ADMINISTRATIVE RULES REVIEW COMMITTEE Rules Digest -- November 1999 Scheduled for committee review - December 14, 1999 - Room #19 For further information, please contact Joe Royce, Legal Counsel, Administrative Rules Review Committee

HIGHLIGHTS IN THIS ISSUE:

CORRECTIONS DEPARTMENT Inmate telephone commissions

CORRECTIONS DEPARTMENT Violator programs

ECONOMIC DEVELOPMENT DEPARTMENT Self-employment loan program (SELP)

EDUCATION DEPARTMENT Standards for practitioner preparation

EDUCATION DEPARTMENT Beginning teacher induction,

EDUCATION DEPARTMENT Supplementary weighting

EDUCATION DEPARTMENT National board certification

DEPARTMENT OF GENERAL SERVICES Newspaper publication

HUMAN SERVICES DEPARTMENT Various emergency rules

INSURANCE DIVISION Health coverage: external reviews

IOWA FINANCE AUTHORITY Low-income housing tax credits,

LIBRARY DIVISION Iowa regional library system

PERSONNEL DEPARTMENT Medical accounts for state employees

RACING & GAMING DIVISION Video games at racetracks

SCHOOL BUDGET REVIEW COMMITTEE On-time funding

STATE PUBLIC DEFENDER Indigent defense

For security reasons, all calls to corrections inmates are operator assisted toll calls_perhaps the most expensive type of telephone call; the telephone company rebates a portion of the revenue from those calls back to the department, where the money is put into a fund "for the benefit of inmates"; this means educational, vocational or recreational programs. Although not mandated, institutions are encouraged to use the funds to promote the health and welfare of inmates. This has been a perennial issue since 1997. The current provisions have been in effect since 1998. This fund is a significant source of revenue; in fiscal year 2000 the toll calls will generate over $900,000 in income and the program will expend over $2.5 million.

Under the existing rule 25% of each institutions funds would be held in "reserve". This money is be disbursed by a committee made up of the director, the deputy director and a rotating member, who is to be the warden of one of the institutions. In 1999 the legislature enacted a provision requiring that all disbursements be approved by a committee made up of department representatives along with the citizens aide. This provision was vetoed because of the inherent conflict in having a legislative official perform an executive function. Nevertheless, this idea has merit--some oversight should be exercised over all the disbursements and should include someone from someone outside the department. The department should consider adding an "outside" member, possibly a representative from the Department of Management, and possibly expanding the role of the committee to reviewing all expenditures.

The proposed change also eliminates the fixed percentage. Apparently this will allow each institution to keep as much of the telephone money as it can justify, only unallocated funds will be forwarded to the departments' central reserve. However, there is no guarantee that the disbursement committee will approve these requests and there is no limit to the amount of money that can be transferred to the central fund. Each institutional request will be evaluated by the deputy for that particular region.

The change also clarifies that telephone funds can be used: "only for recurring and nonrecurring projects of direct benefit to offenders". This should prevent using telephone money for maintenance and repair projects that should properly be paid by the department. It would be helpful to add examples of the types of projects that are eligible and ineligible.

This program provides a intensive and highly structured treatment program to divert offenders, who have violated the terms and conditions of their correctional supervision, from long-term incarceration or return to incarceration. The department provides these programs at two institutions: 30 female beds at the Iowa correctional institution for women (ICIW) at Mitchellville and 80 male beds at the correctional release center (CRC) at Newton. The changes now filed on an emergency basis include reducing the capacity level at the Mitchellville program from 60 to 30 and the Newton program from 100 to 80 and extending the length of legal commitment from 60 days up to six months.

These programs provide up to a six-month confinement for probation, parole, and work release offenders that have violated conditions of supervision and would otherwise have been returned to or sent to prison. The program has been in place for a number of years.

The self-employment loan program (SELP) operates in coordination with the job training partnership program and the entrepreneurship training program. The purpose of the SELP is to provide loans to low-income persons and persons with a disability to establish or expand small business ventures. The department emergency adopts two changes to this program. The first raises the eligibility criteria from 125% of the poverty guideline to 200%. The poverty guideline is set out in the following chart:

The rule change means that each of these income levels double for determining eligibility. The amendment will also eliminate the current ceiling of $2,500 in annual assistance. Note that training funds are paid to the training institution, not to the business itself.

The department implements new rules relating to teacher preparation at Iowa's colleges and universities. All such programs are approved by the state board of education. These rules will be effective in August, 2001.

Compliance with these standards will be by self-evaluation of the participating institutions. Applicants for approval will be visited by a team of department employees. Approval is for five years. Once approved, graduates of these institutions will be issued the appropriate license and endorsements.

The proposal contains a fairly detailed set of standards for the evaluation of these programs. The standards fall under a number of specific categories:

• Staff support and resources;
• Racial, ethnic and gender diversity;
• Racial, ethnic and cultural diversity in both faculty and student body;
• Faculty performance and ongoing development;
• Clinical practice;
• Student performance standards;

These six categories embrace some 50 individual standards.

These provisions initially appeared in September, filed on an emergency basis. They implement Senate File 464, section 23, which mandates that the department coordinate a beginning teacher induction program to promote excellence in teaching, build a supportive environment within school districts, increase the retention of promising beginning teachers, and promote the personal and professional well-being of teachers. This program involves assigning each new teacher a mentor, who is a licensed teacher with at least four years experience and specific training in mentoring. Under the program a mentor is eligible for $500 per semester.

Under these rules each AEA must prepare a model program and make it available to all schools within its area. Any district wishing to participate must prepare a plan outlining the organization and operation of the program. The rules do not detail the evaluation process, the criteria for evaluating application or the make-up of the review team. The process to be followed in determining the amount of funds to be approved for this competitive program grant will be established in the grant application. The review criteria and point allocation for each criterion will also be described in the application. This material should definitely be set out in the rule itself.

The department adopts rules describing its procedures for supplementary weighting; these rules replace a September "emergency" filing. Procedures have been in operation for some time, but now are being adopted through the rule-making process. Supplementary weighting adds a weighting for each resident student in a district who is enrolled in an eligible class:

• taught by a teacher employed by another public school district, or;
• taught by a teacher employed jointly with another public school district, or;
• sent to and enrolled in an eligible class in another school district or sent to and enrolled in an eligible community college class.

The supplementary weighting for each eligible class is calculated by multiplying the fraction of a school year that class represents times the number of eligible resident students enrolled in that class times the weighting factor of 48/100. ICN courses do not qualify for this program.

These revisions set out two financial incentive pilot programs for Iowa teachers receiving National Board Certification (NBC) and provides guidelines to administer both pilot programs. They are based on the statutory changes made by House File 766. The two pilots replace the current program which provides an annual $10000 award for up to five years. In general, National Board Certification is available to teachers nationwide and requires candidates to demonstrate their teaching practice as measured against high and rigorous standards. The goal is to provide skilled teachers who enhance the educational experience of their students and motivate fellow teachers towards excellence in classroom teaching.

If funds are appropriated by the legislature, each NBC teacher can qualify for one of the following annual awards. If in any fiscal year the funds appropriated are insufficient to pay the maximum amount of the annual awards to each eligible teacher or the number of teachers eligible to receive annual awards exceed 1,100 individuals, the funds is prorated among all eligible teachers.

• $5,000 annual award. An eligible teacher who receives NBC certification prior to May 1, 2000, will receive an annual award of up to $5,000 per year or a prorated amount for a period of ten years or until the teacher's total state annual award amount reaches $50,000, whichever occurs first. This is in essence the current program.
• $2,500 annual award. An eligible teacher who receives NBC certification after May 1, 2000, will receive an annual award of up to $2,500 per year or a prorated amount for a maximum period of ten years.

Iowa Code section 618.11 requires the superintendent of printing to annually review the allowable fees for newspapers publishing official publications. Earlier, the superintendent set the 1999 rate at 31 cents per line for the first publication, 21 cents for subsequent publications. For 2000 the rate was set at 33 cents and 23 cents respectively. For 2001 the rate is set at 34 cents and 23 cents respectively

Under the State Mandates Act, §25B.6 this provision must be accompanied by a fiscal note detailing the impact this rule will have on local government. The absence of such a statement in 1999 gave rise to serious controversy. The current rulemaking contains the required statement. That statement reveals an increased cost of 3%. The statement notes that the government rate is about 46% of the retail rate.

These amendments implement the annual adjustment in the maximum amount of resources to be attributed to the community spouse and the amount used for determining the community spouse's maintenance needs and the following changes to the State Supplementary Assistance Program:

• Pass along the January 1, 2000, Supplemental Security Income (SSI) cost-of-living adjustment increases.
• Increase the personal needs allowance for residents of residential care facilities.
• Increase the maximum and flat State Supplementary Assistance (SSA) residential care facility (RCF) and in-home health related care (IHHRC) reimbursement rate by 1.8 percent. The maximum RCF reimbursement rate will be increased from $23.83 to $24.26 per day. The flat RCF reimbursement rate will be increased from $17.05 to $17.36 per day. The monthly IHHRC reimbursement rate will be increased from $458.20 to $466.49.

Senate File 276 allows health insurance enrollees to obtain external review of coverage decisions made by the insurer. Under the Act an insurer must notify an enrollee in writing of the right to have an external review of the coverage decision and include a copy of the final adverse decision. That notice must contain the following:

• That the enrollee was covered by the carrier at the time the service or treatment was proposed;
• That the enrollee has been denied coverage based on a determination by the carrier that the proposed service or treatment does not meet the definition of medical necessity as defined in the enrollee's evidence of coverage;
• That the enrollee or the enrollee's treating health care provider acting on behalf of the enrollee has exhausted all internal appeal mechanisms provided under the carrier's contract; and
• Information on how the enrollee or the enrollee's treating health care provider can request an external review.

The enrollee, or the enrollee's care provider, may file a written request for external review of the coverage decision with the insurance division. The request must be filed within sixty days of the receipt of the coverage decision. The request must be accompanied by a $25 fee. The insurer may contest that request.

If the division determines that external review is appropriate, the division will select an independent reviewer, chosen from a list {up to two names} provided by the insurers. The reviewer must be a health care professional, and must be an expert in the treatment of the medical condition under review. The reviewer must adopt policies and procedures detailing the review process and establishing a quality assurance program. The reviewer cannot be in any way tied or associated with the insurer. The reviewer shall issue an opinion within 30 days from the receipt of the request.

The authority completes a complete revision of its low-income housing tax credit program {Chapter 12}. The authority's rulemaking obligation is specific in Iowa Code §16.52(2), which provides:

2. The authority shall adopt rules and allocation procedures which will ensure the maximum use of available tax credits in order to encourage development of low-income housing in the state. The authority shall consider the following factors in the adoption and application of the allocation rules:
a. Timeliness of the application.
b. Location of the proposed housing project.
c. Relative need in the proposed area for low-income housing.
d. Availability of low-income housing in the proposed area.
e. Economic feasibility of the proposed project.
f. Ability of the applicant to proceed to completion of the project in the calendar year for which the credit is sought.
The authority shall adopt rules specifying the application procedure and the allowance of low-income housing credits under the state housing credit ceiling.

This program is actually established by Section 42 of the federal Internal Revenue Code. Iowa Code §16.52 provides that the finance authority is the housing credit agency for the allowance of low-income housing credit under the state housing credit ceiling established by the federal government; the ceiling is population based at the rate of $1.25 per person. Iowa's ceiling for 1999 is $3.6 million in credits. Traditionally, developers submitted application to construct new rental housing projects or to rehabilitate existing buildings. At least 40% of the units must be rented to households earning less than 60% of the median income for a minimum period of 15 years. The applicants receiving an award of tax credits receive ten years of federal income tax benefits, which they sell to investors for approximately 70% to 75% of their total value. The stated purpose of the program is to provide a tax-credit incentive to developers to construct, acquire or substantially rehabilitate affordable rental housing units throughout the state for low-income Iowans. Individuals or families must have an income that is at 60 percent or below the area median gross income. Ten percent of the funds are set-aside for non-profit projects.

The rules set out eight objectives:

• To assist in the creation of affordable housing units for individuals and families at the lowest income levels for the longest periods of time.
• To assist in the creation of affordable housing units in areas of the greatest needs for such housing.
• To encourage the preservation and rehabilitation of existing affordable housing units.
• To encourage the construction of new affordable housing units.
• To encourage the efficient use, leveraging, and coordination of all funding and incentives to finance low-income development.
• To encourage the efficient use of tax credit financing to leverage other forms of public financing.
• To produce the highest number of low-income housing units in the state on an annual basis.
• To assist in the creation of quality, decent, safe and affordable housing units for limited income individuals and families at reasonable costs.

The division completes action on a new chapter which describes the organization and operation of the Iowa regional library system, which consists of seven regional libraries. Each regional library is governed by an elected board of trustees. Two members from each board make up the 14 member regional executive board, which handles the duties of the regional system. The proposal also establishes regional library service standards. The libraries are located in Clive, Cedar Rapids, Mason City, Waterloo, Sioux City, Davenport and Council Bluffs.

All public libraries within each region are independent entities. The regional libraries act in a consultative and advisory role, providing information resources, continuing education, technological assistance and interlibrary loan services.

This filing was initially published as a notice in September. Federal tax law allows individuals to set aside pre-tax dollars to be spent on health care. 1999 legislation allowed the department to offer this option to state employees. Under this plan state employees could authorize the withholding of up to $5000 each year from pre-tax income; which is placed in a special trust account. Participating employees could them submit claims for reimbursement of necessary medical expenses, including co-payments. Any money not expended from the account and the end of the fiscal year is forfeited by the employee. This forfeited money, roughly estimated at around $37,000, is used to engage a third-party administrator for the program.

The division proposes twenty-five various amendments to Iowa's gambling regulations. Item twenty-four contains a significant change relating to video games at racetracks. Authorized gambling games at racetracks specifically does not include table games or video machines {Iowa Code §99F.1(9)}. The statute is a blanket prohibition, it does not limit the definition of video machine. The current rule implementing this provision is now being amended to read:

This provision was originally placed under notice in September; it implements 1999 Iowa Acts, House File 147. The legislation contains an appropriation for school districts which have a higher actual enrollment than the budgeted enrollment for that year. Section two of the Act states in part:

"The school budget review committee shall consider the relative increase in enrollment on a district-by-district basis, in determining whether to approve the request, and shall determine the amount of additional funding to be provided if the request is granted."

Applications for on-time funding must be received by November 1st. The funding requested is determined by the increased enrollment multiplied by the state cost per pupil. House File 147 appropriates up to four million dollars to pay additional funding authorized under this Act, paid to school districts in the same manner as other state aids.

If the total amount of the requests for on-time funding approved by the Committee exceeds the appropriation to the department for this program, the appropriation shall be prorated such that each school district approved for on-time funding shall receive an amount of on-time funding equal to the percentage that the on-time funding to be provided to the district bears to the total amount of on-time funding to be provided to all districts receiving approval.

These provisions, initially filed on an emergency basis in June; implement 1999 Iowa Acts, Senate File 451, which revises the procedures regarding contracts and claims for indigent defense legal services and adjusts the eligibility guidelines for the appointment of counsel to indigent clients in specific cases. The Act provides that the public defender will establish fee limitations for particular categories of cases, reviewed at least every three years. The public defender must also establish a procedure for the submission of all claims for payment of indigent defense costs, including the submission of interim claims.

Any Iowa attorney is eligible to contract with the public defender to provide indigent defense; however, the public defender is not obligated to offer a contract to any specific applicant. The rates are $60 per hour for class "A" felonies; $55 per hour for Class "B"; and $50 per hour for all other work. Caps are also established for various categories. In evaluating applicants the public defender may confer with judges, attorneys and others concerning competence, effectiveness, trustworthiness of the applicant. The public defender may meet with, or obtain information from the applicant to determine the applicants qualifications and ability and to establish the types of cases the applicant will handle and the geographic area. An applicant who is not offered a contract may appeal that decision through the contested case process.

The rules also establish eligibility criteria for legal services. As provided in Iowa Code §815.9 a person is entitled to an appointed attorney if the person has an income level at or below one hundred twenty-five percent of the United States poverty level, unless the court determines that the person is able to pay for the cost of an attorney. Up to 200% of the guideline the court may authorize payment if the cost would create a substantial hardship. The applicant must provide an "Affidavit of Financial Status/Application for Appointment of Counsel and Order" form, which provides:

• That the information is provided under penalty of perjury.
• That the information accurately represents the number of family members who are supported by or live with the applicant.
• That the information accurately represents the total gross income received or reasonably anticipated to be received by the applicant.
• That the information accurately represents the gross income of the household in which the applicant lives.
• That the information accurately represents the total assets owned, in whole or in part, by the applicant.
• That the information accurately represents the total monthly debts and expenses for which the applicant is responsible.

That the information, in criminal cases contains a statement of the charge against the defendant. In juvenile or civil cases, a statement of the nature of the proceedings shall be included.

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