[Federal Register Volume 68, Number 163 (Friday, August 22, 2003)]
[Notices]
[Pages 50784-50790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21439]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2166-N]
RIN 0938-ZA17


State Children's Health Insurance Program; Final Allotments to 
States, the District of Columbia, and U.S. Territories and 
Commonwealths for Fiscal Year 2004

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: Title XXI of the Social Security Act (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 the State 
Children's Health Insurance Program (SCHIP). 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 2004. States may implement SCHIP through a separate State 
program under title XXI of the Act, an expansion of a State Medicaid 
program under title XIX of the Act, or a combination of both.

EFFECTIVE DATE: This notice is effective on September 22, 2003. Final 
allotments are available for expenditures after October 1, 2003.

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 
fiscal year (FY) 2004 under Title XXI of the Social Security Act (the 
Act). Final allotments for a fiscal year are available to match 
expenditures under an approved State child health plan for 3 fiscal 
years, including the year for which the final allotment was provided. 
The FY 2004 allotments will be available to States for FY 2004, and 
unexpended amounts may

[[Page 50785]]

be carried over to 2005 and 2006. Federal funds appropriated for title 
XXI are limited, and the law specifies a formula to divide the total 
annual appropriation into individual allotments available for each 
State, the District of Columbia, and each U.S. Territory and 
Commonwealth with an approved child health plan.
    Section 2104(b) of the Act 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 have approved plans 
for FY 2004. Therefore, the FY 2004 allotments contained in this notice 
pertain to all States, the District of Columbia, and U.S. Territories 
and Commonwealths.

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 
2004 allotments available to individual States, the District of 
Columbia, and U.S. Territories and Commonwealths for either child 
health assistance expenditures under approved States child health plans 
or for claiming an enhanced Federal medical assistance percentage rate 
for certain SCHIP-related Medicaid expenditures. As discussed below, 
the FY 2004 final allotments have been calculated to reflect the 
methodology for determining an allotment amount for each State, the 
District of Columbia, and each U.S. Territory and Commonwealth as 
prescribed by section 2104(b) of the Act.
    Section 2104(a) of the Act provides that, for purposes of providing 
allotments to the 50 States and the District of Columbia, the following 
amounts are appropriated: $4,295,000,000 for FY 1998; $4,275,000,000 
for each FY 1999 through FY 2001; $3,150,000,000 for each FY 2002 
through FY 2004; $4,050,000,000 for each FY 2005 through FY 2006; and 
$5,000,000,000 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 2104(c)(4)(B) of the Act provides for additional amounts 
for allotment to the Territories and Commonwealths: $34,200,000 for 
each FY 2000 through FY 2001; $25,200,000 for each FY 2002 through FY 
2004; $32,400,000 for each FY 2005 through FY 2006; and $40,000,000 for 
FY 2007. Since, for FY 2004, title XXI of the Act provides an 
additional $25,200,000 for allotment to the U.S. Territories and 
Commonwealths, the total amount available for allotment to the U.S. 
Territories and Commonwealths in FY 2004 is $33,075,000; that is, 
$25,200,000 plus $7,875,000 (0.25 percent of the FY 2004 appropriations 
of $3,150,000,000).
    Therefore, the total amount available nationally for allotment for 
the 50 States and the District of Columbia for FY 2004 was determined 
in accordance with the following formula:

AT = S2104(a) - T2104(c)
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 2004, this is $3,150,000,000.
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 2004, this is: .0025 x $3,150,000,000 
= $7,875,000.

    Therefore, for FY 2004, the total amount available for allotment to 
the 50 States and the District of Columbia is $3,142,125,000. This was 
determined as follows:

AT ($3,142,125,000) = S2104(a) ($3,150,000,000) - 
T2104(c) ($7,875,000)

    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.''
    Under section 2104(b) of the Act, the determination of the number 
of children applied in determining the SCHIP allotment for a particular 
fiscal year is based on the three most recent March supplements to the 
Current Population Survey (CPS) of the Bureau of the Census officially 
available before the beginning of the calendar year in which the fiscal 
year begins. The determination of the State cost factor is based on the 
annual average wages per employee in the health services industry, 
which is determined using the most recent 3 years of such wage data as 
reported and determined as final by the Bureau of Labor Statistics 
(BLS) of the Department of Labor to be officially available before the 
beginning of the calendar year in which the fiscal year begins. Since 
FY 2004 begins on October 1, 2003 (that is, in calendar year 2003), in 
determining the FY 2004 SCHIP allotments, we are using the most recent 
official data from the Bureau of the Census and the BLS, respectively, 
available before January 1 of calendar year 2003 (that is, through the 
end of December 31, 2002).

Number of Children

    For FY 2004, as specified by section 2104(b)(2)(A)(iii) of the Act, 
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 from data provided 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 the 
Centers for Medicare & Medicaid Services (CMS) and the Bureau of the 
Census, each fiscal year we obtain the number of children data 
officially from the Bureau of the Census.
    Under section 2104(b)(2)(B) of the Act, 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 2003 calendar year. In particular, through December 31, 2002, 
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 2000, 2001, and 2002 (representing data for years 
1999, 2000, and 2001).

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: 0.15 and 0.85 multiplied by the ratio of 
the annual average wages in the health industry per employee for the 
State to the annual wages per employee

[[Page 50786]]

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 the Balanced 
Budget Refinement Act of 1999 (BBRA) Pub. L. 106-113, enacted on 
November 29, 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 using data for each of 
the most recent 3 years as reported and determined as final by the BLS 
in the Department of Labor and available before the beginning of the 
calendar year in which the fiscal year begins. Therefore, the State 
cost factor for FY 2004 is based on the most recent 3 years of BLS data 
officially available as final before January 1, 2003 (the beginning of 
the calendar year in which FY 2004 begins); that is, it is based on the 
BLS data available as final through December 31, 2002. In accordance 
with these requirements, we used the final State cost factor data 
available from BLS for 1999, 2000, and 2001 in calculating the FY 2004 
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. Since 
BLS is required to suppress certain State-specific data in providing us 
with the State-specific average wages per health services industry 
employee due to the Privacy Act, we calculated the national average 
wages directly from the State-specific data provided by BLS. As part of 
a continuing formal process between CMS and the BLS, each fiscal year 
CMS obtains these wage data officially from the BLS.
    Section 2104(b)(3)(B) of the Act, as amended by the BBRA, refers to 
wage data as reported by BLS under the ``Standard Industrial 
Classification'' (SIC) system. However, in calendar year 2002, BLS 
phased-out the SIC wage and employment reporting system and replaced it 
with the ``North American Industry Classification System'' (NAICS). In 
accordance with section 2104(b)(3)(B) of the Act, for purposes of 
calculating the FY 2004 allotments, BLS would need to provide wage data 
for the 3 most recent years as available through December 31, 2002; in 
this case, the 3 years of wage data are 1999, 2000, and 2001. However, 
because of the change from the SIC system to NAICS, wage data for 2001 
are not available under the SIC reporting system. Wage data for 1999 
and 2000 under the SIC reporting system are available from BLS. 
Therefore, the BLS wage data used in calculating the FY 2004 SCHIP 
allotments necessarily reflect 2 years of SIC system data (1999 and 
2000) and one year of NAICS data (2001) to obtain the 3-year average 
required for the allotments.
    Under the SIC system, BLS provided CMS with wage data for each 
State under the SIC Code 80 for the years 1999 and 2000. However, the 
wage data codes under the SIC system do not map exactly to the wage 
data codes under the NAICS. As a result, for the year 2001 BLS provided 
us with wage data using three NAICS wage data codes that represent 
approximately 98 percent of the wage data that would have been provided 
under the related SIC Code 80. Specifically, in lieu of SIC Code 80 
data, for the year 2001 BLS provided CMS data that are based on the 
following three NAICS codes: NAICS Code 621 (Ambulatory health care 
services), Code 622 (Hospitals), and Code 623 (Nursing and residential 
care facilities).
    Under section 2104(b)(4) of the Act, 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 for any given fiscal 
year. 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 for the 
fiscal year. 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 2004, this is 
$3,142,125,000.

    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, the preadjusted proportions are subject to 
the application of proportion floors, ceilings, and a reconciliation 
process, as appropriate. The 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. 
This proportion ensures that a State's minimum allotment would be 
$2,000,000. For FY 2004, 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 also 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 the life of the program 
as compared to FY 1999. 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. Terrorities and 
Commonwealths.
    As determined under the first step for determining the States' 
preadjusted proportions, which is applied before 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

[[Page 50787]]

equal one. In that case, the statute requires the proportions 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 application of the floors) to a 
greater degree than the proportions of other States were lowered (due 
to the application of the ceiling). If, after application of the floors 
and ceiling, the sum of the proportions is greater than one, the 
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 statute requires the States' 
proportions to be increased in a ``pro rata'' manner so that the sum of 
the proportions again equals one. Finally, it is also possible, 
although unlikely, that the sum of the proportions (after the 
application of the floors and ceiling) will be exactly one; in that 
case, the proportions would require no further adjustment.

Determination of Preadjusted Proportions

    The following is an explanation of how we applied the two State-
related factors specified in the statute to determine the States' 
``preadjusted'' proportions for FY 2004. The term ``preadjusted,'' as 
used here, refers to the States' proportions before the application of 
the floors and ceiling and adjustments, as specified in the SCHIP 
statute. The determination of each State and the District of Columbia's 
preadjusted proportion for FY 2004 is in accordance with the following 
formula:

PPi = (Ci x SCFi)/ 
[sigma](Ci x SCFi)

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) 
of the Act) 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 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 CPS of the Bureau of the Census, officially available before the 
beginning of the calendar year in which the fiscal year begins. (See 
section 2104(b)(2)(B) of the Act.)
    For fiscal year 2004, 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. (See section 2104(b)(2)(A)(iii) 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: 
0.15 + 0.85 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, as 
reported and determined as final by the BLS of the Department of Labor 
for each of the most recent 3 years officially available before the 
beginning of the calendar year in which the fiscal year begins. (See 
section 2104(b)(3)(B) of the Act).
[Sigma](Ci x SCFi) = 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 the SCHIP statute 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 amounts allotted to a 
state for a fiscal year be available to the State for a total of 3 
years; the fiscal year for which the amounts are allotted, and the 2 
following fiscal years.

III. Table of State Children's Health Insurance Program Final 
Allotments for FY 2004

Key to Table

Column/Description

    Column A = State. Name of State, District of Columbia, U.S. 
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 CPS of the Bureau of the 
Census officially available before the beginning of the calendar year 
in which the fiscal year begins. The FY 2004 allotments were based on 
the 2000, 2001, and 2002 March supplements to the CPS. 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 without health 
insurance coverage. 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 its annual 
March CPS on these topics.
    For FY 2004, the number of children is equal to 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.
    Column C = State Cost Factor. The State cost factor for a State is 
equal to the sum of: 0.15, and 0.85 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 wage data for each State as reported 
and determined as final by the BLS in the Department of Labor for each 
of the most recent 3 years and available before the beginning of the 
calendar year in which the fiscal year begins. The FY 2004 allotments 
were based on final BLS wage data for 1999, 2000, and 2001.
    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

[[Page 50788]]

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 statute are: (1) The percentage 
calculated by dividing $2,000,000 by the total of the amount available 
for all allotments for the fiscal year; (2) an annual floor of 90 
percent of (that is, 10 percent below) the preceding fiscal year's 
allotment proportion; and (3) a cumulative floor of 70 percent of (that 
is, 30 percent below) the FY 1999 allotment proportion. There is also a 
cumulative ceiling of 145 percent of (that is, 45 percent above) the FY 
1999 allotment proportion.
    Column G = Allotment. This is the SCHIP allotment for each State, 
Commonwealth, or Territory for the fiscal year. For each of the 50 
States and the District of Columbia, that 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 Commonwealths, 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.
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[GRAPHIC] [TIFF OMITTED] TN22AU03.003

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IV. Impact Statement

    We have examined the impacts of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), 
section 1102(b) of the Social Security Act, the Unfunded

[[Page 50790]]

Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
    We 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, 
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. This 
notice merely announces the results of our application of this formula, 
and therefore does not reach the economic significance threshold of 
$100 million in any one year.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any one year. Individuals and States are not 
included in the definition of a small entity; therefore, this 
requirement does not apply.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds.
    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 annual expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $110 million or more (adjusted each year for 
inflation) in any one year. This notice will not create an unfunded 
mandate on States, tribal, or local governments because it merely 
notifies states of their SCHIP allotment for FY 2004 and does not 
mandate any additional expenditures by these governments. Therefore, we 
are not required to perform an assessment of the costs and benefits of 
this notice, in accordance with the Unfunded Mandates Reform Act.
    Low-income children will benefit from payments under SCHIP 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 2004 allotments.
    Under Executive Order 13132, we are required to adhere to certain 
criteria regarding Federalism. We have reviewed this notice and 
determined that it does not significantly affect States' rights, roles, 
and responsibilities because it does not set forth any new policies.
    For these reasons, we are not preparing analyses for either the RFA 
or section 1102(b) of the Act because we have determined, and we 
certify, that this notice will not have a significant economic impact 
on a substantial number of small entities or a significant impact on 
the operations of a substantial number of small rural hospitals.
    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. 93.767, State 
Children's Health Insurance Program)

    Dated: April 2, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: April 29, 2003.
Tommy G. Thompson,
Secretary.
[FR Doc. 03-21439 Filed 8-21-03; 8:45 am]
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