The move withdraws a 1998 DOJ opinion and clarifies that under a 1996 welfare-reform law - the Personal Responsibility and Work Opportunity Reconciliation Act - all state agencies, including those that administer welfare funding, have the duty to report individuals unlawfully in the United States to the Department of Homeland Security (DHS).

According to the new Office of Legal Counsel opinion, which was issued Sept. 1, states risk losing funds for the Temporary Assistance for Needy Families (TANF) and the Supplemental Security Income programs if they do not comply.

"Congress wrote this requirement plainly," said Assistant Attorney General T. Elliot Gaiser of the DOJ's Office of Legal Counsel.

"When a state chooses to participate in TANF, it accepts the obligation to report illegal aliens in the United States."

States that do not alert DHS to unlawful individuals attempting to obtain welfare thus encourage illegal immigration and take tax dollars away from U.S. citizens, Gaiser said in a statement.

The previous Clinton-era interpretation of the Personal Responsibility and Work Opportunity Reconciliation Act, which is now reversed, limited states' reporting requirement of illegal immigrants to immigration authorities only to state agencies administering the welfare funds.

"We reached that view by disregarding [the 1996 law's] definition of 'State' and giving that term inconsistent meanings within the same statutory provision," the Office of Legal Counsel admitted in its new opinion. "We conclude that our 1998 Opinion improperly narrowed the conditions that Congress attached to federal funding for certain federal benefits programs. We now withdraw it."

All 50 states, the District of Columbia, and several U.S. territories participate in TANF and the Supplemental Security Income programs, the DOJ said.

Funding for the TANF program alone accounts for more than $16.4 billion each year.

DOJ Office of Legal Counsel Deputy Assistant Attorney General Joshua Craddock, who authored the new opinion, said it doesn't impose any new obligations on states. It only restores the original meaning of the 1996 act that binds all state agencies to federal law in sharing information with DHS about known illegal immigrants, he stated.

"States that accept TANF funding must abide by federal law, and failure to comply may lead to serious consequences, including loss of program funding," Craddock said in the statement.

The DOJ clarified this new opinion only applies prospectively. States will not face retroactive penalties or altered agreements for welfare funds because those contracts complied with the 1998 interpretation.