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SECTION 1. ELIGIBILITY OF PUERTO RICO, THE UNITED STATES VIRGIN 
              ISLANDS, AND GUAM FOR THE TANF SUPPLEMENTAL GRANT FOR 
              POPULATION INCREASES.

    (a) In General.--Section 403(a)(3)(D)(iii) of the Social Security 
Act (42 U.S.C. 603(a)(3)(D)(iii)) is amended by striking ``and the 
District of Columbia.'' and inserting ``, the District of Columbia, 
Puerto Rico, the United States Virgin Islands, and Guam. For fiscal 
years beginning after the effective date of this sentence, this 
paragraph shall be applied and administered as if the term `State' 
included the Commonwealth of Puerto Rico, the United States Virgin 
Islands, and Guam for fiscal year 1998 and thereafter.''.
    (b) Grant Payment Disregarded for Purposes of Section 1108 
Limitation.--Section 1108(a)(2) of such Act (42 U.S.C. 1308(a)(2)) is 
amended by inserting ``, or any payment made to the Commonwealth of 
Puerto Rico, the United States Virgin Islands, or Guam under section 
403(a)(3)'' before the period.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003, and shall apply to expenditures for fiscal 
years beginning with fiscal year 2004.

SEC. 2. ELIGIBILITY OF PUERTO RICO, THE UNITED STATES VIRGIN ISLANDS, 
              AND GUAM FOR THE TANF CONTINGENCY FUND.

    (a) In General.--Section 403(b)(7) of the Social Security Act (42 
U.S.C. 603(b)(7)) is amended by striking ``and the District of 
Columbia'' and inserting ``, the District of Columbia, the Commonwealth 
of Puerto Rico, the United States Virgin Islands, and Guam.''.
    (b) Grant Payment Disregarded for Purposes of Section 1108 
Limitation.--Section 1108(a)(2) of such Act (42 U.S.C. 1308(a)(2)), as 
amended by section 1(b) of this Act, is amended by inserting ``or 
403(b)'' after ``403(a)(3)'' before the period.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003, and shall apply to expenditures for fiscal 
years beginning with fiscal year 2004.

SEC. 3. ELIGIBILITY OF PUERTO RICO, THE UNITED STATES VIRGIN ISLANDS, 
              AND GUAM FOR CHILD CARE ENTITLEMENT FUNDS.

    (a) In General.--Section 418(d) of the Social Security Act (42 
U.S.C. 618(d)) is amended by striking ``and the District of Columbia'' 
and inserting ``, the District of Columbia, the Commonwealth of Puerto 
Rico, the United States Virgin Islands, and Guam''.
    (b) Amount of Payment.--
            (1) General entitlement.--Section 418(a)(1) of such Act (42 
        U.S.C. 618(a)(1)) is amended by striking ``the greater of--'' 
        and all that follows and inserting the following:
                    ``(A) in the case of the Commonwealth of Puerto 
                Rico, the United States Virgin Islands, and Guam, 60 
                percent of the amount required to be paid to the State 
                for fiscal year 2001 under the Child Care and 
                Development Block Grant Act of 1990; or
                    ``(B) in the case of any other State, the greater 
                of--
                            ``(i) the total amount required to be paid 
                        to the State under section 403 for fiscal year 
                        1994 or 1995 (whichever is greater) with 
                        respect to expenditures for child care under 
                        subsections (g) and (i) of section 402 (as in 
                        effect before October 1, 1995); or
                            ``(ii) the average of the total amounts 
                        required to be paid to the State for fiscal 
                        years 1992 through 1994 under the subsections 
                        referred to in clause (i).'';
            (2) Allotment of remainder.--Section 418(a)(2)(B) of such 
        Act (42 U.S.C. 618(a)(2)(B)) is amended to read as follows:
                    ``(B) Allotments to states.--Of the total amount 
                available for payments to States under this paragraph, 
                as determined under subparagraph (A) of this 
                paragraph--
                            ``(i) an amount equal to 65 percent of the 
                        amount required to be paid to each of the 
                        Commonwealth of Puerto Rico, the United States 
                        Virgin Islands, and Guam for fiscal year 2001 
                        under the Child Care and Development Block 
                        Grant Act of 1990, shall be allotted to the 
                        Commonwealth of Puerto Rico, the United States 
                        Virgin Islands, and Guam, respectively; and
                            ``(ii) the remainder shall be allotted 
                        among the other States based on the formula 
                        used for determining the amount of Federal 
                        payments to each State under section 403(n) of 
                        this Act (as in effect before October 1, 
                        1995).''.
    (c) Grant Payment Disregarded for Purposes of Section 1108 
Limitation.--Section 1108(a)(2) of such Act (42 U.S.C. 1308(a)(2)), as 
amended by sections 1(b) and 2(b) of this Act, is amended by striking 
``or 403(b)'' and inserting ``, 403(b), or 418''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003, and shall apply to expenditures for fiscal 
years beginning with fiscal year 2004.

SEC. 4. FOSTER CARE PAYMENTS TO PUERTO RICO, THE UNITED STATES VIRGIN 
              ISLANDS, AND GUAM DISREGARDED FOR PURPOSES OF THE 
              LIMITATION OF PAYMENTS TO TERRITORIES.

    (a) In General.--Section 1108(a)(2) of the Social Security Act (42 
U.S.C. 1308(a)(2)), as amended by sections 1(b), 2(b), and 3(c) of this 
Act, is amended by inserting ``, or any payment made to the 
Commonwealth of Puerto Rico, the United States Virgin Islands, or Guam 
under part E of title IV with respect to foster care'' before the 
period.
    (b) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003, and shall apply to expenditures for fiscal 
years beginning with fiscal year 2004.

SEC. 5. EXEMPT MEDICAID TRANSITIONAL MEDICAL ASSISTANCE IN PUERTO RICO, 
              THE VIRGIN ISLANDS, AND GUAM FROM THE CURRENT MEDICAID 
              CAP ON SPENDING.

    (a) In General.--Section 1108 of the Social Security Act (42 U.S.C. 
1308) is amended--
            (1) in subsection (f), by striking ``subsection (g)'' and 
        inserting ``subsections (g) and (h)''; and
            (2) by adding at the end the following new subsection:
    ``(h) Special Rule for Transitional Medical Assistance in Puerto 
Rico, the Virgin Islands, and Guam.--Expenditures for transitional 
medical assistance under section 1925 in Puerto Rico, the Virgin 
Islands, and Guam shall not be subject to the payment limitations of 
subsection (f).''.
    (b) Permitting Application of Section 1925 in Puerto Rico, the 
Virgin Islands, and Guam.--Section 1925(c)(2) of such Act (42 U.S.C. 
1396r-6(c)(2)) is amended by inserting before the period at the end the 
following: ``, except that such provisions may apply in Puerto Rico, 
the Virgin Islands, and Guam if elected by the Government of the 
respective commonwealth or territory''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003, and shall apply to expenditures for fiscal 
years beginning with fiscal year 2004.

Summary: Amends part A (TANF) of the Social Security Act (SSA) to make Puerto Rico, the United States Virgin Islands, and Guam eligible for: (1) the TANF supplemental grant for population increases, (2) the TANF contingency fund. And (3) child care entitlement funds. Amends SSA title XI to: (1) disregard foster care payments to Puerto Rico, the United States Virgin Islands, and Guam for purposes of the limitation of total payments to each territory. And (2) exempt Medicaid transitional medical assistance in Puerto Rico, the Virgin Islands, and Guam from the current Medicaid cap on spending.