiscal years with re-
spect to 1 or more categories of foster care ex-
penditures, unless section 1123A requires Fed-
eral matching funds to be withheld from the
State.
‘‘(B) CONTENTS.—An application sub-
mitted by a State pursuant to this subsection
shall contain—
‘‘(i) an estimate of the State baseline
for each year in the period covered by the
application;
‘‘(ii) a plan which—
‘‘(I) sets forth a detailed descrip-
tion of how the amounts provided to
the State under this subsection would
be used to help achieve the purpose of
this section, including the costs of
each activity for which any of the
amounts would be expended;
‘‘(II) contains the assurances set
forth in section 422(b)(10);
‘‘(III) does not impair the entitle-
ment of any qualified child or family
to benefits under the State plan ap-
proved under part E of title IV; and
‘‘(IV) is consistent with any cor-
rective action plan that the State may
be implementing pursuant to section
1123A;
‘‘(iii) the categories of expenditure
that are to be included in the demonstra-
tion project; and
‘‘(iv) such other information as the
Secretary may require.
‘‘(2) APPROVAL OF APPLICATIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) of this paragraph, beginning October
1, 2001, the Secretary may approve an applica-
tion submitted by a State pursuant to para-
graph (1) if—
‘‘(i) the State and the Secretary have
agreed on—
‘‘(I) the amount of the State
baseline for each fiscal year covered
by the application; and
‘‘(II) the participation of the
State in any evaluation conducted
pursuant to this section; and
‘‘(ii) the conduct of the demonstration
project proposed by the application would
not—
‘‘(I) result in the State violating
any assurance set forth in section
422(b)(10);
‘‘(II) result in any impairment of
the entitlement of any qualified child
or family to benefits under the State
plan approved under part E of title
IV.
‘‘(B) LIMITATION.—The Secretary may
not approve more than 5 applications submitted
pursuant to this subsection.
‘‘(3) EFFECTS OF APPLICATION APPROVAL.—
‘‘(A) STATE PAYMENT OPTIONS.—A State
with an approved application under this sub-
section for a fiscal year shall elect to receive
payments under this subsection in accordance
with only 1 of clause (i) or (ii), as follows:
‘‘(i) SAVINGS PAID TO THE STATE AT
THE END OF THE FISCAL YEAR.—In addi-
tion to any payment under part E of title
IV for the fiscal year, the State shall be
entitled to receive from the Secretary, sub-
ject to paragraph (4) of this subsection, an
amount equal to the amount (if any) by
which—
‘‘(I) the State baseline for the
fiscal year; exceeds
‘‘(II) the total of all payments
made to the State for the fiscal year
under paragraph (1) or (3) of section
474(a) with respect to the categories
of expenditure specified in the applica-
tion.
‘‘(ii) ADVANCE
PAYMENT
OF
ESTI-
MATED
SAVINGS
AND
YEAR-END
REC-
ONCILIATION.—
‘‘(I) STATE
ESTIMATE
OF
SAV-
INGS.—The State shall transmit to
the Secretary an estimate by the State
of the amount by which the State
baseline for the fiscal year will exceed
the total of the amounts that will be
payable to the State for the fiscal year
under paragraph (1) or (3) of section
474(a) with respect to the categories
of expenditure specified in the applica-
tion.
‘‘(II) ADVANCE PAYMENT OF ES-
TIMATED
SAVINGS.—In addition to
any payment under part E of title IV
for the fiscal year, the State shall be
entitled to receive from the Secretary,
at the beginning of the fiscal year,
subject to paragraph (4) of this sub-
section, an amount equal to the
amount estimated by the State pursu-
ant to subclause (I) of this clause.
‘‘(III) 
YEAR-END
RECONCILI-
ATION.—
‘‘(aa) SAVINGS PAID TO THE
STATE.—If the State baseline for
the fiscal year exceeds the sum of
the amount paid to the State for
the fiscal year under subclause
(II) of this clause and the total
of the amounts payable to the
State for the fiscal year under
paragraph (1) or (3) of section
474(a) with respect to the cat-
egories of expenditure specified
in the application, then the Sec-
retary shall make a further addi-
tional payment to the State in an
amount equal to the excess
amount.
‘‘(bb) RECOVERY OF OVER-
PAYMENT.—If the amount paid
to the State for a fiscal year
under subclause (II) of this
clause plus the total of the
amounts payable to the State for
the fiscal year under paragraph
(1) or (3) of section 474(a) with
respect to the categories of ex-
penditure specified in the appli-
cation exceeds the State baseline
for the fiscal year, then the Sec-
retary shall reduce the amount
otherwise payable to the State
under such paragraphs for each
quarter in the succeeding fiscal
year by an amount equal to 1⁄4 of
the excess amount.
‘‘(iii) CLAIMS
DEADLINE.—For pur-
poses of this subparagraph, the Secretary
may not consider a claim submitted by a
State with respect to an expenditure in a
fiscal year more than 6 months after the
end of the fiscal year.
‘‘(B) LIMITATION ON USE OF FUNDS.—A
State may not use any amount paid to the
State under this subsection for a fiscal year, ex-
cept in accordance with the approved applica-
tion of the State under this subsection for the
fiscal year.
‘‘(4) MAINTENANCE OF EFFORT.—
‘‘(A) IN GENERAL.—If a State baseline for
the fiscal year exceeds the total of the amounts
payable to the State for the fiscal year under
paragraph (1) or (3) of section 474(a) with re-
spect to the categories of expenditure specified
in the application of the State approved under
this subsection, then, as a condition of receiving
an amount under this subsection for a fiscal
year, the State shall expend for the provision of
child welfare services, in addition to any other
amount required by Federal law to be so ex-
pended, an amount equal to the sum described
in subparagraph (B).
‘‘(B) SUM
DESCRIBED.—The sum de-
scribed in this subparagraph with respect to a
State is the sum of the partial sums described
in subparagraph (C) with respect to each cat-
egory of expenditure specified in the applica-
tion.
‘‘(C) PARTIAL
SUMS
DESCRIBED.—The
partial sum described in this subparagraph with
respect to a category of expenditure is—
‘‘(i) 1 minus the percentage or pro-
portion specified or referred to in para-
graph (1) or (3) of section 474(a) with re-
spect to the category of expenditure; multi-
plied by
‘‘(ii) the amount that bears the same
ratio to the excess amount described in
subparagraph (A) of this paragraph as the
amount expended by the State in the cat-
egory of expenditure bears to the total of
the amounts payable to the State for the
fiscal year under paragraph (1) or (3) of
section 474(a) with respect to the cat-
egories of expenditure specified in the ap-
plication.
‘‘(d) 
AMENDMENT
OF
APPLICATIONS
AND
PROJECTS.—
‘‘(1) APPLICATIONS.—A State may amend an
application approved by the Secretary under this
section by submitting to the Secretary an amend-
ment consistent with this section.
‘‘(2) PROJECTS.—The Secretary shall develop a
streamlined process for consideration of amendments
proposed by States to demonstration projects con-
ducted under this section.
‘‘(e) DEFINITIONS.—In this section:
‘‘(1) FOSTER CARE EXPENDITURES.—The term
‘foster care expenditures’ means expenditures in the
following expenditure categories:
‘‘(A) FOSTER
CARE
MAINTENANCE
PAY-
MENTS.—Expenditures for foster care mainte-
nance payments under section 472 for children
in foster family homes or child-care institutions.
‘‘(B) FOSTER CARE ADMINISTRATIVE NON-
TRAINING
EXPENSES.—Expenditures for the
proper and efficient administration of the provi-
sions of the State plan approved under part E
of title IV relating to foster care except for
training.
‘‘(C) 
FOSTER
CARE
TRAINING
EX-
PENSES.—Expenditures for the proper and effi-
cient administration of the provisions of the
State plan approved under part E of title IV re-
lating to foster care training.
‘‘(2) ADOPTION
EXPENDITURES.—The term
‘adoption expenditures’ means expenditures in the
following expenditure categories:
‘‘(A) ADOPTION ASSISTANCE PAYMENTS.—
Expenditures for adoption assistance under sec-
tion 473 pursuant to adoption assistance agree-
ments.
‘‘(B) ADOPTION ASSISTANCE ADMINISTRA-
TIVE NON-TRAINING EXPENSES.—Expenditures
for the proper and efficient administration of
the provisions of the State plan approved under
part E of title IV relating to adoption except
for training.
‘‘(C) ADOPTION ASSISTANCE TRAINING EX-
PENSES.—Expenditures for the proper and effi-
cient administration of the provisions of the
State plan approved under part E of title IV re-
lating to adoption assistance training.
‘‘(3) STATE BASELINE.—The term ‘State base-
line’ means, with respect to a State and a fiscal
year, the total amount to which the State would be
entitled under section 474(a), in the absence of this
section, with respect to the expenditures of the State
in the fiscal year in the categories specified in the
application.
‘‘(4) FISCAL
YEAR.—The term ‘fiscal year’
means the 12-month period ending with September
30 of the year.
‘‘(5) CHILD
WELFARE
SERVICES.—The term
‘child welfare services’ has the meaning given in sec-
tion 425.
‘‘(f) APPROVED APPLICATION CONSIDERED PART OF
STATE PLAN.—For purposes of part E of title IV and sec-
tion 1123A, an approved application of a State under this
section shall be considered part of the State plan approved
under such part for the period of time covered by the ap-
proved application.
‘‘(g) REPORTS.—As soon as is practicable after each
fiscal year for which a State has conducted a demonstra-
tion project under this section, the State shall prepare and
submit to the Secretary a written report on the provision
of child welfare services through the project, which shall
include a statement of the total amount expended for each
kind of child welfare service, and shall make the written
report available to the general public. At the end of each
3-year period, the report shall include an assessment of
the extent to which the demonstration project has achieved
the purpose of this section.’’.
(b) ADMINISTRATIVE GUIDELINES ON BASELINE DE-
TERMINATIONS.—Not later than April 1, 2001, the Sec-
retary of Health and Human Services (in this section re-
ferred to as the ‘‘Secretary’’) shall issue administrative
guidelines with respect to the information required in any
application under section 1130A of the Social Security
Act, including the manner in which the baselines described
in such section are to be determined.
(c) REGULATIONS ON MAINTENANCE OF EFFORT.—
Within 12 months after the date of the enactment of this
section, the Secretary shall prescribe such regulations as
may be necessary to carry out subsections (b)(6) and
(c)(4) of section 1130A of the Social Security Act.
(d) NATIONAL EVALUATION.—
(1) IN GENERAL.—The Secretary shall evaluate
the effectiveness of demonstration projects con-
ducted under section 1130A of the Social Security
Act in achieving the purposes of such section, and
in conducting the evaluation, shall use diverse and
rigorous methods (and is encouraged to use random
assignment) to assess the effectiveness of the
projects involved.
(2) REPORTS.—
(A) INTERIM REPORT.—Not later than 2
years after the Secretary first approves an ap-
plication under section 1130A of the Social Se-
curity Act, the Secretary shall prepare and sub-
mit to the Congress, in writing, an interim re-
port on the results of the evaluations of dem-
onstration projects conducted under such sec-
tion.
(B) FINAL
REPORT.—Not later than 1
year after the end of the last demonstration
project conducted under section 1130A of the
Social Security Act, the Secretary shall prepare
and submit to the Congress, in writing, a final
report on the results of the evaluations.
(3) FUNDING.—Out of any money in the Treas-
ury of the United States not otherwise appropriated,
there are appropriated for fiscal years 2001 through
2004 $6,000,000 to carry out this subsection.
Amounts so appropriated shall remain available until
expended.
TITLE II—WAIVERS
MODIFICATION
SEC. 201. ELIMINATION OF LIMITATION ON NUMBER OF
WAIVERS.
Section 1130(a) of the Social Security Act (42 U.S.C.
1320a–9(a)) is amended by striking paragraph (2) and re-
designating paragraphs (3) through (5) as paragraphs (2)
through (4), respectively.
SEC. 202. CLARIFICATION OF AUTHORITY TO GRANT WAIV-
ERS TO ENABLE STATEWIDE DEMONSTRA-
TION PROJECTS.
Section 1130(f) of the Social Security Act (42 U.S.C.
1320a–9(f)) is amended by adding at the end the following
flush sentence:
‘‘The preceding sentence shall not be interpreted to pre-
vent the Secretary from granting such waivers as may be
necessary to authorize a demonstration project under this
section to be conducted on a statewide basis.’’.
SEC. 203. ELIMINATION OF LIMITATION ON NUMBER OF
STATES THAT MAY BE GRANTED WAIVERS TO
CONDUCT DEMONSTRATION PROJECTS ON
SAME TOPIC.
Section 1130 of the Social Security Act (42 U.S.C.
1320a–9) is amended by adding at the end the following:
‘‘(h) NO LIMIT ON NUMBER OF STATES THAT MAY
BE GRANTED WAIVERS TO CONDUCT SAME OR SIMILAR
DEMONSTRATION PROJECTS.—The Secretary shall not
refuse to grant a waiver to a State under this section on
the grounds that a purpose of the waiver or of the dem-
onstration project for which the waiver is necessary would
be the same as or similar to a purpose of another waiver
or project that is or may be conducted under this sec-
tion.’’.
SEC. 204. ELIMINATION OF LIMITATION ON NUMBER OF
WAIVERS THAT MAY BE GRANTED TO A SIN-
GLE STATE FOR DEMONSTRATION PROJECTS.
Section 1130 of the Social Security Act (42 U.S.C.
1320a–9) is further amended by adding at the end the
following:
‘‘(i) NO LIMIT ON NUMBER OF WAIVERS GRANTED
TO, OR DEMONSTRATION PROJECTS THAT MAY BE CON-
DUCTED BY, A SINGLE STATE.—The Secretary shall not
impose any limit on the number of waivers that may be
granted to a State, or the number of demonstration
projects that a State may be authorized to conduct, under
this section.’’.
SEC. 205. CONDITIONAL AUTHORITY TO CONDUCT INDEFI-
NITELY 
DEMONSTRATION 
PROJECTS 
RE-
QUIRING WAIVERS.
Section 1130(d) of the Social Security Act (42 U.S.C.
1320a–9(d)) is amended to read as follows:
‘‘(d) DURATION OF DEMONSTRATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a demonstration project under this sec-
tion may be conducted for not more than 5 years.
‘‘(2) STATE OPTION TO EXTEND PROJECT IN-
DEFINITELY.—If a State has conducted a dem-
onstration project under this section for 5 years and
has complied with the agreement under which waiv-
ers are provided under subsection (b) with respect to
the project, the State may continue to conduct the
project and the waivers shall continue to remain in
effect, for so long as the State desires such continu-
ance and the compliance continues.’’.
SEC. 206. STREAMLINED PROCESS FOR CONSIDERATION OF
AMENDMENTS 
TO 
DEMONSTRATION
PROJECTS REQUIRING WAIVERS.
Section 1130 of the Social Security Act (42 U.S.C.
1320a–9) is further amended by adding at the end the
following:
‘‘(j) STREAMLINED PROCESS FOR CONSIDERATION
OF AMENDMENTS.—The Secretary shall develop a stream-
lined process for consideration of amendments proposed
by States to demonstration projects conducted under this
section.’’.
SEC. 207. PERMISSIBLE USE OF HISTORICAL BASELINES.
Section 1130(g) of the Social Security Act (42 U.S.C.
1320a–9(g)) is amended by adding at the end the fol-
lowing: ‘‘For the purpose of making the determination, the
Secretary should consider use of historical baselines of fos-
ter care utilization, designs involving random assignment,
or designs involving comparison groups.’’.
SEC. 208. TECHNICAL CORRECTION.
Section 1130(b)(1) of the Social Security Act (42
U.S.C. 
1320a–9(b)(1)) 
is 
amended 
by 
striking
‘‘422(b)(9)’’ and inserting ‘‘422(b)(10)’’.
Æ