House File 548 - Introduced HOUSE FILE 548 BY FRY , CARLSON , and LUNDGREN A BILL FOR An Act relating to funding of county mental health and 1 disability services by modifying provisions relating to 2 the use of specified excess cash flow funds, and including 3 effective date and retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2763YH (4) 88 md/rh

H.F. 548 Section 1. Section 331.391, subsection 4, Code 2019, is 1 amended to read as follows: 2 4. a. If a region is meeting the financial obligations 3 for implementation of its regional service system management 4 plan for a fiscal year and residual funding is anticipated, 5 the regional administrator shall reserve an adequate amount of 6 unobligated and unencumbered funds for cash flow of expenditure 7 obligations in the next fiscal year. 8 b. For fiscal years beginning July 1, 2017, July 1, 2018, 9 and July 1, 2019, that portion of each region’s cash flow 10 amount either reserved in the combined account or reserved 11 among all separate county accounts under the control of the 12 governing board that exceeds twenty-five percent of the gross 13 expenditures from the combined account or from all separate 14 county accounts under control of the governing board in the 15 fiscal year preceding the fiscal year in progress shall be used 16 in whole or in part to fund the payment of services provided 17 under the regional service system management plan under section 18 331.393 . 19 c. b. Each region shall certify to the department of 20 management on or before December 1, 2020, and each December 1 21 thereafter, the amount of the region’s cash flow amount in the 22 combined account that is attributable to each county within the 23 region based upon each county’s proportionate amount of funding 24 and contributions to the region or other methodology specified 25 in the regional governance agreement or certify the cash flow 26 amount for each separate county account that is under the 27 control of the governing board at the conclusion of the most 28 recently completed fiscal year. 29 d. (1) c. For fiscal years beginning on or after July 30 1, 2021, for each region having a population of one hundred 31 thousand or over, the region’s cash flow amount , either 32 reserved in the region’s combined account or reserved among all 33 separate county accounts under the control of the governing 34 board, shall not exceed twenty thirty percent of the gross 35 -1- LSB 2763YH (4) 88 md/rh 1/ 6

H.F. 548 expenditures from the combined account or from all separate 1 county accounts under control of the governing board for the 2 fiscal year preceding the fiscal year in progress. 3 (2) For fiscal years beginning on or after July 1, 2021, 4 for each region having a population of less than one hundred 5 thousand, the region’s cash flow amount shall not exceed 6 twenty-five percent of the gross expenditures from the combined 7 account or from all separate county accounts under control of 8 the governing board for the fiscal year preceding the fiscal 9 year in progress. 10 Sec. 2. Section 331.424A, subsection 4, Code 2019, is 11 amended to read as follows: 12 4. a. An amount of unobligated and unencumbered funds, 13 as specified in the regional governance agreement entered 14 into by the county under section 331.392 , shall be reserved 15 in the county services fund to address cash flow obligations 16 in the next fiscal year, subject to the limitations of this 17 subsection . 18 b. For fiscal years beginning July 1, 2017, July 1, 2018, 19 and July 1, 2019, that portion of each county’s cash flow 20 amount reserved in the county services fund that exceeds an 21 amount equal to twenty-five percent of the gross expenditures 22 from the county services fund in the fiscal year preceding 23 the fiscal year in progress shall be used in whole or in part 24 to fund the county’s financial obligations for the payment of 25 services provided under the regional service system management 26 plan under section 331.393 . 27 c. b. Each county shall, as part of the financial report 28 required under section 331.403 , certify the county’s cash flow 29 amount in the county services fund at the conclusion of the 30 most recently completed fiscal year. 31 d. c. For each fiscal year beginning on or after July 1, 32 2021, of a county’s cash flow amount maintained in the county 33 services fund or of the region’s cash flow amount attributable 34 to the county under section 331.391, subsection 4 , paragraph 35 -2- LSB 2763YH (4) 88 md/rh 2/ 6

H.F. 548 “c” “b” , an amount equal to the county’s cash flow reduction 1 amount shall be used to fund the county’s financial obligations 2 for the payment of services provided under the regional service 3 system management plan under section 331.393 . 4 e. d. (1) For each fiscal year beginning on or after July 5 1, 2021, each county’s cash flow reduction amount shall be 6 determined as follows and shall result in a reduction of the 7 county budgeted amount determined pursuant to subsection 9 : 8 (1) For each county located in a region having a population 9 of one hundred thousand or over, the county’s cash flow 10 reduction amount equals equal to the sum of the county’s cash 11 flow amount in the county services fund plus the most recent 12 amount certified by the region for the county under section 13 331.391, subsection 4 , paragraph “c” “b” , minus twenty thirty 14 percent of the gross expenditures from the county services 15 fund in the fiscal year preceding the fiscal year in progress. 16 However, the cash flow reduction amount shall not be less than 17 zero and shall not exceed the county budgeted amount determined 18 under subsection 9 prior to any reduction resulting from the 19 cash flow reduction amount. 20 (2) For each county located in a region having a population 21 of less than one hundred thousand, the county’s cash flow 22 reduction amount equals the sum of the county’s cash flow 23 amount in the county services fund plus the most recent amount 24 certified by the region for the county under section 331.391, 25 subsection 4 , paragraph “c” , minus twenty-five percent of the 26 gross expenditures budgeted from the county services fund for 27 the fiscal year in progress. However, the cash flow reduction 28 amount shall not be less than zero and shall not exceed the 29 county budgeted amount determined under subsection 9 prior to 30 any reduction resulting from the cash flow reduction amount. 31 For the applicable fiscal years, each county’s cash flow 32 reduction amount calculated pursuant to this paragraph shall 33 result in a reduction of the county budgeted amount determined 34 pursuant to subsection 9. 35 -3- LSB 2763YH (4) 88 md/rh 3/ 6

H.F. 548 Sec. 3. COUNTY BUDGET AMENDMENT AND RECERTIFICATION. 1 1. To the extent necessary to implement the provisions 2 of this Act, a county may amend that portion of the county’s 3 budget related to cash flow amounts in the county mental health 4 and disability services fund for the fiscal year beginning July 5 1, 2018. 6 2. If this Act takes effect on or after March 15, 2019, 7 notwithstanding section 24.17, for the fiscal year beginning 8 July 1, 2019, a county may recertify the county’s budget as 9 necessary to implement the provisions of this Act. A budget 10 recertified pursuant to this section must be recertified 11 in duplicate to the county auditor not later than thirty 12 days after the effective date of this Act, and protests to 13 the budget shall be filed not later than ten days after the 14 county’s budget is recertified. 15 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate 16 importance, takes effect upon enactment. 17 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 18 retroactively to July 1, 2018, for fiscal years beginning on 19 or after that date. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 Current Code section 331.391(4) provides that if a region 24 is meeting the financial obligations for implementation of 25 its regional service system management plan for a fiscal 26 year and residual funding is anticipated, the regional 27 administrator shall reserve an adequate amount of unobligated 28 and unencumbered funds for cash flow of expenditure obligations 29 in the next fiscal year. Additionally, for fiscal years 30 beginning July 1, 2017, July 1, 2018, and July 1, 2019, that 31 portion of each mental health region’s cash flow amount that 32 exceeds 25 percent of the gross expenditures from the combined 33 account or from all separate county accounts in the fiscal year 34 preceding the fiscal year in progress shall be used in whole 35 -4- LSB 2763YH (4) 88 md/rh 4/ 6

H.F. 548 or in part to fund the payment of services provided under the 1 regional service system management plan. This bill strikes the 2 requirement that those excess amounts be used in that manner 3 for those fiscal years. 4 Under current law, for fiscal years beginning on or after 5 July 1, 2021, based on certain population thresholds, each 6 region’s cash flow amount is limited to 20 or 25 percent of 7 the gross expenditures from the combined account or from all 8 separate county accounts under control of the governing board 9 for the fiscal year preceding the fiscal year in progress. The 10 bill removes all population thresholds and limits each region’s 11 cash flow amount to 30 percent. 12 The bill makes similar changes to provisions governing the 13 cash flow amounts held and used by individual counties within 14 each region. The bill also modifies the calculation of each 15 county’s cash flow reduction amount under Code section 331.424A 16 for fiscal years beginning on or after July 1, 2021. An amount 17 equal to the county’s cash flow reduction amount is required 18 to be used to fund the county’s financial obligations for 19 the payment of services provided under the regional service 20 system management plan. Under the bill, the county cash flow 21 reduction amount equals the sum of the county’s cash flow 22 amount in the county services fund plus the most recent amount 23 certified by the region for the county, minus 30 percent of the 24 gross expenditures from the county services fund in the fiscal 25 year preceding the fiscal year in progress. 26 The bill provides that to the extent necessary to implement 27 the provisions of the bill, a county may amend that portion of 28 the county’s budget related to cash flow amounts in the county 29 mental health and disability services fund for the fiscal year 30 beginning July 1, 2018. The bill also provides that if the 31 bill takes effect on or after March 15, 2019, notwithstanding 32 Code section 24.17, for the fiscal year beginning July 1, 2019, 33 a county may recertify the county’s budget as necessary to 34 implement the provisions of the bill. 35 -5- LSB 2763YH (4) 88 md/rh 5/ 6

H.F. 548 The bill takes effect upon enactment and applies 1 retroactively to July 1, 2018, for fiscal years beginning on 2 or after that date. 3 -6- LSB 2763YH (4) 88 md/rh 6/ 6