To provide temporary State and local fiscal relief.

1. Rewrites section 371

   Replaces

   In S. 1054 · Placed on Calendar Senate

   SEC. 371. TEMPORARY STATE [inserted: AND LOCAL ]FISCAL RELIEF[struck: FUND].

   Struck: (a) Authority To Make Payments To States.--

   Struck: (1) In general.--Not later than 45 days after the date of enactment of this Act, the Secretary of the Treasury (in this section referred to as the "Secretary") shall establish a program under which the Secretary shall make a payment to each State in which the chief executive officer of the State, or the chief executive officer's designee, in consultation and coordination with other State and local officials, notifies the Secretary not later than 6 months after the date of enactment of this Act that the State intends to use the payment in accordance with this section.

   Struck: (2) Requirement.--In making payments to States under this section, the Secretary shall ensure that not more than 50 percent of the aggregate amount made available for payments under this section (after the application of section 1903(x)(3) of the Social Security Act) is paid to States in fiscal year 2003.

   Struck: (b) Use of Payment.--

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   Struck: (1) In general.--Subject to paragraph (2), a State shall use the funds provided under a payment made under this section to carry out 1 or more of the following activities:

   Struck: (A) Improving education or job training.

   Struck: (B) Improving health care services.

   Struck: (C) Improving transportation or other infrastructure.

   Struck: (D) Improving law enforcement or public safety.

   Struck: (E) Maintaining essential government services.

   Struck: (2) Limitation.--A State may only use funds provided under a payment made under this section for types of expenditures permitted under the most recently approved budget for the State.

   Struck: (c) Certifications.--In order to receive a payment under this section, the State shall provide the Secretary with certifications that--

   Struck: (1) the State's proposed uses of the funds are consistent with subsection (b); and

   Struck: (2) the State will allocate 50 percent of the funds directly to units of general local government based on the relative local population proportion for the State (as defined in subsection (d)(5)).

   Struck: (d) Amount of Payment.--

   Struck: (1) In general.--The amount of payment made to a State under this section shall be the minimum payment amount described in paragraph (2) plus the relative population proportion amount described in paragraph (3).

   Struck: (2) Minimum payment amount.--The minimum payment amount described in this paragraph is--

   Struck: (A) in the case of any of the several States or the District of Columbia, one-half of 1 percent of the aggregate amount made available for payments under this section (after the application of section 1903(x)(3) of the Social Security Act); and

   Struck: (B) in the case of the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa, one-tenth of 1 percent of such aggregate amount (after the application of section 1903(x)(3) of the Social Security Act).

   Struck: (3) Relative population proportion amount.--The relative population proportion amount described in this paragraph is the product of--

   Struck: (A) the aggregate amount made available for payments under this section (after the application of section 1903(x)(3) of the Social Security Act) minus the total of all of the minimum payment amounts determined under paragraph (2); and

   Struck: (B) the relative State population proportion (as defined in paragraph (4)).

   Struck: (4) Relative state population proportion defined.--In this section, the term "relative State population proportion" means, with respect to a State, the amount equal to the quotient of--

   Struck: (A) the population of the State (as reported in the most recent decennial census); and

   Struck: (B) the total population of all States (as reported in the most recent decennial census).

   Struck: (5) Relative local population proportion defined.--In this section, the term "relative local population proportion" means, with respect to a unit of general local government within a State, the amount equal to the quotient of--

   Struck: (A) the population of such unit of general local government (as reported in the most recent decennial census); and

   Struck: (B) the total population of the State (as reported in the most recent decennial census).

   Struck: (e) Appropriation.--There is authorized to be appropriated and is appropriated for making payments under this section, $20,000,000,000 for fiscal year 2003. Amounts appropriated under this subsection shall remain available for expenditure through December 31, 2004.

   Struck: (f) Increased Payments To States Under the Medicaid Program.-- Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding at the end the following:

   Struck: "(x) Temporary Increased Payments To States.--

   Struck: "(1) In general.--From the amounts made available under paragraph (3), the Secretary shall increase payments to States under this section for the third and fourth calendar quarters of fiscal year 2003, each calendar quarter of fiscal year 2004, and the first calendar quarter of fiscal year 2005.

   Struck: "(2) Method of increase.--The Secretary shall determine the appropriate method for increasing payments to States in accordance with this subsection.

   Struck: "(3) Funding.--Notwithstanding section 371(e) of the Jobs and Growth Tax Relief Reconciliation Act of 2003, from the amounts appropriated in such section for fiscal year 2003, $499,999 of such amount is hereby transferred and made available for the purpose of increasing payments to States under this section in accordance with this subsection. Amounts transferred under this paragraph shall remain available for expenditure through December 31, 2004.".

   Struck: (g) Repeal.--Effective as of January 1, 2005, this section and the amendments made by this section are repealed.

   Inserted: (a) $10,000,000,000 for a Temporary Increase of the Medicaid FMAP.--

   Inserted: (1) Permitting maintenance of fiscal year 2002 fmap for last 2 calendar quarters of fiscal year 2003.--Subject to paragraph (5), if the FMAP determined without regard to this subsection for a State for fiscal year 2003 is less than the FMAP as so determined for fiscal year 2002, the FMAP for the State for fiscal year 2002 shall be substituted for the State's FMAP for the third and fourth calendar quarters of fiscal year 2003, before the application of this subsection.

   Inserted: (2) Permitting maintenance of fiscal year 2003 fmap for first 3 quarters of fiscal year 2004.--Subject to paragraph (5), if the FMAP determined without regard to this subsection for a State for fiscal year 2004 is less than the FMAP as so determined for fiscal year 2003, the FMAP for the State for fiscal year 2003 shall be substituted for the State's FMAP for the first, second, and third calendar quarters of fiscal year 2004, before the application of this subsection.

   Inserted: (3) 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 (5), (6), and (7), 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) and (2)) shall be increased by 2.95 percentage points.

   Inserted: (4) Increase in cap on medicaid payments to territories.--Subject to paragraphs (6) and (7), 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.

   Inserted: (5) Scope of application.--The increases in the FMAP for a State under this subsection shall apply only for purposes of title XIX of the Social Security Act and shall not apply with respect to--

   Inserted: (A) disproportionate share hospital payments described in section 1923 of such Act (42 U.S.C. 1396r-4);

   Inserted: (B) payments under title IV or XXI of such Act (42 U.S.C. 601 et seq. and 1397aa et seq.); or

   Inserted: (C) any payments under XIX of such Act that are based on the enhanced FMAP described in section 2105(b) of such Act (42 U.S.C. 1397ee(b)).

   Inserted: (6) State eligibility.--

   Inserted: (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) 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)) is no more restrictive than the eligibility under such plan (or waiver) as in effect on September 2, 2003.

   Inserted: (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)) 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) in the first calendar quarter (and subsequent calendar quarters) 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.

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   Inserted: (C) Rule of construction.--Nothing in subparagraph (A) or (B) shall be construed as affecting a State's flexibility with respect to benefits offered under the State medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) (including any waiver under such title or under section 1115 of such Act (42 U.S.C. 1315)).

   Inserted: (7) Requirement for certain states.--In the case of a State that requires political subdivisions within the State to contribute toward the non-Federal share of expenditures under the State medicaid plan required under section 1902(a)(2) of the Social Security Act (42 U.S.C. 1396a(a)(2)), the State shall not require that such political subdivisions pay a greater percentage of the non-Federal share of such expenditures for the third and fourth calendar quarters of fiscal year 2003 and the first, second and third calendar quarters of fiscal year 2004, than the percentage that was required by the State under such plan on April 1, 2003, prior to application of this subsection.

   Inserted: (8) Definitions.--In this subsection:

   Inserted: (A) FMAP.--The term "FMAP" means the Federal medical assistance percentage, as defined in section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)).

   Inserted: (B) State.--The term "State" has the meaning given such term for purposes of title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

   Inserted: (9) Repeal.--Effective as of October 1, 2004, this subsection is repealed.

   Inserted: (b) $10,000,000,000 for Assistance in Providing Government Services.--

   Inserted: (1) Establishment.--

   Inserted: (A) In general.--Not later than 45 days after the date of enactment of this Act, the Secretary shall establish a program under which the Secretary shall make a payment to each State in accordance with paragraph (2) and each unit of general local government which qualifies for a payment under paragraph (3).

   Inserted: (B) Requirement.--In making payments under this subsection, the Secretary shall ensure that not more than 72.70 percent of the amount appropriated under subparagraph (C) is paid in fiscal year 2003.

   Inserted: (C) Appropriation.--There is authorized to be appropriated and is appropriated for making payments under this subsection, $10,000,000,000. Amounts appropriated under this subparagraph shall remain available for expenditure through September 30, 2004.

   Inserted: (2) $6,000,000,000 paid to states.--

   Inserted: (A) Amount of payment.--

   Inserted: (i) Based on population.--Subject to clause (ii), $6,000,000,000 of the amount appropriated under paragraph (1)(C) shall be used to pay each State an amount equal to the relative population proportion amount described in clause (iii).

   Inserted: (ii) Minimum payment.--

   Inserted: (I) In general.--No State shall receive a payment under this paragraph that is less than--

   Inserted: (aa) in the case of any of the several States or the District of Columbia, $30,000,000; and

   Inserted: (bb) in the case of the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa, $6,000,000.

   Inserted: (II) Pro rata adjustments.--The Secretary shall adjust on a pro rata basis the amount of the payments to States determined under this subparagraph to the extent necessary to comply with the requirements of subclause (I).

   Inserted: (iii) Relative population proportion amount.--The relative population proportion amount described in this clause is the product of--

   Inserted: (I) $6,000,000,000; and

   Inserted: (II) the relative State population proportion (defined in clause (iv)).

   Inserted: (iv) Relative state population proportion defined.--For purposes of clause (iii)(II), the term "relative State population proportion" means, with respect to a State, the amount equal to the quotient of--

   Inserted: (I) the population of the State (as reported in the most recent decennial census); and

   Inserted: (II) the total population of all States (as reported in the most recent decennial census).

   Inserted: (B) Use of payment.--

   Inserted: (i) In general.--Subject to clause (ii), a State shall use the funds provided under a payment made under this paragraph to fund 1 or more of the following activities:

   Inserted: (I) Education or job training.

   Inserted: (II) Health care or other social services.

   Inserted: (III) Transportation or other infrastructure.

   Inserted: (IV) Law enforcement or public safety.

   Inserted: (V) Essential government services.

   Inserted: (ii) Limitation.--A State may only use funds provided under a payment made under this paragraph for types of expenditures permitted under the most recently approved budget for the State.

   Inserted: (C) Certification.--In order to receive a payment under this paragraph for a fiscal year, the State shall provide the Secretary with a certification that the State's proposed uses of the funds are consistent with subparagraph (B).

   Inserted: (3) $4,000,000,000 paid to units of general local government.--

   Inserted: (A) Eligibility.--The Secretary shall, by regulation, establish procedures under which units of general local government may qualify for the payments provided under this paragraph. Such procedures shall include a requirement that no unit of general local government shall be eligible for a payment under this paragraph unless the unit provides the Secretary with a certification that the unit's proposed uses of the funds are consistent with subparagraph (C).

   Inserted: (B) Amount of payment.--

   Inserted: (i) In general.--Subject to clause (ii), the Secretary shall pay each unit of general local government that qualifies for a payment under the regulation required under subparagraph (A), an amount equal to the same ratio to $4,000,000,000 as the population of such unit of general local government (as reported in the most recent decennial census) bears to the total population of all such units that qualify for a payment under this paragraph (as so reported).

   Inserted: (ii) Adjustments.--The Secretary may adjust the amount of the payment otherwise determined for a unit of general local government under this subparagraph to the extent the Secretary determines necessary to ensure that all such units that would qualify for a payment under this paragraph receive a payment.

   Inserted: (C) Use of payment.--

   Inserted: (i) In general.--Subject to clause (ii), a unit of general local government shall use the funds provided under a payment made under this paragraph to fund 1 or more of the following activities:

   Inserted: (I) Education or job training.

   Inserted: (II) Health care or other social services.

   Inserted: (III) Transportation or other infrastructure.

   Inserted: (IV) Law enforcement or public safety.

   Inserted: (V) Essential government services.

   Inserted: (ii) Limitation.--A unit of general local government may only use funds provided under a payment made under this paragraph for types of expenditures permitted under the most recently approved budget for the unit.

   Inserted: (4) Definitions.--In this subsection:

   Inserted: (A) Secretary.--The term "Secretary" means the Secretary of the Treasury.

   Inserted: (B) State.--The term "State" means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa.

   Inserted: (C) Unit of general local government.--

   Inserted: (i) In general.--The term "unit of general local government" means--

   Inserted: (I) a county, parish, township, city, or political subdivision of a county, parish, township, or city, that is a unit of general local government as determined by the Secretary of Commerce for general statistical purposes; and

   Inserted: (II) the recognized governing body of an Indian tribe or Alaskan native village that carries out substantial governmental duties and powers.

   Inserted: (ii) Treatment of subsumed areas.--For purposes of determining a unit of general local government under this subsection, the rules under section 6720(c) of title 31, United States Code, shall apply.

   Inserted: (5) Repeal.--Effective as of October 1, 2004, this subsection is repealed.

   Original wording

   Strike section 371 and insert the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed