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TANF-ACF-IM-1999-04 (Fiscal Year 2000 Allocation "Supplemental Grants for Population Increases in Certain States.")

Published: September 2, 1999
Temporary Assistance for Needy Families (TANF)
Data Collection and Reporting
Information Memoranda (IM)


AL, AK, AR, AZ, CO, FL, GA, ID, LA, MS, MT, NC, NM, NV, TN, TX and UT State Agencies administering the Temporary Assistance for Needy Families program


Fiscal Year 2000 Allocation "Supplemental Grants for Population Increases in Certain States."


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 States eligible to receive supplemental grants for population increases are those States that qualified in FY 1998.


TANF-ACF-PI-97-5, dated September 16, 1997, and TANF-ACF-PI-98-3, dated May 9 1998, "Supplemental Grants for Population Increases in Certain States."


This Information Memorandum notifies certain States that they will receive additional funding for Fiscal Year 2000.


Questions should be directed to the appropriate Administration for Children and Families (ACF) Regional Administrator.


Elizabeth M. James Duke
Deputy Assistant Secretary for Administration


Alvin C. Collins
Office of Family Assistance

Supplemental Grants for Population Increases in Certain States


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 percapita 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.

1This section does not authorize supplemental grants to territories or tribes. See section 403(a)(3)(D)(iii), which defines "States" as the 50 States and the District of Columbia.

2The Personal Responsibility and Work Opportunity Reconciliation Act both authorizes and appropriates a total of $800 million for these supplemental grants afor FYs 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 subparagraph 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:

the level of welfare spending per poor person by the State in FY 1994 was less than 35 percent of the national average, or

the State’s population increased by more than 10 percent between April 1, 1990 and July 1, 1994.

These States are:

1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. Colorado
6. Idaho
7. Louisiana
8. Mississippi
9. Nevada
10. Texas
11. Utah

These States will receive supplemental grants in the amounts described below under "Amount of Supplemental Grant" and shown in Columns "(n)" through "(q)" 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).)

4Note that the actual grant amounts for FY 2001 will depend on whether States qualified in FY 1998 based on the general eligibility criteria remain qualified. Grants to States qualified under the authomatic qualificaition provision in the statute will receive the amounts shown in Attachment 1 with the exception of FY 2001, when grants will be reduced pro rata pursuant to seciton 403(a)(3)(F) because the total amount remaining available from the $800 million appropriation will be less than the amount required to pay full grants to all States.

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).)

The following additional States are qualified for FY 1998 (and therefore are eligible to qualify in subsequent fiscal years) based on these general eligibility criteria:

1. Florida
2. Georgia
3. Montana
4. New Mexico
5. North Carolina
6. Tennessee

Amount of Supplemental Grant

For FY 2000, 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" is shown in Column "(a)" of Attachment 1. The supplemental grant for FY 2000 is shown in Column "(q)" of Attachment 1.

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 FY 1994), plus the amount of any supplemental grant paid to the State inthe immediately preceding fiscal year divided by the number of individuals in the 1990 census who were State residents with income below the poverty line.

6"The total amount required to be paid..." is the same term used in section 403(a) of title IV-A to describe how State Family Assistance Grants (SFAGs) are calculated. ACF will use the same data set to calculate TANF supplemental Grants as it used to calculate SFAGs. (note that PRWORA stipulates that ACF include child care expenditures under subsections (g) and (i) in calculating TANF Supplemental Grant amounts; child care expenditures are not included in calculating SFAGs.)

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).)

Application Process

States do not have to apply for supplemental grants; ACF will issue those 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 Information Memorandum is the formal notification for FY 2000 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 so 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 will use to report on the rest of their SFAG funds. Supplemental grant funds should be reported on Line 1(A)—Awarded, of the ACF-196 along with the SFAG funds.

7Unlike the Contingency Fund, there is no statutorily required application for supplemental grants. Also, unlike Contingency Funds, receipt of supplemental grants doesn't impose additional requirements on a State. Therefore, ACF will not require an application for supplemental grants.