II 
108TH CONGRESS 
1ST SESSION H. R. 2854
IN THE SENATE OF THE UNITED STATES 
JULY 28 (legislative day, JULY 21), 2003
Received 
AN ACT 
To amend title XXI of the Social Security Act to extend 
the availability of allotments for fiscal years 1998 
through 2001 under the State Children’s Health Insur-
ance Program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. EXTENSION OF AVAILABILITY OF SCHIP ALLOT-
MENTS FOR FISCAL YEARS 1998 THROUGH 
2001. 
(a) EXTENDING AVAILABILITY OF SCHIP ALLOT-
MENTS FOR FISCAL YEARS 1998 THROUGH 2001.—
(1) RETAINED
AND
REDISTRIBUTED
ALLOT-
MENTS FOR FISCAL YEARS 1998 AND 1999.—Para-
graphs (2)(A)(i) and (2)(A)(ii) of section 2104(g) of 
the Social Security Act (42 U.S.C. 1397dd(g)) are 
each amended by striking ‘‘fiscal year 2002’’ and in-
serting ‘‘fiscal year 2004’’. 
(2) EXTENSION AND REVISION OF RETAINED 
AND
REDISTRIBUTED
ALLOTMENTS
FOR
FISCAL 
YEAR 2000.—
(A) PERMITTING AND EXTENDING RETEN-
TION OF PORTION OF FISCAL YEAR 2000 ALLOT-
MENT.—Paragraph (2) of such section 2104(g) 
is amended—
(i) in the heading, by striking ‘‘AND 
1999’’ and inserting ‘‘THROUGH 2000’’; and 
(ii) by adding at the end of subpara-
graph (A) the following: 
‘‘(iii) FISCAL
YEAR
2000
ALLOT-
MENT.—Of the amounts allotted to a State 
pursuant to this section for fiscal year 
2000 that were not expended by the State
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by the end of fiscal year 2002, 50 percent 
of that amount shall remain available for 
expenditure by the State through the end 
of fiscal year 2004.’’. 
(B) REDISTRIBUTED ALLOTMENTS.—Para-
graph (1) of such section 2104(g) is amended—
(i) in subparagraph (A), by inserting 
‘‘or for fiscal year 2000 by the end of fis-
cal year 2002,’’ after ‘‘fiscal year 2001,’’; 
(ii) in subparagraph (A), by striking 
‘‘1998 or 1999’’ and inserting ‘‘1998, 
1999, or 2000’’; 
(iii) in subparagraph (A)(i)—
(I) by striking ‘‘or’’ at the end of 
subclause (I), 
(II) by striking the period at the 
end of subclause (II) and inserting ‘‘; 
or’’; and 
(III) by adding at the end the 
following new subclause: 
‘‘(III) the fiscal year 2000 allot-
ment, the amount specified in sub-
paragraph (C)(i) (less the total of the 
amounts under clause (ii) for such fis-
cal year), multiplied by the ratio of
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the amount specified in subparagraph 
(C)(ii) for the State to the amount 
specified in subparagraph (C)(iii).’’; 
(iv) in subparagraph (A)(ii), by strik-
ing ‘‘or 1999’’ and inserting ‘‘, 1999, or 
2000’’; 
(v) in subparagraph (B), by striking 
‘‘with respect to fiscal year 1998 or 1999’’; 
(vi) in subparagraph (B)(ii)—
(I) by inserting ‘‘with respect to 
fiscal year 1998, 1999, or 2000,’’ 
after ‘‘subsection (e),’’; and 
(II) by striking ‘‘2002’’ and in-
serting ‘‘2004’’; and 
(vii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) AMOUNTS USED IN COMPUTING RE-
DISTRIBUTIONS
FOR
FISCAL
YEAR
2000.—For 
purposes of subparagraph (A)(i)(III)—
‘‘(i) the amount specified in this 
clause is the amount specified in para-
graph (2)(B)(i)(I) for fiscal year 2000, less 
the total amount remaining available pur-
suant to paragraph (2)(A)(iii);
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‘‘(ii) the amount specified in this 
clause for a State is the amount by which 
the State’s expenditures under this title in 
fiscal years 2000, 2001, and 2002 exceed 
the State’s allotment for fiscal year 2000 
under subsection (b); and 
‘‘(iii) the amount specified in this 
clause is the sum, for all States entitled to 
a redistribution under subparagraph (A) 
from the allotments for fiscal year 2000, of 
the amounts specified in clause (ii).’’. 
(C) CONFORMING
AMENDMENTS.—Such 
section 2104(g) is further amended—
(i) in its heading, by striking ‘‘AND 
1999’’ and inserting ‘‘, 1999, AND 2000’’; 
and 
(ii) in paragraph (3)—
(I) by striking ‘‘or fiscal year 
1999’’ and inserting ‘‘, fiscal year 
1999, or fiscal year 2000’’; and 
(II) by striking ‘‘or November 
30, 2001’’ and inserting ‘‘November 
30, 2001, or November 30, 2002’’, re-
spectively.
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(3) EXTENSION AND REVISION OF RETAINED 
AND
REDISTRIBUTED
ALLOTMENTS
FOR
FISCAL 
YEAR 2001.—
(A) PERMITTING AND EXTENDING RETEN-
TION OF PORTION OF FISCAL YEAR 2001 ALLOT-
MENT.—Paragraph (2) of such section 2104(g), 
as amended in paragraph (2)(A)(ii), is further 
amended—
(i) in the heading, by striking ‘‘2000’’ 
and inserting ‘‘2001’’; and 
(ii) by adding at the end of subpara-
graph (A) the following: 
‘‘(iv) 
FISCAL
YEAR
2001
ALLOT-
MENT.—Of the amounts allotted to a State 
pursuant to this section for fiscal year 
2001 that were not expended by the State 
by the end of fiscal year 2003, 50 percent 
of that amount shall remain available for 
expenditure by the State through the end 
of fiscal year 2005.’’. 
(B) REDISTRIBUTED ALLOTMENTS.—Para-
graph (1) of such section 2104(g), as amended 
in paragraph (2)(B), is further amended—
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(i) in subparagraph (A), by inserting 
‘‘or for fiscal year 2001 by the end of fis-
cal year 2003,’’ after ‘‘fiscal year 2002,’’; 
(ii) in subparagraph (A), by striking 
‘‘1999, or 2000’’ and inserting ‘‘1999, 
2000, or 2001’’; 
(iii) in subparagraph (A)(i)—
(I) by striking ‘‘or’’ at the end of 
subclause (II), 
(II) by striking the period at the 
end of subclause (III) and inserting ‘‘; 
or’’; and 
(III) by adding at the end the 
following new subclause: 
‘‘(IV) the fiscal year 2001 allot-
ment, the amount specified in sub-
paragraph (D)(i) (less the total of the 
amounts under clause (ii) for such fis-
cal year), multiplied by the ratio of 
the amount specified in subparagraph 
(D)(ii) for the State to the amount 
specified in subparagraph (D)(iii).’’; 
(iv) in subparagraph (A)(ii), by strik-
ing ‘‘or 2000’’ and inserting ‘‘2000, or 
2001’’;
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(v) in subparagraph (B)—
(I) by striking ‘‘and’’ at the end 
of clause (ii); 
(II) by redesignating clause (iii) 
as clause (iv); and 
(III) by inserting after clause (ii) 
the following new clause: 
‘‘(iii) notwithstanding subsection (e), 
with respect to fiscal year 2001, shall re-
main available for expenditure by the State 
through the end of fiscal year 2005; and’’; 
and 
(vi) by adding at the end the following 
new subparagraph: 
‘‘(D) AMOUNTS USED IN COMPUTING RE-
DISTRIBUTIONS
FOR
FISCAL
YEAR
2001.—For 
purposes of subparagraph (A)(i)(IV)—
‘‘(i) the amount specified in this 
clause is the amount specified in para-
graph (2)(B)(i)(I) for fiscal year 2001, less 
the total amount remaining available pur-
suant to paragraph (2)(A)(iv); 
‘‘(ii) the amount specified in this 
clause for a State is the amount by which 
the State’s expenditures under this title in
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fiscal years 2001, 2002, and 2003 exceed 
the State’s allotment for fiscal year 2001 
under subsection (b); and 
‘‘(iii) the amount specified in this 
clause is the sum, for all States entitled to 
a redistribution under subparagraph (A) 
from the allotments for fiscal year 2001, of 
the amounts specified in clause (ii).’’. 
(C) CONFORMING
AMENDMENTS.—Such 
section 2104(g) is further amended—
(i) in its heading, by striking ‘‘AND 
2000’’ and inserting ‘‘2000, AND 2001’’; 
and 
(ii) in paragraph (3)—
(I) by striking ‘‘or fiscal year 
2000’’ and inserting ‘‘fiscal year 
2000, or fiscal year 2001’’; and 
(II) by striking ‘‘or November 
30, 2002,’’ and inserting ‘‘November 
30, 2002, or November 30, 2003,’’, 
respectively. 
(4) EFFECTIVE
DATE.—This subsection, and 
the amendments made by this subsection, shall be 
effective as if this subsection had been enacted on 
September 30, 2002, and amounts under title XXI
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of the Social Security Act (42 U.S.C. 1397aa et 
seq.) from allotments for fiscal years 1998 through 
2000 are available for expenditure on and after Oc-
tober 1, 2002, under the amendments made by this 
subsection as if this subsection had been enacted on 
September 30, 2002. 
(b) AUTHORITY FOR QUALIFYING STATES TO USE 
PORTION OF SCHIP FUNDS FOR MEDICAID EXPENDI-
TURES.—Section 2105 of the Social Security Act (42 
U.S.C. 1397ee) is amended by adding at the end the fol-
lowing: 
‘‘(g) AUTHORITY FOR QUALIFYING STATES TO USE 
CERTAIN FUNDS FOR MEDICAID EXPENDITURES.—
‘‘(1) STATE OPTION.—
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, a qualifying State (as 
defined in paragraph (2)) may elect to use not 
more than 20 percent of any allotment under 
section 2104 for fiscal year 1998, 1999, 2000, 
or 2001 (insofar as it is available under sub-
sections (e) and (g) of such section) for pay-
ments under title XIX in accordance with sub-
paragraph (B), instead of for expenditures 
under this title. 
‘‘(B) PAYMENTS TO STATES.—
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‘‘(i) IN GENERAL.—In the case of a 
qualifying State that has elected the option 
described in subparagraph (A), subject to 
the availability of funds under such sub-
paragraph with respect to the State, the 
Secretary shall pay the State an amount 
each quarter equal to the additional 
amount that would have been paid to the 
State under title XIX with respect to ex-
penditures described in clause (ii) if the 
enhanced FMAP (as determined under 
subsection (b)) had been substituted for 
the Federal medical assistance percentage 
(as defined in section 1905(b)). 
‘‘(ii) EXPENDITURES
DESCRIBED.—
For purposes of this subparagraph, the ex-
penditures described in this clause are ex-
penditures, made after the date of the en-
actment of this subsection and during the 
period in which funds are available to the 
qualifying State for use under subpara-
graph (A), for medical assistance under 
title XIX to individuals who have not at-
tained age 19 and whose family income ex-
ceeds 150 percent of the poverty line.
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‘‘(iii) NO IMPACT ON DETERMINATION 
OF BUDGET NEUTRALITY FOR WAIVERS.—
In the case of a qualifying State that uses 
amounts paid under this subsection for ex-
penditures described in clause (ii) that are 
incurred under a waiver approved for the 
State, any budget neutrality determina-
tions with respect to such waiver shall be 
determined 
without 
regard 
to 
such 
amounts paid. 
‘‘(2) QUALIFYING STATE.—In this subsection, 
the term ‘qualifying State’ means a State that, on 
and after April 15, 1997, has an income eligibility 
standard that is at least 185 percent of the poverty 
line with respect to any 1 or more categories of chil-
dren (other than infants) who are eligible for med-
ical assistance under section 1902(a)(10)(A) or, in 
the case of a State that has a statewide waiver in 
effect under section 1115 with respect to title XIX 
that was first implemented on July 1, 1995, has an 
income eligibility standard under such waiver for 
children that is at least 185 percent of the poverty 
line, or, in the case of a State that has a statewide 
waiver in effect under section 1115 with respect to 
title XIX that was first implemented on January 1,
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1994, has an income eligibility standard under such 
waiver for children who lack health insurance that is 
at least 185 percent of the poverty line. 
‘‘(3) CONSTRUCTION.—Nothing in paragraphs 
(1) and (2) shall be construed as modifying the re-
quirements applicable to States implementing State 
child health plans under this title.’’. 
SEC. 2. TECHNICAL CORRECTION. 
(a) TEMPORARY
INCREASE
OF
THE
MEDICAID 
FMAP.—Subparagraphs (A) and (B) of section 401(a)(6) 
of the Jobs and Growth Tax Relief Reconciliation Act of 
2003 (Public Law 108–27) are amended to read as fol-
lows: 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a State is eligible for an increase in 
its FMAP under paragraph (3) or an increase 
in a cap amount under paragraph (4) for any 
date after September 2, 2003, only if the eligi-
bility 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)) applied as of such date 
is no more restrictive than the eligibility under 
such plan (or waiver) as in effect on September 
2, 2003.
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‘‘(B) STATE
REINSTATEMENT
OF
ELIGI-
BILITY
PERMITTED.—A State that has re-
stricted 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)) for any 
date after September 2, 2003, is eligible for an 
increase in its FMAP under paragraph (3) or 
an increase in a cap amount under paragraph 
(4) for subsequent dates 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.’’. 
(b) RETROACTIVE EFFECTIVE DATE.—The amend-
ment made by subsection (a) shall take effect as if in-
cluded in the enactment of section 401 of the Jobs and 
Growth Tax Relief Reconciliation Act of 2003 (Public Law 
108–27).
Passed the House of Representatives July 25, 2003. 
Attest: 
JEFF TRANDAHL, 
Clerk. 
By DAN STRODEL, 
Assistant to the Clerk.