(1) 
in 
subparagraph 
(A), 
by 
striking 
‘‘$107,255,000’’ and inserting ‘‘$109,936,375’’; 
(2) 
in 
subparagraph 
(B), 
by 
striking 
‘‘$4,686,000’’ and inserting ‘‘$4,803,150’’; 
(3) 
in 
subparagraph 
(C), 
by 
striking 
‘‘$3,554,000’’ and inserting ‘‘$3,642,850’’; and 
(4) 
in 
subparagraph 
(D), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,250,000’’. 
(b) REAUTHORIZATION
OF MATCHING GRANTS.— 
Section 1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by 
striking ‘‘fiscal years 1997 through 2003’’ and inserting 
‘‘each of fiscal years 2006 through 2010’’. 
SEC. 707. REPEAL OF FEDERAL LOAN FUND 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. 708. BAN ON USING FEDERAL TANF FUNDS TO RE-
PLACE STATE AND LOCAL SPENDING THAT 
DOES NOT MEET THE DEFINITION OF QUALI-
FIED STATE EXPENDITURES. 
(a) PROHIBITION.—Section 408(a) (42 U.S.C. 
608(a)), as amended by section 502(a)(1) of this Act, is 
further amended by adding at the end the following: 
‘‘(13) BAN ON USING FEDERAL TANF FUNDS 
TO
REPLACE
STATE
OR
LOCAL
SPENDING
THAT 
DOES NOT MEET THE DEFINITION OF QUALIFIED 
STATE EXPENDITURES.—A State to which a grant is 
made under section 403 and a sub-State entity that 
receives funds from such a grant shall not expend 
any part of the grant funds to supplant State or 
local spending for benefits or services which are not 
qualified State expenditures (within the meaning of 
section 409(a)(7)(B)(i)).’’. 
(b) PENALTY.—Section 409(a) (42 U.S.C. 609(a)), 
as amended by section 208(d) of this Act, is further 
amended by adding at the end the following: 
‘‘(14) PENALTY
FOR
USING
FEDERAL
TANF 
FUNDS
TO
REPLACE
STATE
OR
LOCAL
SPENDING 
THAT DOES NOT MEET THE DEFINITION OF QUALI-
FIED STATE EXPENDITURES.— 
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
under section 403 for a fiscal year has violated 
section 408(a)(13) during the fiscal year, the 
Secretary shall reduce the grant payable to the 
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount 
equal to 5 percent of the State family assist-
ance grant. 
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF 
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a 
fiscal year based on the degree of noncompli-
ance.’’. 
SEC. 709. EXTENSION OF FUNDING OF STUDIES AND DEM-
ONSTRATIONS. 
Section 413(h)(1) (42 U.S.C. 613(h)(1)) is amended 
by striking ‘‘2002’’ and inserting ‘‘2010’’. 
SEC. 710. LONGITUDINAL STUDIES OF EMPLOYMENT AND 
EARNINGS OF TANF LEAVERS. 
Section 413 (42 U.S.C. 613) is amended— 
(1) in subsection (h)(1)— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (C); 
(B) by striking the period and inserting ‘‘; 
and’’; and 
(C) by adding at the end the following:
‘‘(E) the cost of conducting the studies de-
scribed in subsection (k).’’; and 
(2) by adding at the end the following: 
‘‘(k) LONGITUDINAL STUDIES OF EMPLOYMENT AND 
EARNINGS OF TANF LEAVERS.— 
‘‘(1) IN GENERAL.—The Secretary, directly or 
through grants, contracts, or interagency agree-
ments shall conduct a study in each eligible State of 
a statistically relevant cohort of individuals who 
leave the State program funded under this part dur-
ing fiscal year 2006 and individuals who leave the 
program during fiscal year 2008, which uses State 
unemployment insurance data to track the employ-
ment and earnings status of the individuals during 
the 3-year period beginning at the time the individ-
uals leave the program. 
‘‘(2) REPORTS.—The Secretary shall annually 
publish the findings of the studies conducted pursu-
ant to paragraph (1) of this subsection, and shall 
annually publish the earnings data used in making 
determinations under section 407(b).’’. 
SEC. 711. STUDY BY THE CENSUS BUREAU. 
(a) IN
GENERAL.—Section 414(a) (42 U.S.C. 
614(a)) is amended to read as follows:
‘‘(a) IN GENERAL.—The Bureau of the Census shall 
implement a new longitudinal survey of program dynam-
ics, developed in consultation with the Secretary and made 
available to interested parties, to allow for the assessment 
of the outcomes of continued welfare reform on the eco-
nomic and child well-being of low-income families with 
children, including those who received assistance or serv-
ices from a State program funded under this part, and, 
to the extent possible, shall provide State representative 
samples.’’. 
(b) APPROPRIATION.—Section 414(b) (42 U.S.C. 
614(b)) is amended by striking ‘‘1996,’’ and all that fol-
lows through ‘‘2003’’ and inserting ‘‘2006 through 2010’’. 
TITLE VIII—EXTENSION OF TANF 
PROGRAM THROUGH FISCAL 
YEAR 2005 
SEC. 801. EXTENSION OF TANF PROGRAM AND RELATED 
AUTHORITIES THROUGH FISCAL YEAR 2005. 
(a) IN GENERAL.—Activities authorized by part A of 
title IV of the Social Security Act, and by sections 429A, 
510, 1108(b), 1130(a) and 1925 of such Act, shall con-
tinue through September 30, 2005, in the manner author-
ized for fiscal year 2004, notwithstanding section 
1902(e)(1)(A) of such Act, and out of any money in the 
Treasury of the United States not otherwise appropriated,