(iii) Exception.--If a State does not reserve funds under paragraph (3) for a fiscal year, then--
(I) in the case of a State that is not described in clause (ii), for fiscal year 2005 or 2006, clause (i) shall be applied by substituting `9.0 percent' for `10 percent'; and
(II) in the case of a State that is described in clause (ii), for fiscal year 2005 or 2006, clause (ii) shall be applied by substituting `9.5 percent' for `10.5 percent'.
