falls below the TANF base period 
level. 
‘‘(ii) SEASONAL VARIATIONS.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II) of this clause, notwith-
standing subclauses (II) and (III) of 
clause (i), a State shall be considered 
a needy State— 
‘‘(aa) under subparagraph 
(A)(ii) of this paragraph, if with 
respect to the State, the monthly 
average number of households 
participating in the food stamp 
program for the most recent 3- 
month period for which data are 
available nationally falls below 
the food stamp base period level 
and the Secretary determines 
that this is due to expected sea-
sonal variations in food stamp re-
ceipt in the State; and 
‘‘(bb) under subparagraph 
(A)(iii) of this paragraph, if, with 
respect to a State, the monthly 
average 
of 
the 
number 
of
unduplicated families receiving 
assistance under the State pro-
gram funded under this part and 
all programs funded with quali-
fied State expenditures (as de-
fined in section 409(a)(7)(B)(i)) 
for the most recently concluded 
3-month period for which data 
are 
available 
nationally 
falls 
below the TANF base period 
level and the Secretary deter-
mines that this is due to expected 
seasonal variations in assistance 
receipt in the State. 
‘‘(II) 
LIMITATIONS.—A 
State 
shall not be considered a needy State 
pursuant to— 
‘‘(aa) subclause (I)(aa) of 
this clause, unless the Secretary 
of Agriculture determines that 
the number of households receiv-
ing food stamps remained at ele-
vated levels largely due to eco-
nomic factors; and
‘‘(bb) subclause (I)(bb) of 
this clause, unless the Secretary 
determines that the unduplicated 
number of families receiving as-
sistance under the State program 
funded under this part and all 
programs funded with qualified 
State expenditures (as defined in 
section 
409(a)(7)(B)(i)) 
re-
mained at elevated levels largely 
due to economic factors. 
‘‘(iii) FOOD
STAMP
BASE
PERIOD 
LEVEL.—In this subparagraph, the term 
‘food stamp base period level’ means the 
monthly average number of households 
participating in the food stamp program 
that corresponds to the most recent 3- 
month period for which data are available 
at the time when the State first was deter-
mined to be a needy State under this para-
graph. 
‘‘(iv) TANF BASE PERIOD LEVEL.— 
In this subparagraph, the term ‘TANF 
base period level’ means the monthly aver-
age of the unduplicated number of families
receiving assistance under the State pro-
gram funded under this part and all pro-
grams funded with qualified State expendi-
tures 
(as 
defined 
in 
section 
409(a)(7)(B)(i)) that corresponds to the 
most recent 3 months for which data are 
available at the time when the State first 
was determined to be a needy State under 
this paragraph. 
‘‘(4) EXCEPTIONS.— 
‘‘(A) UNEXPENDED BALANCES.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraph (3) of this subsection, a State 
that has unexpended TANF balances in an 
amount that exceeds 30 percent of the 
total amount of grants received by the 
State under subsection (a) for the most re-
cently completed fiscal year (other than 
welfare-to-work grants made under sub-
section (a)(5) before fiscal year 2000), 
shall not be a needy State under this sub-
section. 
‘‘(ii) DEFINITION
OF
UNEXPENDED 
TANF BALANCES.—In clause (i), the term
‘unexpended TANF balances’ means the 
lessor of— 
‘‘(I) the total amount of grants 
made to the State (regardless of the 
fiscal year in which such funds were 
awarded) under subsection (a) (other 
than welfare-to-work grants made 
under subsection (a)(5) before fiscal 
year 2000) but not yet expended as of 
the end of the fiscal year preceding 
the fiscal year for which the State 
would, in the absence of this subpara-
graph, be considered a needy State 
under this subsection; and 
‘‘(II) the total amount of grants 
made to the State under subsection 
(a) (other than welfare-to-work grants 
made under subsection (a)(5) before 
fiscal year 2000) but not yet expended 
as of the end of such preceding fiscal 
year, plus the difference between— 
‘‘(aa) the pro rata share of 
the current fiscal year grant to 
be made under subsection (a) to 
the State; and
‘‘(bb) current year expendi-
tures of the total amount of 
grants made to the State under 
subsection (a) (regardless of the 
fiscal year in which such funds 
were awarded) (other than such 
welfare-to-work grants) through 
the end of the most recent cal-
endar quarter. 
‘‘(B) FAILURE TO SATISFY MAINTENANCE 
OF
EFFORT
REQUIREMENT.—Notwithstanding 
paragraph (3) of this subsection, a State that 
fails to satisfy the requirement of section 
409(a)(7) with respect to a fiscal year shall not 
be a needy State under this subsection for that 
fiscal year.’’. 
(c) 
CLARIFICATION
OF
REPORTING
REQUIRE-
MENTS.—Paragraph (6) (as so redesignated by subsection 
(b)(2) of this section) of section 403(b) (42 U.S.C. 
603(b)) is amended by striking ‘‘on the status of the 
Fund’’ and inserting ‘‘on the States that qualified for con-
tingency funds and the amount of funding awarded under 
this subsection’’.
(d) ELIMINATION OF PENALTY FOR FAILURE TO 
MAINTAIN 100 PERCENT MAINTENANCE OF EFFORT.— 
Section 409(a) (42 U.S.C. 609(a)) is amended— 
(1) by striking paragraph (10); and 
(2) be redesignating paragraphs (11) through 
(14) as paragraphs (10) through (13), respectively. 
SEC. 209. ELIGIBILITY OF PUERTO RICO, THE UNITED 
STATES VIRGIN ISLANDS, AND GUAM FOR 
THE 
SUPPLEMENTAL 
GRANT 
FOR 
POPU-
LATION 
INCREASES, 
THE 
CONTINGENCY 
FUND, AND MANDATORY CHILD CARE FUND-
ING. 
(a) SUPPLEMENTAL GRANT FOR POPULATION IN-
CREASES.— 
(1) IN
GENERAL.—Section 403(a)(3)(D)(iii) 
(42 U.S.C. 603(a)(3)(D)(iii)) is amended by striking 
‘‘and the District of Columbia.’’ and inserting ‘‘, the 
District of Columbia, Puerto Rico, the United States 
Virgin Islands, and Guam. For fiscal years begin-
ning after the effective date of this sentence, this 
paragraph shall be applied and administered as if 
the term ‘State’ included the Commonwealth of 
Puerto Rico, the United States Virgin Islands, and 
Guam for fiscal year 1998 and thereafter.’’.
(2) GRANT PAYMENT DISREGARDED FOR PUR-
POSES
OF
SECTION
1108
LIMITATION.—Section 
1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
inserting ‘‘, or any payment made to the Common-
wealth of Puerto Rico, the United States Virgin Is-
lands, or Guam under section 403(a)(3)’’ before the 
period. 
(b) CONTINGENCY FUND.— 
(1) 
IN
GENERAL.—Section 
403(b)(7) 
(42 
U.S.C. 603(b)(7)) is amended by striking ‘‘and the 
District of Columbia’’ and inserting ‘‘, the District 
of Columbia, the Commonwealth of Puerto Rico, the 
United States Virgin Islands, and Guam.’’. 
(2) GRANT PAYMENT DISREGARDED FOR PUR-
POSES
OF
SECTION
1108
LIMITATION.—Section 
1108(a)(2) (42 U.S.C. 1308(a)(2)), as amended by 
subsection (a)(2) of this section, is amended by in-
serting ‘‘or 403(b)’’ after ‘‘403(a)(3)’’. 
(c) CHILD CARE ENTITLEMENT FUNDS.— 
(1) IN GENERAL.—Section 418(d) (42 U.S.C. 
618(d)) is amended by striking ‘‘and the District of 
Columbia’’ and inserting ‘‘, the District of Columbia, 
the Commonwealth of Puerto Rico, the United 
States Virgin Islands, and Guam’’. 
(2) AMOUNT OF PAYMENT.—
(A) 
GENERAL
ENTITLEMENT.—Section 
418(a)(1) (42 U.S.C. 618(a)(1)) is amended by 
striking ‘‘the greater of—’’ and all that follows 
and inserting the following: 
‘‘(A) in the case of the Commonwealth of 
Puerto Rico, the United States Virgin Islands, 
and Guam, 60 percent of the amount required 
to be paid to the State for fiscal year 2001 
under the Child Care and Development Block 
Grant Act of 1990; or 
‘‘(B) in the case of any other State, the 
greater of— 
‘‘(i) the total amount required to be 
paid to the State under section 403 for fis-
cal year 1994 or 1995 (whichever is great-
er) with respect to expenditures for child 
care under subsections (g) and (i) of sec-
tion 402 (as in effect before October 1, 
1995); or 
‘‘(ii) the average of the total amounts 
required to be paid to the State for fiscal 
years 1992 through 1994 under the sub-
sections referred to in clause (i).’’.
(B) ALLOTMENT OF REMAINDER.—Section 
418(a)(2)(B) (42 U.S.C. 618(a)(2)(B)) is 
amended to read as follows: 
‘‘(B) ALLOTMENTS
TO
STATES.—Of the 
total amount available for payments to States 
under this paragraph, as determined under sub-
paragraph (A) of this paragraph— 
‘‘(i) an amount equal to 65 percent of 
the amount required to be paid to each of 
the Commonwealth of Puerto Rico, the 
United States Virgin Islands, and Guam 
for fiscal year 2001 under the Child Care 
and Development Block Grant Act of 
1990, shall be allotted to the Common-
wealth of Puerto Rico, the United States 
Virgin Islands, and Guam, respectively; 
and 
‘‘(ii) the remainder shall be allotted 
among the other States based on the for-
mula used for determining the amount of 
Federal payments to each State under sec-
tion 403(n) of this Act (as in effect before 
October 1, 1995).’’. 
(3) GRANT PAYMENT DISREGARDED FOR PUR-
POSES
OF
SECTION
1108
LIMITATION.—Section
1108(a)(2) (42 U.S.C. 1308(a)(2)), as amended by 
subsections (a)(2) and (b)(2) of this section, is 
amended by striking ‘‘or 403(b)’’ and inserting ‘‘, 
403(b), or 418’’. 
TITLE 
III—ACCESS 
TO 
EDU-
CATION, TRAINING, AND RE-
HABILITATIVE SERVICES 
SEC. 301. EDUCATION AND TRAINING. 
(a) 
VOCATIONAL
AND
POSTSECONDARY
EDU-
CATION.— 
(1) IN GENERAL.—Section 407(d)(8) is amend-
ed to read as follows: 
‘‘(8) vocational education and training and 
postsecondary education that is a requirement of the 
individual’s individual responsibility plan under sec-
tion 408(b) (not to exceed 24 months with respect 
to any individual);’’. 
(2) ELIMINATION OF RECIPIENTS COMPLETING 
SECONDARY SCHOOL FROM LIMIT ON NUMBER OF 
TANF
RECIPIENTS
PARTICIPATING
IN
VOCATIONAL 
EDUCATION TRAINING.— 
(A) IN
GENERAL.—Section 407(c)(2)(D) 
(42 U.S.C. 607(c)(2)(D)) is amended by strik-
ing ‘‘educational training, or (if the month is in 
fiscal year 2000 or thereafter) deemed to be en-