[Federal Register Volume 66, Number 120 (Thursday, June 21, 2001)]
[Notices]
[Pages 33257-33264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15577]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2124-N]
RIN 0938-AK52


State Children's Health Insurance Program (SCHIP); Redistribution 
and Continued Availability of Unexpended SCHIP Funds From the 
Appropriation for FY 1998

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the application of new statutory 
provisions concerning the redistribution and availability of unexpended 
funds appropriated for the fiscal year (FY) 1998 for the State 
Children's Health Insurance Program under title XXI of the Social 
Security Act. It sets forth the amounts available for each of the 50 
States, the District of Columbia, and the Commonwealths and Territories 
from the FY 1998 appropriation for a second period of availability 
under the statutory formula. It specifies amounts of allotments that 
may remain available (``retained allotments'') to the States to which 
those amounts were originally allotted during the initial period, and 
the amounts of allotments that are redistributed from the States to 
which they were allotted during the initial period to be available to 
other States (``redistributed allotments''). This notice implements 
section 801 of the Medicare, Medicaid and SCHIP Benefits

[[Page 33258]]

Improvement and Protection Act (BIPA) (enacted as part of Pub. L. 106-
554 on December 21, 2000).

FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.

SUPPLEMENTARY INFORMATION:

I. Background

    Title XXI of the Social Security Act (the Act) sets forth the State 
Children's Health Insurance Program (SCHIP) to enable States, the 
District of Columbia, and specified Commonwealths and Territories to 
initiate and expand health insurance coverage to uninsured, low-income 
children. In this notice, unless otherwise indicated, the use of the 
terms ``State'' and ``States,'' refers to any or all of the 50 States, 
the District of Columbia, and the Commonwealths and Territories. States 
may implement SCHIP through a separate State program under title XXI of 
the Act, an expanded program under title XIX of the Act, or a 
combination of both. Under section 2104 of the Act, the SCHIP 
allotments for a fiscal year (FY) are available to match expenditures 
under an approved State child health plan for a 3-fiscal year ``period 
of availability,'' including the fiscal year for which the allotment 
was provided. After the initial period of availability, the amount of 
unspent allotments is subject to a second period of availability. With 
the exception described below for the allotments made in FYs 1998 and 
1999, allotments unspent in the initial period of availability are to 
be redistributed from States that did not fully spend these allotments 
to States that fully spent their allotments for that fiscal year. The 
Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 
2000 (BIPA), enacted as part of Pub. L. 106-554 on December 21, 2000, 
amended title XXI of the Act, in part by establishing new requirements 
for the second period of availability of amounts of FYs 1998 and 1999 
allotments unspent during the initial period of availability. These 
requirements limit the redistribution of unspent allotments to States 
that fully spent their FY 1998 or 1999 allotments (redistributed 
amounts). These requirements also provide that amounts of unspent 
allotments not redistributed as a result of these limits would remain 
available to States that did not fully expend their FY 1998 or 1999 
allotments (retained allotments). These requirements prescribe a 
methodology and process for determining the FY 1998 and FY 1999 
allotment redistribution and retention amounts.

II. Provisions of This Notice

    This notice announces the application of the new statutory 
provisions concerning the redistribution and continued availability of 
unexpended funds appropriated for FY 1998 for the SCHIP under title XXI 
of the Act. It sets forth the FY 1998 unexpended amounts available for 
redistribution or continued availability for the States. Section 2104 
of the Act provides an allotment for each fiscal year for Federal 
matching payments for an initial 3-year period for the States. 
Specifically, section 801 of BIPA added the new section 2104(g) to the 
Act to provide for a methodology to redistribute or continue 
availability of all unexpended amounts for FYs 1998 and 1999 at the end 
of the initial 3-year period.
    Section 2104 of the Act requires the Secretary to calculate 
allotments for each State with an approved State child health plan 
based on available appropriated funds for each fiscal year. All States 
had approved plans in order to have access to their final FY 1998 SCHIP 
allotments, which were published on May 24, 2000 in the Federal 
Register (65 FR 33634). The final rule setting forth the methodologies 
and procedures to determine the allotment of Federal funds for each 
fiscal year and the grant award and payment process was also published 
on May 24, 2000 in the Federal Register (65 FR 33616).
    BIPA amended the SCHIP statute to add a new section 2104(g) to the 
Act, which required the Secretary to redistribute limited amounts of 
the unexpended allotments for FYs 1998 and 1999 to States that had 
fully expended their allotments for those years, and extended the 
availability of remaining unexpended allotments for those years, in 
accordance with a specified formula. This notice sets forth the results 
of the statutory formula to the unexpended allotments for FY 1998, and 
describes the methodology for the redistribution and continued 
availability of unexpended SCHIP allotments. A later notice will be 
published to address the unexpended allotments for FY 1999.

III. Application of the Provisions of Section 2104(g) of the Act to 
the Unexpended FY 1998 SCHIP Allotments To Determine the 
Redistribution and Continued Availability of Allotments for Each 
State

    Section 2104(e) of the Act requires that the amount of a State's 
allotment for a fiscal year be available to the State for matching 
allowable State expenditures for a 3-year initial period of 
availability; the fiscal year for which the funds are allotted, and the 
two following fiscal years. For FY 1998, the 3-year initial period of 
availability is October 1, 1997 through September 30, 2000. With the 
exception of the methodology specified in BIPA for treating unspent FY 
1998 and 1999 allotments, section 2104(f) requires redistribution of 
the entire amount of unspent allotments after the initial period of 
availability has expired. Section 2104(e) of the Act provides that 
redistributed funds are available for matching State expenditures 
through the end of the fiscal year in which they are reallotted. Before 
BIPA, the FY 1998 redistribution funds would have been available 
through the end of FY 2001; that is, through September 30, 2001. Any 
redistributed funds for the fiscal year that remained unexpended at the 
end of the fiscal year in which they were reallotted would have 
reverted to the Federal Treasury.
    BIPA did not repeal or delete sections 2104(e) and (f) of the Act. 
However, BIPA added a new section 2104(g) of the Act that established a 
formula for redistributing and continuing the availability of 
unexpended allotments for FYs 1998 and 1999 and references the 
provisions of sections 2104(e) and (f) of the Act. This formula 
replaces the redistribution that otherwise would have been required 
under section 2104(f) of the Act.
    Section 2104(g) of the Act requires the Secretary to redistribute 
and continue availability of the unexpended FYs 1998 and 1999 
allotments under section 2104(f) of the Act. Section 2104(g) also 
provides that both FYs 1998 and 1999 redistribution amounts and FYs 
1998 and 1999 retained amounts, under sections 2104(g)(1)(B)(ii) and 
2104(g)(2)(A)(i) of the Act, respectively, shall remain available to 
the States through the end of FY 2002; that is, through September 30, 
2002.
    Section 2104(g)(2)(C) of the Act provides an exception to otherwise 
applicable limits on outreach expenditures for States that did not 
fully expend their FY 1998 allotments during the initial period of 
availability. Section 2105(c)(2) of the Act provided for a ``10-percent 
fiscal year limit'' for certain expenditures, including outreach, 
administration, health services initiatives, and other child health 
assistance expenditures. This limit provides that Federal matching 
funds are not available for expenditures other than child health 
assistance for targeted low-income children in excess of 10-percent of 
the total expenditures during a fiscal year. Section 2104(g)(2)(C) of 
the

[[Page 33259]]

Act allows States that did not fully spend their FY 1998 allotment in 
the initial availability period to use up to 10-percent of the amount 
of the retained FY 1998 allotment for outreach activities approved by 
the Secretary without those expenditures being applied against the 
State's 10-percent fiscal year limit. In this notice we refer to this 
provision of section 2104(g)(2)(C) of the Act as the ``BIPA outreach 
allowance'' or ``new outreach allowance.'' This BIPA outreach allowance 
is distinguished from the limit in section 2105(c)(2) of the Act, which 
we refer to in this notice as the ``10-percent fiscal year limit.''
    There are some differences in the application of the 10-percent 
fiscal year limit under section 2105(c)(2) of the Act and the new 
outreach allowance under section 2104(g)(2) of the Act. Under section 
2105(c)(2) of the Act, the 10-percent fiscal year limit is applied to a 
State's total expenditures for a fiscal year. In this regard, ``total 
expenditures'' refers to both the State and Federal share portions of 
the expenditures. The calculation of the 10-percent fiscal year limit 
is set forth in 42 CFR 457.618. However, the new outreach allowance 
under section 2104(g)(2) of the Act, as added by BIPA, is equal to 10-
percent of the FY 1998 retained allotment amounts, which are only in 
Federal share amounts. Furthermore, the BIPA outreach allowance is 
available only if the State's FY 1998 retained allotment is available. 
That is, once a State's retained allotment is exhausted, the BIPA 
outreach allowance is no longer available, even if the amount of 
outreach expenditures claimed is less than the outreach allowance of 
10-percent of the FY 1998 retained allotment.
    We have established a process under which we will track, through 
the Medicaid and SCHIP budget and expenditure reporting system, the 
Federal share amounts of title XXI outreach expenditures against the 
new outreach allowance. If the Federal share amounts of a State's 
retained allotment outreach expenditure claims exceed this new outreach 
allowance, the total expenditures (State and Federal share) associated 
with the excess Federal share amounts will be applied against the 10-
percent fiscal year limit. In addition, the total outreach expenditures 
associated with outreach claims made after a State's retained allotment 
amounts are exhausted will be applied against the 10-percent fiscal 
year limit (whether or not the new outreach allowance was met).
    The availability of retained allotment funds and the BIPA outreach 
allowance is determined in accordance with requirements related to the 
ordering of expenditures. Section 2105(a)(2) of the Act, as amended by 
BIPA, requires that expenditures be applied against a State's available 
fiscal year SCHIP allotment amounts in the following order:
    (1) Title XIX SCHIP related expenditures for which payment is made 
at the enhanced Federal medical assistance percentage (FMAP) (section 
2105(a)(1)(A) of the Act);
    (2) Title XIX expenditures for medical assistance provided during a 
presumptive eligibility period under section 1920A of the Act (section 
2105(a)(1)(B) of the Act);
    (3) Child health assistance for targeted low-income children in the 
form of providing health benefits coverage that meets the requirements 
of section 2103 (section 2105(a)(1)(C) of the Act); (4)(a) SCHIP 
expenditures applicable to the 10-percent fiscal year limit (not 
including outreach and administrative expenditures) (section 
2105(a)(1)(D)(i and ii) of the Act); (4)(b) Outreach expenditures 
(section 2105(a)(1)(D)(iii) of the Act); and (4)(c) Administration 
expenditures (section 2105(a)(1)(D)(iv) of the Act).
    To implement the BIPA outreach allowance, claims for Federal 
matching funds for outreach expenditures will be compared to the new 
outreach allowance. If, under this comparison, the Federal share of 
outreach expenditures is less than or equal to, but not greater than, 
the new outreach allowance, none of these outreach expenditures will be 
applied against the 10-percent fiscal year limit; they will only serve 
to reduce the new outreach allowance. The following example illustrates 
this:
    Example 1. The State's FY 1998 retained allotment is $20 million. 
Therefore, the State's outreach allowance would be $2 million (10 
percent of $20 million). On the first quarterly expenditure report for 
FY 2001, the State claims $2 million in outreach expenditures (Federal 
share). In this example, assume at least $2 million of retained 
allotment funds, based on claims of expenditures other than outreach, 
remain available. Since the outreach claims are $2 million, none of the 
outreach expenditures would apply against the 10-percent fiscal year 
limit; but instead would be applied to reduce the new outreach 
allowance. In this case, if the outreach claims were exactly $2 
million, there would be $0 remaining of the BIPA outreach allowance ($2 
million outreach allowance minus $2 million in outreach claims).
    If the Federal share of claims for outreach expenditures is greater 
than the BIPA outreach allowance, the total (State and Federal share) 
expenditures in excess of the Federal share amount above the new 
outreach allowance will be applied against the 10-percent fiscal year 
limit. Example 2 illustrates this:
    Example 2. The State's FY 1998 retained allotment is $20 million. 
Therefore, the State's outreach allowance would be $2 million (10 
percent of $20 million). In this example, assume there are at least $2 
million of available retained allotment funds, based on claims of 
expenditures other than outreach. On the first quarterly expenditure 
report for FY 2001, the State claims $2,650,000 in outreach 
expenditures (Federal share). These claims exceed the outreach 
allowance by $650,000 ($2,650,000 in outreach claims minus the $2 
million outreach allowance). We will apply the outreach expenditure 
claims first to exhaust the outreach allowance. The total expenditures 
(State and Federal shares) associated with the remaining $650,000 in 
outreach claims that are in excess of the new outreach allowance would 
then be subject to the 10-percent fiscal year limit, as long as the 
State has not exceeded the 10-percent fiscal year limit. Therefore, the 
amount of outreach claims up to the outreach allowance ($2 million) 
would not be included in expenditures applied against the 10-percent 
fiscal year limit. Assuming an enhanced Federal matching rate of 65 
percent, the claim for Federal matching in excess of the outreach 
allowance would represent $1 million ($650,000 divided by 65 percent, 
the State's enhanced FMAP). The $1 million in total outreach 
expenditures would be applied against the 10-percent fiscal year limit.
    Example 3a, illustrates the case in which program expenditures are 
applied first to exhaust the State's available FY 1998 retained 
allotment amount, resulting in the new outreach allowance being 
unavailable. Example 3b, illustrates the case in which the BIPA 
outreach allowance is used by the application of outreach expenditures 
first to exhaust the new outreach allowance. The only difference 
between Examples 3a and 3b is the order of submission in the categories 
of expenditures; the amounts of the expenditures are the same. The 
result is that in Example 3a, all of the outreach expenditures must be 
applied against the 10-percent fiscal year limit; in Example 3b, none 
of the outreach expenditures are applied against the 10-percent fiscal 
year limit.

[[Page 33260]]

    Example 3a. The State's retained FY 1998 allotment amount is $20 
million; therefore, the BIPA outreach allowance is $2 million (10 
percent of $20 million). On the first quarter expenditure report for FY 
2001, the State claims $21 million in Federal matching for SCHIP 
program expenditures. On the second quarter expenditure report for FY 
2001, the State claims $2 million in Federal matching for outreach 
expenditures. The first quarter FY 2001 claims of $21 million in 
program expenditures would be applied first against, and thereby 
exhaust, the State's FY 1998 retained allotment of $20 million. Since 
the retained allotment amounts are no longer available, the BIPA 
outreach allowance would also no longer be available. Therefore, all $2 
million of the total second quarter FY 2001 outreach expenditures 
(State and Federal share) would be applied against the State's FY 2001 
10-percent fiscal year limit. In this example, if the State's enhanced 
FMAP was 65 percent, approximately $3.1 million ($2 million divided by 
65 percent), representing the State and Federal shares of the $2 
million Federal share claim, would be applied against the State's FY 
2001 10-percent fiscal year limit.
    Example 3b. Assume the same facts as in Example 3a, except that the 
order of submission of expenditures, by quarter, is reversed; that is, 
$2 million in outreach expenditures are submitted on the first quarter 
expenditure report for FY 2001, and $21 million in program expenditures 
are submitted on the second quarter expenditure report for FY 2001. In 
this example, the $2 million in outreach expenditures would be applied 
first against the new outreach allowance, reducing it to $0; these 
outreach expenditure claims would also be applied against the State's 
$20 million FY 1998 retained allotment, thereby reducing it to $18 
million ($20 million minus $2 million). Since the outreach expenditures 
were not in excess of the BIPA outreach allowance, none of the outreach 
expenditures would be applied against the State's FY 2001 10-percent 
fiscal year limit. The $21 million in program expenditure claims 
included in the second quarter expenditure report for FY 2001 would 
then be applied against the remaining retained allotment amounts ($18 
million), and the $3 million excess would be applied against the next 
available SCHIP allotment.
    In general, States' expenditures will be applied against the FY 
1998 redistribution and retained amounts in accordance with existing 
SCHIP regulations on allotments (42 CFR parts 447 and 457). These 
regulations, however, do not directly address the treatment of 
redistributed allotments because they do not make clear whether these 
expenditures will be applied to these allotments based on the fiscal 
year of the initial allotment, the fiscal year of the redistribution, 
or the fiscal year of the allotment whose expiration date matches the 
redistribution. This notice permits States the option to decide the 
order of application of expenditures against the redistribution amounts 
and other available fiscal year allotment amounts. Under this option, a 
redistribution State may have a maximum of four possible choices for 
the order of the application of FY 1998 redistribution funds in FY 
2001, depending on what other fiscal year allotments are available in 
FY 2001: (1) Before FY 1999 allotments, (2) after FY 1999 and before FY 
2000 allotments, (3) after FY 2000 and before FY 2001 allotments, and 
(4) after FY 2001 allotments.
    We believe that States should be afforded the flexibility to decide 
whether redistributed funds would be used before or after other 
available allotment funds to allow them to optimize the use of such 
funds. Therefore, in implementing the BIPA legislation, we offered 
States that will receive an FY 1998 redistribution the option of 
choosing the order of when it would be expended during FY 2001 among 
the other available allotments during FY 2001. All of the 
redistribution States have responded to us with their decision 
regarding this option. Under this option, once a State chooses the 
order of the FY 1998 redistribution amounts, it cannot change that 
order at a later date.
    Both the redistribution amounts and the retained amounts for FY 
1998 will be available for allowable SCHIP expenditures reported for 
the 2-year extension period of October 1, 2000 through September 30, 
2002. This will ensure that the redistribution and retained allotment 
amounts will be available for SCHIP expenditures for the entire period, 
October 1, 2000 through September 30, 2002, even though this notice is 
being published after October 1, 2000.
    We have made provisions on the Form HCFA-21C, Allocation of Title 
XIX and Title XXI Expenditures to the SCHIP Fiscal Year Allotment, 
which is used for tracking States' expenditures against their 
allotments, to include the States' FY 1998 redistributed and retained 
amounts. The redistributed and retained amounts will be automatically 
entered on this form and the Medicaid and SCHIP expenditure system will 
automatically apply expenditures reported on the quarterly expenditure 
reports for the period of October 1, 2000 through September 30, 2002 to 
the FY 1998 redistributed and retained amounts available through 
September 30, 2002. Except as provided above in terms of the States' 
options with respect to the redistribution amounts, expenditures 
reported by States during this period will be applied first against any 
available FY 1998 redistribution or retained amounts before they will 
be applied against any other available FY allotments or future FY 
redistribution and retained amounts, in accordance with the SCHIP 
regulations published on May 24, 2000 in the Federal Register (65 FR 
33616).

IV. Determination of Redistribution or Continued Availability of 
Unexpended FY 1998 Allotments

    In Table 1 of this notice, we set forth the amount of unexpended 
allotments as of December 15, 2000, as specified in section 2104(g) of 
the Act. We also set forth the retained amounts that, under the 
statutory formula, are subject to continued availability by States that 
did not fully expend their FY 1998 allotments, and the amounts that are 
redistributed for availability to States that fully expended their FY 
1998 allotments. The formula for determining the redistributed and 
retained amounts of the FY 1998 SCHIP allotments is described below.
    Establishing the Amount of Unexpended FY 1998 Allotments. The 
amount of unexpended FY 1998 allotments is established by comparing the 
total reported by each State for the 3-year period of availability on 
its 12 quarterly expenditure reports for the period, as submitted and 
certified to HCFA as of December 15, 2000, to the amounts of the 
State's final FY 1998 allotment, as published on May 24, 2000 in the 
Federal Register (65 FR 33634).
    Based on States' expenditure reports submitted and certified 
through December 15, 2000, the total amount of unexpended FY 1998 SCHIP 
allotments is $2,033,508,296.
    Time Frames for Expenditure Reports. To determine unexpended 
allotments during the initial period of availability, or to identify 
States that have fully expended their allotments, section 2104(g)(3) of 
the Act provides that the Secretary use expenditures reported as of 
December 15, 2000 on the Form HCFA-64 or HCFA-21, as approved by the 
Secretary. By December 15, 2000, all States did report and certify 
their FY 2000 fourth quarter expenditure reports (representing the last 
of the 12 quarterly expenditure reports for the 3-year period of 
availability for FY 1998).

[[Page 33261]]

Expenditures reflected in Table 1 below were taken from our Medicaid 
and State Children's Health Insurance Program Budget and Expenditure 
System (MBES/CBES) ``masterfile,'' which represent the State's official 
certified SCHIP and Medicaid expenditure reporting system records.
    Redistribution for the States and the District of Columbia. Section 
2104(g)(1)(i)(I) of the Act specifies the FY 1998 redistribution for 
the 50 States and the District of Columbia that have fully expended 
their FY 1998 allotments. Specifically, the redistribution amounts are 
equal to these States' ``excess'' expenditures during the FY 1998 
period of availability; this amount is the difference between the 
States' total reported applicable expenditures for the period FYs 1998 
through 2000, and the States' FY 1998 SCHIP allotments.
    Redistribution for the Commonwealths and Territories. Section 
2104(g)(1)(ii) of the Act specifies the FY 1998 redistribution for the 
Commonwealths and Territories that have fully expended their FY 1998 
allotments. Under this provision, first the total Commonwealths and 
Territories redistribution amount is calculated by multiplying the 
total amount of the allotments available for redistribution and 
continued availability by 1.05 percent; for the FY 1998 redistribution 
calculation, this amount is $21,351,837 (1.05 percent of 
$2,033,508,296). Second, only those Commonwealths and Territories that 
have fully expended their FY 1998 allotments will receive an amount 
equal to a specified percentage of the 1.05 percent amount; that 
percentage is determined by dividing the Commonwealth or Territory's FY 
1998 SCHIP allotment by the total of all the jurisdictions' FY 1998 
allotments.
    Continued Availability of Unexpended FY 1998 Allotments. Section 
2104(g)(2)(B) of the Act specifies the formula for determining the 
amount of the unexpended FY 1998 allotments for continued availability 
to States. Under section 2104(g)(2)(B) of the Act, first the total 
amount for continued availability for all States is determined. The 
total amount for continued availability is calculated by subtracting 
the redistribution amounts from the total amount available for 
redistribution or continued availability described above. Next, a 
percentage is calculated by dividing the total retained amounts by the 
total amount available for redistribution or continued availability. 
Finally, each State's retained amount is calculated by multiplying this 
percentage by the amount of the State's unexpended FY 1998 SCHIP 
allotment.

V. Table of SCHIP FY 1998 Redistribution and Continued Availability 
of Unexpended FY 1998 Allotments

    A description of the formula used to determine the amount of the 
unexpendedFY 1998 SCHIP allotments for redistribution or continued 
availability is described below. Following the description is Table 1, 
which presents each State's FY 1998 SCHIP allotment redistribution or 
retained amount.
    Redistribution. A total of $4,235,000,000 was allotted nationally 
for FY 1998, representing $4,224,262,500 in allotments to the 50 States 
and the District of Columbia, and $10,737,500 in allotments to the 
Commonwealths and Territories. Based on the 12 quarterly expenditure 
reports for the FY 1998 3-year period of availability, which were 
submitted and certified by December 15, 2000, 12 States and all of the 
Commonwealths and Territories fully expended their FY 1998 allotments.
    Thirty-nine States including the District of Columbia did not fully 
expend their FY 1998 allotments. For the 39 States, including the 
District of Columbia, that did not fully expend their FY 1998 
allotments, their total FY 1998 allotments were $3,401,470,924, and 
their total expenditures through the end of the FY 1998 3-year period 
of availability were $1,367,962,628. Therefore, the amount available 
for redistribution for FY 1998 is $2,033,508,296 ($3,401,470,924 minus 
$1,367,962,628).
    In accordance with the redistribution calculation for FY 1998 
described above, of the total $2,033,508,296 available from the FY 1998 
allotments, $698,855,508 is needed for redistribution for 12 States, 
and $21,351,837 is needed for redistribution to the Commonwealths and 
Territories. Therefore, a total of $720,207,345 is needed for 
redistribution. As a result, $1,313,300,951 ($2,033,508,296 minus 
$720,207,345) is the total amount for continued availability to the 39 
States, including the District of Columbia. Both the $720,207,345 
redistribution amount and the $1,313,300,951 retained amounts will 
remain available through the end of FY 2002.

Key to Table 1--Calculation of the SCHIP FY 1998 Redistribution and 
Continued Availability of the Unexpended FY 1998 Allotments

Column/Description
    Column A = State. Name of State, District of Columbia, the 
Commonwealth or Territory.
    Column B = FYs 98-00 Expenditures, as Reported and Certified by 
States, and Approved by HCFA, By December 15, 2000. This column 
contains the cumulative expenditures for the 3-year period of 
availability for FY 1998 (October 1, 1997 through September 30, 2000), 
as reported and certified by all States by December 15, 2000.
    Column C = FY 1998 Allotment. This column contains the FY 1998 
SCHIP allotments for all States, which were published on May 24, 2000 
in the Federal Register (65 FR 33634).
    Column D = Unexpended FY 1998 Allotment Amounts. This column 
contains the amounts of unexpended FY 1998 SCHIP allotments for States 
that did not fully expend the allotments during the 3-year period of 
availability for FY 1998 (FYs 1998 through 2000), and is equal to the 
difference between the amounts in Column C and Column B. For States 
that did fully expend their FY 1998 allotments during the period of 
availability, the entry in this column is ``NA.'' The total of the 
amounts in this column indicated at the bottom of Column D 
($2,033,508,296) represents the total amount available for 
redistribution and continued availability for FY 1998.
    Column E = Redistributed Amounts. This column contains the amounts 
of States' unexpended FY 1998 SCHIP allotments that are being 
redistributed to those States that have fully expended their FY 1998 
allotments. For the States that have fully expended their FY 1998 SCHIP 
allotments, the amount in Column E is the difference between Column B 
and Column C. This represents, as applicable, the amount that each 
State's cumulative expenditures for FYs 1998 through 2000 exceeded its 
FY 1998 allotment. For the 12 States that have fully expended their FY 
1998 allotments, the FY 1998 redistribution amounts total $698,855,508. 
For the Commonwealths and Territories that have fully expended their FY 
1998 allotments, the amounts in Column E represents their respective 
proportionate shares of $21,351,837 based on their FY 1998 allotments 
(1.05 percent of the total amount for redistribution and continued 
availability of $2,033,508,296). For those States, Commonwealths and 
Territories that did not fully expend

[[Page 33262]]

their FY 1998 allotments during the period of availability, the entry 
in Column E is ``NA.''
    Column F = Continued Allotment Availability. For the States that 
did not fully expend their FY 1998 allotments, this column contains the 
amounts of the States' FY 1998 unexpended allotments after the 
application of the proportionate reduction to account for the total 
redistribution amounts needed for the States that did fully expend 
their FY 1998 allotments. As indicated at the top of Column F, the 
proportionate reduction is approximately 64.6 percent. This percentage 
is multiplied by the unexpended amounts of the States' FY 1998 
allotments in Column D; the result is the amount that remains available 
of the States' unexpended FY 1998 allotments. As indicated at the 
bottom of Column F, the total amount that remains available of the 
unexpended FY 1998 allotments is $1,313,300,951.
    Column G = Unexpended Amounts Used in Redistribution. For the 
States that did not fully expend their FY 1998 allotments, this column 
contains the amounts of the States' FY 1998 unexpended allotments that 
were used in the redistribution in Column E; these amounts are no 
longer available to these States. The amount in Column G is equal to 
the difference between Columns D and F. For States that did fully 
expend their FY 1998 allotments, the entry in Column G is ``NA.''

BILLING CODE 4120-01-P

[[Page 33263]]

[GRAPHIC] [TIFF OMITTED] TN21JN01.010

BILLING CODE 4120-01-C

[[Page 33264]]

VI. Impact Statement

    We have examined the impact of this notice as required by Executive 
Order (EO) 12866. Executive Order 12866 directs agencies to assess all 
costs and benefits of available regulatory alternatives and, when rules 
are necessary, to select regulatory approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, other advantages, distributive impacts, and equity). The 
Regulatory Flexibility Act (RFA) requires agencies to analyze options 
for regulatory relief of small businesses. For purposes of the RFA, 
small entities include small businesses, nonprofit organizations and 
government agencies. This announcement is the result of a statutory 
formula that does not involve any agency discretion or policy.
    The Unfunded Mandates Reform Act of 1995 requires that agencies 
prepare an assessment of anticipated costs and benefits before 
publishing any notice that may result in an annual expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted each year for 
inflation) in any one year. Because participation in the SCHIP program 
on the part of States is voluntary, any payments and expenditures 
States make or incur on behalf of the program that are not reimbursed 
by the Federal Government are made voluntarily. This notice will not 
create an unfunded mandate on States, tribal, or local governments. 
Therefore, we are not required to perform an assessment of the costs 
and benefits of these regulations.
    Under Executive Order 13132, Federalism, we have reviewed this 
notice and determined that it does not significantly affect States' 
rights, roles, and responsibilities.
    Low-income children will benefit from payments under this program 
through increased opportunities for health insurance coverage.
    We believe this notice will have an overall positive impact by 
informing States, the District of Columbia, and Commonwealths and 
Territories of the extent to which they are permitted to expend funds 
under their child health plans using the FY 1998 allotment 
redistribution and retained amounts.
    In accordance with the provisions of Executive Order 12866, this 
notice was not reviewed by the Office of Management and Budget.

(Section 1102 of the Social Security Act (42 U.S.C. 1302))

(Catalog of Federal Domestic Assistance Program No. 00.000, State 
Children's Health Insurance Program)

    Dated: March 19, 2001.
Michael McMullan,
Acting Deputy Administrator, Health Care Financing Administration.

    Dated: May 27, 2001.
Tommy G. Thompson,
Secretary.
[FR Doc. 01-15577 Filed 6-20-01; 8:45 am]
BILLING CODE 4120-01-P