(a) General. For available grant funds, up to and including $10,000,000, grants will be made to States according to the terms and formula in paragraphs (b) and (c) of this section. For any available grant funds in excess of $10,000,000, distribution of grants will be at the discretion of ACL, and will be made according to criteria that ACL will communicate to the States via grant solicitation. ACL will provide information to each State as to what must be included in the application for grant funds. ACL awards the following type of grants:

1. (1) New program grants.
2. (2) Existing program enhancement grants.

(b) Grant award. Subject to the availability of funds, each eligible State that submits an acceptable application receives a grant that includes a fixed amount (minimum funding level) and a variable amount.

1. (1) A fixed portion is awarded to States in the following amounts:

   1. (i) Each of the 50 States, $75,000.
   2. (ii) The District of Columbia, $75,000.
   3. (iii) Puerto Rico, $75,000.
   4. (iv) American Samoa, $25,000.
   5. (v) Guam, $25,000.
   6. (vi) The Virgin Islands, $25,000.
2. (2) A variable portion which is based on the number and location of Medicare beneficiaries residing in the State is awarded to each State. The variable amount a particular State receives is determined as set forth in paragraph (c) of this section.

(c) Calculation of variable portion of the grant.

1. (1) ACL bases the variable portion of the grant on—

   1. (i) The amount of available funds, and
   2. (ii) A comparison of each State with the average of all of the States (except the State being compared) with respect to three factors that relate to the size of the State's Medicare population and where that population resides.

2. (2) The factors ACL uses to compare States' Medicare populations comprise separate components of the variable amount. These factors, and the extent to which they each contribute to the variable amount, are as follows:

   1. (i) Approximately 75 percent of the variable amount is based on the number of Medicare beneficiaries living in the State as a percentage of all Medicare beneficiaries nationwide.
   2. (ii) Approximately 10 percent of the variable amount is based on the percentage of the State's total population who are Medicare beneficiaries.
   3. (iii) Approximately 15 percent of the variable amount is based on the percentage of the State's Medicare beneficiaries that reside in rural areas (“rural areas” are defined as all areas not included within a metropolitan Statistical Area).
3. (3) Based on the foregoing four factors (that is, the amount of available funds and the three comparative factors), ACL determines a variable rate for each participating State for each grant period.