Under the Temporary Assistance for Needy Families (TANF) program, states are required to spend a minimum amount of state money under the maintenance of effort (MOE) requirement in order to receive TANF grants. States that meet certain economic criteria and that spend more than the minimum amount can receive additional funding from the TANF contingency fund. Cash donations and the value of in-kind contributions by nonfederal third parties may be counted as state spending for purposes of the MOE. Beginning in 2017, H.R. 2959 would freeze the amount of third-party contributions that a state may claim toward meeting its MOE requirement at the level spent in 2016. This legislation also would prohibit states from counting spending on medical services toward the MOE.
Based on information from the Department of Health and Human Services, CBO assumes that any state that would be affected by the changes under the bill would find other ways to meet its MOE requirement. Furthermore, to the extent that a state could no longer draw down funds from the TANF contingency fund, CBO expects that other states would use those funds instead. Thus, CBO estimates that enacting the legislation would have no significant effect on direct spending. Because enacting this bill could affect direct spending, pay-as-you-go procedures apply. Enacting H.R. 2959 would not affect revenues.