[Federal Register Volume 65, Number 101 (Wednesday, May 24, 2000)]
[Notices]
[Pages 33638-33644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-12881]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2067-N]
RIN 0938-AJ94


State Children's Health Insurance Program; Final Allotments to 
States, the District of Columbia, and U.S. Territories and 
Commonwealths for Fiscal Year 2000

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: This notice sets forth the final allotments of Federal funding 
available to each State, the District of Columbia, and each U.S. 
Territory and Commonwealth for fiscal year (FY) 2000 under title XXI of 
the Social Security Act (the Act).
    Established by section 4901 of the Balanced Budget Act (BBA) of 
1997 (Public Law 105-33), title XXI of the Act authorizes payment of 
Federal matching funds to States, the District of Columbia, and U.S. 
Territories and Commonwealths to initiate and expand health insurance 
coverage to uninsured, low-income children under a new State Children's 
Health Insurance Program (SCHIP). States may implement SCHIP through a 
separate State program under title XXI, an expansion of a State 
Medicaid program under title XIX, or a combination of both. Recent 
legislation, the Medicare, Medicaid and SCHIP Balanced Budget 
Refinement Act (BBRA) of 1999 (Public Law 106-113, enacted November 29, 
1999), amended title XXI of the Act in part by modifying the SCHIP 
allotment formula effective with the FY 2000 allotments. The FY 2000 
allotments contained in this notice were determined under the new SCHIP 
allotment formula.

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FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.

SUPPLEMENTARY INFORMATION:

I. Purpose of This Notice

    This notice sets forth the allotments available to each State, the 
District of Columbia, and each U.S. Territory and Commonwealth for FY 
2000 under title XXI of the Social Security Act (the Act). In prior 
years, we published ``reserved'' allotments at the beginning of the 
fiscal year and then ``final'' allotments at some later time, because 
it was not certain at the beginning of the fiscal year that every 
State, the District of Columbia, and every U.S. Territory and 
Commonwealth would qualify for an allotment. As we explain below, each 
State, the District of Columbia, and each U.S. Territory and 
Commonwealth has now qualified for an allotment by having an approved 
State child health plan for the fiscal year. Therefore, publication of 
``reserved'' allotments is not necessary.
    Final allotments for a fiscal year are available to match 
expenditures under an approved State child health plan for three fiscal 
years, including the year for which the final allotment was provided. 
Federal funds appropriated for title XXI are limited, and the law 
specifies a formula to divide the total annual appropriation into 
individual allotments

[[Page 33639]]

available for each State, the District of Columbia, and each U.S. 
Territory and Commonwealth with an approved child health plan. The 
allotment formula outlined in title XXI has been modified with the 
enactment of Public Law 106-113 on November 29, 1999, as described 
under section II of this notice.
    Section 2104(b) of the Act indicates that ``the Secretary shall 
allot to each State * * * with a State child health plan approved under 
this title.'' This language requires States, the District of Columbia, 
and U.S. Territories and Commonwealths to have an approved child health 
plan for the fiscal year in order for the Secretary to provide an 
allotment for that fiscal year. All States, the District of Columbia, 
and U.S. Territories and Commonwealths had approved plans prior to the 
end of FY 1999.

II. Methodology for Determining Final Allotments for States, the 
District of Columbia, and U.S. Territories and Commonwealths

    This notice specifies in the Table under section III, the final FY 
2000 allotments available to individual States, the District of 
Columbia, and U.S. Territories and Commonwealths for child health 
assistance expenditures under approved State child health plans. As 
discussed below, the FY 2000 final allotments have been calculated to 
reflect the way title XXI, as amended by the new Public Law 106-113, 
prescribes the process for determining an allotment amount for each 
State, the District of Columbia, and each U.S. Territory and 
Commonwealth. As a result of the recent changes to the allotment 
formula, the calculation of the allotments for FY 2000 and subsequent 
fiscal years differs from the way the FY 1998 and FY 1999 allotments 
were calculated for the first two years of the program.
    We have applied the statutory formula specified in section 2104(b) 
of the Act, as modified by section 701 of the BBRA of 1999, to 
calculate the final allotments for FY 2000, as discussed below. The 
recent legislative changes will reduce the variability of individual 
State allotments from year to year and over a number of years. The new 
formula results in more stable federal allotments, which may permit 
States to more effectively plan and budget their State programs.
    Section 2104(a) of title XXI provides that, for purposes of 
providing allotments to the 50 States and the District of Columbia, the 
following amounts are appropriated: $4.295 billion for FY 1998; $4.275 
billion for each fiscal year FY 1999 through FY 2001; $3.150 billion 
for each FY 2002 through 2004; $4.050 billion for each FY 2005 through 
2006 and $5 billion for FY 2007. However, under section 2104(c) of the 
Act, 0.25 percent of the total amount appropriated each year is 
available for allotment to the U.S. Territories and Commonwealths of 
Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Northern 
Mariana Islands. The total amounts are allotted to the U.S. Territories 
and Commonwealths according to the following percentages: Puerto Rico, 
91.6 percent; Guam, 3.5 percent; the Virgin Islands, 2.6 percent; 
American Samoa, 1.2 percent; and the Northern Mariana Islands, 1.1 
percent.
    Section 702 of the BBRA of 1999, provides for additional funds 
available for allotment only to the U.S. Territories and Commonwealths 
for fiscal years 2000 to 2007. Under this new provision, an additional 
$34.2 million is made available for allotment to the U.S. Territories 
and Commonwealths in fiscal years 2000 and 2001; $25.2 million in 
fiscal years 2002 through 2004; $32.4 million for fiscal years 2005 and 
2006; and $40 million for fiscal year 2007. Therefore, the total amount 
available for allotment to the U.S. Territories and Commonwealths in FY 
2000 is $44,887,500 (that is, $34,200,000 plus $10,687,500 (.25 percent 
of the FY 2000 appropriation of $4,275,000,000)).
    Furthermore, under sections 4921 and 4922 of Public Law 105-33, the 
total amount available for allotment to the 50 States and the District 
of Columbia is reduced by an additional total of $60,000,000; 
$30,000,000 to Public Health Service for a special diabetes research 
program for children with Type I diabetes, and $30 million for special 
diabetes programs for Indians. The diabetes programs are funded from 
FYs 1998 through 2002 only.
    Therefore, the total amount available nationally for allotment for 
the 50 States and the District of Columbia for FY 2000 was determined 
in accordance with the following formula:

AT=S2104(a)--T 2104(c)--
D4921--D4922

    AT=Total amount available for allotment to the 50 States 
and the District of Columbia for the fiscal year.
    S2104(a)=Total appropriation for the fiscal year 
indicated in section 2104(a) of the Act. For FY 2000, this is 
$4,275,000,000.
    T2104(c)=Total amount available for allotment for the 
U.S. Territories and Commonwealths; determined under section 2104(c) of 
the Act as 0.25 percent of the total appropriation for the 50 States 
and the District of Columbia. For FY 2000, this is: .0025 x 
$4,275,000,000=$10,687,500
    D4921=Amount of grant for research regarding Type I 
Diabetes under section 4921 of the Balanced Budget Act of 1997. This is 
$30,000,000 for each of the fiscal years 1998 through 2002.
    D4922=Amount of grant for diabetes programs for Indians 
under section 4922 of the BBA. This is $30,000,000 for each of the 
fiscal years 1998 through 2002. Therefore, for FY 2000 the total amount 
available for allotment to the 50 States and the District of Columbia 
is $4,204,312,500. This was determined as follows: 
AT($4,204,312,500) = S2104(a) ($4,275,000,000)--
T2104(c) ($10,687,500)--D4921 ($30,000,000)--
4922($30,000,000)

    For purposes of the following discussion, the term ``State,'' as 
defined in section 2104(b)(1)(D)(ii) of the Act, ``means one of the 50 
States or the District of Columbia.''
    Public Law 106-113 amended title XXI such that, beginning with FY 
2000, the determination of the Number of Children for a fiscal year is 
based on the three most recent March supplements to the Current 
Population Survey (CPS) of the Bureau of the Census before the 
beginning of the calendar year in which the fiscal year begins. 
Similarly, the determination of the State Cost Factor is based on the 
Annual Average Wages Per Employee in the health services industry, 
which is determined by the most recent three years of such wage data 
reported by the Bureau of Labor Statistics of the Department of Labor 
prior to the beginning of the calendar year in which the fiscal year 
begins.
    Therefore, for FY 2000 and subsequent fiscal years, we will use the 
most recent official data from the Bureau of the Census and Bureau of 
Labor Statistics, respectively, available prior to January 1 of the 
calendar year in which the fiscal year begins. Specifically, in 
determining the FY 2000 allotments in this notice, we utilized the most 
recent data available from the Bureau of the Census and the Bureau of 
Labor Statistics prior to January 1, 1999, because FY 2000 begins on 
October 1, 1999 in calendar year 1999. This is a change from the first 
two years of the program, in which the Number of Children and the State 
Cost Factor were based on the most recent data available before the 
beginning of the fiscal year.

Number of Children

    Section 701(a)(1) of the BBRA of 1999 accelerated the phase-in of 
the blend of the numbers of uninsured low-income children and low-
income children

[[Page 33640]]

specified in the statute, which are used in determining the Number of 
Children factor. Prior to this legislative change, the Number of 
Children for FYs 1998 through 2000 would have been based on the total 
number of low-income uninsured children in the State. As a result of 
the legislative change, the total number of uninsured low-income 
children in the State is only used for determining the Number of 
Children factor for FYs 1998 and 1999. Under the legislation, for FY 
2000 the Number of Children is now calculated as the sum of 75 percent 
of the number of low-income, uninsured children in the State, and 25 
percent of the number of low-income children in the State. For FY 2001 
and succeeding years through FY 2007, the Number of Children is 
calculated as the sum of 50 percent of the number of low-income, 
uninsured children in the State, and 50 percent of the number of low-
income children in the State.
    The Number of Children factor for each State is developed by the 
Bureau of the Census based on the standard methodology used to 
determine official poverty status and uninsured status in the annual 
CPS on these topics. As part of a continuing formal process between 
HCFA and the Bureau of the Census, each fiscal year HCFA obtains the 
Number of Children data officially from the Bureau of the Census.
    Under section 2104(b)(2)(B) of the Act, as amended by section 
701(a)(3) of the BBRA of 1999, in determining the FY 2000 final 
allotments, the Number of Children for each State (provided in 
thousands) was determined and provided by the Bureau of the Census 
based on the arithmetic average of the number of low-income children 
and low-income children with no health insurance as calculated from the 
three most recent March supplements to the CPS officially available 
from the Bureau of the Census before the beginning of the 1999 calendar 
year. In particular, through December 31, 1998, the most recent 
official data available from the Bureau of the Census on the numbers of 
children were data from the three March CPSs conducted in March 1996, 
1997, and 1998.

State Cost Factor

    The State Cost Factor is based on annual average wages in the 
health services industry in the State. The State Cost Factor for a 
State is equal to the sum of: .15, and .85 multiplied by the ratio of 
the annual average wages in the health industry per employee for the 
State to the annual wages per employee in the health industry for the 
50 States and the District of Columbia. Under section 2104(b)(3)(B) of 
the Act, as amended by section 701(a)(4) of the BBRA of 1999, the State 
Cost Factor for each State for a fiscal year is calculated based on the 
average of the annual wages for employees in the health industry for 
each State as reported, determined, available as final, and provided to 
HCFA by the Bureau of Labor Statistics (BLS) in the Department of Labor 
for each of the most recent three years available before the beginning 
of the calendar year in which the fiscal year begins. For example, FY 
2000 begins on October 1, 1999, that is, FY 2000 begins during calendar 
year 1999. Therefore, the State cost factor for FY 2000 would be based 
on the most recent three years of BLS data available as final before 
January 1, 1999 (the beginning of the calendar year in which FY 2000 
begins), that is, it would be based on the BLS data available as final 
through December 31, 1998. In accordance with these requirements, we 
used the final State Cost Factor data available from BLS for 1994, 
1995, and 1996 in calculating the FY 2000 final allotments.
    The State Cost Factor is determined based on the calculation of the 
ratio of each State's average annual wages in the health industry to 
the National average annual wages in the health care industry. In order 
for the National average to appropriately reflect the State-specific 
suppressed data, HCFA calculated the National average wages directly 
from the State-specific data provided by BLS. This was necessary 
because, due to the Privacy Act, BLS is required to suppress certain 
State-specific data in providing HCFA with the State-specific average 
wages per health services industry employee. As part of a continuing 
formal process between HCFA and the BLS, each fiscal year HCFA obtains 
these wage data officially from the BLS.
    Under section 2104(b)(4) of the Act, as amended by section 
701(a)(2) of the BBRA of 1999, each State and the District of Columbia 
is allotted a ``proportion'' of the total amount available nationally 
for allotment to the States. The term ``proportion'' is defined in 
section 2104(b)(4)(D)(i) of the Act and refers to a State's share of 
the total amount available for allotment. In order for the entire total 
amount available to be allotted to the States, the sum of the 
proportions for all States must exactly equal one. Under the statutory 
definition, a State's proportion for a fiscal year is equal to the 
State's allotment for the fiscal year divided by the total amount 
available nationally for allotment. In general, a State's allotment for 
a fiscal year is calculated by multiplying the State's proportion for 
the fiscal year by the national total amount available for allotment 
for that fiscal year in accordance with the following formula:

SAi = Pi x AT

    SAi = Allotment for a State or District of Columbia for 
a fiscal year.
    Pi = Proportion for a State or District of Columbia for 
a fiscal year.
    AT = Total amount available for allotment to the 50 
States and the District of Columbia for the fiscal year. For FY 2000, 
this is $4,204,312,500.

    In accordance with the statutory formula for determining 
allotments, the State proportions are determined under two steps, which 
are described below in further detail.
    Under the first step, each State's proportion is calculated by 
multiplying the State's Number of Children and the State Cost Factor to 
determine a ``product'' for each State. The products for all States are 
then summed. Finally, the product for a State is divided by the sum of 
the products for all States, thereby yielding the State's preadjusted 
proportion.

Application of Floors and Ceilings

    Under the second step, which was added by section 701(a)(2) of the 
BBRA of 1999, the preadjusted proportions are subject to the 
application of proportion floors, ceilings and a reconciliation 
process, as appropriate. The amended SCHIP statute specifies three 
proportion floors, or minimum proportions, that apply in determining 
States' allotments. The first proportion floor is equal to $2,000,000 
divided by the total of the amount available nationally for the fiscal 
year. For FY 2000, no State's preadjusted proportion is below this 
floor. The second proportion floor is equal to 90 percent of the 
allotment proportion for the State for the previous fiscal year; that 
is, a State's proportion for a fiscal year must not be lower than 10 
percent below the previous fiscal year's proportion. The third 
proportion floor is equal to 70 percent of the allotment proportion for 
the State for FY 1999; that is, the proportion for a fiscal year must 
not be lower than 30 percent below the FY 1999 proportion.
    Each State's allotment proportion for a fiscal year is limited by a 
maximum ceiling amount, equal to 145 percent of the State's proportion 
for FY 1999; that is, a State's proportion for a fiscal year must be no 
higher than 45 percent above the State's proportion for FY 1999. The 
floors and ceilings are intended to minimize the fluctuation of State 
allotments from year to year and over

[[Page 33641]]

the life of the program. Note, the floors and ceilings on proportions 
are not applicable in determining the allotments of the U.S. 
Territories and Commonwealths; they receive a fixed percentage 
specified in the statute of the total allotment available to the U.S. 
Territories and Commonwealths.
    As determined under the first step, which is applied prior to the 
application of any floors or ceilings, the sum of the proportions for 
all the States and the District of Columbia will be equal to exactly 
one. However, the application of the floors and ceilings under the 
second step may change the proportions for certain States; that is, 
some States' proportions may need to be raised to the floors, while 
other States' proportions may need to be lowered to the maximum 
ceiling. If this occurs, the sum of the proportions for all States and 
the District of Columbia may not exactly equal one. In that case, the 
statute requires that the proportions will need to be adjusted, under a 
method that is determined by whether the sum of the proportions is 
greater or less than one.
    The sum of the proportions would be greater than one if the 
application of the floors and ceilings resulted in raising the 
proportions of some States (due to the floor) to a greater degree than 
the proportions of other States were lowered (due to the ceiling). If, 
after application of the floors and ceiling, the sum of the proportions 
is greater than one, the new statute requires the Secretary to 
determine a maximum percentage increase limit, which, when applied to 
the State proportions, would result in the sum of the proportions being 
exactly one.
    If, after the application of the floors and ceiling, the sum of the 
proportions is less than one, the States' proportions must be increased 
in a ``pro rata'' manner so that the sum of the proportions again 
equals one. It is also possible, although unlikely, that the sum of the 
proportions (after the applications of the floors and ceilings) will be 
exactly one, and therefore, the proportions would require no further 
adjustment.

Determination of Preadjusted Proportions

    Following is an explanation of how HCFA applied the two State-
related factors specified in the statute to determine the States' 
preadjusted proportions for FY 2000. The term ``preadjusted,'' as used 
here, refers to the States' proportions prior to the application of the 
floors and ceiling and adjustments, as specified in the BBRA of 1999. 
The determination of each State and the District of Columbia's 
preadjusted proportion for FY 2000 and subsequent fiscal years is in 
accordance with the following formula:

PPi = (CixSCFi)/
(CixSCFi)
    PPi = Preadjusted proportion for a State or District of 
Columbia for a fiscal year.
    Ci = Number of children in a State (Section 
2104(b)(1)(A)(I)) for a fiscal year. This number is based on the number 
of low-income children for a State for a fiscal year and the number of 
low-income uninsured children for a State for a fiscal year coverage 
for the fiscal year determined on the basis of the arithmetic average 
of the number of such children as reported and defined in the three 
most recent March supplements to the Current Population Survey of the 
Bureau of the Census, and for FY 2000 and subsequent fiscal years, 
officially available before the beginning of the calendar year in which 
the fiscal year begins. (Section 2104(b)(2)(B) of the Act).

    For fiscal year 2000, the number of children is equal to the sum of 
75 percent of the number of low-income uninsured children in the State 
for the fiscal year and 25 percent of the number of low-income children 
in the State for the fiscal year. For fiscal years 2001 and thereafter, 
the number of children is equal to the sum of 50 percent of the number 
of low-income uninsured children in the State for the fiscal year and 
50 percent of the number of low-income children in the State for the 
fiscal year. (Section 2104(b)(2)(A) of the Act).
SCFi=State cost factor for a State (Section 
2104(b)(1)(A)(ii)of the Act). For a fiscal year, this is equal to:

.15+.85 x (Wi/WN)

    Wi=The annual average wages per employee for a State for 
such year (Section 2104(b)(3)(A)(ii)(I) of the Act).
    WN = The annual average wages per employee for the 50 
States and the District of Columbia (Section 2104(b)(3)(A)(ii)(II) of 
the Act).

    The annual average wages per employee for a State or for all States 
and the District of Columbia for a fiscal year is equal to the average 
of such wages for employees in the health services industry (SIC 80), 
as reported by the Bureau of Labor Statistics of the Department of 
Labor for each of the most recent three years, and for FY 2000 and 
subsequent fiscal years, finally available before the beginning of the 
calendar year in which the fiscal year begins. (Section 2104(b)(3)(B) 
of the Act).
(CixSCFi) =The sum of the products of 
(Ci x SCFi) for each State (Section 2104(b)(1)(B) 
of the Act).
    The resulting proportions would then be subject to the application 
of the floors and ceilings specified in Public Law 106-113 and 
reconciled, as necessary, to eliminate any deficit or surplus of the 
allotments because the sum of the proportions was either greater than 
or less than one.
    Section 2104(e) of the Act requires that the amount of a State's 
allotment for a fiscal year be available to the State for a total of 
three years, the fiscal year for which the State child health plan is 
approved and two years following. Section 2104(f) of the Act requires 
the Secretary to establish a process for redistribution of the amounts 
of States' allotments that are not expended during the three-year 
period to States that have fully expended their allotments.

III. Table of State Children's Health Insurance Program Final 
Allotments for FY 2000

Key to Table

Column/Description
    Column A = Name of State, Commonwealth, or Territory.
    Column B = Number of Children. The Number of Children for each 
State (provided in thousands) was determined and provided by the Bureau 
of the Census based on the arithmetic average of the number of low-
income children and low-income uninsured children, and is based on the 
three most recent March supplements to the Current population survey of 
the Bureau of the Census officially available before the beginning of 
the calendar year in which the fiscal year begins. The FY 2000 
allotments were based on the 1996, 1997, and 1998 March supplements to 
the Current Population Survey. These data represent the number of 
people in each State under 19 years of age whose family income is at or 
below 200 percent of the poverty threshold appropriate for that family, 
and who are reported to be not covered by health insurance. The Number 
of Children for each State was developed by the Bureau of the Census 
based on the standard methodology used to determine official poverty 
status and uninsured status in their annual March Current Population 
Surveys on these topics.
    For FY 2000, the Number of Children is equal to the sum of 75 
percent of the number of low-income uninsured children in the State and 
25 percent of the number of low-income children in the State. For FY 
2001 and succeeding years, the Number of Children is equal to the sum 
of 50 percent of the number

[[Page 33642]]

of low-income uninsured children in the State and 50 percent of the 
number of low-income children in the State.
    Column C=State Cost Factor. The State Cost Factor for a State is 
equal to the sum of: .15, and .85 multiplied by the ratio of the annual 
average wages in the health industry per employee for the State to the 
annual wages per employee in the health industry for the 50 States and 
the District of Columbia. The State Cost Factor for each State was 
calculated based on such final wage data for each State as reported, 
determined, and provided to HCFA by the BLS in the Department of Labor 
for each of the most recent three years before the beginning of the 
calendar year in which the fiscal year begins. The FY 2000 allotments 
were based on final BLS wage data for 1994, 1995, and 1996.
    Column D=Product. The Product for each State was calculated by 
multiplying the Number of Children in Column B by the State Cost Factor 
in Column C. The sum of the Products for all 50 States and the District 
of Columbia is below the Products for each State in Column D. The 
Product for each State and the sum of the Products for all States 
provides the basis for allotment to States and the District of 
Columbia.
    Column E=Proportion of Total. This is the calculated percentage 
share for each State of the total allotment available to the 50 States 
and the District of Columbia. The Percent Share of Total is calculated 
as the ratio of the Product for each State in Column D to the sum of 
the products for all 50 States and the District of Columbia below the 
Products for each State in Column D.
    Column F=Adjusted Proportion of Total. This is the calculated 
percentage share for each State of the total allotment available after 
the application of the floors and ceilings and after any further 
reconciliation needed to ensure that the sum of the State proportions 
is equal to one. The three floors specified in the amended statute are: 
(1) A floor of $2,000,000 divided by the total of the amount available; 
(2) an annual floor of 90 percent of (or 10 percent below) the 
preceding fiscal year's allotment proportion; and (3) a cumulative 
floor of 70 percent of (or 30 percent below) the FY 1999 allotment 
proportion. There is also a cumulative ceiling of 145 percent of (or 45 
percent above) the FY 1999 allotment proportion.
    Column G=Allotment. This is the State Children's Health Insurance 
Program allotment for each State, Commonwealth, or Territory for the 
fiscal year. For each of the 50 States and the District of Columbia, 
this is determined as the Adjusted Proportion of Total in Column F for 
the State multiplied by the total amount available for allotment for 
the 50 States and the District of Columbia for the fiscal year.
    For each of the U.S. Territory and Commonwealth, the allotment is 
determined as the Proportion of Total in Column E multiplied by the 
total amount available for allotment to the U.S. Territories and 
Commonwealths. For the U.S. Territories and Commonwealths, the 
Proportion of Total in Column E is specified in section 2104(c) of the 
Act. The total amount is then allotted to the U.S. Territories and 
Commonwealths according to the percentages specified in section 2104 of 
the Act. There is no adjustment made to the allotments of the U.S. 
Territories and Commonwealths as they are not subject to the 
application of the floors and ceiling. As a result, Column F in the 
table, the Adjusted Proportion of Total, is empty for the U.S. 
Territories and Commonwealths.
BILLING CODE 4120-01-P

[[Page 33643]]

[GRAPHIC] [TIFF OMITTED] TN24MY00.002

BILLING CODE 4120-01-C

IV. Impact Statement

    HCFA has examined the impact of this notice as required by 
Executive Order 12866. Executive Order 12866 directs agencies to assess 
all costs and benefits of available regulatory alternatives and, when 
rules are necessary, to select regulatory approaches that maximize net 
benefits (including potential economic environments, public health and 
safety,

[[Page 33644]]

other advantages, distributive impacts, and equity). We believe that 
this notice is consistent with the regulatory philosophy and principles 
identified in the Executive Order. The formula for the allotments is 
specified in the statute. Since the formula is specified in the 
statute, we have no discretion in determining the allotments.
    The Unfunded Mandates Reform Act of 1995 requires that agencies 
prepare an assessment of anticipated costs and benefits before 
publishing any notice that may result in an expenditure in any year by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted each year for 
inflation). Because participation in the SCHIP program on the part of 
States is voluntary, any payments and expenditures States make or incur 
on behalf of the program that are not reimbursed by the federal 
government are made voluntarily. This notice will not create unfunded 
mandate on States, tribal or local governments. Therefore, we are not 
required to perform an assessment of the costs and benefits of these 
regulations.
    Under Executive Order 12612, Federalism, we have reviewed this 
notice and determined that it does not significantly affect States' 
rights, roles, and responsibilities. Low-income children will benefit 
from payments under this program through increased opportunities for 
health insurance coverage.
    We believe this notice will have an overall positive impact by 
informing States, the District of Columbia, and U.S. Territories and 
Commonwealths of the extent to which they are permitted to expend funds 
under their child health plans using their FY 2000 allotments.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

(Section 1102 of the Social Security Act (42 U.S.C. 1302))

(Catalog of Federal Domestic Assistance Program No. 00.000, State 
Children's Health Insurance Program)

    Dated: February 7, 2000.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing, Administration.
    Dated: March 20, 2000.
Donna E. Shalala,
Secretary.
[FR Doc. 00-12881 Filed 5-23-00; 8:45 am]
BILLING CODE 4120-01-P