
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 107-133 Section 201(f)]
[CITE: 42USC674]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
 SUBCHAPTER IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES 
              WITH CHILDREN AND FOR CHILD-WELFARE SERVICES
 
    Part E--Federal Payments for Foster Care and Adoption Assistance
 
Sec. 674. Payments to States


(a) Amounts

    For each quarter beginning after September 30, 1980, each State 
which has a plan approved under this part shall be entitled to a payment 
equal to the sum of--
        (1) an amount equal to the Federal medical assistance percentage 
    (as defined in section 1396d(b) of this title) of the total amount 
    expended during such quarter as foster care maintenance payments 
    under section 672 of this title for children in foster family homes 
    or child-care institutions; plus
        (2) an amount equal to the Federal medical assistance percentage 
    (as defined in section 1396d(b) of this title) of the total amount 
    expended during such quarter as adoption assistance payments under 
    section 673 of this title pursuant to adoption assistance 
    agreements; plus
        (3) an amount equal to the sum of the following proportions of 
    the total amounts expended during such quarter as found necessary by 
    the Secretary for the provision of child placement services and for 
    the proper and efficient administration of the State plan--
            (A) 75 per centum of so much of such expenditures as are for 
        the training (including both short- and long-term training at 
        educational institutions through grants to such institutions or 
        by direct financial assistance to students enrolled in such 
        institutions) of personnel employed or preparing for employment 
        by the State agency or by the local agency administering the 
        plan in the political subdivision,
            (B) 75 percent of so much of such expenditures (including 
        travel and per diem expenses) as are for the short-term training 
        of current or prospective foster or adoptive parents and the 
        members of the staff of State-licensed or State-approved child 
        care institutions providing care to foster and adopted children 
        receiving assistance under this part, in ways that increase the 
        ability of such current or prospective parents, staff members, 
        and institutions to provide support and assistance to foster and 
        adopted children, whether incurred directly by the State or by 
        contract,
            (C) 50 percent of so much of such expenditures as are for 
        the planning, design, development, or installation of statewide 
        mechanized data collection and information retrieval systems 
        (including 50 percent of the full amount of expenditures for 
        hardware components for such systems) but only to the extent 
        that such systems--
                (i) meet the requirements imposed by regulations 
            promulgated pursuant to section 679(b)(2) of this title;
                (ii) to the extent practicable, are capable of 
            interfacing with the State data collection system that 
            collects information relating to child abuse and neglect;
                (iii) to the extent practicable, have the capability of 
            interfacing with, and retrieving information from, the State 
            data collection system that collects information relating to 
            the eligibility of individuals under part A of this 
            subchapter (for the purposes of facilitating verification of 
            eligibility of foster children); and
                (iv) are determined by the Secretary to be likely to 
            provide more efficient, economical, and effective 
            administration of the programs carried out under a State 
            plan approved under part B of this subchapter or this part; 
            and

            (D) 50 percent of so much of such expenditures as are for 
        the operation of the statewide mechanized data collection and 
        information retrieval systems referred to in subparagraph (C); 
        and
            (E) one-half of the remainder of such expenditures; plus

        (4) the lesser of--
            (A) 80 percent of the amount (if any) by which--
                (i) the total amount expended by the State during the 
            fiscal year in which the quarter occurs to carry out 
            programs in accordance with the State application approved 
            under section 677(b) of this title for the period in which 
            the quarter occurs (including any amendment that meets the 
            requirements of section 677(b)(5) of this title); exceeds
                (ii) the total amount of any penalties assessed against 
            the State under section 677(e) of this title during the 
            fiscal year in which the quarter occurs; or

            (B) the amount allotted to the State under section 677 of 
        this title for the fiscal year in which the quarter occurs, 
        reduced by the total of the amounts payable to the State under 
        this paragraph for all prior quarters in the fiscal year.

(b) Quarterly estimates of State's entitlement for next quarter; 
        payments; United States' pro rata share of amounts recovered as 
        overpayment; allowance, disallowance, or deferral of claim

    (1) The Secretary shall, prior to the beginning of each quarter, 
estimate the amount to which a State will be entitled under subsection 
(a) of this section for such quarter, such estimates to be based on (A) 
a report filed by the State containing its estimate of the total sum to 
be expended in such quarter in accordance with subsection (a) of this 
section, and stating the amount appropriated or made available by the 
State and its political subdivisions for such expenditures in such 
quarter, and if such amount is less than the State's proportionate share 
of the total sum of such estimated expenditures, the source or sources 
from which the difference is expected to be derived, (B) records showing 
the number of children in the State receiving assistance under this 
part, and (C) such other investigation as the Secretary may find 
necessary.
    (2) The Secretary shall then pay to the State, in such installments 
as he may determine, the amounts so estimated, reduced or increased to 
the extent of any overpayment or underpayment which the Secretary 
determines was made under this section to such State for any prior 
quarter and with respect to which adjustment has not already been made 
under this subsection.
    (3) The pro rata share to which the United States is equitably 
entitled, as determined by the Secretary, of the net amount recovered 
during any quarter by the State or any political subdivision thereof 
with respect to foster care and adoption assistance furnished under the 
State plan shall be considered an overpayment to be adjusted under this 
subsection.
    (4)(A) Within 60 days after receipt of a State claim for 
expenditures pursuant to subsection (a) of this section, the Secretary 
shall allow, disallow, or defer such claim.
    (B) Within 15 days after a decision to defer such a State claim, the 
Secretary shall notify the State of the reasons for the deferral and of 
the additional information necessary to determine the allowability of 
the claim.
    (C) Within 90 days after receiving such necessary information (in 
readily reviewable form), the Secretary shall--
        (i) disallow the claim, if able to complete the review and 
    determine that the claim is not allowable, or
        (ii) in any other case, allow the claim, subject to disallowance 
    (as necessary)--
            (I) upon completion of the review, if it is determined that 
        the claim is not allowable; or
            (II) on the basis of findings of an audit or financial 
        management review.

(c) Automated data collection expenditures

    The Secretary shall treat as necessary for the proper and efficient 
administration of the State plan all expenditures of a State necessary 
in order for the State to plan, design, develop, install, and operate 
data collection and information retrieval systems described in 
subsection (a)(3)(C) of this section, without regard to whether the 
systems may be used with respect to foster or adoptive children other 
than those on behalf of whom foster care maintenance payments or 
adoption assistance payments may be made under this part.

(d) Reduction for violation of plan requirement

    (1) If, during any quarter of a fiscal year, a State's program 
operated under this part is found, as a result of a review conducted 
under section 1320a-2a of this title, or otherwise, to have violated 
paragraph (18) or (23) of section 671(a) of this title with respect to a 
person or to have failed to implement a corrective action plan within a 
period of time not to exceed 6 months with respect to such violation, 
then, notwithstanding subsection (a) of this section and any regulations 
promulgated under section 1320a-2a(b)(3) of this title, the Secretary 
shall reduce the amount otherwise payable to the State under this part, 
for that fiscal year quarter and for any subsequent quarter of such 
fiscal year, until the State program is found, as a result of a 
subsequent review under section 1320a-2a of this title, to have 
implemented a corrective action plan with respect to such violation, 
by--
        (A) 2 percent of such otherwise payable amount, in the case of 
    the 1st such finding for the fiscal year with respect to the State;
        (B) 3 percent of such otherwise payable amount, in the case of 
    the 2nd such finding for the fiscal year with respect to the State; 
    or
        (C) 5 percent of such otherwise payable amount, in the case of 
    the 3rd or subsequent such finding for the fiscal year with respect 
    to the State.

In imposing the penalties described in this paragraph, the Secretary 
shall not reduce any fiscal year payment to a State by more than 5 
percent.
    (2) Any other entity which is in a State that receives funds under 
this part and which violates paragraph (18) or (23) of section 671(a) of 
this title during a fiscal year quarter with respect to any person shall 
remit to the Secretary all funds that were paid by the State to the 
entity during the quarter from such funds.
    (3)(A) Any individual who is aggrieved by a violation of section 
671(a)(18) of this title by a State or other entity may bring an action 
seeking relief from the State or other entity in any United States 
district court.
    (B) An action under this paragraph may not be brought more than 2 
years after the date the alleged violation occurred.
    (4) This subsection shall not be construed to affect the application 
of the Indian Child Welfare Act of 1978 [25 U.S.C. 1901 et seq.].

(Aug. 14, 1935, ch. 531, title IV, Sec. 474, as added Pub. L. 96-272, 
title I, Sec. 101(a)(1), June 17, 1980, 94 Stat. 506; amended Pub. L. 
96-611, Sec. 3, Dec. 28, 1980, 94 Stat. 3567; Pub. L. 98-369, div. B, 
title VI, Sec. 2663(c)(18), July 18, 1984, 98 Stat. 1167; Pub. L. 98-
617, Sec. 4(a), (b), Nov. 8, 1984, 98 Stat. 3296, 3297; Pub. L. 99-272, 
title XII, Secs. 12306(a), (b), 12307(c), Apr. 7, 1986, 100 Stat. 294, 
296; Pub. L. 99-514, title XVIII, Sec. 1883(b)(9), Oct. 22, 1986, 100 
Stat. 2917; Pub. L. 100-203, title IX, Sec. 9132(a), Dec. 22, 1987, 101 
Stat. 1330-313; Pub. L. 101-239, title VIII, Secs. 8001(a), 8002(c), 
8006(a), title X, Secs. 10401(a), 10402(a), 10403(c)(1), Dec. 19, 1989, 
103 Stat. 2452, 2453, 2461, 2487, 2488; Pub. L. 101-508, title V, 
Sec. 5071(a), Nov. 5, 1990, 104 Stat. 1388-233; Pub. L. 103-66, title 
XIII, Sec. 13713(a)(1), (2), (b)(1), Aug. 10, 1993, 107 Stat. 656, 657; 
Pub. L. 103-432, title II, Secs. 207(a), (b), 210(a), Oct. 31, 1994, 108 
Stat. 4457, 4460; Pub. L. 104-188, title I, Sec. 1808(b), Aug. 20, 1996, 
110 Stat. 1903; Pub. L. 105-89, title II, Sec. 202(b), Nov. 19, 1997, 
111 Stat. 2125; Pub. L. 105-200, title III, Sec. 301(b), (c), title IV, 
Sec. 410(g), July 16, 1998, 112 Stat. 658, 674; Pub. L. 106-169, title 
I, Sec. 101(c), Dec. 14, 1999, 113 Stat. 1828.)

                       References in Text

    Parts A and B of this subchapter, referred to in subsec. 
(a)(3)(C)(iii), (iv), are classified to sections 601 et seq. and 620 et 
seq., respectively, of this title.
    The Indian Child Welfare Act of 1978, referred to in subsec. (d)(4), 
is Pub. L. 95-608, Nov. 8, 1978, 92 Stat. 3069, as amended, which is 
classified principally to chapter 21 (Sec. 1901 et seq.) of Title 25, 
Indians. For complete classification of this Act to the Code, see Short 
Title note set out under section 1901 of Title 25 and Tables.


                               Amendments

    1999--Subsec. (a)(4). Pub. L. 106-169 amended par. (4) generally. 
Prior to amendment, par. (4) read as follows: ``an amount equal to the 
sum of--
        ``(A) so much of the amounts expended by such State to carry out 
    programs under section 677 of this title as do not exceed the basic 
    amount for such State determined under section 677(e)(1) of this 
    title; and
        ``(B) the lesser of--
            ``(i) one-half of any additional amounts expended by such 
        State for such programs; or
            ``(ii) the maximum additional amount for such State under 
        such section 677(e)(1) of this title.''
    1998--Subsec. (a). Pub. L. 105-200, Sec. 410(g), struck out 
``(subject to the limitations imposed by subsection (b) of this 
section)'' after ``this part'' in introductory provisions.
    Subsec. (d)(1), (2). Pub. L. 105-200, Sec. 301(b), substituted 
``paragraph (18) or (23) of section 671(a) of this title'' for ``section 
671(a)(18) of this title''.
    Subsec. (e). Pub. L. 105-200, Sec. 301(c), struck out subsec. (e) 
which read as follows: ``Notwithstanding subsection (a) of this section, 
a State shall not be eligible for any payment under this section if the 
Secretary finds that, after November 19, 1997, the State has--
        ``(1) denied or delayed the placement of a child for adoption 
    when an approved family is available outside of the jurisdiction 
    with responsibility for handling the case of the child; or
        ``(2) failed to grant an opportunity for a fair hearing, as 
    described in section 671(a)(12) of this title, to an individual 
    whose allegation of a violation of paragraph (1) of this subsection 
    is denied by the State or not acted upon by the State with 
    reasonable promptness.''
    1997--Subsec. (e). Pub. L. 105-89 added subsec. (e).
    1996--Subsec. (d). Pub. L. 104-188 added subsec. (d).
    1994--Subsec. (b). Pub. L. 103-432, Sec. 207(a), (b)(2), 
redesignated subsec. (d) as (b) and struck out former subsec. (b) which 
related to maximum aggregate sums payable to any State and State 
allotments for fiscal years 1981 to 1992.
    Subsec. (b)(4). Pub. L. 103-432, Sec. 210(a), added par. (4).
    Subsec. (c). Pub. L. 103-432, Sec. 207(a), (b)(2), redesignated 
subsec. (e) as (c) and struck out former subsec. (c) which related to 
reimbursement for expenditures.
    Subsec. (d). Pub. L. 103-432, Sec. 207(b)(2), redesignated subsec. 
(d) as (b).
    Subsec. (d)(1). Pub. L. 103-432, Sec. 207(b)(1), substituted 
``subsection (a) of this section for such quarter'' for ``subsections 
(a), (b), and (c) of this section for such quarter'' and ``subsection 
(a) of this section'' for ``the provisions of such subsections''.
    Subsec. (e). Pub. L. 103-432, Sec. 207(b)(2), redesignated subsec. 
(e) as (c).
    1993--Subsec. (a)(3)(B). Pub. L. 103-66, Sec. 13713(a)(1)(A), struck 
out ``and'' at end.
    Subsec. (a)(3)(C). Pub. L. 103-66, Sec. 13713(b)(1), substituted 
``50 percent'' for ``75 percent'' in two places in introductory 
provisions.
    Pub. L. 103-66, Sec. 13713(a)(1)(C), added subpar. (C). Former 
subpar. (C) redesignated (E).
    Subsec. (a)(3)(D), (E). Pub. L. 103-66, Sec. 13713(a)(1)(B), (C), 
added subpar. (D) and redesignated former subpar. (C) as (E).
    Subsec. (e). Pub. L. 103-66, Sec. 13713(a)(2), added subsec. (e).
    1990--Subsec. (a)(3). Pub. L. 101-508 inserted ``provision of child 
placement services and for the'' before ``proper and efficient''.
    1989--Subsec. (a)(3)(B), (C). Pub. L. 101-239, Sec. 8006(a), added 
subpar. (B) and redesignated former subpar. (B) as (C).
    Subsec. (a)(4). Pub. L. 101-239, Sec. 8002(c), amended par. (4) 
generally. Prior to amendment, par. (4) read as follows: ``an amount for 
transitional independent living programs as provided in section 677 of 
this title.''
    Subsec. (b)(1). Pub. L. 101-239, Sec. 10403(c)(1), amended Pub. L. 
98-617, Sec. 4(a)(1), see 1984 Amendment note below.
    Pub. L. 101-239, Sec. 8001(a), substituted ``through 1992'' for 
``through 1989''.
    Subsec. (b)(2)(A)(iv). Pub. L. 101-239, Sec. 10402(a), added cl. 
(iv).
    Subsec. (b)(2)(B). Pub. L. 101-239, Sec. 10403(c)(1), amended Pub. 
L. 98-617, Sec. 4(a)(1), see 1984 Amendment note below.
    Pub. L. 101-239, Sec. 8001(a), substituted ``through 1992'' for 
``through 1989''.
    Subsec. (b)(4)(B). Pub. L. 101-239, Sec. 10403(c)(1), amended Pub. 
L. 98-617, Sec. 4(a)(1), see 1984 Amendment note below.
    Pub. L. 101-239, Sec. 8001(a), substituted ``through 1992'' for 
``through 1989''.
    Subsec. (b)(5)(A). Pub. L. 101-239, Sec. 8001(a), substituted 
``1992'' for ``1989'' in introductory provisions and in cl. (ii).
    Subsec. (c)(1), (2). Pub. L. 101-239, Sec. 8001(a), substituted 
``through 1992'' for ``through 1989''.
    Subsec. (c)(4)(B), (C). Pub. L. 101-239, Sec. 10401(a), substituted 
``$325,000,000'' for ``$266,000,000''.
    1987--Subsec. (b)(1), (2)(A)(iii), (B), (4)(B). Pub. L. 100-203, 
Sec. 9132(a)(1), substituted ``through 1989'' for ``through 1987''.
    Subsec. (b)(5)(A). Pub. L. 100-203, Sec. 9132(a)(1), (2), 
substituted ``October 1, 1989'' for ``October 1, 1987'' in introductory 
provisions and ``through 1989'' for ``through 1987'' in cl. (ii).
    Subsec. (c)(1), (2). Pub. L. 100-203, Sec. 9132(a)(3), substituted 
``through 1989'' for ``through 1987''.
    1986--Subsec. (a)(3). Pub. L. 99-272, Sec. 12307(c)(1), substituted 
``; plus'' for period at end.
    Subsec. (a)(4). Pub. L. 99-514 realigned margins of par. (4).
    Pub. L. 99-272, Sec. 12307(c)(2), added par. (4).
    Subsec. (b)(1). Pub. L. 99-272, Sec. 12306(a)(1), substituted 
``1987'' for ``1985''.
    Subsec. (b)(2)(A). Pub. L. 99-272, Sec. 12306(a)(2), substituted in 
cl. (iii) ``each of the fiscal years 1983 through 1987'' for ``fiscal 
year 1983'', and struck out cls. (iv) and (v) relating to limitations 
with respect to fiscal years 1984 and 1985, respectively, if the 
appropriation for each of those years is equal to $266,000,000.
    Subsec. (b)(2)(B), (4)(B). Pub. L. 99-272, Sec. 12306(a)(1), 
substituted ``1987'' for ``1985''.
    Subsec. (b)(5)(A). Pub. L. 99-272, Sec. 12306(a)(3), substituted 
``October 1, 1987'' for ``October 1, 1985'' in introductory provision, 
and in cl. (ii) substituted ``1984 through 1987'' for ``1984 and 1985''.
    Subsec. (c)(1), (2). Pub. L. 99-272, Sec. 12306(b), substituted 
``1987'' for ``1985''.
    1984--Subsec. (b)(1). Pub. L. 98-617, Sec. 4(a)(1)(A), formerly 
Sec. 4(a)(1), as redesignated and amended by Pub. L. 101-239, 
Sec. 10403(c)(1), substituted ``1985'' for ``1984'' after ``1981 
through''.
    Subsec. (b)(2)(A)(v). Pub. L. 98-617, Sec. 4(a)(2), added cl. (v).
    Subsec. (b)(2)(B). Pub. L. 98-617, Sec. 4(a)(1)(B), formerly 
Sec. 4(a)(1), as redesignated and amended by Pub. L. 101-239, 
Sec. 10403(c)(1), substituted ``1981 through 1985'' for ``1982 through 
1984''.
    Subsec. (b)(4)(A). Pub. L. 98-369, Sec. 2663(c)(18)(A), substituted 
``subparagraph (C)'' for ``subparagraph (c)''.
    Subsec. (b)(4)(B). Pub. L. 98-617, Sec. 4(a)(1)(A), formerly 
Sec. 4(a)(1), as redesignated and amended by Pub. L. 101-239, 
Sec. 10403(c)(1), substituted ``1985'' for ``1984'' after ``1981 
through''.
    Subsec. (b)(5)(A). Pub. L. 98-617, Sec. 4(a)(3)(A), substituted 
``October 1, 1985'' for ``October 1, 1984''.
    Subsec. (b)(5)(A)(ii). Pub. L. 98-617, Sec. 4(a)(3)(B), substituted 
``each of fiscal years 1984 and 1985'' for ``fiscal year 1984''.
    Subsec. (c)(1), (2). Pub. L. 98-617, Sec. 4(b), substituted ``1985'' 
for ``1984'' after ``1981 through''.
    Pub. L. 98-369, Sec. 2663(c)(18)(B), substituted ``relevant'' for 
``relvant''.
    Subsec. (d)(1). Pub. L. 98-369, Sec. 2663(c)(18)(C), substituted 
``and (C) such'' for ``and (c) such'' and ``Secretary may find'' for 
``secretary may find''.
    1980--Subsec. (d). Pub. L. 96-611 added subsec. (d).


                    Effective Date of 1998 Amendment

    Amendment by section 301(b), (c) of Pub. L. 105-200 effective as if 
included in the enactment of section 202 of the Adoption and Safe 
Families Act of 1997, Pub. L. 105-89, see section 301(d) of Pub. L. 105-
200, set out as a note under section 671 of this title.


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-89 effective Nov. 19, 1997, except as 
otherwise provided, with delay permitted if State legislation is 
required, see section 501 of Pub. L. 105-89, set out as a note under 
section 622 of this title.


                    Effective Date of 1994 Amendment

    Section 207(c) of Pub. L. 103-432 provided that: ``The amendments 
and repeals made by this section [amending this section] shall apply to 
payments for calendar quarters beginning on or after October 1, 1993.''
    Section 210(b) of Pub. L. 103-432 provided that: ``The amendment 
made by subsection (a) [amending this section] shall be effective with 
respect to claims made on or after the date of the enactment of this Act 
[Oct. 31, 1994].''


                    Effective Date of 1993 Amendment

    Section 13713(a)(3) of Pub. L. 103-66 provided that: ``The 
amendments made by this subsection [amending this section] shall take 
effect on October 1, 1993.''
    Section 13713(b)(2) of Pub. L. 103-66, as amended by Pub. L. 104-
193, title V, Sec. 502, Aug. 22, 1996, 110 Stat. 2277, provided that: 
``The amendment made by paragraph (1) [amending this section] shall 
apply to expenditures during fiscal years beginning on or after October 
1, 1997.''


                    Effective Date of 1990 Amendment

    Section 5071(b) of Pub. L. 101-508 provided that: ``The amendment 
made by subsection (a) [amending this section] shall take effect on the 
date of the enactment of this Act [Nov. 5, 1990].''


                    Effective Date of 1989 Amendment

    Section 8001(b) of Pub. L. 101-239 provided that: ``The amendments 
made by subsection (a) [amending this section] shall take effect on 
October 1, 1989.''
    Section 8002(e) of Pub. L. 101-239 provided that: ``The amendments 
made by subsections (a), (b) and (c) [amending this section and section 
677 of this title] shall take effect October 1, 1989.''
    Section 8006(b) of Pub. L. 101-239, as amended by Pub. L. 103-66, 
title XIII, Sec. 13715, Aug. 10, 1993, 107 Stat. 657, provided that: 
``The amendments made by subsection (a) [amending this section] shall 
apply to expenditures made on or after October 1, 1989, and before 
October 1, 1992, and to expenditures made on or after October 1, 1993.''
    Amendment by section 10401(a) of Pub. L. 101-239 effective Oct. 1, 
1989, see section 10401(b) of Pub. L. 101-239, set out as a note under 
section 620 of this title.
    Section 10402(b) of Pub. L. 101-239 provided that: ``The amendments 
made by subsection (a) [amending this section] shall take effect on 
October 1, 1989.''
    Section 10403(c)(2) of Pub. L. 101-239 provided that: ``The 
amendment made by paragraph (1) of this subsection [amending this 
section] shall take effect as if included in section 4 of Public Law 98-
617 at the time such section became law [enacted Nov. 8, 1974].''


                    Effective Date of 1987 Amendment

    Section 9132(b) of Pub. L. 100-203 provided that: ``The amendments 
made by subsection (a) [amending this section] shall become effective 
October 1, 1987.''


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 effective July 18, 1984, but not to be 
construed as changing or affecting any right, liability, status, or 
interpretation which existed (under the provisions of law involved) 
before that date, see section 2664(b) of Pub. L. 98-369, set out as a 
note under section 401 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 673, 673b, 677 of this 
title; title 2 section 906.
