A bill to extend temporary State fiscal relief, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Fiscal Relief Act of 2004''.

SEC. 2. EXTENSION OF TEMPORARY STATE FISCAL RELIEF.

    (a) Extension of Temporary Freeze of Medicaid FMAP for Certain 
States.--Section 401(a) of the Jobs and Growth Tax Relief 
Reconciliation Act of 2003 (42 U.S.C. 1396d note) is amended--
            (1) in the subsection heading, by striking 
        ``$10,000,000,000 for a'';
            (2) in paragraph (2)--
                    (A) in the paragraph heading, by striking ``first 3 
                quarters of''; and
                    (B) by striking ``the first, second, and third 
                calendar quarters'' and inserting ``each calendar 
                quarter'';
            (3) by redesignating paragraphs (3) through (9) as 
        paragraphs (4) through (10), respectively; and
            (4) by inserting after paragraph (2), the following:
            ``(3) Permitting maintenance of fiscal year 2004 fmap for 
        fiscal year 2005.--Subject to paragraph (6), if the FMAP 
        determined without regard to this subsection for a State for 
        fiscal year 2005 is less than the FMAP as so determined for 
        fiscal year 2004, the FMAP for the State for fiscal year 2004 
        shall be substituted for the State's FMAP for each calendar 
        quarter of fiscal year 2005, before the application of this 
        subsection.''.
    (b) Temporary Increase in Medicaid FMAP for All States.--Section 
401(a) of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (42 
U.S.C. 1396d note), as amended by subsection (a), is amended by 
striking paragraphs (4) and (5) (as redesignated by subsection (a)(3)) 
and inserting the following:
            ``(4) Temporary increase in medicaid fmap.--
                    ``(A) General 2.95 percentage points increase for 
                last 2 calendar quarters of fiscal year 2003 and first 
                3 calendar quarters of fiscal year 2004.--Subject to 
                paragraphs (6), (7), and (8), for each State for the 
                third and fourth calendar quarters of fiscal year 2003 
                and for the first, second, and third calendar quarters 
                of fiscal year 2004, the FMAP (taking into account the 
                application of paragraphs (1), (2), and (3)) shall be 
                increased by 2.95 percentage points.
                    ``(B) General 1.26 percentage points increase for 
                last calendar quarter of fiscal year 2004 and each 
                calendar quarter of fiscal year 2005.--Subject to 
                paragraphs (6), (7), and (8), for each State for the 
                fourth calendar quarter of fiscal year 2004 and each 
                calendar quarter of fiscal year 2005, the FMAP (taking 
                into account the application of paragraphs (1), (2), 
                and (3) but without regard to the application of 
                subparagraph (A)) shall be increased by 1.26 percentage 
                points.
            ``(5) Increase in cap on medicaid payments to 
        territories.--
                    ``(A) Last 2 calendar quarters of fiscal year 2003 
                and first 3 calendar quarters of fiscal year 2004.--
                Subject to paragraphs (7) and (8), with respect to the 
                third and fourth calendar quarters of fiscal year 2003 
                and the first, second, and third calendar quarters of 
                fiscal year 2004, the amounts otherwise 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 5.90 percent of such 
amounts.
                    ``(B) Last calendar quarter of fiscal year 2004 and 
                each calendar quarter of fiscal year 2005.--Subject to 
                paragraphs (7) and (8), with respect to the fourth 
                calendar quarter of fiscal year 2004 and each calendar 
                quarter of fiscal year 2005, the amounts otherwise 
                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 2.52 percent of such amounts.''.
    (c) Conforming Amendments.--Section 401(a) of the Jobs and Growth 
Tax Relief Reconciliation Act of 2003 (42 U.S.C. 1396d note), as 
amended by subsections (a) and (b), is amended--
            (1) in paragraph (1), by striking ``paragraph (5)'' and 
        inserting ``paragraph (6)'';
            (2) in paragraph (2), by striking ``paragraph (5)'' and 
        inserting ``paragraph (6)'';
            (3) in paragraph (7) (as redesignated by subsection 
        (a)(3))--
                    (A) by striking ``paragraph (4)'' each place it 
                appears and inserting ``paragraph (5)''; and
                    (B) by striking ``paragraph (3)'' each place it 
                appears and inserting ``paragraph (4)'';
            (4) in paragraph (8) (as so redesignated), by striking 
        ``the first, second and third calendar quarters of fiscal year 
        2004'' and inserting ``each calendar quarter of fiscal year 
        2004 and fiscal year 2005''; and
            (5) in paragraph (10) (as so redesignated), by striking 
        ``October 1, 2004'' and inserting ``January 1, 2005''.

SEC. 3. TRANSITIONAL FUND TO IMPLEMENT THE MEDICARE PRESCRIPTION DRUG, 
              IMPROVEMENT, AND MODERNIZATION ACT OF 2003.

    Section 1931(h) of the Social Security Act (42 U.S.C. 1396u-1(h)) 
is amended--
            (1) in paragraph (1)--
                    (A) by striking ``described in paragraph (2)'' and 
                inserting ``described in--
                    ``(A) paragraph (2)(A)'';
                    (B) by striking the period and inserting ``; and''; 
                and
                    (C) by adding at the end the following:
                    ``(B) paragraph (2)(B) the per centum specified in 
                section 1903(a)(7) shall be increased to such 
                percentage as the Secretary specifies, except that the 
                percentage shall not be less than the percentage 
                applied by the Secretary to the payments made for 
                administrative expenditures described in subparagraph 
                (A) before the date of enactment of this 
                subparagraph.'';
            (2) in paragraph (2), by striking ``that (but for the 
        enactment of this section) would not be incurred.'' and 
        inserting ``that--
                    ``(A) but for the enactment of this section would 
                not be incurred; or
                    ``(B) but for the enactment of the Medicare, 
                Prescription Drug, Improvement, and Modernization Act 
                of 2003 and the amendments made by that Act would not 
                be incurred.''; and
            (3) by striking paragraph (3) and inserting the following:
            ``(3) Limitations.--
                    ``(A) Welfare reform attributable expenditures.--
                The total amount of additional Federal funds that are 
                expended as a result of the application of this 
                subsection with respect to administrative expenditures 
                described in paragraph (2)(A) for the period beginning 
                with fiscal year 1997 shall not exceed $500,000,000. In 
                applying this subparagraph, the Secretary shall ensure 
                the equitable distribution of additional funds among 
                the States.
                    ``(B) MMA attributable expenditures.--The total 
                amount of additional Federal funds that are expended as 
                a result of the application of this subsection with 
                respect to administrative expenditures described in 
                paragraph (2)(B) for the period beginning on October 1, 
                2004, and ending on the later of April 1, 2006, or the 
                end of the first fiscal year quarter that begins on or 
                after the date on which benefits are first provided 
                under the voluntary prescription drug benefit program 
                under part D of title XVIII (other than under the 
                program under subpart 4 of part D of title XVIII), 
                shall not exceed $1,200,000,000. In applying this 
                subparagraph, the Secretary shall ensure the equitable 
                distribution of additional funds among the States, 
                taking into account the following:
                            ``(i) The percentage of individuals who 
                        reside in a State who are eligible for medicare 
                        cost-sharing under clause (i), (iii), or (iv) 
                        of section 1902(a)(10)(E).
                            ``(ii) The number of full-benefit dual 
                        eligible individuals (as defined in section 
                        1935(c)(6)) who reside in a State.''.

Summary: State Fiscal Relief Act of 2004 - Amends the Jobs and Growth Tax Relief Reconciliation Act of 2003 to extend the temporary freeze of the Federal medical assistance percentage (FMAP) under title XIX (Medicaid) of the Social Security Act (SSA) for certain States (continuing the FY 2003 FMAP through each calendar quarter of FY 2004, and the FY 2004 FMAP for each calendar quarter of FY 2005 if the FY 2005 FMAP would otherwise be less than the FY 2004 FMAP).

Amends the Jobs and Growth Tax Relief Reconciliation Act of 2003 to increase the FMAP: (1) by 2.95 percentage points for the last two calendar quarters of FY 2003 and the first three calendar quarters of FY 2004; and (2) by 1.26 percentage points for the last calendar quarter of FY 2004 and each calendar quarter of FY 2005.

Increases by 5.9 percent the ceiling on Medicaid payments to specified territories for the last two calendar quarters of FY 2003 and the first three calendar quarters of FY 2004. Increases such ceiling by 2.52 percent for the last calendar quarter of FY 2004 and each calendar quarter of FY 2005.

Amends SSA title XIX, with respect to the transitional increased Federal matching rate for increased administrative costs, to require a specified minimum increase for administrative expenditures that would not be incurred but for enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Sets $1.2 billion as the cap on the total amount of additional Federal funds expended as a result of this Act with respect to such administrative expenditures between October 1, 2004, and the later of either: (1) April 1, 2006; or (2) the end of the first fiscal year quarter that begins on or after the date on which benefits are first provided under the voluntary prescription drug benefit program under SSA title XVIII (Medicare) part D.