REDISTRIBUTION OF CERTAIN UNUSED SCHIP ALLOTMENTS FOR FISCAL YEARS 2004 AND 2005 TO REDUCE FUNDING SHORTFALLS FOR FISCAL YEAR 2007.

SEC. 201. REDISTRIBUTION OF CERTAIN UNUSED SCHIP ALLOTMENTS FOR FISCAL YEARS 2004 AND 2005 TO REDUCE FUNDING SHORTFALLS FOR FISCAL YEAR 2007. (a) Redistribution of Certain Unused SCHIP Allotments.—Section 2104 of the Social Security Act (42 U.S.C. 1397dd) is amended by adding at the end the following new subsection: “(h) Special Rules to Address Fiscal Year 2007 Shortfalls.—“(1) Redistribution of unused fiscal year 2004 allotments.—“(A) In general.—Notwithstanding subsection (f) and subject to subparagraphs (C) and (D), with respect to months beginning during fiscal year 2007, the Secretary shall provide for a redistribution under such subsection from the allotments for fiscal year 2004 under subsection (b) that are not expended by the end of fiscal year 2006, to a shortfall State described in subparagraph (B), such amount as the Secretary determines will eliminate the estimated shortfall described in such subparagraph for such State for the month. “(B) Shortfall state described.—For purposes of this paragraph, a shortfall State described in this subparagraph is a State with a State child health plan approved under this title for which the Secretary estimates, subject to paragraph (4)(B) and on a monthly basis using the most recent data available to the Secretary as of such month, that the projected expenditures under such plan for such State for fiscal year 2007 will exceed the sum of—“(i) the amount of the State’s allotments for each of fiscal years 2005 and 2006 that was not expended by the end of fiscal year 2006; and “(ii) the amount of the State’s allotment for fiscal year 2007. “(C) Funds redistributed in the order in which states realize funding shortfalls.—The Secretary shall redistribute the amounts available for redistribution under subparagraph (A) to shortfall States described in subparagraph (B) in the order in which such States realize monthly funding shortfalls under this title for fiscal year 2007. The Secretary shall only make redistributions under this paragraph to the extent that there are unexpended fiscal year 2004 allotments under subsection (b) available for such redistributions. “(D) Proration rule.—If the amounts available for redistribution under subparagraph (A) for a month are less than the total amounts of the estimated shortfalls determined for the month under that subparagraph, the amount computed under such subparagraph for each shortfall State shall be reduced proportionally. “(2) Funding remainder of reduction of shortfall for fiscal year 2007 through redistribution of certain unused fiscal year 2005 allotments.—120 STAT. 3699“(A) In general.—Subject to subparagraphs (C) and (D) and paragraph (5)(B), with respect to months beginning during fiscal year 2007 after March 31, 2007, the Secretary shall provide for a redistribution under subsection (f) from amounts made available for redistribution under paragraph (3) to each shortfall State described in subparagraph (B), such amount as the Secretary determines will eliminate the estimated shortfall described in such subparagraph for such State for the month. “(B) Shortfall state described.—For purposes of this paragraph, a shortfall State described in this subparagraph is a State with a State child health plan approved under this title for which the Secretary estimates, subject to paragraph (4)(B) and on a monthly basis using the most recent data available to the Secretary as of March 31, 2007, that the projected expenditures under such plan for such State for fiscal year 2007 will exceed the sum of—“(i) the amount of the State’s allotments for each of fiscal years 2005 and 2006 that was not expended by the end of fiscal year 2006; “(ii) the amount, if any, that is to be redistributed to the State in accordance with paragraph (1); and “(iii) the amount of the State’s allotment for fiscal year 2007. “(C) Funds redistributed in the order in which states realize funding shortfalls.—The Secretary shall redistribute the amounts available for redistribution under subparagraph (A) to shortfall States described in subparagraph (B) in the order in which such States realize monthly funding shortfalls under this title for fiscal year 2007. The Secretary shall only make redistributions under this paragraph to the extent that such amounts are available for such redistributions. “(D) Proration rule.—If the amounts available for redistribution under paragraph (3) for a month are less than the total amounts of the estimated shortfalls determined for the month under subparagraph (A), the amount computed under such subparagraph for each shortfall State shall be reduced proportionally. “(3) Treatment of certain states with fiscal year 2005 allotments unexpended at the end of the first half of fiscal year 2007.—“(A) Identification of states.—The Secretary, on the basis of the most recent data available to the Secretary as of March 31, 2007—“(i) shall identify those States that received an allotment for fiscal year 2005 under subsection (b) which have not expended all of such allotment by March 31, 2007; and “(ii) for each such State shall estimate—“(I) the portion of such allotment that was not so expended by such date; and “(II) whether the State is described in subparagraph (B). “(B) States with funds in excess of 200 percent of need.—A State described in this subparagraph is a 120 STAT. 3700 State for which the Secretary determines, on the basis of the most recent data available to the Secretary as of March 31, 2007, that the total of all available allotments under this title to the State as of such date, is at least equal to 200 percent of the total projected expenditures under this title for the State for fiscal year 2007. “(C) Redistribution and limitation on availability of portion of unused allotments for certain states.—“(i) In general.—In the case of a State identified under subparagraph (A)(i) that is also described in subparagraph (B), notwithstanding subsection (e), the applicable amount described in clause (ii) shall not be available for expenditure by the State on or after April 1, 2007, and shall be redistributed in accordance with paragraph (2). “(ii) Applicable amount.—For purposes of clause (i), the applicable amount described in this clause is the lesser of—“(I) 50 percent of the amount described in subparagraph (A)(ii)(I); or “(II) $20,000,000. “(4) Special rules.—“(A) Expenditures limited to coverage for populations eligible on october 1, 2006.—A State shall use amounts redistributed under this subsection only for expenditures for providing child health assistance or other health benefits coverage for populations eligible for such assistance or benefits under the State child health plan (including under a waiver of such plan) on October 1, 2006. “(B) Regular fmap for expenditures for coverage of nonchild populations.—To the extent a State uses amounts redistributed under this subsection for expenditures for providing child health assistance or other health benefits coverage to an individual who is not a child or a pregnant woman, the Federal medical assistance percentage (as defined in the first sentence of section 1905(b)) applicable to the State for the fiscal year shall apply to such expenditures for purposes of making payments to the State under subsection (a) of section 2105 from such amounts. “(5) Retrospective adjustment.—“(A) In general.—The Secretary may adjust the estimates and determinations made under paragraphs (1), (2), and (3) as necessary on the basis of the amounts reported by States not later than November 30, 2007, on CMS Form 64 or CMS Form 21, as the case may be and as approved by the Secretary, but in no case may the applicable amount described in paragraph (3)(C)(ii) exceed the amount determined by the Secretary on the basis of the most recent data available to the Secretary as of March 31, 2007. “(B) Funding of any retrospective adjustments only from unexpended 2005 allotments.—Notwithstanding subsections (e) and (f), to the extent the Secretary determines it necessary to adjust the estimates and determinations made for purposes of paragraphs (1), (2), and 120 STAT. 3701 (3), the Secretary may use only the allotments for fiscal year 2005 under subsection (b) that remain unexpended through the end of fiscal year 2007 for providing any additional amounts to States described in paragraph (2)(B) (without regard to whether such unexpended allotments are from States described in paragraph (3)(B)). “(C) Rules of construction.—Nothing in this subsection shall be construed as—“(i) authorizing the Secretary to use the allotments for fiscal year 2006 or 2007 under subsection (b) of States described in paragraph (3)(B) to provide additional amounts to States described in paragraph (2)(B) for purposes of eliminating the funding shortfall for such States for fiscal year 2007; or “(ii) limiting the authority of the Secretary to redistribute the allotments for fiscal year 2005 under subsection (b) that remain unexpended through the end of fiscal year 2007 and are available for redistribution under subsection (f) after the application of subparagraph (B). “(6) 1-year availability; no further redistribution.—Notwithstanding subsections (e) and (f), amounts redistributed to a State pursuant to this subsection for fiscal year 2007 shall only remain available for expenditure by the State through September 30, 2007, and any amounts of such redistributions that remain unexpended as of such date, shall not be subject to redistribution under subsection (f). Nothing in the preceding sentence shall be construed as limiting the ability of the Secretary to adjust the determinations made under paragraphs (1), (2), and (3) in accordance with paragraph (5). “(7) Definition of state.—For purposes of this subsection, the term ‘State’ means a State that receives an allotment for fiscal year 2007 under subsection (b).”. (b) Extending Authority for Qualifying States to Use Certain Funds for Medicaid Expenditures.—Section 2105(g)(1)(A) of such Act (42 U.S.C. 1397ee(g)(1)(A)) is amended by striking “or 2005” and inserting “2005, 2006, or 2007”. (c) Report to Congress.—Not later than April 30, 2007, the Secretary of Health and Human Services shall submit a report to the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate regarding the amounts redistributed to States under section 2104 of the Social Security Act to reduce funding shortfalls for the State Children’s Health Insurance Program (SCHIP) for fiscal year 2007. Such report shall include descriptions and analyses of—(1) the extent to which such redistributed amounts have reduced or eliminated such shortfalls on the basis of reports by States submitted to the Secretary as of April 1, 2007; and (2) the effect of the redistribution and limited availability of unexpended fiscal year 2005 allotments under such program on the States described in section 2104(h)(3)(B) of the Social 120 STAT. 3702 Security Act (42 U.S.C. 1397dd(h)(3)(B)) on the basis of reports by States submitted to the Secretary as of such date.