125
construction, or permanent improvement of any building 
or facility. 
‘‘(f) BENEFITS FOR ALIENS.—No individual shall be 
eligible to receive benefits under a State plan approved 
under subsection (d)(3) if the individual is not eligible to 
participate in the food stamp program under title IV of 
the Personal Responsibility and Work Opportunity Rec-
onciliation Act of 1996 (8 U.S.C. 1601 et seq.). 
‘‘(g) EMPLOYMENT
AND TRAINING.—Each State 
shall implement an employment and training program for 
needy individuals under the program. 
‘‘(h) ENFORCEMENT.—
‘‘(1) REVIEW
OF
COMPLIANCE
WITH
STATE 
PLAN.—The Secretary shall review and monitor 
State compliance with this section and the State 
plan approved under subsection (d)(3). 
‘‘(2) NONCOMPLIANCE.—
‘‘(A) IN GENERAL.—If the Secretary, after 
reasonable notice to a State and opportunity for 
a hearing, finds that—
‘‘(i) there has been a failure by the 
State to comply substantially with any pro-
vision or requirement set forth in the State 
plan approved under subsection (d)(3); or
126
‘‘(ii) in the operation of any program 
or activity for which assistance is provided 
under this section, there is a failure by the 
State to comply substantially with any pro-
vision of this section, the Secretary shall 
notify the State of the finding and that no 
further payments will be made to the State 
under this section (or, in the case of non-
compliance in the operation of a program 
or activity, that no further payments to the 
State will be made with respect to the pro-
gram or activity) until the Secretary is sat-
isfied that there is no longer any failure to 
comply or that the noncompliance will be 
promptly corrected. 
‘‘(B) OTHER SANCTIONS.—In the case of a 
finding of noncompliance made pursuant to 
subparagraph (A), the Secretary may, in addi-
tion to, or in lieu of, imposing the sanctions de-
scribed in subparagraph (A), impose other ap-
propriate sanctions, including recoupment of 
money improperly expended for purposes pro-
hibited or not authorized by this section and 
disqualification from the receipt of financial as-
sistance under this section.
127
‘‘(C) NOTICE.—The notice required under 
subparagraph (A) shall include a specific identi-
fication of any additional sanction being im-
posed under subparagraph (B). 
‘‘(3) ISSUANCE
OF
REGULATIONS.—The Sec-
retary shall establish by regulation procedures for—
‘‘(A) receiving, processing, and deter-
mining the validity of complaints concerning 
any failure of a State to comply with the State 
plan or any requirement of this section; and 
‘‘(B) imposing sanctions under this sec-
tion. 
‘‘(i) PAYMENTS.—
‘‘(1) IN GENERAL.—For each fiscal year, the 
Secretary shall pay to a State that has an applica-
tion approved by the Secretary under subsection 
(d)(3) an amount that is equal to the allotment of 
the State under subsection (l)(2) for the fiscal year. 
‘‘(2) METHOD
OF
PAYMENT.—The Secretary 
shall make payments to a State for a fiscal year 
under this section by issuing 1 or more letters of 
credit for the fiscal year, with necessary adjustments 
on account of overpayments or underpayments, as 
determined by the Secretary. 
‘‘(3) SPENDING OF FUNDS BY STATE.—
128
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), payments to a State from an 
allotment under subsection (l)(2) for a fiscal 
year may be expended by the State only in the 
fiscal year. 
‘‘(B) CARRYOVER.—The State may reserve 
up to 10 percent of an allotment under sub-
section (l)(2) for a fiscal year to provide assist-
ance under this section in subsequent fiscal 
years, except that the reserved funds may not 
exceed 30 percent of the total allotment re-
ceived under this section for a fiscal year. 
‘‘(4) PROVISION
OF
FOOD
ASSISTANCE.—A 
State may provide food assistance under this section 
in any manner determined appropriate by the State 
to provide food assistance to needy individuals and 
families in the State, such as electronic benefits 
transfer limited to food purchases, coupons limited 
to food purchases, or direct provision of commod-
ities. 
‘‘(5) DEFINITION
OF
FOOD
ASSISTANCE.—In 
this section, the term ‘food assistance’ means assist-
ance that may be used only to obtain food, as de-
fined in section 3(g). 
‘‘(j) AUDITS.—
129
‘‘(1) REQUIREMENT.—After the close of each 
fiscal year, a State shall arrange for an audit of the 
expenditures of the State during the program period 
from amounts received under this section. 
‘‘(2) INDEPENDENT AUDITOR.—An audit under 
this section shall be conducted by an entity that is 
independent of any agency administering activities 
that receive assistance under this section and be in 
accordance with generally accepted auditing prin-
ciples. 
‘‘(3) PAYMENT ACCURACY.—Each annual audit 
under this section shall include an audit of payment 
accuracy under this section that shall be based on a 
statistically valid sample of the caseload in the 
State. 
‘‘(4) SUBMISSION.—Not later than 30 days 
after the completion of an audit under this section, 
the State shall submit a copy of the audit to the leg-
islature of the State and to the Secretary. 
‘‘(5) REPAYMENT
OF
AMOUNTS.—Each State 
shall repay to the United States any amounts deter-
mined through an audit under this section to have 
not been expended in accordance with this section or 
to have not been expended in accordance with the 
State plan, or the Secretary may offset the amounts
130
against any other amount paid to the State under 
this section. 
‘‘(k) NONDISCRIMINATION.—
‘‘(1) IN
GENERAL.—The Secretary shall not 
provide financial assistance for any program, 
project, or activity under this section if any person 
with responsibilities for the operation of the pro-
gram, project, or activity discriminates with respect 
to the program, project, or activity because of race, 
religion, color, national origin, sex, or disability. 
‘‘(2) ENFORCEMENT.—The powers, remedies, 
and procedures set forth in title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.) may 
be used by the Secretary to enforce paragraph (1). 
‘‘(l) ALLOTMENTS.—
‘‘(1) DEFINITION OF STATE.—In this section, 
the term ’State’ means each of the 50 States, the 
District of Columbia, Guam, and the Virgin Islands 
of the United States. 
‘‘(2) STATE ALLOTMENT.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), from the amounts made 
available under section 18 of this Act for each 
fiscal year, the Secretary shall allot to each 
State participating in the program established
131
under subsection (a) an amount that is equal to 
the sum of—
‘‘(i) the greater of, as determined by 
the Secretary—
‘‘(I) the total dollar value of all 
benefits issued under the food stamp 
program established under this Act by 
the State during fiscal year 2005; or 
‘‘(II) the average per fiscal year 
of the total dollar value of all benefits 
issued under the food stamp program 
by the State during each of fiscal 
years 2003 through 2005; and 
‘‘(ii) the greater of, as determined by 
the Secretary—
‘‘(I) the total amount received by 
the State for administrative costs and 
the employment and training program 
under subsections (a) and (h), respec-
tively, of section 16 of this Act for fis-
cal year 2005; or 
‘‘(II) the average per fiscal year 
of the total amount received by the 
State for administrative costs and the 
employment and training program
132
under subsections (a) and (h), respec-
tively, of section 16 of this Act for 
each of fiscal years 2003 through 
2005. 
‘‘(B) INSUFFICIENT FUNDS.—If the Sec-
retary finds that the total amount of allotments 
to which States would otherwise be entitled for 
a fiscal year under subparagraph (A) will ex-
ceed the amount of funds that will be made 
available to provide the allotments for the fiscal 
year, the Secretary shall reduce the allotments 
made to States under this subsection, on a pro 
rata basis, to the extent necessary to allot 
under this subsection a total amount that is 
equal to the funds that will be made available.’’. 
TITLE VII—ABSTINENCE 
EDUCATION 
SEC. 701. EXTENSION OF ABSTINENCE EDUCATION PRO-
GRAM. 
(a) EXTENSION OF APPROPRIATIONS.—
(1) IN GENERAL.—Section 510(d) (42 U.S.C. 
710(d)) is amended in the first sentence by inserting 
before the period the following: ‘‘and for each of the 
fiscal years 2006 through 2010’’.
133
(2) ADDITIONAL
FUNDS
FOR
FISCAL
YEAR 
2005.—
(A) ADDITIONAL
FUNDS.—Activities au-
thorized by section 510 of the Social Security 
Act shall continue through September 30, 2005, 
in the manner authorized for fiscal year 2004, 
and out of any money in the Treasury of the 
United States not otherwise appropriated, there 
are hereby appropriated such sums as may be 
necessary for such purpose, in addition to other 
amounts appropriated for such purpose for fis-
cal year 2005. Grants and payments may be 
made pursuant to this authority through the 
fourth quarter of fiscal year 2005 at the level 
provided for such activities through the fourth 
quarter of fiscal year 2004. 
(B) EFFECTIVE DATE.—Subparagraph (A) 
takes effect upon the date of the enactment of 
this Act. 
(b) ALLOTMENT
OF FUNDS.—Section 510(a) (42 
U.S.C. 710(a)) is amended—
(1) in the matter preceding paragraph (1), by 
striking ‘‘an application for the fiscal year under 
section 505(a)’’ and inserting ‘‘, for the fiscal year, 
an application under section 505(a), and an applica-
134
tion under this section (in such form and meeting 
such terms and conditions as determined appropriate 
by the Secretary),’’; and 
(2) in paragraph (2), to read as follows: 
‘‘(2) the percentage that would be determined 
for the State under section 502(c)(1)(B)(ii) if the 
calculation under such section took into consider-
ation only those States that transmitted both such 
applications for such fiscal year.’’. 
(c) REALLOTMENT
OF FUNDS.—Section 510 (42 
U.S.C. 710(a)) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(e)(1) With respect to allotments under subsection 
(a) for fiscal year 2006 and subsequent fiscal years, the 
amount of any allotment to a State for a fiscal year that 
the Secretary determines will not be required to carry out 
a program under this section during such fiscal year or 
the succeeding fiscal year shall be available for reallotment 
from time to time during such fiscal years on such dates 
as the Secretary may fix, to other States that the Sec-
retary determines—
‘‘(A) require amounts in excess of amounts pre-
viously allotted under subsection (a) to carry out a 
program under this section; and
135
‘‘(B) will use such excess amounts during such 
fiscal years. 
‘‘(2) Reallotments under paragraph (1) shall be made 
on the basis of such States’ applications under this sec-
tion, after taking into consideration the population of low-
income children in each such State as compared with the 
population of low-income children in all such States with 
respect to which a determination under paragraph (1) has 
been made by the Secretary. 
‘‘(3) Any amount reallotted under paragraph (1) to 
a State is deemed to be part of its allotment under sub-
section (a).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall be effective with respect to the program 
under section 510 of the Social Security Act for fiscal 
years 2006 and succeeding fiscal years. 
TITLE VIII—TRANSITIONAL 
MEDICAL ASSISTANCE 
SEC. 801. EXTENSION OF MEDICAID TRANSITIONAL MED-
ICAL ASSISTANCE PROGRAM THROUGH FIS-
CAL YEAR 2006. 
(a) IN
GENERAL.—Section 1925(f) (42 U.S.C. 
1396r–6(f)) is amended by striking ‘‘2003’’ and inserting 
‘‘2006’’.
136
(b) 
CONFORMING
AMENDMENT.—Section 
1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)) is amended by 
striking ‘‘September 30, 2003’’ and inserting ‘‘the last 
date (if any) on which section 1925 applies under sub-
section (f) of that section’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on April 1, 2005. 
SEC. 802. ADJUSTMENT TO PAYMENTS FOR MEDICAID AD-
MINISTRATIVE COSTS TO PREVENT DUPLICA-
TIVE PAYMENTS AND TO FUND EXTENSION 
OF TRANSITIONAL MEDICAL ASSISTANCE. 
(a) IN GENERAL.—Section 1903 (42 U.S.C. 1396b) 
is amended—
(1) in subsection (a)(7), by striking ‘‘section 
1919(g)(3)(B)’’ and inserting ‘‘subsection (x) and 
section 1919(g)(3)(C)’’; and 
(2) by adding at the end the following: 
‘‘(x) ADJUSTMENTS TO PAYMENTS FOR ADMINISTRA-
TIVE COSTS
TO FUND EXTENSION
OF TRANSITIONAL 
MEDICAL ASSISTANCE.—
‘‘(1) REDUCTIONS IN PAYMENTS FOR ADMINIS-
TRATIVE COSTS.—Effective for each of the last 2 
calendar quarters in fiscal year 2005 and for each 
calendar quarter in fiscal year 2006, the Secretary 
shall reduce the amount paid under subsection
137
(a)(7) to each State by an amount equal to 45 per-
cent for calendar quarters in fiscal year 2005, and 
80 percent for calendar quarters in fiscal year 2006, 
of one-quarter of the annualized amount determined 
for the medicaid program under section 16(k)(2)(B) 
of the Food Stamp Act of 1977 (7 U.S.C. 
2025(k)(2)(B)). 
‘‘(2) 
ALLOCATION
OF
ADMINISTRATIVE 
COSTS.—None of the funds or expenditures de-
scribed in section 16(k)(5)(B) of the Food Stamp 
Act of 1977 (7 U.S.C. 2025(k)(5)(B)) may be used 
to pay for costs—
‘‘(A) eligible for reimbursement under sub-
section (a)(7) (or costs that would have been el-
igible for reimbursement but for this sub-
section); and 
‘‘(B) allocated for reimbursement to the 
program under this title under a plan submitted 
by a State to the Secretary to allocate adminis-
trative costs for public assistance programs; 
except that, for purposes of subparagraph (A), the 
reference in clause (iii) of that section to ‘subsection 
(a)’ is deemed a reference to subsection (a)(7) and 
clause (iv)(II) of that section shall be applied as if
138
‘medicaid program’ were substituted for ‘food stamp 
program’.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect on April 1, 2005. 
TITLE IX—EFFECTIVE DATE 
SEC. 901. EFFECTIVE DATE. 
(a) IN GENERAL.—Except as otherwise provided in 
this Act, this Act and the amendments made by this Act 
shall take effect on October 1, 2005. 
(b) EXCEPTION.—In the case of a State plan under 
part A or D of title IV of the Social Security Act which 
the Secretary determines requires State legislation in 
order for the plan to meet the additional requirements im-
posed by the amendments made by this Act, the effective 
date of the amendments imposing the additional require-
ments shall be 3 months after the first day of the first 
calendar quarter beginning after the close of the first reg-
ular session of the State legislature that begins after the 
date of the enactment of this Act. For purposes of the 
preceding sentence, in the case of a State that has a 2-
year legislative session, each year of the session shall be 
considered to be a separate regular session of the State 
legislature.
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