(1) to ameliorate the hardships faced by mil-
lions of Americans as a result of State and local 
budget crises, including tax increases and cuts to 
education, health care, and other vital State and 
local programs; 
(2) to avoid the economic damage that would be 
caused by tens of billions of dollars in State and 
local tax increases and spending cuts that would fur-
ther weaken the Nation’s economic growth and job 
creation; and 
(3) to improve the Nation’s readiness for a ter-
rorist attack by providing financial assistance to as-
sist States and cities to—
(A) prepare first responders and emer-
gency personnel; 
(B) implement anti-counterfeiting protec-
tions; 
(C) strengthen security at vulnerable tar-
gets, such as nuclear power plants and public 
transportation systems; and 
(D) address other homeland security prior-
ities. 
SEC. 3. DEFINITIONS. 
As used in this Act, the following definitions shall 
apply:
(1) STATE.—Except as used in section 6, the 
term ‘‘State’’ means each of the several States of 
the United States, the District of Columbia, and the 
Commonwealth of Puerto Rico. 
(2) METROPOLITAN
STATISTICAL
AREA.—The 
term ‘‘metropolitan statistical area’’ means a statis-
tical geographic entity associated with at least 1 ur-
banized area that has a population of not less than 
50,000, as identified by the Office of Management 
and Budget. 
(3) METROPOLITAN CITY.—The term ‘‘metro-
politan city’’ means—
(A) a central city within a metropolitan 
statistical area; and 
(B) any other city within a metropolitan 
statistical area that has a population of not less 
than 50,000. 
(4) UNIT OF GENERAL LOCAL GOVERNMENT.—
(A) IN GENERAL.—The term ‘‘unit of gen-
eral local government’’ means—
(i) a county, parish, township, city, or 
political subdivision of a county, parish, 
township, or city, that is a unit of general 
local government as determined by the Sec-
retary of Commerce for general statistical 
purposes; and 
(ii) the District of Columbia, the 
Commonwealth of Puerto Rico, and the 
recognized governing body of an Indian 
tribe or Alaskan native village that carries 
out substantial governmental duties and 
powers. 
(B) TREATMENT OF SUBSUMED AREAS.—
For purposes of determining a unit of general 
local government under this section, the rules 
under section 6720(c) of title 31, United States 
Code, shall apply. 
SEC. 4. HOMELAND SECURITY GRANTS. 
(a) GRANTS AUTHORIZED.—
(1) IN
GENERAL.—From the amount appro-
priated under subsection (d), the Secretary of 
Homeland Security (referred to in this section as the 
‘‘Secretary’’) shall, as soon as practicable after the 
date of enactment of this Act, award grants to 
States and metropolitan cities, which have submitted 
an application in accordance with subsection (c) to 
accomplish the objectives described under subsection 
(b). 
(2) ALLOCATIONS TO STATES.—
(A) POPULATION-BASED
ALLOCATIONS.—
The Secretary shall allocate $2,500,000,000 for 
grants to the States based on the relative popu-
lation of each State. 
(B) RISK-BASED
ALLOCATIONS.—Subject 
to paragraph (4), the Secretary shall allocate 
$2,500,000,000 for grants to the States based 
on—
(i) the potential risk, as it pertains to 
chemical security, of each State; 
(ii) the proximity of each State to the 
nearest operating nuclear power plant; 
(iii) the proximity of each State to the 
nearest United States land or water port; 
(iv) the proximity of each State to the 
nearest international border; and 
(v) the proximity of each State to the 
nearest Disaster Medical Assistance Team. 
(3) ALLOCATIONS TO METROPOLITAN CITIES.—
(A) POPULATION-BASED
ALLOCATIONS.—
The Secretary shall allocate $2,500,000,000 for 
grants to units of general local government 
within metropolitan cities based on the relative 
population of each metropolitan statistical area.
(B) RISK-BASED ALLOCATIONS.—The Sec-
retary shall allocate $2,500,000,000 for grants 
to metropolitan cities within metropolitan sta-
tistical areas based on—
(i) the potential risk, as it pertains to 
chemical security, of each metropolitan sta-
tistical area; 
(ii) the proximity of each metropolitan 
statistical area to the nearest operating 
nuclear power plant; 
(iii) the proximity of each metropoli-
tan statistical area to the nearest United 
States land or water port; 
(iv) the proximity of each metropoli-
tan statistical area to the nearest inter-
national border; and 
(v) the proximity of each metropolitan 
statistical area to the nearest Disaster 
Medical Assistance Team. 
(C) METROPOLITAN
CITIES.—The Sec-
retary shall distribute the allocations under sub-
paragraphs (A) and (B) to metropolitan cities 
based on the relative population of each such 
city.
(4) CLARIFICATION OF RISK FACTORS.—In allo-
cating funds to States and metropolitan statistical 
areas under paragraphs (2)(B) and (3)(B), the Sec-
retary shall equally weigh each of the following risk 
factors: 
(A) POTENTIAL RISK AS IT PERTAINS TO 
CHEMICAL SECURITY.—If a State or metropoli-
tan statistical area is within the vulnerable zone 
of a worst-case chemical release, as specified in 
the most recent risk management plans filed 
with the Environmental Protection Agency or 
another instrument developed by the Environ-
mental Protection Agency or the Homeland Se-
curity Department that captures the same in-
formation for the same facilities, the ratio 
under paragraphs (2)(B)(i) and (3)(B)(i) shall 
be 1 divided by the total number of States or 
metropolitan statistical areas that are within 
such a zone. 
(B) PROXIMITY AS IT PERTAINS TO NU-
CLEAR SECURITY.—If a State or metropolitan 
statistical area is located within 50 miles of an 
operating nuclear power plant, as identified by 
the Nuclear Regulatory Commission, the ratio 
under paragraphs (2)(B)(ii) and (3)(B)(ii) shall
the total number of States or metropolitan sta-
tistical areas that are located within 50 miles of 
an international border. 
(E) PROXIMITY TO DISASTER MEDICAL AS-
SISTANCE TEAMS.—If a State or metropolitan 
statistical area is located within 50 miles of a 
Disaster Medical Assistance Team, as organized 
by the National Disaster Medical System 
through the Department of Public Health, the 
ratio under paragraphs (2)(B)(v) and (3)(B)(v) 
shall be 1 divided by the total number of States 
or metropolitan statistical areas that are lo-
cated within 50 miles of a Disaster Medical As-
sistance Team. 
(b) USE OF FUNDS.—Grants awarded pursuant to 
subsection (a) may be used to—
(1) support police, fire, health, and other emer-
gency personnel by—
(A) purchasing or upgrading communica-
tions systems, protective gear, or hazardous 
materials detection equipment; 
(B) providing training for emergency re-
sponses; and 
(C) providing for expenses related to reten-
tion of personnel and overtime;
(2) improve safeguards against the counter-
feiting of official State documents, including—
(A) the improvement of procedures to ob-
tain proof of identity before issuance of official 
identification cards; and 
(B) the implementation of biometric identi-
fiers and holograms; 
(3) improve security at chemical plants by—
(A) strengthening requirements for perim-
eter security and assisting in meeting such re-
quirements; and 
(B) strengthening requirements for the use 
and handling of hazardous materials and assist-
ing in meeting such requirements; 
(4) improve security in train and subway cars 
and stations, on bridges, in tunnels, and in arenas 
by installing and improving—
(A) fire and blast protections; 
(B) ventilation systems; 
(C) entrance security; 
(D) sensors to detect chemical and biologi-
cal weapons; and 
(E) emergency evacuation systems; 
(5) improve security at and around skyscrapers, 
public monuments, and other major buildings;
(6) secure food and water supplies, reservoirs, 
water treatment plants, and distribution systems; 
(7) strengthen protections of other critical net-
works, including—
(A) telecommunications; 
(B) electrical power plants and grids; and 
(C) computer networks and databases; 
(8) plan and prepare for a response for chem-
ical or biological attacks, including—
(A) purchasing, distributing, and storing 
treatments and preventive measures; 
(B) providing emergency training for 
health officials; and 
(C) developing public health surveillance 
systems to identify the disease outbreaks by 
monitoring ambulance calls, hospital admit-
tance, and other measures; 
(9) establish systems to notify members of the 
public and appropriate agencies when a threat has 
emerged and any precautions the public should take; 
(10) establish programs that offer opportunities 
for members of the community to participate in ter-
rorism preparation and prevention, including neigh-
borhood watch groups; and
(11) design, review, and improve disaster re-
sponse systems, enhancing communities’ ability to 
coordinate efforts and share information, and devise 
and implement a homeland security plan. 
(c) APPLICATION.—
(1) IN GENERAL.—Each eligible entity desiring 
a grant under this section shall submit an applica-
tion to the Secretary at such time, in such manner, 
and accompanied by such information as the Sec-
retary may reasonably require. 
(2) CONTENTS.—Each application submitted 
pursuant to paragraph (1) shall—
(A) describe the activities for which assist-
ance under this section is sought; and 
(B) provide such additional assurances as 
the Secretary determines to be necessary to en-
sure that the grantee will use the proceeds of 
the grant in compliance with subsection (b). 
(d) AUTHORIZATION
AND APPROPRIATION.—There 
are authorized to be appropriated, and are appropriated, 
$10,000,000,000 for fiscal year 2003 to carry out this sec-
tion, which shall remain available through September 30, 
2004.
SEC. 5. BUDGET CRISIS RELIEF GRANTS. 
(a) GRANTS AUTHORIZED.—From the amount appro-
priated under subsection (c) for fiscal year 2003, the Sec-
retary of the Treasury (referred to in this section as the 
‘‘Secretary’’) shall, as soon as practicable after the date 
of enactment of this Act, allocate financial assistance to 
each of the States as follows: 
(1) GRANTS TO STATES.—
(A) 
ALLOCATIONS
BASED
ON
POPU-
LATION.—The 
Secretary 
shall 
allocate 
$7,500,000,000 among the States on the basis 
of the relative population of each State, as de-
termined by the Secretary on the basis of the 
most recent satisfactory data. 
(B) ALLOCATIONS BASED ON UNEMPLOY-
MENT.—The 
Secretary 
shall 
allocate 
$7,500,000,000 among the States on the basis 
of the relative number of unemployed individ-
uals for calendar year 2002 in each State, as 
determined by the Secretary on the basis of the 
most recent satisfactory data. 
(2) GRANTS TO LOCAL GOVERNMENT.—
(A) 
ALLOCATIONS
BASED
ON
POPU-
LATION.—The Secretary shall allocate an addi-
tional $7,500,000,000 among units of general 
local government within each State on the basis
of the relative population of each State and of 
each such unit within each State, as determined 
by the Secretary on the basis of the most recent 
satisfactory data. 
(B) ALLOCATIONS BASED ON UNEMPLOY-
MENT.—The Secretary shall allocate an addi-
tional $7,500,000,000 among units of general 
local government within each State on the basis 
of the relative number of unemployed individ-
uals for calendar year 2002 in each State and 
in each such unit within each State, as deter-
mined by the Secretary on the basis of the most 
recent satisfactory data. 
(b) MAINTENANCE OF EFFORT.—A State or unit of 
general local government, before receiving the proceeds of 
a grant under this section, shall certify that such State 
or unit of general local government—
(1) will maintain its expenditures for elemen-
tary, secondary, and higher education at a level 
equal to not less than the level of such expenditures 
maintained by the State or unit of general local gov-
ernment for the fiscal year immediately preceding 
the fiscal year for which the grant is received; and
(2) will not raise the net tuition, after scholar-
ships and tuition waivers, at public colleges and uni-
versities by more than the inflation rate. 
(c) AUTHORIZATION
AND APPROPRIATION.—There 
are authorized to be appropriated, and are appropriated, 
$30,000,000,000 for fiscal year 2003 to carry out this sec-
tion.
SEC 6. TEMPORARY STATE FISCAL RELIEF THROUGH IN-
CREASE IN MEDICAID FMAP. 
(a) DEFINITIONS.—In this section, the following defi-
nitions shall apply: 
(1) 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)). 
(2) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the 
Social Security Act (42 U.S.C. 1396 et seq.). 
(b) PERMITTING MAINTENANCE OF FISCAL YEAR 
2002 FMAP FOR LAST 2 CALENDAR QUARTERS OF FIS-
CAL YEAR 2003.—Notwithstanding any other provision of 
law, but subject to subsection (f), if the FMAP determined 
without regard to this section for a State for fiscal year 
2003 is less than the FMAP as so determined for fiscal 
year 2002, the FMAP for the State for fiscal year 2002
shall be substituted for the State’s FMAP for the third 
and fourth calendar quarters of fiscal year 2003, before 
the application of this section. 
(c) PERMITTING MAINTENANCE OF FISCAL YEAR 
2003 FMAP FOR FISCAL YEAR 2004.—Notwithstanding 
any other provision of law, but subject to subsection (f), 
if the FMAP determined without regard to this section 
for a State for fiscal year 2004 is less than the FMAP 
as so determined for fiscal year 2003, the FMAP for the 
State for fiscal year 2003 shall be substituted for the 
State’s FMAP for each calendar quarter of fiscal year 
2004, before the application of this section. 
(d) GENERAL 2.45 PERCENTAGE POINTS INCREASE 
FOR LAST 2 CALENDAR QUARTERS OF FISCAL YEAR 2003 
AND FISCAL YEAR 2004.—Notwithstanding any other 
provision of law, but subject to subsections (f) and (g), 
for each State for the third and fourth calendar quarters 
of fiscal year 2003 and each calendar quarter of fiscal year 
2004, the FMAP (taking into account the application of 
subsections (b) and (c)) shall be increased by 2.45 per-
centage points. 
(e) INCREASE IN CAP ON MEDICAID PAYMENTS TO 
TERRITORIES.—Notwithstanding any other provision of 
law, but subject to subsection (g), with respect to the third 
and fourth calendar quarters of fiscal year 2003 and each
calendar quarter of fiscal year 2004, the amounts other-
wise 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 4.90 percent of such 
amounts. 
(f) SCOPE OF APPLICATION.—The increases in the 
FMAP for a State under this section shall apply only for 
purposes of title XIX of the Social Security Act and shall 
not apply with respect to—
(1) disproportionate share hospital payments 
described in section 1923 of such Act (42 U.S.C. 
1396r–4); or 
(2) payments under title IV or XXI of such Act 
(42 U.S.C. 601 et seq. and 1397aa et seq.). 
(g) STATE ELIGIBILITY.—
(1) IN GENERAL.—Subject to paragraph (2), a 
State is eligible for an increase in its FMAP under 
subsection (d) or an increase in a cap amount under 
subsection (e) only if the eligibility under its State 
plan under title XIX of the Social Security Act (in-
cluding any waiver under such title or under section 
1115 of such Act (42 U.S.C. 1315)) is no more re-
strictive than the eligibility under such plan (or 
waiver) as in effect on September 2, 2003. 
(2) 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 September 2, 2003, but prior to the 
date of enactment of this Act is eligible for an in-
crease in its FMAP under subsection (d) or an in-
crease in a cap amount under subsection (e) 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 September 2, 
2003. 
(3) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (1) or (2) 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 sec-
tion 1115 of such Act (42 U.S.C. 1315)).