(a) It is the intent of the Legislature to provide counties with grant savings as defined in subdivisions (d) and (e) subject to the amounts appropriated in the annual Budget Act.

(b) It is the intent of the Legislature that the counties use the funds, when appropriated, to do all of the following:

(1) Improve the quality of jobs provided to recipients.

(2) Help individuals attain long-term self-sufficiency.

(3) Prevent the need for CalWORKs benefits for those families making the transition from the CalWORKs program.

(c) It is further the intent of the Legislature to evaluate the efforts of counties in using the funds to improve the state’s understanding of how best to assist families in attaining long-term and sustained self-sufficiency.

(d) In order to provide counties with additional incentive to move CalWORKs recipients to employment, each county shall receive the state share of savings, including federal funds under the Temporary Assistance for Needy Families block grant subject to the amounts appropriated in the annual Budget Act, resulting from the following outcomes:

(1) Recipients exiting the program due to employment that has lasted a minimum of six months.

(2) Increased earnings by recipients due to employment.

(3) Diversion of applicants from the program pursuant to Section 11266.5 for six months in addition to the number of months equivalent to the diversion payment.

(e) (1) For purposes of subdivision (d), the department, shall apply the method for valuing the outcomes to determine county share of savings that was utilized in fiscal years 1998–99 and 1999–2000, except that increased earning by recipients due to employment shall be valued at 50 percent of actual grant savings instead of 100 percent.

(2) The method shall be adjusted as appropriate, and determined in consultation with program stakeholders, to account for any changes made to the Temporary Assistance to Needy Families program requirements for block grant funding levels as a result of Congressional reauthorization of the program in 2002.

(f) The funds allocated to counties pursuant to subdivisions (d) and (e) that are federal Temporary Assistance for Needy Families block grant funds shall be used only for purposes for which these federal funds may be used. The funds that are state General Fund dollars shall be expended for purposes directly connected to the CalWORKs program and countable towards the state maintenance of effort level required by federal law, unless the Director of Finance determines that all or part of the funds are not needed in that fiscal year to meet the required maintenance of effort. Any unexpended funds may be retained by each county for expenditure in subsequent fiscal years for purposes consistent with this subdivision.

(g) (1) Notwithstanding Section 11250 or any other provision of law, commencing October 1, 2000, exclusively for purposes of county performance incentives provided under this section and exclusively for purposes of providing nonassistance services pursuant to Section 42 U.S.C. Sec. 601(a)(1) and (2) to families not receiving aid under this chapter, “needy families” also includes any family in which the minor child is living with a parent or adult relative caregiver and the family’s income is less than 200 percent of the official federal poverty guidelines applicable to a family of the size involved.

(2) A county shall not expend more than 25 percent of its performance incentive funds for purposes of this subdivision.

(3) For purposes of this subdivision, “nonassistance services” means services that do not constitute assistance as defined in applicable federal law and regulations governing the Temporary Assistance for Needy Families program.

(h) Each county shall submit a plan to the department describing how it intends to expend its fiscal incentive funds and how the benefits and services relate to the issue of sustaining self-sufficiency. The plan shall also describe how these services will be coordinated with other services within the community that are funded from sources such as the county’s single allocation, Welfare-to-Work grants, and community college funds.

(i) Each county shall report quarterly on the actual expenditure of funds under this section and shall complete a self-evaluation report annually on the results of the benefits and services provided and any lessons the county has learned from the approach it has taken.

(j) The department shall evaluate the programs that have been supported by county incentive funds to determine the extent to which the goals of the TANF program and the goals specified in this section are achieved.

(k) Acceptance of incentive funds beginning with the 2000–01 fiscal year shall constitute a waiver of any claim, cause of action, or action whenever filed, with respect to fiscal incentives earned through the 1999–2000 fiscal year under subdivision (c) of this section as enacted by Chapter 270 of the Statutes of 1997, but not allocated to counties by the department.

(l) This section shall not be interpreted to entitle any individual or family to assistance or services under any program created and funded under this section.

(Amended by Stats. 2000, Ch. 108, Sec. 24.5. Effective July 10, 2000.)