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Page Number: 467.0

524US2

Unit: $U93

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CLINTON v. CITY OF NEW YORK

Opinion of the Court

Section 4722(c) of the Balanced Budget Act

Title XIX of the Social Security Act, 79 Stat. 343, as
amended, authorizes the Federal Government to transfer
huge sums of money to the States to help ﬁnance medical
In 1991,
care for the indigent. See 42 U. S. C. § 1396d(b).
Congress directed that those federal subsidies be reduced by
the amount of certain taxes levied by the States on health
care providers.1
In 1994, the Department of Health and
Human Services (HHS) notiﬁed the State of New York that
15 of its taxes were covered by the 1991 Act, and that as of
June 30, 1994, the statute therefore required New York to
return $955 million to the United States. The notice ad-
vised the State that it could apply for a waiver on certain
statutory grounds. New York did request a waiver for
those tax programs, as well as for a number of others, but
HHS has not formally acted on any of those waiver requests.
New York has estimated that the amount at issue for the
period from October 1992 through March 1997 is as high as
$2.6 billion.

Because HHS had not taken any action on the waiver re-
quests, New York turned to Congress for relief. On August
5, 1997, Congress enacted a law that resolved the issue in
New York’s favor. Section 4722(c) of the Balanced Budget
Act of 1997 identiﬁes the disputed taxes and provides that
they “are deemed to be permissible health care related taxes
and in compliance with the requirements” of the relevant
provisions of the 1991 statute.2

1 Medicaid Voluntary Contribution and Provider-Speciﬁc Tax Amend-

ments of 1991, Pub. L. 102–234, 105 Stat. 1793, 42 U. S. C. § 1396b(w).

2 Section 4722(c) provides:
“(c) WAIVER OF CERTAIN PROVIDER TAX PROVISIONS.—Not-
withstanding any other provision of law, taxes, fees, or assessments, as
deﬁned in section 1903(w)(3)(A) of the Social Security Act (42 U. S. C.
1396b(w)(3)(A)), that were collected by the State of New York from a
health care provider before June 1, 1997, and for which a waiver of the
provisions of subparagraph (B) or (C) of section 1903(w)(3) of such Act has
been applied for, or that would, but for this subsection require that such