S.F. 2118 Section 1. Section 225C.7A, subsection 5, Code 2022, is 1 amended to read as follows: 2 5. Regional service payments received by a region 3 shall be deposited in the region’s combined account under 4 section 331.391 and used solely for providing mental health 5 and disability services under the regional service system 6 management plan , or deposited into county administrative funds, 7 as defined in section 331.391, subsection 1, paragraph “b” , 8 for the payment of employees performing duties related to the 9 mental health and disability services system. A regional 10 administrator shall have the authority to transfer moneys from 11 the region’s combined account . 12 Sec. 2. Section 225C.7A, subsection 7, paragraph b, Code 13 2022, is amended to read as follows: 14 b. For the fiscal year years beginning on or after July 15 1, 2022, each mental health and disability services region 16 for which the amount certified during the fiscal year under 17 section 331.391, subsection 4 , paragraph “b” , exceeds twenty 18 twenty-five percent of the actual expenditures of the region 19 for the fiscal year preceding the fiscal year in progress, the 20 remaining quarterly payments of the region’s regional service 21 payment shall be reduced by an amount equal to the amount by 22 which the region’s amount certified under section 331.391, 23 subsection 4 , paragraph “b” , exceeds twenty twenty-five percent 24 of the actual expenditures of the region for the fiscal year 25 preceding the fiscal year in progress, but the amount of the 26 reduction shall not exceed the total amount of the region’s 27 regional service payment for the fiscal year. If the region’s 28 remaining quarterly payments are insufficient to effectuate 29 the required reductions under this paragraph, the region is 30 required to pay to the department of human services any amount 31 for which the reduction in quarterly payments could not be 32 made. The amount of reductions to quarterly payments and 33 amounts paid to the department under this paragraph shall be 34 transferred and credited to the region incentive fund under 35 -1- LSB 5259XS (5) 89 dg/jh 1/ 6

S.F. 2118 subsection 8 . 1 Sec. 3. Section 225C.7A, subsection 7, paragraph c, Code 2 2022, is amended by striking the paragraph. 3 Sec. 4. Section 225C.7A, subsection 8, paragraph c, 4 subparagraph (2), subparagraph division (b), subparagraph 5 subdivision (ii), Code 2022, is amended to read as follows: 6 (ii) For applications for the fiscal year years beginning on 7 or after July 1, 2022, twenty twenty-five percent of the actual 8 expenditures of the mental health and disability services 9 region for the fiscal year that commenced two years prior to 10 the fiscal year of application for assistance. 11 Sec. 5. Section 225C.7A, subsection 8, paragraph c, 12 subparagraph (2), subparagraph division (b), subparagraph 13 subdivision (iii), Code 2022, is amended by striking the 14 subparagraph subdivision. 15 Sec. 6. Section 331.391, subsections 1 and 3, Code 2022, are 16 amended to read as follows: 17 1. a. The funding under the control of the governing board 18 shall be maintained in a combined account. A county exempted 19 under section 331.389, subsection 1 , shall maintain a county 20 mental health and disability services fund for the deposit 21 of funding received under section 225C.7A and appropriations 22 specifically authorized to be made from the county mental 23 health and disability services fund shall not be made from 24 any other fund of the county. A county mental health and 25 disability services fund established by an exempt county, to 26 the extent feasible, shall be considered to be the same as 27 a region combined account and shall be subject to the same 28 requirements as a region’s combined account including expenses 29 payable from county administrative funds pursuant to paragraph 30 “b” . 31 b. The funding received pursuant to section 225C.7A, 32 subsection 5, and under the control of a board of supervisors 33 shall be maintained in a county administrative fund. Moneys in 34 a county administrative fund shall only be used for the payment 35 -2- LSB 5259XS (5) 89 dg/jh 2/ 6

S.F. 2118 of county employees performing duties related to the mental 1 health and disability services system. 2 3. The funding provided pursuant to appropriations from the 3 mental health and disability services regional service fund 4 created in section 225C.7A and from performance-based contracts 5 with the department shall be credited to the account under the 6 control of the governing board or account under the control of 7 a board of supervisors . 8 Sec. 7. Section 331.391, subsection 4, paragraphs b and c, 9 Code 2022, are amended to read as follows: 10 b. Each region shall certify to the department of human 11 services on or before December 1, 2021, and each December 1 12 thereafter, the aggregate amount of the region’s cash flow 13 amount in the combined account and each county administrative 14 account at the conclusion of the most recently completed fiscal 15 year. 16 c. For fiscal years beginning on or after July 1, 2023, the 17 region’s cash flow amount shall not exceed five twenty-five 18 percent of the aggregate actual expenditures from the combined 19 account and each county administrative account for the fiscal 20 year preceding the fiscal year in progress. 21 Sec. 8. Section 331.432, subsection 3, paragraph b, Code 22 2022, is amended to read as follows: 23 b. Payments or transfers of moneys from any fund of the 24 county to a mental health and disability services region’s 25 combined account under section 331.391 are prohibited. This 26 paragraph applies to fiscal years beginning on or after July 27 1, 2022, but does not apply to transfers from a county public 28 hospital fund under section 347.7 for the fiscal year beginning 29 July 1, 2022, or the fiscal year beginning July 1, 2023 , or a 30 county administrative fund under section 331.391, subsection 31 1, paragraph “b” . 32 Sec. 9. 2021 Iowa Acts, chapter 177, section 107, is amended 33 to read as follows: 34 SEC. 107. DEPARTMENT OF HUMAN SERVICES —— MENTAL HEALTH AND 35 -3- LSB 5259XS (5) 89 dg/jh 3/ 6

S.F. 2118 DISABILITY REGIONS STUDY. The department of human services 1 shall convene a study committee to evaluate the current mental 2 health and disability region structure and operations in the 3 context of the changes made and the funding provided by this 4 division of this Act. The study shall, at a minimum, use 5 data-driven and outcome-based decision making to identify 6 and recommend modifications to required core services for 7 regions, and review how effectively each mental health and 8 disability services region has implemented the core services 9 outlined in sections 331.397 and 331.397A , including the 10 degree of uniformity of the core services between the regions. 11 The study committee membership shall include, at a minimum, 12 a representative from each mental health and disability 13 services region as the chief executive officer of each region 14 designates. The department shall be authorized to contract 15 with and retain the services of an independent contractor in 16 order to conduct the study. The department shall submit a 17 report detailing the study’s findings and recommendations to 18 the general assembly and the governor no later than December 19 15, 2022. 20 Sec. 10. EFFECTIVE DATE. The following, being deemed of 21 immediate importance, takes effect upon enactment: 22 The section of this Act amending 2021 Iowa Acts, chapter 177, 23 section 107. 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 mental health and disability 28 services funds to establish county-controlled accounts for 29 administrative expenses and increase the amount mental health 30 and disability services funds may carryforward. 31 The mental health and disability services (MHDS) system is a 32 system of 14 separate regional service areas consisting of one 33 or more counties that work together to provide services related 34 to mental health and disabilities to people within those 35 -4- LSB 5259XS (5) 89 dg/jh 4/ 6

S.F. 2118 regions. Under current law, a county may use a county mental 1 health and disabilities services fund (county services fund) 2 in order to pay for MHDS-related expenses. At the conclusion 3 of fiscal year 2021-2022, the counties will be required to 4 transfer any remaining amounts in their county services funds 5 to a combined regional account. 6 The bill establishes county administrative funds that will 7 be controlled by a county’s board of supervisors and used 8 solely for the payment of county employees performing duties 9 related to the mental health and disability services system. 10 The bill allows the regional administrator to transfer funds 11 received by a region into a county administrative fund or from 12 an MHDS regional combined account into a county administrative 13 fund after June 30, 2022. 14 The bill provides that, for the fiscal years beginning on 15 or after July 1, 2022, an MHDS region’s payments from the 16 state will be reduced by the amount the region’s combined 17 fund exceeds 25 percent of its actual expenditures from the 18 aggregate of the region’s combined account and county services 19 funds. Under current law, for the fiscal year beginning July 20 1, 2022, state payments to regional accounts will be reduced 21 by the amount that a region’s combined fund exceeds 20 percent 22 of the region’s actual expenditures, and for fiscal years 23 beginning July 1, 2023, and after, state payments to regional 24 accounts will be reduced by the amount that a region’s combined 25 fund exceeds 5 percent of the region’s actual expenditures. 26 The bill provides that a region will remain eligible to 27 receive funding from the state’s region incentive fund within 28 the state MHDS regional service fund, assuming all other 29 criteria are met, if, beginning in fiscal year 2022-2023, the 30 region’s expenditures do not exceed 25 percent of the aggregate 31 amounts in the region’s combined account and county services 32 funds. Under current law, for a region to be eligible for 33 additional region incentive fund moneys, and assuming other 34 criteria are met, for the fiscal year beginning July 1, 2022, a 35 -5- LSB 5259XS (5) 89 dg/jh 5/ 6

S.F. 2118 region may not have funds in the region’s combined account in 1 excess of 20 percent of the region’s actual expenditures, and 2 in all fiscal years beginning July 1, 2023, and after, a region 3 may not have funds in the region’s combined account in excess 4 of 5 percent of the region’s actual expenditures. 5 The bill allows a county administrative fund to transfer 6 funds into an MHDS regional combined account. 7 The bill provides that the scope of a study committee 8 created by 2021 Iowa Acts, chapter 177, section 107, shall 9 also include the use of data-driven and outcome-based decision 10 making to identify and recommend modifications to required 11 core services for MHDS regions. The bill also provides that 12 the study committee membership shall include, at a minimum, 13 a representative from each mental health and disability 14 services region as the chief executive officer of each region 15 designates. The changes to the MHDS study committee are 16 effective upon enactment. 17 -6- LSB 5259XS (5) 89 dg/jh 6/ 6