TEMPORARY ADJUSTMENT OF CONTINGENCY FUND FOR STATE WELFARE PROGRAMS.

SEC. 404. TEMPORARY ADJUSTMENT OF CONTINGENCY FUND FOR STATE WELFARE PROGRAMS. (a) Reduction of Appropriation.—Section 403(b)(2) of the Social Security Act (42 U.S.C. 603(b)(2)) is amended by inserting “, reduced by the sum of the dollar amounts specified in paragraph (6)(C)(ii)” before the period. (b) Increase in State Remittances.—Section 403(b)(6) of such Act (42 U.S.C. 603(b)(6)) is amended by adding at the end the following: “(C) Adjustment of state remittances.— “(i) In general.—The amount otherwise required by subparagraph (A) to be remitted by a State for a fiscal year shall be increased by the lesser of— “(I) the total adjustment for the fiscal year, multiplied by the adjustment percentage for the State for the fiscal year; or “(II) the unadjusted net payment to the State for the fiscal year. “(ii) Total adjustment.—As used in clause (i), the term ‘total adjustment’ means— “(I) in the case of fiscal year 1998, $2,000,000; “(II) in the case of fiscal year 1999, $9,000,000; “(III) in the case of fiscal year 2000, $16,000,000; and “(IV) in the case of fiscal year 2001, $13,000,000. “(iii) Adjustment percentage.—As used in clause (i), the term ‘adjustment percentage’ means, with respect to a State and a fiscal year— “(I) the unadjusted net payment to the State for the fiscal year; divided by 111 STAT. 2135 “(II) the sum of the unadjusted net payments to all States for the fiscal year. “(iv) Unadjusted net payment.—As used in this subparagraph, the term, ‘unadjusted net payment’ means with respect to a State and a fiscal year— “(I) the total amount paid to the State under paragraph (3) in the fiscal year; minus “(II) the amount that, in the absence of this subparagraph, would be required by subparagraph (A) or by section 409(a)(10) to be remitted by the State in respect of the payment.”. (c) Recommendations for Improving the Operation of the Contingency Fund.—Not later than March 1, 1998, the Secretary of Health and Human Services shall make recommendations to the Congress for improving the operation of the Contingency Fund for State Welfare Programs.