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Temporary Assistance for Needy
U.S. Department of Health and Human Services|
Administration for Children and Families
Office of Family Assistance
Washington, D.C. 20447
Transmittal No. TANF-ACF-PI-98-3
Date: May 8, 1998
SUBJECT: "Supplemental Grants for Population Increases in Certain States."
BACKGROUND: In addition to State Family Assistance Grants, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) provides additional funding to States. Beginning with FY 1998, certain States received "Supplemental Grants for Population Increases." The only States qualifying in FY 1999 are those States that qualified in FY 1998.
REFERENCE: TANF-ACF-PI-97-5, dated September 16, 1997, "Supplemental Grants for Population Increases in Certain States."
PURPOSE: This program instruction notifies certain States that they will receive additional funding, for FY 1999.
INQUIRIES: Questions should be directed to the appropriate Administration for Children and Families (ACF) Regional Administrator.
Office of Family Assistance
Section 403(a)(3) of the Social Security Act, as amended, provides for supplemental grants beginning in FY 1998 to states1 that experience increases in their populations and have low levels of welfare spending per capita. A total of $800 million is available for these grants for FYs 1998 through 2001.2
Eligibility for Supplemental Grants
States may qualify for supplemental grants based on either of two sets of criteria. Under the criteria for "automatic qualification," States with very low levels of per capita welfare spending or very high rates of population growth are deemed automatically qualified for full supplemental grants in all four fiscal years. Under the second set of criteria, i.e., that for "general eligibility," States with below average per capita welfare spending and above-average rates of population growth may also qualify for supplemental grants for all four years, but the amount received in any year will depend on whether a State remains qualified for that year.
A state may qualify for a grant in years after FY 1998 only if it was qualified in FY 1998. (See section 403 (a)(3)(C) (ii).3 So, unless a State is qualified for FY 1998 under either the automatic qualification criteria or the general eligibility criteria described below, it is not eligible for supplemental grants in any of fiscal years 1998 to 2001. Because the data necessary to determine a State's eligibility for FY 1998 already are available, those eligible States are listed in the following sections. Only those States listed below will be eligible for supplemental grants; no additional States will be eligible in later years.
2The Personal Responsibility and Work Opportunity Reconciliation Act both authorizes and appropriates a total of $800 million for these supplemental grants for FY's 1998-2001. No further Congressional action is needed to enable ACF to issue these grants.
3Note that the reference to "1997" in the heading to this sub paragraph of the Act is a typographical error and should read "1998." This is clear from the language of the Act that follows the heading.
Automatic Qualification: Certain States automatically are deemed qualified for full supplemental grants for fiscal years 1998 through 2001. A State is deemed automatically qualified for FYs 1998 through 2001 if either:
(1) the level of welfare spending per poor person by the State in FY 1994 was less than 35 percent of the national average, or
(2) the State's population increased by more than 10 percent between April 1, 1990 and July 1, 1994.
These States are:
These States will receive supplemental grants in the amounts described below under "Amount of Supplemental Grant" and shown in Columns "(o)" through "(r)" in Attachment 1 for each of fiscal years 1998 through 2001.4 These States will receive these grants even if their levels of population growth or welfare spending change in subsequent fiscal years so as to render them otherwise not qualified.
(See section 403(a)(3)(C)(iii).)
General Eligibility: Other States may qualify for a fiscal year if:
1) the level of welfare spending per poor person in the State for the immediately preceding fiscal year5 is less than the national average; and,
(2) the State's population growth rate, according to Census data for the most recent year for which data are available, is greater than the national average population growth rate for all States for the same period.
(See section 403 (a) (3) (C) (i) .)
5The statute at section 403(a)(3) (D) defines this term for any fiscal year as being the sum of the amount required to be paid to the State for FY 1994 under former section 403 (as in effect during FY1994), plus the amount of any supplemental grant paid to the State in the immediately preceding year divided by the number of individuals in the 1990 census who were State residents with income below the poverty line.
The following additional States qualified in FY 1998 (and therefore are eligible to qualify in subsequent fiscal years) based on these general eligibility criteria:
Amount of Supplemental Grant
For FY 1999, the amount of the supplemental grant to a qualified State is the supplemental grant paid to the State in the prior fiscal year, and 2.5 percent of "the total amount required to be paid ... under former section 403 [of the Social Security Act] (as in effect during fiscal year 1994) for fiscal year 1994." 6 The "total amount required to be paid" in FY 1998 is shown in Column "(a)" of Attachment 1. The supplemental grant for FY 1999 is shown in Column "(P)" of Attachment 1.
Grant Reduced if State is No Longer Qualified. If a State that was qualified in FY 1998 under the "general eligibility" criteria described above becomes "unqualified" in a later year, it will still receive a supplemental grant for that later year. However, under section 403(a)(3)(B), the amount of the grant for that "unqualified year" will be limited to the amount of the supplemental grant the State received in the most recent prior fiscal year for which the State was qualified. (This provision does not affect the 11 States that are "deemed" to be qualified for fiscal years 1998 through 2001; those States will receive a full supplemental grant regardless of whether they otherwise are qualified in years after FY 1998.) If in any year the amount of funds remaining from the $800 million appropriation is insufficient to pay to all States the full amounts of their grants, ACF will reduce each State's grant on a pro rata basis. (See section 403(a)(3)(F).)
States do not have to apply for supplemental grants; ACF will issue grants automatically to qualifying States.7 ACF will notify each State of the amount of its supplemental grant prior to the beginning of a fiscal year. This Program Instruction is the formal notification for FY 1999 grants.
Use of Supplemental Grants
Supplemental grants may be used for the same purposes as, and are subject to the same statutory requirements and restrictions as, State Family Assistance Grants. For example: assistance provided with supplemental grants counts towards individuals, 5-year limit on receipt of assistance; supplemental grant funds may be transferred to the Child Care and Development Block Grant or Social Services Block Grant programs, subject to section 404(d); and, supplemental grants are subject to the 15%- limitation on administrative expenditures.
For purposes of determining compliance with statutory restrictions expressed in terms of a percentage of a State's grants, ACF will use the sum of the State's State Family Assistance Grant and its supplemental grant. The percentage limitation will apply to the total of those grants, not to the grants individually.
Payment of Supplemental Grants
ACF will award supplemental grants quarterly, pursuant to section 404(a). Unless a State requests a different distribution, ACF will allocate a State's supplemental grant funds in proportion to the State's quarterly SFAG allocations.
Supplemental grant funds will be available through the HHS Payment Management System. Supplemental grants, like SFAG grants, are subject to the Cash Management Improvement Act (CMIA) and Federal regulations regarding the drawdown of Federal funds.
Like SFAG funds, States may reserve, pursuant to section 404(e), supplemental grant funds for use in subsequent fiscal years. As with SFAG funds, ACF assumes that all States will elect to reserve any supplemental grant funds that remain unobligated at the end of a fiscal year. In effect, ACF will issue supplemental grants with an indefinite expenditure period, i.e., in the same manner as ACF issues SFAG grants.
States will report on the use of supplemental grant funds using the same reporting form (ACF-196) that they use to report on the rest of their SFAG funds. Supplemental grant funds should be reported on Line1(A) - Awarded of the ACF-196 along with the SFAG funds.