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Title 42, The Public Health and WelfareRelease 119-110

§606 Federal Loans for State Welfare Programs

Title 42 › CHAPTER 7 — SOCIAL SECURITY › SUBCHAPTER IV — GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES › Part A — Block Grants to States for Temporary Assistance for Needy Families › § 606

Last updated Sep 22, 2026|Official source

Summary

The Secretary must make loans to any loan-eligible State for up to 3 years. A loan-eligible State is one that has not been penalized under section 609(a)(1). The Secretary must charge interest equal to the current average market yield on U.S. marketable securities with a similar time left until they mature. States may spend the loan only for the same kinds of things allowed under section 603(a), including welfare anti-fraud work and help for Indian families who moved from a tribal service area with an approved tribal family assistance plan. For fiscal years 1997 through 2003, all loans to a single State cannot add up to more than 10 percent of that State’s family assistance grant. The total amount of loans outstanding nationwide cannot exceed $1,700,000,000. The Treasury will provide whatever funds are needed to cover the cost of these loans from money not already set aside.

Full Legal Text

Title 42, §606

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Loan authority
(1)In general
The Secretary shall make loans to any loan-eligible State, for a period to maturity of not more than 3 years.
(2)Loan-eligible State
As used in paragraph (1), the term “loan-eligible State” means a State against which a penalty has not been imposed under section 609(a)(1) of this title.
(b)Rate of interest
The Secretary shall charge and collect interest on any loan made under this section at a rate equal to the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the period to maturity of the loan.
(c)Use of loan
A State shall use a loan made to the State under this section only for any purpose for which grant amounts received by the State under section 603(a) of this title may be used, including—
(1)welfare anti-fraud activities; and
(2)the provision of assistance under the State program to Indian families that have moved from the service area of an Indian tribe with a tribal family assistance plan approved under section 612 of this title.
(d)Limitation on total amount of loans to State
The cumulative dollar amount of all loans made to a State under this section during fiscal years 1997 through 2003 shall not exceed 10 percent of the State family assistance grant.
(e)Limitation on total amount of outstanding loans
The total dollar amount of loans outstanding under this section may not exceed $1,700,000,000.
(f)Appropriation
Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as may be necessary for the cost of loans under this section.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 606, acts Aug. 14, 1935, ch. 531, title IV, § 406, 49 Stat. 629; Aug. 10, 1939, ch. 666, title IV, § 403, 53 Stat. 1380; Aug. 28, 1950, ch. 809, title III, pt. 2, § 323(a), 64 Stat. 551; Aug. 1, 1956, ch. 836, title III, §§ 321, 322, 351(b), 70 Stat. 850, 855;
July 25, 1962, Pub. L. 87–543, title I, §§ 104(a)(3)(D), 108(a), 109, 152, 156(b), 76 Stat. 185, 189, 190, 206, 207; Oct. 13, 1964, Pub. L. 88–641, § 2(a), 78 Stat. 1042;
July 30, 1965, Pub. L. 89–97, title IV, § 409, 79 Stat. 422; Jan. 2, 1968, Pub. L. 90–248, title II, §§ 201(f), 206(b), 207(a), 241(b)(5), 81 Stat. 880, 893, 916; Jan. 4, 1975, Pub. L. 93–647, §§ 3(a)(5), 101(c)(7), 88 Stat. 2348, 2360; Nov. 12, 1977, Pub. L. 95–171, § 3(a)(2), 91 Stat. 1354; Dec. 28, 1980, Pub. L. 96–611, § 4, 94 Stat. 3567; Aug. 13, 1981, Pub. L. 97–35, title XXI, § 2184(b)(2), title XXIII, §§ 2311, 2312, 2317(b), 2353(b)(1), 95 Stat. 817, 852, 853, 856, 872; Sept. 3, 1982, Pub. L. 97–248, title I, § 153(a), 96 Stat. 396;
July 18, 1984, Pub. L. 98–369, div. B, title III, § 2361(c), title VI, § 2663(c)(3)(A), (B)(i), 98 Stat. 1104, 1166; Aug. 16, 1984, Pub. L. 98–378, § 20(a), 98 Stat. 1322, related to definitions used in this part, prior to repeal by Pub. L. 104–193, § 103(a)(1), as amended by Pub. L. 105–33, title V, § 5514(c), Aug. 5, 1997, 111 Stat. 620.

Amendments

2003—Subsec. (d). Pub. L. 108–40 substituted “2003” for “2002”. 1997—Pub. L. 105–33 made technical amendment to directory language of Pub. L. 104–193, § 103(a)(1), which enacted this section.

Statutory Notes and Related Subsidiaries

Effective Date

of 2003 AmendmentAmendment by Pub. L. 108–40 effective July 1, 2003, see section 8 of Pub. L. 108–40, set out as a note under section 603 of this title.

Effective Date

of 1997 AmendmentAmendment by Pub. L. 105–33 effective as if included in the provision of Pub. L. 104–193 amended at the time the provision became law, see section 5518(d) of Pub. L. 105–33, set out as a note under section 862a of Title 21, Food and Drugs.

Effective Date

Section effective July 1, 1997, with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see section 116 of Pub. L. 104–193, as amended, set out as a note under section 601 of this title.

Reference

Citations & Metadata

Citation

42 U.S.C. § 606

Title 42, The Public Health and Welfare

Last Updated

Sep 22, 2026

Release point: 119-110