1. It shall be the policy of the Commonwealth to expend federal block grant funds allocated to it under the Temporary Assistance for Needy Families (TANF) program established pursuant to Public Law 104-193, as amended, in a fiscally prudent manner so as to reasonably conserve unexpended allocations of such federal funds for use in offsetting future TANF program costs. In order to accumulate sufficient resources to offset expected caseload increases in the event of an economic downturn, the Commonwealth shall conserve no less than $20,000,000 of the federal TANF block grant in each fiscal year of the biennium.

2. It is hereby acknowledged that as of June 30, 1997, there existed with the federal government an unexpended balance of $31,300,000 in federal TANF block grant funds which are available to the Commonwealth of Virginia to reimburse expenditures incurred in accordance with the adopted State Plan for the TANF program. Based on fiscal year 1998 spending levels and appropriations in this act, the Commonwealth's unexpended balance for authorized federal TANF block grant funds is estimated at $17,200,000 on June 30, 1998; $24,100,000 on June 30, 1999; and $22,300,000 on June 30, 2000.

3. With the executive budget each year, the Department of Planning and Budget shall provide an update to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees on the total level of reserves necessary to cover likely caseload increases in the event of a future economic downturn. The Department shall collaborate with the Department of Social Services in developing its recommendations.