; or (B) case management activities to carry out section 408(b). . (c) Prohibition on use of funds for direct spending on child care or child welfare services or activities Section 404(k) ( 42 U.S.C. 604(k) ), as amended by subsection (a) of this section, is amended by adding at the end the following: (2) Direct spending on child care services or activities or child welfare services or activities A State to which a grant is made under this part shall not use the grant for direct spending on child care services or activities or direct spending on child welfare services or activities. . (d) Expansion of authority To transfer funds to other programs Section 404(d) ( 42 U.S.C. 604(d) ) is amended by striking paragraphs (1) through (3) and inserting the following: (1) In general A State may use not more than 50 percent of the grant made to the State under section 403(a)(1) to carry out a State program pursuant to any or all of the following provisions of law: (A) The Child Care and Development Block Grant Act of 1990. (B) Title I of the Workforce Innovation and Opportunity Act. (C) Subpart 1 of part B of this title. (2) Limitation on amount transferrable to subpart 1 of part b of this title (A) In general.—A State may use not more than the applicable percentage of the amount of a grant made to the State under section 403(a)(1) to carry out State programs pursuant to subpart 1 of part B. (B) Applicable percentage For purposes of subparagraph (A), the applicable percentage is 10 percent. (3) Applicable rules (A) In general Except as provided in subparagraph (B) of this paragraph, any amount paid to a State under this part that is used to carry out a State program pursuant to a provision of law specified in paragraph (1) shall not be subject to the requirements of this part, but shall be subject to the requirements that apply to Federal funds provided directly under the provision of law to carry out the program, and the expenditure of any amount so used shall not be considered to be an expenditure under this part. (B)