42 U.S.C. § 604 : US Code - Section 604: Use of grants

Search 42 U.S.C. § 604 : US Code - Section 604: Use of grants

(a) General rules
Subject to this part, a State to which a grant is made under
section 603 of this title may use the grant -
(1) in any manner that is reasonably calculated to accomplish
the purpose of this part, including to provide low income
households with assistance in meeting home heating and cooling
costs; or
(2) in any manner that the State was authorized to use amounts
received under part A or F of this subchapter, as such parts were
in effect on September 30, 1995, or (at the option of the State)
August 21, 1996.
(b) Limitation on use of grant for administrative purposes
(1) Limitation
A State to which a grant is made under section 603 of this
title shall not expend more than 15 percent of the grant for
administrative purposes.
(2) Exception
Paragraph (1) shall not apply to the use of a grant for
information technology and computerization needed for tracking or
monitoring required by or under this part.
(c) Authority to treat interstate immigrants under rules of former
State
A State operating a program funded under this part may apply to a
family the rules (including benefit amounts) of the program funded
under this part of another State if the family has moved to the
State from the other State and has resided in the State for less
than 12 months.
(d) Authority to use portion of grant for other purposes
(1) In general
Subject to paragraph (2), a State may use not more than 30
percent of the amount of any grant made to the State under
section 603(a) of this title for a fiscal year to carry out a
State program pursuant to any or all of the following provisions
of law:
(A) Subchapter XX of this chapter.
(B) The Child Care and Development Block Grant Act of 1990
[42 U.S.C. 9858 et seq.].
(2) Limitation on amount transferable to subchapter XX programs
(A) In general
A State may use not more than the applicable percent of the
amount of any grant made to the State under section 603(a) of
this title for a fiscal year to carry out State programs
pursuant to subchapter XX of this chapter.
(B) Applicable percent
For purposes of subparagraph (A), the applicable percent is
4.25 percent in the case of fiscal year 2001 and each
succeeding fiscal year.
(3) Applicable rules
(A) In general
Except as provided in subparagraph (B) of this paragraph, any
amount paid to a State under this part that is used to carry
out a State program pursuant to a provision of law specified in
paragraph (1) shall not be subject to the requirements of this
part, but shall be subject to the requirements that apply to
Federal funds provided directly under the provision of law to
carry out the program, and the expenditure of any amount so
used shall not be considered to be an expenditure under this
part.
(B) Exception relating to subchapter XX programs
All amounts paid to a State under this part that are used to
carry out State programs pursuant to subchapter XX of this
chapter shall be used only for programs and services to
children or their families whose income is less than 200
percent of the income official poverty line (as defined by the
Office of Management and Budget, and revised annually in
accordance with section 9902(2) of this title) applicable to a
family of the size involved.
(e) Authority to reserve certain amounts for assistance
A State or tribe may reserve amounts paid to the State or tribe
under this part for any fiscal year for the purpose of providing,
without fiscal year limitation, assistance under the State or
tribal program funded under this part.
(f) Authority to operate employment placement program
A State to which a grant is made under section 603 of this title
may use the grant to make payments (or provide job placement
vouchers) to State-approved public and private job placement
agencies that provide employment placement services to individuals
who receive assistance under the State program funded under this
part.
(g) Implementation of electronic benefit transfer system
A State to which a grant is made under section 603 of this title
is encouraged to implement an electronic benefit transfer system
for providing assistance under the State program funded under this
part, and may use the grant for such purpose.
(h) Use of funds for individual development accounts
(1) In general
A State to which a grant is made under section 603 of this
title may use the grant to carry out a program to fund individual
development accounts (as defined in paragraph (2)) established by
individuals eligible for assistance under the State program
funded under this part.
(2) Individual development accounts
(A) Establishment
Under a State program carried out under paragraph (1), an
individual development account may be established by or on
behalf of an individual eligible for assistance under the State
program operated under this part for the purpose of enabling
the individual to accumulate funds for a qualified purpose
described in subparagraph (B).
(B) Qualified purpose
A qualified purpose described in this subparagraph is 1 or
more of the following, as provided by the qualified entity
providing assistance to the individual under this subsection:
(i) Postsecondary educational expenses
Postsecondary educational expenses paid from an individual
development account directly to an eligible educational
institution.
(ii) First home purchase
Qualified acquisition costs with respect to a qualified
principal residence for a qualified first-time homebuyer, if
paid from an individual development account directly to the
persons to whom the amounts are due.
(iii) Business capitalization
Amounts paid from an individual development account
directly to a business capitalization account which is
established in a federally insured financial institution and
is restricted to use solely for qualified business
capitalization expenses.
(C) Contributions to be from earned income
An individual may only contribute to an individual
development account such amounts as are derived from earned
income, as defined in section 911(d)(2) of the Internal Revenue
Code of 1986.
(D) Withdrawal of funds
The Secretary shall establish such regulations as may be
necessary to ensure that funds held in an individual
development account are not withdrawn except for 1 or more of
the qualified purposes described in subparagraph (B).
(3) Requirements
(A) In general
An individual development account established under this
subsection shall be a trust created or organized in the United
States and funded through periodic contributions by the
establishing individual and matched by or through a qualified
entity for a qualified purpose (as described in paragraph
(2)(B)).
(B) "Qualified entity" defined
As used in this subsection, the term "qualified entity" means
-
(i) a not-for-profit organization described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt
from taxation under section 501(a) of such Code; or
(ii) a State or local government agency acting in
cooperation with an organization described in clause (i).
(4) No reduction in benefits
Notwithstanding any other provision of Federal law (other than
the Internal Revenue Code of 1986) that requires consideration of
1 or more financial circumstances of an individual, for the
purpose of determining eligibility to receive, or the amount of,
any assistance or benefit authorized by such law to be provided
to or for the benefit of such individual, funds (including
interest accruing) in an individual development account under
this subsection shall be disregarded for such purpose with
respect to any period during which such individual maintains or
makes contributions into such an account.
(5) Definitions
As used in this subsection -
(A) Eligible educational institution
The term "eligible educational institution" means the
following:
(i) An institution described in section 1088(a)(1) or
1141(a) of title 20, as such sections are in effect on August
22, 1996.
(ii) An area vocational education school (as defined in
subparagraph (C) or (D) of section 2471(4) of title 20) which
is in any State (as defined in section 2471(33) of title 20),
as such sections are in effect on August 22, 1996.
(B) Post-secondary educational expenses
The term "post-secondary educational expenses" means -
(i) tuition and fees required for the enrollment or
attendance of a student at an eligible educational
institution, and
(ii) fees, books, supplies, and equipment required for
courses of instruction at an eligible educational
institution.
(C) Qualified acquisition costs
The term "qualified acquisition costs" means the costs of
acquiring, constructing, or reconstructing a residence. The
term includes any usual or reasonable settlement, financing, or
other closing costs.
(D) Qualified business
The term "qualified business" means any business that does
not contravene any law or public policy (as determined by the
Secretary).
(E) Qualified business capitalization expenses
The term "qualified business capitalization expenses" means
qualified expenditures for the capitalization of a qualified
business pursuant to a qualified plan.
(F) Qualified expenditures
The term "qualified expenditures" means expenditures included
in a qualified plan, including capital, plant, equipment,
working capital, and inventory expenses.
(G) Qualified first-time homebuyer
(i) In general
The term "qualified first-time homebuyer" means a taxpayer
(and, if married, the taxpayer's spouse) who has no present
ownership interest in a principal residence during the 3-year
period ending on the date of acquisition of the principal
residence to which this subsection applies.
(ii) Date of acquisition
The term "date of acquisition" means the date on which a
binding contract to acquire, construct, or reconstruct the
principal residence to which this subparagraph applies is
entered into.
(H) Qualified plan
The term "qualified plan" means a business plan which -
(i) is approved by a financial institution, or by a
nonprofit loan fund having demonstrated fiduciary integrity,
(ii) includes a description of services or goods to be
sold, a marketing plan, and projected financial statements,
and
(iii) may require the eligible individual to obtain the
assistance of an experienced entrepreneurial advisor.
(I) Qualified principal residence
The term "qualified principal residence" means a principal
residence (within the meaning of section 1034 of the Internal
Revenue Code of 1986), the qualified acquisition costs of which
do not exceed 100 percent of the average area purchase price
applicable to such residence (determined in accordance with
paragraphs (2) and (3) of section 143(e) of such Code).
(i) Sanction welfare recipients for failing to ensure that minor
dependent children attend school
A State to which a grant is made under section 603 of this title
shall not be prohibited from sanctioning a family that includes an
adult who has received assistance under any State program funded
under this part attributable to funds provided by the Federal
Government or under the food stamp program, as defined in section
2012(h) of title 7, if such adult fails to ensure that the minor
dependent children of such adult attend school as required by the
law of the State in which the minor children reside.
(j) Requirement for high school diploma or equivalent
A State to which a grant is made under section 603 of this title
shall not be prohibited from sanctioning a family that includes an
adult who is older than age 20 and younger than age 51 and who has
received assistance under any State program funded under this part
attributable to funds provided by the Federal Government or under
the food stamp program, as defined in section 2012(h) of title 7,
if such adult does not have, or is not working toward attaining, a
secondary school diploma or its recognized equivalent unless such
adult has been determined in the judgment of medical, psychiatric,
or other appropriate professionals to lack the requisite capacity
to complete successfully a course of study that would lead to a
secondary school diploma or its recognized equivalent.
(k) Limitations on use of grant for matching under certain Federal
transportation program
(1) Use limitations
A State to which a grant is made under section 603 of this
title may not use any part of the grant to match funds made
available under section 3037 of the Transportation Equity Act for
the 21st Century, unless -
(A) the grant is used for new or expanded transportation
services (and not for construction) that benefit individuals
described in subparagraph (C), and not to subsidize current
operating costs;
(B) the grant is used to supplement and not supplant other
State expenditures on transportation;
(C) the preponderance of the benefits derived from such use
of the grant accrues to individuals who are -
(i) recipients of assistance under the State program funded
under this part;
(ii) former recipients of such assistance;
(iii) noncustodial parents who are described in section
603(a)(5)(C)(iii) of this title; and
(iv) low-income individuals who are at risk of qualifying
for such assistance; and
(D) the services provided through such use of the grant
promote the ability of such recipients to engage in work
activities (as defined in section 607(d) of this title).
(2) Amount limitation
From a grant made to a State under section 603(a) of this
title, the amount that a State uses to match funds described in
paragraph (1) of this subsection shall not exceed the amount (if
any) by which 30 percent of the total amount of the grant exceeds
the amount (if any) of the grant that is used by the State to
carry out any State program described in subsection (d)(1) of
this section.
(3) Rule of interpretation
The provision by a State of a transportation benefit under a
program conducted under section 3037 of the Transportation Equity
Act for the 21st Century, to an individual who is not otherwise a
recipient of assistance under the State program funded under this
part, using funds from a grant made under section 603(a) of this
title, shall not be considered to be the provision of assistance
to the individual under the State program funded under this part.