Title II, SEC. 2108. PAYMENTS TO STATES. (a) In General. Subject to section 2102(a)(9)(B) (relating to limitation on payment for administrative costs), the Secretary shall pay to each State with a plan approved under this subpart, for each quarter, from its allotment under section 2109(b), an amount equal to (1) the Federal matching percentage (as defined in subsection (b)) of amount demonstrated by State claims to have been expended during the quarter for home and community-based services under the plan for individuals with disabilities; plus (2) an amount equal to 90 percent of amount expended during the quarter under the plan for activities (including preliminary screening) relating to determination of eligibility and performance of needs assessment; plus (3) an amount equal to 90 percent (or, beginning with quarters in fiscal year 2003, 75 percent) of the amount expended during the quarter for the design, development, and installation of mechanical claims processing systems and for information retrieval; plus (4) an amount equal to 50 percent of the remainder of the amounts expended during the quarter as found necessary by the Secretary for the proper and efficient administration of the State plan. (b) Federal Matching Percentage. (1) In general. In subsection (a), the term ``Federal matching percentage'' means, with respect to a State, the reference percentage specified in paragraph (2) increased by 28 percentage points, except that the Federal matching percentage shall in no case be less than 75 percent or more than 95 percent. (2) Reference percentage. (A) In general. The reference percentage specified in this paragraph is 100 percent less the State percentage specified in subparagraph (B), except that (i) the percentage under this paragraph shall in no case be less than 50 percent or more than 83 percent, and (ii) the percentage for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa shall be 50 percent. (B) State percentage. The State percentage specified in this subparagraph is that percentage which bears the same ratio to 45 percent as the square of the per capita income of such State bears to the square of the per capita income of the continental United States (including Alaska) and Hawaii. (c) Payments on Estimates with Retrospective Adjustments. The method of computing and making payments under this section shall be as follows: (1) The Secretary shall, prior to the beginning of each quarter, estimate the amount to be paid to the State under subsection (a) for such quarter, based on a report filed by the State containing its estimate of the total sum to be expended in such quarter, and such other information as the Secretary may find necessary. (2) From the allotment available therefore, the Secretary shall pay the amount so estimated, reduced or increased, as the case may be, by any sum (not previously adjusted under this section) by which the Secretary finds that the estimate of the amount to be paid the State for any prior period under this section was greater or less than the amount which should have been paid. (d) Application of Rules Regarding Limitations on Provider-Related Donations and Health Care Related Taxes. The provisions of section 1903(w) of the Social Security Act shall apply to payments to States under this section in the same manner as they apply to payments to States under section 1903(a) of such Act .