To amend title XXI of the Social Security Act to modify the rules relating to the availability and method of redistribution of unexpended SCHIP allotments, and for other purposes.

Summary: Children's Health Protection and Improvement Act of 2004 - Amends title XXI (State Children's Health Insurance Program) (SCHIP) of the Social Security Act (SSA) to revise the extended availability through FY 2004 of SCHIP allotments for FY 1998 through 2001.

Specifies formulae for amounts to be used in computing redistributions for FY 2003, 2003, and 2004. Provides for reallocation of 70 percent of the expiring FY 1998, 1999, and 2000 funds to States that have fully expended their annual allotments. Extends the availability of the remaining 30 percent of such expiring funds with the States that currently have them.

Permits 50 percent of the total amount of a State's unexpended FY 2002 SCHIP allotments to remain available through FY 2006. Permits 50 percent of the total amount of a State's unexpended FY 2003 and 2004 SCHIP allotments to remain available through the end of FY 2007. Requires redistribution of the other 50 percent of such funds to States that have fully spent their allotments during the three-year period they were available.

Requires a second redistribution according to the same 70-30 formula of any retained or redistributed funds still unexpended at the end of the two-year extention or redistribution.

Provides for continued authority for qualifying States to use certain funds for Medicaid expenditures.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children's Health Protection and 
Improvement Act of 2004''.

SEC. 2. CHANGES TO RULES FOR REDISTRIBUTION AND EXTENDED AVAILABILITY 
              OF 1998 THROUGH 2004 SCHIP ALLOTMENTS.

    Section 2104(g) of the Social Security Act (42 U.S.C. 1397dd(g)), 
as amended by Public Law 108-74 (117 Stat. 892), is amended--
            (1) in the subsection heading by striking ``, 1999, 2000, 
        and 2001'' and inserting ``Through 2004''; and
            (2) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) in the matter preceding clause (i)--
                                    (I) by inserting ``or for fiscal 
                                year 2002 by the end of fiscal year 
                                2004, or for fiscal year 2003 by the 
                                end of fiscal year 2005, or for fiscal 
                                year 2004 by the end of fiscal year 
                                2006,'' after ``fiscal year 2003,''; 
                                and
                                    (II) by striking ``or 2001'' and 
                                inserting ``2001, 2002, 2003, or 
                                2004'';
                            (ii) in clause (i)--
                                    (I) in subclause (III), by striking 
                                ``or'' at the end;
                                    (II) in subclause (IV), by striking 
                                the period at the end and inserting a 
                                semicolon; and
                                    (III) by adding at the end the 
                                following:
                                    ``(V) the fiscal year 2002 
                                allotment, the amount specified in 
                                subparagraph (E)(i) (less the total of 
                                the amounts under clause (ii) for such 
                                fiscal year), multiplied by the ratio 
                                of the amount specified in subparagraph 
                                (E)(ii) for the State to the amount 
                                specified in subparagraph (E)(iii);
                                    ``(VI) the fiscal year 2003 
                                allotment, the amount specified in 
                                subparagraph (F)(i) (less the total of 
                                the amounts under clause (ii) for such 
                                fiscal year), multiplied by the ratio 
                                of the amount specified in subparagraph 
                                (F)(ii) for the State to the amount 
                                specified in subparagraph (F)(iii); or
                                    ``(VII) the fiscal year 2004 
                                allotment, the amount specified in 
                                subparagraph (G)(i) (less the total of 
                                the amounts under clause (ii) for such 
                                fiscal year), multiplied by the ratio 
                                of the amount specified in subparagraph 
                                (G)(ii) for the State to the amount 
                                specified in subparagraph (G)(iii).''; 
                                and
                            (iii) in clause (ii), by striking ``or 
                        2001'' and inserting ``2001, 2002, 2003, or 
                        2004'';
                    (B) in subparagraph (B)--
                            (i) in clause (ii), by inserting ``but 
                        subject to paragraph (4)'' after ``subsection 
                        (e)'';
                            (ii) in clause (iii)--
                                    (I) by inserting ``but subject to 
                                paragraph (4)'' after ``subsection 
                                (e)''; and
                                    (II) by striking ``and'' at the 
                                end;
                            (iii) by redesignating clause (iv) as 
                        clause (vii); and
                            (iv) by inserting after clause (iii), the 
                        following:
                            ``(iv) notwithstanding subsection (e) but 
                        subject to paragraph (4), with respect to 
                        fiscal year 2002, shall remain available for 
                        expenditure by the State through the end of 
                        fiscal year 2006;
                            ``(v) notwithstanding subsection (e), with 
                        respect to fiscal year 2003, shall remain 
                        available for expenditure by the State through 
                        the end of fiscal year 2007; and
                            ``(vi) with respect to fiscal year 2004, 
                        subsection (e) shall apply; and''; and
                    (C) by adding at the end the following:
                    ``(E) Amounts used in computing redistributions for 
                fiscal year 2002.--For purposes of subparagraph 
                (A)(i)(V)--
                            ``(i) the amount specified in this clause 
                        is the amount specified in paragraph 
                        (2)(B)(i)(I) for fiscal year 2002, less the 
                        total amount remaining available pursuant to 
                        paragraph (2)(A)(v);
                            ``(ii) the amount specified in this clause 
                        for a State is the amount by which the State's 
                        expenditures under this title in fiscal years 
                        2002, 2003, and 2004 exceed the State's 
                        allotment for fiscal year 2002 under subsection 
                        (b); and
                            ``(iii) the amount specified in this clause 
                        is the sum, for all States entitled to a 
                        redistribution under subparagraph (A) from the 
                        allotments for fiscal year 2002, of the amounts 
                        specified in clause (ii).
                    ``(F) Amounts used in computing redistributions for 
                fiscal year 2003.--For purposes of subparagraph 
                (A)(i)(VI)--
                            ``(i) the amount specified in this clause 
                        is the amount specified in paragraph 
                        (2)(B)(i)(I) for fiscal year 2003, less the 
                        total amount remaining available pursuant to 
                        paragraph (2)(A)(vi);
                            ``(ii) the amount specified in this clause 
                        for a State is the amount by which the State's 
                        expenditures under this title in fiscal years 
                        2003, 2004, and 2005 exceed the State's 
                        allotment for fiscal year 2003 under subsection 
                        (b); and
                            ``(iii) the amount specified in this clause 
                        is the sum, for all States entitled to a 
                        redistribution under subparagraph (A) from the 
                        allotments for fiscal year 2003, of the amounts 
                        specified in clause (ii).
                    ``(G) Amounts used in computing redistributions for 
                fiscal year 2004.--For purposes of subparagraph 
                (A)(i)(VII)--
                            ``(i) the amount specified in this clause 
                        is the amount specified in paragraph 
                        (2)(B)(i)(I) for fiscal year 2004, less the 
                        total amount remaining available pursuant to 
                        paragraph (2)(A)(vii);
                            ``(ii) the amount specified in this clause 
                        for a State is the amount by which the State's 
                        expenditures under this title in fiscal years 
                        2004, 2005, and 2006 exceed the State's 
                        allotment for fiscal year 2004 under subsection 
                        (b); and
                            ``(iii) the amount specified in this clause 
                        is the sum, for all States entitled to a 
                        redistribution under subparagraph (A) from the 
                        allotments for fiscal year 2004, of the amounts 
                        specified in clause (ii).'';
            (3) in paragraph (2)--
                    (A) in the paragraph heading by striking ``2001'' 
                and inserting ``2004''; and
                    (B) in subparagraph (A)--
                            (i) in clause (i), by striking ``Of'' and 
                        inserting ``Subject to paragraph (4), of'';
                            (ii) in clause (ii), by striking ``Of'' and 
                        inserting ``Subject to paragraph (4), of'';
                            (iii) in clause (iii), by striking ``Of'' 
                        and inserting ``Subject to paragraph (4), of'';
                            (iv) in clause (iv), by striking ``Of'' and 
                        inserting ``Subject to paragraph (4), of''; and
                            (v) by adding at the end the following:
                            ``(v) Fiscal year 2002 allotment.--Subject 
                        to paragraph (4), of the amounts allotted to a 
                        State pursuant to this section for fiscal year 
                        2002 that were not expended by the State by the 
                        end of fiscal year 2004, 50 percent of that 
                        amount shall remain available for expenditure 
                        by the State through the end of fiscal year 
                        2006.
                            ``(vi) Fiscal year 2003 allotment.--Of the 
                        amounts allotted to a State pursuant to this 
                        section for fiscal year 2001 that were not 
                        expended by the State by the end of fiscal year 
                        2005, 50 percent of that amount shall remain 
                        available for expenditure by the State through 
                        the end of fiscal year 2007.
                            ``(vii) Fiscal year 2004 allotment.--Of the 
                        amounts allotted to a State pursuant to this 
                        section for fiscal year 2004 that were not 
                        expended by the State by the end of fiscal year 
                        2006, 50 percent of that amount shall remain 
                        available for expenditure by the State through 
                        the end of fiscal year 2007.'';
            (4) in paragraph (3)--
                    (A) by striking ``or fiscal year 2001'' and 
                inserting ``fiscal year 2001, fiscal year 2002, fiscal 
                year 2003, or fiscal year 2004,''; and
                    (B) by striking ``or November 30, 2003,'' and 
                inserting ``November 30, 2003, November 30, 2004, 
                November 30, 2005, or November 30, 2006,''; and
            (5) by adding at the end the following:
            ``(4) Additional extended availability of fiscal years 1998 
        through 2002 allotments.--
                    ``(A) Fiscal year 1998, 1999, and 2000 
                allotments.--With respect to any amounts allotted to a 
                State pursuant to this section for fiscal years 1998, 
                1999, or 2000 that were redistributed to a State under 
                paragraph (1), or whose availability to a State was 
                extended through the end of fiscal year 2004 under 
                paragraph (2), that were not expended by the State by 
                the end of fiscal year 2004, the following rules shall 
                apply:
                            ``(i) 30 percent of such amounts shall 
                        remain available for expenditure by the State 
                        through the end of fiscal year 2007.
                            ``(ii) The remainder of such amounts shall 
                        be redistributed to States that have fully 
                        expended the amount of their fiscal year 2002 
                        allotments under this section in the same ratio 
                        as unexpended fiscal year 2002 allotments are 
                        redistributed under paragraph (1)(A)(i)(V) to 
                        such States and the amounts redistributed under 
                        this clause shall remain available for 
                        expenditure through the end of fiscal year 
                        2007.
                    ``(B) Fiscal year 2001 allotments.--With respect to 
                any amounts allotted to a State pursuant to this 
                section for fiscal year 2001 that were redistributed to 
                a State under paragraph (1), or whose availability to a 
                State was extended through the end of fiscal year 2005 
                under paragraph (2), that were not expended by the 
                State by the end of fiscal year 2005, the following 
                rules shall apply:
                            ``(i) 30 percent of such amounts shall 
                        remain available for expenditure by the State 
                        through the end of fiscal year 2007.
                            ``(ii) The remainder of such amounts shall 
                        be redistributed to States that have fully 
                        expended the amount of their fiscal year 2003 
                        allotments in the same ratio as unexpended 
                        fiscal year 2003 allotments are redistributed 
                        under paragraph (1)(A)(i)(VI) to such States 
                        and the amounts redistributed under this clause 
                        shall remain available for expenditure through 
                        the end of fiscal year 2007.
                    ``(C) Fiscal year 2002 allotments.--With respect to 
                any amounts allotted to a State pursuant to this 
                section for fiscal year 2002 that were redistributed to 
                a State under paragraph (1), or whose availability to a 
                State was extended through the end of fiscal year 2006 
                under paragraph (2), that were not expended by the 
                State by the end of such fiscal year, the following 
                rules shall apply:
                            ``(i) 30 percent of those amounts shall 
                        remain available for expenditure by the State 
                        through the end of fiscal year 2007.
                            ``(ii) The remainder of such amounts shall 
                        be redistributed to States that have fully 
                        expended the amount of their fiscal year 2004 
                        allotments in the same ratio as unexpended 
                        fiscal year 2004 allotments are redistributed 
                        under paragraph (1)(A)(i)(VII) to such States 
                        and the amounts redistributed under this clause 
                        shall remain available for expenditure through 
                        the end of fiscal year 2007.''.

SEC. 3. CONTINUED AUTHORITY FOR QUALIFYING STATES TO USE CERTAIN FUNDS 
              FOR MEDICAID EXPENDITURES.

    Section 2105(g)(1)(A) of the Social Security Act (42 U.S.C. 
1397ee(g)(1)(A)), as added by Public Law 108-74 (117 Stat. 895) and 
amended by Public Law 108-127 (117 Stat. 134), is amended by striking 
``or 2001'' and inserting ``2001, 2002, 2003 or 2004''.