II 

109TH CONGRESS 

2D SESSION S. 3972 

To amend title XXI of the Social Security Act to reduce funding shortfalls 

for the State Children’s Health Insurance Program (SCHIP) for fiscal 

year 2007. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28, 2006 

Mr. GRASSLEY (for himself, Mr. ISAKSON, Mr. CHAMBLISS, Mr. BURR, and 

Ms. MURKOWSKI) introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend title XXI of the Social Security Act to reduce 

funding shortfalls for the State Children’s Health Insurance Program (SCHIP) for fiscal year 2007. 

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 ‘‘Fiscal Accountability, 

5 Integrity, and Responsibility in SCHIP Act of 2006’’ or 

6 the ‘‘FAIR-SCHIP Act of 2006’’. 


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1 SEC. 2. FUNDING OF THE SCHIP ALLOTMENT SHORTFALLS 

2 FOR FISCAL YEAR 2007. 

3 (a) IN GENERAL.—Section 2104 of the Social Secu4 rity Act (42 U.S.C. 1397dd) is amended by adding at the 

5 end the following new subsection: 

6 ‘‘(h) SPECIAL RULES TO ADDRESS FISCAL YEAR

7 2007 SHORTFALLS.— 

8 ‘‘(1) INITIAL DOWN PAYMENT ON SHORTFALL

9 FOR FISCAL YEAR 2007.—The provisions of sub10 section (d) shall apply with respect to fiscal year 

11 2007 in the same manner as they apply to fiscal 

12 year 2006, except that, for purposes of this para13 graph— 

14 ‘‘(A) any reference to ‘fiscal year 2006’, 

15 ‘December 16, 2005’, ‘2005’, ‘2004’, ‘Sep16 tember 30, 2006’ and ‘October 1, 2006’ shall 

17 be deemed a reference to ‘fiscal year 2007’, 

18 ‘December 16, 2006’, ‘2006’, ‘2005’, ‘Sep19 tember 30, 2007’ and ‘October 1, 2007’ respec20 tively; 

21 ‘‘(B) there shall be substituted for the dol22 lar amount specified in subsection (d)(1), and 

23 shall be treated as the amount appropriated 

24 under such subsection, $450,000,000; 

25 ‘‘(C) paragraphs (3)(B) and (4) of sub26 section (d) shall not apply (and paragraph (4) 


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1 of this subsection shall apply in lieu of para2 graph (4) of such subsection); 

3 ‘‘(D) if the dollar amount specified in sub4 paragraph (B) is not at least equal to the total 

5 of the shortfalls described in subsection (d)(2) 

6 (as applied under this paragraph), the amounts 

7 under subsection (d)(3) (as applied under this 

8 paragraph) shall be ratably reduced. 

9 ‘‘(2) FUNDING REMAINDER OF SHORTFALL FOR

10 FISCAL YEAR 2007 THROUGH REDISTRIBUTION OF

11 CERTAIN UNUSED FISCAL YEAR 2005 ALLOT12 MENTS.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (C), the Secretary shall provide for a re15 distribution under subsection (f) from amounts 

16 made available for redistribution under para17 graph (3), to each shortfall State described in 

18 subparagraph (B) that is one of the 50 States 

19 or District of Columbia, such amount as the 

20 Secretary determines will eliminate the esti21 mated shortfall described in such subparagraph 

22 for the State. 

23 ‘‘(B) SHORTFALL STATE DESCRIBED.—For 

24 purposes of this paragraph, a shortfall State 

25 described in this subparagraph is a State with 


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1 a State child health plan approved under this 

2 title for which the Secretary estimates, on the 

3 basis of the most recent data available to the 

4 Secretary as of March 31, 2007, that the pro5 jected expenditures under such plan for such 

6 State for fiscal year 2007 will exceed the sum 

7 of— 

8 ‘‘(i) the amount of the State’s allot9 ments for each of fiscal years 2005 and 

10 2006 that will not be expended by the end 

11 of fiscal year 2006; 

12 ‘‘(ii) the amount, if any, that is to be 

13 redistributed to the State during fiscal 

14 year 2007 in accordance with subsection 

15 (f) (other than under this paragraph); 

16 ‘‘(iii) the amount of the State’s allot17 ment for fiscal year 2007; and 

18 ‘‘(iv) the amount of any additional al19 lotment to the State under paragraph (1). 

20 ‘‘(C) PRORATION RULE.—If the amounts 

21 available for redistribution under paragraph (3) 

22 are less than the total amounts computed under 

23 subparagraph (A), the amount computed under 

24 subparagraph (A) for each shortfall State shall 

25 be reduced proportionally. 


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1 ‘‘(3) TREATMENT OF CERTAIN STATES WITH

2 FISCAL YEAR 2005 ALLOTMENTS UNEXPENDED AT

3 THE END OF THE FIRST HALF OF FISCAL YEAR

4 2007.— 

5 ‘‘(A) IDENTIFICATION OF STATES.—The 

6 Secretary— 

7 ‘‘(i) shall identify those States that re8 ceived an allotment for fiscal year 2005 

9 under subsection (b) which have not ex10 pended all of such allotment by March 31, 

11 2007; and 

12 ‘‘(ii) for each such State shall deter13 mine— 

14 ‘‘(I) the portion of such allotment 

15 that was not so expended by such 

16 date; and 

17 ‘‘(II) whether the State is a de18 scribed in subparagraph (B). 

19 ‘‘(B) STATES WITH FUNDS IN EXCESS OF

20 200 PERCENT OF NEED.—A State described in 

21 this subparagraph is a State for which the Sec22 retary determines, as of March 31, 2007, the 

23 total of all available allotments under this title 

24 as of such date, is at least equal to 200 percent 


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1 of the total projected expenditures under this 

2 title for the State for fiscal year 2007. 

3 ‘‘(C) REDISTRIBUTION AND LIMITATION

4 ON AVAILABILITY.— 

5 ‘‘(i) APPLICATION TO PORTION OF UN6 USED ALLOTMENTS FOR CERTAIN

7 STATES.—In the case of a State identified 

8 under subparagraph (A)(i) that is also de9 scribed in subparagraph (B), notwith10 standing subsection (e), the percentage 

11 specified by the Secretary in clause (ii) of 

12 the amount described in subparagraph 

13 (A)(ii)(I) shall not be available for expendi14 ture on or after April 1, 2007. 

15 ‘‘(ii) PERCENTAGE SPECIFIED.—The 

16 Secretary shall specify a percentage 

17 which— 

18 ‘‘(I) does not exceed 75 percent; 

19 and 

20 ‘‘(II) when applied under clause 

21 (i) results in the total of the amounts 

22 under such clause equaling the total 

23 of the amounts under paragraph 

24 (2)(A). 


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1 ‘‘(4) USE OF ADDITIONAL ALLOTMENT.—Addi2 tional allotments provided under this subsection are 

3 only available for amounts expended under a State 

4 plan approved under this title for child health assist5 ance for targeted low-income children or child health 

6 assistance or other health benefits coverage for preg7 nant women. 

8 ‘‘(5) RETROSPECTIVE ADJUSTMENT.—The Sec9 retary may adjust the determinations made under 

10 paragraphs (2) and (3) as necessary on the basis of 

11 the amounts reported by States not later than No12 vember 30, 2007, on CMS Form 64 or CMS Form 

13 21, as the case may be and as approved by the Sec14 retary, but in no case may the percentage specified 

15 in paragraph (3)(C)(ii) exceed 75 percent. 

16 ‘‘(6) 1-YEAR AVAILABILITY; NO REDISTRIBU17 TION OF UNEXPENDED ADDITIONAL ALLOTMENTS.— 

18 ‘‘(A) IN GENERAL.—Notwithstanding sub19 sections (e) and (f), amounts allotted or redis20 tributed to a State pursuant to this subsection 

21 for fiscal year 2007 shall only remain available 

22 for expenditure by the State through September 

23 30, 2007, and any amounts of such allotments 

24 or redistributions that remain unexpended as of 

25 such date, shall not be subject to redistribution 


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1 under subsection (f). Nothing in the preceding 

2 sentence shall be construed as limiting the abil3 ity of the Secretary to adjust the determina4 tions made under paragraphs (2) and (3) in ac5 cordance with paragraph (5). 

6 ‘‘(B) REVERSION UPON TERMINATION OF

7 RETROSPECTIVE ADJUSTMENT PERIOD.—Any 

8 amounts of such allotments or redistributions 

9 that remain unexpended as of September 30, 

10 2007, shall revert to the Treasury on December 

11 31, 2007.’’. 

12 (b) EXTENDING AUTHORITY FOR QUALIFYING

13 STATES TO USE CERTAIN FUNDS FOR MEDICAID EX14 PENDITURES.—Section 2105(g)(1)(A) of such Act (42 

15 U.S.C. 1397ee(g)(1)(A)) is amended by striking ‘‘or 

16 2005’’ and inserting ‘‘2005, 2006, or 2007’’. 

Æ 


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