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.