§2025. Administrative cost-sharing and quality control
(a) Administrative costs
Subject to subsection (k), 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 supplemental nutrition assistance 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 benefits after their delivery to receiving points within the State, (3) the issuance of benefits to all eligible households, (4) informational activities relating to the supplemental nutrition assistance program, including those undertaken under section 2020(e)(1)(A) of this title, but not including recruitment activities designed to persuade an individual to apply for program benefits or that promote the program through television, radio, or billboard advertisements, (5) fair hearings, (6) automated data processing and information retrieval systems subject to the conditions set forth in subsection (g), (7) supplemental nutrition assistance program investigations and prosecutions, (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)), and (9) establishing and operating a longitudinal database in accordance with section 2026(n) of this title: Provided, That the Secretary is authorized at the Secretary's discretion to pay any State agency administering the supplemental nutrition assistance 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, such amounts for administrative costs as the Secretary determines to be necessary for effective operation of the supplemental nutrition assistance 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 supplemental nutrition assistance 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 supplemental nutrition assistance 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 supplemental nutrition assistance 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
(i) In general
In carrying out the supplemental nutrition assistance 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.
(ii) Tolerance level for excluding small errors
The Secretary shall set the tolerance level for excluding small errors for the purposes of this subsection-
(I) for fiscal year 2014, at an amount not greater than $37; and
(II) for each fiscal year thereafter, the amount specified in subclause (I) adjusted by the percentage by which the thrifty food plan is adjusted under section 2012(u)(4) of this title between June 30, 2013, and June 30 of the immediately preceding fiscal year.
(B) Quality control system integrity
(i) In general
Not later than 180 days after December 20, 2018, the Secretary shall issue interim final regulations that-
(I) ensure that the quality control system established under this subsection produces valid statistical results;
(II) provide for oversight of contracts entered into by a State agency for the purpose of improving payment accuracy;
(III) ensure the accuracy of data collected under the quality control system established under this subsection; and
(IV) for each fiscal year, to the maximum extent practicable, provide for the evaluation of the integrity of the quality control process of not fewer than 2 State agencies, selected in accordance with criteria determined by the Secretary.
(ii) Debarment
In accordance with the nonprocurement debarment procedures under part 417 of title 2, Code of Federal Regulations, or successor regulations, the Secretary shall debar any person that, in carrying out the quality control system established under this subsection, knowingly submits, or causes to be submitted, false information to the Secretary.
(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) 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 supplemental nutrition assistance program (referred to in this paragraph as the "new investment amount"), which new investment amount shall not be matched by Federal funds;
(II) 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
(III) take any combination of the actions described in subclauses (I) and (II); or
(ii) make the determinations described in clause (i) and enter into a settlement with the State agency, only with respect to any 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)(II) 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)(I) 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)(I), 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)(I), 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 supplemental nutrition assistance 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, including providing access to applicable State records and the entire information systems in which the records are contained, 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). 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). 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 supplemental nutrition assistance 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 supplemental nutrition assistance program;
(C) a significant growth in the caseload under the supplemental nutrition assistance program in a State prior to or during a fiscal year, such as a 15 percent growth in caseload;
(D) a change in the supplemental nutrition assistance program or other Federal or State program that has a substantial adverse impact on the management of the supplemental nutrition assistance program of a State; and
(E) a significant circumstance beyond the control of the State agency.
(d) State performance indicators
(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 through 2017
(A) Regulations
With respect to fiscal year 2005 through fiscal year 2017, 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 through fiscal year 2017, 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).
(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.
(5) Use of performance bonus payments
A State agency may use a performance bonus payment received under this subsection only to carry out the program established under this chapter, including investments in-
(A) technology;
(B) improvements in administration and distribution; and
(C) actions to prevent fraud, waste, and abuse.
(6) Fiscal year 2018 and fiscal years thereafter
(A) With respect to fiscal year 2018 and each fiscal year thereafter, the Secretary shall 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.
(B) The Secretary shall not award performance bonus payments to State agencies in fiscal year 2019 for fiscal year 2018 performance.
(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 supplemental nutrition assistance 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 supplemental nutrition assistance program. The Secretary and State agencies shall have access to the information regarding individual supplemental nutrition assistance 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 supplemental nutrition assistance 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
(1) In general
Except as provided in paragraph (2), the Secretary is authorized to pay to each State agency the amount provided under subsection (a)(6) for the costs incurred by the State agency in the-
(A) planning, design, development, or installation of 1 or more automatic data processing and information retrieval systems that the Secretary determines-
(i) would assist in meeting the requirements of this chapter;
(ii) meet such conditions as the Secretary prescribes;
(iii) are likely to provide more efficient and effective administration of the supplemental nutrition assistance program;
(iv) would be compatible with other systems used in the administration of State programs, including the program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);
(v) would be tested adequately before and after implementation, including a requirement that-
(I) such testing shall be accomplished through pilot projects in limited areas for major systems changes (as determined under rules promulgated by the Secretary);
(II) each pilot project described in subclause (I) that is carried out before the implementation of a system shall be conducted in a live-production environment; and
(III) the data resulting from each pilot project carried out under this clause shall be thoroughly evaluated before the Secretary approves the system to be implemented more broadly;
(vi) would be operated in accordance with an adequate plan for-
(I) continuous updating to reflect changed policy and circumstances; and
(II) testing the effect of the system on access for eligible households and on payment accuracy; and
(vii) would be accessible by the Secretary for inspection and audit under section 2020(a)(3)(B) of this title; and
(B) operation of 1 or more automatic data processing and information retrieval systems that the Secretary determines may continue to be operated in accordance with clauses (i) through (vii) of subparagraph (A).
(2) Limitation
The Secretary shall not make payments to a State agency under paragraph (1) to the extent that the State agency-
(A) is reimbursed for the costs under any other Federal program; or
(B) uses the systems for purposes not connected with the supplemental nutrition assistance program.
(h) Funding of employment and training programs
(1)
(A)
(B)
(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)
(i)
(ii)
(iii)
(iv)
(I)(aa) Subject to items (bb) and (cc), not less than 50 percent shall be reallocated to State agencies requesting such funds to conduct employment and training programs and activities for which such State agencies had previously received funding under subparagraph (F)(viii) that the Secretary determines have the most demonstrable impact on the ability of participants to find and retain employment that leads to increased household income and reduced reliance on public assistance.
(bb) The Secretary shall base the determination under item (aa) on-
(AA) project results from the independent evaluations conducted under subparagraph (F)(vii)(I); or
(BB) if the project results from the independent evaluations conducted under subparagraph (F)(vii)(I) are not yet available, the reports under subparagraph (F)(vii)(II) or other information relating to performance of the programs and activities funded under subparagraph (F)(viii).
(cc) Employment and training activities funded under this subclause are not subject to subparagraph (F)(vii), but are subject to monitoring under paragraph (h)(5).
(II) Not less than 30 percent shall be reallocated to State agencies requesting such funds to implement or continue employment and training programs and activities under section 2015(d)(4)(B)(i) of this title that the Secretary determines have the most demonstrable impact on the ability of participants to find and retain employment that leads to increased household income and reduced reliance on public assistance, including programs and activities that are targeted to-
(aa) individuals 50 years of age or older;
(bb) formerly incarcerated individuals;
(cc) individuals participating in a substance abuse treatment program;
(dd) homeless individuals;
(ee) people with disabilities seeking to enter the workforce;
(ff) other individuals with substantial barriers to employment; or
(gg) households facing multi-generational poverty, to support employment and workforce participation through an integrated and family-focused approach in providing supportive services.
(III) The Secretary shall reallocate any remaining funds available under this subparagraph, to State agencies requesting such funds to use for employment and training programs and activities that the Secretary determines have the most demonstrable impact on the ability of participants to find and retain employment that leads to increased household income and reduced reliance on public assistance under section 2015(d)(4)(B)(i) of this title.
(v)
(D)
(E)
(i)
(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)
(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.
(F)
(i)
(I)
(II)
(aa) meet such terms and conditions as the Secretary considers to be appropriate; and
(bb) except as otherwise provided in this subparagraph, be in accordance with the requirements of sections 2015(d) and 2029 of this title.
(ii)
(I)
(II)
(aa) agree to participate in the evaluation described in clause (vii), including providing evidence that the State has a robust data collection system for program administration and cooperating to make available State data on the employment activities and post-participation employment, earnings, and public benefit receipt of participants to ensure proper and timely evaluation;
(bb) commit to collaborate with the State workforce board and other job training programs in the State and local area; and
(cc) commit to maintain at least the amount of State funding for employment and training programs and services under paragraphs (2) and (3) and under section 2029 of this title as the State expended for fiscal year 2013.
(III)
(aa) consider the degree to which the pilot project would enhance existing employment and training programs in the State;
(bb) consider the degree to which the pilot project would enhance the employment and earnings of program participants;
(cc) consider whether there is evidence that the pilot project could be replicated easily by other States or political subdivisions;
(dd) consider whether the State agency has a demonstrated capacity to operate high quality employment and training programs; and
(ee) ensure the pilot projects, when considered as a group, test a range of strategies, including strategies that-
(AA) target individuals with low skills or limited work experience, individuals subject to the requirements under section 2015(o) of this title, and individuals who are working;
(BB) are located in a range of geographic areas and States, including rural and urban areas;
(CC) emphasize education and training, rehabilitative services for individuals with barriers to employment, rapid attachment to employment, and mixed strategies; and
(DD) test programs that assign work registrants to mandatory and voluntary participation in employment and training activities.
(iii)
(I)
(II)
(iv)
(I) Employment in the public or private sector that is not subsidized by any public program.
(II) Employment in the private sector for which the employer receives a subsidy from public funds to offset all or a part of the wages and costs of employing an adult.
(III) Employment in the public sector for which the employer receives a subsidy from public funds to offset all or a part of the wages and costs of employing an adult.
(IV) A work activity that-
(aa) is performed in return for public benefits;
(bb) provides an adult with an opportunity to acquire the general skills, knowledge, and work habits necessary to obtain employment;
(cc) is designed to improve the employability of those who cannot find unsubsidized employment; and
(dd) is supervised by an employer, work site sponsor, or other responsible party on an ongoing basis.
(V) Training in the public or private sector that-
(aa) is given to a paid employee while the employee is engaged in productive work; and
(bb) provides knowledge and skills essential to the full and adequate performance of the job.
(VI) Job search, obtaining employment, or preparation to seek or obtain employment, including-
(aa) life skills training;
(bb) substance abuse treatment or mental health treatment, determined to be necessary and documented by a qualified medical, substance abuse, or mental health professional; and
(cc) rehabilitation activities, supervised by a public agency or other responsible party on an ongoing basis.
(VII) Structured programs and embedded activities-
(aa) in which adults perform work for the direct benefit of the community under the auspices of public or nonprofit organizations;
(bb) that are limited to projects that serve useful community purposes in fields such as health, social service, environmental protection, education, urban and rural redevelopment, welfare, recreation, public facilities, public safety, and child care;
(cc) that are designed to improve the employability of adults not otherwise able to obtain unsubsidized employment;
(dd) that are supervised on an ongoing basis; and
(ee) with respect to which a State agency takes into account, to the maximum extent practicable, the prior training, experience, and skills of a recipient in making appropriate community service assignments.
(VIII) Career and technical training programs that are-
(aa) directly related to the preparation of adults for employment in current or emerging occupations; and
(bb) supervised on an ongoing basis.
(IX) Training or education for job skills that are-
(aa) required by an employer to provide an adult with the ability to obtain employment or to advance or adapt to the changing demands of the workplace; and
(bb) supervised on an ongoing basis.
(X) Education that is-
(aa) related to a specific occupation, job, or job offer; and
(bb) supervised on an ongoing basis.
(XI) In the case of an adult who has not completed secondary school or received a certificate of general equivalence, regular attendance that is-
(aa) in accordance with the requirements of the secondary school or course of study, at a secondary school or in a course of study leading to a certificate of general equivalence; and
(bb) supervised on an ongoing basis.
(XII) Providing child care to enable another recipient of public benefits to participate in a community service program that-
(aa) does not provide compensation for the community service;
(bb) is a structured program designed to improve the employability of adults who participate in the program; and
(cc) is supervised on an ongoing basis.
(v)
(vi)
(I)
(II)
(III)
(aa) assess whether the work registrant is participating in substantial employment and training activities outside of the pilot project that are expected to result in the work registrant gaining increased skills, training, work, or experience consistent with the objectives of the pilot project; and
(bb) if determined to be acceptable, count hours engaged in the activities toward any minimum participation requirement.
(vii)
(I)
(aa)
(bb)
(cc)
(AA) as a result of the employment and training programs and services provided by the State agency under the pilot project; as compared to
(BB) a control group that is not subject to the employment and training programs and services provided by the State agency under the pilot project.
(II)
(aa) the status of each pilot project carried out under this subparagraph;
(bb) the results of the evaluation completed during the previous fiscal year;
(cc) to the maximum extent practicable, baseline information relevant to the stated goals and desired outcomes of the pilot project;
(dd) the employment and training programs and services each State tested under the pilot, including-
(AA) the system of the State for assessing the ability of work registrants to participate in and meet the requirements of employment and training activities and assigning work registrants to appropriate activities; and
(BB) the employment and training activities and services provided under the pilot;
(ee) the impact of the employment and training programs and services on appropriate employment, income, and public benefit receipt as well as other outcomes among households participating in the pilot project, relative to households not participating; and
(ff) the steps and funding necessary to incorporate into State employment and training programs and services the components of the pilot projects that demonstrate increased employment and earnings.
(viii)
(I)
(aa) for fiscal year 2014, $10,000,000; and
(bb) for fiscal year 2015, $190,000,000.
(II)
(aa)
(bb)
(III)
(ix)
(I)
(aa) pilot projects that comply with this chapter;
(bb) the program and administrative costs of carrying out the pilot projects;
(cc) the costs incurred in developing systems and providing information and data for the independent evaluations under clause (vii); and
(dd) the costs of the evaluations under clause (vii).
(II)
(III)
(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 or a pilot project under paragraph (1)(F), 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 or a pilot project under paragraph (1)(F), and may not be used for carrying out other provisions of this chapter.
(5)
(A)
(i) preparing members of households participating in the supplemental nutrition assistance program for employment, including the acquisition of basic skills necessary for employment; and
(ii) increasing the number of household members who obtain and retain employment subsequent to participation in the employment and training programs.
(B)
(i)
(ii)
(I) be based on common measures of performance for Federal workforce training programs; and
(II) include additional indicators that reflect the challenges facing the types of members of households participating in the supplemental nutrition assistance program who participate in a specific employment and training component.
(iii)
(iv)
(I) the percentage and number of program participants who received employment and training services and are in unsubsidized employment subsequent to the receipt of those services;
(II) the percentage and number of program participants who obtain a recognized credential, including a registered apprenticeship, or a regular secondary school diploma or its recognized equivalent, while participating in, or within 1 year after receiving, employment and training services;
(III) the percentage and number of program participants who are in an education or training program that is intended to lead to a recognized credential, including a registered apprenticeship or on-the-job training program, a regular secondary school diploma or its recognized equivalent, or unsubsidized employment;
(IV) subject to terms and conditions established by the Secretary, measures developed by each State agency to assess the skills acquisition of employment and training program participants that reflect the goals of the specific employment and training program components of the State agency, which may include, at a minimum-
(aa) the percentage and number of program participants who are meeting program requirements in each component of the education and training program of the State agency;
(bb) the percentage and number of program participants who are gaining skills likely to lead to employment as measured through testing, quantitative or qualitative assessment, or other method; and
(cc) the percentage and number of program participants who do not comply with employment and training requirements and who are ineligible under section 2015(b) of this title; and
(V) other indicators approved by the Secretary.
(v)
(C)
(i) compliance with Federal employment and training program rules and regulations;
(ii) that program activities are appropriate to meet the needs of the individuals referred by the State agency to an employment and training program component;
(iii) that reporting measures are appropriate to identify improvements in skills, training, work and experience for participants in an employment and training program component; and
(iv) for States receiving additional allocations under paragraph (1)(E), any information the Secretary may require to evaluate the compliance of the State agency with paragraph (1), which may include-
(I) a report for each fiscal year of the number of individuals in the State who meet the conditions of paragraph (1)(E)(ii), the number of individuals the State agency offers a position in a program described in subparagraph (B) or (C) of section 2015(o)(2) of this title, and the number who participate in such a program;
(II) a description of the types of employment and training programs the State agency uses to comply with paragraph (1)(E) and the availability of those programs throughout the State; and
(III) any additional information the Secretary determines to be appropriate.
(D)
(E)
(F)
(i) effectively assist members of households participating in the supplemental nutrition assistance program in gaining skills, training, work, or experience that will increase the ability of the participants to obtain regular employment; and
(ii) are best integrated with statewide workforce development systems.
(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)) that impair the integrity of the supplemental nutrition assistance 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 supplemental nutrition assistance 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 supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition assistance 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 supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition assistance 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, the Secretary shall reduce, for each fiscal year, the amount paid under subsection (a) to each State by an amount equal to the amount determined for the supplemental nutrition assistance 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) to each State by an amount equal to the sum of the amounts determined for the supplemental nutrition assistance 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, 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) (or costs that would have been eligible for reimbursement but for this subsection); and
(ii) allocated for reimbursement to the supplemental nutrition assistance 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)); 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 supplemental nutrition assistance program.
(
Editorial Notes
References in Text
The Social Security Act, referred to in subsecs. (e), (g)(1)(D), (h)(1)(F)(i)(I), (iv), and (k), is act Aug. 14, 1935, ch. 531,
Codification
Amendments
2018-Subsec. (a).
Subsec. (c)(1)(B).
Subsec. (c)(4).
Subsec. (d).
Subsec. (d)(2).
Subsec. (d)(2)(A), (B).
Subsec. (d)(6).
Subsec. (g)(1).
Subsec. (g)(1)(A)(v).
Subsec. (g)(1)(A)(vi).
Subsec. (g)(1)(A)(vii).
Subsec. (g)(1)(B).
Subsec. (g)(1)(C) to (F).
Subsec. (h)(1)(A).
Subsec. (h)(1)(C)(i).
Subsec. (h)(1)(C)(iv), (v).
Subsec. (h)(1)(D).
Subsec. (h)(5)(B)(v).
2014-Subsec. (a).
Subsec. (a)(4).
Subsec. (c)(1)(A).
Subsec. (c)(1)(D)(i).
Subsec. (c)(1)(D)(ii).
Subsec. (c)(1)(E)(i).
Subsec. (c)(1)(F).
Subsec. (d)(5).
Subsec. (h)(1)(A).
Subsec. (h)(1)(C).
Subsec. (h)(1)(F).
Subsec. (h)(3), (4).
Subsec. (h)(5).
2013-Subsec. (h)(1)(A).
2008-
Subsec. (a)(2), (3).
Subsec. (a)(4).
Subsec. (c)(9)(C).
Subsec. (g).
Subsec. (h)(1)(A).
Subsec. (h)(1)(E)(i).
Subsec. (k)(3)(A).
Subsec. (k)(3)(B)(ii).
2002-Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(4).
Subsec. (c)(5).
Subsec. (c)(6).
Subsec. (c)(7).
Subsec. (c)(8)(A).
Subsec. (c)(8)(B).
Subsec. (c)(8)(C).
Subsec. (c)(8)(C)(i).
Subsec. (c)(8)(C)(ii).
Subsec. (c)(8)(C)(iii).
Subsec. (c)(8)(D), (H).
Subsec. (d).
"(1) An assessment of the feasibility of measuring payment errors due to improper denials and terminations of benefits or otherwise developing performance standards with financial consequences for improper denials and terminations, including incorporation in subsection (c) of this section. The Secretary shall report the results of such study and the recommendations of the Secretary to the Congress by July 1, 1990.
"(2) An evaluation of the effectiveness of the system of program improvement initiated under this section that shall be reported to the Congress along with the Secretary's recommendations no later than 3 years from September 19, 1988."
Subsec. (h)(1)(A)(vii).
"(I) $90,000,000; and
"(II) an additional amount of $75,000,000."
Subsec. (h)(1)(B).
"(i)
"(I) changes in each State's caseload (as defined in section 2015(o)(6)(A) of this title);
"(II) for fiscal year 1998, the portion of food stamp recipients who reside in each State who are not eligible for an exception under section 2015(o)(3) of this title; and
"(III) for each of fiscal years 1999 through 2002, the portion of food stamp recipients who reside in each State who are not eligible for an exception under section 2015(o)(3) of this title and who-
"(aa) do not reside in an area subject to a waiver granted by the Secretary under section 2015(o)(4) of this title; or
"(bb) do reside in an area subject to a waiver granted by the Secretary under section 2015(o)(4) of this title, if the State agency provides employment and training services in the area to food stamp recipients who are not eligible for an exception under section 2015(o)(3) of this title.
"(ii)
"(iii)
Subsec. (h)(1)(E) to (G).
Subsec. (h)(3).
Subsec. (k)(3)(A).
Subsec. (k)(3)(B)(ii).
1999-Subsec. (a).
1998-Subsec. (a).
Subsec. (h)(1)(A)(iv)(II).
Subsec. (h)(1)(A)(v)(II).
Subsec. (k).
1997-Subsec. (h)(1).
1996-Subsec. (a).
Subsec. (b).
Subsec. (c)(1)(B).
Subsec. (g)(4).
Subsec. (h).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(5).
Subsec. (h)(6).
1995-Subsec. (i)(3).
1994-Subsec. (e).
1993-Subsec. (a).
Subsec. (c)(1)(C).
Subsec. (c)(3)(A).
Subsec. (c)(6).
Subsec. (c)(8), (9).
Subsec. (g).
"63 percent effective on October 1, 1991, of".
Subsec. (h)(3).
Subsecs. (j), (k).
1991-Subsec. (g).
Subsec. (h)(4).
1990-Subsec. (a).
Subsec. (g).
Subsec. (h)(1).
1988-Subsec. (a)(4).
Subsec. (c).
Subsec. (d).
Subsec. (h).
Subsec. (h)(3).
Subsec. (h)(6).
Subsec. (j).
Subsec. (k).
1987-Subsec. (a).
1986-Subsec. (h).
1985-Subsec. (a).
Subsec. (b)(1).
Subsec. (d)(2)(A).
Subsec. (d)(6).
Subsec. (h).
Subsec. (i).
1982-Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsecs. (h), (i).
1981-Subsec. (a).
Subsec. (b)(1).
Subsec. (c).
Subsec. (d).
Subsec. (f).
1980-Subsec. (b).
Subsec. (c).
Subsec. (g).
Subsec. (h).
Subsec. (i).
1979-Subsec. (a).
Subsec. (f).
1977-
1973-Subsec. (a).
1971-Subsec. (a).
1969-Subsec. (a).
1968-Subsec. (a).
1967-Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by section 4022 of
Effective Date of 2013 Amendment
Amendment by
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Amendment by sections 4001(b), 4002(a)(8), 4115(b)(11), 4121, 4122, and 4406(a)(3), (4) of
Effective Date of 2002 Amendment
Amendment by section 4118(a) of
Amendment by section 4121(a), (d) of
Amendment by section 4122(a) of
Effective Date of 1999 Amendment
Effective Date of 1998 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1996 Amendment
Amendment by section 109(c) of
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1993 Amendment
"(a)
"(b)
"(B) The amendment made by section 13951(c)(2) [amending this section] shall take effect on October 1, 1992.
"(2)(A) Except as provided in subparagraph (B), the amendments made by section 13961 [amending this section] shall be effective with respect to calendar quarters beginning on or after April 1, 1994.
"(B) In the case of a State whose legislature meets biennially, and does not have a regular session scheduled in calendar year 1994, and that demonstrates to the satisfaction of the Secretary of Agriculture that there is no mechanism, under the constitution and laws of the State, for appropriating the additional funds required by the amendments made by this section before the next such regular legislative session, the Secretary may delay the effective date of all or part of the amendments made by section 13961 [amending this section] until the beginning date of a calendar quarter that is not later than the first calendar quarter beginning after the close of the first regular session of the State legislature after the date of enactment of this Act [Aug. 10, 1993].
"(3) Sections 13912(a) and 13912(b)(1) [amending section 2014 of this title] shall take effect, and shall be implemented beginning on, July 1, 1994.
"(4) Sections 13911, 13913, 13914, 13915, 13916, 13922, 13924, 13931, 13932, and 13942 [amending this section and sections 2012, 2014, 2015, and 2017 of this title] shall take effect, and shall be implemented beginning on, September 1, 1994.
"(5)(A) Except as provided in subparagraph (B), section 13921 [amending section 2014 of this title] shall take effect, and shall be implemented beginning on, September 1, 1994.
"(B) State agencies shall implement the amendment made by section 13921 not later than October 1, 1995.
"(6) Section 13912(b)(2) [amending section 2014 of this title] shall take effect, and shall be implemented beginning on, January 1, 1997."
Effective Date of 1991 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 1750 of
Effective Date of 1988 Amendment
Amendment by sections 204(b), 321(b), and 404(e) of
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1985 Amendment
Effective Date of 1982 Amendment
Amendment by section 179 of
Enactment by section 180(a) of
Effective Date of 1981 Amendments
Amendment by
Amendment by
Amendment by
Amendment by
Effective Date of 1979 Amendment
Secretary of Agriculture to issue final regulations implementing the amendment of this section by
Effective Date of 1977 Amendment
Regulations
Secretary of Agriculture to promulgate regulations necessary to implement amendment of this section by
Process for Selecting Pilot Programs
"(A)
"(i) develop and publish the process for selecting pilot projects under section 16(h)(1)(F) of the Food and Nutrition Act of 2008 [7 U.S.C. 2025(h)(1)(F)] (as added by subsection (a)(1)(C)); and
"(ii) issue such request for proposals for the independent evaluation as is determined appropriate by the Secretary.
"(B)
"(C)
Monitoring of Employment and Training Programs
"(A)
"(B)
Carryover Funds
Review of Methodology Used To Make Certain Determinations
"(1) review the adequacy of the methodology used in making the determinations required under section 16(k)(2)(B) of the Food and Nutrition Act of 2008 [7 U.S.C. 2025(k)(2)(B)] (as added by subsection (a)(2)); and
"(2) submit a written report on the results of the review to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate."
Report to Congress
Quality Control Sanctions
"(a)
"(b)
Quality Control Studies and Penalty Moratorium
"(a)(1)(A) The Secretary of Agriculture (hereinafter referred to in this section as the 'Secretary') shall conduct a study of the quality control system used for the food stamp program established under the Food Stamp Act of 1977 [now the Food and Nutrition Act of 2008] (7 U.S.C. 2011 et seq.).
"(B) The study shall-
"(i) examine how best to operate such system in order to obtain information that will allow the State agencies to improve the quality of administration; and
"(ii) provide reasonable data on the basis of which Federal funding may be withheld for State agencies with excessive levels of erroneous payments.
"(2)(A) The Secretary shall also contract with the National Academy of Sciences to conduct a concurrent independent study for the purpose described in paragraph (1).
"(B) For purposes of such study, the Secretary shall provide to the National Academy of Sciences any relevant data available to the Secretary at the onset of the study and on an ongoing basis.
"(3) Not later than 1 year after the date the Secretary and the National Academy of Sciences enter into the contract required under paragraph (2), the Secretary and the National Academy of Sciences shall report the results of their respective studies to the Congress.
"(b)(1) During the 6-month period beginning on the date of enactment of this Act [Dec. 23, 1985] (hereinafter in this section referred to as the 'moratorium period'), the Secretary shall not impose any reductions in payments to State agencies pursuant to section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025).
"(2) During the moratorium period, the Secretary and the State agencies shall continue to-
"(A) operate the quality control systems in effect under the Food Stamp Act of 1977 [7 U.S.C. 2011 et seq.]; and
"(B) calculate error rates under section 16 of such Act [7 U.S.C. 2025].
"(c)(1) Not later than 6 months after the date on which the results of both studies required under subsection (a)(3) have been reported, the Secretary shall publish regulations that shall-
"(A) restructure the quality control system used under the Food Stamp Act of 1977 [7 U.S.C. 2011 et seq.] to the extent the Secretary determines to be appropriate, taking into account the studies conducted under subsection (a); and
"(B) establish, taking into account the studies conducted under subsection (a), criteria for adjusting the reductions that shall be made for quarters prior to the implementation of the restructured quality control system so as to eliminate reductions for those quarters that would not be required if the restructured quality control system had been in effect during those quarters.
"(2) Beginning 6 months after the date on which the results of both studies required under subsection (a)(3) have been reported, the Secretary shall-
"(A) implement the restructured quality control system; and
"(B) reduce payments to State agencies-
"(i) for quarters after implementation of such system in accordance with the restructured quality control system; and
"(ii) for quarters before implementation of such system, as provided under the regulations described in paragraph (1)(B)."
[References to the food stamp program established under the Food and Nutrition Act of 2008 considered to refer to the supplemental nutrition assistance program established under that Act, see section 4002(c) of