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programs for a purpose described in 
paragraph (3) or (4) of section 
401(a).’’. 
SEC. 104. SUPPLEMENTAL GRANT FOR POPULATION IN-
CREASES IN CERTAIN STATES. 
Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is 
amended—
(1) in the subparagraph heading, by striking 
‘‘OF GRANTS FOR FISCAL YEAR 2002’’; 
(2) in clause (i), by striking ‘‘fiscal year 2002’’ 
and inserting ‘‘each of fiscal years 2004 through 
2007’’; 
(3) in clause (ii), by striking ‘‘2002’’ and in-
serting ‘‘2007’’; and 
(4) in clause (iii), by striking ‘‘fiscal year 
2002’’ and inserting ‘‘each of fiscal years 2004 
through 2007’’. 
SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVE-
MENT. 
(a) REALLOCATION OF FUNDING.—
(1) 
IN
GENERAL.—Section 
403(a)(4) 
(42 
U.S.C. 603(a)(4)) is amended—
(A) in the paragraph heading, by striking 
‘‘HIGH
PERFORMANCE
STATES’’ and inserting 
‘‘EMPLOYMENT ACHIEVEMENT’’;
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(B) in subparagraph (D)(ii)—
(i) in subclause (I), by striking 
‘‘equals 
$200,000,000’’ 
and 
inserting 
‘‘(other than 2003) equals $200,000,000, 
and 
for 
bonus 
year 
2003 
equals 
$100,000,000’’; and 
(ii) in subclause (II), by striking 
‘‘$1,000,000,000’’ 
and 
inserting 
‘‘$900,000,000’’; and 
(C) in subparagraph (F), by striking 
‘‘$1,000,000,000’’ 
and 
inserting 
‘‘$900,000,000’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect on the date of the 
enactment of this Act, or September 30, 2003, 
whichever is earlier. 
(b) BONUS
TO REWARD EMPLOYMENT ACHIEVE-
MENT.—
(1) 
IN
GENERAL.—Section 
403(a)(4) 
(42 
U.S.C. 603(a)(4)) is amended by striking subpara-
graphs (A) through (F) and inserting the following: 
‘‘(A) IN
GENERAL.—The Secretary shall 
make a grant pursuant to this paragraph to 
each State for each bonus year for which the 
State is an employment achievement State.
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‘‘(B) AMOUNT OF GRANT.—
‘‘(i) IN GENERAL.—Subject to clause 
(ii) of this subparagraph, the Secretary 
shall determine the amount of the grant 
payable under this paragraph to an em-
ployment achievement State for a bonus 
year, which shall be based on the perform-
ance of the State as determined under sub-
paragraph (D)(i) for the fiscal year that 
immediately precedes the bonus year. 
‘‘(ii) LIMITATION.—The amount pay-
able to a State under this paragraph for a 
bonus year shall not exceed 5 percent of 
the State family assistance grant. 
‘‘(C) FORMULA
FOR
MEASURING
STATE 
PERFORMANCE.—
‘‘(i) IN GENERAL.—Subject to clause 
(ii), not later than October 1, 2003, the 
Secretary, in consultation with the States, 
shall develop a formula for measuring 
State performance in operating the State 
program funded under this part so as to 
achieve the goals of employment entry, job 
retention, and increased earnings from em-
ployment for families receiving assistance
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under the program, as measured on an ab-
solute basis and on the basis of improve-
ment in State performance. 
‘‘(ii) SPECIAL RULE FOR BONUS YEAR 
2004.—For the purposes of awarding a 
bonus under this paragraph for bonus year 
2004, the Secretary may measure the per-
formance of a State in fiscal year 2003 
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 be-
fore the effective date of this paragraph. 
‘‘(D) DETERMINATION
OF
STATE
PER-
FORMANCE.—For each bonus year, the Sec-
retary shall—
‘‘(i) use the formula developed under 
subparagraph (C) to determine the per-
formance of each eligible State for the fis-
cal 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
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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: 
‘‘(i) BONUS YEAR.—The term ‘bonus 
year’ means each of fiscal years 2004 
through 2009. 
‘‘(ii) 
EMPLOYMENT
ACHIEVEMENT 
STATE.—The term ‘employment achieve-
ment State’ means, with respect to a bonus 
year, an eligible State whose performance 
determined 
pursuant 
to 
subparagraph 
(D)(i) for the fiscal year preceding the 
bonus year equals or exceeds the perform-
ance standards prescribed under subpara-
graph (D)(ii) for such preceding fiscal 
year. 
‘‘(F) APPROPRIATION.—
‘‘(i) IN GENERAL.—Out of any money 
in the Treasury of the United States not 
otherwise appropriated, there are appro-
priated for fiscal years 2004 through 2009
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$600,000,000 for grants under this para-
graph. 
‘‘(ii) EXTENDED
AVAILABILITY
OF 
PRIOR
APPROPRIATION.—Amounts appro-
priated under section 403(a)(4)(F) of the 
Social Security Act (as in effect before the 
date of the enactment of this clause) that 
have not been expended as of such date of 
enactment shall remain available through 
fiscal year 2004 for grants under section 
403(a)(4) of such Act (as in effect before 
such date of enactment) for bonus year 
2003. 
‘‘(G) GRANTS
FOR
TRIBAL
ORGANIZA-
TIONS.—This paragraph shall apply with re-
spect to tribal organizations in the same man-
ner in which this paragraph applies with re-
spect to States. In determining the criteria 
under which to make grants to tribal organiza-
tions under this paragraph, the Secretary shall 
consult with tribal organizations.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1), except for section 403(a)(4)(F)(ii) 
of the Social Security Act as inserted by the amend-
ment, shall take effect on October 1, 2003.
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SEC. 106. CONTINGENCY FUND. 
(a) DEPOSITS INTO FUND.—Section 403(b)(2) (42 
U.S.C. 603(b)(2)) is amended—
(1) by striking ‘‘1997, 1998, 1999, 2000, 2001, 
and 2002’’ and inserting ‘‘2004 through 2008’’; and 
(2) 
by 
striking 
all 
that 
follows 
‘‘$2,000,000,000’’ and inserting a period. 
(b) GRANTS.—Section 403(b)(3)(C)(ii) (42 U.S.C. 
603(b)(3)(C)(ii)) is amended by striking ‘‘fiscal years 
1997 through 2002’’ and inserting ‘‘fiscal years 2004 
through 2008’’. 
(c) DEFINITION OF NEEDY STATE.—Clauses (i) and 
(ii) of section 403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are 
amended by inserting after ‘‘1996’’ the following: ‘‘, and 
the Food Stamp Act of 1977 as in effect during the cor-
responding 3-month period in the fiscal year preceding 
such most recently concluded 3-month period,’’. 
(d) ANNUAL RECONCILIATION: FEDERAL MATCHING 
OF STATE EXPENDITURES ABOVE ‘‘MAINTENANCE OF 
EFFORT’’ 
LEVEL.—Section 
403(b)(6) 
(42 
U.S.C. 
603(b)(6)) is amended—
(1) in subparagraph (A)(ii)—
(A) by adding ‘‘and’’ at the end of sub-
clause (I); 
(B) by striking ‘‘; and’’ at the end of sub-
clause (II) and inserting a period; and
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(C) by striking subclause (III); 
(2) in subparagraph (B)(i)(II), by striking all 
that follows ‘‘section 409(a)(7)(B)(iii))’’ and insert-
ing a period; 
(3) by amending subparagraph (B)(ii)(I) to 
read as follows: 
‘‘(I) the qualified State expendi-
tures 
(as 
defined 
in 
section 
409(a)(7)(B)(i)) for the fiscal year; 
plus’’; and 
(4) by striking subparagraph (C). 
(e) CONSIDERATION OF CERTAIN CHILD CARE EX-
PENDITURES
IN
DETERMINING
STATE
COMPLIANCE 
WITH CONTINGENCY FUND MAINTENANCE OF EFFORT 
REQUIREMENT.—Section 
409(a)(10) 
(42 
U.S.C. 
609(a)(10)) is amended—
(1) by striking ‘‘(other than the expenditures 
described in subclause (I)(bb) of that paragraph)) 
under the State program funded under this part’’ 
and inserting a close parenthesis; and 
(2) by striking ‘‘excluding any amount ex-
pended by the State for child care under subsection 
(g) or (i) of section 402 (as in effect during fiscal 
year 1994) for fiscal year 1994,’’.
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(f) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2003. 
SEC. 107. USE OF FUNDS. 
(a) GENERAL RULES.—Section 404(a)(2) (42 U.S.C. 
604(a)(2)) is amended by striking ‘‘in any manner that’’ 
and inserting ‘‘for any purposes or activities for which’’. 
(b) TREATMENT OF INTERSTATE IMMIGRANTS.—
(1) 
STATE
PLAN
PROVISION.—Section 
402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)) is amended 
by striking clause (i) and redesignating clauses (ii) 
through (iv) as clauses (i) through (iii), respectively. 
(2) USE OF FUNDS.—Section 404 (42 U.S.C. 
604) is amended by striking subsection (c). 
(c) INCREASE IN AMOUNT TRANSFERABLE TO CHILD 
CARE.—Section 404(d)(1) (42 U.S.C. 604(d)(1)) is 
amended by striking ‘‘30’’ and inserting ‘‘50’’. 
(d) INCREASE IN AMOUNT TRANSFERABLE TO TITLE 
XX 
PROGRAMS.—Section 
404(d)(2)(B) 
(42 
U.S.C. 
604(d)(2)(B)) is amended to read as follows: 
‘‘(B) APPLICABLE
PERCENT.—For pur-
poses of subparagraph (A), the applicable per-
cent is 10 percent for fiscal year 2004 and each 
succeeding fiscal year.’’. 
(e) CLARIFICATION OF AUTHORITY OF STATES TO 
USE TANF FUNDS CARRIED OVER FROM PRIOR YEARS
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TO PROVIDE TANF BENEFITS AND SERVICES.—Section 
404(e) (42 U.S.C. 604(e)) is amended to read as follows: 
‘‘(e) AUTHORITY TO CARRYOVER OR RESERVE CER-
TAIN AMOUNTS FOR BENEFITS OR SERVICES OR FOR FU-
TURE CONTINGENCIES.—
‘‘(1) CARRYOVER.—A State or tribe may use a 
grant made to the State or tribe under this part for 
any fiscal year to provide, without fiscal year limita-
tion, any benefit or service that may be provided 
under the State or tribal program funded under this 
part. 
‘‘(2) CONTINGENCY RESERVE.—A State or tribe 
may designate any portion of a grant made to the 
State or tribe under this part as a contingency re-
serve for future needs, and may use any amount so 
designated to provide, without fiscal year limitation, 
any benefit or service that may be provided under 
the State or tribal program funded under this part. 
If a State or tribe so designates a portion of such 
a grant, the State shall, on an annual basis, include 
in its report under section 411(a) the amount so 
designated.’’.
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SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE 
PROGRAMS. 
(a) REPEAL.—Section 406 (42 U.S.C. 606) is re-
pealed. 
(b) CONFORMING AMENDMENTS.—
(1) Section 409(a) (42 U.S.C. 609(a)) is 
amended by striking paragraph (6). 
(2) Section 412 (42 U.S.C. 612) is amended by 
striking subsection (f) and redesignating subsections 
(g) through (i) as subsections (f) through (h), re-
spectively. 
(3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) 
is amended by striking ‘‘406,’’. 
SEC. 109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-
SUFFICIENCY PLAN REQUIREMENTS. 
(a) MODIFICATION
OF
STATE
PLAN
REQUIRE-
MENTS.—Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) 
is amended by striking clauses (ii) and (iii) and inserting 
the following: 
‘‘(ii) Require a parent or caretaker re-
ceiving assistance under the program to 
engage in work or alternative self-suffi-
ciency activities (as defined by the State), 
consistent with section 407(e)(2). 
‘‘(iii) Require families receiving assist-
ance under the program to engage in ac-
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ing participation of the individual in the activi-
ties; 
‘‘(C) require, at a minimum, each such in-
dividual to participate in activities in accord-
ance with the self-sufficiency plan; 
‘‘(D) monitor the participation of each 
such individual in the activities specified in the 
self sufficiency plan, and regularly review the 
progress of the family toward self-sufficiency; 
‘‘(E) upon such a review, revise the self-
sufficiency plan and activities as the State 
deems appropriate. 
‘‘(2) TIMING.—The State shall comply with 
paragraph (1) with respect to a family—
‘‘(A) in the case of a family that, as of Oc-
tober 1, 2003, is not receiving assistance from 
the State program funded under this part, not 
later than 60 days after the family first receives 
assistance on the basis of the most recent appli-
cation for the assistance; or 
‘‘(B) in the case of a family that, as of 
such date, is receiving the assistance, not later 
than 12 months after the date of enactment of 
this subsection.
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‘‘(3) STATE DISCRETION.—A State shall have 
sole discretion, consistent with section 407, to define 
and design activities for families for purposes of this 
subsection, to develop methods for monitoring and 
reviewing progress pursuant to this subsection, and 
to make modifications to the plan as the State 
deems appropriate to assist the individual in increas-
ing their degree of self-sufficiency. 
‘‘(4) RULE OF INTERPRETATION.—Nothing in 
this part shall preclude a State from requiring par-
ticipation in work and any other activities the State 
deems appropriate for helping families achieve self-
sufficiency and improving child well-being.’’. 
(2) PENALTY
FOR
FAILURE
TO
ESTABLISH 
FAMILY
SELF-SUFFICIENCY
PLAN.—Section 
409(a)(3) (42 U.S.C. 609(a)(3)) is amended—
(A) in the paragraph heading, by inserting 
‘‘OR
ESTABLISH
FAMILY
SELF-SUFFICIENCY 
PLAN’’ after ‘‘RATES’’; and 
(B) in subparagraph (A), by inserting ‘‘or 
408(b)’’ after ‘‘407(a)’’. 
SEC. 110. WORK PARTICIPATION REQUIREMENTS. 
(a) ELIMINATION
OF
SEPARATE
PARTICIPATION 
RATE REQUIREMENTS FOR 2-PARENT FAMILIES.—
(1) IN GENERAL.—
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(A) Section 407 (42 U.S.C. 607) is amend-
ed in each of subsections (a) and (b) by striking 
paragraph (2). 
(B) 
Section 
407(b)(4) 
(42 
U.S.C. 
607(b)(4)) is amended by striking ‘‘paragraphs 
(1)(B) and (2)(B)’’ and inserting ‘‘paragraph 
(1)(B)’’. 
(C) 
Section 
407(c)(1) 
(42 
U.S.C. 
607(c)(1)) is amended by striking subparagraph 
(B). 
(D) Section 407(c)(2)(D) (42 U.S.C. 
607(c)(2)(D)) is amended by striking ‘‘para-
graphs (1)(B)(i) and (2)(B) of subsection (b)’’ 
and inserting ‘‘subsection (b)(1)(B)(i)’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect on October 1, 
2002. 
(b) WORK PARTICIPATION REQUIREMENTS.—Section 
407 (42 U.S.C. 607) is amended by striking all that pre-
cedes subsection (b)(3) and inserting the following: 
‘‘SEC. 407. WORK PARTICIPATION REQUIREMENTS. 
‘‘(a) PARTICIPATION
RATE
REQUIREMENTS.—A 
State to which a grant is made under section 403 for a 
fiscal year shall achieve a minimum participation rate 
equal to not less than—
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‘‘(1) 50 percent for fiscal year 2004; 
‘‘(2) 55 percent for fiscal year 2005; 
‘‘(3) 60 percent for fiscal year 2006; 
‘‘(4) 65 percent for fiscal year 2007; and 
‘‘(5) 70 percent for fiscal year 2008 and each 
succeeding fiscal year. 
‘‘(b) CALCULATION OF PARTICIPATION RATES.—
‘‘(1) AVERAGE MONTHLY RATE.—For purposes 
of subsection (a), the participation rate of a State 
for a fiscal year is the average of the participation 
rates of the State for each month in the fiscal year. 
‘‘(2) MONTHLY PARTICIPATION RATES; INCOR-
PORATION OF 40-HOUR WORK WEEK STANDARD.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the participation rate of a State for 
a month is—
‘‘(i) the total number of countable 
hours (as defined in subsection (c)) with 
respect to the counted families for the 
State for the month; divided by 
‘‘(ii) 160 multiplied by the number of 
counted families for the State for the 
month. 
‘‘(B) COUNTED FAMILIES DEFINED.—
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‘‘(i) IN GENERAL.—In subparagraph 
(A), the term ‘counted family’ means, with 
respect to a State and a month, a family 
that includes a work-eligible individual and 
that receives assistance in the month under 
the State program funded under this part, 
subject to clause (ii). 
‘‘(ii) STATE
OPTION
TO
EXCLUDE 
CERTAIN
FAMILIES.—At the option of a 
State, the term ‘counted family’ shall not 
include—
‘‘(I) a family in the first month 
for which the family receives assist-
ance from a State program funded 
under this part on the basis of the 
most recent application for such as-
sistance; or 
‘‘(II) on a case-by-case basis, a 
family in which the youngest child has 
not attained 12 months of age. 
‘‘(iii) STATE OPTION TO INCLUDE IN-
DIVIDUALS RECEIVING ASSISTANCE UNDER 
A
TRIBAL
FAMILY
ASSISTANCE
PLAN
OR 
TRIBAL WORK PROGRAM.—At the option of 
a State, the term ‘counted family’ may in-
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clude families in the State that are receiv-
ing assistance under a tribal family assist-
ance plan approved under section 412 or 
under a tribal work program to which 
funds are provided under this part. 
‘‘(C) WORK-ELIGIBLE
INDIVIDUAL
DE-
FINED.—In this section, the term ‘work-eligible 
individual’ means an individual—
‘‘(i) who is married or a single head 
of household; and 
‘‘(ii) whose needs are (or, but for 
sanctions under this part that have been in 
effect for more than 3 months (whether or 
not consecutive) in the preceding 12 
months or under part D, would be) in-
cluded in determining the amount of cash 
assistance to be provided to the family 
under the State program funded under this 
part.’’. 
(c) RECALIBRATION
OF
CASELOAD
REDUCTION 
CREDIT.—
(1) IN GENERAL.—Section 407(b)(3)(A)(ii) (42 
U.S.C. 607(b)(3)(A)(ii)) is amended to read as fol-
lows:
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‘‘(ii) the average monthly number of 
families that received assistance under the 
State program funded under this part dur-
ing the base year.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
407(b)(3)(B) (42 U.S.C. 607(b)(3)(B)) is amended 
by striking ‘‘and eligibility criteria’’ and all that fol-
lows through the close parenthesis and inserting 
‘‘and the eligibility criteria in effect during the then 
applicable base year’’. 
(3) BASE YEAR DEFINED.—Section 407(b)(3) 
(42 U.S.C. 607(b)(3)) is amended by adding at the 
end the following: 
‘‘(C) BASE YEAR DEFINED.—In this para-
graph, the term ‘base year’ means, with respect 
to a fiscal year—
‘‘(I) if the fiscal year is fiscal 
year 2004, fiscal year 1996; 
‘‘(II) if the fiscal year is fiscal 
year 2005, fiscal year 1998; 
‘‘(III) if the fiscal year is fiscal 
year 2006, fiscal year 2001; or 
‘‘(IV) if the fiscal year is fiscal 
year 2007 or any succeeding fiscal
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year, the then 4th preceding fiscal 
year.’’. 
(d) SUPERACHIEVER CREDIT.—Section 407(b) (42 
U.S.C. 607(b)) is amended by striking paragraphs (4) and 
(5) and inserting the following: 
‘‘(4) SUPERACHIEVER CREDIT.—
‘‘(A) IN
GENERAL.—The participation 
rate, determined under paragraphs (1) and (2) 
of this subsection, of a superachiever State for 
a fiscal year shall be increased by the lesser 
of—
‘‘(i) the amount (if any) of the super-
achiever credit applicable to the State; or 
‘‘(ii) the number of percentage points 
(if any) by which the minimum participa-
tion rate required by subsection (a) for the 
fiscal year exceeds 50 percent. 
‘‘(B) SUPERACHIEVER
STATE.—For pur-
poses of subparagraph (A), a State is a super-
achiever State if the State caseload for fiscal 
year 2001 has declined by at least 60 percent 
from the State caseload for fiscal year 1995. 
‘‘(C) AMOUNT
OF
CREDIT.—The super-
achiever credit applicable to a State is the num-
ber of percentage points (if any) by which the
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decline referred to in subparagraph (B) exceeds 
60 percent. 
‘‘(D) DEFINITIONS.—In this paragraph: 
‘‘(i) STATE
CASELOAD
FOR
FISCAL 
YEAR 2001.—The term ‘State caseload for 
fiscal year 2001’ means the average 
monthly number of families that received 
assistance during fiscal year 2001 under 
the State program funded under this part. 
‘‘(ii) STATE
CASELOAD
FOR
FISCAL 
YEAR 1995.—The term ‘State caseload for 
fiscal year 1995’ means the average 
monthly number of families that received 
aid under the State plan approved under 
part A (as in effect on September 30, 
1995) during fiscal year 1995.’’. 
(e) COUNTABLE HOURS.—Section 407 of such Act 
(42 U.S.C. 607) is amended by striking subsections (c) 
and (d) and inserting the following: 
‘‘(c) COUNTABLE HOURS.—
‘‘(1) DEFINITION.—In subsection (b)(2), the 
term ‘countable hours’ means, with respect to a fam-
ily for a month, the total number of hours in the 
month in which any member of the family who is a 
work-eligible individual is engaged in a direct work
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activity or other activities specified by the State (ex-
cluding an activity that does not address a purpose 
specified in section 401(a)), subject to the other pro-
visions of this subsection. 
‘‘(2) LIMITATIONS.—Subject to such regula-
tions as the Secretary may prescribe: 
‘‘(A) MINIMUM WEEKLY AVERAGE OF 24 
HOURS
OF
DIRECT
WORK
ACTIVITIES
RE-
QUIRED.—If the work-eligible individuals in a 
family are engaged in a direct work activity for 
an average total of fewer than 24 hours per 
week in a month, then the number of countable 
hours with respect to the family for the month 
shall be zero. 
‘‘(B) MAXIMUM WEEKLY AVERAGE OF 16 
HOURS OF OTHER ACTIVITIES.—An average of 
not more than 16 hours per week of activities 
specified by the State (subject to the exclusion 
described in paragraph (1)) may be considered 
countable hours in a month with respect to a 
family. 
‘‘(3) SPECIAL RULES.—For purposes of para-
graph (1): 
‘‘(A) PARTICIPATION
IN
QUALIFIED
AC-
TIVITIES.—
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‘‘(i) IN GENERAL.—If, with the ap-
proval of the State, the work-eligible indi-
viduals in a family are engaged in 1 or 
more qualified activities for an average 
total of at least 24 hours per week in a 
month, then all such engagement in the 
month shall be considered engagement in a 
direct work activity, subject to clause (iii). 
‘‘(ii) 
QUALIFIED
ACTIVITY
DE-
FINED.—The 
term 
‘qualified 
activity’ 
means an activity specified by the State 
(subject to the exclusion described in para-
graph (1)) that meets such standards and 
criteria as the State may specify, includ-
ing—
‘‘(I) substance abuse counseling 
or treatment; 
‘‘(II) 
rehabilitation 
treatment 
and services; 
‘‘(III) work-related education or 
training directed at enabling the fam-
ily member to work; 
‘‘(IV) job search or job readiness 
assistance; and
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‘‘(V) any other activity that ad-
dresses a purpose specified in section 
401(a). 
‘‘(iii) LIMITATION.—
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), clause (i) 
shall not apply to a family for more 
than 3 months in any period of 24 
consecutive months. 
‘‘(II) SPECIAL RULE APPLICABLE 
TO
EDUCATION
AND
TRAINING.—A 
State may, on a case-by-case basis, 
apply clause (i) to a work-eligible indi-
vidual so that participation by the in-
dividual in education or training, if 
needed to permit the individual to 
complete a certificate program or 
other work-related education or train-
ing directed at enabling the individual 
to fill a known job need in a local 
area, may be considered countable 
hours with respect to the family of the 
individual for not more than 4 months 
in any period of 24 consecutive 
months.
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(3) 
Section 
408(a)(5)(B)(i) 
(42 
U.S.C. 
608(a)(5)(B)(i)) is amended in the heading by strik-
ing ‘‘ASSISTANCE’’ and inserting ‘‘AID’’. 
(4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is 
amended by striking ‘‘assistance’’ and inserting 
‘‘aid’’. 
SEC. 118. TECHNICAL CORRECTIONS. 
(a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is 
amended by inserting a comma after ‘‘appropriate’’. 
(b) 
Section 
411(a)(1)(A)(ii)(III) 
(42 
U.S.C. 
611(a)(1)(A)(ii)(III)) is amended by striking the last close 
parenthesis. 
(c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is 
amended by striking ‘‘section’’ and inserting ‘‘sections’’. 
(d)(1) Section 413 (42 U.S.C. 613) is amended by 
striking subsection (g) and redesignating subsections (h) 
through (j) and subsections (k) and (l) (as added by sec-
tions 112(c) and 115(a) of this Act, respectively) as sub-
sections (g) through (k), respectively. 
(2) Each of the following provisions is amended by 
striking ‘‘413(j)’’ and inserting ‘‘413(i)’’: 
(A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
603(a)(5)(A)(ii)(III)). 
(B) 
Section 
403(a)(5)(F) 
(42 
U.S.C. 
603(a)(5)(F)).
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(C) 
Section 
403(a)(5)(G)(ii) 
(42 
U.S.C. 
603(a)(5)(G)(ii)). 
(D) 
Section 
412(a)(3)(B)(iv) 
(42 
U.S.C. 
612(a)(3)(B)(iv)). 
SEC. 119. FATHERHOOD PROGRAM. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘Promotion and Support of Responsible Fatherhood and 
Healthy Marriage Act of 2003’’. 
(b) FATHERHOOD PROGRAM.—
(1) IN GENERAL.—Title I of the Personal Re-
sponsibility and Work Opportunity Reconciliation 
Act of 1996 (Public Law 104–193) is amended by 
adding at the end the following: 
‘‘SEC. 117. FATHERHOOD PROGRAM. 
‘‘(a) IN GENERAL.—Title IV (42 U.S.C. 601–679b) 
is amended by inserting after part B the following: 
‘‘ ‘PART C—FATHERHOOD PROGRAM 
‘‘ ‘SEC. 441. FINDINGS AND PURPOSES. 
‘‘ ‘(a) FINDINGS.—The Congress finds that there is 
substantial evidence strongly indicating the urgent need 
to promote and support involved, committed, and respon-
sible fatherhood, and to encourage and support healthy 
marriages between parents raising children, including data 
demonstrating the following:
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‘‘ ‘(1) In approximately 90 percent of cases 
where a parent is absent, that parent is the father. 
‘‘ ‘(2) By some estimates, 60 percent of children 
born in the 1990’s will spend a significant portion 
of their childhood in a home without a father. 
‘‘ ‘(3) Nearly 75 percent of children in single-
parent homes will experience poverty before they are 
11 years old, compared with only 20 percent of chil-
dren in 2-parent families. 
‘‘ ‘(4) Low income is positively correlated with 
children’s difficulties with education, social adjust-
ment, and delinquency, and single-parent households 
constitute a disproportionate share of low-income 
households. 
‘‘ ‘(5) Where families (whether intact or with a 
parent absent) are living in poverty, a significant 
factor is the father’s lack of job skills. 
‘‘ ‘(6) Children raised in 2-parent married fami-
lies, on average, fare better as a group in key areas, 
including better school performance, reduced rates of 
substance abuse, crime, and delinquency, fewer 
health, emotional, and behavioral problems, lower 
rates of teenage sexual activity, less risk of abuse or 
neglect, and lower risk of teen suicide.
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‘‘ ‘(7) Committed and responsible fathering dur-
ing infancy and early childhood contributes to the 
development of emotional security, curiosity, and 
math and verbal skills. 
‘‘ ‘(8) An estimated 24,000,000 children (33.5 
percent) live apart from their biological father. 
‘‘ ‘(9) A recent national survey indicates that of 
children under age 18 not living with their biological 
father, 37 percent had not seen their father even 
once in the last 12 months. 
‘‘ ‘(b) PURPOSES.—The purposes of this part are: 
‘‘ ‘(1) To provide for projects and activities by 
public entities and by nonprofit community entities, 
including religious organizations, designed to test 
promising approaches to accomplishing the following 
objectives: 
‘‘ ‘(A) Promoting responsible, caring, and 
effective parenting through counseling, men-
toring, and parenting education, dissemination 
of educational materials and information on 
parenting skills, encouragement of positive fa-
ther involvement, including the positive involve-
ment of nonresident fathers, and other meth-
ods.
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‘‘ ‘(B) Enhancing the abilities and commit-
ment of unemployed or low-income fathers to 
provide material support for their families and 
to avoid or leave welfare programs by assisting 
them to take full advantage of education, job 
training, and job search programs, to improve 
work habits and work skills, to secure career 
advancement by activities such as outreach and 
information dissemination, coordination, as ap-
propriate, with employment services and job 
training programs, including the One-Stop de-
livery system established under title I of the 
Workforce Investment Act of 1998, encourage-
ment and support of timely payment of current 
child support and regular payment toward past 
due child support obligations in appropriate 
cases, and other methods. 
‘‘ ‘(C) Improving fathers’ ability to effec-
tively manage family business affairs by means 
such as education, counseling, and mentoring in 
matters 
including 
household 
management, 
budgeting, banking, and handling of financial 
transactions, time management, and home 
maintenance.
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SEC. 402. ELIMINATION OF LIMITATION ON NUMBER OF 
WAIVERS. 
Section 1130(a)(2) (42 U.S.C. 1320a–9(a)(2)) is 
amended by striking ‘‘not more than 10’’. 
SEC. 403. ELIMINATION OF LIMITATION ON NUMBER OF 
STATES THAT MAY BE GRANTED WAIVERS TO 
CONDUCT DEMONSTRATION PROJECTS ON 
SAME TOPIC. 
Section 1130 (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. 404. ELIMINATION OF LIMITATION ON NUMBER OF 
WAIVERS THAT MAY BE GRANTED TO A SIN-
GLE STATE FOR DEMONSTRATION PROJECTS. 
Section 1130 (42 U.S.C. 1320a–9) is further amend-
ed by adding at the end the following: 
‘‘(i) NO LIMIT ON NUMBER OF WAIVERS GRANTED 
TO, OR DEMONSTRATION PROJECTS THAT MAY BE CON-
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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. 405. STREAMLINED PROCESS FOR CONSIDERATION OF 
AMENDMENTS TO AND EXTENSIONS OF DEM-
ONSTRATION PROJECTS REQUIRING WAIV-
ERS. 
Section 1130 (42 U.S.C. 1320a–9) is further amend-
ed by adding at the end the following: 
‘‘(j) STREAMLINED PROCESS FOR CONSIDERATION 
OF AMENDMENTS
AND EXTENSIONS.—The Secretary 
shall develop a streamlined process for consideration of 
amendments and extensions proposed by States to dem-
onstration projects conducted under this section.’’. 
SEC. 406. AVAILABILITY OF REPORTS. 
Section 1130 (42 U.S.C. 1320a–9) is further amend-
ed by adding at the end the following: 
‘‘(k) AVAILABILITY
OF REPORTS.—The Secretary 
shall make available to any State or other interested party 
any report provided to the Secretary under subsection 
(f)(2), and any evaluation or report made by the Secretary 
with respect to a demonstration project conducted under
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this section, with a focus on information that may promote 
best practices and program improvements.’’. 
SEC. 407. TECHNICAL CORRECTION. 
Section 1130(b)(1) (42 U.S.C. 1320a–9(b)(1)) is 
amended 
by 
striking 
‘‘422(b)(9)’’ 
and 
inserting 
‘‘422(b)(10)’’. 
TITLE V—SUPPLEMENTAL 
SECURITY INCOME 
SEC. 501. REVIEW OF STATE AGENCY BLINDNESS AND DIS-
ABILITY DETERMINATIONS. 
Section 1633 (42 U.S.C. 1383b) is amended by add-
ing at the end the following: 
‘‘(e)(1) The Commissioner of Social Security shall re-
view determinations, made by State agencies pursuant to 
subsection (a) in connection with applications for benefits 
under this title on the basis of blindness or disability, that 
individuals who have attained 18 years of age are blind 
or disabled as of a specified onset date. The Commissioner 
of Social Security shall review such a determination before 
any action is taken to implement the determination. 
‘‘(2)(A) In carrying out paragraph (1), the Commis-
sioner of Social Security shall review—
‘‘(i) at least 20 percent of all determinations re-
ferred to in paragraph (1) that are made in fiscal 
year 2004;
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‘‘(ii) at least 40 percent of all such determina-
tions that are made in fiscal year 2005; and 
‘‘(iii) at least 50 percent of all such determina-
tions that are made in fiscal year 2006 or thereafter. 
‘‘(B) In carrying out subparagraph (A), the Commis-
sioner of Social Security shall, to the extent feasible, select 
for review the determinations which the Commissioner of 
Social Security identifies as being the most likely to be 
incorrect.’’. 
TITLE VI—STATE AND LOCAL 
FLEXIBILITY 
SEC. 601. PROGRAM COORDINATION DEMONSTRATION 
PROJECTS. 
(a) PURPOSE.—The purpose of this section is to es-
tablish a program of demonstration projects in a State or 
portion of a State to coordinate multiple public assistance, 
workforce development, and other programs, for the pur-
pose of supporting working individuals and families, help-
ing families escape welfare dependency, promoting child 
well-being, or helping build stronger families, using inno-
vative approaches to strengthen service systems and pro-
vide more coordinated and effective service delivery. 
(b) DEFINITIONS.—In this section: 
(1) ADMINISTERING
SECRETARY.—The term 
‘‘administering Secretary’’ means, with respect to a
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qualified program, the head of the Federal agency 
responsible for administering the program. 
(2) QUALIFIED PROGRAM.—The term ‘‘qualified 
program’’ means—
(A) a program under part A of title IV of 
the Social Security Act; 
(B) the program under title XX of such 
Act; 
(C) activities funded under title I of the 
Workforce Investment Act of 1998, except sub-
title C of such title; 
(D) a demonstration project authorized 
under section 505 of the Family Support Act of 
1988; 
(E) activities funded under the Wagner-
Peyser Act; 
(F) activities funded under the Adult Edu-
cation and Family Literacy Act; 
(G) activities funded under the Child Care 
and Development Block Grant Act of 1990; 
(H) activities funded under the United 
States Housing Act of 1937 (42 U.S.C. 1437 et 
seq.), except that such term shall not include—
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section (a) shall not be subject to, or receive any 
benefit under, this Act except as provided in this 
section. 
‘‘(c) LEAD AGENCY.—
‘‘(1) DESIGNATION.—A State desiring to par-
ticipate in the program established under subsection 
(a) shall designate, in an application submitted to 
the Secretary under subsection (d)(1), an appro-
priate State agency that complies with paragraph 
(2) to act as the lead agency for the State. 
‘‘(2) DUTIES.—The lead agency shall—
‘‘(A) administer, either directly, through 
other State agencies, or through local agencies, 
the assistance received under this section by the 
State; 
‘‘(B) develop the State plan to be sub-
mitted to the Secretary under subsection (d)(1); 
and 
‘‘(C) coordinate the provision of food as-
sistance under this section with other Federal, 
State, and local programs. 
‘‘(d) APPLICATION AND PLAN.—
‘‘(1) APPLICATION.—To be eligible to receive 
assistance under this section, a State shall prepare 
and submit to the Secretary an application at such
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time, in such manner, and containing such informa-
tion as the Secretary shall by regulation require, in-
cluding—
‘‘(A) an assurance that the State will com-
ply with the requirements of this section; 
‘‘(B) a State plan that meets the require-
ments of paragraph (2); and 
‘‘(C) an assurance that the State will com-
ply with the requirements of the State plan 
under paragraph (2). 
‘‘(2) REQUIREMENTS OF PLAN.—
‘‘(A) LEAD AGENCY.—The State plan shall 
identify the lead agency. 
‘‘(B) USE OF BLOCK GRANT FUNDS.—The 
State plan shall provide that the State shall use 
the amounts provided to the State for each fis-
cal year under this section—
‘‘(i) to provide food assistance to 
needy individuals and families residing in 
the State, other than residents of institu-
tions who are ineligible for food stamps 
under section 3(i); 
‘‘(ii) to administer an employment 
and training program under subsection (g) 
for needy individuals under the program
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and to provide reimbursements to needy 
individuals and families as would be al-
lowed under section 16(h)(3); and 
‘‘(iii) to pay administrative costs in-
curred in providing the assistance. 
‘‘(C) ASSISTANCE FOR ENTIRE STATE.—
The State plan shall provide that benefits under 
this section shall be available throughout the 
entire State. 
‘‘(D) NOTICE AND HEARINGS.—The State 
plan shall provide that an individual or family 
who applies for, or receives, assistance under 
this section shall be provided with notice of, and 
an opportunity for a hearing on, any action 
under this section that adversely affects the in-
dividual or family. 
‘‘(E) OTHER ASSISTANCE.—
‘‘(i) COORDINATION.—The State plan 
may coordinate assistance received under 
this section with assistance provided under 
the State program funded under part A of 
title IV of the Social Security Act (42 
U.S.C. 601 et seq.). 
‘‘(ii) PENALTIES.—If an individual or 
family is penalized for violating part A of
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title IV of the Act, the State plan may re-
duce the amount of assistance provided 
under this section or otherwise penalize the 
individual or family. 
‘‘(F) 
ELIGIBILITY
LIMITATIONS.—The 
State plan shall describe the income and re-
source eligibility limitations that are established 
for the receipt of assistance under this section. 
‘‘(G) RECEIVING BENEFITS IN MORE THAN 
1 JURISDICTION.—The State plan shall estab-
lish a system to verify and otherwise ensure 
that no individual or family shall receive bene-
fits under this section in more than 1 jurisdic-
tion within the State. 
‘‘(H) PRIVACY.—The State plan shall pro-
vide for safeguarding and restricting the use 
and disclosure of information about any indi-
vidual or family receiving assistance under this 
section. 
‘‘(I) OTHER
INFORMATION.—The State 
plan shall contain such other information as 
may be required by the Secretary. 
‘‘(3) APPROVAL OF APPLICATION AND PLAN.—
During fiscal years 2004 through 2008, the Sec-
retary may approve the applications and State plans
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that satisfy the requirements of this section of not 
more than 5 States for a term of not more than 5 
years. 
‘‘(e) CONSTRUCTION
OF
FACILITIES.—No funds 
made available under this section shall be expended for 
the purchase or improvement of land, or for the purchase, 
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.—
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‘‘(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 
‘‘(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-
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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. 
‘‘(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.
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‘‘(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.—
‘‘(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
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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.—
‘‘(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,
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the State shall submit a copy of the audit to the 
legislature 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 
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
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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 
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 2003; 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 2001 through 2003; and 
‘‘(ii) the greater of, as determined by 
the Secretary—
‘‘(I) the total amount received by 
the State for administrative costs and
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the employment and training program 
under subsections (a) and (h), respec-
tively, of section 16 of this Act for fis-
cal year 2003; or 
‘‘(II) the average per fiscal year 
of 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 
each of fiscal years 2001 through 
2003. 
‘‘(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.’’.
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TITLE VII—ABSTINENCE 
EDUCATION 
SEC. 701. EXTENSION OF ABSTINENCE EDUCATION PRO-
GRAM. 
(a) 
EXTENSION
OF
APPROPRIATIONS.—Section 
510(d) (42 U.S.C. 710(d)) is amended by striking ‘‘2002’’ 
and inserting ‘‘2008’’. 
(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-
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:
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‘‘(e)(1) With respect to allotments under subsection 
(a) for fiscal year 2004 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 
‘‘(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).’’.
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall be effective with respect to the program 
under section 510 for fiscal years 2004 and succeeding 
fiscal years. 
TITLE VIII—TRANSITIONAL 
MEDICAL ASSISTANCE 
SEC. 801. EXTENSION OF MEDICAID TRANSITIONAL MED-
ICAL ASSISTANCE PROGRAM THROUGH FIS-
CAL YEAR 2004. 
(a) IN
GENERAL.—Section 1925(f ) (42 U.S.C. 
1396r–6(f )) is amended by striking ‘‘2002’’ and inserting 
‘‘2004’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)) is amended by 
striking ‘‘September 30, 2002’’ 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 October 1, 2003. 
SEC. 802. ADJUSTMENT TO PAYMENTS FOR MEDICAID AD-
MINISTRATIVE COSTS TO PREVENT DUPLICA-
TIVE PAYMENTS AND TO FUND EXTENSION 
OF TRANSITIONAL MEDICAL ASSISTANCE. 
Section 1903 (42 U.S.C. 1396b) is amended—
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(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 calendar quar-
ter in fiscal year 2004 and fiscal year 2005, the Sec-
retary shall reduce the amount paid under sub-
section (a)(7) to each State by an amount equal to 
45 percent for fiscal year 2004, and 80 percent for 
fiscal year 2005, 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-