Prohibiting State diversion of Federal funds to replace State spending

Section 404 of the Social Security Act (42 U.S.C. 604) is amended by adding at the end the following:

(l)

Limitation on use of Federal funds To replace State general revenue funds

Funds made available to States under this part must be used to supplement, not supplant, State general revenue spending on activities described in this section.

Targeting funds to core purposes

(a)

Requirement that States reserve 25 percent of TANF grant for spending on core activities

Section 408(a) (42 U.S.C. 608(a)) is amended by adding at the end the following:

(13)

Requirement that States reserve 25 percent of TANF grant for spending on core activities

A State to which a grant is made under section 403(a) for a fiscal year shall expend not less than 25 percent of the grant on assistance, case management, work supports and supportive services, work, wage subsidies, work activities (as defined in section 407(d)), and non-recurring short-term benefits.

(b)

Requirement that at least 25 percent of qualified State expenditures from non-Private sources be for core activities

Section 408(a) (42 U.S.C. 608(a)), as amended by subsection (a) of this section, is amended by adding at the end the following:

(14)

Requirement that at least 25 percent of qualified State expenditures from non-private sources counting towards maintenance of effort requirement be for core activities

Not less than 25 percent of the qualified State expenditures of a State during the fiscal year shall be expenditures of funds from non-private sources for assistance, case management, work supports and supportive services, work, wage subsidies, work activities (as defined in section 407(d)), and non-recurring short-term benefits.