State and Local Welfare Reform and Fiscal Relief Act

State and Local Welfare Reform and Fiscal Relief Act - Amends the program of Aid to Families with Dependent Children (AFDC) established by Part A of Title IV of the Social Security Act to establish a new formula for determining the amount of the Federal payment to each State for amounts expended by a State under such program. Provides for an annual cost-of-living increase in such amount. Requires that such increases be passed on to recipients of aid under the program. Directs that each State plan for the operation of the State AFDC program provide for the reimbursement of the political subdivisions of the State for the amount contributed to the program by the subdivisions.