Fathers Count Act of 1998

Fathers Count Act of 1998 - Amends title IV of the Social Security Act to replace part C (Work Incentive Program) with a new part C (Grants to States to Encourage Fathers to Become Better Parents) instructing the Secretary of Health and Human Services, beginning FY 2000, to award grants to States for projects designed to encourage fathers to become better parents. Prescribes grant amounts for FY 2000 through 2004, and State uses for such funds.

Permits States to contract with religious, charitable, or private organizations to provide and administer services under such grants.

Declares religious organizations eligible as contractors to provide assistance or to accept disbursements on the same basis as any other private organization, so long as program implementation complies with the Establishment Clause of the Constitution.

Prohibits discrimination against religious organizations that apply as contractors or accept disbursements under this Act. Delineates safeguards against certain Federal and State requirements with respect to such religious organizations, including an organization's control over the definition, development, practice, and expression of religious beliefs.

Proscribes the use of funds under this Act for sectarian worship, instruction, or proselytization.

Declares that this Act does not preempt any State constitution or statute that prohibits or restricts the expenditure of State funds in or by religious organizations.

Authorizes appropriations.