42 U.S.C. § 604 — Use of grants

(a) General rules. Subject to this part, a State^* may use a section 603 grant (1) in any way reasonably calculated to accomplish this part’s purpose, including helping low-income households meet home-heating and cooling costs; or (2) in any way the State was authorized to use amounts under former part A or F as in effect on September 30, 1995, or, at the State’s option, August 21, 1996. (b) Administrative limit. (1) A State may not spend more than 15 percent of the grant for administration^*. (2) This limit does not apply to information technology and computerization needed for tracking or monitoring required by or under this part. (c) Interstate immigrants. A State may apply to a family the rules, including benefit amounts, of the program in the State the family left if it moved to the State and has lived there less than 12 months. (d) Other programs. (1) Subject to (2), a State may use no more than 30 percent of a fiscal-year section 603(a) grant for State programs under (A) division A of subchapter XX of this chapter or (B) the Child Care and Development Block Grant Act of 1990 [42 U.S.C. 9857 et seq.]. (2)(A) No more than the applicable percent may be used for division A of subchapter XX programs. (B) The applicable percent is 4.25 percent for fiscal year^* 2001 and every later fiscal year. (3)(A) Except under (B), money used for a program named in (1) is not subject to this part’s requirements. It is subject to requirements applying to Federal money provided directly under that program, and its spending does not count as spending under this part. (B) Money used for division A of subchapter XX programs may be used only for programs and services for children or families whose income is below 200 percent of the official poverty line for a family of the relevant size. The Office of Management and Budget defines that line and revises it annually under section 9902(2). (e) Carryover. A State or tribe may use a grant from any fiscal year, without a fiscal-year deadline, for any benefit or service allowed under its program funded under this part. (f) Employment placement. A State may pay, or provide job-placement vouchers to, State-approved public or private agencies that provide placement services to people receiving State-program assistance. (g) Electronic transfer. A State is encouraged to implement an electronic benefit-transfer system and may use the grant for it. (h) Individual development accounts. (1) A State may fund accounts established by people eligible for State-program assistance. (2)(A) An account may be established by or for an eligible person^* to accumulate funds for a purpose in (B). (B) A qualified purpose, as provided by the helping qualified entity, is (i) postsecondary educational expenses paid directly to an eligible institution; (ii) qualified acquisition costs for a qualified principal residence for a qualified first-time homebuyer, paid directly to the persons owed the money; or (iii) money paid directly to a business-capitalization account in a federally insured financial institution, restricted solely to qualified business-capitalization expenses. (C) Contributions may come only from earned income, as “earned income” is defined in section 911(d)(2) of the Internal Revenue Code of 1986. (D) The Secretary^* must issue regulations ensuring funds are withdrawn only for a purpose in (B). (3)(A) The account must be a United States^* trust funded by periodic contributions from the individual matched by or through a qualified entity for a purpose in (B). (B) “Qualified entity” means (i) a nonprofit organization described in section 501(c)(3) and tax-exempt under section 501(a) of the 1986 Internal Revenue Code; or (ii) a State or local agency cooperating with such an organization. (4) Except for the Internal Revenue Code, other Federal laws requiring financial circumstances to be considered for assistance eligibility or amount must disregard account funds and interest while the person maintains or contributes to the account. (5) Definitions. (A) “Eligible educational institution” means an institution described in title 20 section 1088(a)(1) or 1141(a), or an area vocational education school described in title 20 section 2471(4)(C) or (D) in a State as defined in section 2471(33), as those provisions existed August 22, 1996. (B) “Post-secondary educational expenses” means tuition and required enrollment or attendance fees, plus required fees, books, supplies, and equipment for courses at an eligible institution. (C) “Qualified acquisition costs” means acquiring, constructing, or reconstructing a residence, including usual or reasonable settlement, financing, and other closing costs. (D) “Qualified business” means a business that does not contravene a law or public policy, as the Secretary determines. (E) “Qualified business capitalization expenses” means qualified expenses for capitalizing a qualified business under a qualified plan. (F) “Qualified expenditures” means expenses included in a qualified plan, including capital, plant, equipment, working capital, and inventory. (G)(i) “Qualified first-time homebuyer” means a taxpayer, and if married the spouse, with no present ownership interest in a principal residence during the three years ending on acquisition. (ii) “Date of acquisition” means the date a binding contract to acquire, construct, or reconstruct the residence is entered. (H) “Qualified plan” means a business plan approved by a financial institution or nonprofit loan fund with demonstrated fiduciary integrity, describing goods or services, a marketing plan, and projected financial statements, and possibly requiring an experienced entrepreneurial adviser. (I) “Qualified principal residence” means a principal residence within section 1034 of the 1986 Internal Revenue Code, whose qualified acquisition costs do not exceed 100 percent of the average area purchase price determined under section 143(e)(2) and (3). (i) School sanctions. A State may sanction a family including an adult^* who received federally funded State-program or supplemental nutrition assistance program assistance if the adult fails to ensure minor dependent children attend school as required by the law of the State where they live. “Supplemental nutrition assistance program” is defined in title 7 section 2012(l); this section does not define it. (j) Diploma sanctions. A State may sanction a family including an adult older than 20 and younger than 51 who received such assistance if the adult lacks, and is not working toward, a secondary diploma or recognized equivalent. The sanction is not allowed if medical, psychiatric, or other appropriate professionals judge that the adult lacks the capacity to complete such a course. (k) Transportation matching. (1) A State may not use a grant to match section 3037 Transportation Equity Act funds unless (A) it pays for new or expanded transportation services, not construction, benefiting people in (C), and not current operating costs; (B) it supplements, not replaces, State transportation spending; (C) most benefits go to (i) current recipients, (ii) former recipients, (iii) noncustodial parents described in section 603(a)(5)(C)(iii), or (iv) low-income people at risk of qualifying; and (D) services promote recipients’ ability to engage in work activities as defined in section 607(d). (2) The match may not exceed the amount by which 30 percent of the grant exceeds any amount used for a program in (d)(1). (3) A transportation benefit to a nonrecipient using this grant is not assistance under the State program.