‘‘(2) 
AMOUNTS
AND
EXPENDITURES
DE-
SCRIBED.—
‘‘(A) EXPENDITURES
IN
EXCESS
OF
150
PERCENT
OF
BASELINE
AMOUNT.—The
amounts and expenditures described in this
paragraph are an amount equal to the applica-
ble percentage, as determined by the Secretary
in accordance with subparagraph (B), of the ex-
penditures incurred by the State for the provi-
sion of community-based attendant services and
supports to an individual that exceed 150 per-
cent of the average cost of providing nursing fa-
cility services to an individual who resides in
the State and is eligible for such services under
this title, as determined in accordance with cri-
teria established by the Secretary.
‘‘(B) 
APPLICABLE
PERCENTAGE.—The
Secretary shall establish a payment scale for
the expenditures described in subparagraph (A)
so that the Federal financial participation for
such expenditures gradually increases from 70
percent to 90 percent as such expenditures in-
crease.
‘‘(3) SPECIFICATION OF ORDER OF SELECTION
FOR
EXPENDITURES.—In order to receive the
amounts described in paragraph (2), a State shall—
‘‘(A) develop, in collaboration with the in-
dividuals and representatives described in sub-
section (b)(1) and pursuant to guidelines estab-
lished by the Secretary, criteria to identify and
select the expenditures submitted under that
paragraph; and
‘‘(B) submit such criteria to the Sec-
retary.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on October 1, 2002.
TITLE II—PROMOTION OF SYS-
TEMS CHANGE AND CAPACITY
BUILDING
SEC. 201. GRANTS TO PROMOTE SYSTEMS CHANGE AND CA-
PACITY BUILDING.
(a) AUTHORITY TO AWARD GRANTS.—
(1) IN GENERAL.—The Secretary of Health and
Human Services (in this section referred to as the
‘‘Secretary’’) shall award grants to eligible States to
carry out the activities described in subsection (b).
(2) APPLICATION.—In order to be eligible for a
grant under this section, a State shall submit to the
Secretary an application in such form and manner,
and that contains such information, as the Secretary
may require.
(b) PERMISSIBLE ACTIVITIES.—A State that receives
a grant under this section may use funds provided under
the grant for any of the following activities, focusing on
areas of need identified by the State and the Consumer
Task Force established under subsection (c):
(1) The development and implementation of the
provision of community-based attendant services and
supports under section 1935 of the Social Security
Act (as added by section 101(b) and amended by
sections 102 and 103) through active collaboration
with—
(A) individuals with disabilities;
(B) elderly individuals;
(C) representatives of such individuals; and
(D) providers of, and advocates for, serv-
ices and supports for such individuals.
(2) Substantially involving individuals with sig-
nificant disabilities and representatives of such indi-
viduals in jointly developing, implementing, and con-
tinually improving a mutually acceptable comprehen-
sive, effectively working statewide plan for pre-
venting and alleviating unnecessary institutionaliza-
tion of such individuals.
(3) Engaging in system change and other ac-
tivities deemed necessary to achieve any or all of the
goals of such statewide plan.
(4) Identifying and remedying disparities and
gaps in services to classes of individuals with disabil-
ities and elderly individuals who are currently expe-
riencing or who face substantial risk of unnecessary
institutionalization.
(5) Building and expanding system capacity to
offer quality consumer controlled community-based
services and supports to individuals with disabilities
and elderly individuals, including by—
(A) seeding the development and effective
use of community-based attendant services and
supports cooperatives, independent living cen-
ters, small businesses, microenterprises and
similar joint ventures owned and controlled by
individuals with disabilities or representatives of
such individuals and community-based attend-
ant services and supports workers;
(B) enhancing the choice and control indi-
viduals with disabilities and elderly individuals
exercise, including through their representa-
tives, with respect to the personal assistance
and supports they rely upon to lead inde-
pendent, self-directed lives;
(C) enhancing the skills, earnings, benefits,
supply, career, and future prospects of workers
who provide community-based attendant serv-
ices and supports;
(D) engaging in a variety of needs assess-
ment and data gathering;
(E) developing strategies for modifying
policies, practices, and procedures that result in
unnecessary 
institutional 
bias 
or 
the
overmedicalization of long-term services and
supports;
(F) engaging in interagency coordination
and single point of entry activities;
(G) providing training and technical assist-
ance with respect to the provision of commu-
nity-based attendant services and supports;
(H) engaging in—
(i) public awareness campaigns;
(ii) facility-to-community transitional
activities; and
(iii) 
demonstrations 
of 
new 
ap-
proaches; and
(I) engaging in other systems change ac-
tivities necessary for developing, implementing,
or evaluating a comprehensive statewide system
of community-based attendant services and sup-
ports.
(6) Ensuring that the activities funded by the
grant are coordinated with other efforts to increase
personal 
attendant 
services 
and 
supports,
including—
(A) programs funded under or amended by
the Ticket to Work and Work Incentives Im-
provement Act of 1999 (Public Law 106–170;
113 Stat. 1860);
(B) grants funded under the Families of
Children With Disabilities Support Act of 2000
(42 U.S.C. 15091 et seq.); and
(C) other initiatives designed to enhance
the delivery of community-based services and
supports to individuals with disabilities and el-
derly individuals.
(7) Engaging in transition partnership activities
with nursing facilities and intermediate care facili-
ties for the mentally retarded that utilize and build
upon items and services provided to individuals with
disabilities or elderly individuals under the Medicaid