Section 403(a)(3) of the Social Security Act as amended, provides for supplemental grants beginning in FY 1998 to States 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 FY’s 1998 through 2001.

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 per capita welfare spending and very high rates of population growth we deemed 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.

Certain States automatically are deemed qualified for supplemental grants for fiscal years 1998 through 2001. A State is deemed automatically qualified for FY’s 1998 through 2001 if either:

1. the level of welfare spending per poor person by the State in FY 1994 was less than 35 percent of the national average, or
2. the State's population increased by more than 10 percent between April 1, 1990 and July 1, 1994.

These States are;

These States will receive supplemental grants in the amounts described below under "Amount of Supplemental Grant" and shown in Columns "(o)" through "(r)" in Attachment I for each of fiscal years 1998 through 2001. 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(aX3)(C)(iii).)

Other States may qualify for a fiscal year if, the level of welfare spending per poor person in the State for the immediately preceding fiscal year is less than the national average; and 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)(Qi).)

The following additional States an 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

For FY 2001, 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." The "total amount required to be paid" is shown in Column "(a)' of Attachment 1. The supplemental grant for FY 2001 is shown in Column "(r)" of Attachment 1.

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 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.)

States do not have to apply for supplemental grants; ACF will issue those grants automatically to qualifying States. 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 2001 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.

ACF will award supplemental grants quarterly, pursuant to section 4W(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, an 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(a), supplemental grant funds for use in subsequent fiscal years. As with SFAG funds. ACF assumes that all States will elect to so resave 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 I (A)-Awarded, of the ACF-196 along with the SFAG funds.

Attachment:

Supplemental Grants to States with Population Growth and/or Low Grants per Poor Person (HTML)
Excel Spreadsheet

(a) The total amount required to be paid to the State under former Sec. 403 for FY 1994, plus the amount issued to the State for Supplemental Grants for Population Increases in FY 2000.

(b) The number of individuals, according to the 1990 census who were residents of the State and whose income was below the poverty line.

(c) (a) divided by (b). The national average of (c) equals the total of (a) divided by the total of (b).

(d) percentage of each State's amount of (C) of the tow.

(e) Amounts for (d) that we less than 35%.

(f) Increase in population greater than 10% between 1990 and 1994.

(g) December 1999 census estimates for 1998.

(h) December 1999 census estimates for 1999.

(I) (h) minus (g).

(j) (I) divided by (g). The national average of (j) equals the total of (i) divided by the total of (g),

(k) Amounts for (c) that am greater than the national average of (j).

(l) Amounts for (c) that are less than the national average of (c).

(m) States that have previously qualified and continue to meet dual qualifications.

(n) All States that are lea than 35% in (e) or greater than 10% in (f) are automatic. States that qualify in (m) that are not "automatic are listed as "qualify"

(o) The amount of Supplemental Grants issued to States in FY 1998.

(p) The amount of Supplemental, Grants issued to States in FY 1999.

(q) The amount of Supplemental, Grants issued to States in FY 2000.

(r) The amount of Supplemental, Grants to be issued to States in FY 2001.