Senate File 504 - Reprinted SENATE FILE 504 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1187) (As Amended and Passed by the Senate April 18, 2017 ) A BILL FOR An Act relating to mental health and disabilities, including 1 the funding of mental health and disability services by 2 modifying the mental health and disability services property 3 tax levy, providing for the expenditure and deposit of 4 certain county hospital property tax revenues, requiring the 5 use of specified excess cash flow funds, including certain 6 law enforcement notification provisions, and including 7 effective date and applicability provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 SF 504 (3) 87 md/hb/rh/rj/jh

S.F. 504 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 229.11, Code 2017, is amended by adding the 12 following new subsection: 13 NEW SUBSECTION . 1A. If a respondent is detained pursuant to 14 subsection 1, paragraph “b” or “c” , the sheriff or the sheriff’s 15 deputy that took the respondent into immediate custody may 16 inform the hospital or facility that an arrest warrant has been 17 issued for or charges are pending against the respondent and 18 may request the hospital or facility to notify the sheriff or 19 the sheriff’s deputy about the discharge of the respondent 20 prior to discharge. 21 Sec. 3. Section 230.20, subsection 2, paragraph b, Code 22 2017, is amended to read as follows: 23 b. The per diem costs billed to each mental health and 24 disability services region shall not exceed the per diem costs 25 billed to the county region in the fiscal year beginning July 26 1, 1996 2016 . However, the per diem costs billed to a mental 27 health and disability services region may be adjusted annually 28 to reflect increased costs, to the extent of the percentage 29 increase in the statewide per capita expenditure target amount, 30 if any per capita growth amount is authorized by the general 31 assembly for the fiscal year in accordance with section 426B.3 . 32 Sec. 4. Section 331.391, subsection 4, Code 2017, is amended 33 by striking the subsection and inserting in lieu thereof the 34 following: 35 -1- SF 504 (3) 87 md/hb/rh/rj/jh 1/ 12

S.F. 504 4. a. If a region is meeting the financial obligations 1 for implementation of its regional service system management 2 plan for a fiscal year and residual funding is anticipated, 3 the regional administrator shall reserve an adequate amount of 4 unobligated and unencumbered funds for cash flow of expenditure 5 obligations in the next fiscal year. 6 b. For fiscal years beginning July 1, 2017, July 1, 2018, 7 and July 1, 2019, that portion of each region’s cash flow 8 amount either reserved in the combined account or reserved 9 among all separate county accounts under the control of the 10 governing board that exceeds twenty-five percent of the gross 11 expenditures from the combined account or from all separate 12 county accounts under control of the governing board in the 13 fiscal year preceding the fiscal year in progress shall be used 14 in whole or in part to fund the payment of services provided 15 under the regional service system management plan under section 16 331.393. 17 c. Each region shall certify to the department of management 18 on or before December 1, 2020, and each December 1 thereafter, 19 the amount of the region’s cash flow amount in the combined 20 account that is attributable to each county within the region 21 based upon each county’s proportionate amount of funding and 22 contributions to the region or other methodology specified in 23 the regional governance agreement or certify the cash flow 24 amount for each separate county account that is under the 25 control of the governing board at the conclusion of the most 26 recently completed fiscal year. 27 d. (1) For fiscal years beginning on or after July 1, 2021, 28 for each region having a population of one hundred thousand or 29 over, the region’s cash flow amount shall not exceed twenty 30 percent of the gross expenditures from the combined account 31 or from all separate county accounts under control of the 32 governing board for the fiscal year preceding the fiscal year 33 in progress. 34 (2) For fiscal years beginning on or after July 1, 2021, 35 -2- SF 504 (3) 87 md/hb/rh/rj/jh 2/ 12

S.F. 504 for each region having a population of less than one hundred 1 thousand, the region’s cash flow amount shall not exceed 2 twenty-five percent of the gross expenditures from the combined 3 account or from all separate county accounts under control of 4 the governing board for the fiscal year preceding the fiscal 5 year in progress. 6 Sec. 5. Section 331.424A, subsection 1, Code 2017, is 7 amended by striking the subsection and inserting in lieu 8 thereof the following: 9 1. For the purposes of part 6 of division III of this 10 chapter, this section, and chapter 426B, unless the context 11 otherwise requires: 12 a. “Base expenditure amount” is an amount determined for 13 each county that is the lesser of the following amounts: 14 (1) The county’s base year expenditures for mental health 15 and disabilities services, as defined in section 331.424A, 16 subsection 1, paragraph “a” , Code 2017. 17 (2) The product of the statewide per capita expenditure 18 target amount multiplied by the county’s population for the 19 fiscal year beginning July 1, 2017. 20 b. “Cash flow reduction amount” means the amount calculated 21 under subsection 4 and used to reduce a county budgeted amount 22 under subsection 9 for fiscal years beginning on or after July 23 1, 2021. 24 c. “County budgeted amount” means the amount calculated 25 under subsection 9 and certified for levy under subsection 6. 26 d. “County services fund” means a county mental health and 27 disabilities services fund created pursuant to this section. 28 e. “Population” means the population shown by the latest 29 preceding certified federal census or the latest applicable 30 population estimate issued by the federal government, whichever 31 is most recent and available as of July 1 of the fiscal year 32 preceding the fiscal year to which the funding calculations 33 apply. 34 f. “Region” means a mental health and disability services 35 -3- SF 504 (3) 87 md/hb/rh/rj/jh 3/ 12

S.F. 504 region formed in accordance with section 331.389. 1 g. “Regional per capita expenditure target amount” means the 2 amount determined in subsection 8 for each region. 3 h. “Statewide per capita expenditure target amount” means 4 forty-seven dollars and twenty-eight cents. 5 Sec. 6. Section 331.424A, subsection 4, Code 2017, is 6 amended by striking the subsection and inserting in lieu 7 thereof the following: 8 4. a. An amount of unobligated and unencumbered funds, 9 as specified in the regional governance agreement entered 10 into by the county under section 331.392, shall be reserved 11 in the county services fund to address cash flow obligations 12 in the next fiscal year, subject to the limitations of this 13 subsection. 14 b. For fiscal years beginning July 1, 2017, July 1, 2018, 15 and July 1, 2019, that portion of each county’s cash flow 16 amount reserved in the county services fund that exceeds an 17 amount equal to twenty-five percent of the gross expenditures 18 from the county services fund in the fiscal year preceding 19 the fiscal year in progress shall be used in whole or in part 20 to fund the county’s financial obligations for the payment of 21 services provided under the regional service system management 22 plan under section 331.393. 23 c. Each county shall, as part of the financial report 24 required under section 331.403, certify the county’s cash flow 25 amount in the county services fund at the conclusion of the 26 most recently completed fiscal year. 27 d. For each fiscal year beginning on or after July 1, 28 2021, of a county’s cash flow amount maintained in the county 29 services fund or of the region’s cash flow amount attributable 30 to the county under section 331.391, subsection 4, paragraph 31 “c” , an amount equal to the county’s cash flow reduction amount 32 shall be used to fund the county’s financial obligations for 33 the payment of services provided under the regional service 34 system management plan under section 331.393. 35 -4- SF 504 (3) 87 md/hb/rh/rj/jh 4/ 12

S.F. 504 e. For each fiscal year beginning on or after July 1, 2021, 1 each county’s cash flow reduction amount shall be determined as 2 follows and shall result in a reduction of the county budgeted 3 amount determined pursuant to subsection 9: 4 (1) For each county located in a region having a population 5 of one hundred thousand or over, the county’s cash flow 6 reduction amount equals the sum of the county’s cash flow 7 amount in the county services fund plus the most recent amount 8 certified by the region for the county under section 331.391, 9 subsection 4, paragraph “c” , minus twenty percent of the gross 10 expenditures from the county services fund in the fiscal year 11 preceding the fiscal year in progress. However, the cash flow 12 reduction amount shall not be less than zero and shall not 13 exceed the county budgeted amount determined under subsection 9 14 prior to any reduction resulting from the cash flow reduction 15 amount. 16 (2) For each county located in a region having a population 17 of less than one hundred thousand, the county’s cash flow 18 reduction amount equals the sum of the county’s cash flow 19 amount in the county services fund plus the most recent amount 20 certified by the region for the county under section 331.391, 21 subsection 4, paragraph “c” , minus twenty-five percent of the 22 gross expenditures budgeted from the county services fund for 23 the fiscal year in progress. However, the cash flow reduction 24 amount shall not be less than zero and shall not exceed the 25 county budgeted amount determined under subsection 9 prior to 26 any reduction resulting from the cash flow reduction amount. 27 Sec. 7. Section 331.424A, subsections 6 and 7, Code 2017, 28 are amended to read as follows: 29 6. For each fiscal year, the county shall certify a levy 30 for payment of services. For each fiscal year, county revenues 31 from taxes imposed by the county credited to the county 32 services fund shall not exceed an amount equal to the county 33 budgeted amount of base year expenditures for mental health 34 and disability services for the fiscal year . A levy certified 35 -5- SF 504 (3) 87 md/hb/rh/rj/jh 5/ 12

S.F. 504 under this section is not subject to the appeal provisions of 1 section 331.426 or to any other provision in law authorizing 2 a county to exceed, increase, or appeal a property tax levy 3 limit. 4 7. Appropriations specifically authorized to be made from 5 the mental health and disabilities county services fund shall 6 not be made from any other fund of the county. 7 Sec. 8. Section 331.424A, subsection 8, Code 2017, is 8 amended by striking the subsection and inserting in lieu 9 thereof the following: 10 8. For the fiscal year beginning July 1, 2017, the regional 11 per capita expenditure target amount is the sum of the base 12 expenditure amount for all counties in the region divided by 13 the population of the region. However, a regional per capita 14 expenditure target amount shall not exceed the statewide 15 per capita expenditure target amount. For the fiscal year 16 beginning July 1, 2018, and each subsequent fiscal year, the 17 regional per capita expenditure target amount for each region 18 is equal to the regional per capita expenditure target amount 19 for the fiscal year beginning July 1, 2017. 20 Sec. 9. Section 331.424A, Code 2017, is amended by adding 21 the following new subsection: 22 NEW SUBSECTION . 9. For the fiscal year beginning July 1, 23 2017, and each subsequent fiscal year, the county budgeted 24 amount determined for each county shall be the amount necessary 25 to meet the county’s financial obligations for the payment 26 of services provided under the regional service system 27 management plan approved pursuant to section 331.393, not to 28 exceed an amount equal to the product of the regional per 29 capita expenditure target amount multiplied by the county’s 30 population, and, for fiscal years beginning on or after July 1, 31 2021, reduced by the amount of the county’s cash flow reduction 32 amount for the fiscal year calculated under subsection 4, if 33 applicable. 34 Sec. 10. Section 331.432, subsection 3, Code 2017, is 35 -6- SF 504 (3) 87 md/hb/rh/rj/jh 6/ 12

S.F. 504 amended to read as follows: 1 3. Except as authorized in section 331.477 , transfers 2 of moneys between the county mental health and disabilities 3 services fund created pursuant to section 331.424A and any 4 other fund are prohibited. This subsection does not apply to 5 appropriations made or the value of in-kind care and treatment 6 provided pursuant to section 347.7, subsection 1, paragraph 7 “c” . 8 Sec. 11. Section 347.7, subsection 1, Code 2017, is amended 9 by adding the following new paragraph: 10 NEW PARAGRAPH . c. For the fiscal years beginning July 11 1, 2017, July 1, 2018, and July 1, 2019, if a county public 12 hospital is located in a county having a population of two 13 hundred twenty-five thousand or over and having a county 14 budgeted amount for the fiscal year under section 331.424A, 15 subsection 9, equal to the product of the regional per 16 capita expenditure target amount multiplied by the county’s 17 population, as those terms are defined in section 331.424A, the 18 board of trustees shall appropriate for payment on July 1 of 19 each such fiscal year from the county public hospital fund to 20 the board of supervisors for deposit in the county services 21 fund created pursuant to section 331.424A, two million eight 22 hundred thousand dollars, and the county public hospital shall, 23 in each such fiscal year, contract with the county in which the 24 county public hospital is located to provide care and treatment 25 to patients who are residents of the county and whose costs for 26 such care and treatment would otherwise qualify for payment 27 from the county services fund under section 331.424A, in an 28 amount equal to three million five hundred thousand dollars. 29 Sec. 12. Section 426B.1, subsection 2, Code 2017, is amended 30 to read as follows: 31 2. Moneys shall be distributed from the property tax 32 relief fund to counties for the mental health and disability 33 regional service system for providing county base property tax 34 equivalent equalization payments and the per capita growth 35 -7- SF 504 (3) 87 md/hb/rh/rj/jh 7/ 12

S.F. 504 amount established pursuant to section 426B.3 mental health and 1 disabilities services , in accordance with the appropriations 2 made to the fund and other statutory requirements. 3 Sec. 13. Section 426B.2, Code 2017, is amended to read as 4 follows: 5 426B.2 Property tax relief fund payments. 6 1. The director of human services shall draw warrants on the 7 property tax relief fund, payable to the county treasurer in 8 the amount due to a county in accordance with section 426B.3 9 statutory requirements , and mail the warrants to the county 10 auditors in July and January of each year. 11 2. As used in this chapter and in section 331.424A , for 12 purposes of population-based funding calculations, “population” 13 means the population shown by the latest preceding certified 14 federal census or the latest applicable population estimate 15 issued by the federal government, whichever is most recent and 16 available as of July 1 of the fiscal year preceding the fiscal 17 year to which the funding calculations apply. 18 Sec. 14. REPEAL. Section 426B.3, Code 2017, is repealed. 19 Sec. 15. COUNTY BUDGET RECERTIFICATION. If this Act takes 20 effect on or after March 15, 2017, notwithstanding section 21 24.17, for the fiscal year beginning July 1, 2017, a county may 22 recertify the county’s budget as necessary to implement the 23 provisions of this Act. A budget recertified pursuant to this 24 section must be recertified in duplicate to the county auditor 25 not later than thirty days after the effective date of this 26 Act, and protests to the budget shall be filed not later than 27 ten days after the county’s budget is recertified. 28 Sec. 16. MENTAL HEALTH AND DISABILITY SERVICES FUNDING —— 29 FISCAL VIABILITY REVIEW DURING 2018 LEGISLATIVE INTERIM. The 30 legislative council is requested to authorize a study 31 committee to analyze the viability of the mental health and 32 disability services funding provisions in this Act, including 33 the methodology used to calculate and determine the base 34 expenditure amount, the county budgeted amount, the regional 35 -8- SF 504 (3) 87 md/hb/rh/rj/jh 8/ 12

S.F. 504 per capita expenditure target amount, the statewide per 1 capita expenditure target amount, and the cash flow reduction 2 amount. The study committee shall consist of five members of 3 the senate, three of whom shall be appointed by the majority 4 leader of the senate and two of whom shall be appointed by 5 the minority leader of the senate, and five members of the 6 house of representatives, three of whom shall be appointed by 7 the speaker of the house of representatives and two of whom 8 shall be appointed by the minority leader of the house of 9 representatives. The study committee shall meet during the 10 2018 legislative interim to make appropriate recommendations 11 for consideration during the 2019 legislative session in a 12 report submitted to the general assembly by January 15, 2019. 13 Sec. 17. WORKGROUP —— MENTAL HEALTH, DISABILITY, AND 14 SUBSTANCE USE DISORDER SERVICES. The department of human 15 services shall convene a stakeholder workgroup to make 16 recommendations relating to the delivery of, access to, and 17 coordination and continuity of mental health, disability, and 18 substance use disorder services and supports for individuals 19 with mental health, disability, and substance use disorder 20 needs, particularly for individuals with complex mental 21 health, disability, and substance use disorder needs. The 22 workgroup shall be comprised of representatives from community 23 mental health centers, law enforcement agencies, the national 24 alliance on mental illness, the Iowa hospital association, 25 the judicial system, mental health and disability services 26 regions, substance abuse treatment providers, the department 27 of public health, and other entities as appropriate. The 28 report shall incorporate selected strategies from community 29 service plans submitted by the mental health and disability 30 services regions to the department of human services pursuant 31 to this Act to address services and supports for individuals 32 with mental health, disability, and substance use disorder 33 needs, particularly for individuals with complex mental health, 34 disability, and substance use disorder needs. The workgroup 35 -9- SF 504 (3) 87 md/hb/rh/rj/jh 9/ 12

S.F. 504 shall submit a report with recommendations to the governor and 1 general assembly by December 15, 2017. 2 Sec. 18. REGIONAL WORKGROUP —— MENTAL HEALTH AND DISABILITY 3 REGIONAL SERVICES. 4 1. The regional administrator of each mental health 5 and disability services region shall convene a stakeholder 6 workgroup to meet on a regular basis, beginning July 1, 2017, 7 to create collaborative policies and processes relating to 8 the delivery of, access to, and continuity of services and 9 supports for individuals with mental health, disability, and 10 substance use disorder needs, particularly for individuals with 11 complex mental health, disability, and substance use disorder 12 needs. Each region shall review resources currently available 13 including the reduction of mental health and disability 14 services fund balances and options for combining funding from 15 different sources, particularly funding available pursuant 16 to Tit. XIX of the federal Social Security Act, and shall 17 consider providing additional services and supports in their 18 own region or partnering with one or more regions to provide 19 additional services and supports to serve such individuals. 20 The workgroup shall be comprised of representatives from 21 hospitals, the judicial system, law enforcement agencies, 22 managed care organizations, mental health providers, crisis 23 service providers, substance abuse providers, the national 24 alliance on mental illness, and other entities as appropriate. 25 2. Each mental health and disability services region 26 shall submit a community service plan to the department of 27 human services by October 16, 2017. The plan shall include 28 planning and implementation time frames and assessment tools 29 for determining the effectiveness of the plan in achieving the 30 department’s identified outcomes for success in the delivery 31 of, access to, and coordination and continuity of services and 32 supports for individuals with mental health, disability, and 33 substance use disorder needs, particularly for individuals with 34 complex mental health, disability, and substance use disorder 35 -10- SF 504 (3) 87 md/hb/rh/rj/jh 10/ 12

S.F. 504 needs, and financial strategies to support the plan including 1 combined funding from different sources, particularly funding 2 available pursuant to Tit. XIX of the federal Social Security 3 Act. The plan shall address how mental health and disability 4 services regions will spend down mental health and disabilities 5 services fund balances remaining from the fiscal year ending 6 June 30, 2016. 7 3. The regional administrator of each mental health and 8 disability services region shall enter into a memorandum of 9 understanding with each of Iowa’s managed care organizations 10 that delineates the roles and responsibilities of the region 11 and the managed care organizations in relation to the plan 12 developed by the region to address the services and supports 13 necessary to meet the needs of individuals with mental health, 14 disability, and substance use disorder needs, particularly 15 individuals with complex mental health, disability, and 16 substance use disorder needs. 17 4. In addition to the requirements specified in subsections 18 2 and 3, the eastern Iowa mental health and disability 19 services region shall consult with the department to complete 20 an analysis of the region’s mental health, disability, and 21 substance use disorder service and support concerns and 22 identify funding opportunities to address such areas of concern 23 in the region, and shall include information in the region’s 24 plan that includes the concerns, strategies to address the 25 concerns, and the budget. 26 5. The department shall submit a report to the governor 27 and general assembly by December 3, 2018, providing a summary 28 of services implemented by each mental health and disability 29 services region and an assessment of each region in achieving 30 the department’s identified outcomes for success. 31 Sec. 19. SAVINGS PROVISION. This Act, pursuant to section 32 4.13, does not affect the operation of, or prohibit the 33 application of, prior provisions of law amended or repealed 34 by this Act, or rules adopted under chapter 17A to administer 35 -11- SF 504 (3) 87 md/hb/rh/rj/jh 11/ 12