PART 270—HIGH PERFORMANCE BONUS AWARDS Link to an amendment published at 91 FR 48289, July 31, 2026. Authority: 42 U.S.C. 603(a)(4). Source: 65 FR 52851, Aug. 30, 2000, unless otherwise noted. § 270.1 What does this part cover? This part covers the regulatory provisions relating to the bonus to reward high performing States in the TANF program, as authorized in section 403(a)(4) of the Social Security Act. § 270.2 What definitions apply to this part? The following definitions apply under this part: Absolute rate Act Bonus year CCDF Comparison year Fiscal year Food Stamp Program et seq. CMS Improvement rate Medicaid MSIS Performance year SCHIP Separate State Program SSP-MOE Data Report State TANF We (and any other first person plural pronouns) § 270.3 What is the annual maximum amount we will award and the maximum amount that a State can receive each year? (a) Except as provided in § 270.9, we will award $200 million in bonus funds annually, subject to Congressional authorization and the availability of the appropriation. (b) The amount payable to a State in a bonus year may not exceed five percent of a State's family assistance grant. § 270.4 On what measures will we base the bonus awards? (a) Performance measures: general. (b) Work measures. (i) Job entry rate; (ii) Success in the work force rate; (iii) Increase in the job entry rate; and (iv) Increase in success in the work force rate. (2) For any given year, we will score and rank competing States and award bonuses to the ten States with the highest scores in each work measure. (c) Measures of participation by low-income working households in the Food Stamp Program Food Stamp absolute measure. i.e., (ii) We will rank all States that choose to compete on this measure and will award bonuses to the three States with the highest scores. We will calculate the percentage rate for this measure to two decimal points. If two or more States have the same percentage rate for the measure, we will calculate the rates for these States to as many decimal points as necessary to eliminate the tie. (2) Food Stamp improvement measure. i.e., (ii) For any given year, we will compare a State's performance on this measure to its performance in the previous year, beginning with a comparison of calendar (CY) 2000 to CY 2001, based on Census Bureau decennial and annual demographic program data. (iii) We will rank all States that choose to compete on this measure and will award bonuses to the seven States with the greatest percentage point improvement in this measure. We will calculate the percentage rate for this measure to two decimal points. If two or more States have the same percentage rate for this measure, we will calculate the rates for these States to as many decimal points as necessary to eliminate the tie. (d) Measures of participation by low-income families in the Medicaid/SCHIP Programs. (1) Medicaid/SCHIP absolute measure. (ii) We will rank the performance of each State that chooses to compete on this absolute measure and award bonuses to the three States with the highest scores. (iii) We will calculate the percentage rate for this measure to two decimal points. If two or more States have the same percentage rate for this measure, we will calculate the rates for these States to as many decimal points as necessary to eliminate the tie. (2) Medicaid/SCHIP improvement measure. (ii) For any given year, we will compare a State's performance on this improvement measure to its performance in the previous year, beginning with a comparison of FY 2000 to FY 2001, based on a quarterly submission by the State as determined by matching individuals (adults and children) who have left TANF assistance and who are not receiving TANF assistance in the fourth month with Medicaid or SCHIP enrollment data. (iii) We will rank the performance of all States that choose to compete on this improvement measure and will award bonuses to the seven States with the greatest percentage point improvement in this measure. (iv) We will calculate the percentage rate for the measure to two decimal points. If two or more States have the same percentage rate for this measure, we will calculate the rates for these States to as many decimal points as necessary to eliminate the tie. (e) Child care subsidy measure. (i) The accessibility of services based on the percentage of children in the State who meet the maximum allowable Federal eligibility requirements for the Child Care and Development Fund (CCDF) who are served by the State during the performance year, and who are included in the data reported on the ACF-800 and ACF-801 for the same fiscal year; and (ii) The affordability of CCDF services based on a comparison of the reported assessed family co-payment to reported family income and a comparison of the number of eligible children under the State's defined income limits to the number of eligible children under the federal eligibility limits. (2) Beginning in FY 2003, we will measure State performance based upon a composite ranking of: (i) The two components described in paragraph (e)(1) of this section; and (ii) The quality of CCDF services based on a comparison of reimbursement rates during the performance year to the market rates, determined in accordance with 45 CFR 98.43(b)(2), applicable to that year. (3) For the affordability component in paragraph (e)(1)(ii) of this section, we will compare family income to the assessed State family co-payment as reported on the ACF-801 across four income ranges. These income ranges refer to percentages of the Federal Poverty Guidelines for a family of three persons. The income ranges are as follows: (i) Income below the poverty level; (ii) Income at least 100 percent and below 125 percent of poverty; (iii) Income at least 125 percent and below 150 percent of poverty; and (iv) Income at least 150 percent and below 175 percent of poverty. (4)(i) For the affordability component, we will calculate, for each income range, the average of the ratios of family co-payment to family income for each family served; and (ii) We will calculate a ratio of the number of children eligible under the State's defined income limits compared to the number of children eligible under the Federal eligibility limits in the CCDF, i.e., 85 percent of the State's median income. (iii) We will rank each State based on each of the four averages calculated in paragraph (e)(4)(i) of this section and the ratio calculated in paragraph (e)(4)(ii) of this section and combine the ranks to obtain the State's score on this component. (5) For the quality component specified in paragraph (e)(2)(ii) of this section, in FY 2003 and beyond, we will compare the actual rates paid by the State as reported on the ACF-801 (not the published maximum rates) to the market rates applicable to the performance year, i.e., FY 2002. Each State competing on this measure must submit the following data as a part of its market rate survey: (i) Age-specific rates for children 0-13 years of age reported by the child care centers and family day care homes responding to the State's market rate survey; and (ii) The provider's county or, if the State uses multi-county regions to measure market rates or set maximum payment rates, the administrative region. (6) For the quality component, we will compute the percentile of the market represented by the amount paid for each child as reported on the ACF-801 by comparing the actual payment for each child to the array of reported market rates for children of the same age in the relevant county or administrative region. (We will compare payments for children in center-based care to reported center care provider rates. We will compare payments for children in non-center-based care, i.e., family day care and unlicensed child care, to reported family child care provider rates.) (i) We will take the percentile that results from the per-child comparison of the actual payment to the reported market rates and compute separate State-wide averages for center-based and non-center-based care; and (ii) We will rank the State according to the two State-wide averages and combine the ranks to obtain the State's score on this component. (7) For any given year, we will rank the States that choose to compete on the child care measure on each component of the overall measure and award bonuses to the ten States with the highest composite rankings. (8) We will calculate each component score for this measure to two decimal points. If two or more States have the same score for a component, we will calculate the scores for these States to as many decimal points as necessary to eliminate the tie. (9)(i) The rank of the measure for the FY 2002 bonus year will be a composite weighted score of the two components at paragraph (e)(1) of this section, with the component at paragraph (e)(1)(i) of this section having a weight of 6 and the component at paragraph (e)(1)(ii) of this section having a weight of 4. (ii) The rank of the measure for the bonus beginning in FY 2003 will be a composite weighted score of the three components at paragraph (e)(2) of this section, with the component at paragraph (e)(1)(i) of this section having a weight of 5, the component at paragraph (e)(1)(ii) of this section having a weight of 3, and the component at paragraph (e)(2)(ii) of this section having a weight of 2. (10) We will award bonuses only to the top ten qualifying States that have fully obligated their CCDF Matching Funds for the fiscal year corresponding to the performance year and fully expended their CCDF Matching Funds for the fiscal year preceding the performance year. (f) Family formation and stability measure. (2) We will rank the performance of those States that choose to compete on this measure and will award bonuses to the ten States with the greatest percentage point improvement in this measure. (3) We will calculate the percentage rate for the measure to two decimal points. If two or more States have the same percentage rate for this measure, we will calculate the rates for these States to as many decimal points as necessary to eliminate the tie. (g) Option to compete. [65 FR 52851, Aug. 30, 2000, as amended at 65 FR 75634, Dec. 4, 2000; 66 FR 23859, May 10, 2001] Effective Date Note: At 66 FR 23859, May 10, 2001, in § 270.4(e)(2)(ii) was revised. This paragraph contains information collection and recordkeeping requirements and will not become effective until approval has been given by the Office of Management and Budget. § 270.5 What factors will we use to determine a State's score on the work measures? (a) Definitions. (1) The Job Entry (2) The Success in the Work Force Rate (i) The Job Retention Rate (ii) The Earnings Gain Rate (3) The Increase in the Job Entry Rate (4) The Increase in Success in the Work Force Rate means the positive percentage point difference on at least one sub-measure between the success in the work force rate for the performance year and the success in the work force rate for the comparison year. It is composed of two equally weighted sub-measures defined as follows: (i) The Increase in the Job Retention Rate (ii) The Increase in the Earning Gain Rate (b) Ranking of States. (2) We will rank the competing States on the work measures for which they: (i) Indicate they wish to compete; and (ii) Submit the data specified in § 270.6 within the time frames specified in § 270.11. (3) We will rank the States on absolute performance in each of the work measures in paragraphs (a)(1) and (a)(2) of this section. For each of the work measures in paragraphs (a)(3) and (a)(4) of this section, we will rank States based on the percentage point change in their improvement rate in the performance year compared to the comparison year. The rank of the performance in paragraphs (a)(2) and (a)(4) of this section will be a composite score of the rank of the job retention and the earnings gain measures. (4) We will calculate the percentage rate for each work measure to two decimal points. If two or more States have the same absolute or improvement rate for a specific work measure, we will calculate the rates for these States to as many decimal points as necessary to eliminate the tie. § 270.6 What data and other information must a State report to us? (a) Data for work measures. (2) Each State must submit the information in this paragraph for both adult TANF recipients and adult SSP-MOE recipients for whom the State would report the data described in paragraph (b) of this section. (b) Data on SSP-MOE programs. (c) Data for the Medicaid/SCHIP measures. (d) Data for the child care measure. (e) Intent to compete. § 270.7 What data will we use to measure performance on the work support and other measures? (a) We will use Census Bureau data to rank States on their performance on the Food Stamp measures in § 270.4(c) and on the measure of family formation and stability in § 270.4(f). We will also use Census Bureau data, along with other information, to rank States on the child care measure in § 270.4(e). We will rank only those States that choose to compete on these measures. (b) We will rank State performance on the Medicaid/SCHIP measures in § 270.4(d) based on data submitted by those States that choose to compete on these measures, as determined by matching TANF individuals who were enrolled in Medicaid/SCHIP and are no longer receiving TANF assistance with Medicaid/SCHIP enrollment data. (c) We will rank State performance on the child care measure based on data submitted by those States that choose to compete on this measure. We will use data reported on Forms ACF 800, ACF 801, ACF 696 and other necessary data we will specify. § 270.8 How will we allocate the bonus award funds? (a) In FY 2002 and beyond, we will allocate and award $140 million to the ten States with the highest scores for each work measure as follows, subject to reallocation as specified in § 270.9: (1) Job Entry Rate—$56 million (2) Success in the Work Force—$35 million (3) Increase in Job Entry Rate—$28 million (4) Increase in Success in the Work Force—$21 million; (b) In FY 2002 and beyond, we will allocate and award $20 million to the ten States with the highest scores on the Food Stamp measures and $20 million to the ten States with the highest scores on the Medicaid/SCHIP measures, subject to reallocation as specified in § 270.9. For these measures, we will: (1) Award $6 million to the three States with the highest scores on the Food Stamp absolute measure; (2) Award $6 million to the three States with the highest scores on the Medicaid/SCHIP absolute measure; (3) Award $14 million to the seven States with the highest scores on the Food Stamp improvement measure; and (4) Award $14 million to the seven States with the highest scores on the Medicaid/SCHIP improvement measure. (c) In FY 2002 and beyond, we will allocate and award $10 million to the ten States with the highest scores on the child care subsidy measure and $10 million to the ten States with the highest scores on the family formation and stability improvement measure. (d) We will distribute the bonus dollars for each measure based on each State's percentage of the total amount of the State family assistance grants of the States that will receive a bonus. § 270.9 How will we redistribute funds if that becomes necessary? (a) If we cannot distribute the funds as specified in § 270.8, we will reallocate any undistributed funds among the measures listed in § 270.4. (b) If we still cannot distribute funds within the bonus year, they will remain available for distribution in the next bonus year, to the extent authorized by law. § 270.10 How will we annually review the award process? (a) Annual determination. (b) Criteria. (1) Our experience in awarding high performance bonuses in previous years; and (2) The availability of national, State-reliable, and objective data. (c) Consultation. § 270.11 When must the States report the data and other information in order to compete for bonus awards? (a) All measures. (b) Work measures. (1) The data for the first and second quarters of the performance year and, if a State chooses to compete on an improvement measure, the first and second quarters of the comparison year, must be submitted by the dates we will specify in program guidance. (2) The data for the third and fourth quarters of the performance year and, if a State chooses to compete on an improvement measure, the third and fourth quarters of the comparison year, must be submitted by the dates we will specify in program guidance. (c) SSP-MOE reporting. (1) At the same time as it submits its quarterly TANF Data Report; or (2) At the time it seeks to be considered for a high performance bonus as long as it submits the required data for the full period for which this determination will be made. (d) Medicaid/SCHIP measures. (e) Child care subsidy measure. § 270.12 Must States file the data electronically? Each State must submit the data required to compete for the high performance bonus work measures and the Medicaid/SCHIP measures electronically in a manner that we and CMS will specify. § 270.13 What do States need to know about the use of bonus funds? (a) A State must use bonus award funds to carry out the purposes of the TANF block grant as specified in section 401 (Purpose) and section 404 (Use of Grants) of the Act. (b) As applicable, these funds are subject to the requirements in and limitations of sections 404 and 408 of the Act and § 263.11 of this chapter. (c) For Puerto Rico, Guam, the Virgin Islands, and American Samoa, the bonus award funds are not subject to the mandatory ceilings on funding established in section 1108(c)(4) of the Act. (d) States must report quarterly on the use of the bonus funds.