

        SECTION 10. TITLE XX SOCIAL SERVICES BLOCK GRANT PROGRAM

                                CONTENTS

Overview, Allocation Formula, and Funding
Program Goals
Data on Services, Recipients, and Expenditures
Transfer of Funds Among Block Grants
Social Services in Empowerment Zones and Enterprise Communities
Legislative History

               OVERVIEW, ALLOCATION FORMULA, AND FUNDING

    Title XX of the Social Security Act, also referred to as
the Social Services Block Grant (SSBG), is a capped entitlement
program. Thus, States are entitled to their share, according to
a formula, of a nationwide funding ceiling or ``cap,'' which is
specified in statute. Block grant funds are given to States to
help them achieve a wide range of social policy goals, which
include preventing child abuse, increasing the availability of
child care, and providing community-based care for the elderly
and disabled. Funds are allocated to the States on the basis of
population. The allotments for Puerto Rico, Guam, the Virgin
Islands and the Northern Marianas from the national total are
based on their allocation for fiscal year 1981 adjusted to
reflect the new total funding level. The Omnibus Budget
Reconciliation Act (OBRA) of 1987 (Public Law 100-203) extended
eligibility for title XX funds to American Samoa. The Federal
funds are available to States without a State matching
requirement.
     Title XX of the Social Security Act was created in 1975
(Public Law 93-647); however, it was OBRA 1981 (Public Law 97-
35) that amended title XX to establish a ``block grant to
States for social services.'' The entitlement ceiling, or cap,
was cut from the fiscal year 1981 level of $2.9 billion to $2.4
billion for fiscal year 1982. Table 10-1 shows appropriated
amounts in fiscal years 1982-2000, as well as the entitlement
ceilings established through fiscal year 2001. The table's
footnotes, as well as the legislative history section of this
chapter, elaborate on instances in which the appropriated
amount for the program in a given year differed from the
entitlement ceiling established for that year in statute. In
these cases, appropriations legislation has, in effect,
superseded the authority of any previous legislation's capped
entitlement amounts. In theory, the entitlement ceiling
represents the total amount from which States are entitled to
receive their authorized allotments. However, as table 10-1
shows, appropriation levels have not always met the entitlement
ceiling, and in a few cases, have surpassed it. Table

 TABLE 10-1.--TITLE XX SOCIAL SERVICES BLOCK GRANT FUNDING LEVELS, 1982-
                                  2001
                        [In millions of dollars]
------------------------------------------------------------------------
                                                             Entitlement
                 Fiscal year                  Appropriation    ceiling
------------------------------------------------------------------------
1982........................................        $2,400        $2,400
1983........................................     \1\ 2,675         2,450
1984........................................         2,700         2,700
1985........................................     \2\ 2,725         2,700
1986........................................     \3\ 2,584         2,700
1987........................................         2,700         2,700
1988........................................         2,700     \4\ 2,750
1989........................................         2,700         2,700
1990........................................     \5\ 2,762     \6\ 2,800
1991........................................         2,800         2,800
1992........................................         2,800         2,800
1993........................................         2,800         2,800
1994........................................     \7\ 2,800         2,800
1995........................................         2,800         2,800
1996........................................         2,381     \8\ 2,381
1997........................................     \9\ 2,500     \8\ 2,380
1998........................................    \10\ 2,299     \8\ 2,380
1999........................................    \11\ 1,909     \8\ 2,380
2000........................................    \12\ 1,775     \8\ 2,380
2001........................................            NA    \13\ 1,700
------------------------------------------------------------------------
\1\ Amount includes an additional $225 million appropriated in the
  emergency jobs bill (Public Law 98-8).
\2\ Amount includes $25 million earmarked for training of day care
  providers, licensing officials, and parents including training in the
  prevention of child abuse in child care settings (Public Law 98-473).
\3\ The entitlement ceiling for fiscal year 1986 was $2.7 billion.
  However, the Gramm-Rudman-Hollings legislation sequestration of funds
  for that period reduced the funding by $116 million to $2.584 billion.

\4\ The 1987 Budget Reconciliation Act (Public Law 100-203) included a
  $50 million increase in the title XX entitlement ceiling for fiscal
  year 1988; however, these additional funds were not appropriated.
\5\ The fiscal year 1990 appropriation included a supplemental
  appropriation of $100 million (Public Law 101-198). The Gramm-Rudman-
  Hollings legislation sequestration of funds for fiscal year 1990
  reduced the funding by $37.8 million to $2.762 billion.
\6\ OBRA 1989 (Public Law 101-239) included a permanent $100 million
  increase in the title XX entitlement ceiling to $2.8 billion,
  beginning in fiscal year 1990.
\7\ The $2.8 billion appropriated amount shown does not include the $1
  billion that OBRA 1993 made available on an entitlement basis under
  title XX for empowerment zones and enterprise communities.
\8\ At the time of the fiscal year 1996 appropriation, the entitlement
  ceiling for title XX was still permanently set at $2.8 billion.
  However, the 1996 welfare reform law (Public Law 104-193) amended
  title XX of the Social Security Act to set the entitlement ceiling at
  $2.381 billion for fiscal year 1996, and $2.380 billion for fiscal
  years 1997-2002. Under this legislation, the ceiling was scheduled to
  return to $2.8 billion for fiscal year 2003 and succeeding years.
\9\ Public Law 104-208 contained a $2.5 billion appropriation for title
  XX, exceeding the ceiling established in the 1996 welfare reform law.
\10\ The fiscal year 1998 appropriations measure (Public Law 105-78)
  included $2.299 billion for title XX despite the $2.38 billion ceiling
  established in the 1996 welfare reform law.
\11\ The Omnibus Consolidated Appropriations Act for fiscal year 1999
  (Public Law 105-277) included an appropriation level of $1.909 billion
  for title XX, once again, below the $2.38 billion ceiling established
  in Public Law 104-193.
\12\ The fiscal year 2000 Consolidated Appropriations Act (Public Law
  106-113) set title XX funding at $1.775 billion, of which $425 million
  may not be obligated to States until September 29, 2000.
\13\ Under the Transportation Equity Act (TEA, Public Law 105-178), the
  title XX entitlement ceiling is scheduled to be permanently reduced to
  $1.7 billion beginning in fiscal year 2001.

NA--Not applicable.

Source: Table prepared by the Congressional Research Service.

10-2 shows the total funds available to each State and
territory under title XX in selected fiscal years from 1989
through 2000.

                             PROGRAM GOALS

    The purpose of the Title XX Social Services Block Grant
Program is to provide assistance to States to enable them to
furnish services directed at one or more of five broad goals:
  --Achieving or maintaining economic self-support to prevent,
        reduce, or eliminate dependency;
  --Achieving or maintaining self-sufficiency, including
        reduction or prevention of dependency;
  --Preventing or remedying neglect, abuse, or exploitation of
        children and adults unable to protect their own
        interests, or preserving, rehabilitating or reuniting
        families;
  --Preventing or reducing inappropriate institutional care by
        providing for community-based care, home-based care, or
        other forms of less intensive care; and
  --Securing referral or admission for institutional care when
        other forms of care are not appropriate, or providing
        services to individuals in institutions.
    States are given wide discretion to determine the services
to be provided and the groups that may be eligible for
services, usually low income families and individuals. In
addition to supporting social services, the law allows States
to use their allotment for staff training, administration,
planning, evaluation, and purchasing technical assistance in
developing, implementing, or administering the State social
service program. States decide what amount of the Federal
allotment to spend on services, training, and administration.
    Some restrictions are placed on the use of title XX funds.
Funds cannot be used for the following: most medical care
except family planning; rehabilitation and certain
detoxification services; purchase of land, construction, or
major capital improvements; most room and board except
emergency short-term services; educational services generally
provided by public schools; most social services provided in
and by employees of hospitals, nursing homes, and prisons; cash
payments for subsistence; child day care services that do not
meet State and local standards; and wages to individuals as a
social service except wages of welfare recipients employed in
child day care.

             DATA ON SERVICES, RECIPIENTS, AND EXPENDITURES

    In the past, limited information has been available on the
use of title XX funds by the States. Under the Title XX Social
Services Block Grant Program, each State must submit a report
to the Secretary of the U.S. Department of Health and Human
Services (DHHS) on the intended use of its funds. These
preexpenditure reports are only required to include information
about the types of activities to be funded and the
characteristics of the individuals to be served.

                  TABLE 10-2.--TITLE XX SOCIAL SERVICES BLOCK GRANT ALLOCATIONS BY STATE AND TERRITORY, SELECTED FISCAL YEARS 1989-2000
                                                                [In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          State                              1989        1993        1995        1996        1997        1998        1999        2000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................       $45.1       $46.2       $45.1       $38.4       $40.3       $37.0       $30.6       $28.5
Alaska..................................................         5.9         6.2         6.4         5.5         5.8         5.3         4.3         4.0
American Samoa..........................................         0.2         0.1         0.1         0.1         0.1         0.1         0.1         0.1
Arizona.................................................        36.5        41.0        41.8        36.1        38.9        36.7        31.7        30.0
Arkansas................................................        26.4        28.3        26.2        22.3        23.4        21.6        18.0        16.6

California..............................................       300.5       333.2       336.9       286.5       300.1       274.8       228.1       212.8
Colorado................................................        36.4        38.9        37.9        32.7        34.9        32.6        27.4        25.7
Connecticut.............................................        35.5        38.8        35.8        30.1        31.3        28.5        23.4        21.6
Delaware................................................         7.1         7.5         7.5         6.4         6.7         6.2         5.2         4.8
District of Columbia....................................         7.0         6.8         6.4         5.3         5.4         4.8         3.9         3.5

Florida.................................................       130.0       144.8       147.2       125.6       133.2       123.3       103.0        96.6
Georgia.................................................        68.0        72.5        73.7        63.5        67.4        62.7        52.6        49.4
Guam....................................................         0.5         0.5         0.5         0.4         0.4         0.4         0.3         0.3
Hawaii..................................................        11.8        12.4        12.7        10.8        11.3        10.3         8.5         7.8
Idaho...................................................        11.2        11.3        11.6        10.1        10.8        10.1         8.5         8.0

Illinois................................................       128.7       128.0       127.0       107.4       112.2       102.9        84.8        78.5
Indiana.................................................        61.3        62.1        61.8        52.4        54.9        50.5        41.8        38.7
Iowa....................................................        31.8        31.1        30.7        25.8        27.0        24.7        20.4        18.8
Kansas..................................................        27.4        27.7        27.5        23.2        24.4        22.3        18.4        17.1
Kentucky................................................        41.5        41.3        41.0        34.8        36.5        33.6        27.8        25.8

Louisiana...............................................        50.1        47.2        46.8        39.4        41.2        37.8        31.1        28.7
Maine...................................................        13.1        13.7        13.5        11.4        11.8        10.8         8.9         8.2
Maryland................................................        49.7        53.5        53.6        45.6        47.8        43.9        36.3        33.6
Massachusetts...........................................        65.0        67.4        65.5        55.2        57.7        52.8        43.6        40.3
Michigan................................................       101.9       104.1       103.0        87.0        90.7        83.1        68.7        64.5
Minnesota...............................................        46.9        49.0        48.9        41.5        43.6        40.1        33.3        30.9

Mississippi.............................................        29.2        28.8        28.5        24.3        25.5        23.5        19.4        18.0
Missouri................................................        56.4        57.3        56.7        48.0        50.4        46.3        38.3        35.6
Montana.................................................         9.1         8.9         9.0         7.7         8.2         7.6         6.3         5.8
Nebraska................................................        17.8        17.7        17.5        14.8        15.5        14.2        11.8        10.9
Nevada..................................................        10.7        13.5        14.5        12.8        13.9        13.3        11.5        11.1

New Hampshire...........................................        11.4        12.4        12.1        10.3        10.9        10.0         8.3         7.7
New Jersey..............................................        84.9        86.5        85.0        72.3        75.5        69.1        57.2        53.1
New Mexico..............................................        16.5        17.0        17.3        14.8        15.8        14.7        12.3        11.4
New York................................................       198.0       201.4       197.8       167.1       173.5       157.8       130.1       119.6
North Carolina..........................................        70.5        74.2        74.7        63.8        67.5        62.6        52.4        49.0

North Dakota............................................         7.6         7.2         6.9         5.8         6.1         5.6         4.6         4.2
Northern Mariana Islands................................         0.1         0.1         0.1         0.1         0.1         0.1         0.1         0.1
Ohio....................................................       119.8       121.4       120.2       101.8       106.0        97.0        80.0        73.8
Oklahoma................................................        36.8        35.2        35.1        29.7        31.1        28.5        23.6        21.9
Oregon..................................................        30.1        31.8        32.5        27.8        29.5        27.3        22.9        21.4

Pennsylvania............................................       132.4       133.0       131.1       110.5       115.1       105.0        86.3        79.3
Puerto Rico.............................................        14.0        14.5        14.5        12.3        12.9        11.9         9.9         9.2
Rhode Island............................................        10.9        11.2        11.0         9.2         9.5         8.6         7.1         6.5
South Carolina..........................................        37.6        39.0        39.3        33.4        35.0        32.0        26.5        24.8
South Dakota............................................         7.9         7.8         7.8         6.6         6.9         6.3         5.2         4.9

Tennessee...............................................        53.5        54.6        54.8        46.8        49.4        45.7        38.1        35.4
Texas...................................................       185.8       190.2       192.7       165.5       175.5       162.9       136.9       128.2
Utah....................................................        18.5        19.3        19.8        17.1        18.2        17.0        14.3        13.6
Vermont.................................................         6.0         6.3         6.2         5.3         5.5         5.1         4.2         3.9
Virginia................................................        64.5        69.3        69.6        59.6        62.6        57.6        47.8        44.4

Virgin Islands..........................................         0.5         0.5         0.5         0.4         0.4         0.4         0.3         0.3
Washington..............................................        49.7        54.5        56.1        48.2        51.0        47.3        39.6        37.0
West Virginia...........................................        21.4        20.1        19.8        16.7        17.4        15.9        13.1        12.0
Wisconsin...............................................        53.3        54.8        54.7        46.2        48.5        44.6        36.9        34.1
Wyoming.................................................         5.6         5.1         5.1         4.3         4.5         4.2         3.4         3.2
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................     2,700.0     2,800.0     2,800.0     2,381.0     2,500.0     2,299.0     1,909.0     1,775.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Administration for Children and Families, U.S. Department of Health and Human Services.

    The Family Support Act of 1988 (Public Law 100-485)
strengthened reporting requirements. That legislation required
States to submit annual reports containing detailed information
on the services actually funded and the individuals served
through title XX funds. DHHS published a final rule on November
15, 1993 implementing the reporting requirements and providing
uniform definitions of services. Although all States are now
submitting these reports, DHHS has released very little summary
information. In July 1999, DHHS released an analysis of
expenditure and recipient data for fiscal years 1995-97;
however, the analysis included only 40 States.
    Table 10-3 is a comparison of the primary services offered
by States as reported on expenditure reports submitted by
States for fiscal years 1988-97. It should be noted when
comparing the totals in any particular service category across
years that for fiscal years 1988-95, the table includes data
from the five eligible territories, whereas this is not true
for fiscal years 1996 and 1997. Also, as indicated in the table
footnotes, categorization of services has varied over the
years, making a strict comparison over years difficult.
Nevertheless, table 10-3 presents a reasonably accurate picture
of the range of services that have been offered by States under
title XX. Based on these reports, at least 35 States in 1997
used title XX funds for each of the following services: (1)
daycare for children; (2) foster care services for children;
(3) home-based services; (4) prevention/intervention; and (5)
protective services for children.

  TABLE 10-3.--COMPARISON OF THE NUMBER OF STATES \1\ OFFERING SELECTED SERVICES, SELECTED FISCAL YEARS 1988-97
----------------------------------------------------------------------------------------------------------------
                            Services                              1988  1990  1992  1993  1994  1995  1996  1997
----------------------------------------------------------------------------------------------------------------
Adoption........................................................    29    35    34    36    38    35    28    27
Case management.................................................    26    26    33    38    34    33    27    26
Counseling......................................................    22    21    24    23    30    22    22    22
Day care--adults................................................    23    26    28    27    28    29    28    27
Day care--children..............................................    51    45    47    49    45    51    47    47
Education/training..............................................    19    17    17    19    19    18    13    17
Emergency \2\...................................................    15    16    17    21    19    14  ....  ....
Employment......................................................    21    23    22    23    16    19    16    15
Family planning.................................................    26    26    26    23    19    20    16    17
Foster care--adults.............................................    12    10    11    16    14    15    14    15
Foster care--children...........................................    29    30    31    37    41    41    36    36
Health-related..................................................    22    23    30    34    27    21    14    16
Home-based \3\..................................................    45    46    46    45    46    45    39    39
Home delivered/congregate meals.................................    20    20    22    20    18    22    21    25
Housing.........................................................    10    16    14    14    14    12    10    10
Independent/transitional living.................................    17    16    17    16    15    21    12    12
Information and referral........................................    23    25    27    26    26    27    13    15
Legal...........................................................    17    13    16    19    14    12    11    12
Pregnancy and parenting \4\.....................................  ....  ....  ....  ....  ....  ....    14    15
Prevention/intervention.........................................    33    27    31    36    36    42    33    36
Protective--adults..............................................    34    30    32    36    35    35    30    30
Protective--children............................................    38    42    46    50    49    44    40    39
Recreation \5\..................................................  ....  ....  ....  ....  ....  ....     8     9
Residential care/treatment......................................    21    25    29    27    31    26    20    20
Services for unmarried parents \6\..............................    13    13    14    20    15    17  ....  ....
Social support \7\..............................................    27    45    37    35    37    27  ....  ....
Special services--children \8\..................................    27    19    18    22    15    16  ....  ....
Special services--disabled......................................    39    34    38    38    34    33    25    22
Special services--youth at risk.................................    16    14    18    17    16    19    18    18
Substance abuse.................................................    10    11    15    12    13    12     9    11
Transportation..................................................    30    25    27    30    27    29    22    21
Other \7\.......................................................    20    19    19    13    18    32    29    31
----------------------------------------------------------------------------------------------------------------
\1\ For fiscal years 1988-95, the 50 States, the District of Columbia, and the 5 eligible territories are
  included. For fiscal years 1996 and 1997, the 50 States and the District of Columbia are represented.
\2\ ``Emergency'' is not listed as a separate service category on the standard expenditure reporting form for
  fiscal years 1996 and 1997.
\3\ Home-based services include: homemaker, chore, home health, companionship, and home maintenance.
\4\ Pregnancy and parenting services for young parents is a category included on the standard reporting form for
  fiscal years 1996 and 1997. This is not to imply that these services were not available prior to 1996. These
  services apply to both married and unmarried adolescent parents. The category ``Services for unmarried
  parents'' is not included on the fiscal year 1996 and 1997 reporting forms.
\5\ The category ``recreation'' is included on the standard reporting form for fiscal years 1996 and 1997. For
  earlier years, recreation is included in ``social support.''
\6\ ``Services for unmarried parents'' is not listed as a separate category on the form for fiscal years 1996
  and 1997. See footnote 4.
\7\ ``Social Support'' is not listed as a separate category on the form for fiscal years 1996 and 1997. For
  earlier years, this category included: socialization, recreation (see footnote 5), camping, physical activity,
  living skills (money management), day treatment, family development, social adjustment, community living
  services, family management, life skills education, personal and financial management.
\8\ The category ``special services--children'' is not listed as a separate category on the form for fiscal
  years 1996 and 1997.

Source: U.S. Department of Health and Human Services for fiscal years 1988-95. Congressional Research Service,
  based on postexpenditure data submitted by the States to DHHS, for fiscal years 1996 and 1997.

    Table 10-4 shows the percentage of title XX expenditures
for each category of service in fiscal years 1995-97. The table
is based on an analysis conducted by the Congressional Research
Service of expenditure data submitted to DHHS from 50 States
and the District of Columbia. Although the majority of States
used a common form for reporting these data, some discretion
was used in categorizing expenditures on a national basis.
While every category may not be absolutely comparable in every
State, this table, like table 10-3, provides a reasonably
accurate picture of the use of title XX funds across the
country.
     The table indicates that the single largest category of
spending in fiscal year 1997 was child day care, accounting for
almost 13 percent of expenditures. The percentage of total
title XX expenditures dedicated to child welfare-related
services, shown in several categories (adoption services,
foster care services for children, and protective services for
children), appears to have dropped from 22.5 percent in 1995 to
16 percent in 1997. Home-based services and special services
for the disabled represent significant categories of
expenditures in 1997, accounting for almost 12 and 9 percent of
spending, respectively. States devoted about 14 percent of
their expenditures to administrative costs in each of the 3
years.

   TABLE 10-4.--USE OF TITLE XX FUNDS, BY EXPENDITURE CATEGORY, FISCAL
                              YEARS 1995-97
------------------------------------------------------------------------
                                              Percent of funds
             Service              --------------------------------------
                                       1995         1996         1997
------------------------------------------------------------------------
Adoption.........................          1.1          1.1          0.9
Case management..................          3.9          3.8          5.8
Congregate meals.................          0.0          0.0          0.1
Counseling.......................          1.3          1.4          1.7
Day care--adults.................          0.8          1.5          0.9
Day care--children...............         14.7         14.8         12.9
Education/training...............          0.9          0.5          0.7
Employment.......................          1.1          1.2          1.2
Family planning..................          1.1          1.3          1.2
Foster care--adults..............          0.7          0.3          0.4
Foster care--children............         10.4         14.1          8.1
Health-related...................          0.6          0.5          0.9
Home-based.......................         10.2         10.4         11.5
Home delivered meals.............          0.5          0.6          0.8
Housing..........................          0.2          0.2          0.2
Independent/transitional living..          0.4          0.3          0.2
Information and referral.........          0.8          0.9          1.1
Legal............................          0.4          0.4          0.4
Pregnancy and parenting..........          0.4          0.4          0.4
Prevention/intervention..........          6.8          5.2          5.4
Protective--adults...............          2.1          3.0          3.7
Protective--children.............         11.0          6.7          7.0
Recreation.......................          0.1          0.1          0.1
Residential treatment............          3.9          2.7          3.0
Special services--disabled.......          3.8          7.2          9.2
Special services--youth at risk..          2.0          2.2          1.6
Substance abuse..................          0.3          0.3          0.3
Transportation...................          0.6          0.6          0.5
Other............................          5.6          4.8          6.0
Administrative costs.............         14.0         13.5         14.0
                                  --------------------------------------
    Total........................        100.0        100.0        100.0
------------------------------------------------------------------------
Source: Table prepared by the Congressional Research Service based on
  data submitted by 50 States and the District of Columbia to the U.S.
  Department of Health and Human Services.

                  TRANSFER OF FUNDS AMONG BLOCK GRANTS

    Welfare reform legislation enacted in 1996 (Public Law 104-
193) replaced the Aid to Families with Dependent Children
(AFDC) Program with a block grant to States called Temporary
Assistance for Needy Families (TANF; see section 7). The
welfare reform law authorized States to transfer up to 30
percent of their TANF allotments to title XX or to the Child
Care and Development Block Grant (CCDBG). However, as
originally enacted, Public Law 104-193 required that, for every
dollar transferred to title XX, States must transfer $2 to the
CCDBG. This provision was revised by the Balanced Budget Act of
1997 (Public Law 105-33) so that States are allowed to transfer
up to 10 percent of their TANF allotment to title XX,
regardless of how much, if any, they transfer to the CCDBG. The
welfare reform law stipulates that any TANF funds transferred
to title XX must be used for families with incomes no higher
than 200 percent of the Federal poverty guidelines, and may be
used to provide vouchers for families who are not eligible for
cash assistance under TANF because of time limits, or for
children who are denied cash assistance under TANF because they
were born into families already receiving benefits for another
child.
    Beginning in fiscal year 2001, under provisions of the
Transportation Equity Act, signed into law June 9, 1998 (Public
Law 105-178), the percentage amount of their annual TANF
allotment that States can transfer into title XX is scheduled
to be reduced from 10 percent to 4.25 percent. This legislation
also permanently reduces the entitlement ceiling to $1.7
billion beginning in fiscal year 2001.
     Public Law 97-35, which created the title XX block grant,
gave States the authority to transfer up to 10 percent of their
annual allotment to one or any combination of the three health
care block grants and the Low-Income Home Energy Assistance
Program (LIHEAP). (The three health care block grants are: the
Preventive Health and Health Services Block Grant; the Maternal
and Child Health Services Block Grant; and the Alcohol, Drug
Abuse, and Mental Health Services Block Grant.) In turn, most
other block grant statutes allow States to transfer funds to
the title XX program. However, the Augustus F. Hawkins Human
Services Reauthorization Act of 1990 eliminated the authority
to transfer LIHEAP funds to other block grants, beginning for
fiscal year 1994.

    SOCIAL SERVICES IN EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

    The Omnibus Budget Reconciliation Act of 1993 (Public Law
103-66) made $1 billion available on an entitlement basis under
title XX for the Secretary of DHHS to make grants to States for
social services in qualified empowerment zones and enterprise
communities (the legislation also provided certain tax
incentives for zones and communities). On December 21, 1994,
President Clinton selected 105 designees to participate in this
program (6 urban and 3 rural empowerment zones, 60 urban and 30
rural enterprise communities, 2 supplemental empowerment zones
and 4 enhanced enterprise communities). These funds remain
available for expenditure for 10 years. The Taxpayer Relief Act
of 1997 (Public Law 105-34) authorized a second round of
enterprise zone and community designations, but no title XX
funding was included for the second round.
    An empowerment zone or enterprise community is qualified
for purposes of the title XX grant if it has been designated a
zone or community under part I, subchapter U, chapter I of the
Internal Revenue Code of 1986 and if its strategic plan
(required in an application for designation under the Internal
Revenue Code) is qualified.
    A qualified plan is a plan that: (1) includes a detailed
description of the activities proposed for the area that are to
be funded with the grant; (2) contains a commitment that the
funds provided will not be used to supplant Federal or non-
Federal funds for services and activities which promote the
purposes of the grant; (3) to the extent a State does not use
the funds on certain program options, explains the reasons why
not; and (4) explains how the plan was developed in cooperation
with the local government or governments with jurisdiction over
the zone or community.
    With respect to each empowerment zone, the Secretary was
required to make one grant ($50 million if urban, $20 million
if rural) to each State in which the zone lies on the date of
its designation, and a second grant of the same amount on the
first day of the following fiscal year. With respect to each
enterprise community, the Secretary made one grant of up to $3
million to each State in which the community lies on the date
of its designation. States have up to 10 years from the date of
their designation in which to expend these additional title XX
funds, although they must be obligated within the first 2
years.
    States, in conjunction with the local governments with
jurisdiction over the zone or community, have broad discretion
in the use of grant funds. Funds must be used for social
services directed at three goals of the basic title XX grant
program: achieving or maintaining economic self-support to
prevent, reduce or eliminate dependency; achieving or
maintaining self-sufficiency, including reduction or prevention
of dependency; or preventing or remedying neglect, abuse, or
exploitation of children and adults unable to protect their own
interests, or preserving, rehabilitating or reuniting families.
The funds also must be used in accordance with the strategic
plan and on activities that benefit residents of the zone or
community.
    Despite the similar purposes for which funds may be used,
the range of allowable services is narrower in some respects,
and broader in others, under the title XX empowerment zone
provisions relative to the basic title XX program. For example,
the basic title XX program includes a broader range of purposes
than those outlined above for the empowerment zone program. On
the other hand, certain restrictions of the basic title XX
program (e.g., restrictions that limit drug treatment services
to initial detoxification, and restrictions on the use of funds
for the payment of wages) are waived under the empowerment zone
program, in order to carry out certain specified program
options.

                          LEGISLATIVE HISTORY

    (For legislative history before 1996, see previous editions
of the Green Book.)
    Although $2.8 billion was the permanently authorized
entitlement ceiling at the time, Congress appropriated only
$2.381 billion for title XX in fiscal year 1996 (Public Law
104-134). The Personal Responsibility and Work Opportunity
Reconciliation Act (Public Law 104-193) subsequently set the
annual entitlement ceiling for title XX at $2.38 billion in
each of fiscal years 1997-2002. Under this legislation, the
entitlement ceiling was scheduled to return to the permanent
level of $2.8 billion in fiscal year 2003. (Enactment of Public
Law 105-178 in 1998 would subsequently lower this ceiling--see
below.) Despite the newly established ceiling of $2.38 billion,
Congress appropriated $2.5 billion for title XX in fiscal year
1997 (Public Law 104-208).
     In June 1998, the Transportation Equity Act (TEA, Public
Law 105-178) was enacted, including a provision which schedules
the title XX ceiling to be reduced to $1.7 billion beginning in
fiscal year 2001. This will result in reductions of $680
million in each of fiscal years 2001 and 2002 (from the
previously scheduled ceiling of $2.38 billion), and annual
reductions of $1.1 billion beginning in fiscal year 2003 (from
the previously scheduled entitlement ceiling of $2.8 billion).
In addition to reducing the ceiling, the TEA reduces the
percentage of a State's annual TANF allotment that it may
transfer to title XX, beginning in fiscal year 2001, from 10
percent to 4.25 percent.
     The fiscal year 1998 appropriations measure (Public Law
105-178) decreased title XX funding to $2.299 billion, once
again below the $2.38 billion ceiling established under the
welfare reform law of 1996. In explaining the reduction, the
Senate Appropriations Committee noted that funding is provided
for social services through other Federal programs. The House
Appropriations Committee expressed concern that DHHS lacked
information on the effectiveness of SSBG-funded activities.
Funding for title XX continued to decline with a $1.909 billion
appropriation under the Omnibus Consolidated Appropriations Act
for fiscal year 1999 (Public Law 105-277). For fiscal year
2000, the Consolidated Appropriations Act (Public Law 106-113)
set title XX funding at $1.775 billion, of which $425 million
may not be obligated to States until September 29, 2000.
