110 STAT. 1321-249 PUBLIC LAW 104-134—APR. 26, 1996 In applying subparagraph (B), there shall not be counted as payments for any period or fiscal year any pa3anent that is attributable to an expenditure which is exempt under subsection (c)(1). In applying such subparagraph to the 9-month period, there shall be counted payments (other than those described in the previous sentence) that are attributable to an expenditure for periods occurring in the 9-month period and before the date of the enactment of this Act. (2) NON-FEDERAL PARTICIPATION PERCENTAGE.— For purposes of paragraph (1), the "non-Federal participation percentage" for a State for the 9-month period or State fiscal year is equal to the ratio of— (A) the State's base State expenditures (as defined in paragraph (3)) plus the applicable percentage (as defined in paragraph (4)) of the difference between the amount of such expenditures and the amount of the State expenditures that would be required for the State to qualify for the maximum Federal financial participation specified in paragraph (5) under title XIX of the Social Security Act if this section did not apply for such period or State fiscal year; to (B) the total expenditures under the State plan of the State under such title for such period or State fiscal year. Such ratio shall be calculated as if total expenditures under the State plan were no greater than necessary for the State to receive the maximum Federal financial participation specified in paragraph (5). (3) BASE STATE EXPENDITURES.—For purposes of this subsection, the term "base State expenditures" means— (A) for the 9-month period, $266,250,000, or (B) for State fiscal year 1996-1997, $355,000,000, or (C) for State fiscal year 1997-1998, $355,000,000. (4) APPLICABLE PERCENTAGE.—For purposes of this subsection, the "applicable percentage"— (A) for the 9-month period is 20 percent, (B) for State fiscal year 1996-1997 is 35 percent, and (C) for State fiscal year 1997-1998 is 55 percent. (5) MAXIMUM FEDERAL PARTICIPATION.—For purposes of this section, the maximum Federal financial participation specified in this paragraph for a State— (A) for the 9-month period, is $1,966,500,000 (B) for State fiscal year 1996-1997 is $2,622,000,000, and (C) for State fiscal year 1997-1998 is $2,622,000,000. (c) ADDITIONAL RULES. — (1) LIMITING APPLICATION TO EXPENDITURES FOR PERIODS IN WHICH ELECTION IN EFFECT. — T h is section (and the maximum Federal financial participation specified in subsection (b)(5)) shall not apply to any expenditure that is applicable to a reporting period that is not covered under an election under subsection (a), including any expenditure applicable to any reporting period before October 1, 1995. (2) ELECTION PROCESS. —An election of a State under subsection (a) shall be made, by notice from the Governor of the State to the Secretary of Health and Human Services,
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