House File 650 - Introduced HOUSE FILE 650 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 194) A BILL FOR An Act relating to the funding of mental health and disability 1 services by modifying the mental health and disability 2 services property tax levy, providing for the expenditure 3 and deposit of certain county hospital property tax 4 revenues, requiring the use of specified excess cash flow 5 funds, and including effective date and applicability 6 provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 2688HV (3) 87 md/hb/rh/rj

H.F. 650 Section 1. Section 222.73, subsection 2, paragraph b, Code 1 2017, is amended to read as follows: 2 b. The per diem costs billed to each mental health and 3 disability services region shall not exceed the per diem costs 4 billed to the county region in the fiscal year beginning July 5 1, 1996 2016 . However, the per diem costs billed to a county 6 may be adjusted for a fiscal year to reflect increased costs 7 to the extent of the percentage increase in the statewide per 8 capita expenditure target amount, if any per capita growth 9 amount is authorized by the general assembly for that fiscal 10 year in accordance with section 331.424A . 11 Sec. 2. Section 230.20, subsection 2, paragraph b, Code 12 2017, is amended to read as follows: 13 b. The per diem costs billed to each mental health and 14 disability services region shall not exceed the per diem costs 15 billed to the county region in the fiscal year beginning July 16 1, 1996 2016 . However, the per diem costs billed to a mental 17 health and disability services region may be adjusted annually 18 to reflect increased costs, to the extent of the percentage 19 increase in the statewide per capita expenditure target amount, 20 if any per capita growth amount is authorized by the general 21 assembly for the fiscal year in accordance with section 426B.3 . 22 Sec. 3. Section 331.391, subsection 4, Code 2017, is amended 23 by striking the subsection and inserting in lieu thereof the 24 following: 25 4. a. If a region is meeting the financial obligations 26 for implementation of its regional service system management 27 plan for a fiscal year and residual funding is anticipated, 28 the regional administrator shall reserve an adequate amount of 29 unobligated and unencumbered funds for cash flow of expenditure 30 obligations in the next fiscal year. 31 b. For fiscal years beginning July 1, 2017, July 1, 2018, 32 and July 1, 2019, that portion of each region’s cash flow 33 amount reserved in the combined account or among all separate 34 county accounts under the control of the governing board that 35 -1- LSB 2688HV (3) 87 md/hb/rh/rj 1/ 17

H.F. 650 exceeds twenty-five percent of the gross expenditures from the 1 combined account or from all separate county accounts under 2 control of the governing board in the fiscal year preceding 3 the fiscal year in progress shall be used in whole or in part 4 to fund the payment of services provided under the regional 5 service system management plan under section 331.393. 6 c. Each region shall certify to the department of management 7 on or before December 1, 2020, and each December 1 thereafter, 8 the amount of the region’s cash flow amount in the combined 9 account that is attributable to each county within the region 10 based upon each county’s proportionate amount of funding and 11 contributions to the region or other methodology specified in 12 the regional governance agreement or certify the cash flow 13 amount for each separate county account that is under the 14 control of the governing board at the conclusion of the most 15 recently completed fiscal year. 16 d. (1) For fiscal years beginning on or after July 1, 2021, 17 for each region having a population of one hundred thousand or 18 over, the region’s cash flow amount shall not exceed twenty 19 percent of the gross expenditures from the combined account 20 or from all separate county accounts under control of the 21 governing board for the fiscal year preceding the fiscal year 22 in progress. 23 (2) For fiscal years beginning on or after July 1, 2021, 24 for each region having a population of less than one hundred 25 thousand, the region’s cash flow amount shall not exceed 26 twenty-five percent of the gross expenditures from the combined 27 account or from all separate county accounts under control of 28 the governing board for the fiscal year preceding the fiscal 29 year in progress. 30 Sec. 4. Section 331.424A, subsection 1, Code 2017, is 31 amended by striking the subsection and inserting in lieu 32 thereof the following: 33 1. For the purposes of part 6 of division III of this 34 chapter, this section, and chapter 426B, unless the context 35 -2- LSB 2688HV (3) 87 md/hb/rh/rj 2/ 17

H.F. 650 otherwise requires: 1 a. “Base expenditure amount” is an amount determined for 2 each county that is the lesser of the following amounts: 3 (1) The county’s base year expenditures for mental health 4 and disabilities services, as defined in section 331.424A, 5 subsection 1, paragraph “a” , Code 2017. 6 (2) The product of the statewide per capita expenditure 7 target amount multiplied by the county’s population for the 8 fiscal year beginning July 1, 2017. 9 b. “Cash flow reduction amount” means the amount calculated 10 under subsection 4 and used to reduce a county budgeted amount 11 under subsection 9 for fiscal years beginning on or after July 12 1, 2021. 13 c. “County budgeted amount” means the amount calculated 14 under subsection 9 and certified for levy under subsection 6. 15 d. “County services fund” means a county mental health and 16 disabilities services fund created pursuant to this section. 17 e. “Population” means the population shown by the latest 18 preceding certified federal census or the latest applicable 19 population estimate issued by the federal government, whichever 20 is most recent and available as of July 1 of the fiscal year 21 preceding the fiscal year to which the funding calculations 22 apply. 23 f. “Region” means a mental health and disability services 24 region formed in accordance with section 331.389. 25 g. “Regional per capita expenditure target amount” means the 26 amount determined in subsection 8 for each region. 27 h. “Statewide per capita expenditure target amount” means 28 forty-seven dollars and twenty-eight cents. 29 Sec. 5. Section 331.424A, subsection 4, Code 2017, is 30 amended by striking the subsection and inserting in lieu 31 thereof the following: 32 4. a. An amount of unobligated and unencumbered funds, 33 as specified in the regional governance agreement entered 34 into by the county under section 331.392, shall be reserved 35 -3- LSB 2688HV (3) 87 md/hb/rh/rj 3/ 17

H.F. 650 in the county services fund to address cash flow obligations 1 in the next fiscal year, subject to the limitations of this 2 subsection. 3 b. For fiscal years beginning July 1, 2017, July 1, 2018, 4 and July 1, 2019, that portion of each county’s cash flow 5 amount reserved in the county services fund that exceeds an 6 amount equal to twenty-five percent of the gross expenditures 7 from the county services fund in the fiscal year preceding 8 the fiscal year in progress shall be used in whole or in part 9 to fund the county’s financial obligations for the payment of 10 services provided under the regional service system management 11 plan under section 331.393. 12 c. Each county shall as part of the financial report 13 required under section 331.403 certify the county’s cash flow 14 amount in the county services fund at the conclusion of the 15 most recently completed fiscal year. 16 d. For each fiscal year beginning on or after July 1, 17 2021, of a county’s cash flow amount maintained in the county 18 services fund or of the region’s cash flow amount attributable 19 to the county under section 331.391, subsection 4, paragraph 20 “c” , an amount equal to the county’s cash flow reduction amount 21 shall be used to fund the county’s financial obligations for 22 the payment of services provided under the regional service 23 system management plan under section 331.393. 24 e. For each fiscal year beginning on or after July 1, 2021, 25 each county’s cash flow reduction amount shall be determined as 26 follows and shall result in a reduction of the county budgeted 27 amount determined pursuant to subsection 9: 28 (1) For each county located in a region having a population 29 of one hundred thousand or over, the county’s cash flow 30 reduction amount equals the sum of the county’s cash flow 31 amount in the county services fund plus the most recent amount 32 certified by the region for the county under section 331.391, 33 subsection 4, paragraph “c” , minus twenty percent of the gross 34 expenditures from the county services fund in the fiscal year 35 -4- LSB 2688HV (3) 87 md/hb/rh/rj 4/ 17

H.F. 650 preceding the fiscal year in progress. However, the cash flow 1 reduction amount shall not be less than zero and shall not 2 exceed the county budgeted amount determined under subsection 9 3 prior to any reduction resulting from the cash flow reduction 4 amount. 5 (2) For each county located in a region having a population 6 of less than one hundred thousand, the county’s cash flow 7 reduction amount equals the sum of the county’s cash flow 8 amount in the county services fund plus the most recent amount 9 certified by the region for the county under section 331.391, 10 subsection 4, paragraph “c” , minus twenty-five percent of the 11 gross expenditures budgeted from the county services fund for 12 the fiscal year in progress. However, the cash flow reduction 13 amount shall not be less than zero and shall not exceed the 14 county budgeted amount determined under subsection 9 prior to 15 any reduction resulting from the cash flow reduction amount. 16 Sec. 6. Section 331.424A, subsections 6 and 7, Code 2017, 17 are amended to read as follows: 18 6. For each fiscal year, the county shall certify a levy 19 for payment of services. For each fiscal year, county revenues 20 from taxes imposed by the county credited to the county 21 services fund shall not exceed an amount equal to the county 22 budgeted amount of base year expenditures for mental health 23 and disability services for the fiscal year . A levy certified 24 under this section is not subject to the appeal provisions of 25 section 331.426 or to any other provision in law authorizing 26 a county to exceed, increase, or appeal a property tax levy 27 limit. 28 7. Appropriations specifically authorized to be made from 29 the mental health and disabilities county services fund shall 30 not be made from any other fund of the county. 31 Sec. 7. Section 331.424A, subsection 8, Code 2017, is 32 amended by striking the subsection and inserting in lieu 33 thereof the following: 34 8. For the fiscal year beginning July 1, 2017, and each 35 -5- LSB 2688HV (3) 87 md/hb/rh/rj 5/ 17

H.F. 650 subsequent fiscal year, the regional per capita expenditure 1 target amount is the sum of the base expenditure amount for all 2 counties in the region divided by the population of the region. 3 However, a regional per capita expenditure target amount shall 4 not exceed the statewide per capita expenditure target amount. 5 Sec. 8. Section 331.424A, Code 2017, is amended by adding 6 the following new subsection: 7 NEW SUBSECTION . 9. For the fiscal year beginning July 1, 8 2017, and each subsequent fiscal year, the county budgeted 9 amount determined for each county shall be the amount necessary 10 to meet the county’s financial obligations for the payment 11 of services provided under the regional service system 12 management plan approved pursuant to section 331.393, not to 13 exceed an amount equal to the product of the regional per 14 capita expenditure target amount multiplied by the county’s 15 population, and, for fiscal years beginning on or after July 1, 16 2021, reduced by the amount of the county’s cash flow reduction 17 amount for the fiscal year calculated under subsection 4, if 18 applicable. 19 Sec. 9. Section 331.432, subsection 3, Code 2017, is amended 20 to read as follows: 21 3. Except as authorized in section 331.477 , transfers 22 of moneys between the county mental health and disabilities 23 services fund created pursuant to section 331.424A and any 24 other fund are prohibited. This subsection does not apply 25 to transfers made pursuant to section 347.7, subsection 1, 26 paragraph “c” . 27 Sec. 10. Section 347.7, subsection 1, Code 2017, is amended 28 by adding the following new paragraph: 29 NEW PARAGRAPH . c. For the fiscal years beginning July 30 1, 2017, July 1, 2018, and July 1, 2019, if a county public 31 hospital is located in a county having a population of two 32 hundred twenty-five thousand or over and having a county 33 budgeted amount for the fiscal year under section 331.424A, 34 subsection 9, equal to the product of the regional per 35 -6- LSB 2688HV (3) 87 md/hb/rh/rj 6/ 17

H.F. 650 capita expenditure target amount multiplied by the county’s 1 population, as those terms are defined in section 331.424A, the 2 board of trustees shall appropriate for payment on July 1 of 3 each such fiscal year from the county public hospital fund to 4 the board of supervisors for deposit in the county services 5 fund created pursuant to section 331.424A, two million eight 6 hundred thousand dollars and the county public hospital shall 7 in each such fiscal year provide care and treatment to patients 8 who are residents of the county and whose costs for such care 9 and treatment would otherwise qualify for payment from the 10 county services fund under section 331.424A, in an amount equal 11 to three million five hundred thousand dollars. 12 Sec. 11. Section 426B.1, subsection 2, Code 2017, is amended 13 to read as follows: 14 2. Moneys shall be distributed from the property tax 15 relief fund to counties for the mental health and disability 16 regional service system for providing county base property tax 17 equivalent equalization payments and the per capita growth 18 amount established pursuant to section 426B.3 mental health and 19 disabilities services , in accordance with the appropriations 20 made to the fund and other statutory requirements. 21 Sec. 12. Section 426B.2, Code 2017, is amended to read as 22 follows: 23 426B.2 Property tax relief fund payments. 24 1. The director of human services shall draw warrants on the 25 property tax relief fund, payable to the county treasurer in 26 the amount due to a county in accordance with section 426B.3 27 statutory requirements , and mail the warrants to the county 28 auditors in July and January of each year. 29 2. As used in this chapter and in section 331.424A , for 30 purposes of population-based funding calculations, “population” 31 means the population shown by the latest preceding certified 32 federal census or the latest applicable population estimate 33 issued by the federal government, whichever is most recent and 34 available as of July 1 of the fiscal year preceding the fiscal 35 -7- LSB 2688HV (3) 87 md/hb/rh/rj 7/ 17

H.F. 650 year to which the funding calculations apply. 1 Sec. 13. REPEAL. Section 426B.3, Code 2017, is repealed. 2 Sec. 14. COUNTY BUDGET RECERTIFICATION. If this Act takes 3 effect on or after March 15, 2017, notwithstanding section 4 24.17, for the fiscal year beginning July 1, 2017, a county may 5 recertify the county’s budget as necessary to implement the 6 provisions of this Act. A budget recertified pursuant to this 7 section must be recertified in duplicate to the county auditor 8 not later than thirty days after the effective date of this 9 Act, and protests to the budget shall be filed not later than 10 ten days after the county’s budget is recertified. 11 Sec. 15. MENTAL HEALTH AND DISABILITY SERVICES FUNDING —— 12 FISCAL VIABILITY REVIEW DURING 2018 LEGISLATIVE INTERIM. The 13 legislative council is requested to authorize a study 14 committee to analyze the viability of the mental health and 15 disability services funding provisions in this Act, including 16 the methodology used to calculate and determine the base 17 expenditure amount, the county budgeted amount, the regional 18 per capita expenditure target amount, the statewide per 19 capita expenditure target amount, and the cash flow reduction 20 amount. The study committee shall consist of five members of 21 the senate, three of whom shall be appointed by the majority 22 leader of the senate and two of whom shall be appointed by 23 the minority leader of the senate, and five members of the 24 house of representatives, three of whom shall be appointed by 25 the speaker of the house of representatives and two of whom 26 shall be appointed by the minority leader of the house of 27 representatives. The study committee shall meet during the 28 2018 legislative interim to make appropriate recommendations 29 for consideration during the 2019 legislative session in a 30 report submitted to the general assembly by January 15, 2019. 31 Sec. 16. WORKGROUP —— MENTAL HEALTH, DISABILITY, AND 32 SUBSTANCE USE DISORDER SERVICES. The department of human 33 services shall convene a stakeholder workgroup to make 34 recommendations relating to the delivery of, access to, and 35 -8- LSB 2688HV (3) 87 md/hb/rh/rj 8/ 17

H.F. 650 coordination and continuity of mental health, disability, and 1 substance use disorder services and supports for individuals 2 with mental health, disability, and substance use disorder 3 needs, particularly for individuals with complex mental 4 health, disability, and substance use disorder needs. The 5 workgroup shall be comprised of representatives from community 6 mental health centers, law enforcement agencies, the national 7 alliance on mental illness, the Iowa hospital association, 8 the judicial system, mental health and disability services 9 regions, substance abuse treatment providers, the department 10 of public health, and other entities as appropriate. The 11 report shall incorporate selected strategies from community 12 service plans submitted by the mental health and disability 13 services regions to the department of human services pursuant 14 to this Act to address services and supports for individuals 15 with mental health, disability, and substance use disorder 16 needs, particularly for individuals with complex mental health, 17 disability, and substance use disorder needs. The workgroup 18 shall submit a report with recommendations to the governor and 19 general assembly by December 15, 2017. 20 Sec. 17. REGIONAL WORKGROUP —— MENTAL HEALTH AND DISABILITY 21 REGIONAL SERVICES. 22 1. The regional administrator of each mental health 23 and disability services region shall convene a stakeholder 24 workgroup to meet on a regular basis, beginning July 1, 2017, 25 to create collaborative policies and processes relating to 26 the delivery of, access to, and continuity of services for 27 individuals with mental health, disability, and substance use 28 disorder needs, particularly for individuals with complex 29 mental health, disability, and substance use disorder needs. 30 Each region shall review resources currently available 31 including the reduction of mental health and disability 32 services fund balances and options for combining funding from 33 different sources, particularly funding available pursuant 34 to Tit. XIX of the federal Social Security Act, and shall 35 -9- LSB 2688HV (3) 87 md/hb/rh/rj 9/ 17

H.F. 650 consider providing additional services and supports in their 1 own region or partnering with one or more regions to provide 2 additional services and supports to serve such individuals. 3 The workgroup shall be comprised of representatives from 4 hospitals, the judicial system, law enforcement agencies, 5 managed care organizations, mental health providers, crisis 6 service providers, substance abuse providers, the national 7 alliance on mental illness, and other entities as appropriate. 8 2. Each mental health and disability services region 9 shall submit a community service plan to the department of 10 human services by October 16, 2017. The plan shall include 11 planning and implementation time frames and assessment tools 12 for determining the effectiveness of the plan in achieving the 13 department’s identified outcomes for success in the delivery 14 of, access to, and coordination and continuity of services and 15 supports for individuals with mental health, disability, and 16 substance use disorder needs, particularly for individuals with 17 complex mental health, disability, and substance use disorder 18 needs, and financial strategies to support the plan including 19 combined funding from different sources, particularly funding 20 available pursuant to Tit. XIX of the federal Social Security 21 Act. The plan shall address how mental health and disability 22 services regions will spend down mental health and disabilities 23 services fund balances remaining from the fiscal year ending 24 June 30, 2016. 25 3. The regional administrator of each mental health and 26 disability services region shall enter into a memorandum of 27 understanding with each of Iowa’s managed care organizations 28 that delineates the roles and responsibilities of the region 29 and the managed care organizations in relation to the plan 30 developed by the region to address the services and supports 31 necessary to meet the needs of individuals with mental health, 32 disability, and substance use disorder needs, particularly 33 individuals with complex mental health, disability, and 34 substance use disorder needs. 35 -10- LSB 2688HV (3) 87 md/hb/rh/rj 10/ 17

H.F. 650 4. In addition to the requirements specified in subsections 1 2 and 3, the eastern Iowa mental health and disability 2 services region shall consult with the department to complete 3 an analysis of the region’s mental health, disability, and 4 substance use disorder service and support concerns and 5 identify funding opportunities to address such areas of concern 6 in the region, and shall include information in the region’s 7 plan that includes the concerns, strategies to address the 8 concerns, and the budget. 9 5. The department shall submit a report to the governor 10 and general assembly by December 3, 2018, providing a summary 11 of services implemented by each mental health and disability 12 services region and an assessment of each region in achieving 13 the department’s identified outcomes for success. 14 Sec. 18. SAVINGS PROVISION. This Act, pursuant to section 15 4.13, does not affect the operation of, or prohibit the 16 application of, prior provisions of law amended or repealed 17 by this Act, or rules adopted under chapter 17A to administer 18 prior provisions of law amended or repealed by this Act, for 19 fiscal years beginning before July 1, 2017. 20 Sec. 19. EFFECTIVE UPON ENACTMENT. This Act, being deemed 21 of immediate importance, takes effect upon enactment. 22 Sec. 20. APPLICABILITY. This Act applies to fiscal years 23 beginning on or after July 1, 2017. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill relates to the funding of mental health and 28 disability services by modifying the mental health and 29 disability services property tax levy, providing for the 30 expenditure and deposit of certain county hospital property tax 31 revenues, and requiring the use of specified excess cash flow 32 funds. 33 Under current law, for the fiscal period beginning July 1, 34 2013, and ending June 30, 2018, county revenues from property 35 -11- LSB 2688HV (3) 87 md/hb/rh/rj 11/ 17

H.F. 650 taxes levied by the county and credited to a county mental 1 health and disabilities services fund created pursuant to Code 2 section 331.424A (county services fund) shall not exceed the 3 lower of the amount of the county’s base year expenditures for 4 mental health and disability services or the amount equal to 5 the product of the statewide per capita expenditure target 6 for the fiscal year beginning July 1, 2013, multiplied by the 7 county’s general population for the applicable fiscal year. 8 After June 30, 2017, current law provides that county revenues 9 from property taxes levied and credited to the county services 10 fund shall not exceed an amount equal to the county’s base year 11 expenditures for these services. 12 The bill amends Code section 331.424A relating to the amount 13 of county funding for mental health and disability services 14 and the amount of property taxes levied for payment of such 15 services. 16 The bill establishes a methodology for establishing a 17 regional per capita expenditure target amount. For the fiscal 18 year beginning July 1, 2017, and succeeding fiscal years, the 19 regional per capita expenditure target amount for each region 20 is the sum of the base expenditure amount for all counties 21 in the region divided by the population of the region. The 22 bill defines “base expenditure amount” as the lesser of either 23 the county’s base year expenditures for mental health and 24 disabilities services, as defined in section 331.424A, Code 25 2017, or the product of $47.28 multiplied by the county’s 26 population for the fiscal year beginning July 1, 2017. 27 However, the bill prohibits a regional per capita expenditure 28 target amount that exceeds the statewide per capita expenditure 29 target amount. 30 Under the bill, a county is required to certify a property 31 tax levy for payment of services in an amount not to exceed the 32 county budgeted amount for the fiscal year. For the fiscal 33 year beginning July 1, 2017, and subsequent fiscal years, 34 each county’s budgeted amount shall be the amount necessary 35 -12- LSB 2688HV (3) 87 md/hb/rh/rj 12/ 17

H.F. 650 to meet the county’s financial obligations for the payment of 1 services under the regional service system management plan, not 2 to exceed an amount equal to the product of the regional per 3 capita expenditure target amount multiplied by the county’s 4 population, and, for fiscal years beginning on or after July 5 1, 2021, reduced by the county’s cash flow reduction amount, 6 if applicable. 7 The bill amends Code section 331.391(4) relating to the 8 authority of a region to reserve an adequate amount for 9 cash flow expenditures in the next fiscal year. Under the 10 bill, if a region is meeting the financial obligations for 11 implementation of its regional service system management plan 12 for a fiscal year and residual funding is anticipated, the 13 regional administrator shall reserve an adequate amount of 14 unobligated and unencumbered funds for cash flow of expenditure 15 obligations in the next fiscal year. 16 The bill requires that for fiscal years beginning July 1, 17 2017, July 1, 2018, and July 1, 2019, that portion of each 18 region’s cash flow amount reserved that exceeds 25 percent of 19 the gross expenditures from the region’s combined account or 20 from all separate county accounts under the control of the 21 governing board in the fiscal year preceding the fiscal year 22 in progress shall be used in whole or in part to fund the 23 payment of services provided under the regional service system 24 management plan. 25 Each region is also required to either certify to the 26 department of management on or before December 1, 2020, and 27 each December 1 thereafter, the amount of the region’s cash 28 flow amount in the combined account that is attributable 29 to each county within the region based upon each county’s 30 proportionate amount of funding and contributions to the region 31 or other methodology specified in the regional governance 32 agreement or certify the cash flow amount for each separate 33 county account that is under the control of the governing board 34 at the conclusion of the most recently completed fiscal year. 35 -13- LSB 2688HV (3) 87 md/hb/rh/rj 13/ 17

H.F. 650 The bill provides that for fiscal years beginning on or after 1 July 1, 2021, for each region having a population of 100,000 2 or over, the region’s cash flow amount shall not exceed 20 3 percent of the gross expenditures from the region’s combined 4 account or from all separate county accounts under control of 5 the governing board for the fiscal year preceding the fiscal 6 year in progress. For fiscal years beginning on or after July 7 1, 2021, for each region having a population of less than 8 100,000, the region’s cash flow amount shall not exceed 25 9 percent of the gross expenditures from the region’s combined 10 account or from all separate county accounts under control of 11 the governing board for the fiscal year preceding the fiscal 12 year in progress. 13 Under current law, counties are required to reserve an 14 amount to address cash flow obligations in the next fiscal 15 year that does not exceed 25 percent of the gross expenditures 16 budgeted from the county services fund for the fiscal year 17 in progress. Under the bill, an amount of unobligated and 18 unencumbered funds, as specified in the regional governance 19 agreement, shall be reserved in the county services fund to 20 address cash flow obligations in the next fiscal year, subject 21 to the limitations in the bill. 22 For fiscal years beginning July 1, 2017, July 1, 2018, and 23 July 1, 2019, that portion of each county’s cash flow amount 24 reserved in the county services fund that exceeds an amount 25 equal to 25 percent of the gross expenditures from the county 26 services fund in the fiscal year preceding the fiscal year in 27 progress shall be used in whole or in part to fund the county’s 28 financial obligations for the payment of services provided 29 under the regional service system management plan. 30 The bill requires each county, as part of the county’s annual 31 financial report, to certify the county’s cash flow amount in 32 the county services fund at the conclusion of the most recently 33 completed fiscal year. 34 For each fiscal year beginning on or after July 1, 2021, of 35 -14- LSB 2688HV (3) 87 md/hb/rh/rj 14/ 17

H.F. 650 a county’s cash flow amount maintained in the county services 1 fund or of the region’s cash flow amount attributable to the 2 county, an amount equal to the county’s cash flow reduction 3 amount shall be used to fund the county’s financial obligations 4 for the payment of services provided under the regional service 5 system management plan and shall result in a reduction of the 6 county budgeted amount. 7 For each county located in a region having a population of 8 100,000 or over, the county’s cash flow reduction amount equals 9 the sum of the county’s cash flow amount in the county services 10 fund plus the most recent amount certified by the region for 11 the county as required in the bill, minus 20 percent of the 12 gross expenditures from the county services fund in the fiscal 13 year preceding the fiscal year in progress. However, the cash 14 flow reduction amount shall not be less than zero and shall 15 not exceed the county budgeted amount prior to any reduction 16 resulting from the cash flow reduction amount. 17 For each county located in a region having a population of 18 less than 100,000, the county’s cash flow reduction amount 19 equals the sum of the county’s cash flow amount in the county 20 services fund plus the most recent amount certified by the 21 region for the county as required in the bill, minus 25 percent 22 of the gross expenditures budgeted from the county services 23 fund for the fiscal year in progress. However, the cash 24 flow reduction amount shall not be less than zero and shall 25 not exceed the county budgeted amount prior to any reduction 26 resulting from the cash flow reduction amount. 27 The bill provides that for the fiscal years beginning July 28 1, 2017, July 1, 2018, and July 1, 2019, if a county public 29 hospital is located in a county having a population of 225,000 30 or over and having a county budgeted amount for the fiscal year 31 equal to the product of the regional per capita expenditure 32 target amount multiplied by the county’s population, the board 33 of trustees of the county public hospital shall appropriate 34 for payment on July 1 of each such fiscal year from the county 35 -15- LSB 2688HV (3) 87 md/hb/rh/rj 15/ 17

H.F. 650 public hospital fund to the board of supervisors for deposit in 1 the county services fund, $2.8 million and the county public 2 hospital shall in each such fiscal year provide care and 3 treatment to patients who are residents of the county and whose 4 costs for such care and treatment would otherwise qualify for 5 payment from the county services fund, in an amount equal to 6 $3.5 million. 7 The bill repeals Code section 426B.3 relating to per capita 8 funding and repayments of Medicaid offset amounts and makes 9 conforming Code changes to other provisions of law. 10 The bill provides that, notwithstanding the deadline for 11 certifying a county budget, for the fiscal year beginning 12 July 1, 2017, a county may recertify the county’s budget as 13 necessary to implement the bill if the bill takes effect after 14 the budget certification deadline. A budget recertified 15 pursuant to the bill must be recertified to the county auditor 16 no later than 30 days after the effective date of the bill, 17 and protests to the budget must be filed no later than 10 days 18 after the county’s budget is recertified. 19 The bill requests the legislative council to authorize 20 a study committee to analyze the viability of the mental 21 health and disability services funding provisions in the bill, 22 including the methodology used to calculate and determine 23 the base expenditure amount, the county budgeted amount, the 24 regional per capita expenditure target amount, the statewide 25 per capita expenditure target amount, and the cash flow 26 reduction amount. The study committee shall consist of 10 27 legislative members appointed as specified in the bill. The 28 study committee shall meet during the 2018 legislative interim 29 to make appropriate recommendations for consideration during 30 the 2019 legislative session in a report submitted to the 31 general assembly by January 15, 2019. 32 The bill requires the department of human services to 33 convene a stakeholder workgroup to make recommendations 34 relating to the delivery of, access to, and coordination 35 -16- LSB 2688HV (3) 87 md/hb/rh/rj 16/ 17

H.F. 650 and continuity of mental health, disability, and substance 1 use disorder services and supports for individuals with 2 mental health, disability, and substance use disorder needs, 3 particularly for individuals with complex mental health, 4 disability, and substance use disorder needs. The bill 5 specifies the composition of the workgroup and the contents of 6 the report required to be submitted to the governor and the 7 general assembly by December 15, 2017. 8 The bill also requires the regional administrator of each 9 mental health and disability services region to convene a 10 stakeholder workgroup to meet on a regular basis, beginning 11 July 1, 2017, to create collaborative policies and processes 12 relating to the delivery of, access to, and continuity of 13 services for individuals with mental health, disability, and 14 substance use disorder needs, particularly for individuals with 15 complex mental health, disability, and substance use disorder 16 needs. The bill specifies the topics to be reviewed and 17 addressed by the workgroup. Each mental health and disability 18 services region is required to submit a community service plan 19 to the department of human services by October 16, 2017. The 20 bill specifies the contents of the plan. The department of 21 human services is required to submit a report to the governor 22 and general assembly by December 3, 2018, providing a summary 23 of services implemented by each mental health and disability 24 services region and an assessment of each region in achieving 25 the department’s identified outcomes for success. 26 The bill takes effect upon enactment and applies to fiscal 27 years beginning on or after July 1, 2017. 28 The bill does not affect the operation of, or prohibit the 29 application of, prior provisions of law amended or repealed by 30 the bill, or rules adopted to administer prior provisions of 31 law amended or repealed by the bill, for fiscal years beginning 32 before July 1, 2017. 33 -17- LSB 2688HV (3) 87 md/hb/rh/rj 17/ 17