42 U.S.C. § 609 — Penalties

Page 2185 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 established under that Act, see section 4002(c) of Pub. L. 110–246, set out as a note under section 2012 of Title 7, Agriculture. § 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 of title 31 finds that an amount paid to a State under section 603 of this title for a fiscal year has been used in violation of this part, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year quarter by the amount so used. (B) Enhanced penalty for intentional viola- tions If the State does not prove to the satisfac- tion of the Secretary that the State did not intend to use the amount in violation of this part, the Secretary shall further reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year quarter by an amount equal to 5 percent of the State family assist- ance grant. (C) Penalty for misuse of competitive wel- fare-to-work funds If the Secretary of Labor finds that an amount paid to an entity under section 603(a)(5)(B) of this title has been used in vio- lation of subparagraph (B) or (C) of section 603(a)(5) of this title, the entity shall remit to the Secretary 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 determines that a State has not, within 45 days after the end of a fiscal quarter, submitted the report re- quired by section 611(a) of this title for the quarter, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year by an amount equal to 4 percent of the State family assistance grant. (ii) Rescission of penalty The Secretary shall rescind a penalty imposed on a State under clause (i) with respect to a report if the State submits the report before the end of the fiscal quarter that immediately succeeds the fiscal quar- ter for which the report was required. (B) Report on engagement in additional work activities and expenditures for other ben- efits and services (i) In general If the Secretary determines that a State has not submitted the report required by section 611(c)(1)(A)(i) of this title by May 31, 2011, or the report required by section 611(c)(1)(A)(ii) of this title by August 31, 2011, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately suc- ceeding fiscal year by an amount equal to not more than 4 percent of the State fam- ily assistance grant. (ii) Rescission of penalty The Secretary shall rescind a penalty imposed on a State under clause (i) with respect to a report required by section 611(c)(1)(A) of this title if the State sub- mits the report not later than— (I) in the case of the report required under section 611(c)(1)(A)(i) of this title, June 15, 2011; and (II) in the case of the report required under section 611(c)(1)(A)(ii) of this title, September 15, 2011. (iii) Penalty based on severity of failure The Secretary shall impose a reduction under clause (i) with respect to a fiscal year based on the degree of noncompli- ance. (3) Failure to satisfy minimum participation rates (A) In general If the Secretary determines that a State to which a grant is made under section 603 of this title for a fiscal year has failed to com- ply with section 607(a) of this title for the fiscal year, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year by an amount equal to the applicable percentage of the State fam- ily assistance grant. (B) ‘‘Applicable percentage’’ defined As used in subparagraph (A), the term ‘‘ap- plicable percentage’’ means, with respect to a State— (i) if a penalty was not imposed on the State under subparagraph (A) for the im- mediately preceding fiscal year, 5 percent; or (ii) if a penalty was imposed on the State under subparagraph (A) for the imme- diately preceding fiscal year, the lesser of— (I) the percentage by which the grant payable to the State under section 603(a)(1) of this title was reduced for such preceding fiscal year, increased by 2 per- centage points; or (II) 21 percent. (C) Penalty based on severity of failure The Secretary shall impose reductions under subparagraph (A) with respect to a fis- cal year based on the degree of noncompli- ance, and may reduce the penalty if the non- compliance is due to circumstances that caused the State to become a needy State (as defined in section 603(b)(5) of this title) during the fiscal year or if the noncompli- ance is due to extraordinary circumstances such as a natural disaster or regional reces- sion. The Secretary shall provide a written Page 2186 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 report to Congress to justify any waiver or penalty reduction due to such extraordinary circumstances. (4) Failure to participate in the income and eli- gibility verification system If the Secretary determines that a State program funded under this part is not partici- pating during a fiscal year in the income and eligibility verification system required by sec- tion 1320b–7 of this title, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the imme- diately succeeding fiscal year by an amount equal to not more than 2 percent of the State family assistance grant. (5) Failure to comply with paternity establish- ment and child support enforcement re- quirements under part D Notwithstanding any other provision of this chapter, if the Secretary determines that the State agency that administers a program funded under this part does not enforce the penalties requested by the agency admin- istering part D against recipients of assistance under the State program who fail to cooperate in establishing paternity or in establishing, modifying, or enforcing a child support order in accordance with such part and who do not qualify for any good cause or other exception established by the State under section 654(29) of this title, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately suc- ceeding fiscal year (without regard to this sec- tion) by not more than 5 percent. (6) Failure to timely repay a Federal Loan Fund for State Welfare Programs If the Secretary determines that a State has failed to repay any amount borrowed from the Federal Loan Fund for State Welfare Pro- grams established under section 606 of this title within the period of maturity applicable to the loan, plus any interest owed on the loan, the Secretary shall reduce the grant pay- able to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year quarter (without regard to this section) by the outstanding loan amount, plus the in- terest owed on the outstanding amount. The Secretary shall not forgive any outstanding loan amount or interest owed on the out- standing amount. (7) Failure of any State to maintain certain level of historic effort (A) In general The Secretary shall reduce the grant pay- able to the State under section 603(a)(1) of this title for a fiscal year by the amount (if any) by which qualified State expenditures for the then immediately preceding fiscal year are less than the applicable percentage of historic State expenditures with respect to such preceding fiscal year. (B) Definitions As used in this paragraph: (i) Qualified State expenditures (I) In general The term ‘‘qualified State expendi- tures’’ means, with respect to a State and a fiscal year, the total expenditures by the State during the fiscal year, under all State programs, for any of the following with respect to eligible fami- lies: (aa) Cash assistance, including any amount collected by the State as sup- port 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 distrib- uted 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 as- sistance. (bb) Child care assistance. (cc) Educational activities designed to increase self-sufficiency, job train- ing, and work, excluding any expendi- ture for public education in the State except expenditures which involve the provision of services or assistance to a member of an eligible family which is not generally available to persons who are not members of an eligible family. (dd) Administrative costs in connec- tion with the matters described in items (aa), (bb), (cc), and (ee), but only to the extent that such costs do not ex- ceed 15 percent of the total amount of qualified State expenditures for the fiscal year. (ee) Any other use of funds allowable under section 604(a)(1) of this title. (II) Exclusion of transfers from other State and local programs Such term does not include expendi- tures under any State or local program during a fiscal year, except to the extent that— (aa) the expenditures exceed the amount expended under the State or local program in the fiscal year most recently ending before August 22, 1996; or (bb) the State is entitled to a pay- ment under former section 603 of this title (as in effect immediately before August 22, 1996) with respect to the ex- penditures. (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). (IV) Eligible families As used in subclause (I), the term ‘‘eli- gible families’’ means families eligible for assistance under the State 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, 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 [8 U.S.C. 1601 et seq.]. Page 2187 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 1 See References in Text note below. (V) Counting of spending on certain pro- family activities The term ‘‘qualified State expendi- tures’’ includes the total expenditures by the State during the fiscal year under all State programs for a purpose described in paragraph (3) or (4) of section 601(a) of this title. (ii) Applicable percentage The term ‘‘applicable percentage’’ means 80 percent (or, if the State meets the re- quirements of section 607(a) of this title, 75 percent). (iii) Historic State expenditures The term ‘‘historic State expenditures’’ means, with respect to a State, the lesser of— (I) the expenditures by the State under parts A and F (as in effect during fiscal year 1994) for fiscal year 1994; or (II) the amount which bears the same ratio to the amount described in sub- clause (I) as— (aa) the State family assistance grant, plus the total amount required to be paid to the State under former section 603 of this title for fiscal year 1994 with respect to amounts expended by the State for child care under sub- section (g) or (i) of section 602 of this title (as in effect during fiscal year 1994); bears to (bb) the total amount required to be paid to the State under former section 603 of this title (as in effect during fis- cal year 1994) for fiscal year 1994. Such term does not include any expendi- tures under the State plan approved under part A (as so in effect) on behalf of individ- uals covered by a tribal family assistance plan approved under section 612 of this title, as determined by the Secretary. (iv) Expenditures by the State The term ‘‘expenditures by the State’’ does not include— (I) any expenditure from amounts made available by the Federal Govern- ment; (II) any State funds expended for the medicaid program under subchapter XIX; (III) any State funds which are used to match Federal funds provided under sec- tion 603(a)(5) of this title; or (IV) any State funds which are ex- pended as a condition of receiving Fed- eral funds other than under this part. Notwithstanding subclause (IV) of the pre- ceding sentence, such term includes ex- penditures by a State for child care in a fiscal year to the extent that the total amount of the expenditures does not ex- ceed the amount of State expenditures in fiscal year 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. (v) Source of data In determining expenditures by a State for fiscal years 1994 and 1995, the Secretary shall use information which was reported by the State on ACF Form 231 or (in the case of expenditures under part F) ACF Form 331, available as of the dates speci- fied in clauses (ii) and (iii) of section 603(a)(1)(D) 1 of this title. (8) Noncompliance of State child support en- forcement program with requirements of part D (A) In general If the Secretary finds, with respect to a State’s program under part D, in a fiscal year beginning on or after October 1, 1997— (i)(I) on the basis of data submitted by a State pursuant to section 654(15)(B) of this title, or on the basis of the results of a re- view conducted under section 652(a)(4) of this title, that the State program failed to achieve the paternity establishment per- centages (as defined in section 652(g)(2) of this title), or to meet other performance measures that may be established by the Secretary; (II) on the basis of the results of an audit or audits conducted under section 652(a)(4)(C)(i) of this title that the State data submitted pursuant to section 654(15)(B) of this title is incomplete or un- reliable; or (III) on the basis of the results of an audit or audits conducted under section 652(a)(4)(C) of this title that a State 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); and (ii) that, with respect to the succeeding fiscal year— (I) the State failed to take sufficient corrective action to achieve the appro- priate performance levels or compliance as described in subparagraph (A)(i); or (II) the data submitted by the State pursuant to section 654(15)(B) of this title is incomplete or unreliable; the amounts otherwise payable to the State under this part for quarters following the end of such succeeding fiscal year, prior to quarters following the end of the first quar- ter throughout which the State program has achieved the paternity establishment per- centages or other performance measures as described in subparagraph (A)(i)(I), or is in substantial compliance with 1 or more of the requirements of part D as described in sub- paragraph (A)(i)(III), as appropriate, shall be reduced by the percentage specified in sub- paragraph (B). (B) Amount of reductions The reductions required under subpara- graph (A) shall be— (i) not less than 1 nor more than 2 per- cent; (ii) not less than 2 nor more than 3 per- cent, if the finding is the 2nd consecutive finding made pursuant to subparagraph (A); or Page 2188 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 (iii) not less than 3 nor more than 5 per- cent, if the finding is the 3rd or a subse- quent 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, a State determined as a result of an audit— (i) to have failed to have substantially complied with 1 or more of the require- ments of part D shall be determined to have achieved substantial compliance only if the Secretary determines that the ex- tent of the noncompliance is of a technical nature which does not adversely affect the performance of the State’s program under part D; or (ii) to have submitted incomplete or un- reliable data pursuant to section 654(15)(B) of this title shall be determined to have submitted adequate data only if the Sec- retary determines that the extent of the incompleteness or unreliability of the data is of a technical nature which does not ad- versely affect the determination of the level of the State’s paternity establish- ment percentages (as defined under section 652(g)(2) of this title) or other performance measures that may be established by the Secretary. (9) Failure to comply with 5-year limit on as- sistance If the Secretary determines that a State has not complied with section 608(a)(7) of this title during a fiscal year, the Secretary shall re- duce the grant payable to the State under sec- tion 603(a)(1) of this title for the immediately succeeding fiscal year by an amount equal to 5 percent of the State family assistance grant. (10) Failure of State receiving amounts from Contingency Fund to maintain 100 percent of historic effort If, at the end of any fiscal year during which amounts from the Contingency Fund for State Welfare Programs have been paid to a State, the Secretary finds that the qualified State expenditures (as defined in paragraph (7)(B)(i) (other than the expenditures described in sub- clause (I)(bb) of that paragraph)) under the State program funded under this part for the fiscal year are less than 100 percent of historic State expenditures (as defined in paragraph (7)(B)(iii) of this subsection), 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, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately suc- ceeding fiscal year by the total of the amounts so paid to the State that the State has not re- mitted under section 603(b)(6) of this title. (11) Failure to maintain assistance to adult sin- gle custodial parent who cannot obtain child care for child under age 6 (A) In general If the Secretary determines that a State to which a grant is made under section 603 of this title for a fiscal year has violated sec- tion 607(e)(2) of this title during the fiscal year, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year by an amount equal to not more than 5 percent of the State family assistance grant. (B) Penalty based on severity of failure The Secretary shall impose reductions under subparagraph (A) with respect to a fis- cal year based on the degree of noncompli- ance. (12) Requirement to expend additional State funds to replace grant reductions; penalty for failure to do so If the grant payable to a State under section 603(a)(1) of this title for a fiscal year is re- duced by reason of this subsection, the State shall, during the immediately succeeding fis- cal year, expend under the State program funded under this part an amount equal to the total amount of such reductions. If the State fails during such succeeding fiscal year to make the expenditure required by the pre- ceding sentence from its own funds, the Sec- retary 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. (13) Penalty for failure of State to maintain historic effort during year in which wel- fare-to-work grant is received If a grant is made to a State under section 603(a)(5)(A) of this title for a fiscal year and paragraph (7) of this subsection requires the grant payable to the State under section 603(a)(1) of this title to be reduced for the im- mediately succeeding fiscal year, then the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for such succeeding fiscal year by the amount of the grant made to the State under section 603(a)(5)(A) of this title for the fiscal year. (14) Penalty for failure to reduce assistance for recipients refusing without good cause to work (A) In general If the Secretary determines that a State to which a grant is made under section 603 of this title in a fiscal year has violated section 607(e) of this title during the fiscal year, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year by an amount equal to not less than 1 per- cent and not more than 5 percent of the State family assistance grant. (B) Penalty based on severity of failure The Secretary shall impose reductions under subparagraph (A) with respect to a fis- cal year based on the degree of noncompli- ance. Page 2189 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 (15) Penalty for failure to establish or comply with work participation verification proce- dures (A) In general If the Secretary determines that a State to which a grant is made under section 603 of this title in a fiscal year has violated section 607(i)(2) of this title during the fiscal year, the Secretary shall reduce the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year by an amount equal to not less than 1 percent and not more than 5 percent of the State family assistance grant. (B) Penalty based on severity of failure The Secretary shall impose reductions under subparagraph (A) with respect to a fis- cal year based on the degree of noncompli- ance. (16) Penalty for failure to enforce spending policies (A) In general If, within 2 years after February 22, 2012, any State has not reported to the Secretary on such State’s implementation of the poli- cies and practices required by section 608(a)(12) of this title, or the Secretary de- termines, based on the information provided in State reports, that any State has not im- plemented and maintained such policies and practices, the Secretary shall reduce, by an amount equal to 5 percent of the State fam- ily assistance grant, the grant payable to such State under section 603(a)(1) of this title for— (i) the fiscal year immediately suc- ceeding the year in which such 2-year pe- riod ends; and (ii) each succeeding fiscal year in which the State does not demonstrate that such State has implemented and maintained such policies and practices. (B) Reduction of applicable penalty The Secretary may reduce the amount of the reduction required under subparagraph (A) based on the degree of noncompliance of the State. (C) State not responsible for individual viola- tions Fraudulent activity by any individual in an attempt to circumvent the policies and practices required by section 608(a)(12) of this title shall not trigger a State penalty under subparagraph (A). (b) Reasonable cause exception (1) In general The Secretary may not impose a penalty on a State under subsection (a) with respect to a requirement if the Secretary determines that the State 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), (7), (8), (10), (12), or (13) of subsection (a) and, with respect to the penalty under paragraph (2)(B) of subsection (a), shall only apply to the ex- tent the Secretary determines that the rea- sonable cause for failure to comply with a re- quirement of that paragraph is as a result of a one-time, unexpected event, such as a wide- spread data system failure or a natural or man-made disaster. (c) Corrective compliance plan (1) In general (A) Notification of violation Before imposing a penalty against a State under subsection (a) with respect to a viola- tion of this part, the Secretary shall notify the State of the violation and allow the State the opportunity to enter into a correc- tive compliance plan in accordance with this subsection which outlines how the State will correct or discontinue, as appropriate, the violation and how the State will insure con- tinuing 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 receives a notice provided under subparagraph (A) with respect to a violation, the State may submit to the Fed- eral Government a corrective compliance plan to correct or discontinue, as appro- priate, the violation. (C) Consultation about modifications During the 60-day period that begins with the date the Secretary receives a corrective compliance plan submitted by a State in ac- cordance with subparagraph (B), the Sec- retary may consult with the State on modi- fications to the plan. (D) Acceptance of plan A corrective compliance plan submitted by a State in accordance with subparagraph (B) is deemed to be accepted by the Secretary if the Secretary 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 viola- tion The Secretary may not impose any penalty under subsection (a) with respect to any viola- tion covered by a State corrective compliance plan accepted by the Secretary if the State corrects or discontinues, as appropriate, the violation pursuant to the plan. (3) Effect of failing to correct or discontinue violation The Secretary shall assess some or all of a penalty imposed on a State under subsection (a) with respect to a violation if the State does not, in a timely manner, correct or dis- continue, as appropriate, the violation pursu- ant to a State corrective compliance plan ac- cepted by the Secretary. (4) Inapplicability to certain penalties This subsection shall not apply to the impo- sition of a penalty against a State under para- graph (2)(B), (6), (7), (8), (10), (12), (13), or (16) of subsection (a). Page 2190 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 (d) Limitation on amount of penalties (1) In general In imposing the penalties described in sub- section (a), the Secretary shall not reduce any quarterly payment to a State by more than 25 percent. (2) Carryforward of unrecovered penalties To the extent that paragraph (1) of this sub- section prevents the Secretary from recov- ering during a fiscal year the full amount of penalties imposed on a State under subsection (a) of this section for a prior fiscal year, the Secretary shall apply any remaining amount of such penalties to the grant payable to the State under section 603(a)(1) of this title for the immediately succeeding fiscal year. (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.) 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 Nation- ality. 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 re- peal 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 pay- ments 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 ear- lier 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), sub- stituted ‘‘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), sub- stituted ‘‘2012, or 2013’’ for ‘‘or 2012’’. Subsec. (a)(7)(B)(ii). Pub. L. 112–35, § 2(b)(2), sub- stituted ‘‘2012’’ for ‘‘2011’’. 2010—Subsec. (a)(2). Pub. L. 111–291, § 812(b)(1), des- ignated 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), sub- stituted ‘‘2011, or 2012’’ for ‘‘or 2011’’. Subsec. (a)(7)(B)(ii). Pub. L. 111–242, § 131(b)(3)(B), sub- stituted ‘‘2011’’ for ‘‘2010’’. Subsec. (b)(2). Pub. L. 111–291, § 812(b)(2), inserted be- fore 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 require- ment of that paragraph is as a result of a one-time, un- expected event, such as a widespread data system fail- ure 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), sub- stituted ‘‘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), sub- stituted ‘‘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), sub- stituted ‘‘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. Page 2191 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 609 Subsec. (a)(8)(A)(i)(III). Pub. L. 106–113 substituted ‘‘paragraph (24), or subparagraph (A) or (B)(i) of para- graph (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 semi- colon. 1997—Pub. L. 105–33, § 5514(c), made technical amend- ment 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 sub- par. (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 pen- alty reduction due to such extraordinary cir- cumstances’’. Subsec. (a)(7)(B)(i)(I)(aa). Pub. L. 105–33, § 5506(b), in- serted before period at end ‘‘, including any amount collected by the State as support pursuant to a plan ap- proved under part D, on behalf of a family receiving as- sistance 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), sub- stituted ‘‘this part, families’’ for ‘‘this part, and fami- lies’’ 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 Oppor- tunity 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 sub- paragraph (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 ‘expendi- tures 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 Fed- eral funds; or ‘‘(IV) any State funds which are expended as a con- dition of receiving Federal funds under Federal pro- grams other than under this part. Notwithstanding subclause (IV) of the preceding sen- tence, 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 head- ing 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 com- plied 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 com- pliance 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 para- graph (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 fis- cal 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 sub- stituted ‘‘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 suc- ceeding fiscal year to make the expenditure required by the preceding sentence from its own funds, the Sec- retary may reduce the grant payable to the State under section 603(a)(1) of this title for the fiscal year that fol- lows 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), in- serted ‘‘or discontinue, as appropriate,’’ after ‘‘cor- rect’’. 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 dis- continue, as appropriate,’’ before ‘‘the violation’’ in text. Subsec. (c)(4). Pub. L. 105–33, § 5506(m), amended head- ing 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.’’ Page 2192 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 610 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 sub- section (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 Oppor- tunity 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 Responsi- bility 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 effec- tive as if included in the provision of Pub. L. 104–193 amended at the time the provision became law, see sec- tion 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 accel- erate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substan- tially 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. § 610. Appeal of adverse decision (a) In general Within 5 days after the date the Secretary takes any adverse action under this part with respect to a State, the Secretary shall notify the chief executive officer of the State of the ad- verse action, including any action with respect to the State plan submitted under section 602 of this title or the imposition of a penalty under section 609 of this title. (b) Administrative review (1) In general Within 60 days after the date a State re- ceives notice under subsection (a) of an ad- verse action, the State may appeal the action, in whole or in part, to the Departmental Ap- peals Board established in the Department of Health and Human Services (in this section re- ferred to as the ‘‘Board’’) by filing an appeal with the Board. (2) Procedural rules The Board shall consider an appeal filed by a State under paragraph (1) on the basis of such documentation as the State may submit and as the Board may require to support the final decision of the Board. In deciding wheth- er to uphold an adverse action or any portion of such an action, the Board shall conduct a thorough review of the issues and take into ac- count all relevant evidence. The Board shall make a final determination with respect to an appeal filed under paragraph (1) not less than 60 days after the date the appeal is filed. (c) Judicial review of adverse decision (1) In general Within 90 days after the date of a final deci- sion by the Board under this section with re- spect to an adverse action taken against a State, the State may obtain judicial review of the final decision (and the findings incor- porated into the final decision) by filing an ac- tion in— (A) the district court of the United States for the judicial district in which the prin- cipal or headquarters office of the State agency is located; or (B) the United States District Court for the District of Columbia. (2) Procedural rules The district court in which an action is filed under paragraph (1) shall review the final deci- sion of the Board on the record established in the administrative proceeding, in accordance with the standards of review prescribed by subparagraphs (A) through (E) of section 706(2) of title 5. The review shall be on the basis of the documents and supporting data submitted to the Board. (Aug. 14, 1935, ch. 531, title IV, § 410, as added Pub. L. 104–193, title I, § 103(a)(1), Aug. 22, 1996, 110 Stat. 2148; amended Pub. L. 105–33, title V, § 5514(c), Aug. 5, 1997, 111 Stat. 620.) Editorial Notes PRIOR PROVISIONS A prior section 610, act Aug. 14, 1935, ch. 531, title IV, § 410, as added Oct. 21, 1976, Pub. L. 94–585, § 1(a), 90 Stat. 2901; amended July 18, 1984, Pub. L. 98–369, div. B, title VI, § 2663(c)(6), 98 Stat. 1166, related to food stamp pro- gram coupons, 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 610, act Aug. 14, 1935, ch. 531, title IV, § 410, as added Jan. 2, 1968, Pub. L. 90–248, title II, § 211(b), 81 Stat. 897, provided for furnishing by Sec- retary to Secretary of the Treasury the names of par- ents contained in reports from State agencies, for as- certainment of addresses, and authorization for appro- priations for such purpose, prior to repeal by Pub. L. 93–647, § 101(c)(8), Jan. 4, 1975, 88 Stat. 2360, eff. July 1, 1975. AMENDMENTS 1997—Pub. L. 105–33 made technical amendment to di- rectory language of Pub. L. 104–193, § 103(a)(1), which en- acted this section. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Amendment by 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 transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings com- menced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Sec- retary for Family Support, and provisions relating to termination of entitlement under AFDC program, see section 116 of Pub. L. 104–193, as amended, set out as a note under section 601 of this title.