Fiscal years 2003 and 2004

(A) Guidance With respect to fiscal years 2003 and 2004, the Secretary shall establish, in guidance issued to State agencies not later than October 1, 2002 — (i) performance criteria relating to— (I) actions taken to correct errors, reduce rates of error, and improve eligibility determinations; and (II) other indicators of effective administration determined by the Secretary; and (ii) standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii).

(B) Performance bonus payments With respect to each of fiscal years 2003 and 2004, the Secretary shall— (i) measure the performance of each State agency with respect to the criteria established under subparagraph (A)(i); and (ii) subject to paragraph (3), award performance bonus payments in the following fiscal year, in a total amount of $48,000,000 for each fiscal year, to State agencies that meet standards for high or most improved performance established by the Secretary under subparagraph (A)(ii).