II 

108TH CONGRESS 

2D SESSION S. 2671 

To extend temporary State fiscal relief, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 15, 2004 

Mr. ROCKEFELLER (for himself and Mr. SMITH) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To extend temporary State fiscal relief, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘State Fiscal Relief Act 

5 of 2004’’. 

6 SEC. 2. EXTENSION OF TEMPORARY STATE FISCAL RELIEF. 

7 (a) EXTENSION OF TEMPORARY FREEZE OF MED8 ICAID FMAP FOR CERTAIN STATES.—Section 401(a) of 

9 the Jobs and Growth Tax Relief Reconciliation Act of 

10 2003 (42 U.S.C. 1396d note) is amended— 
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1 (1) in the subsection heading, by striking 

2 ‘‘$10,000,000,000 FOR A’’; 

3 (2) in paragraph (2)— 

4 (A) in the paragraph heading, by striking 

5 ‘‘FIRST 3 QUARTERS OF’’; and 

6 (B) by striking ‘‘the first, second, and 

7 third calendar quarters’’ and inserting ‘‘each 

8 calendar quarter’’; 

9 (3) by redesignating paragraphs (3) through 

10 (9) as paragraphs (4) through (10), respectively; 

11 and 

12 (4) by inserting after paragraph (2), the fol13 lowing: 

14 ‘‘(3) PERMITTING MAINTENANCE OF FISCAL

15 YEAR 2004 FMAP FOR FISCAL YEAR 2005.—Subject to 

16 paragraph (6), if the FMAP determined without re17 gard to this subsection for a State for fiscal year 

18 2005 is less than the FMAP as so determined for 

19 fiscal year 2004, the FMAP for the State for fiscal 

20 year 2004 shall be substituted for the State’s FMAP 

21 for each calendar quarter of fiscal year 2005, before 

22 the application of this subsection.’’. 

23 (b) TEMPORARY INCREASE IN MEDICAID FMAP FOR

24 ALL STATES.—Section 401(a) of the Jobs and Growth 

25 Tax Relief Reconciliation Act of 2003 (42 U.S.C. 1396d 
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1 note), as amended by subsection (a), is amended by strik2 ing paragraphs (4) and (5) (as redesignated by subsection 

3 (a)(3)) and inserting the following: 

4 ‘‘(4) TEMPORARY INCREASE IN MEDICAID

5 FMAP.— 

6 ‘‘(A) GENERAL 2.95 PERCENTAGE POINTS

7 INCREASE FOR LAST 2 CALENDAR QUARTERS OF

8 FISCAL YEAR 2003 AND FIRST 3 CALENDAR

9 QUARTERS OF FISCAL YEAR 2004.—Subject to 

10 paragraphs (6), (7), and (8), for each State for 

11 the third and fourth calendar quarters of fiscal 

12 year 2003 and for the first, second, and third 

13 calendar quarters of fiscal year 2004, the 

14 FMAP (taking into account the application of 

15 paragraphs (1), (2), and (3)) shall be increased 

16 by 2.95 percentage points. 

17 ‘‘(B) GENERAL 1.26 PERCENTAGE POINTS

18 INCREASE FOR LAST CALENDAR QUARTER OF

19 FISCAL YEAR 2004 AND EACH CALENDAR QUAR20 TER OF FISCAL YEAR 2005.—Subject to para21 graphs (6), (7), and (8), for each State for the 

22 fourth calendar quarter of fiscal year 2004 and 

23 each calendar quarter of fiscal year 2005, the 

24 FMAP (taking into account the application of 

25 paragraphs (1), (2), and (3) but without regard 
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1 to the application of subparagraph (A)) shall be 

2 increased by 1.26 percentage points. 

3 ‘‘(5) INCREASE IN CAP ON MEDICAID PAYMENTS

4 TO TERRITORIES.— 

5 ‘‘(A) LAST 2 CALENDAR QUARTERS OF FIS6 CAL YEAR 2003 AND FIRST 3 CALENDAR QUAR7 TERS OF FISCAL YEAR 2004.—Subject to para8 graphs (7) and (8), with respect to the third 

9 and fourth calendar quarters of fiscal year 

10 2003 and the first, second, and third calendar 

11 quarters of fiscal year 2004, the amounts other12 wise determined for Puerto Rico, the Virgin Is13 lands, Guam, the Northern Mariana Islands, 

14 and American Samoa under subsections (f) and 

15 (g) of section 1108 of the Social Security Act 

16 (42 U.S.C. 1308) shall each be increased by an 

17 amount equal to 5.90 percent of such amounts. 

18 ‘‘(B) LAST CALENDAR QUARTER OF FISCAL

19 YEAR 2004 AND EACH CALENDAR QUARTER OF

20 FISCAL YEAR 2005.—Subject to paragraphs (7) 

21 and (8), with respect to the fourth calendar 

22 quarter of fiscal year 2004 and each calendar 

23 quarter of fiscal year 2005, the amounts other24 wise determined for Puerto Rico, the Virgin Is25 lands, Guam, the Northern Mariana Islands, 
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1 and American Samoa under subsections (f) and 

2 (g) of section 1108 of the Social Security Act 

3 (42 U.S.C. 1308) shall each be increased by an 

4 amount equal to 2.52 percent of such 

5 amounts.’’. 

6 (c) CONFORMING AMENDMENTS.—Section 401(a) of 

7 the Jobs and Growth Tax Relief Reconciliation Act of 

8 2003 (42 U.S.C. 1396d note), as amended by subsections 

9 (a) and (b), is amended— 

10 (1) in paragraph (1), by striking ‘‘paragraph 

11 (5)’’ and inserting ‘‘paragraph (6)’’; 

12 (2) in paragraph (2), by striking ‘‘paragraph 

13 (5)’’ and inserting ‘‘paragraph (6)’’; 

14 (3) in paragraph (7) (as redesignated by sub15 section (a)(3))— 

16 (A) by striking ‘‘paragraph (4)’’ each place 

17 it appears and inserting ‘‘paragraph (5)’’; and 

18 (B) by striking ‘‘paragraph (3)’’ each place 

19 it appears and inserting ‘‘paragraph (4)’’; 

20 (4) in paragraph (8) (as so redesignated), by 

21 striking ‘‘the first, second and third calendar quar22 ters of fiscal year 2004’’ and inserting ‘‘each cal23 endar quarter of fiscal year 2004 and fiscal year 

24 2005’’; and 
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1 (5) in paragraph (10) (as so redesignated), by 

2 striking ‘‘October 1, 2004’’ and inserting ‘‘January 

3 1, 2005’’. 

4 SEC. 3. TRANSITIONAL FUND TO IMPLEMENT THE MEDI5 CARE PRESCRIPTION DRUG, IMPROVEMENT, 

6 AND MODERNIZATION ACT OF 2003. 

7 Section 1931(h) of the Social Security Act (42 U.S.C. 

8 1396u–1(h)) is amended— 

9 (1) in paragraph (1)— 

10 (A) by striking ‘‘described in paragraph 

11 (2)’’ and inserting ‘‘described in— 

12 ‘‘(A) paragraph (2)(A)’’; 

13 (B) by striking the period and inserting ‘‘; 

14 and’’; and 

15 (C) by adding at the end the following: 

16 ‘‘(B) paragraph (2)(B) the per centum 

17 specified in section 1903(a)(7) shall be in18 creased to such percentage as the Secretary 

19 specifies, except that the percentage shall not 

20 be less than the percentage applied by the Sec21 retary to the payments made for administrative 

22 expenditures described in subparagraph (A) be23 fore the date of enactment of this subpara24 graph.’’; 
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1 (2) in paragraph (2), by striking ‘‘that (but for 

2 the enactment of this section) would not be in3 curred.’’ and inserting ‘‘that— 

4 ‘‘(A) but for the enactment of this section 

5 would not be incurred; or 

6 ‘‘(B) but for the enactment of the Medi7 care, Prescription Drug, Improvement, and 

8 Modernization Act of 2003 and the amend9 ments made by that Act would not be in10 curred.’’; and 

11 (3) by striking paragraph (3) and inserting the 

12 following: 

13 ‘‘(3) LIMITATIONS.— 

14 ‘‘(A) WELFARE REFORM ATTRIBUTABLE

15 EXPENDITURES.—The total amount of addi16 tional Federal funds that are expended as a re17 sult of the application of this subsection with 

18 respect to administrative expenditures described 

19 in paragraph (2)(A) for the period beginning 

20 with fiscal year 1997 shall not exceed 

21 $500,000,000. In applying this subparagraph, 

22 the Secretary shall ensure the equitable dis23 tribution of additional funds among the States. 

24 ‘‘(B) MMA ATTRIBUTABLE EXPENDI25 TURES.—The total amount of additional Fed-
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1 eral funds that are expended as a result of the 

2 application of this subsection with respect to 

3 administrative expenditures described in para4 graph (2)(B) for the period beginning on Octo5 ber 1, 2004, and ending on the later of April 

6 1, 2006, or the end of the first fiscal year quar7 ter that begins on or after the date on which 

8 benefits are first provided under the voluntary 

9 prescription drug benefit program under part D 

10 of title XVIII (other than under the program 

11 under subpart 4 of part D of title XVIII), shall 

12 not exceed $1,200,000,000. In applying this 

13 subparagraph, the Secretary shall ensure the 

14 equitable distribution of additional funds among 

15 the States, taking into account the following: 

16 ‘‘(i) The percentage of individuals who 

17 reside in a State who are eligible for medi18 care cost-sharing under clause (i), (iii), or 

19 (iv) of section 1902(a)(10)(E). 

20 ‘‘(ii) The number of full-benefit dual 

21 eligible individuals (as defined in section 

22 1935(c)(6)) who reside in a State.’’. 

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