Set-aside for economic downturns

Section 404(e) (42 U.S.C. 604(e)) is amended to read as follows: (e) Deadlines for obligation and expenditures of funds by States (1) In general Except as provided in paragraph (2), a State to which a grant is made under section 403(a)(1) shall obligate the funds within 2 years after the date the funds are made available, and shall expend the funds within 3 years after such date. (2) Exception for limited amount of funds set aside for future use (A) In general A State to which funds are paid under section 403(a)(1) may reserve not more than 15 percent of the funds for use in the State program funded under this part without fiscal year limitation. (B) Notice of intent to reserve funds A State that intends to reserve funds paid to the State under section 402(a)(1) shall notify the Secretary of the intention not later than the end of the period in which the funds are available for obligation without regard to subparagraph (A) of this paragraph..