112 STAT. 656 PUBLIC LAW 105-200—JULY 16, 1998 any overpayments or underpayments which the Secretary determines were made under this section to the States involved for prior periods and with respect to which adjustment has not already been made under this subsection. Upon the making of any estimate by the Secretary under the preceding sentence, any appropriations available for payments under this section are deemed obligated. "(e) REGULATIONS. —The Secretary shall prescribe such regulations as may be necessary governing the calculation of incentive payments under this section, including directions for excluding from the calculations certain closed cases and cases over which the States do not have jurisdiction. "(f) REINVESTMENT. —^A State to which a pa3mtient is made under this section shall expend the full amount of the payment to supplement, and not supplant, other funds used by the State— "(1) to carry out the State plan approved under this part; or "(2) for any activity (including cost-effective contracts with local agencies) approved by the Secretary, whether or not the expenditures for the activity are eligible for reimbursement under this part, which may contribute to improving the effectiveness or efficiency of the State program operated under this part.". 42 USC 658a (b) TRANSITION RULE.— Notwithstanding any other provision note. of law— (1) for fiscal year 2000, the Secretary shall reduce by onethird the amount otherwise payable to a State under section 458 of the Social Security Act, and shall reduce by two-thirds the amount otherwise payable to a State under section 458A of such Act; and (2) for fiscal year 2001, the Secretary shall reduce by twothirds the amount otherwise payable to a State under section 458 of the Social Security Act, and shall reduce by one-third the amount otherwise payable to a State under section 458A of such Act. 42 USC 658a (c) REGULATIONS.— Within 9 months after the date of the enact- "lote. ment of this section, the Secretary of Health and Human Services shall prescribe regulations governing the implementation of section 458A of the Social Security Act when such section takes effect and the implementation of subsection (b) of this section. 42 USC 658a (d) STUDIES.— note. (1) GENERAL REVIEW OF NEW INCENTIVE PAYMENT SYSTEM.— (A) IN GENERAL. —The Secretary of Health and Human Services shall conduct a study of the implementation of the incentive payment system established by section 458A of the Social Security Act, in order to identify the problems and successes of the system. Deadlines. (B) REPORTS TO THE CONGRESS.— (i) REPORT ON VARIATIONS IN STATE PERFORMANCE ATTRIBUTABLE TO DEMOGRAPHIC VARIABLES.— Not later than October 1, 2000, the Secretary shall submit to the Congress a report that identifies any demographic or economic variables that account for differences in the performance levels achieved by the States with respect to the performance measures used in the system, and contains the recommendations of the Secretary for such adjustments to the system as may be necessary to ensure that the relative performance
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