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 Insurance Program, and for other purposes.

SECTION 1. EXTENSION OF AVAILABILITY OF SCHIP ALLOTMENTS FOR FISCAL 
              YEARS 1998 THROUGH 2001.

    (a) Extending Availability of SCHIP Allotments for Fiscal Years 
1998 Through 2001.--
        (1) Retained and redistributed allotments for fiscal years 1998 
    and 1999.--Paragraphs (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 inserting ``fiscal year 
    2004''.
        (2) Extension and revision of retained and redistributed 
    allotments for fiscal year 2000.--
            (A) Permitting and extending retention of portion of fiscal 
        year 2000 allotment.--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 subparagraph (A) the 
            following:
                ``(iii) Fiscal year 2000 allotment.--Of the amounts 
            allotted to a State pursuant to this section for fiscal 
            year 2000 that were not expended by the State 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.--Paragraph (1) of such 
        section 2104(g) is amended--
                (i) in subparagraph (A), by inserting ``or for fiscal 
            year 2000 by the end of fiscal 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 allotment, the amount 
                specified in subparagraph (C)(i) (less the total of the 
                amounts under clause (ii) for such fiscal year), 
                multiplied by the ratio of the amount specified in 
                subparagraph (C)(ii) for the State to the amount 
                specified in subparagraph (C)(iii).'';

                (iv) in subparagraph (A)(ii), by striking ``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 inserting ``2004''; 
                and

                (vii) by adding at the end the following new 
            subparagraph:
            ``(C) Amounts used in computing redistributions for fiscal 
        year 2000.--For purposes of subparagraph (A)(i)(III)--
                ``(i) the amount specified in this clause is the amount 
            specified in paragraph (2)(B)(i)(I) for fiscal year 2000, 
            less the total amount remaining available pursuant to 
            paragraph (2)(A)(iii);
                ``(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'', 
                respectively.

        (3) Extension and revision of retained and redistributed 
    allotments for fiscal year 2001.--
            (A) Permitting and extending retention of portion of fiscal 
        year 2001 allotment.--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 subparagraph (A) the 
            following:
                ``(iv) Fiscal year 2001 allotment.--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.--Paragraph (1) of such 
        section 2104(g), as amended in paragraph (2)(B), is further 
        amended--
                (i) in subparagraph (A), by inserting ``or for fiscal 
            year 2001 by the end of fiscal 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 allotment, the amount 
                specified in subparagraph (D)(i) (less the total of the 
                amounts under clause (ii) for such fiscal 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 striking ``or 2000'' 
            and inserting ``2000, or 2001'';
                (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 remain 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 redistributions for fiscal 
        year 2001.--For purposes of subparagraph (A)(i)(IV)--
                ``(i) the amount specified in this clause is the amount 
            specified in paragraph (2)(B)(i)(I) for fiscal year 2001, 
            less the total amount remaining available pursuant 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 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 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 October 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 Expenditures.--Section 2105 of the Social Security Act (42 
U.S.C. 1397ee) is amended by adding at the end the following:
    ``(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 subsections (e) and (g) of such section) for 
        payments under title XIX in accordance with subparagraph (B), 
        instead of for expenditures under this title.
            ``(B) Payments to states.--
                ``(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 
            subparagraph 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 expenditures 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 expenditures described in this clause are 
            expenditures, made after the date of the enactment of this 
            subsection and during the period in which funds are 
            available to the qualifying State for use under 
            subparagraph (A), for medical assistance under title XIX to 
            individuals who have not attained age 19 and whose family 
            income exceeds 150 percent of the poverty line.
                ``(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 expenditures 
            described in clause (ii) that are incurred under a waiver 
            approved for the State, any budget neutrality 
            determinations 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 
    children (other than infants) who are eligible for medical 
    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, 
    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 requirements 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 
follows:
            ``(A) In general.--Subject to subparagraph (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 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)) applied as of such date is no more restrictive 
        than the eligibility under such plan (or waiver) as in effect 
        on September 2, 2003.
            ``(B) 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)) 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 amendment made by subsection 
(a) shall take effect as if included in the enactment of section 401 of 
the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Public Law 
108-27).

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

Summary: Amends title XXI (State Children's Health Insurance Program) (SCHIP) of the Social Security Act (SSA) to revise the special rule for the redistribution and availability of unexpended FY1998 and 1999 SCHIP allotments, including to: (1) extend the availability of FY 1998 and 1999 reallocated funds through FY 2004; and (2) permit 50 percent of the total amount of unexpended FY 2000 and 2001 SCHIP allotments that remain available to a State through the end of FY 2002 and 2003 to remain available for expenditure by the State through the end of FY 2004 and 2005, respectively. Makes this amendment effective as though it had been enacted on September 30, 2002.

Grants authority to qualifying States, with respect to FY 1998 through 2001 SCHIP allotments, for fiscal years in which such allotments are available, to elect to use not more than 20 percent of them (instead of for expenditures under SCHIP) for Medicaid medical assistance payments with respect to certain children under SSA title XIX.

Amends the Jobs and Growth Tax Relief Reconciliation Act of 2003 to make a technical amendment with respect to State eligibility for an increase in its Federal medical assistance percentage (FMAP) or an increase in the cap on Medicaid payments to territories. Makes this amendment effective as if included in the enactment of the Jobs and Growth Tax Relief Reconciliation Act of 2003.