(Sec. 3) Provides that, between the enactment of this Act and August 31, 2006, a state shall be considered a needy state for purposes of the TANF Contingency Fund for State Welfare Programs if: (1) cash benefits under the state TANF program have been provided on a short-term, nonrecurring basis to a family which has resided in another state that includes an area for which a major disaster has been declared as a result of Hurricane Katrina, and has traveled (not necessarily directly) to the state from such other state as a result of the hurricane; and (2) the state has determined that the family is not receiving cash benefits from any program funded under part A of any other state. Declares that no state match is required for such state payments.
(Sec. 4) Provides that between the enactment of this Act and the end of FY2006: (1) the states of Louisiana, Mississippi, and Alabama shall be considered eligible for federal loans for State Welfare Programs; and (2) the cumulative dollar amount of all loans made to such a state by reason of this Act shall not exceed 20% of the state family assistance grant payable to the state for FY2006. Prohibits the imposition of a penalty against Louisiana, Mississippi, or Alabama for failure to repay such a loan or make any interest payment on it.
(Sec. 5) Authorizes a state or tribe to use a grant made under the TANF program for any fiscal year to provide, without fiscal year limitation, any benefit or service that may be provided under the state or tribal TANF program to support needy families affected by Hurricane Katrina.
(Sec. 6) Declares that benefits provided on a short-term, nonrecurring basis under a state TANF program, between the enactment of this Act and the end of FY2006, to meet a subsistence need of a family resulting from Hurricane Katrina shall not be considered assistance for purposes of mandatory work requirements and the five-year limit on assistance.
(Sec. 7) Prohibits the Secretary from imposing a penalty on Louisiana, Mississippi, or Alabama for failure to comply with any provision of the TANF program between the enactment of this Act and the end of FY2006, if the failure resulted from Hurricane Katrina or reasonable conduct of the state in addressing needs of Hurricane Katrina victims.
(Sec. 8) Designates each amount provided in this Act (other than in Sec. 2) as an emergency requirement exempt from the budget enforcement requirements of H.Con. Res. 95 (109th Congress).