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Table 1 illustrates how the incentive works.

Adoptions Finalized and Incentive Bonuses Paid for State XYZ for FYs 1998 Through 2002

STATE XYZ	1995	1996	1997	AVG	1998	1999	2000	2001	2002
1. Established Baseline	-	-	-	-	100	150	150	160	190
2. Established Special Needs Baseline	-	-	-	-	50	75	90	100	115
3. Total Number of Adoptions	78	106	117	100	150	148	160	190	238
4. Number of Special Needs Adoptions	34	56	59	50	75	90	100	115	160
5. Bonus Payment [(L3-LI)x$4,000]	-	-	-	-	$200,000	**	$40,000	$120,000	$192,000
6. Special Needs Bonus Payment* [(L4-L2)x$2,000]	-	-	-	-	$50,000	**	$20,000	$30,000	$90,000
7. Total Bonus [Line5+Line6]	-	-	-	-	$250,000	**	$60,000	$150,00	$282,000

* Special needs bonus payments are made only if Line 3 exceeds Line 1, and Line 4 exceeds Line 2.
** No bonus payments are made because the total number of adoptions for fiscal year 1999 did not exceed the baseline for the year.

Please note the following situations reflected in the table:

1. Each year's awards are considered on their own.
   
   
2. Incentives are not paid out until the year after they have been earned.
   
   
3. In this example, the baselines for the 1998 incentives are 100 and 50. Because the 1997 achievements were 117 and 59, however, no year's established baselines (other than 1998) could fall below 117 and 59 for the purposes of earning the incentive funds.

The following table indicates how the baselines and incremental targets for adoption and guardianship may be structured:

1997 Baseline Data:
117 Adoptions
30 Guardianships
147 Permanent Placements

Goals for 2002:
234 Adoptions
60 Guardianships
294 Permanent Placements

Attachment 2 - Table 2: Illustrates how a State may set its incremental targets