7 U.S.C. § 2025 : US Code - Section 2025: Administrative cost-sharing and quality control

Search 7 U.S.C. § 2025 : US Code - Section 2025: Administrative cost-sharing and quality control

(a) Administrative costs
Subject to subsection (k) of this section, the Secretary is
authorized to pay to each State agency an amount equal to 50 per
centum of all administrative costs involved in each State agency's
operation of the food stamp program, which costs shall include, but
not be limited to, the cost of (1) the certification of applicant
households, (2) the acceptance, storage, protection, control, and
accounting of coupons after their delivery to receiving points
within the State, (3) the issuance of coupons to all eligible
households, (4) food stamp informational activities, including
those undertaken under section 2020(e)(1)(A) of this title, but not
including recruitment activities, (5) fair hearings, (6) automated
data processing and information retrieval systems subject to the
conditions set forth in subsection (g) of this section, (7) food
stamp program investigations and prosecutions, and (8) implementing
and operating the immigration status verification system
established under section 1137(d) of the Social Security Act (42
U.S.C. 1320b-7(d)): Provided, That the Secretary is authorized at
the Secretary's discretion to pay any State agency administering
the food stamp program on all or part of an Indian reservation
under section 2020(d) of this title or in a Native village within
the State of Alaska identified in section 1610(b) of title 43.(!1)
such amounts for administrative costs as the Secretary determines
to be necessary for effective operation of the food stamp program,
as well as to permit each State to retain 35 percent of the value
of all funds or allotments recovered or collected pursuant to
sections 2015(b) and 2022(c) of this title and 20 percent of the
value of any other funds or allotments recovered or collected,
except the value of funds or allotments recovered or collected that
arise from an error of a State agency. The officials responsible
for making determinations of ineligibility under this chapter shall
not receive or benefit from revenues retained by the State under
the provisions of this subsection.
(b) Work supplementation or support program
(1) "Work supplementation or support program" defined
In this subsection, the term "work supplementation or support
program" means a program under which, as determined by the
Secretary, public assistance (including any benefits provided
under a program established by the State and the food stamp
program) is provided to an employer to be used for hiring and
employing a public assistance recipient who was not employed by
the employer at the time the public assistance recipient entered
the program.
(2) Program
A State agency may elect to use an amount equal to the
allotment that would otherwise be issued to a household under the
food stamp program, but for the operation of this subsection, for
the purpose of subsidizing or supporting a job under a work
supplementation or support program established by the State.
(3) Procedure
If a State agency makes an election under paragraph (2) and
identifies each household that participates in the food stamp
program that contains an individual who is participating in the
work supplementation or support program - 
(A) the Secretary shall pay to the State agency an amount
equal to the value of the allotment that the household would be
eligible to receive but for the operation of this subsection;
(B) the State agency shall expend the amount received under
subparagraph (A) in accordance with the work supplementation or
support program in lieu of providing the allotment that the
household would receive but for the operation of this
subsection;
(C) for purposes of - 
(i) sections 2014 and 2017(a) of this title, the amount
received under this subsection shall be excluded from
household income and resources; and
(ii) section 2017(b) of this title, the amount received
under this subsection shall be considered to be the value of
an allotment provided to the household; and
(D) the household shall not receive an allotment from the
State agency for the period during which the member continues
to participate in the work supplementation or support program.
(4) Other work requirements
No individual shall be excused, by reason of the fact that a
State has a work supplementation or support program, from any
work requirement under section 2015(d) of this title, except
during the periods in which the individual is employed under the
work supplementation or support program.
(5) Length of participation
A State agency shall provide a description of how the public
assistance recipients in the program shall, within a specific
period of time, be moved from supplemented or supported
employment to employment that is not supplemented or supported.
(6) Displacement
A work supplementation or support program shall not displace
the employment of individuals who are not supplemented or
supported.
(c) Quality control system
(1) In general
(A) System
In carrying out the food stamp program, the Secretary shall
carry out a system that enhances payment accuracy and improves
administration by establishing fiscal incentives that require
State agencies with high payment error rates to share in the
cost of payment error.
(B) Adjustment of Federal share of administrative costs for
fiscal years before fiscal year 2003
(i) In general
Subject to clause (ii), with respect to any fiscal year
before fiscal year 2003, the Secretary shall adjust a State
agency's federally funded share of administrative costs under
subsection (a) of this section, other than the costs already
shared in excess of 50 percent under the proviso in the first
sentence of subsection (a) of this section or under
subsection (g) of this section, by increasing that share of
all such administrative costs by 1 percentage point to a
maximum of 60 percent of all such administrative costs for
each full  1/10  of a percentage point by which the payment
error rate is less than 6 percent.
(ii) Limitation
Only States with a rate of invalid decisions in denying
eligibility that is less than a nationwide percentage that
the Secretary determines to be reasonable shall be entitled
to the adjustment under clause (i).
(C) Establishment of liability amount for fiscal year 2003 and
thereafter
With respect to fiscal year 2004 and any fiscal year
thereafter for which the Secretary determines that, for the
second or subsequent consecutive fiscal year, a 95 percent
statistical probability exists that the payment error rate of a
State agency exceeds 105 percent of the national performance
measure for payment error rates announced under paragraph (6),
the Secretary shall establish an amount for which the State
agency may be liable (referred to in this paragraph as the
"liability amount") that is equal to the product obtained by
multiplying - 
(i) the value of all allotments issued by the State agency
in the fiscal year;
(ii) the difference between - 
(I) the payment error rate of the State agency; and
(II) 6 percent; and
(iii) 10 percent.
(D) Authority of Secretary with respect to liability amount
With respect to the liability amount established for a State
agency under subparagraph (C) for any fiscal year, the
Secretary shall - 
(i)(I) waive the responsibility of the State agency to pay
all or any portion of the liability amount established for
the fiscal year (referred to in this paragraph as the "waiver
amount");
(II) require that a portion, not to exceed 50 percent, of
the liability amount established for the fiscal year be used
by the State agency for new investment, approved by the
Secretary, to improve administration by the State agency of
the food stamp program (referred to in this paragraph as the
"new investment amount"), which new investment amount shall
not be matched by Federal funds;
(III) designate a portion, not to exceed 50 percent, of the
amount established for the fiscal year for payment to the
Secretary in accordance with subparagraph (E) (referred to in
this paragraph as the "at-risk amount"); or
(IV) take any combination of the actions described in
subclauses (I) through (III); or
(ii) make the determinations described in clause (i) and
enter into a settlement with the State agency, only with
respect to any waiver amount or new investment amount, before
the end of the fiscal year in which the liability amount is
determined under subparagraph (C).
(E) Payment of at-risk amount for certain States
(i) In general
A State agency shall pay to the Secretary the at-risk
amount designated under subparagraph (D)(i)(III) for any
fiscal year in accordance with clause (ii), if, with respect
to the immediately following fiscal year, a liability amount
has been established for the State agency under subparagraph
(C).
(ii) Method of payment of at-risk amount
(I) Remission to the Secretary
In the case of a State agency required to pay an at-risk
amount under clause (i), as soon as practicable after
completion of all administrative and judicial reviews with
respect to that requirement to pay, the chief executive
officer of the State shall remit to the Secretary the at-
risk amount required to be paid.
(II) Alternative method of collection
(aa) In general
If the chief executive officer of the State fails to
make the payment under subclause (I) within a reasonable
period of time determined by the Secretary, the Secretary
may reduce any amount due to the State agency under any
other provision of this section by the amount required to
be paid under clause (i).
(bb) Accrual of interest
During any period of time determined by the Secretary
under item (aa), interest on the payment under subclause
(I) shall not accrue under section 2022(a)(2) of this
title.
(F) Use of portion of liability amount for new investment
(i) Reduction of other amounts due to State agency
In the case of a State agency that fails to comply with a
requirement for new investment under subparagraph (D)(i)(II)
or clause (iii)(I), the Secretary may reduce any amount due
to the State agency under any other provision of this section
by the portion of the liability amount that has not been used
in accordance with that requirement.
(ii) Effect of State agency's wholly prevailing on appeal
If a State agency begins required new investment under
subparagraph (D)(i)(II), the State agency appeals the
liability amount of the State agency, and the determination
by the Secretary of the liability amount is reduced to $0 on
administrative or judicial review, the Secretary shall pay to
the State agency an amount equal to 50 percent of the new
investment amount that was included in the liability amount
subject to the appeal.
(iii) Effect of Secretary's wholly prevailing on appeal
If a State agency does not begin required new investment
under subparagraph (D)(i)(II), the State agency appeals the
liability amount of the State agency, and the determination
by the Secretary of the liability amount is wholly upheld on
administrative or judicial review, the Secretary shall - 
(I) require all or any portion of the new investment
amount to be used by the State agency for new investment,
approved by the Secretary, to improve administration by the
State agency of the food stamp program, which amount shall
not be matched by Federal funds; and
(II) require payment of any remaining portion of the new
investment amount in accordance with subparagraph (E)(ii).
(iv) Effect of neither party's wholly prevailing on appeal
The Secretary shall promulgate regulations regarding
obligations of the Secretary and the State agency in a case
in which the State agency appeals the liability amount of the
State agency and neither the Secretary nor the State agency
wholly prevails.
(G) Corrective action plans
The Secretary shall foster management improvements by the
States by requiring State agencies, other than State agencies
with payment error rates of less than 6 percent, to develop and
implement corrective action plans to reduce payment errors.
(2) Error rate definitions
As used in this section - 
(A) the term "payment error rate" means the sum of the point
estimates of an overpayment error rate and an underpayment
error rate determined by the Secretary from data collected in a
probability sample of participating households;
(B) the term "overpayment error rate" means the percentage of
the value of all allotments issued in a fiscal year by a State
agency that are either - 
(i) issued to households that fail to meet basic program
eligibility requirements; or
(ii) overissued to eligible households; and
(C) the term "underpayment error rate" means the ratio of the
value of allotments underissued to recipient households to the
total value of allotments issued in a fiscal year by a State
agency.
(3) Exclusions
The following errors may be measured for management purposes
but shall not be included in the payment error rate:
(A) Any errors resulting in the application of new
regulations promulgated under this chapter during the first 120
days from the required implementation date for such
regulations.
(B) Errors resulting from the use by a State agency of
correctly processed information concerning households or
individuals received from Federal agencies or from actions
based on policy information approved or disseminated, in
writing, by the Secretary or the Secretary's designee.
(4) Reporting requirements
The Secretary may require a State agency to report any factors
that the Secretary considers necessary to determine a State
agency's payment error rate, liability amount or new investment
amount under paragraph (1), or performance under the performance
measures under subsection (d) of this section. If a State agency
fails to meet the reporting requirements established by the
Secretary, the Secretary shall base the determination on all
pertinent information available to the Secretary.
(5) Procedures
To facilitate the implementation of this subsection, each State
agency shall expeditiously submit to the Secretary data
concerning the operations of the State agency in each fiscal year
sufficient for the Secretary to establish the State agency's
payment error rate, liability amount or new investment amount
under paragraph (1), or performance under the performance
measures under subsection (d) of this section. The Secretary
shall initiate efforts to collect the amount owed by the State
agency as a claim established under paragraph (1) for a fiscal
year, subject to the conclusion of any formal or informal appeal
procedure and administrative or judicial review under section
2023 of this title (as provided for in paragraph (7)), before the
end of the fiscal year following such fiscal year.
(6) National performance measure for payment error rates
(A) Announcement
At the time the Secretary makes the notification to State
agencies of their error rates, the Secretary shall also
announce a national performance measure that shall be the sum
of the products of each State agency's error rate as developed
for the notifications under paragraph (8) times that State
agency's proportion of the total value of national allotments
issued for the fiscal year using the most recent issuance data
available at the time of the notifications issued pursuant to
paragraph (8).
(B) Use of alternative measure of State error
Where a State fails to meet reporting requirements pursuant
to paragraph (4), the Secretary may use another measure of a
State's error developed pursuant to paragraph (5), to develop
the national performance measure.
(C) Use of national performance measure
The announced national performance measure shall be used in
determining the liability amount of a State under paragraph
(1)(C) for the fiscal year whose error rates are being
announced under paragraph (8).
(D) No administrative or judicial review
The national performance measure announced under this
paragraph shall not be subject to administrative or judicial
review.
(7) Administrative and judicial review
(A) In general
Except as provided in subparagraphs (B) and (C), if the
Secretary asserts a financial claim against or establishes a
liability amount with respect to a State agency under paragraph
(1), the State may seek administrative and judicial review of
the action pursuant to section 2023 of this title.
(B) Determination of payment error rate
With respect to any fiscal year, a determination of the
payment error rate of a State agency or a determination whether
the payment error rate exceeds 105 percent of the national
performance measure for payment error rates shall be subject to
administrative or judicial review only if the Secretary
establishes a liability amount with respect to the fiscal year
under paragraph (1)(C).
(C) Authority of Secretary with respect to liability amount
An action by the Secretary under subparagraph (D) or (F)(iii)
of paragraph (1) shall not be subject to administrative or
judicial review.
(8) Criteria for payment by a State agency
(A) This paragraph applies to the determination of whether a
payment is due by a State agency for a fiscal year under
paragraph (1).
(B) Not later than the first May 31 after the end of the fiscal
year referred to in subparagraph (A), the case review and all
arbitrations of State-Federal difference cases shall be
completed.
(C) Not later than the first June 30 after the end of the
fiscal year referred to in subparagraph (A), the Secretary shall -

(i) determine final error rates, the national average payment
error rate, and the amounts of payment claimed against State
agencies or liability amount established with respect to State
agencies;
(ii) notify State agencies of the payment claims or liability
amounts; and
(iii) provide a copy of the document providing notification
under clause (ii) to the chief executive officer and the
legislature of the State.
(D) A State agency desiring to appeal a payment claim or
liability amount determined under subparagraph (C) shall submit
to an administrative law judge - 
(i) a notice of appeal, not later than 10 days after
receiving a notice of the claim or liability amount; and
(ii) evidence in support of the appeal of the State agency,
not later than 60 days after receiving a notice of the claim or
liability amount.
(E) Not later than 60 days after a State agency submits
evidence in support of the appeal, the Secretary shall submit
responsive evidence to the administrative law judge to the extent
such evidence exists.
(F) Not later than 30 days after the Secretary submits
responsive evidence, the State agency shall submit rebuttal
evidence to the administrative law judge to the extent such
evidence exists.
(G) The administrative law judge, after an evidentiary hearing,
shall decide the appeal - 
(i) not later than 60 days after receipt of rebuttal evidence
submitted by the State agency; or
(ii) if the State agency does not submit rebuttal evidence,
not later than 90 days after the State agency submits the
notice of appeal and evidence in support of the appeal.
(H) In considering a claim or liability amount under this
paragraph, the administrative law judge shall consider all
grounds for denying the claim or liability amount, in whole or in
part, including the contention of a State agency that the claim
or liability amount should be waived, in whole or in part, for
good cause.
(I) The deadlines in subparagraphs (D), (E), (F), and (G) shall
be extended by the administrative law judge for cause shown.
(9) "Good cause" defined
As used in this subsection, the term "good cause" includes - 
(A) a natural disaster or civil disorder that adversely
affects food stamp program operations;
(B) a strike by employees of a State agency who are necessary
for the determination of eligibility and processing of case
changes under the food stamp program;
(C) a significant growth in food stamp caseload in a State
prior to or during a fiscal year, such as a 15 percent growth
in caseload;
(D) a change in the food stamp program or other Federal or
State program that has a substantial adverse impact on the
management of the food stamp program of a State; and
(E) a significant circumstance beyond the control of the
State agency.
(d) Bonuses for States that demonstrate high or most improved
performance
(1) Fiscal years 2003 and 2004
(A) Guidance
With respect to fiscal years 2003 and 2004, the Secretary
shall establish, in guidance issued to State agencies not later
than October 1, 2002 - 
(i) performance criteria relating to - 
(I) actions taken to correct errors, reduce rates of
error, and improve eligibility determinations; and
(II) other indicators of effective administration
determined by the Secretary; and
(ii) standards for high and most improved performance to be
used in awarding performance bonus payments under
subparagraph (B)(ii).
(B) Performance bonus payments
With respect to each of fiscal years 2003 and 2004, the
Secretary shall - 
(i) measure the performance of each State agency with
respect to the criteria established under subparagraph
(A)(i); and
(ii) subject to paragraph (3), award performance bonus
payments in the following fiscal year, in a total amount of
$48,000,000 for each fiscal year, to State agencies that meet
standards for high or most improved performance established
by the Secretary under subparagraph (A)(ii).
(2) Fiscal years 2005 and thereafter
(A) Regulations
With respect to fiscal year 2005 and each fiscal year
thereafter, the Secretary shall - 
(i) establish, by regulation, performance criteria relating
to - 
(I) actions taken to correct errors, reduce rates of
error, and improve eligibility determinations; and
(II) other indicators of effective administration
determined by the Secretary;
(ii) establish, by regulation, standards for high and most
improved performance to be used in awarding performance bonus
payments under subparagraph (B)(ii); and
(iii) before issuing proposed regulations to carry out
clauses (i) and (ii), solicit ideas for performance criteria
and standards for high and most improved performance from
State agencies and organizations that represent State
interests.
(B) Performance bonus payments
With respect to fiscal year 2005 and each fiscal year
thereafter, the Secretary shall - 
(i) measure the performance of each State agency with
respect to the criteria established under subparagraph
(A)(i); and
(ii) subject to paragraph (3), award performance bonus
payments in the following fiscal year, in a total amount of
$48,000,000 for each fiscal year, to State agencies that meet
standards for high or most improved performance established
by the Secretary under subparagraph (A)(ii).
(3) Prohibition on receipt of performance bonus payments
A State agency shall not be eligible for a performance bonus
payment with respect to any fiscal year for which the State
agency has a liability amount established under subsection
(c)(1)(C) of this section.
(4) Payments not subject to judicial review
A determination by the Secretary whether, and in what amount,
to award a performance bonus payment under this subsection shall
not be subject to administrative or judicial review.
(e) Use of social security account numbers; access to information
The Secretary and State agencies shall (1) require, as a
condition of eligibility for participation in the food stamp
program, that each household member furnish to the State agency
their social security account number (or numbers, if they have more
than one number), and (2) use such account numbers in the
administration of the food stamp program. The Secretary and State
agencies shall have access to the information regarding individual
food stamp program applicants and participants who receive benefits
under title XVI of the Social Security Act [42 U.S.C. 1381 et seq.]
that has been provided to the Commissioner of Social Security, but
only to the extent that the Secretary and the Commissioner of
Social Security determine necessary for purposes of determining or
auditing a household's eligibility to receive assistance or the
amount thereof under the food stamp program, or verifying
information related thereto.
(f) Payment of certain legal fees
Notwithstanding any other provision of law, counsel may be
employed and counsel fees, court costs, bail, and other expenses
incidental to the defense of officers and employees of the
Department of Agriculture may be paid in judicial or administrative
proceedings to which such officers and employees have been made
parties and that arise directly out of their performance of duties
under this chapter.
(g) Cost sharing for computerization
The Secretary is authorized to pay to each State agency the
amount provided under subsection (a)(6) of this section for the
costs incurred by the State agency in the planning, design,
development, or installation of automatic data processing and
information retrieval systems that the Secretary determines (1)
will assist in meeting the requirements of this chapter, (2) meet
such conditions as the Secretary prescribes, (3) are likely to
provide more efficient and effective administration of the food
stamp program, and (4) will be compatible with other such systems
used in the administration of State programs funded under part A of
title IV of the Social Security Act [42 U.S.C. 601 et seq.]:
Provided, That there shall be no such payments to the extent that a
State agency is reimbursed for such costs under any other Federal
program or uses such systems for purposes not connected with the
food stamp program: Provided further, That any costs matched under
this subsection shall be excluded in determining the State agency's
administrative costs under any other subsection of this section.
(h) Funding of employment and training programs
(1) In general. - 
(A) Amounts. - To carry out employment and training programs,
the Secretary shall reserve for allocation to State agencies, to
remain available until expended, from funds made available for
each fiscal year under section 2027(a)(1) of this title the
amount of - 
(i) for fiscal year 1996, $75,000,000;
(ii) for fiscal year 1997, $79,000,000;
(iii) for fiscal year 1998 - 
(I) $81,000,000; and
(II) an additional amount of $131,000,000;
(iv) for fiscal year 1999 - 
(I) $84,000,000; and
(II) an additional amount of $31,000,000;
(v) for fiscal year 2000 - 
(I) $86,000,000; and
(II) an additional amount of $86,000,000;
(vi) for fiscal year 2001 - 
(I) $88,000,000; and
(II) an additional amount of $131,000,000; and
(vii) for each of fiscal years 2002 through 2007,
$90,000,000.
(B) Allocation. - Funds made available under subparagraph (A)
shall be made available to and reallocated among State agencies
under a reasonable formula that - 
(i) is determined and adjusted by the Secretary; and
(ii) takes into account the number of individuals who are not
exempt from the work requirement under section 2015(o) of this
title.
(C) Reallocation. - If a State agency will not expend all of
the funds allocated to the State agency for a fiscal year under
subparagraph (B), the Secretary shall reallocate the unexpended
funds to other States (during the fiscal year or the subsequent
fiscal year) as the Secretary considers appropriate and
equitable.
(D) Minimum allocation. - Notwithstanding subparagraph (B), the
Secretary shall ensure that each State agency operating an
employment and training program shall receive not less than
$50,000 for each fiscal year.
(E) Additional allocations for states that ensure availability
of work opportunities. - 
(i) In general. - In addition to the allocations under
subparagraph (A), from funds made available under section
2027(a)(1) of this title, the Secretary shall allocate not more
than $20,000,000 for each of fiscal years 2002 through 2007 to
reimburse a State agency that is eligible under clause (ii) for
the costs incurred in serving food stamp recipients who - 
(I) are not eligible for an exception under section
2015(o)(3) of this title; and
(II) are placed in and comply with a program described in
subparagraph (B) or (C) of section 2015(o)(2) of this title.
(ii) Eligibility. - To be eligible for an additional
allocation under clause (i), a State agency shall make and
comply with a commitment to offer a position in a program
described in subparagraph (B) or (C) of section 2015(o)(2) of
this title to each applicant or recipient who - 
(I) is in the last month of the 3-month period described in
section 2015(o)(2) of this title;
(II) is not eligible for an exception under section
2015(o)(3) of this title;
(III) is not eligible for a waiver under section 2015(o)(4)
of this title; and
(IV) is not exempt under section 2015(o)(6) of this title.
(2) If, in carrying out such program during such fiscal year, a
State agency incurs costs that exceed the amount allocated to the
State agency under paragraph (1), the Secretary shall pay such
State agency an amount equal to 50 per centum of such additional
costs, subject to the first limitation in paragraph (3), including
the costs for case management and casework to facilitate the
transition from economic dependency to self-sufficiency through
work.
(3) The Secretary shall also reimburse each State agency in an
amount equal to 50 per centum of the total amount of payments made
or costs incurred by the State agency in connection with
transportation costs and other expenses reasonably necessary and
directly related to participation in an employment and training
program under section 2015(d)(4) of this title, except that the
amount of the reimbursement for dependent care expenses shall not
exceed an amount equal to the payment made under section
2015(d)(4)(I)(i)(II) of this title but not more than the applicable
local market rate, and such reimbursement shall not be made out of
funds allocated under paragraph (1).
(4) Funds provided to a State agency under this subsection may be
used only for operating an employment and training program under
section 2015(d)(4) of this title, and may not be used for carrying
out other provisions of this chapter.
(5) The Secretary shall monitor the employment and training
programs carried out by State agencies under section 2015(d)(4) of
this title to measure their effectiveness in terms of the increase
in the numbers of household members who obtain employment and the
numbers of such members who retain such employment as a result of
their participation in such employment and training programs.
(i) Geographical error-prone profiles
(1) The Department of Agriculture may use quality control
information made available under this section to determine which
project areas have payment error rates (as defined in subsection
(d)(1) of this section) that impair the integrity of the food stamp
program.
(2) The Secretary may require a State agency to carry out new or
modified procedures for the certification of households in areas
identified under paragraph (1) if the Secretary determines such
procedures would improve the integrity of the food stamp program
and be cost effective.
(j) Training materials regarding certification of farming
households
Not later than 180 days after September 19, 1988, and annually
thereafter, the Secretary shall publish instructional materials
specifically designed to be used by the State agency to provide
intensive training to State agency personnel who undertake the
certification of households that include a member who engages in
farming.
(k) Reductions in payments for administrative costs
(1) Definitions
In this subsection:
(A) AFDC program
The term "AFDC program" means the program of aid to families
with dependent children established under part A of title IV of
the Social Security Act (42 U.S.C. 601 et seq. (as in effect,
with respect to a State, during the base period for that
State)).
(B) Base period
The term "base period" means the period used to determine the
amount of the State family assistance grant for a State under
section 403 of the Social Security Act (42 U.S.C. 603).
(C) Medicaid program
The term "medicaid program" means the program of medical
assistance under a State plan or under a waiver of the plan
under title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.).
(2) Determinations of amounts attributable to benefiting programs
Not later than 180 days after June 23, 1998, the Secretary of
Health and Human Services, in consultation with the Secretary of
Agriculture and the States, shall, with respect to the base
period for each State, determine - 
(A) the annualized amount the State received under section
403(a)(3) of the Social Security Act (42 U.S.C. 603(a)(3) (as
in effect during the base period)) for administrative costs
common to determining the eligibility of individuals, families,
and households eligible or applying for the AFDC program and
the food stamp program, the AFDC program and the medicaid
program, and the AFDC program, the food stamp program, and the
medicaid program that were allocated to the AFDC program; and
(B) the annualized amount the State would have received under
section 403(a)(3) of the Social Security Act (42 U.S.C.
603(a)(3) (as so in effect)), section 1903(a)(7) of the Social
Security Act (42 U.S.C. 1396b(a)(7) (as so in effect)), and
subsection (a) of this section (as so in effect), for
administrative costs common to determining the eligibility of
individuals, families, and households eligible or applying for
the AFDC program and the food stamp program, the AFDC program
and the medicaid program, and the AFDC program, the food stamp
program, and the medicaid program, if those costs had been
allocated equally among such programs for which the individual,
family, or household was eligible or applied for.
(3) Reduction in payment
(A) In general
Notwithstanding any other provision of this section,
effective for each of fiscal years 1999 through 2007, the
Secretary shall reduce, for each fiscal year, the amount paid
under subsection (a) of this section to each State by an amount
equal to the amount determined for the food stamp program under
paragraph (2)(B). The Secretary shall, to the extent
practicable, make the reductions required by this paragraph on
a quarterly basis.
(B) Application
If the Secretary of Health and Human Services does not make
the determinations required by paragraph (2) by September 30,
1999 - 
(i) during the fiscal year in which the determinations are
made, the Secretary shall reduce the amount paid under
subsection (a) of this section to each State by an amount
equal to the sum of the amounts determined for the food stamp
program under paragraph (2)(B) for fiscal year 1999 through
the fiscal year during which the determinations are made; and
(ii) for each subsequent fiscal year through fiscal year
2007, subparagraph (A) applies.
(4) Appeal of determinations
(A) In general
Not later than 5 days after the date on which the Secretary
of Health and Human Services makes any determination required
by paragraph (2) with respect to a State, the Secretary shall
notify the chief executive officer of the State of the
determination.
(B) Review by administrative law judge
(i) In general
Not later than 60 days after the date on which a State
receives notice under subparagraph (A) of a determination,
the State may appeal the determination, in whole or in part,
to an administrative law judge of the Department of Health
and Human Services by filing an appeal with the
administrative law judge.
(ii) Documentation
The administrative law judge shall consider an appeal filed
by a State under clause (i) on the basis of such
documentation as the State may submit and as the
administrative law judge may require to support the final
decision of the administrative law judge.
(iii) Review
In deciding whether to uphold a determination, in whole or
in part, the administrative law judge shall conduct a
thorough review of the issues and take into account all
relevant evidence.
(iv) Deadline
Not later than 60 days after the date on which the record
is closed, the administrative law judge shall - 
(I) make a final decision with respect to an appeal filed
under clause (i); and
(II) notify the chief executive officer of the State of
the decision.
(C) Review by Departmental Appeals Board
(i) In general
Not later than 30 days after the date on which a State
receives notice under subparagraph (B) of a final decision,
the State may appeal the decision, in whole or in part, to
the Departmental Appeals Board established in the Department
of Health and Human Services (referred to in this paragraph
as the "Board") by filing an appeal with the Board.
(ii) Review
The Board shall review the decision on the record.
(iii) Deadline
Not later than 60 days after the date on which the appeal
is filed, the Board shall - 
(I) make a final decision with respect to an appeal filed
under clause (i); and
(II) notify the chief executive officer of the State of
the decision.
(D) Judicial review
The determinations of the Secretary of Health and Human
Services under paragraph (2), and a final decision of the
administrative law judge or Board under subparagraphs (B) and
(C), respectively, shall not be subject to judicial review.
(E) Reduced payments pending appeal
The pendency of an appeal under this paragraph shall not
affect the requirement that the Secretary reduce payments in
accordance with paragraph (3).
(5) Allocation of administrative costs
(A) In general
No funds or expenditures described in subparagraph (B) may be
used to pay for costs - 
(i) eligible for reimbursement under subsection (a) of this
section (or costs that would have been eligible for
reimbursement but for this subsection); and
(ii) allocated for reimbursement to the food stamp program
under a plan submitted by a State to the Secretary of Health
and Human Services to allocate administrative costs for
public assistance programs.
(B) Funds and expenditures
Subparagraph (A) applies to - 
(i) funds made available to carry out part A of title IV,
or title XX, of the Social Security Act (42 U.S.C. 601 et
seq., 1397 et seq.);
(ii) expenditures made as qualified State expenditures (as
defined in section 409(a)(7)(B) of that Act (42 U.S.C.
609(a)(7)(B)));
(iii) any other Federal funds (except funds provided under
subsection (a) of this section); and
(iv) any other State funds that are - 
(I) expended as a condition of receiving Federal funds;
or
(II) used to match Federal funds under a Federal program
other than the food stamp program.