Exhibit 2--SSA-Title V-Secs 505 and 506

Social Security Act, Title V, sec. 505. - Application for block grant
funds
(a)

In order to be entitled to payments for allotments under section 702 of this title for
a fiscal year, a State must prepare and transmit to the Secretary an application (in a
standardized form specified by the Secretary) that (1)
contains a statewide needs assessment (to be conducted every 5 years) that
shall identify (consistent with the health status goals and national health
objectives referred to in section 701(a) of this title) the need for (A)
preventive and primary care services for pregnant women, mothers,
and infants up to age one;
(B)
preventive and primary care services for children; and
(C)
services for children with special health care needs (as specified in
section 701(a)(1)(D) of this title);
(2)
includes for each fiscal year (A)
a plan for meeting the needs identified by the statewide needs
assessment under paragraph (1); and
(B)
a description of how the funds allotted to the State under section
702(c) of this title will be used for the provision and coordination of services
to carry out such plan that shall include (i)
subject to paragraph (3), a statement of the goals and objectives
consistent with the health status goals and national health objectives
referred to in section 701(a) of this title for meeting the needs
specified in the State plan described in subparagraph (A);
(ii)
an identification of the areas and localities in the State in which
services are to be provided and coordinated;
(iii)
an identification of the types of services to be provided and the
categories or characteristics of individuals to be served; and
(iv)
information the State will collect in order to prepare reports required
under section 706(a) of this title;
(3)
except as provided under subsection (b) of this section, provides that the
State will use (A)
at least 30 percent of such payment amounts for preventive and
primary care services for children, and
(B)
at least 30 percent of such payment amounts for services for children
with special health care needs (as specified in section 701(a)(1)(D) of this
title);

(4)
provides that a State receiving funds for maternal and child health services
under this subchapter shall maintain the level of funds being provided solely by
such State for maternal and child health programs at a level at least equal to the
level that such State provided for such programs in fiscal year 1989; and
(5)

provides that (A)

(B)

the State will establish a fair method (as determined by the State) for
allocating funds allotted to the State under this subchapter among such
individuals, areas, and localities identified under paragraph (1)(A) as
needing maternal and child health services, and the State will identify and
apply guidelines for the appropriate frequency and content of, and
appropriate referral and followup with respect to, health care assessments
and services financially assisted by the State under this subchapter and
methods for assuring quality assessments and services;
funds allotted to the State under this subchapter will only be used,
consistent with section 708 of this title, to carry out the purposes of this
subchapter or to continue activities previously conducted under the
consolidated health programs (described in section 701(b)(1) of this title);

(C)

the State will use (i)

special consideration (where appropriate) for the continuation of the
funding of special projects in the State previously funded under this
subchapter (as in effect before August 31, 1981), and

(ii)
a reasonable proportion (based upon the State's previous use of
funds under this subchapter) of such sums to carry out the purposes
described in subparagraphs (A) through (D) of section 701(a)(1) of
this title;
(D)

(E)

(F)

if any charges are imposed for the provision of health services assisted
by the State under this subchapter, such charges
(i)
will be pursuant to a public schedule of charges,
(ii)
will not be imposed with respect to services provided to low income
mothers or children, and
(iii)
will be adjusted to reflect the income, resources, and family size of
the individual provided the services;
the State agency (or agencies) administering the State's program
under this subchapter will provide for a toll-free telephone number (and
other appropriate methods) for the use of parents to access information
about health care providers and practitioners who provide health care
services under this subchapter and subchapter XIX of this chapter and
about other relevant health and health-related providers and practitioners;
and
the State agency (or agencies) administering the State's program
under this subchapter will -

(i)
participate in the coordination of activities between such program and
the early and periodic screening, diagnostic, and treatment program
under section 1396d(a)(4)(B) of this title (including the establishment
of periodicity and content standards for early and periodic screening,
diagnostic, and treatment services), to ensure that such programs
are carried out without duplication of effort,
(ii)

(iii)

participate in the arrangement and carrying out of coordination
agreements described in section 1396a(a)(11) of this title (relating to
coordination of care and services available under this subchapter and
subchapter XIX of this chapter),
participate in the coordination of activities within the State with
programs carried out under this subchapter and related Federal grant
programs (including supplemental food programs for mothers,
infants, and children, related education programs, and other health,
developmental disability, and family planning programs), and

(iv)
provide, directly and through their providers and institutional
contractors, for services to identify pregnant women and infants who
are eligible for medical assistance under subparagraph (A) or (B) of
section 1396a(l)(1) of this title and, once identified, to assist them in
applying for such assistance.
The application shall be developed by, or in consultation with, the State maternal
and child health agency and shall be made public within the State in such manner as to
facilitate comment from any person (including any Federal or other public agency)
during its development and after its transmittal.
(b)

The Secretary may waive the requirements under subsection (a)(3) of this section
that a State's application for a fiscal year provide for the use of funds for specific
activities if for that fiscal year (1)
the Secretary determines (A)
on the basis of information provided in the State's most recent annual
report submitted under section 706(a)(1) of this title, that the State has
demonstrated an extraordinary unmet need for one of the activities
described in subsection (a)(3) of this section, and
(B)
that the granting of the waiver is justified and will assist in carrying out
the purposes of this subchapter; and
(2)
the State provides assurances to the Secretary that the State will provide
for the use of some amounts paid to it under section 703 of this title for the
activities described in subparagraphs (A) and (B) of subsection (a)(3) of this
section and specifies the percentages to be substituted in each of such
subparagraphs

Social Security Act, Title V, sec. 506. - Administrative and fiscal
accountability

(a) Annual reporting requirements; form, etc.
(1)
Each State shall prepare and submit to the Secretary annual reports on its
activities under this subchapter. Each such report shall be prepared by, or in
consultation with, the State maternal and child health agency. In order properly
to evaluate and to compare the performance of different States assisted under
this subchapter and to assure the proper expenditure of funds under this
subchapter, such reports shall be in such standardized form and contain such
information (including information described in paragraph (2)) as the Secretary
determines (after consultation with the States) to be necessary
(A)
to secure an accurate description of those activities,
(B)
to secure a complete record of the purposes for which funds were
spent, of the recipients of such funds,
(C)
to describe the extent to which the State has met the goals and
objectives it set forth under section 705(a)(2)(B)(i) of this title and the
national health objectives referred to in section 701(a) of this title, and
(D)
to determine the extent to which funds were expended consistent with
the State's application transmitted under section 705(a) of this title. Copies
of the report shall be provided, upon request, to any interested public
agency, and each such agency may provide its views on these reports to
the Congress.
(2)
Each annual report under paragraph (1) shall include the following
information:
(A)
(i)
The number of individuals served by the State under this subchapter
(by class of individuals).
(ii)
The proportion of each class of such individuals which has health
coverage.
(iii)
The types (as defined by the Secretary) of services provided under
this subchapter to individuals within each such class.
(iv)
The amounts spent under this subchapter on each type of services,
by class of individuals served.
(B)
Information on the status of maternal and child health in the State,
including (i)
information (by county and by racial and ethnic group) on (I)
the rate of infant mortality, and
(II)
the rate of low-birth-weight births;

(ii)
information (on a State-wide basis) on (I)
the rate of maternal mortality,
(II)
the rate of neonatal death,
(III)
the rate of perinatal death,
(IV)
the number of children with chronic illness and the type of
illness,
(V)
the proportion of infants born with fetal alcohol syndrome,
(VI)
the proportion of infants born with drug dependency,
(VII)
the proportion of women who deliver who do not receive
prenatal care during the first trimester of pregnancy, and
(VIII)
the proportion of children, who at their second birthday, have
been vaccinated against each of measles, mumps, rubella,
polio, diphtheria, tetanus, pertussis, Hib meningitis, and
hepatitis B; and
(iii)
(C)

information on such other indicators of maternal, infant, and child
health care status as the Secretary may specify.
Information (by racial and ethnic group) on -

(i)
(ii)

(D)

the number of deliveries in the State in the year, and
the number of such deliveries to pregnant women who were provided
prenatal, delivery, or postpartum care under this subchapter or were
entitled to benefits with respect to such deliveries under the State
plan under subchapter XIX of this chapter in the year.
Information (by racial and ethnic group) on -

(i)
(ii)

the number of infants under one year of age who were in the State in
the year, and
the number of such infants who were provided services under this
subchapter or were entitled to benefits under the State plan under
subchapter XIX of this chapter or the State plan under subchapter
XXI of this chapter at any time during the year.

(E)
(i)
(ii)
(iii)
(iv)

Information on the number of obstetricians,
family practitioners,
certified family nurse practitioners,

certified nurse midwives,
(v)
(vi)

pediatricians, and

certified pediatric nurse practitioners,
who were licensed in the State in the year.
For purposes of subparagraph (A), each of the following shall be considered to be a
separate class of individuals: pregnant women, infants up to age one, children with
special health care needs, other children under age 22, and other individuals.
(3)
The Secretary shall annually transmit to the Committee on Energy and
Commerce of the House of Representatives and the Committee on Finance of the
Senate a report that includes (A)
a description of each project receiving funding under paragraph (2) or
(3) of section 702(a) of this title, including the amount of Federal funds
provided, the number of individuals served or trained, as appropriate,
under the project, and a summary of any formal evaluation conducted with
respect to the project;
(B)
a summary of the information described in paragraph (2)(A) reported
by States;
(C)
based on information described in paragraph (2)(B) supplied by the
States under paragraph (1), a compilation of the following measures of
maternal and child health in the United States and in each State:
(i)
Information on (I)
the rate of infant mortality, and
(II)
the rate of low-birth-weight births.
Information under this clause shall also be compiled by racial and
ethnic group.
(ii)
Information on (I)
the rate of maternal mortality,
(II)
the rate of neonatal death,
(III)
the rate of perinatal death,
(IV)
the proportion of infants born with fetal alcohol syndrome,
(V)
the proportion of infants born with drug dependency,
(VI)
the proportion of women who deliver who do not receive
prenatal care during the first trimester of pregnancy, and
(VII)
the proportion of children, who at their second birthday, have
been vaccinated against each of measles, mumps, rubella,
polio, diphtheria, tetanus, pertussis, Hib meningitis, and
hepatitis B.

(iii)

(iv)

Information on such other indicators of maternal, infant, and child
health care status as the Secretary has specified under paragraph
(2)(B)(iii).
Information (by racial and ethnic group) on (I)
the number of deliveries in the State in the year, and
(II)
the number of such deliveries to pregnant women who were
provided prenatal, delivery, or postpartum care under this
subchapter or were entitled to benefits with respect to such
deliveries under the State plan under subchapter XIX of this
chapter in the year;

(D)

based on information described in subparagraphs (C), (D), and (E) of
paragraph (2) supplied by the States under paragraph (1), a compilation of
the following information in the United States and in each State:
(i)
Information on (I)
the number of deliveries in the year, and
(II)
the number of such deliveries to pregnant women who were
provided prenatal, delivery, or postpartum care under this
subchapter or were entitled to benefits with respect to such
deliveries under a State plan under subchapter XIX of this
chapter in the year.
Information under this clause shall also be compiled by racial and
ethnic group.
(ii)
Information on (I)
the number of infants under one year of age in the year, and
(II)
the number of such infants who were provided services under
this subchapter or were entitled to benefits under a State plan
under subchapter XIX of this chapter or the State plan under
subchapter XXI of this chapter at any time during the year.
Information under this clause shall also be compiled by racial and
ethnic group.
(iii)
Information on the number of (I)
obstetricians,
(II)
family practitioners,
(III)
certified family nurse practitioners,
(IV)
certified nurse midwives,
(V)
pediatricians, and

(VI)
certified pediatric nurse practitioners,
who were licensed in a State in the year; and
(E)

an assessment of the progress being made to meet the health status
goals and national health objectives referred to in section 701(a) of this
title.
(b) Audits; implementation, standards, etc.
(1)
Each State shall, not less often than once every two years, audit its
expenditures from amounts received under this subchapter. Such State audits
shall be conducted by an entity independent of the State agency administering a
program funded under this subchapter in accordance with the Comptroller
General's standards for auditing governmental organizations, programs, activities,
and functions and generally accepted auditing standards. Within 30 days following
the completion of each audit report, the State shall submit a copy of that audit
report to the Secretary.
(2)
Each State shall repay to the United States amounts found by the Secretary,
after notice and opportunity for a hearing to the State, not to have been
expended in accordance with this subchapter and, if such repayment is not made,
the Secretary may offset such amounts against the amount of any allotment to
which the State is or may become entitled under this subchapter or may
otherwise recover such amounts.
(3)
The Secretary may, after notice and opportunity for a hearing, withhold
payment of funds to any State which is not using its allotment under this
subchapter in accordance with this subchapter. The Secretary may withhold such
funds until the Secretary finds that the reason for the withholding has been
removed and there is reasonable assurance that it will not recur.
(c) Public inspection of reports and audits
The State shall make copies of the reports and audits required by this section
available for public inspection within the State.
(d) Access to books, records, etc.; creation of new records
(1)
For the purpose of evaluating and reviewing the block grant established
under this subchapter, the Secretary and the Comptroller General shall have
access to any books, accounts, records, correspondence, or other documents that
are related to such block grant, and that are in the possession, custody, or
control of States, political subdivisions thereof, or any of their grantees.
(2)
In conjunction with an evaluation or review under paragraph (1), no State or
political subdivision thereof (or grantee of either) shall be required to create or
prepare new records to comply with paragraph (1).
(3)
For other provisions relating to deposit, accounting, reports, and auditing
with respect to Federal grants to States, see section 6503(b) [1] of title 31.