42 U.S.C. § 604

Editorial Notes

References in Text

Pub. L. 104–193, title I, § 108(e)Aug. 22, 1996110 Stat. 2167Part F, referred to in subsec. (a)(2), was classified to section 681 et seq. of this title, prior to repeal by , , .

Pub. L. 97–35Pub. L. 101–508, title V, § 5082(2)Nov. 5, 1990104 Stat. 1388–236section 9857(a) of this titleThe Child Care and Development Block Grant Act of 1990, referred to in subsec. (d)(1)(B), is subchapter C (§ 658A et seq.) of chapter 8 of subtitle A of title VI of , as added by , , , which is classified generally to subchapter II–B (§ 9857 et seq.) of chapter 105 of this title. For complete classification of this Act to the Code, see and Tables.

Division A of subchapter XX, referred to in subsec. (d)(2), (3)(B), was in the original a reference to subtitle 1 of title XX, which was translated as if referring to subtitle A of title XX of the Social Security Act, to reflect the probable intent of Congress. Title XX of the Act, enacting subchapter XX of this chapter, does not contain a subtitle 1.

The Internal Revenue Code of 1986, referred to in subsec. (h)(2)(C), (3)(B)(i), (4), (5)(I), is classified generally to Title 26, Internal Revenue Code.

Section 1088(a) of title 20Pub. L. 105–244, title I, § 101(c)Oct. 7, 1998112 Stat. 1617section 1002(a)(1) of Title 20, referred to in subsec. (h)(5)(A)(i), was repealed and section 1088(d) was redesignated section 1088(a), by , , . Provisions similar to those in former section 1088(a)(1) are now contained in , Education.

Section 1141(a) of title 20Pub. L. 105–244, § 3Oct. 7, 1998112 Stat. 1585Oct. 1, 1998, referred to in subsec. (h)(5)(A)(i), was repealed by , title I, § 101(b), title VII, § 702, , , 1616, 1803, effective .

Section 2471 of title 20Pub. L. 105–332, § 1(b)Oct. 31, 1998112 Stat. 3076, referred to in subsec. (h)(5)(A)(ii), was omitted in the general amendment of chapter 44 (§ 2301 et seq.) of Title 20, Education, by , , .

lsection 2012(t) of title 7Pub. L. 113–79, title IV, § 4030(a)(3)Feb. 7, 2014128 Stat. 813Section 2012() of title 7, referred to in subsecs. (i) and (j), was struck out, and a new similarly defining “supplemental nutrition assistance program” was enacted, by , (5), , .

section 3037 of Pub. L. 105–178June 9, 1998112 Stat. 387section 5309 of Title 49Pub. L. 109–59, title III, § 3018(c)Aug. 10, 2005119 Stat. 1605Oct. 1, 2005Section 3037 of the Transportation Equity Act for the 21st Century, referred to in subsec. (k)(1), (3), is , title III, , , which was formerly set out as a note under , Transportation, and was repealed by , , , effective .

Codification

Pub. L. 110–234Pub. L. 110–246Pub. L. 110–234section 4(a) of Pub. L. 110–246 and made identical amendments to this section. The amendments by were repealed by .

Prior Provisions

Aug. 14, 1935, ch. 53149 Stat. 628Aug. 28, 1950, ch. 80964 Stat. 558May 8, 1961Pub. L. 87–31, § 475 Stat. 77July 25, 1962Pub. L. 87–543, title I76 Stat. 185Jan. 2, 1968Pub. L. 90–248, title II81 Stat. 916Jan. 4, 1975Pub. L. 93–647, § 101(c)(6)(B)88 Stat. 2360July 18, 1984Pub. L. 98–369, div. B, title VI, § 2663l98 Stat. 1171Pub. L. 104–193, § 103(a)(1)Pub. L. 105–33, title V, § 5514(c)Aug. 5, 1997111 Stat. 620A prior section 604, acts , title IV, § 404, ; , title III, pt. 6, § 361(c), (d), ; , , ; , , §§ 104(a)(5)(B), 107(b), , 189; , , §§ 241(b)(4), 245, , 918; , , ; , ()(1), , related to deviation from State plan, prior to repeal by , as amended by , , .

Amendments

Pub. L. 112–962012—Subsec. (d)(1)(A). made technical amendment to reference in original act which appears in text as reference to division A of subchapter XX.

Pub. L. 111–148, § 6703(d)(2)(A)(i)2010—Subsec. (d)(1)(A). , inserted “division A of” before “subchapter XX”.

Pub. L. 111–148, § 6703(d)(2)(A)(ii)Subsec. (d)(2). , inserted “division A of” before “subchapter XX” in heading.

Pub. L. 111–148, § 6703(d)(2)(A)(i)Subsec. (d)(2)(A). , inserted “division A of” before “subchapter XX”.

Pub. L. 111–148, § 6703(d)(2)(A)(iii)Subsec. (d)(3)(B). , inserted “division A of” before “subchapter XX” in heading.

Pub. L. 111–148, § 6703(d)(2)(A)(i), inserted “division A of” before “subchapter XX”.

Pub. L. 111–52009—Subsec. (e). amended subsec. (e) generally. Prior to amendment, text read as follows: “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.”

Pub. L. 110–246, § 4115(c)(2)(G)l2008—Subsecs. (i), (j). , substituted “section 2012()” for “section 2012(h)”.

Pub. L. 110–246, § 4002(b)(1)(A)section 2012(h) of title 7, (B), (2)(V), substituted “supplemental nutrition assistance program” for “food stamp program” and made technical amendment to reference in original act which appears in text as reference to .

Pub. L. 106–1691999—Subsec. (e). inserted “or tribe” after “A State” and “to the State” and inserted “or tribal” after “under the State”.

Pub. L. 106–113section 603(a)(5)(C)(iii) of this titlesection 603(a)(5)(C)(ii)(II) of this titleSubsec. (k)(1)(C)(iii). substituted “” for “item (aa) or (bb) of ”.

Pub. L. 105–178section 603(a) of this title1998—Subsec. (d)(2). amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “A State may use not more than 10 percent of the amount of any grant made to the State under for a fiscal year to carry out State programs pursuant to subchapter XX of this chapter.”

Pub. L. 105–200Subsec. (k). added subsec. (k).

Pub. L. 105–33, § 5514(c)Pub. L. 104–193, § 103(a)(1)1997—, made technical amendment to directory language of , which enacted this section.

Pub. L. 105–33, § 5503August 21, 1996Subsec. (a)(2). , inserted “, or (at the option of the State) ” before period.

Pub. L. 105–33, § 5002(a)(1)Subsec. (d)(1). , substituted “Subject to paragraph (2), a State may” for “A State may”.

Pub. L. 105–33, § 5002(a)(2)Subsec. (d)(2). , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “Notwithstanding paragraph (1), not more than ⅓ of the total amount paid to a State under this part for a fiscal year that is used to carry out State programs pursuant to provisions of law specified in paragraph (1) may be used to carry out State programs pursuant to subchapter XX of this chapter.”

Statutory Notes and Related Subsidiaries

Effective Date of 2008 Amendment

Pub. L. 110–234Pub. L. 110–246May 22, 2008Pub. L. 110–234section 4 of Pub. L. 110–246section 8701 of Title 7Amendment of this section and repeal of by effective , the date of enactment of , except as otherwise provided, see , set out as an Effective Date note under , Agriculture.

Pub. L. 110–246Oct. 1, 2008section 4407 of Pub. L. 110–246section 1161 of Title 2Amendment by sections 4002(b)(1)(A), (B), (2)(V) and 4115(c)(2)(G) of effective , see , set out as a note under , The Congress.

Effective Date of 1999 Amendments

Pub. L. 106–169, title IV, § 401lDec. 14, 1999113 Stat. 1858lDec. 14, 1999(), , , provided that the amendment made by section 401() is effective .

Pub. L. 106–113Pub. L. 106–113section 603 of this titleFor effective date of amendment by , see section 1000(a)(4) [title VIII, § 801(e)] of , set out as a note under .

Effective Date of 1998 Amendment

Pub. L. 105–178, title VIII, § 8401(c)June 9, 1998112 Stat. 499

Effective Date of 1997 Amendment

Pub. L. 105–33, title V, § 5002(b)Aug. 5, 1997111 Stat. 594

section 5503 of Pub. L. 105–33Pub. L. 104–193section 5518(a) of Pub. L. 105–33section 602 of this titleAmendment by effective as if included in section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, , at the time such section 103(a) became law, see , set out as a note under .

section 5514(c) of Pub. L. 105–33Pub. L. 104–193section 5518(d) of Pub. L. 105–33section 862a of Title 21Amendment by effective as if included in the provision of amended at the time the provision became law, see , set out as a note under , Food and Drugs.

Effective Date

July 1, 1997section 116 of Pub. L. 104–193section 601 of this titleSection effective , with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see , as amended, set out as a note under .

Assets for Independence

Pub. L. 105–285, title IVOct. 27, 1998112 Stat. 2759Pub. L. 106–554, § 1(a)(1) [title VI, §§ 602–607(a), 608(a), 609, 610]Dec. 21, 2000114 Stat. 2763Pub. L. 107–110, title VII, § 702(h)Jan. 8, 2002115 Stat. 1947Pub. L. 114–95, title IX, § 9215lDec. 10, 2015129 Stat. 2168

     (I) is—

(aa) a credit union designated as a low-income credit union by the National Credit Union Administration (NCUA); or

(bb) an organization designated as a community development financial institution by the Secretary of the Treasury (or the Community Development Financial Institutions Fund); and

     (II) can demonstrate a collaborative relationship with a local community-based organization whose activities are designed to address poverty in the community and the needs of community members for economic independence and stability.

Rule of construction“(B) .—Nothing in this paragraph shall be construed as preventing an organization described in subparagraph (A)(i) from collaborating with a financial institution or for-profit community development corporation to carry out the purposes of this title.

Qualified expenses“(8) .—The term ‘qualified expenses’ means one or more of the following, as provided by a qualified entity:

Postsecondary educational expenses“(A) .—Postsecondary educational expenses paid from an individual development account directly to an eligible educational institution. In this subparagraph:

Postsecondary educational expenses“(i) .—The term ‘postsecondary educational expenses’ means the following:

Tuition and fees     “(I) .—Tuition and fees required for the enrollment or attendance of a student at an eligible educational institution.

Fees, books, supplies, and equipment     “(II) .—Fees, books, supplies, and equipment required for courses of instruction at an eligible educational institution.

Eligible educational institution“(ii) .—The term ‘eligible educational institution’ means the following:

Institution of higher education20 U.S.C. 1001     “(I) .—An institution described in section 101 or 102 of the Higher Education Act of 1965 [, 1002].

Postsecondary vocational education school20 U.S.C. 2471(4)Oct. 27, 1998     “(II) .—An area vocational education school (as defined in subparagraph (C) or (D) of section 521(4) of the Carl D. Perkins Vocational and Applied Technology Education Act ()) which is in any State (as defined in section 521(33) of such Act), as such sections are in effect on the date of enactment of this title [].

First-home purchase“(B) .—Qualified acquisition costs with respect to a 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. In this subparagraph:

Principal residence“(i) .—The term ‘principal residence’ means a main residence, the qualified acquisition costs of which do not exceed 120 percent of the average area purchase price applicable to such residence.

Qualified acquisition costs“(ii) .—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.

Qualified first-time homebuyer.—“(iii)

In general     “(I) .—The term ‘qualified first-time homebuyer’ means an individual participating in the project involved (and, if married, the individual’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 subparagraph applies.

Date of acquisition     “(II) .—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.

Business capitalization“(C) .—Amounts paid from an individual development account directly to a business capitalization account that is established in a federally insured financial institution (or in a State insured financial institution if no federally insured financial institution is available) and is restricted to use solely for qualified business capitalization expenses. In this subparagraph:

Qualified business capitalization expenses“(i) .—The term ‘qualified business capitalization expenses’ means qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan.

Qualified expenditures“(ii) .—The term ‘qualified expenditures’ means expenditures included in a qualified plan, including capital, plant, equipment, working capital, and inventory expenses.

Qualified business“(iii) .—The term ‘qualified business’ means any business that does not contravene any law or public policy (as determined by the Secretary).

Qualified plan“(iv) .—The term ‘qualified plan’ means a business plan, or a plan to use a business asset purchased, which—

     “(I) is approved by a financial institution, a microenterprise development organization, or 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 adviser.

Transfers to idas of family members“(D) .—Amounts paid from an individual development account directly into another such account established for the benefit of an eligible individual who is—

“(i) the individual’s spouse; or

26 U.S.C. 151“(ii) any dependent of the individual with respect to whom the individual is allowed a deduction under section 151 of the Internal Revenue Code of 1986 [].

Qualified savings of the individual for the period“(9) .—The term ‘qualified savings of the individual for the period’ means the aggregate of the amounts contributed by an individual to the individual development account of the individual during the period.

Secretary“(10) .—The term ‘Secretary’ means the Secretary of Health and Human Services, acting through the Director of Community Services.

Tribal government25 U.S.C. 450b25 U.S.C. 530420 U.S.C. 7517“(11) .—The term ‘tribal government’ means a tribal organization, as defined in section 4 of the Indian Self-Determination and Education Assistance Act () [now ] or a Native Hawaiian organization, as defined in section 6207 of the Native Hawaiian Education Act [].

“SEC. 405. APPLICATIONS.

Announcement of Demonstration ProjectsOct. 27, 1998“(a) .—Not later than 3 months after the date of enactment of this title [], the Secretary shall publicly announce the availability of funding under this title for demonstration projects and shall ensure that applications to conduct the demonstration projects are widely available to qualified entities.

Submission“(b) .—Not later than 6 months after the date of enactment of this title, a qualified entity may submit to the Secretary an application to conduct a demonstration project under this title.

Criteria“(c) .—In considering whether to approve an application to conduct a demonstration project under this title, the Secretary shall assess the following:

Sufficiency of project“(1) .—The degree to which the project described in the application appears likely to aid project participants in achieving economic self-sufficiency through activities requiring one or more qualified expenses.

Administrative ability“(2) .—The experience and ability of the applicant to responsibly administer the project.

Ability to assist participants“(3) .—The experience and ability of the applicant in recruiting, educating, and assisting project participants to increase their economic independence and general well-being through the development of assets.

Commitment of non-federal funds“(4) .—The aggregate amount of direct funds from non-Federal public sector and from private sources that are formally committed to the project as matching contributions.

Adequacy of plan for providing information for evaluation“(5) .—The adequacy of the plan for providing information relevant to an evaluation of the project.

Other factors“(6) .—Such other factors relevant to the purposes of this title as the Secretary may specify.

Preferences“(d) .—In considering an application to conduct a demonstration project under this title, the Secretary shall give preference to an application that—

“(1) demonstrates the willingness and ability to select individuals described in section 408 who are predominantly from households in which a child (or children) is living with the child’s biological or adoptive mother or father, or with the child’s legal guardian;

“(2) provides a commitment of non-Federal funds with a proportionately greater amount of such funds committed from private sector sources; and

“(3) targets such individuals residing within one or more relatively well-defined neighborhoods or communities (including rural communities) that experience high rates of poverty or unemployment.

ApprovalOct. 27, 1998“(e) .—Not later than 9 months after the date of enactment of this title [], the Secretary shall, on a competitive basis, approve such applications to conduct demonstration projects under this title as the Secretary considers to be appropriate, taking into account the assessments required by subsections (c) and (d). The Secretary shall ensure, to the maximum extent practicable, that the applications that are approved involve a range of communities (both rural and urban) and diverse populations.

Contracts With Nonprofit Entities26 U.S.C. 501(c)(3)“(f) .—The Secretary may contract with an entity described in section 501(c)(3) of the Internal Revenue Code of 1986 [] and exempt from taxation under section 501(a) of such Code to carry out any responsibility of the Secretary under this section or section 412 if—

“(1) such entity demonstrates the ability to carry out such responsibility; and

“(2) the Secretary can demonstrate that such responsibility would not be carried out by the Secretary at a lower cost.

Grandfathering of Existing Statewide ProgramsOct. 27, 1998“(g) .—Any statewide individual asset-building program that is carried out in a manner consistent with the purposes of this title, that is established under State law as of the date of enactment of this Act [], and that as of such date is operating with an annual State appropriation of not less than $1,000,000 in non-Federal funds, shall be deemed to meet the eligibility requirements of this subtitle [title], and the entity carrying out the program shall be deemed to be a qualified entity. The Secretary shall consider funding the statewide program as a demonstration project described in this subtitle [title]. In considering the statewide program for funding, the Secretary shall review an application submitted by the entity carrying out such statewide program under this section, notwithstanding the preference requirements listed in subsection (d). Any program requirements under sections 407 through 411 that are inconsistent with State statutory requirements in effect on the date of enactment of this Act, governing such statewide program, shall not apply to the program.

“SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.

Demonstration AuthorityOct. 27, 1998“(a) .—If the Secretary approves an application to conduct a demonstration project under this title, the Secretary shall, not later than 10 months after the date of enactment of this title [], authorize the applicant to conduct the project for 5 project years in accordance with the approved application and the requirements of this title.

Grant Authority“(b) .—For each project year of a demonstration project conducted under this title, the Secretary may make a grant to the qualified entity authorized to conduct the project. In making such a grant, the Secretary shall make the grant on the first day of the project year in an amount not to exceed the lesser of—

“(1) the aggregate amount of funds committed as matching contributions from non-Federal public or private sector sources; or

“(2) $1,000,000.

“SEC. 407. RESERVE FUND.

Establishment“(a) .—A qualified entity under this title, other than a State or local government agency or a tribal government, shall establish a Reserve Fund that shall be maintained in accordance with this section.

Amounts in Reserve Fund.—“(b)

In general“(1) .—As soon after receipt as is practicable, a qualified entity shall deposit in the Reserve Fund established under subsection (a)—

“(A) all funds provided to the qualified entity from any public or private source in connection with the demonstration project; and

“(B) the proceeds from any investment made under subsection (c)(2).

Uniform accounting regulations“(2) .—The Secretary shall prescribe regulations with respect to accounting for amounts in the Reserve Fund established under subsection (a).

Use of Amounts in the Reserve Fund.—“(c)

In general“(1) .—A qualified entity shall use the amounts in the Reserve Fund established under subsection (a) to—

“(A) assist participants in the demonstration project in obtaining the skills (including economic literacy, budgeting, credit, and counseling skills) and information necessary to achieve economic self-sufficiency through activities requiring qualified expenses;

“(B) provide deposits in accordance with section 410 for individuals selected by the qualified entity to participate in the demonstration project;

“(C) administer the demonstration project; and

“(D) provide the research organization evaluating the demonstration project under section 414 with such information with respect to the demonstration project as may be required for the evaluation.

Authority to invest funds.—“(2)

Guidelines“(A) .—The Secretary shall establish guidelines for investing amounts in the Reserve Fund established under subsection (a) in a manner that provides an appropriate balance between return, liquidity, and risk.

Investment“(B) .—A qualified entity shall invest the amounts in its Reserve Fund that are not immediately needed to carry out the provisions of paragraph (1), in accordance with the guidelines established under subparagraph (A).

Limitation on uses“(3) .—Not more than 15 percent of the amounts provided to a qualified entity under section 406(b) shall be used by the qualified entity for the purposes described in subparagraphs (A), (C), and (D) of paragraph (1), of which not less than 2 percent of the amounts shall be used by the qualified entity for the purposes described in paragraph (1)(D). Of the total amount specified in this paragraph, not more than 7.5 percent shall be used for administrative functions under paragraph (1)(C), including program management, reporting requirements, recruitment and enrollment of individuals, and monitoring. The remainder of the total amount specified in this paragraph (not including the amount specified for use for the purposes described in paragraph (1)(D)) shall be used for nonadministrative functions described in paragraph (1)(A), including case management, budgeting, economic literacy, and credit counseling. If the cost of nonadministrative functions described in paragraph (1)(A) is less than 5.5 percent of the total amount specified in this paragraph, such excess funds may be used for administrative functions. If two or more qualified entities are jointly administering a project, no qualified entity shall use more than its proportional share for the purposes described in subparagraphs (A), (C), and (D) of paragraph (1).

Unused Federal Grant Funds Transferred to the Secretary When Project Terminates“(d) .—Notwithstanding subsection (c), upon the termination of any demonstration project authorized under this section, the qualified entity conducting the project shall transfer to the Secretary an amount equal to—

“(1) the amounts in its Reserve Fund at the time of the termination; multiplied by

“(2) a percentage equal to—

“(A) the aggregate amount of grants made to the qualified entity under section 406(b); divided by

“(B) the aggregate amount of all funds provided to the qualified entity from all sources to conduct the project.

“SEC. 408. ELIGIBILITY FOR PARTICIPATION.

In General42 U.S.C. 601

Pub. L. 106–554, § 1(a)(1) [title VI, § 607(b)]Dec. 21, 2000114 Stat. 2763

Pub. L. 106–554, § 1(a)(1) [title VI, § 608(b)]Dec. 21, 2000114 Stat. 2763