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139 STAT. 302 PUBLIC LAW 119–21—JULY 4, 2025 of Federal Regulations (as in effect on May 1, 2025), subject to clause (iv)— ‘‘(aa) if, on the date of enactment of this subpara- graph, the expansion State or unit of local government in such State has enacted a tax and imposes such tax on such class and the Secretary determines that the tax is within the hold harmless threshold as of that date, the lower of— ‘‘(AA) the applicable percent of net patient revenue attributable to such class that has been so determined; and ‘‘(BB) the applicable percent specified in clause (ii) for the fiscal year; and ‘‘(bb) if, on the date of enactment of this subpara- graph, the expansion State or unit of local government in such State has not enacted or does not impose a tax with respect to such class, 0 percent. ‘‘(ii) For purposes of clause (i)(II)(aa)(BB), the applicable percent is— ‘‘(I) for fiscal year 2028, 5.5 percent; ‘‘(II) for fiscal year 2029, 5 percent; ‘‘(III) for fiscal year 2030, 4.5 percent; ‘‘(IV) for fiscal year 2031, 4 percent; and ‘‘(V) for fiscal year 2032 and each subsequent fiscal year, 3.5 percent. ‘‘(iii) For purposes of clause (i): ‘‘(I) EXPANSION STATE.—The term ‘expansion State’ means a State that, beginning on January 1, 2014, or on any date thereafter, elects to provide medical assistance to all individuals described in section 1902(a)(10)(A)(i)(VIII) under the State plan under this title or under a waiver of such plan. ‘‘(II) NON-EXPANSION STATE.—The term ‘non-expan- sion State’ means a State that is not an expansion State. ‘‘(iv) In the case of a tax of an expansion State or unit of local government in such State in effect on the date of enactment of this clause, that applies to a class of health care items or services that is described in para- graph (3) or (4) of section 433.56(a) of title 42, Code of Federal Regulations (as in effect on May 1, 2025), and for which, on such date of enactment, is within the hold harmless threshold (as determined by the Secretary), the applicable percent of net patient revenue attributable to such class that has been so determined shall apply for a fiscal year instead of the applicable percent specified in clause (ii) for the fiscal year.’’. (b) NON-APPLICATION TO TERRITORIES.—The amendments made by this section shall only apply with respect to a State that is 1 of the 50 States or the District of Columbia. (c) IMPLEMENTATION FUNDING.—For the purposes of carrying out the provisions of, and the amendments made by, this section, there are appropriated, out of any monies in the Treasury not otherwise appropriated, to the Administrator of the Centers for Medicare & Medicaid Services, $20,000,000 for fiscal year 2026, to remain available until expended. 42 USC 1396b note. Definitions.