---
kind: "section"
citation: "42 U.S.C. § 609"
title: "42"
title_heading: "The Public Health and Welfare"
number: "609"
heading: "Penalties"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/609"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter IV — Grants to States for Aid and Services to Needy Families with Children and for Child-Welfare Services"
  - "Part A — Block Grants to States for Temporary Assistance for Needy Families"
---

# §609. Penalties

- (a) **In general—** Subject to this section:
  - (1) **Use of grant in violation of this part—**
    - (A) **General penalty—** If an audit conducted under [chapter 75](/usc/31/chstV/ch75.md) of title 31 finds that an amount paid to a [State](/usc/42/619.md?p=5) under [section 603 of this title](/usc/42/603.md) for a [fiscal year](/usc/42/619.md?p=3) has been used in [violation](/usc/42/2000e–16a.md?p=c) of this part, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) quarter by the amount so used.
    - (B) **Enhanced penalty for intentional violations—** If the [State](/usc/42/619.md?p=5) does not prove to the satisfaction of the [Secretary](/usc/42/1301.md?p=a-6) that the [State](/usc/42/619.md?p=5) did not intend to use the amount in [violation](/usc/42/2000e–16a.md?p=c) of this part, the [Secretary](/usc/42/1301.md?p=a-6) shall further reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) quarter by an amount equal to 5 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
    - (C) **Penalty for misuse of competitive welfare-to-work funds—** If the [Secretary](/usc/42/1301.md?p=a-6) of Labor finds that an amount paid to an entity under [section 603(a)(5)(B) of this title](/usc/42/603.md?p=a-5-B) has been used in [violation](/usc/42/2000e–16a.md?p=c) of subparagraph (B) or (C) of [section 603(a)(5) of this title](/usc/42/603.md?p=a-5), the entity shall remit to the [Secretary](/usc/42/1301.md?p=a-6) of Labor an amount equal to the amount so used.
  - (2) **Failure to submit required report—**
    - (A) **Quarterly reports—**
      - (i) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) has not, within 45 days after the end of a fiscal quarter, submitted the report required by [section 611(a) of this title](/usc/42/611.md?p=a) for the quarter, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to 4 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
      - (ii) **Rescission of penalty—** The [Secretary](/usc/42/1301.md?p=a-6) shall rescind a penalty imposed on a [State](/usc/42/619.md?p=5) under [clause (i)](#a-2-A-i) with respect to a report if the [State](/usc/42/619.md?p=5) submits the report before the end of the fiscal quarter that immediately succeeds the fiscal quarter for which the report was required.
    - (B) **Report on engagement in additional work activities and expenditures for other benefits and services—**
      - (i) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) has not submitted the report required by [section 611(c)(1)(A)(i) of this title](/usc/42/611.md?p=c-1-A-i) by May 31, 2011, or the report required by [section 611(c)(1)(A)(ii) of this title](/usc/42/611.md?p=c-1-A-ii) by August 31, 2011, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to not more than 4 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
      - (ii) **Rescission of penalty—** The [Secretary](/usc/42/1301.md?p=a-6) shall rescind a penalty imposed on a [State](/usc/42/619.md?p=5) under [clause (i)](#a-2-B-i) with respect to a report required by [section 611(c)(1)(A) of this title](/usc/42/611.md?p=c-1-A) if the [State](/usc/42/619.md?p=5) submits the report not later than—
        - (I) in the case of the report required under [section 611(c)(1)(A)(i) of this title](/usc/42/611.md?p=c-1-A-i), June 15, 2011; and
        - (II) in the case of the report required under [section 611(c)(1)(A)(ii) of this title](/usc/42/611.md?p=c-1-A-ii), September 15, 2011.
      - (iii) **Penalty based on severity of failure—** The [Secretary](/usc/42/1301.md?p=a-6) shall impose a reduction under [clause (i)](#a-2-B-i) with respect to a [fiscal year](/usc/42/619.md?p=3) based on the degree of noncompliance.
  - (3) **Failure to satisfy minimum participation rates—**
    - (A) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) to which a [grant](/usc/42/1397j.md?p=10) is made under [section 603 of this title](/usc/42/603.md) for a [fiscal year](/usc/42/619.md?p=3) has failed to comply with [section 607(a) of this title](/usc/42/607.md?p=a) for the [fiscal year](/usc/42/619.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to the applicable percentage of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
    - (B) **“Applicable percentage” defined—** As used in [subparagraph (A)](#a-3-A), the term “applicable percentage” means, with respect to a [State](/usc/42/619.md?p=5)—
      - (i) if a penalty was not imposed on the [State](/usc/42/619.md?p=5) under [subparagraph (A)](#a-3-A) for the immediately preceding [fiscal year](/usc/42/619.md?p=3), 5 percent; or
      - (ii) if a penalty was imposed on the [State](/usc/42/619.md?p=5) under [subparagraph (A)](#a-3-A) for the immediately preceding [fiscal year](/usc/42/619.md?p=3), the lesser of—
        - (I) the percentage by which the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) was reduced for such preceding [fiscal year](/usc/42/619.md?p=3), increased by 2 percentage points; or
        - (II) 21 percent.
    - (C) **Penalty based on severity of failure—** The [Secretary](/usc/42/1301.md?p=a-6) shall impose reductions under [subparagraph (A)](#a-3-A) with respect to a [fiscal year](/usc/42/619.md?p=3) based on the degree of noncompliance, and may reduce the penalty if the noncompliance is due to circumstances that caused the [State](/usc/42/619.md?p=5) to become a needy [State](/usc/42/619.md?p=5) (as defined in [section 603(b)(5) of this title](/usc/42/603.md?p=b-5)) during the [fiscal year](/usc/42/619.md?p=3) or if the noncompliance is due to extraordinary circumstances such as a natural [disaster](/usc/42/5204.md?p=2) or regional recession. The [Secretary](/usc/42/1301.md?p=a-6) shall provide a written report to Congress to justify any waiver or penalty reduction due to such extraordinary circumstances.
  - (4) **Failure to participate in the income and eligibility verification system—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) program funded under this part is not participating during a [fiscal year](/usc/42/619.md?p=3) in the income and eligibility verification system required by [section 1320b–7 of this title](/usc/42/1320b–7.md), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to not more than 2 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
  - (5) **Failure to comply with paternity establishment and child support enforcement requirements under part D—** Notwithstanding any other provision of this chapter, if the [Secretary](/usc/42/1301.md?p=a-6) determines that the [State agency](/usc/42/629a.md?p=a-3) that administers a program funded under this part does not enforce the penalties requested by the [agency](/usc/42/1397n–12.md?p=1) administering part D against recipients of assistance under the [State](/usc/42/619.md?p=5) program who fail to cooperate in establishing paternity or in establishing, modifying, or enforcing a [child](/usc/42/1382c.md?p=c) support order in accordance with such part and who do not qualify for any good cause or other exception established by the [State](/usc/42/619.md?p=5) under [section 654(29) of this title](/usc/42/654.md?p=29), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) (without regard to this section) by not more than 5 percent.
  - (6) **Failure to timely repay a Federal Loan Fund for State Welfare Programs—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) has failed to repay any amount borrowed from the Federal Loan Fund for [State](/usc/42/619.md?p=5) Welfare Programs established under [section 606 of this title](/usc/42/606.md) within the period of maturity applicable to the loan, plus any interest owed on the loan, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) quarter (without regard to this section) by the outstanding loan amount, plus the interest owed on the outstanding amount. The [Secretary](/usc/42/1301.md?p=a-6) shall not forgive any outstanding loan amount or interest owed on the outstanding amount.
  - (7) **Failure of any State to maintain certain level of historic effort—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for a [fiscal year](/usc/42/619.md?p=3) by the amount (if any) by which qualified [State](/usc/42/619.md?p=5) expenditures for the then immediately preceding [fiscal year](/usc/42/619.md?p=3) are less than the applicable percentage of historic [State](/usc/42/619.md?p=5) expenditures with respect to such preceding [fiscal year](/usc/42/619.md?p=3).
    - (B) **Definitions—** As used in this paragraph:
      - (i) **Qualified State expenditures—**
        - (I) **In general—** The term “qualified [State](/usc/42/619.md?p=5) expenditures” means, with respect to a [State](/usc/42/619.md?p=5) and a [fiscal year](/usc/42/619.md?p=3), the total expenditures by the [State](/usc/42/619.md?p=5) during the [fiscal year](/usc/42/619.md?p=3), under all [State](/usc/42/619.md?p=5) programs, for any of the following with respect to eligible families:
          - (aa) Cash assistance, [including](/usc/42/1301.md?p=b) any amount collected by the [State](/usc/42/619.md?p=5) as support pursuant to a plan approved under part D, on behalf of a family receiving assistance under the [State](/usc/42/619.md?p=5) program funded under this part, that is distributed to the family under [section 657(a)(1)(B) of this title](/usc/42/657.md?p=a-1-B) and disregarded in determining the eligibility of the family for, and the amount of, such assistance.
          - (bb) [Child](/usc/42/1382c.md?p=c) care assistance.
          - (cc) Educational activities designed to increase self-sufficiency, job training, and work, excluding any expenditure for public education in the [State](/usc/42/619.md?p=5) except expenditures which involve the provision of services or assistance to a member of an eligible family which is not generally available to [persons](/usc/42/1301.md?p=a-3) who are not members of an eligible family.
          - (dd) Administrative costs in connection with the matters described in items [(aa)](#a-7-B-i-I-aa), [(bb)](#a-7-B-i-I-bb), [(cc)](#a-7-B-i-I-cc), and [(ee)](#a-7-B-i-I-ee), but only to the extent that such costs do not exceed 15 percent of the total amount of qualified [State](/usc/42/619.md?p=5) expenditures for the [fiscal year](/usc/42/619.md?p=3).
          - (ee) Any other use of funds allowable under [section 604(a)(1) of this title](/usc/42/604.md?p=a-1).
        - (II) **Exclusion of transfers from other State and local programs—** Such term does not include expenditures under any [State](/usc/42/619.md?p=5) or local program during a [fiscal year](/usc/42/619.md?p=3), except to the extent that—
          - (aa) the expenditures exceed the amount expended under the [State](/usc/42/619.md?p=5) or local program in the [fiscal year](/usc/42/619.md?p=3) most recently ending before August 22, 1996; or
          - (bb) the [State](/usc/42/619.md?p=5) is entitled to a payment under former [section 603 of this title](/usc/42/603.md) (as in effect immediately before August 22, 1996) with respect to the expenditures.
        - (III) **Exclusion of amounts expended to replace penalty grant reductions—** Such term does not include any amount expended in order to comply with [paragraph (12)](#a-12).
        - (IV) **Eligible families—** As used in [subclause (I)](#a-7-B-i-I), the term “eligible families” means families eligible for assistance under the [State](/usc/42/619.md?p=5) program funded under this part, families that would be eligible for such assistance but for the application of [section 608(a)(7) of this title](/usc/42/608.md?p=a-7), and families of aliens lawfully present in the [United States](/usc/42/1301.md?p=a-2) that would be eligible for such assistance but for the application of title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 [[8 U.S.C. 1601](/usc/8/1601.md) et seq.].
        - (V) **Counting of spending on certain pro-family activities—** The term “qualified [State](/usc/42/619.md?p=5) expenditures” [includes](/usc/42/1301.md?p=b) the total expenditures by the [State](/usc/42/619.md?p=5) during the [fiscal year](/usc/42/619.md?p=3) under all [State](/usc/42/619.md?p=5) programs for a purpose described in paragraph (3) or (4) of [section 601(a) of this title](/usc/42/601.md?p=a).
      - (ii) **Applicable percentage—** The term “applicable percentage” means 80 percent (or, if the [State](/usc/42/619.md?p=5) meets the requirements of [section 607(a) of this title](/usc/42/607.md?p=a), 75 percent).
      - (iii) **Historic State expenditures—** The term “historic [State](/usc/42/619.md?p=5) expenditures” means, with respect to a [State](/usc/42/619.md?p=5), the lesser of—
        - (I) the expenditures by the [State](/usc/42/619.md?p=5) under parts A and F (as in effect during [fiscal year](/usc/42/619.md?p=3) 1994) for [fiscal year](/usc/42/619.md?p=3) 1994; or
        - (II) the amount which bears the same ratio to the amount described in [subclause (I)](#a-7-B-iii-I) as—
          - (aa) the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10), plus the total amount required to be paid to the [State](/usc/42/619.md?p=5) under former [section 603 of this title](/usc/42/603.md) for [fiscal year](/usc/42/619.md?p=3) 1994 with respect to amounts expended by the [State](/usc/42/619.md?p=5) for [child](/usc/42/1382c.md?p=c) care under subsection (g) or (i) of [section 602 of this title](/usc/42/602.md) (as in effect during [fiscal year](/usc/42/619.md?p=3) 1994); bears to
          - (bb) the total amount required to be paid to the [State](/usc/42/619.md?p=5) under former [section 603 of this title](/usc/42/603.md) (as in effect during [fiscal year](/usc/42/619.md?p=3) 1994) for [fiscal year](/usc/42/619.md?p=3) 1994.

      Such term does not include any expenditures under the [State](/usc/42/619.md?p=5) plan approved under part A (as so in effect) on behalf of individuals covered by a tribal family assistance plan approved under [section 612 of this title](/usc/42/612.md), as determined by the [Secretary](/usc/42/1301.md?p=a-6).

      - (iv) **Expenditures by the State—** The term “expenditures by the [State](/usc/42/619.md?p=5)” does not include—
        - (I) any expenditure from amounts made available by the Federal Government;
        - (II) any [State](/usc/42/619.md?p=5) funds expended for the medicaid program under subchapter XIX;
        - (III) any [State](/usc/42/619.md?p=5) funds which are used to match Federal funds provided under [section 603(a)(5) of this title](/usc/42/603.md?p=a-5); or
        - (IV) any [State](/usc/42/619.md?p=5) funds which are expended as a condition of receiving Federal funds other than under this part.

      Notwithstanding subclause (IV) of the preceding sentence, such term [includes](/usc/42/1301.md?p=b) expenditures by a [State](/usc/42/619.md?p=5) for [child](/usc/42/1382c.md?p=c) care in a [fiscal year](/usc/42/619.md?p=3) to the extent that the total amount of the expenditures does not exceed the amount of [State](/usc/42/619.md?p=5) expenditures in [fiscal year](/usc/42/619.md?p=3) 1994 or 1995 (whichever is the greater) that equal the non-Federal share for the programs described in [section 618(a)(1)(A) of this title](/usc/42/618.md?p=a-1-A).

      - (v) **Source of data—** In determining expenditures by a [State](/usc/42/619.md?p=5) for [fiscal years](/usc/42/619.md?p=3) 1994 and 1995, the [Secretary](/usc/42/1301.md?p=a-6) shall use information which was reported by the [State](/usc/42/619.md?p=5) on ACF Form 231 or (in the case of expenditures under part F) ACF Form 331, available as of the dates specified in clauses [(ii)](/usc/42/603.md) and [(iii)](/usc/42/603.md) of section 603(a)(1)(D)[^1] of this title.
  - (8) **Noncompliance of State child support enforcement program with requirements of part D—**
    - (A) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) finds, with respect to a [State](/usc/42/619.md?p=5)’s program under part D, in a [fiscal year](/usc/42/619.md?p=3) beginning on or after October 1, 1997—
      - (i)
        - (I) on the basis of data submitted by a [State](/usc/42/619.md?p=5) pursuant to [section 654(15)(B) of this title](/usc/42/654.md?p=15-B), or on the basis of the results of a review conducted under [section 652(a)(4) of this title](/usc/42/652.md?p=a-4), that the [State](/usc/42/619.md?p=5) program failed to achieve the paternity establishment percentages (as defined in [section 652(g)(2) of this title](/usc/42/652.md?p=g-2)), or to meet other performance measures that may be established by the [Secretary](/usc/42/1301.md?p=a-6);
        - (II) on the basis of the results of an audit or audits conducted under [section 652(a)(4)(C)(i) of this title](/usc/42/652.md?p=a-4-C-i) that the [State](/usc/42/619.md?p=5) data submitted pursuant to [section 654(15)(B) of this title](/usc/42/654.md?p=15-B) is incomplete or unreliable; or
        - (III) on the basis of the results of an audit or audits conducted under [section 652(a)(4)(C) of this title](/usc/42/652.md?p=a-4-C) that a [State](/usc/42/619.md?p=5) failed to substantially comply with 1 or more of the requirements of part D (other than paragraph (24), or subparagraph (A) or (B)(i) of paragraph (27), of [section 654 of this title](/usc/42/654.md)); and
      - (ii) that, with respect to the succeeding [fiscal year](/usc/42/619.md?p=3)—
        - (I) the [State](/usc/42/619.md?p=5) failed to take sufficient corrective action to achieve the appropriate performance levels or compliance as described in [subparagraph (A)(i)](#a-8-A-i); or
        - (II) the data submitted by the [State](/usc/42/619.md?p=5) pursuant to [section 654(15)(B) of this title](/usc/42/654.md?p=15-B) is incomplete or unreliable;

      the amounts otherwise payable to the [State](/usc/42/619.md?p=5) under this part for quarters following the end of such succeeding [fiscal year](/usc/42/619.md?p=3), prior to quarters following the end of the first quarter throughout which the [State](/usc/42/619.md?p=5) program has achieved the paternity establishment percentages or other performance measures as described in [subparagraph (A)(i)(I)](#a-8-A-i-I), or is in substantial compliance with 1 or more of the requirements of part D as described in [subparagraph (A)(i)(III)](#a-8-A-i-III), as appropriate, shall be reduced by the percentage specified in [subparagraph (B)](#a-8-B).

    - (B) **Amount of reductions—** The reductions required under [subparagraph (A)](#a-8-A) shall be—
      - (i) not less than 1 nor more than 2 percent;
      - (ii) not less than 2 nor more than 3 percent, if the finding is the 2nd consecutive finding made pursuant to [subparagraph (A)](#a-8-A); or
      - (iii) not less than 3 nor more than 5 percent, if the finding is the 3rd or a subsequent consecutive such finding.
    - (C) **Disregard of noncompliance which is of a technical nature—** For purposes of this section and [section 652(a)(4) of this title](/usc/42/652.md?p=a-4), a [State](/usc/42/619.md?p=5) determined as a result of an audit—
      - (i) to have failed to have substantially complied with 1 or more of the requirements of part D shall be determined to have achieved substantial compliance only if the [Secretary](/usc/42/1301.md?p=a-6) determines that the extent of the noncompliance is of a technical nature which does not adversely affect the performance of the [State](/usc/42/619.md?p=5)’s program under part D; or
      - (ii) to have submitted incomplete or unreliable data pursuant to [section 654(15)(B) of this title](/usc/42/654.md?p=15-B) shall be determined to have submitted adequate data only if the [Secretary](/usc/42/1301.md?p=a-6) determines that the extent of the incompleteness or unreliability of the data is of a technical nature which does not adversely affect the determination of the level of the [State](/usc/42/619.md?p=5)’s paternity establishment percentages (as defined under [section 652(g)(2) of this title](/usc/42/652.md?p=g-2)) or other performance measures that may be established by the [Secretary](/usc/42/1301.md?p=a-6).
  - (9) **Failure to comply with 5-year limit on assistance—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) has not complied with [section 608(a)(7) of this title](/usc/42/608.md?p=a-7) during a [fiscal year](/usc/42/619.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to 5 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
  - (10) **Failure of State receiving amounts from Contingency Fund to maintain 100 percent of historic effort—** If, at the end of any [fiscal year](/usc/42/619.md?p=3) during which amounts from the Contingency Fund for [State](/usc/42/619.md?p=5) Welfare Programs have been paid to a [State](/usc/42/619.md?p=5), the [Secretary](/usc/42/1301.md?p=a-6) finds that the qualified [State](/usc/42/619.md?p=5) expenditures (as defined in [paragraph (7)(B)(i)](#a-7-B-i) (other than the expenditures described in [subclause (I)(bb)](#a-7-B-i-I-bb) of that paragraph)) under the [State](/usc/42/619.md?p=5) program funded under this part for the [fiscal year](/usc/42/619.md?p=3) are less than 100 percent of historic [State](/usc/42/619.md?p=5) expenditures (as defined in paragraph (7)(B)(iii) of this subsection), excluding any amount expended by the [State](/usc/42/619.md?p=5) for [child](/usc/42/1382c.md?p=c) care under subsection (g) or (i) of [section 602 of this title](/usc/42/602.md) (as in effect during [fiscal year](/usc/42/619.md?p=3) 1994) for [fiscal year](/usc/42/619.md?p=3) 1994, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by the total of the amounts so paid to the [State](/usc/42/619.md?p=5) that the [State](/usc/42/619.md?p=5) has not remitted under [section 603(b)(6) of this title](/usc/42/603.md?p=b-6).
  - (11) **Failure to maintain assistance to adult single custodial parent who cannot obtain child care for child under age 6—**
    - (A) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) to which a [grant](/usc/42/1397j.md?p=10) is made under [section 603 of this title](/usc/42/603.md) for a [fiscal year](/usc/42/619.md?p=3) has violated [section 607(e)(2) of this title](/usc/42/607.md?p=e-2) during the [fiscal year](/usc/42/619.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to not more than 5 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
    - (B) **Penalty based on severity of failure—** The [Secretary](/usc/42/1301.md?p=a-6) shall impose reductions under [subparagraph (A)](#a-11-A) with respect to a [fiscal year](/usc/42/619.md?p=3) based on the degree of noncompliance.
  - (12) **Requirement to expend additional State funds to replace grant reductions; penalty for failure to do so—** If the [grant](/usc/42/1397j.md?p=10) payable to a [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for a [fiscal year](/usc/42/619.md?p=3) is reduced by reason of this subsection, the [State](/usc/42/619.md?p=5) shall, during the immediately succeeding [fiscal year](/usc/42/619.md?p=3), expend under the [State](/usc/42/619.md?p=5) program funded under this part an amount equal to the total amount of such reductions. If the [State](/usc/42/619.md?p=5) fails during such succeeding [fiscal year](/usc/42/619.md?p=3) to make the expenditure required by the preceding sentence from its own funds, the [Secretary](/usc/42/1301.md?p=a-6) may reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the [fiscal year](/usc/42/619.md?p=3) that follows such succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to the sum of—
    - (A) not more than 2 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10); and
    - (B) the amount of the expenditure required by the preceding sentence.
  - (13) **Penalty for failure of State to maintain historic effort during year in which welfare-to-work grant is received—** If a [grant](/usc/42/1397j.md?p=10) is made to a [State](/usc/42/619.md?p=5) under [section 603(a)(5)(A) of this title](/usc/42/603.md?p=a-5-A) for a [fiscal year](/usc/42/619.md?p=3) and paragraph (7) of this subsection requires the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) to be reduced for the immediately succeeding [fiscal year](/usc/42/619.md?p=3), then the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for such succeeding [fiscal year](/usc/42/619.md?p=3) by the amount of the [grant](/usc/42/1397j.md?p=10) made to the [State](/usc/42/619.md?p=5) under [section 603(a)(5)(A) of this title](/usc/42/603.md?p=a-5-A) for the [fiscal year](/usc/42/619.md?p=3).
  - (14) **Penalty for failure to reduce assistance for recipients refusing without good cause to work—**
    - (A) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) to which a [grant](/usc/42/1397j.md?p=10) is made under [section 603 of this title](/usc/42/603.md) in a [fiscal year](/usc/42/619.md?p=3) has violated [section 607(e) of this title](/usc/42/607.md?p=e) during the [fiscal year](/usc/42/619.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to not less than 1 percent and not more than 5 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
    - (B) **Penalty based on severity of failure—** The [Secretary](/usc/42/1301.md?p=a-6) shall impose reductions under [subparagraph (A)](#a-14-A) with respect to a [fiscal year](/usc/42/619.md?p=3) based on the degree of noncompliance.
  - (15) **Penalty for failure to establish or comply with work participation verification procedures—**
    - (A) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [State](/usc/42/619.md?p=5) to which a [grant](/usc/42/1397j.md?p=10) is made under [section 603 of this title](/usc/42/603.md) in a [fiscal year](/usc/42/619.md?p=3) has violated [section 607(i)(2) of this title](/usc/42/607.md?p=i-2) during the [fiscal year](/usc/42/619.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3) by an amount equal to not less than 1 percent and not more than 5 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10).
    - (B) **Penalty based on severity of failure—** The [Secretary](/usc/42/1301.md?p=a-6) shall impose reductions under [subparagraph (A)](#a-15-A) with respect to a [fiscal year](/usc/42/619.md?p=3) based on the degree of noncompliance.
  - (16) **Penalty for failure to enforce spending policies—**
    - (A) **In general—** If, within 2 years after February 22, 2012, any [State](/usc/42/619.md?p=5) has not reported to the [Secretary](/usc/42/1301.md?p=a-6) on such [State](/usc/42/619.md?p=5)’s implementation of the policies and [practices](/usc/42/17061.md?p=19) required by [section 608(a)(12) of this title](/usc/42/608.md?p=a-12), or the [Secretary](/usc/42/1301.md?p=a-6) determines, based on the information provided in [State](/usc/42/619.md?p=5) reports, that any [State](/usc/42/619.md?p=5) has not implemented and maintained such policies and [practices](/usc/42/17061.md?p=19), the [Secretary](/usc/42/1301.md?p=a-6) shall reduce, by an amount equal to 5 percent of the [State](/usc/42/619.md?p=5) family assistance [grant](/usc/42/1397j.md?p=10), the [grant](/usc/42/1397j.md?p=10) payable to such [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for—
      - (i) the [fiscal year](/usc/42/619.md?p=3) immediately succeeding the year in which such 2-year period ends; and
      - (ii) each succeeding [fiscal year](/usc/42/619.md?p=3) in which the [State](/usc/42/619.md?p=5) does not demonstrate that such [State](/usc/42/619.md?p=5) has implemented and maintained such policies and [practices](/usc/42/17061.md?p=19).
    - (B) **Reduction of applicable penalty—** The [Secretary](/usc/42/1301.md?p=a-6) may reduce the amount of the reduction required under [subparagraph (A)](#a-16-A) based on the degree of noncompliance of the [State](/usc/42/619.md?p=5).
    - (C) **State not responsible for individual violations—** Fraudulent activity by any individual in an attempt to circumvent the policies and [practices](/usc/42/17061.md?p=19) required by [section 608(a)(12) of this title](/usc/42/608.md?p=a-12) shall not trigger a [State](/usc/42/619.md?p=5) penalty under [subparagraph (A)](#a-16-A).
- (b) **Reasonable cause exception—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) may not impose a penalty on a [State](/usc/42/619.md?p=5) under [subsection (a)](#a) with respect to a requirement if the [Secretary](/usc/42/1301.md?p=a-6) determines that the [State](/usc/42/619.md?p=5) has reasonable cause for failing to comply with the requirement.
  - (2) **Exception—** Paragraph (1) of this subsection shall not apply to any penalty under paragraph [(6)](#a-6), [(7)](#a-7), [(8)](#a-8), [(10)](#a-10), [(12)](#a-12), or [(13)](#a-13) of subsection (a) and, with respect to the penalty under [paragraph (2)(B)](#a-2-B) of subsection (a), shall only apply to the extent the [Secretary](/usc/42/1301.md?p=a-6) determines that the reasonable cause for failure to comply with a requirement of that paragraph is as a result of a one-time, unexpected event, such as a widespread data system failure or a natural or man-made [disaster](/usc/42/5204.md?p=2).
- (c) **Corrective compliance plan—**
  - (1) **In general—**
    - (A) **Notification of violation—** Before imposing a penalty against a [State](/usc/42/619.md?p=5) under [subsection (a)](#a) with respect to a [violation](/usc/42/2000e–16a.md?p=c) of this part, the [Secretary](/usc/42/1301.md?p=a-6) shall notify the [State](/usc/42/619.md?p=5) of the [violation](/usc/42/2000e–16a.md?p=c) and allow the [State](/usc/42/619.md?p=5) the opportunity to enter into a corrective compliance plan in accordance with this subsection which outlines how the [State](/usc/42/619.md?p=5) will correct or discontinue, as appropriate, the [violation](/usc/42/2000e–16a.md?p=c) and how the [State](/usc/42/619.md?p=5) will insure continuing compliance with this part.
    - (B) **60-day period to propose a corrective compliance plan—** During the 60-day period that begins on the date the [State](/usc/42/619.md?p=5) receives a notice provided under [subparagraph (A)](#c-1-A) with respect to a [violation](/usc/42/2000e–16a.md?p=c), the [State](/usc/42/619.md?p=5) may submit to the Federal Government a corrective compliance plan to correct or discontinue, as appropriate, the [violation](/usc/42/2000e–16a.md?p=c).
    - (C) **Consultation about modifications—** During the 60-day period that begins with the date the [Secretary](/usc/42/1301.md?p=a-6) receives a corrective compliance plan submitted by a [State](/usc/42/619.md?p=5) in accordance with [subparagraph (B)](#c-1-B), the [Secretary](/usc/42/1301.md?p=a-6) may consult with the [State](/usc/42/619.md?p=5) on modifications to the plan.
    - (D) **Acceptance of plan—** A corrective compliance plan submitted by a [State](/usc/42/619.md?p=5) in accordance with [subparagraph (B)](#c-1-B) is deemed to be accepted by the [Secretary](/usc/42/1301.md?p=a-6) if the [Secretary](/usc/42/1301.md?p=a-6) does not accept or reject the plan during 60-day period that begins on the date the plan is submitted.
  - (2) **Effect of correcting or discontinuing violation—** The [Secretary](/usc/42/1301.md?p=a-6) may not impose any penalty under [subsection (a)](#a) with respect to any [violation](/usc/42/2000e–16a.md?p=c) covered by a [State](/usc/42/619.md?p=5) corrective compliance plan accepted by the [Secretary](/usc/42/1301.md?p=a-6) if the [State](/usc/42/619.md?p=5) corrects or discontinues, as appropriate, the [violation](/usc/42/2000e–16a.md?p=c) pursuant to the plan.
  - (3) **Effect of failing to correct or discontinue violation—** The [Secretary](/usc/42/1301.md?p=a-6) shall assess some or all of a penalty imposed on a [State](/usc/42/619.md?p=5) under [subsection (a)](#a) with respect to a [violation](/usc/42/2000e–16a.md?p=c) if the [State](/usc/42/619.md?p=5) does not, in a timely manner, correct or discontinue, as appropriate, the [violation](/usc/42/2000e–16a.md?p=c) pursuant to a [State](/usc/42/619.md?p=5) corrective compliance plan accepted by the [Secretary](/usc/42/1301.md?p=a-6).
  - (4) **Inapplicability to certain penalties—** This subsection shall not apply to the imposition of a penalty against a [State](/usc/42/619.md?p=5) under paragraph [(2)(B)](#a-2-B), [(6)](#a-6), [(7)](#a-7), [(8)](#a-8), [(10)](#a-10), [(12)](#a-12), [(13)](#a-13), or [(16)](#a-16) of subsection (a).
- (d) **Limitation on amount of penalties—**
  - (1) **In general—** In imposing the penalties described in [subsection (a)](#a), the [Secretary](/usc/42/1301.md?p=a-6) shall not reduce any quarterly payment to a [State](/usc/42/619.md?p=5) by more than 25 percent.
  - (2) **Carryforward of unrecovered penalties—** To the extent that paragraph (1) of this subsection prevents the [Secretary](/usc/42/1301.md?p=a-6) from recovering during a [fiscal year](/usc/42/619.md?p=3) the full amount of penalties imposed on a [State](/usc/42/619.md?p=5) under [subsection (a)](#a) of this section for a prior [fiscal year](/usc/42/619.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall apply any remaining amount of such penalties to the [grant](/usc/42/1397j.md?p=10) payable to the [State](/usc/42/619.md?p=5) under [section 603(a)(1) of this title](/usc/42/603.md?p=a-1) for the immediately succeeding [fiscal year](/usc/42/619.md?p=3).

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Aug. 14, 1935, ch. 531, title IV, § 409, as added Pub. L. 104–193, title I, § 103(a)(1), Aug. 22, 1996, 110 Stat. 2142; amended Pub. L. 105–33, title V, §§ 5001(a)(2), (g), 5004(a), 5506, 5514(c), Aug. 5, 1997, 111 Stat. 589, 592, 594, 613, 620; Pub. L. 105–200, title I, § 101(b), July 16, 1998, 112 Stat. 647; Pub. L. 106–113, div. B, § 1000(a)(4) [title VIII, § 807(b)], Nov. 29, 1999, 113 Stat. 1535, 1501A–287; Pub. L. 106–169, title IV, § 401(b), Dec. 14, 1999, 113 Stat. 1858; Pub. L. 108–40, § 3(g), June 30, 2003, 117 Stat. 837; Pub. L. 108–89, title I, § 101(b)(3), Oct. 1, 2003, 117 Stat. 1131; Pub. L. 108–308, § 2(b)(3), Sept. 30, 2004, 118 Stat. 1135; Pub. L. 109–68, § 2(b)(2)(C), Sept. 21, 2005, 119 Stat. 2003; Pub. L. 109–171, title VII, §§ 7101(b)(3), 7102(c)(2), 7103(b), Feb. 8, 2006, 120 Stat. 135, 137, 140; Pub. L. 111–242, § 131(b)(3), Sept. 30, 2010, 124 Stat. 2612; Pub. L. 111–291, title VIII, § 812(b), Dec. 8, 2010, 124 Stat. 3162; Pub. L. 112–35, § 2(b), Sept. 30, 2011, 125 Stat. 384; Pub. L. 112–96, title IV, §§ 4002(c), 4004(b), (d), 4005(b)–(d), Feb. 22, 2012, 126 Stat. 195, 197, 198.)

## Notes

### Editorial Notes

### References in Text

Part D, referred to in subsec. (a)(5), (7)(B)(i)(I)(aa), (8), is classified to section 651 et seq. of this title.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, referred to in subsec. (a)(7)(B)(i)(IV), is Pub. L. 104–193, Aug. 22, 1996, 110 Stat. 2105. Title IV of the Act is classified principally to chapter 14 (§ 1601 et seq.) of Title 8, Aliens and Nationality. For complete classification of title IV to the Code, see Tables.

Part F, referred to in subsec. (a)(7)(B)(iii)(I), (v), was classified to section 681 et seq. of this title, prior to repeal by Pub. L. 104–193, title I, § 108(e), Aug. 22, 1996, 110 Stat. 2167.

Section 603(a)(1)(D) of this title, referred to in subsec. (a)(7)(B)(v), was repealed by Pub. L. 108–40, § 3(a)(2), June 30, 2003, 117 Stat. 836.

### Prior Provisions

A prior section 609, act Aug. 14, 1935, ch. 531, title IV, § 409, as added Nov. 5, 1990, Pub. L. 101–508, title V, § 5052(a), 104 Stat. 1388–228, related to exclusion from AFDC unit of child for whom Federal, State, or local foster care maintenance or adoption assistance payments were made, prior to repeal by Pub. L. 104–193, § 103(a)(1), as amended by Pub. L. 105–33, title V, § 5514(c), Aug. 5, 1997, 111 Stat. 620.

Another prior section 609, act Aug. 14, 1935, ch. 531, title IV, § 409, as added and amended July 25, 1962, Pub. L. 87–543, title I, §§ 101(b)(2)(E), 105(a), 76 Stat. 180, 186; Aug. 13, 1981, Pub. L. 97–35, title XXIII, § 2307(a), 95 Stat. 846; Sept. 3, 1982, Pub. L. 97–248, title I, § 154(c), 96 Stat. 397; July 18, 1984, Pub. L. 98–369, div. B, title VI, §§ 2627, 2641(a), 2663(c)(5), 98 Stat. 1136, 1146, 1166, related to community work experience programs, prior to repeal by Pub. L. 100–485, title II, §§ 202(b)(12), 204(a), (b)(1)(A), Oct. 13, 1988, 102 Stat. 2378, 2381, effective Oct. 1, 1990, with provision for earlier effective dates in case of States making certain changes in their State plans and formally notifying the Secretary of Health and Human Services of their desire to become subject to the amendments by title II of Pub. L. 100–485 at such earlier effective dates.

### Amendments

2012—Subsec. (a)(2)(A)(i), (ii). Pub. L. 112–96, § 4005(c), realigned margins.

Subsec. (a)(3)(C). Pub. L. 112–96, § 4005(b), substituted “603(b)(5)” for “603(b)(6)”.

Subsec. (a)(7)(A). Pub. L. 112–96, § 4002(c)(1), substituted “a fiscal year” for “fiscal year 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, or 2013”.

Subsec. (a)(7)(B)(ii). Pub. L. 112–96, § 4002(c)(2), struck out “for fiscal years 1997 through 2012,” after “means” and substituted “607(a) of this title,” for “607(a) of this title for the fiscal year,”.

Subsec. (a)(16). Pub. L. 112–96, § 4004(b), added par. (16).

Subsec. (c)(2). Pub. L. 112–96, § 4005(d), inserted comma after “appropriate”.

Subsec. (c)(4). Pub. L. 112–96, § 4004(d), substituted “(13), or (16)” for “or (13)”.

2011—Subsec. (a)(7)(A). Pub. L. 112–35, § 2(b)(1), substituted “2012, or 2013” for “or 2012”.

Subsec. (a)(7)(B)(ii). Pub. L. 112–35, § 2(b)(2), substituted “2012” for “2011”.

2010—Subsec. (a)(2). Pub. L. 111–291, § 812(b)(1), designated existing provisions as subpar. (A), inserted heading, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), in subpar. (A)(ii), substituted “clause (i)” for “subparagraph (A)”, and added subpar. (B).

Subsec. (a)(7)(A). Pub. L. 111–242, § 131(b)(3)(A), substituted “2011, or 2012” for “or 2011”.

Subsec. (a)(7)(B)(ii). Pub. L. 111–242, § 131(b)(3)(B), substituted “2011” for “2010”.

Subsec. (b)(2). Pub. L. 111–291, § 812(b)(2), inserted before period at end “and, with respect to the penalty under paragraph (2)(B) of subsection (a), shall only apply to the extent the Secretary determines that the reasonable cause for failure to comply with a requirement of that paragraph is as a result of a one-time, unexpected event, such as a widespread data system failure or a natural or man-made disaster”.

Subsec. (c)(4). Pub. L. 111–291, § 812(b)(3), inserted “(2)(B),” after “paragraph”.

2006—Subsec. (a)(7)(A). Pub. L. 109–171, § 7101(b)(3)(A), substituted “2007, 2008, 2009, 2010, or 2011” for “or 2007”.

Subsec. (a)(7)(B)(i)(V). Pub. L. 109–171, § 7103(b), added subcl. (V).

Subsec. (a)(7)(B)(ii). Pub. L. 109–171, § 7101(b)(3)(B), substituted “2010” for “2006”.

Subsec. (a)(15). Pub. L. 109–171, § 7102(c)(2), added par. (15).

2005—Subsec. (a)(7)(A). Pub. L. 109–68, § 2(b)(2)(C)(i), substituted “2006, or 2007” for “or 2006”.

Subsec. (a)(7)(B)(ii). Pub. L. 109–68, § 2(b)(2)(C)(ii), substituted “2006” for “2005”.

2004—Subsec. (a)(7)(A). Pub. L. 108–308, § 2(b)(3)(A), substituted “2005, or 2006” for “or 2005”.

Subsec. (a)(7)(B)(ii). Pub. L. 108–308, § 2(b)(3)(B), substituted “2005” for “2004”.

2003—Subsec. (a)(7)(A). Pub. L. 108–89, § 101(b)(3)(A), substituted “2004, or 2005” for “or 2004”.

Pub. L. 108–40, § 3(g)(1), substituted “2003, or 2004” for “or 2003”.

Subsec. (a)(7)(B)(ii). Pub. L. 108–89, § 101(b)(3)(B), substituted “2004” for “2003”.

Pub. L. 108–40, § 3(g)(2), substituted “2003” for “2002”.

1999—Subsec. (a)(7)(B)(i)(II). Pub. L. 106–169 made technical amendment to reference in original act which appears in text as reference to August 22, 1996.

Subsec. (a)(8)(A)(i)(III). Pub. L. 106–113 substituted “paragraph (24), or subparagraph (A) or (B)(i) of paragraph (27), of section 654 of this title” for “section 654(24) of this title”.

1998—Subsec. (a)(8)(A)(i)(III). Pub. L. 105–200 inserted “(other than section 654(24) of this title)” before semicolon.

1997—Pub. L. 105–33, § 5514(c), made technical amendment to directory language of Pub. L. 104–193, § 103(a)(1), which enacted this section.

Subsec. (a)(1)(C). Pub. L. 105–33, § 5001(g)(2), added subpar. (C).

Subsec. (a)(2)(A). Pub. L. 105–33, § 5506(a), substituted “45 days” for “1 month”.

Subsec. (a)(3)(A). Pub. L. 105–33, § 5506(n)(1), struck out “not more than” after “an amount equal to”.

Subsec. (a)(3)(C). Pub. L. 105–33, § 5506(n)(2), inserted before period at end “or if the noncompliance is due to extraordinary circumstances such as a natural disaster or regional recession. The Secretary shall provide a written report to Congress to justify any waiver or penalty reduction due to such extraordinary circumstances”.

Subsec. (a)(7)(B)(i)(I)(aa). Pub. L. 105–33, § 5506(b), inserted before period at end “, including any amount collected by the State as support pursuant to a plan approved under part D, on behalf of a family receiving assistance under the State program funded under this part, that is distributed to the family under section 657(a)(1)(B) of this title and disregarded in determining the eligibility of the family for, and the amount of, such assistance”.

Subsec. (a)(7)(B)(i)(III). Pub. L. 105–33, § 5506(c), added subcl. (III). Former subcl. (III) redesignated (IV).

Subsec. (a)(7)(B)(i)(IV). Pub. L. 105–33, § 5506(d), substituted “this part, families” for “this part, and families” and “section 608(a)(7) of this title, and families of aliens lawfully present in the United States that would be eligible for such assistance but for the application of title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996” for “section 608(a)(7) of this title or section 1612 of title 8”.

Pub. L. 105–33, § 5506(c), redesignated subcl. (III) as (IV).

Subsec. (a)(7)(B)(ii). Pub. L. 105–33, § 5506(e), struck out “reduced (if appropriate) in accordance with subparagraph (C)(ii)” after “75 percent)”.

Subsec. (a)(7)(B)(iv). Pub. L. 105–33, § 5001(a)(2), amended heading and text of cl. (iv) generally. Prior to amendment, text read as follows: “The term ‘expenditures by the State’ does not include—

“(I) any expenditures from amounts made available by the Federal Government;

“(II) any State funds expended for the medicaid program under subchapter XIX of this chapter;

“(III) any State funds which are used to match Federal funds; or

“(IV) any State funds which are expended as a condition of receiving Federal funds under Federal programs other than under this part.

Notwithstanding subclause (IV) of the preceding sentence, such term includes expenditures by a State for child care in a fiscal year to the extent that the total amount of such expenditures does not exceed an amount equal to the amount of State expenditures in fiscal year 1994 or 1995 (whichever is greater) that equal the non-Federal share for the programs described in section 618(a)(1)(A) of this title.”

Subsec. (a)(7)(B)(v). Pub. L. 105–33, § 5506(f), added cl. (v).

Subsec. (a)(8). Pub. L. 105–33, § 5506(g), amended heading and text of par. (8) generally. Prior to amendment, par. (8) provided that if a State program operated under part D of this subchapter was found to not have complied substantially with the requirements of such part for any quarter, and was not complying substantially with such requirements at the time of the finding, the Secretary was to reduce the grant payable to the State under section 603(a)(1) of this title for certain quarters until the program was found to be in substantial compliance with such requirements.

Subsec. (a)(9). Pub. L. 105–33, § 5506(h), substituted “608(a)(7)” for “608(a)(1)(B)”.

Subsec. (a)(10). Pub. L. 105–33, § 5506(i), substituted “the qualified State expenditures (as defined in paragraph (7)(B)(i) (other than the expenditures described in subclause (I)(bb) of that paragraph)) under the State program funded under this part for the fiscal year” for “the expenditures under the State program funded under this part for the fiscal year (excluding any amounts made available by the Federal Government)”, inserted “excluding any amount expended by the State for child care under subsection (g) or (i) of section 602 of this title (as in effect during fiscal year 1994) for fiscal year 1994,” after “(as defined in paragraph (7)(B)(iii) of this subsection),”, and inserted before period at end “that the State has not remitted under section 603(b)(6) of this title”.

Subsec. (a)(12). Pub. L. 105–33, § 5506(j), in heading substituted “Requirement” for “Failure” and “reductions; penalty for failure to do so” for “reductions” and in text inserted at end “If the State fails during such succeeding fiscal year to make the expenditure required by the preceding sentence from its own funds, the Secretary may reduce the grant payable to the State under section 603(a)(1) of this title for the fiscal year that follows such succeeding fiscal year by an amount equal to the sum of—

“(A) not more than 2 percent of the State family assistance grant; and

“(B) the amount of the expenditure required by the preceding sentence.”

Subsec. (a)(13). Pub. L. 105–33, § 5001(g)(1)(A), added par. (13).

Subsec. (a)(14). Pub. L. 105–33, § 5004(a), added par. (14).

Subsec. (b)(2). Pub. L. 105–33, § 5506(k), substituted “(6), (7), (8), (10), or (12)” for “(7) or (8)”.

Pub. L. 105–33, § 5001(g)(1)(B), substituted “(12), or (13)” for “or (12)”.

Subsec. (c)(1)(A), (B). Pub. L. 105–33, § 5506(l)(1), inserted “or discontinue, as appropriate,” after “correct”.

Subsec. (c)(2). Pub. L. 105–33, § 5506(l)(2), inserted “or discontinuing” after “correcting” in heading and “or discontinues, as appropriate” after “corrects” in text.

Subsec. (c)(3). Pub. L. 105–33, § 5506(l)(3), inserted “or discontinue” after “correct” in heading and “or discontinue, as appropriate,” before “the violation” in text.

Subsec. (c)(4). Pub. L. 105–33, § 5506(m), amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “This subsection shall not apply to the imposition of a penalty against a State under subsection (a)(6) of this section.”

Pub. L. 105–33, § 5001(g)(1)(C), substituted “(12), or (13)” for “or (12)”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2006 Amendment

Amendment by Pub. L. 109–171 effective as if enacted on Oct. 1, 2005, except as otherwise provided, see section 7701 of Pub. L. 109–171, set out as a note under section 603 of this title.

### Effective Date of 2003 Amendment

Amendment by Pub. L. 108–40 effective July 1, 2003, see section 8 of Pub. L. 108–40, set out as a note under section 603 of this title.

### Effective Date of 1999 Amendments

Amendment by Pub. L. 106–169 effective as if included in the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104–193, see section 401(q) of Pub. L. 106–169, set out as a note under section 602 of this title.

Pub. L. 106–113, div. B, § 1000(a)(4) [title VIII, § 807(c)], Nov. 29, 1999, 113 Stat. 1535, 1501A–287, provided that: “The amendments made by this section [amending this section and section 655 of this title] shall take effect on October 1, 1999.”

### Effective Date of 1997 Amendment

Pub. L. 105–33, title V, § 5004(b), Aug. 5, 1997, 111 Stat. 594, provided that: “The amendment made by subsection (a) of this section [amending this section] shall take effect as if included in the enactment of section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 [Pub. L. 104–193].”

Amendment by section 5506 of Pub. L. 105–33 effective as if included in section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104–193, at the time such section 103(a) became law, see section 5518(a) of Pub. L. 105–33, set out as a note under section 602 of this title.

Amendment by section 5514(c) of Pub. L. 105–33 effective as if included in the provision of Pub. L. 104–193 amended at the time the provision became law, see section 5518(d) of Pub. L. 105–33, set out as a note under section 862a of Title 21, Food and Drugs.

### Effective Date

Section effective July 1, 1997, with delayed effective date for subsec. (a)(2)–(5), (8), (10) of this section, and with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see section 116 of Pub. L. 104–193, set out as a note under section 601 of this title.