['Employee Benefits']
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12/05/2023
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(a) General rule. A State that meets the eligibility requirements in §148.310 may apply for a grant to fund losses that were incurred during the State’s fiscal year 2002, 2003, or 2004 in connection with the operation of its qualified high risk pool. If a State becomes eligible for a grant in the middle of its fiscal year, a State may apply for losses incurred in a partial fiscal year if a partial year audit is done. Only losses that are incurred after eligibility is established will qualify for a grant.
(b) Maximum number of grants. An eligible State may only be awarded a maximum of two grants, with one grant per fiscal year. A grant for a partial fiscal year counts as a full grant.
(c) Deadline for submitting grant applications. The deadlines for submitting grant applications are stated in §148.316(d).
(d) Initial distribution of grant funds. States that meet all of the eligibility requirements in §148.310 and submit timely requests in accordance with paragraph (c) of this section will receive an initial distribution of grant funds using the following methodology:
(d)(1) Initial grant applications submitted for losses incurred in State fiscal year 2002 (hereafter referred to as 02 States). Initial grants to States that submitted an application for losses incurred in State fiscal year 2002 were funded out of the $40 million appropriation for Federal fiscal year (FFY) 2003, which is available for obligation until the end of FFY 2004. (This is referred to as the “initial $40 million appropriation.”)
(d)(2) Initial grant applications submitted for losses incurred in State fiscal year 2003 (hereafter referred to as 03 States). Initial grants to States that did not submit an application for losses in State fiscal year 2002 (or submitted an application but did not qualify) and first qualified for a grant for losses incurred in State fiscal year 2003 will be funded out of the initial $40 million appropriation.
(d)(3) Initial grant allocations. Initial grant allocations will be determined by taking all grant applications described in paragraphs (d)(1) and (2) of this section, and allocating in accordance with §148.312.
(d)(4) Other applications. All other grants, including the initial grants for the 04 States (States that initially qualify based upon losses incurred in their fiscal year 2004), will be funded out of the $40 million appropriation for FFY 2004, which is available for obligation until the end of FFY 2005. (This is referred to as the “second $40 million appropriation.”)
(e) Allocation of funds. Grants to States described in paragraphs (d)(1) and (d)(2) of this section will be allocated in accordance with paragraphs (e)(1) and (e)(2) of this section.
(e)(1) Initial allocation.
(e)(1)(i) Reserves. We will first determine the projected number of 03 States (those that are expected to submit their initial grant requests after the deadline for grants relating to a State’s 2002 losses). We will reserve the portion of the initial $40 million appropriation that we estimate will be needed to fund grants for 03 States.
(e)(1)(ii) Initial allocation to 02 States. The remainder of the initial $40 million appropriation will be allotted to the 02 States.
(e)(1)(iii) Excess reserves. If the initial allotments for any of the 02 or 03 States are less than 50 percent of the losses incurred by those States, any reserved funds that remain after allotments have been made to all 02 and 03 States will be proportionally redistributed to the 02 and 03 States, but not to exceed 50 percent of losses incurred by the States. The size of the initial grants will be increased retroactively for those States.
(e)(2) Second allocation. The procedure described in paragraph (e)(1) of this section will also be applied to allocate the second $40 million appropriation. A reserve will be established based on the amounts expected to be needed to fund grants to 04 States before funds are allocated for second year grants for 02 and 03 States. If any excess funds remain after States receive their full allotments, the funds will be proportionally distributed to States whose allotments were less than 50 percent of their losses.
[68 FR 23414, May 2, 2003, as amended at 69 FR 15701, Mar. 26, 2004]
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