HR8872-119

What This Bill Does

The Preventing Waste, Fraud, and Abuse in TANF Act tightens how States manage federal Temporary Assistance for Needy Families block-grant funds. It applies the Payment Integrity Information Act of 2019 to State TANF programs as if each State were a federal agency for payment-integrity purposes, and it requires the Secretary of Health and Human Services to report to Congress within one year with a 10-year plan to reduce or eliminate improper State TANF payments. It also limits TANF-funded assistance and services to families with income below twice the federal poverty guidelines, sets deadlines for States to obligate and spend TANF funds, caps future-use reserves, bars States from using federal TANF money to replace State or local spending, and requires State chief executives to certify non-supplanting. The amendments take effect October 1, 2027.

Who Benefits and How

Lower-income families below twice the federal poverty guidelines benefit because the bill directs TANF grant money toward assistance and services for families under that income threshold. If States previously used TANF funds for broader services or higher-income groups, the bill narrows the eligible population and makes the lower-income target group the statutory priority.

Federal taxpayers and congressional TANF overseers benefit from stronger payment-integrity rules. Applying the Payment Integrity Information Act to State TANF programs creates a clearer improper-payment review framework, and HHS must give Congress a written plan to reduce or eliminate improper TANF payments within 10 years.

Families who depend on timely TANF-funded services may benefit from the new obligation and expenditure deadlines. States generally would have to obligate annual TANF funds by the end of the next fiscal year and spend them by the end of the second succeeding fiscal year, which discourages indefinite accumulation of federal TANF balances.

State and local programs that already fund TANF-related services from non-federal sources benefit indirectly because the anti-supplanting rule prevents a State from swapping federal TANF dollars in for money the State or locality otherwise would have spent.

Who Bears the Burden and How

State TANF agencies bear the largest compliance burden. They would have to treat TANF payment integrity like a federal-agency payment-integrity obligation, comply with the income threshold, track obligation and expenditure deadlines, monitor reserve balances, notify HHS when reserving funds, and document that federal TANF money supplements rather than replaces State or local funds.

The Secretary of Health and Human Services bears a reporting burden: within one year of enactment, HHS must send Congress a written plan to reduce or eliminate improper State TANF payments within 10 years.

Families at or above twice the federal poverty guidelines bear an eligibility burden because States could no longer use TANF grants under section 403(a)(1) to provide them assistance or services.

States with large unobligated TANF balances bear a budget-management burden. They can reserve only up to 15 percent of a fiscal year's TANF grant for future use, and total reserves cannot exceed 50 percent of the prior year's grant. States also must notify HHS before reserving funds.

State chief executives bear a certification burden because the State TANF plan must include a certification that federal TANF funds will not supplant State or other non-federal funds for services and activities promoting TANF purposes.

Key Provisions

• Applies the Payment Integrity Information Act of 2019 to State TANF programs and requires HHS to report to Congress within one year on a 10-year plan to reduce or eliminate improper State TANF payments.
• Limits TANF-funded assistance and services under section 403(a)(1) to families whose income is less than twice the federal poverty guidelines.
• Requires States to obligate TANF funds by the end of the succeeding fiscal year and expend them by the end of the second succeeding fiscal year.
• Allows States to reserve only up to 15 percent of a fiscal year's TANF grant for future use and caps total reserves at 50 percent of the prior fiscal year's TANF grant.
• Requires States intending to reserve TANF funds to notify the Secretary of Health and Human Services by the end of the normal obligation period.
• Bars States from using federal TANF funds to supplant State or local money and requires State chief executives to certify non-supplanting in the State plan.
• Sets an October 1, 2027 effective date for the TANF amendments.