A bill to provide States with fiscal relief through a temporary increase in the Federal medical assistance percentage and direct payments to States.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Fiscal Relief Act of 2008''.

SEC. 2. TEMPORARY STATE FISCAL RELIEF.

    (a) Temporary Increase of the Medicaid FMAP.--
            (1) Permitting maintenance of fiscal year 2007 fmap for 
        last 3 calendar quarters of fiscal year 2008.--Subject to 
        paragraph (5), if the FMAP determined without regard to this 
        subsection for a State for fiscal year 2008 is less than the 
        FMAP as so determined for fiscal year 2007, the FMAP for the 
        State for fiscal year 2007 shall be substituted for the State's 
        FMAP for the second, third, and fourth calendar quarters of 
        fiscal year 2008, before the application of this subsection.
            (2) Permitting maintenance of fiscal year 2008 fmap for 
        first 2 quarters of fiscal year 2009.--Subject to paragraph 
        (5), if the FMAP determined without regard to this subsection 
        for a State for fiscal year 2009 is less than the FMAP as so 
        determined for fiscal year 2008, the FMAP for the State for 
        fiscal year 2008 shall be substituted for the State's FMAP for 
        the first and second calendar quarters of fiscal year 2009, 
        before the application of this subsection.
            (3) General 1.225 percentage points increase for last 3 
        calendar quarters of fiscal year 2008 and first 2 calendar 
        quarters of fiscal year 2009.--Subject to paragraphs (5), (6), 
        and (7), for each State for the second, third, and fourth 
        calendar quarters of fiscal year 2008 and for the first and 
        second calendar quarters of fiscal year 2009, the FMAP (taking 
        into account the application of paragraphs (1) and (2)) shall 
        be increased by 1.225 percentage points.
            (4) Increase in cap on medicaid payments to territories.--
        Subject to paragraphs (6) and (7), with respect to the second, 
        third, and fourth calendar quarters of fiscal year 2008 and the 
        first and second calendar quarters of fiscal year 2009, the 
        amounts otherwise determined for Puerto Rico, the Virgin 
        Islands, Guam, the Northern Mariana Islands, and American Samoa 
        under subsections (f) and (g) of section 1108 of the Social 
        Security Act (42 U.S.C. 1308) shall each be increased by an 
        amount equal to 2.45 percent of such amounts.
            (5) Scope of application.--The increases in the FMAP for a 
        State under this subsection shall apply only for purposes of 
        title XIX of the Social Security Act and shall not apply with 
        respect to--
                    (A) disproportionate share hospital payments 
                described in section 1923 of such Act (42 U.S.C. 1396r-
                4);
                    (B) payments under title IV or XXI of such Act (42 
                U.S.C. 601 et seq. and 1397aa et seq.); or
                    (C) any payments under XIX of such Act that are 
                based on the enhanced FMAP described in section 2105(b) 
                of such Act (42 U.S.C. 1397ee(b)).
            (6) State eligibility.--
                    (A) In general.--Subject to subparagraph (B), a 
                State is eligible for an increase in its FMAP under 
                paragraph (3) or an increase in a cap amount under 
                paragraph (4) only if the eligibility under its State 
                plan under title XIX of the Social Security Act 
                (including any waiver under such title or under section 
                1115 of such Act (42 U.S.C. 1315)) is no more 
                restrictive than the eligibility under such plan (or 
                waiver) as in effect on December 31, 2007.
                    (B) State reinstatement of eligibility permitted.--
                A State that has restricted eligibility under its State 
                plan under title XIX of the Social Security Act 
                (including any waiver under such title or under section 
                1115 of such Act (42 U.S.C. 1315)) after December 31, 
                2007 is eligible for an increase in its FMAP under 
                paragraph (3) or an increase in a cap amount under 
                paragraph (4) in the first calendar quarter (and 
                subsequent calendar quarters) in which the State has 
                reinstated eligibility that is no more restrictive than 
                the eligibility under such plan (or waiver) as in 
                effect on December 31, 2007.
                    (C) Rule of construction.--Nothing in subparagraph 
                (A) or (B) shall be construed as affecting a State's 
                flexibility with respect to benefits offered under the 
                State medicaid program under title XIX of the Social 
                Security Act (42 U.S.C. 1396 et seq.) (including any 
                waiver under such title or under section 1115 of such 
                Act (42 U.S.C. 1315)).
            (7) Requirement for certain states.--In the case of a State 
        that requires political subdivisions within the State to 
        contribute toward the non-Federal share of expenditures under 
        the State medicaid plan required under section 1902(a)(2) of 
        the Social Security Act (42 U.S.C. 1396a(a)(2)), the State 
        shall not require that such political subdivisions pay a 
        greater percentage of the non-Federal share of such 
        expenditures for the second, third, and fourth calendar 
        quarters of fiscal year 2008 and the first and second calendar 
        quarters of fiscal year 2009, than the percentage that was 
        required by the State under such plan on December 31, 2007, 
        prior to application of this subsection.
            (8) Definitions.--In this subsection:
                    (A) FMAP.--The term ``FMAP'' means the Federal 
                medical assistance percentage, as defined in section 
                1905(b) of the Social Security Act (42 U.S.C. 
                1396d(b)).
                    (B) State.--The term ``State'' has the meaning 
                given such term for purposes of title XIX of the Social 
                Security Act (42 U.S.C. 1396 et seq.).
            (9) Repeal.--Effective as of October 1, 2009, this 
        subsection is repealed.
    (b) Payments to States for Assistance With Providing Government 
Services.--The Social Security Act (42 U.S.C. 301 et seq.) is amended 
by inserting after title V the following:

               ``TITLE VI--TEMPORARY STATE FISCAL RELIEF

``SEC. 601. TEMPORARY STATE FISCAL RELIEF.

    ``(a) Appropriation.--There is authorized to be appropriated and is 
appropriated for making payments to States under this section--
            ``(1) $3,600,000,000 for fiscal year 2008; and
            ``(2) $2,400,000,000 for fiscal year 2009.
    ``(b) Payments.--
            ``(1) Fiscal year 2008.--From the amount appropriated under 
        subsection (a)(1) for fiscal year 2008, the Secretary of the 
        Treasury shall, not later than the later of the date that is 45 
        days after the date of enactment of this Act or the date that a 
        State provides the certification required by subsection (e) for 
        fiscal year 2008, pay each State the amount determined for the 
        State for fiscal year 2008 under subsection (c).
            ``(2) Fiscal year 2009.--From the amount appropriated under 
        subsection (a)(2) for fiscal year 2009, the Secretary of the 
        Treasury shall, not later than the later of October 1, 2008, or 
        the date that a State provides the certification required by 
        subsection (e) for fiscal year 2009, pay each State the amount 
        determined for the State for fiscal year 2009 under subsection 
        (c).
    ``(c) Payments Based on Population.--
            ``(1) In general.--Subject to paragraph (2), the amount 
        appropriated under subsection (a) for each of fiscal years 2008 
        and 2009 shall be used to pay each State an amount equal to the 
        relative population proportion amount described in paragraph 
        (3) for such fiscal year.
            ``(2) Minimum payment.--
                    ``(A) In general.--No State shall receive a payment 
                under this section for a fiscal year that is less 
                than--
                            ``(i) in the case of 1 of the 50 States or 
                        the District of Columbia, \1/2\ of 1 percent of 
                        the amount appropriated for such fiscal year 
                        under subsection (a); and
                            ``(ii) in the case of the Commonwealth of 
                        Puerto Rico, the United States Virgin Islands, 
                        Guam, the Commonwealth of the Northern Mariana 
                        Islands, or American Samoa, \1/10\ of 1 percent 
                        of the amount appropriated for such fiscal year 
                        under subsection (a).
                    ``(B) Pro rata adjustments.--The Secretary of the 
                Treasury shall adjust on a pro rata basis the amount of 
                the payments to States determined under this section 
                without regard to this subparagraph to the extent 
                necessary to comply with the requirements of 
                subparagraph (A).
            ``(3) Relative population proportion amount.--The relative 
        population proportion amount described in this paragraph is the 
        product of--
                    ``(A) the amount described in subsection (a) for a 
                fiscal year; and
                    ``(B) the relative State population proportion (as 
                defined in paragraph (4)).
            ``(4) Relative state population proportion defined.--For 
        purposes of paragraph (3)(B), the term `relative State 
        population proportion' means, with respect to a State, the 
        amount equal to the quotient of--
                    ``(A) the population of the State (as reported in 
                the most recent decennial census); and
                    ``(B) the total population of all States (as 
                reported in the most recent decennial census).
    ``(d) Use of Payment.--
            ``(1) In general.--Subject to paragraph (2), a State shall 
        use the funds provided under a payment made under this section 
        for a fiscal year to--
                    ``(A) provide essential government services;
                    ``(B) cover the costs to the State of complying 
                with any Federal intergovernmental mandate (as defined 
                in section 421(5) of the Congressional Budget Act of 
                1974) to the extent that the mandate applies to the 
                State, and the Federal Government has not provided 
                funds to cover the costs; or
                    ``(C) compensate for a decline in Federal funding 
                to the State.
            ``(2) Limitation.--A State may only use funds provided 
        under a payment made under this section for types of 
        expenditures permitted under the most recently approved budget 
        for the State.
    ``(e) Certification.--In order to receive a payment under this 
section for a fiscal year, the State shall provide the Secretary of the 
Treasury with a certification that the State's proposed uses of the 
funds are consistent with subsection (d).
    ``(f) Definition of State.--In this section, the term `State' means 
the 50 States, the District of Columbia, the Commonwealth of Puerto 
Rico, the United States Virgin Islands, Guam, the Commonwealth of the 
Northern Mariana Islands, and American Samoa.
    ``(g) Repeal.--Effective as of October 1, 2009, this title is 
repealed.''.

Summary: State Fiscal Relief Act of 2008 - Provides that, if the federal medical assistance percentage (FMAP) determined without regard to this Act under title XIX (Medicaid) of the Social Security Act for a state for FY2008 is less than the FMAP as so determined for FY2007, the FY2007 FMAP shall be substituted for the state's otherwise applicable FMAP for the second, third, and fourth calendar quarters of FY2008. Provides also that, if the FMAP determined without regard to this Act for a state for FY2009 is less than the FMAP as so determined for FY2008, the FY2008 FMAP shall be substituted for the state's otherwise applicable FMAP for the first and second calendar quarters of FY2009. Provides that, for each eligible state for the second, third, and, fourth calendar quarters of FY2008, and for the first and second calendar quarters of FY2009, the FMAP shall be increased by 1.225 points. Provides for an increase in cap on Medicaid payments to territories. Makes a state eligible for such an FMAP increase, and a territory for an increase in a cap amount, only if eligibility under its Medicaid plan is no more restrictive than the eligibility under such plan as in effect on December 31, 2007. Authorizes appropriations for FY2008-FY2009 for payments to states for use in: (1) providing government services. (2) covering the costs of complying with any federal intergovernmental mandate to the extent that the federal government has not provided funds to cover such costs. Or (3) compensating for a decline in federal funding to the state.