Amended in Assembly June 13, 2013

Senate Bill No. 80

Introduced by Committee on Budget and Fiscal Review

January 10, 2013

begin delete An act relating to the Budget Act of 2013. end delete begin insert An act to amend Sections 17600.10, 17600.15, 17600.20, 17601.25, 17603, 17604, and 17606.10, to amend, repeal, and add Section 17600 of, to add Sections 11450.025, 14301.5 17600.50, 17600.60, 17601.50, 17601.75, and 17609.02 to, to add a heading to Article 2.5 (commencing with Section 17601.25) of Chapter 6 of Part 5 of Division 9 of, and to add Article 6.6 (commencing with Section 14199.1) to Chapter 7 of Part 3 of Division 9 of, and Article 11 (commencing with Section 17610), Article 12 (commencing with Section 17612.1), and Article 13 (commencing with Section 17613.1) to Chapter 6 of Part 5 of Division 9 of, the Welfare and Institutions Code, relating to health and human services, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 80, as amended, Committee on Budget and Fiscal Review. begin delete Budget Act of 2013. end delete begin insert Health and human services. end insert

begin insert

(1) Existing federal law provides for allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states, with California’s version of this program being known as the California Work Opportunity and Responsibility to Kids (CalWORKs) program. Under the CalWORKs program, each county provides cash assistance and other benefits to qualified low-income families and individuals who meet specified eligibility criteria, including participating in specified welfare-to-work activities.

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This bill would increase aid payments by 5% as of March 1, 2014, and would specify a process by which additional grant increases could be made depending on projected revenue and costs.

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(2) Existing law establishes the Local Revenue Fund, a continuously appropriated fund, that allocates Vehicle License Fund moneys and sales tax moneys. Existing law creates various accounts and subaccounts within that fund, including the Health Subaccount and the Social Services Subaccount, each of which get funding from the Local Revenue Fund.

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This bill would make an appropriation by reallocating funds in the 2012-13 fiscal year and subsequent fiscal years to change the relative percentages of funds from those 2 sources that are allocated to the Health Subaccount and the Social Services Subaccount.

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(3) Existing law provides for the establishment of the Sales Tax Growth Account in the continuously appropriated Local Revenue Fund for the allocation of sales and use tax growth revenues to local government.

end insert begin insert

This bill would delete specified subaccounts in the Sales Tax Growth Account and would add a Family Support Subaccount and a Child Poverty and Family Supplemental Support Subaccount to the Sales Tax Account. The bill would provide funding for the Child Poverty and Family Supplemental Support Subaccount from the Sales Tax Growth Account in the 2013-14 fiscal year and from sales tax in later fiscal years. The bill would require the transfer of funds from the Child Poverty and Family Services Supplemental Support Subaccount to the counties for use to support the CalWORKs program, as specified.

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This bill would establish funding for the Family Support Subaccount from the Health Subaccount. The bill would require the transfer of funds from the Family Services Support Subaccount to the counties for use to support the CalWORKs program, as specified.

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Under existing law, cities and counties that receive funds from the Local Revenue Fund are required to establish and maintain a local health and welfare trust fund comprised of specified accounts.

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This bill would also require counties to establish a family support account in their local health and welfare trust accounts. By requiring additional duties from the counties, this bill would impose a state-mandated local program.

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(4) Existing law requires counties, through a choice of methodologies, including County Medical Services Programs, nonpublic hospitals, and public hospitals, to provide specified health services eligible county residents who are indigent. Funding for this program, under existing law, has come from the Health Subaccount.

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This bill would allow counties to receive funding from the Health Subaccount by either proving actual costs or by electing to receive 60% of the funds that would otherwise have been allocated to them, and would establish a default contribution for counties that fail to make a choice or to inform the Director of Health Care Services by December 4, 2013. The bill would place the difference between prior fiscal year contributions to counties from the Health Subaccount and the new contributions to counties in the Family Support Subaccount, to be used by counties for CalWORKs, as specified.

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This bill would establish processes by which the counties prove actual costs to the Department of Health Care Services, as specified.

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(5) Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Under existing law, eligibility for the Medi-Cal program is expanding.

end insert begin insert

This bill would require specified percentages of newly eligible beneficiaries to be assigned to public hospital health systems in an eligible county, if applicable, until the county public hospital health system meets its enrollment target, as defined. The bill would also require, subject to specified criteria, Medi-Cal managed care plans serving newly eligible beneficiaries to pay county public hospital health systems for services provided to newly eligible beneficiaries in amounts that are no less than the cost of providing those services, as specified.

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(6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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(7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

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This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2013.

end delete

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

Section 11450.025 is added to the Welfare and
Institutions Code, to read:

begin insert 11450.025. end insert   

(a) Notwithstanding any other law, effective on
March 1, 2014, the maximum aid payments in effect on July 1,
2012, as specified in subdivision (b) of Section 11450.02, shall be
increased by 5 percent.

(b) Commencing in 2014 and annually thereafter, on or before
January 10 and on or before May 14, the Director of Finance shall
do all of the following:

(1) Estimate the amount of growth revenues pursuant to
subdivision (f) of Section 17606.10 that will be deposited in the
Child Poverty and Family Supplemental Support Subaccount of
the Local Revenue Fund for the current fiscal year and the
following fiscal year and the amounts in the subaccount carried
over from prior fiscal years.

(2) For the current fiscal year and the following fiscal year,
determine the total cost of providing the increase described in
subdivision (a), as well as any other increase in the maximum aid
payments subsequently provided only under this section, after
adjusting for updated projections of CalWORKs costs associated
with caseload changes, as reflected in the local assistance
subvention estimates prepared by the State Department of Social
Services and released with the annual Governor’s Budget and
subsequent May Revision update.

(3) If the amount estimated in paragraph (1) plus the amount
projected to be deposited for the current fiscal year into the Child
Poverty and Family Supplemental Support Subaccount pursuant
to subparagraph (3) of subdivision (e) of Section 17600.15 is
greater than the amount determined in paragraph (2), the
difference shall be used to calculate the percentage increase to
the CalWORKs maximum aid payment standards that could be
fully funded on an ongoing basis beginning the following fiscal
year.

(4) If the amount estimated in paragraph (1) plus the amount
projected to be deposited for the current fiscal year into the Child
Poverty and Family Supplemental Support Subaccount pursuant
to subparagraph (3) of subdivision (e) of Section 17600.15 is equal
to or less than the amount determined in paragraph (2), no
additional increase to the CalWORKs maximum aid payment
standards shall be provided in the following fiscal year in
accordance with this section.

(5) (A) Commencing with the 2014-15 fiscal year and for all
fiscal years thereafter, if changes to the estimated amounts
determined in paragraphs (1) or (2), or both, as of the May
Revision, are enacted as part of the final budget, the Director of
Finance shall repeat, using the same methodology used in the May
Revision, the calculations described in paragraphs (3) and (4)
using the revenue projections and grant costs assumed in the
enacted budget.

(B) If a calculation is required pursuant to subparagraph (A),
the Department of Finance shall report the result of this calculation
to the appropriate policy and fiscal committees of the Legislature
upon enactment of the Budget Act.

(c) An increase in maximum aid payments calculated pursuant
to paragraph (3) of subdivision (b), or pursuant to paragraph (5)
of subdivision (b) if applicable, shall become effective on October
1 of the following fiscal year.

(d) (1) An increase in maximum aid payments provided in
accordance with this section shall be funded with growth revenues
from the Child Poverty and Family Supplemental Support
Subaccount in accordance with paragraph (3) of subdivision (e)
of Section 17600.15 and subdivision (f) of Section 17606.10, to
the extent funds are available in that subaccount.

(2) If funds received by the Child Poverty and Family
Supplemental Support Subaccount in a particular fiscal year are
insufficient to fully fund any increases to maximum aid payments
made pursuant to this section, the remaining cost for that fiscal
year will be addressed through existing provisional authority
included in the annual Budget Act. Additional grant increases
shall not be provided until and unless the ongoing cumulative costs
of all prior grant increases provided pursuant this section are fully
funded by the Child Poverty and Family Supplemental Support
Subaccount.

(e) Notwithstanding Section 15200, counties shall not be
required to contribute a share of cost to cover the costs of increases
to maximum aid payments made pursuant to this section.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Article 6.6 (commencing with Section 14199.1) is added
to Chapter 7 of Part 3 of Division 9 of the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 6.6. end insert   Medicaid Expansion Under The Federal Affordable
Care Act

 

begin insert 14199.1. end insert   

(a) The Legislature finds and declares the following:

(1) Beginning January 1, 2014, many low-income individuals
will be eligible for Medi-Cal coverage pursuant to federal law, as
part of health care reform.

(2) In implementing this expansion of Medi-Cal coverage, it is
critical to maintain the role of county public hospital health systems
that have traditionally served Medi-Cal and uninsured
beneficiaries to ensure adequate access to care is available for
the new Medi-Cal members, and to preserve the policy goal to
support and strengthen traditional safety net providers who treat
a high volume of uninsured and Medi-Cal patients.

(b) For purposes of this section, the following definitions shall
apply:

(1) “County public hospital health system” shall have the
meaning provided in subdivision (f) of Section 17612.2.

(2) “Default members” means newly eligible beneficiaries
enrolled in each Medi-Cal managed care plan who do not
affirmatively select a primary care provider as part of the
enrollment process.

(3) “Enrollment target” means the number of newly eligible
beneficiaries assigned to primary care providers within a county
public hospital health system, not to exceed the number of
unduplicated Low Income Health Program and uninsured patient
count in the county public hospital health system. The unduplicated
patient count shall be certified by the county public hospital health
system and provided to the department, along with its proposed
enrollment target, by November 30, 2013. The county public
hospital health system may notify the department of a proposed
reduction to its enrollment target based on its capacity to accept
new patients. A standardized protocol for determining the target
shall be developed by the department in consultation with the
public hospital health system counties.

(4) “Low Income Health Program” shall mean the LIHP as
defined in subdivision (c) of Section 15909.1.

(5) “Medi-Cal managed care plan” means an organization or
entity that enters into a contract with the department pursuant to
Article 2.7 (commencing with Section 14087.3), Article 2.8
(commencing with Section 14087.5), Article 2.81 (commencing
with Section 14087.96), Article 2.91 (commencing with Section
14089), or Chapter 8 (commencing with Section 14200).

(6) “Newly eligible beneficiaries” shall have the meaning
provided in subdivision (s) of Section 17612.2.

(7) “Primary care provider” means a primary care physician
or nonphysician medical practitioner, medical group, clinic, or a
medical home.

(8) “Public hospital health system county” shall have the
meaning provided in subdivision (u) of Section 17612.2.

(c) Subject to subdivision (d), default members who reside in a
public hospital health system county shall be assigned by each
Medi-Cal managed care plan in the county to a primary care
provider in accordance with the following:

(1) Throughout the three-year period ending on December 31,
2016, at least seventy-five percent of default members shall be
assigned by each Medi-Cal managed care plan to primary care
providers within the county public hospital health system until the
county public hospital health system meets its enrollment target.

(2) Following the expiration of the three-year period set forth
in paragraph (1), at least 50 percent of default members shall be
assigned by each Medi-Cal managed care plan to primary care
providers within the county public hospital health system until the
county public hospital health system meets its applicable
enrollment target.

(3) Paragraphs (1) and (2) shall not apply with respect to a
county public hospital health system during any time period in
which the county public hospital health system meets or exceeds
its applicable target. For time periods during which paragraphs
(1) and (2) do not apply, default members shall be assigned to
primary care providers in the same manner as other Medi-Cal
members of the Medi-Cal managed care plan who do not
affirmatively select primary care providers. Medi-Cal managed
care plans shall not modify the assignment procedures due to the
default assignment requirements of this section with respect to
primary care providers within the county public hospital health
system.

(4) In implementing the assignment process set forth in
paragraphs (1) and (2), to the extent legally permissible and
consistent with federal and state privacy and patient confidentiality
laws, each Medi-Cal managed care plan shall first assign to a
primary care provider within the county public hospital health
system those default members who have accessed care within the
county public hospital health system two or more times within the
past 12 months. The department and the county public hospital
health systems shall work together to share patient information in
order to provide the Medi-Cal managed care plans with data
demonstrating which default members have accessed the county
public hospital health system providers prior to assignment to a
primary care provider.

(5) If at any time a county public hospital health system notifies
a contracted Medi-Cal managed care plan that it has reached its
maximum capacity for the assignment of default members, the
requirements set forth in paragraphs (1) and (2) shall not apply
to the Medi-Cal managed care plan so notified. Once the county
public hospital health system notifies a Medi-Cal managed care
plan that it has capacity to accept assignment of default members,
the requirements set forth in paragraphs (1) and (2) shall apply
effective on the first day of the month following that notice.

(6) A Medi-Cal managed care plan shall not assign default
members to a primary care provider within the county public
hospital health system if that primary care provider has notified
the Medi-Cal managed care plan that it does not have capacity to
accept new patients.

(d) The default process described in this section shall not apply
to Low Income Health Program enrollees subject to Section
14005.60.

(e) Nothing set forth in this section shall alter, reduce, or modify
in any manner the way in which Medi-Cal managed care plans
assign other Medi-Cal members to the county public hospital health
systems.

(f) (1) The department shall modify its contracts with the
Medi-Cal managed care plans in public hospital health system
counties to include the assignment requirements set forth in this
section.

(2) Each Medi-Cal managed care plan shall demonstrate and
certify that it has contracts or other arrangements in place with
county public hospital health systems that provide for implementing
the requirements of this section. To the extent a Medi-Cal managed
care plan is not compliant with any of the requirements of this
section, the department shall reduce by 25 percent the default
assignment into the Medi-Cal managed care plan with respect to
all Medi-Cal beneficiaries, as long as the other Medi-Cal managed
care plan or plans in that county have the capacity to receive the
additional default membership.

(g) Nothing in this section shall modify the ability of newly
eligible beneficiaries to select or change their primary care
providers.

(h) The department shall seek any necessary federal approvals
to implement the provisions of this section.

begin insert 14199.2. end insert   

(a) Subject to subdivision (e), Medi-Cal managed
care plans serving newly eligible beneficiaries, as defined in
subdivision (s) of Section 17612.2, shall pay county public hospital
health systems, as defined in subdivision (f) of Section 17612.2,
for services provided to newly eligible beneficiaries in amounts
that are no less than the cost of providing those services, including
the cost of network and out-of-network services that are charged
to or paid for by county public hospital health systems. For
purposes of this requirement, the cost of providing services shall
mean the amounts, including the federal and nonfederal share of
all allowable costs, determined in a manner consistent with the
cost claiming protocols developed for the federal Medicaid
demonstration project authorized under Section 1115 of the Social
Security Act entitled the “Bridge to Health Care Reform” (waiver
number 11-W-00193/9), including protocols pending federal
approval, and under Section 14166.8.

(b) Consistent with federal law, the capitation rates paid to
Medi-Cal managed care plans for newly eligible beneficiaries
shall be determined to reflect the obligations imposed by
subdivision (a).

(c) (1) Prior to the execution of a change order or contract
amendment between the department and a Medi-Cal managed
care plan providing for coverage of newly eligible beneficiaries,
the Medi-Cal managed care plan shall demonstrate and certify
that it has contracts or other arrangements in place with county
public hospital health systems that provide for payments for
services meeting the requirements of subdivision (a).

(2) Each year, each Medi-Cal managed care plan shall provide
to the department an accounting of the payments made to
demonstrate compliance with subdivision (a). To the extent a
Medi-Cal managed care plan is not compliant with any of the
requirements of this section, the department shall reduce the default
assignment into the Medi-Cal managed care plan with respect to
all Medi-Cal beneficiaries by 25 percent, as long as the other
Medi-Cal managed care plan or plans in the county have the
capacity to receive the additional default membership.

(d) A Medi-Cal managed care plan shall not impose a fee or
retention amount, or reduce other payments to a county public
hospital health system, that would result in a direct or indirect
reduction to the amounts required to be paid under subdivision
(a).

(e) (1) If a nonfederal share is necessary with respect to the
capitation rates described in subdivision (b), a county public
hospital health system or affiliated governmental entity shall have
the right to voluntarily provide intergovernmental transfers for
the nonfederal share of expenditures for the capitation rates
described in subdivision (b) with respect to the requirements in
subdivision (a). Only if the county public hospital health system
or affiliated governmental entity so chooses, the requirements in
this section shall apply. Notwithstanding any other law, the state
shall not assess the fee described in subdivision (d) of Section
14301.4, or any other similar fee. Nothing in this section shall be
construed to require a county public hospital health system to
provide the nonfederal share for expenditures for purposes other
than those described in subdivision (a), or for expenditures that
are otherwise for Medi-Cal managed care beneficiaries who do
not receive services in the county public hospital health system.

(2) Within 12 months following the end of each fiscal year, a
county public hospital system shall submit data to the department
demonstrating the payments received from Medi-Cal managed
care plans as required under subdivision (a). If the amount of the
applicable intergovernmental transfer provided by a county public
hospital system does not equal the nonfederal share of those
payments, the county hospital system and the department shall
adjust the amount of the intergovernmental transfer accordingly.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 14301.5 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 14301.5. end insert   

(a) (1) To the extent federal financial participation
is not jeopardized and consistent with federal law, and subject to
the conditions set forth in subdivision (b), the department shall
pay Medi-Cal managed care plans rate range increases, as defined
by paragraph (4) of subdivision (b) of Section 14301.4, at a
minimum level of 75 percent of the rate range available with
respect to all enrollees who are newly eligible beneficiaries for
purposes of this section. If a nonfederal share is necessary to fund
the rate range increases, a county public hospital health system
as defined in subdivision (f) of Section 17612.2 or affiliated
governmental entity may voluntarily provide intergovernmental
transfers for the nonfederal share.

(2) The increased payments to Medi-Cal managed care plans
that would be paid consistent with actuarial certification and
enrollment in the absence of this section, including, but not limited
to, payments described in Section 14182.15, shall not be reduced
as a consequence of payment under this section.

(b) Payments to Medi-Cal managed care plans pursuant to
subdivision (a) are conditioned on all of the following:

(1) The Medi-Cal managed care plan shall pay all of the rate
range increases provided under this section as additional payments
to county public hospital health systems for providing and making
available services to Medi-Cal enrollees of the plan.

(2) The Medi-Cal managed care plan shall demonstrate that it
has a contract or other arrangement in place with county public
hospital health systems to provide additional payments to county
public hospital health systems for services rendered to Medi-Cal
beneficiaries that meet the requirements of paragraph (1). The
existence of those agreements or arrangements shall be reported
to the department by the county public hospital health system.

(3) Additional payments described in paragraph (1) shall not
supplant amounts that would otherwise be payable by Medi-Cal
managed care plans to county public hospital health systems. A
Medi-Cal managed care plan shall not impose a fee or retention
amount, or reduce other payments to a county public hospital
health system, that would result in a direct or indirect reduction
to these payments.

(4) The county public hospital health system or affiliated
governmental entity voluntarily provides an intergovernmental
transfer of public funds to the state for use as the nonfederal share,
if any, of the increased capitation rates. Notwithstanding any other
provision of law, the department shall not assess the fee described
in subdivision (d) of Section 14301.4, or any other similar fee.

(c) To the extent a Medi-Cal managed care plan is not compliant
with any of the requirements imposed upon it pursuant to this
section, the department shall reduce by 25 percent the default
assignment into the Medi-Cal managed care plan with respect to
all Medi-Cal beneficiaries, as long as the other Medi-Cal managed
care plan or plans in that county have the capacity to receive the
additional default membership.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 17600 of the end insert begin insert Welfare and Institutions Code end insert begin insert is
amended to read: end insert

17600.  

(a) There is hereby created the Local Revenue Fund,
which shall have all of the following accounts:

(1) The Sales Tax Account.

(2) The Vehicle License Fee Account.

(3) The Vehicle License Collection Account.

(4) The Sales Tax Growth Account.

(5) The Vehicle License Fee Growth Account.

(b) The Sales Tax Account shall have all of the following
subaccounts:

(1) The Mental Health Subaccount.

(2) The Social Services Subaccount.

(3) The Health Subaccount.

(4) The CalWORKs Maintenance of Effort Subaccount.

(c) The Sales Tax Growth Account shall have all of the
following subaccounts:

(1) The Caseload Subaccount.

(2) The Base Restoration Subaccount.

(3) The Indigent Health Equity Subaccount.

(4) The Community Health Equity Subaccount.

(5) The Mental Health Equity Subaccount.

(6) The State Hospital Mental Health Equity Subaccount.

(7) The County Medical Services Subaccount.

(8) The General Growth Subaccount.

(9) The Special Equity Subaccount.

(d) Notwithstanding Section 13340 of the Government Code,
the Local Revenue Fund is hereby continuously appropriated,
without regard to fiscal years, for the purpose of this chapter.

(e) The Local Revenue Fund shall be invested in the Surplus
Money Investment Fund and all interest earned shall be distributed
in January and July among the accounts and subaccounts in
proportion to the amounts deposited into each subaccount, except
as provided in subdivision (f).

(f) If a distribution required by subdivision (e) would cause a
subaccount to exceed its limitations imposed pursuant to any of
the following, the distribution shall be made among the remaining
subaccounts in proportion to the amounts deposited into each
subaccount in the six prior months:

(1) Subdivision (a) of Section 17605.

(2) Subdivision (a) of Section 17605.05.

(3) Subdivision (b) of Section 17605.10.

(4) Subdivision (c) of Section 17605.10.

begin insert

(g) This section shall remain in effect only until July 1, 2013,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2013, deletes or extends that date.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 17600 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 17600. end insert   

(a) There is hereby created the Local Revenue Fund,
which shall consist of the following accounts:

(1) The Sales Tax Account.

(2) The Vehicle License Fee Account.

(3) The Vehicle License Collection Account.

(4) The Sales Tax Growth Account.

(5) The Vehicle License Fee Growth Account.

(b) The Sales Tax Account shall have all of the following
subaccounts:

(1) The Mental Health Subaccount.

(2) The Social Services Subaccount.

(3) The Health Subaccount.

(4) The CalWORKs Maintenance of Effort Subaccount.

(5) The Family Support Subaccount.

(6) The Child Poverty and Family Supplemental Support
Subaccount.

(c) The Sales Tax Growth Account shall have all of the following
subaccounts:

(1) The Caseload Subaccount.

(2) The County Medical Services Subaccount.

(3) The General Growth Subaccount.

(d) Notwithstanding Section 13340 of the Government Code,
the Local Revenue Fund is hereby continuously appropriated,
without regard to fiscal years, for the purpose of this chapter.

(e) Moneys in the Local Revenue Fund shall be invested in the
Surplus Money Investment Fund and all interest earned shall be
distributed in January and July among the accounts and
subaccounts in proportion to the amounts deposited into each
subaccount.

(f) This section shall be operative on July 1, 2013.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 17600.10 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17600.10.  

(a) Each county and city and county receiving funds
in accordance with this chapter shall establish and maintain a local
health and welfare trust fund comprised of the following accounts:

(1) The mental health account.

(2) The social services account.

(3) The health account.

(4) The CalWORKs Maintenance of Effort Subaccount.

begin insert

(5) The family support account.

end insert

(b) Each city receiving funds in accordance with this chapter
shall establish and maintain a local health and welfare trust fund
comprised of a health account and a mental health account.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 17600.15 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17600.15.  

(a) Of the sales tax proceeds from revenues collected
in the 1991-92 fiscal year which are deposited to the credit of the
Local Revenue Fund, 51.91 percent shall be credited to the Mental
Health Subaccount, 36.17 percent shall be credited to the Social
Services Subaccount, and 11.92 percent shall be credited to the
Health Subaccount of the Sales Tax Account.

(b) For the 1992-93 fiscal year to the 2011-12 fiscal year,
inclusive, of the sales tax proceeds from revenues deposited to the
credit of the Local Revenue Fund, the Controller shall make
monthly deposits to the Mental Health Subaccount, the Social
Services Subaccount, and the Health Subaccount of the Sales Tax
Account until the deposits equal the amounts that were allocated
to counties, cities, and cities and counties mental health accounts,
social services accounts, and health accounts, respectively, of the
local health and welfare trust funds in the prior fiscal year pursuant
to this chapter from the Sales Tax Account and the Sales Tax
Growth Account. Any excess sales tax revenues received pursuant
to Sections 6051.2 and 6201.2 of the Revenue and Taxation Code
shall be deposited in the Sales Tax Growth Account of the Local
Revenue Fund.

(c) (1) For the 2012-13 fiscal year begin delete and fiscal years thereafter end delete ,
of the sales tax proceeds from revenues deposited to the credit of
the Local Revenue Fund, the Controller shall make monthly
deposits to the Social Services Subaccount and the Health
Subaccount of the Sales Tax Account until the deposits equal the
amounts that were allocated to counties’, cities’, and city and
counties social services accounts and health accounts, respectively,
of the local health and welfare trust funds in the prior fiscal year
pursuant to this chapter from the Sales Tax Account and the Sales
Tax Growth Account.

(2) For the 2012-13 fiscal year, begin delete and fiscal years thereafter, end delete of
the sales tax proceeds from revenues deposited to the credit of the
Local Revenue Fund, the Controller shall make monthly deposits
to the Mental Health Subaccount of the Sales Tax Account until
the deposits equal the amounts that were allocated to counties’,
cities’, and city and counties CalWORKs Maintenance of Effort
Subaccounts pursuant to subdivision (a) of Section 17601.25, and
any additional amounts above the amount specified in subdivision
(a) of Section 17601.25, of the local health and welfare trust funds
in the prior fiscal year pursuant to this chapter from the Sales Tax
Account and the Sales Tax Growth Account. The Controller shall
not include in this calculation any funding deposited in the Mental
Health Subaccount from the Support Services Growth Subaccount
pursuant to Section 30027.9 of the Government Code or funds
described in subdivision (c) of Section 17601.25.

(3) Any excess sales tax revenues received pursuant to Sections
6051.2 and 6201.2 of the Revenue and Taxation Code after the
allocations required by paragraphs (1) and (2) are made shall be
deposited in the Sales Tax Growth Account of the Local Revenue
Fund.

begin insert

(d) (1) For the 2013-14 fiscal year, of the sales tax proceeds
from revenues deposited to the credit of the Local Revenue Fund,
the Controller shall make monthly deposits pursuant to a schedule
provided by the Department of Finance, which shall provide for
total allocations as follows:

end insert begin insert

(A) To the Social Services Subaccount of the Sales Tax Account
until the deposits are one billion dollars ($1,000,000,000) less
than the total amount that was allocated to the social services
accounts of the local health and welfare trust funds in the prior
fiscal year pursuant to this chapter from the Sales Tax Account
and the Sales Tax Growth Account.

end insert begin insert

(B) To the Health Subaccount of the Sales Tax Account until
the deposits are one billion dollars ($1,000,000,000) more than
the total amount that was allocated to the health accounts of the
local health and welfare trust funds in the prior fiscal year
pursuant to this chapter from the Sales Tax Account and the Sales
Tax Growth Account.

end insert begin insert

(C) To the Mental Health Subaccount of the Sales Tax Account
until the deposits equal the amounts that were allocated to
counties’, cities’, and cities and counties’ CalWORKs Maintenance
of Effort Subaccounts pursuant to subdivision (a) of Section
17601.25, and any additional amounts above the amount specified
in subdivision (a) of Section 17601.25, of the local health and
welfare trust funds in the prior fiscal year pursuant to this chapter
from the Sales Tax Account and the Sales Tax Growth Account.
The Controller shall not include in this calculation any funding
deposited in the Mental Health Subaccount from the Support
Services Growth Subaccount pursuant to Section 30027.9 of the
Government Code or funds described in subdivision (c) of Section
17601.25.

end insert begin insert

(2) Any excess sales tax revenues received pursuant to Sections
6051.2 and 6201.2 of the Revenue and Taxation Code after the
allocations required by subparagraphs (A) to (C), inclusive, of
paragraph (1) are made shall be deposited in the Sales Tax Growth
Account of the Local Revenue Fund.

end insert begin insert

(e) For the 2014-15 fiscal year and fiscal years thereafter, of
the sales tax proceeds from revenues deposited to the credit of the
Local Revenue Fund, the Controller shall make the following
monthly deposits:

end insert begin insert

(1) To the Social Services Subaccount, of the Sales Tax Account
until the deposits equal the total amount that was allocated to the
social services accounts of the local health and welfare trust funds
in the prior fiscal year pursuant to this chapter, from the Sales
Tax Account and the Sales Tax Growth Account.

end insert begin insert

(2) To the Health Subaccount of the Sales Tax Account, until
the deposits equal the total amount that was deposited in the prior
year from the Sales Tax Account in addition to the amounts that
were allocated to the health accounts of the local health and
welfare trust funds in the prior fiscal year pursuant to this chapter
from the Sales Tax Growth Account.

end insert begin insert

(3) To the Child Poverty and Family Supplemental Support
Subaccount until the deposits equal the amounts that were
deposited in the prior fiscal year from the Sales Tax Account and
the Sales Tax Growth Account.

end insert begin insert

(4) To the Mental Health Subaccount of the Sales Tax Account
until the deposits equal the amounts that were allocated to
counties’, cities’, and cities and counties’ CalWORKs Maintenance
of Effort Subaccounts pursuant to subdivision (a) of Section
17601.25, and any additional amounts above the amount specified
in subdivision (a) of Section 17601.25 of the local health and
welfare trust funds in the prior fiscal year pursuant to this chapter
from the Sales Tax Account and the Sales Tax Growth Account.
The Controller shall not include in this calculation any funding
deposited in the Mental Health Subaccount from the Support
Services Growth Subaccount pursuant to Section 30027.9 of the
Government Code or funds described in subdivision (c) of Section
17601.25.

end insert begin insert

(5) Any excess sales tax revenues received pursuant to Sections
6051.2 and 6201.2 of the Revenue and Taxation Code after the
allocations required by paragraphs (1) to (4), inclusive, are made
shall be deposited in the Sales Tax Growth Account of the Local
Revenue Fund.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 17600.20 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17600.20.  

(a)  begin delete Any end delete begin insert Excluding funds allocated to the CalWORKs
Maintenance of Effort Subaccount and the family support account,
any end insert county begin delete or end delete begin insert , end insert city begin insert , end insert or city and county may reallocate money
among accounts in the local health and welfare trust fund, not to
exceed 10 percent of the amount deposited in the account from
which the funds are reallocated for that fiscal year.

(b) After depositing funds to the social services account
allocated to a county or city and county pursuant to Section 17605
and after reallocating funds from both the health account and
mental health account of the local health and welfare trust fund
under subdivision (a), a county may reallocate up to an additional
10 percent of the money from the health account to the social
services account in the 1992-93 fiscal year and fiscal years
thereafter, for caseload increases for mandated social services
programs listed in paragraph (2) of subdivision (b) of Section
17605 in excess of revenue growth in the social services account.

(c) (1) A county begin delete or end delete begin insert , end insert city begin insert , end insert or city and county shall, at a regularly
scheduled public hearing of its governing body, document that any
decision to make any substantial change in its allocation of mental
health, social services, or health trust fund moneys among services,
facilities, programs, or providers as a result of reallocating funds
pursuant to subdivision (a), (b), or (d) was based on the most
cost-effective use of available resources to maximize client
outcomes.

(2) Any county or city and county that reallocates funds pursuant
to subdivision (b) shall document, at a regularly scheduled public
hearing of the board of supervisors, that the net social services
caseload has increased beyond the revenue growth in the social
services account.

(3) Any county, city, or city and county that is required to
document any reallocation of funds pursuant to paragraphs (1) and
(2) shall forward a copy of the documentation to the Controller.
The Controller shall make copies of the documentation available
to the Legislature and to other interested parties, upon request.

(d) In addition to subdivision (a), a county or city and county
may reallocate up to an additional 10 percent of the money from
the social services account to the mental health account or the
health account in the 1993-94 fiscal year and fiscal years thereafter
when there exist in the social services account revenues in excess
of the amount necessary to fund mandated caseload costs, pursuant
to paragraph (2) of subdivision (b) of Section 17605, as determined
by the county board of supervisors, as a result of implementation
of personal care services or other program changes.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 17600.50 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 17600.50. end insert   

(a) A county that participated in the County Medical
Services Program in the 2011-12 fiscal year, including the
Counties of Alpine, Amador, Butte, Calaveras, Colusa, Del Norte,
El Dorado, Glenn, Humboldt, Imperial, Inyo, Kings, Lake, Lassen,
Madera, Marin, Mariposa, Mendocino, Modoc, Mono, Napa,
Nevada, Plumas, San Benito, Shasta, Sierra, Siskiyou, Solano,
Sonoma, Sutter, Tehama, Trinity, Tuolumne, and Yuba and the
Governing Board of the County Medical Services Program, shall
adopt resolutions by December 4, 2013, that confirm acceptance
for the following approach to determining payments to the Family
Support Services Subaccount:

(1) The amount of payments to the Family Support Services
Subaccount shall be equal to 60 percent of the sum of the following:

(A) The 1991 health realignment funds that would have
otherwise been allocated to the counties listed above pursuant to
Sections 17603, 17604, 17606.10, and 17606.20 and the
maintenance of effort in subdivision (a) of Section 17608.10 for
these counties, as those sections read on January 1, 2012.

(B) The 1991 health realignment funds that would have
otherwise been allocated to the County Medical Services Program
pursuant to Sections 17603, 17604, 17605.07, and 17606.20, as
those sections read on January 1, 2012.

(2) The payment computed in paragraph (1) shall be achieved
through the following:

(A) Each county listed in subdivision (a) shall pay the amounts
otherwise payable to the County Medical Services Program
pursuant to subparagraph (B) of paragraph (2) of subdivision (j)
of Section 16809 to the Family Support Services Subaccount.

(B) The County Medical Services Program shall pay the
difference between the total computed in paragraph (1) and the
amount calculated in subparagraph (A) from funds provided
pursuant to the Welfare and Institutions Code.

(b) The Counties of Fresno, Merced, Orange, Placer,
Sacramento, San Diego, San Luis Obispo, Santa Barbara, Santa
Cruz, Stanislaus, Tulare, and Yolo shall each tentatively inform
the state by October 1, 2013, which of the following options it
selects for determining its payments to the Family Support Services
Subaccount. On or before December 4, 2013, the board of
supervisors of each county and city and county may adopt a
resolution informing the state of the county’s or city and county’s
final selection of the option for determining its payments to the
Family Support Services Subaccount:

(1) The formula detailed in Article 13 (commencing with Section
17613.1).

(2) (A) A calculation of 60 percent of the total of 1991 health
realignment funds that would have otherwise been allocated to
that county or city and county pursuant to Sections 17603, 17604,
17606.10, and 17606.20 and 60 percent of the maintenance of
effort in subdivision (a) of Section 17608.10, as those sections
read on January 1, 2012.

(B) If a county’s maintenance of effort in subdivision (a) of
Section 17608.10 is greater than 14.6 percent of the total value of
the county’s 2010-11 allocation pursuant to Sections 17603,
17604, 17606.10, and 17606.20 and subdivision (a) of Section
17608.10, the value of the maintenance of effort used in the
calculation in subparagraph (A) shall be limited to 14.6 percent.

(c) The Counties of Alameda, Contra Costa, Kern, Los Angeles,
Monterey, Riverside, San Bernardino, San Francisco, San Joaquin,
San Mateo, Santa Clara, and Ventura shall each tentatively inform
the state by October 1, 2013, which of the following options it
selects for determining its payments to the Family Support Services
Subaccount. On or before December 4, 2013, the board of
supervisors of each county and city and county may adopt a
resolution informing the state of the county’s or city and county’s
final selection of the option for determining its payments to the
Family Support Services Subaccount:

(1) The formula detailed in Article 12 (commencing with Section
17612.1).

(2) (A) A calculation of 60 percent of the total of 1991 health
realignment funds that would have otherwise been allocated to
that county or city and county pursuant to Sections 17603, 17604,
17606.10, and 17606.20 and 60 percent of the maintenance of
effort in subdivision (a) of Section 17608.10, as those sections
read on January 1, 2012.

(B) If a county’s maintenance of effort in subdivision (a) of
Section 17608.10 is greater than 25.9 percent of the total value of
the county’s 2010-11 fiscal year allocation pursuant to Sections
17603, 17604, 17606.10, and 17606.20, and subdivision (a) of
Section 17608.10, the value of the maintenance of effort used in
the calculation in subparagraph (A) shall be limited to 25.9
percent.

(d) (1) If the board of supervisors of a county or city and county
fails to adopt a resolution pursuant to subdivision (b) or (c), as
applicable, or fails to inform the Director of Health Care Services
of the city and county or county’s final selection, by December 4,
2013, the calculation shall be 62.5 percent of the total of 1991
health realignment funds that would have otherwise been allocated
to that county or city and county pursuant to Sections 17603,
17604, 17606.10, and 17606.20 and 62.5 percent of the
maintenance of effort in subdivision (a) of Section 17608.10.

(2) If the County Medical Services Program governing board
or the board of supervisors of a county that participates in the
County Medical Services Program fails to adopt a resolution
pursuant to subdivision (a), or fails to inform the Director of Health
Care Services of the county’s final selection, by December 4, 2013,
then paragraphs (1) and (2) of subdivision (a) applies to the
applicable counties and to the County Medical Services Program.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 17600.60 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 17600.60. end insert   

(a) The County Health Care Funding Resolution
Committee is hereby created to do all of the following:

(1) Determine whether the calculation of the historical
percentage or amount to be applied in calculations in Section
17612.3 complies with that section, taking into account the data
and calculations provided by the county and any alternative data
and calculations submitted by the department.

(2) Hear and determine petitions from certain counties, as
defined, to make particularized changes in what provisions of
Section 17600.50 are controlling.

(3) Hear and determine petitions for an alternative cost
calculation to the cost per person calculation in subdivision (c) of
Section 17613.2.

(b) The committee shall consist of the following members:

(1) One person selected by the California State Association of
Counties.

(2) One person selected by the State Department of Health Care
Services.

(3) One person selected by the Director of Finance.

(c) (1) The committee is not subject to the Bagley-Keene Open
Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
Code) and shall be exempt from the Administrative Procedures
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code). The Department
of Finance shall provide staff for the committee.

(2) Pursuant to paragraph (2) of subdivision (b) of Section 3 of
Article I of the California Constitution, the Legislature finds and
declares that the public interest in affordable and accessible health
care outweighs the public interest in access to these proceedings.

(d) (1) A county or city and county, that chose to be subject to
paragraph (2) of subdivision (b) or paragraph (2) of subdivision
(c) of Section 17600.50 may submit a petition to the committee to
be subject to paragraph (1) of subdivision (b) or paragraph (1) of
subdivision (c) of Section 17600.50, as applicable, if the county
or city and county demonstrates and provides sufficient evidence
of both of the following criteria:

(A) There have been changes in expenditures related to state
and federal law, regulation and rulemaking, or court decisions
that have a material impact on the provision of health care services
to indigent adults.

(B) All of the data necessary to participate in Article 12
(commencing with Section 17612.1) or Article 13 (commencing
with Section 17613.1), as appropriate.

(2) The form of petition shall be determined by the committee
by December 31, 2013.

(3) If the committee approves the petition the county or city and
county shall be subject to paragraph (1) of subdivision (b) or
paragraph (1) of subdivision (c) of Section 17600.50, as applicable,
at the start of the next fiscal year.

(e) (1) A county that chose to be subject to Article 13
(commencing with Section 17613.1) may submit a petition to the
committee for an alternative cost calculation to the cost per person
calculation in subdivision (c) of Section 17613.2 with the
documentation of extraordinary circumstances, including
circumstances related to the local health care marketplace,
provider, and provider contracts.

(2) The county shall submit all necessary data to support its
submission.

(f) The committee shall make decisions within 45 days of hearing
any petition.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert The heading of Article 2.5 (commencing with Section
17601.25) is added to Chapter 6 of Part 5 of Division 9 of the end insert begin insert Welfare and Institutions Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 2.5. end insert   Family Support Allocations

 

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 17601.25 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17601.25.  

(a) Notwithstanding any other law, beginning in
the 2012-13 fiscal year, except for funds deposited in the Mental
Health Subaccount from the Support Services Growth Subaccount
pursuant to Section 30027.9 of the Government Code and the funds
described in subdivision (c), any funds under this chapter or any
other provision of Chapter 89 of the Statutes of 1991 that would
otherwise have been deposited into each county’s or city and
county’s mental health account subsequent to July 15 shall instead
be deposited in the CalWORKs Maintenance of Effort Subaccount.
However, in each fiscal year, the amount deposited in the
CalWORKs Maintenance of Effort Subaccount shall not exceed
one billion one hundred twenty million five hundred fifty-one
thousand dollars ($1,120,551,000).

(b) All of the funds deposited in the CalWORKs Maintenance
of Effort Subaccount pursuant to subdivision (a) shall be used by
each county or city and county that receives an allocation of those
funds to pay an increased county contribution toward the costs of
CalWORKs grants. Each county’s total annual contribution
pursuant to this section shall equal the total amount of funds
deposited in the county’s CalWORKs Maintenance of Effort
Subaccount during that fiscal year. The CalWORKs Maintenance
of Effort Subaccount shall not be subject to the transferability
provisions of Section 17600.20 and shall not be factored into the
calculation of growth allocations pursuant to Article 7
(commencing with Section 17606.05). Each county’s contribution
pursuant to this section begin insert and Section 17601.75 end insert shall be in addition
to the share of cost required pursuant to Section 15200.

(c) There shall be a monthly allocation of ninety-three million
three hundred seventy-nine thousand two hundred fifty-two dollars
($93,379,252) from the Mental Health Account in the Local
Revenue Fund 2011 to the Mental Health Subaccount pursuant to
subdivision (a) of Sections 30027.5, 30027.6, 30027.7, and 30027.8
of the Government Code.

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 17601.50 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 17601.50. end insert   

The moneys in the Child Poverty and Family
Supplemental Support Subaccount shall be allocated to the family
support account in the local health and welfare trust fund in each
county and city and county by the Controller pursuant to a schedule
prepared by the Department of Finance. All funds allocated shall
be attributable to the payment of grant increases as authorized by
Section 11450.025. Funds that are not allocated in a fiscal year,
shall be available for allocation in the following fiscal year.

end insert

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 17601.75 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 17601.75. end insert   

(a) On or before the 27th day of the month, the
Controller shall allocate to the family support account in the local
health and welfare trust fund of each county and city and county
the amounts deposited and remaining unexpended and unreserved
on the 15th day of the month in the Family Support Subaccount of
the Local Revenue Fund, pursuant to schedules developed by the
Department of Finance in conjunction with the appropriate state
departments and in consultation with the California State
Association of Counties.

(b) All of the funds deposited in the family support account shall
be used by each county and city and county that receives an
allocation of those funds to pay an increased county contribution
toward the costs of CalWORKS grants. Each county’s total annual
contribution pursuant to this section shall equal the total amount
of funds deposited in each county’s and city and county’s family
support account during that fiscal year. The family support account
shall not be subject to the transferability provisions of Section
17600.20. Each county’s contribution pursuant to this section and
Section 17601.25 shall be in addition to the shares of cost required
pursuant to Section 15200.

end insert

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 17603 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17603.  

begin insert This paragraph shall only apply until the end of the
2012-12 fiscal year. end insert On or before the 27th day of each month, the
Controller shall allocate to the local health and welfare trust fund
health accounts the amounts deposited and remaining unexpended
and unreserved on the 15th day of the month in the Health
Subaccount of the Sales Tax Account of the Local Revenue Fund,
in accordance with subdivisions (a) and (b):

(a) For the 1991-92 fiscal year, allocations shall be made in
accordance with the following schedule:

 

Jurisdiction	Allocation Percentage
Alameda	4.5046
Alpine	0.0137
Amador	0.1512
Butte	0.8131
Calaveras	0.1367
Colusa	0.1195
Contra Costa	2.2386
Del Norte	0.1340
El Dorado	0.5228
Fresno	2.3531
Glenn	0.1391
Humboldt	0.8929
Imperial	0.8237
Inyo	0.1869
Kern	1.6362
Kings	0.4084
Lake	0.1752
Lassen	0.1525
Los Angeles	37.2606
Madera	0.3656
Marin	1.0785
Mariposa	0.0815
Mendocino	0.2586
Merced	0.4094
Modoc	0.0923
Mono	0.1342
Monterey	0.8975
Napa	0.4466
Nevada	0.2734
Orange	5.4304
Placer	0.2806
Plumas	0.1145
Riverside	2.7867
Sacramento	2.7497
San Benito	0.1701
San Bernardino	2.4709
San Diego	4.7771
San Francisco	7.1450
San Joaquin	1.0810
San Luis Obispo	0.4811
San Mateo	1.5937
Santa Barbara	0.9418
Santa Clara	3.6238
Santa Cruz	0.6714
Shasta	0.6732
Sierra	0.0340
Siskiyou	0.2246
Solano	0.9377
Sonoma	1.6687
Stanislaus	1.0509
Sutter	0.4460
Tehama	0.2986
Trinity	0.1388
Tulare	0.7485
Tuolumne	0.2357
Ventura	1.3658
Yolo	0.3522
Yuba	0.3076
Berkeley	0.0692
Long Beach	0.2918
Pasadena	0.1385

 

(b) For the 1992-93 fiscal year and fiscal years thereafter begin insert until
the commencement of the 2012-13 fiscal year end insert , the allocations to
each county and city and county shall equal the amounts received
in the prior fiscal year by each county, city, and city and county
from the Sales Tax Account and the Sales Tax Growth Account
of the Local Revenue Fund into the health and welfare trust fund.

begin insert

(c) (1) For the 2013-14 fiscal year, on the 27th day of each
month, the Controller shall allocate, in the same proportion and
funds in subdivision (b) were allocated, to each county’s and city
and county’s local health and welfare trust fund health accounts,
the amounts deposited and remaining unexpended and unreserved
on the 15th day of the month in the Health Subaccount of the Sales
Tax Account of the Local Revenue Fund.

end insert begin insert

(2) (A) Beginning January 2014 and for the remainder of the
2013-14 fiscal year ending June 30, 2014, on or before the 25th
of each month, the Controller shall transfer to the Family Support
Subaccount from the Health Subaccount amounts determined
pursuant to a schedule prepared by the Department of Finance in
consultation with the California State Association of Counties.
Cumulatively, no more than three hundred million dollars
($300,000,000) shall be transferred.

end insert begin insert

(B) Every month, after the transfers in subparagraph (A) have
occurred, the remainder shall be allocated to the counties and
cities and counties in the same proportions as funds in subdivision
(b) were allocated.

end insert begin insert

(C) For counties participating in the County Medical Services
Program, transfers from each county shall not be greater than the
monthly amount the county would otherwise pay pursuant to
paragraph (2) of subdivision (j) of Section 16809 for participation
in the County Medical Services Program. Any difference between
the amount paid by these counties and the proportional share of
the three hundred million dollars ($300,000,000) calculated as
payable by these counties and the County Medical Services
Program shall be paid from the funds available for allocation to
the County Medical Services Program in accordance with the
Welfare and Institution Code.

end insert begin insert

(3) For the 2013-14 fiscal year, the Controller, using the same
timing and criteria used in paragraph (1), shall allocate to each
city, not to include a city and county, funds that shall equal the
amounts received in the prior fiscal year by each city from the
Sales Tax Account and the Sales Tax Growth Account of the Local
Revenue Fund into the health and welfare trust fund.

end insert begin insert

(d) (1) (A) For the 2014-15 fiscal year and for every fiscal
year thereafter, the Department of Finance, in consultation with
the California State Association of Counties, shall calculate the
amount each county or city and county shall contribute to the
Family Support Subaccount in accordance with Section 17600.50.

end insert begin insert

(B) On or before the 25th of each month, the Controller shall
transfer, based on a schedule prepared the Department of Finance
in consultation with the California State Association of Counties,
from the funds deposited and remaining unexpended and
unreserved on the 15th day of the month in the Health Subaccount
of the Sales Tax Account of the Local Revenue Fund to the Family
Support Subaccount, funds that equal, over the course of the year,
the amount determined in subparagraph (A) pursuant to a schedule
provided by the Department of Finance.

end insert begin insert

(C) After the transfer in subparagraph (B) has occurred, the
State Controller shall allocate on or before the 27th of each month
to health account in the local health and welfare trust fund of every
county and city and county from a schedule prepared by the
Department of Finance, in consultation with the California State
Association of Counties, any funds remaining in the Health Account
from the funds deposited and remaining unexpended and
unreserved on the 15th day of the month in the Health Subaccount
of the Sales Tax Account of the Local Revenue Fund. The schedule
shall be prepared as the allocations would have been distributed
pursuant to subdivision (b).

end insert begin insert

(D) For the 2014-15 fiscal year and for every fiscal year
thereafter, the Controller, using the same timing and criteria as
had been used in subdivision (b), shall allocate to each city, not
to include a city and county, funds that equal the amounts received
in the prior fiscal year by each city from the Sales Tax Account
and the Sales Tax Growth Account of the Local Revenue Fund into
the health and welfare trust fund.

end insert

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 17604 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17604.  

(a) All motor vehicle license fee revenues collected in
the 1991-92 fiscal year that are deposited to the credit of the Local
Revenue Fund shall be credited to the Vehicle License Fee Account
of that fund.

(b) (1) For the 1992-93 fiscal year and fiscal years thereafter,
from vehicle license fee proceeds from revenues deposited to the
credit of the Local Revenue Fund, the Controller shall make
monthly deposits to the Vehicle License Fee Account of the Local
Revenue Fund until the deposits equal the amounts that were
allocated to counties, cities, and cities and counties as general
purpose revenues in the prior fiscal year pursuant to this chapter
from the Vehicle License Fee Account in the Local Revenue Fund
and the Vehicle License Fee Account and the Vehicle License Fee
Growth Account in the Local Revenue Fund.

(2) Any excess vehicle fee revenues deposited into the Local
Revenue Fund pursuant to Section 11001.5 of the Revenue and
Taxation Code shall be deposited in the Vehicle License Fee
Growth Account of the Local Revenue Fund.

(3) The Controller shall calculate the difference between the
total amount of vehicle license fee proceeds deposited to the credit
of the Local Revenue Fund, pursuant to paragraph (1) of
subdivision (a) of Section 11001.5 of the Revenue and Taxation
Code, and deposited into the Vehicle License Fee Account for the
period of July 16, 2009, to July 15, 2010, inclusive, and the amount
deposited for the period of July 16, 2010, to July 15, 2011,
inclusive.

(4) Of vehicle license fee proceeds deposited to the Vehicle
License Fee Account after July 15, 2011, an amount equal to the
difference calculated in paragraph (3) shall be deemed to have
been deposited during the period of July 16, 2010, to July 15, 2011,
inclusive, and allocated to cities, counties, and a city and county
as if those proceeds had been received during the 2010-11 fiscal
year.

(c) (1) On or before the 27th day of each month, the Controller
shall allocate to each county, city, or city and county, as general
purpose revenues the amounts deposited and remaining unexpended
and unreserved on the 15th day of the month in the Vehicle License
Fee Account of the Local Revenue Fund, in accordance with
paragraphs (2) and (3).

(2) For the 1991-92 fiscal year, allocations shall be made in
accordance with the following schedule:

 

Jurisdiction	Allocation Percentage
Alameda	4.5046
Alpine	0.0137
Amador	0.1512
Butte	0.8131
Calaveras	0.1367
Colusa	0.1195
Contra Costa	2.2386
Del Norte	0.1340
El Dorado	0.5228
Fresno	2.3531
Glenn	0.1391
Humboldt	0.8929
Imperial	0.8237
Inyo	0.1869
Kern	1.6362
Kings	0.4084
Lake	0.1752
Lassen	0.1525
Los Angeles	37.2606
Madera	0.3656
Marin	1.0785
Mariposa	0.0815
Mendocino	0.2586
Merced	0.4094
Modoc	0.0923
Mono	0.1342
Monterey	0.8975
Napa	0.4466
Nevada	0.2734
Orange	5.4304
Placer	0.2806
Plumas	0.1145
Riverside	2.7867
Sacramento	2.7497
San Benito	0.1701
San Bernardino	2.4709
San Diego	4.7771
San Francisco	7.1450
San Joaquin	1.0810
San Luis Obispo	0.4811
San Mateo	1.5937
Santa Barbara	0.9418
Santa Clara	3.6238
Santa Cruz	0.6714
Shasta	0.6732
Sierra	0.0340
Siskiyou	0.2246
Solano	0.9377
Sonoma	1.6687
Stanislaus	1.0509
Sutter	0.4460
Tehama	0.2986
Trinity	0.1388
Tulare	0.7485
Tuolumne	0.2357
Ventura	1.3658
Yolo	0.3522
Yuba	0.3076
Berkeley	0.0692
Long Beach	0.2918
Pasadena	0.1385

 

(3) For the 1992-93, 1993-94, and 1994-95 fiscal year and
fiscal years thereafter, allocations shall be made in the same
amounts as were distributed from the Vehicle License Fee Account
and the Vehicle License Fee Growth Account in the prior fiscal
year.

(4) For the 1995-96 fiscal year, allocations shall be made in the
same amounts as distributed in the 1994-95 fiscal year from the
Vehicle License Fee Account and the Vehicle License Fee Growth
Account after adjusting the allocation amounts by the amounts
specified for the following counties:

 

Alpine	$(11,296)
Amador	25,417
Calaveras	49,892
Del Norte	39,537
Glenn	(12,238)
Lassen	17,886
Mariposa	(6,950)
Modoc	(29,182)
Mono	(6,950)
San Benito	20,710
Sierra	(39,537)
Trinity	(48,009)

 

(5) For the 1996-97 fiscal year and fiscal years thereafter,
allocations shall be made in the same amounts as were distributed
from the Vehicle License Fee Account and the Vehicle License
Fee Growth Account in the prior fiscal year.

Initial proceeds deposited in the Vehicle License Fee Account
in the 2003-04 fiscal year in the amount that would otherwise have
been transferred pursuant to Section 10754 of the Revenue and
Taxation Code for the period June 20, 2003, to July 15, 2003,
inclusive, shall be deemed to have been deposited during the period
June 16, 2003, to July 15, 2003, inclusive, and allocated to cities,
counties, and a city and county during the 2002-03 fiscal year.

(d) The Controller shall make monthly allocations from the
amount deposited in the Vehicle License Collection Account of
the Local Revenue Fund to each county in accordance with a
schedule to be developed by the State Department of Mental Health
in consultation with the California Mental Health Directors
Association, which is compatible with the intent of the Legislature
expressed in the act adding this subdivision.

begin insert

(e) Prior to making the allocations in accordance with
paragraph (5) of subdivision (c) and subdivision (d), the Controller
shall adjust the distributions from the Vehicle License Fee Account
to reflect an equal exchange of sales and use tax funds from the
Social Services Subaccount to the Health Subaccount, as required
by subdivision (d) of Section 17600.15, and of Vehicle License Fee
funds from the Health Account to the Social Services Account.

end insert

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 17606.10 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

17606.10.  

(a) For the 1992-93 fiscal year and subsequent
fiscal years, the Controller shall allocate funds, on a monthly basis
from the General Growth Subaccount in the Sales Tax Growth
Account to the appropriate accounts in the local health and welfare
trust fund of each county, city, and city and county in accordance
with a schedule setting forth the percentage of total state resources
received in the 1990-91 fiscal year, including State Legalization
Impact Assistance Grants distributed by the state under Part 4.5
(commencing with Section 16700), funding provided for purposes
of implementation of Division 5 (commencing with Section 5000),
for the organization and financing of community mental health
services, including the Cigarette and Tobacco Products Surtax
proceeds which are allocated to county mental health programs
pursuant to Chapter 1331 of the Statutes of 1989, Chapter 51 of
the Statutes of 1990, and Chapter 1323 of the Statutes of 1990,
and state hospital funding and funding distributed for programs
administered under Sections 1794, 10101.1, and 11322.2, as
annually adjusted by the Department of Finance, in conjunction
with the appropriate state department to reflect changes in equity
status from the base percentages. However, for the 1992-93 fiscal
year, the allocation for community mental health services shall be
based on the following schedule:

 

	Percentage
	of Statewide
Jurisdiction	Resource Base
Alameda	4.3693
Alpine	0.0128
Amador	0.0941
Butte	0.7797
Calaveras	0.1157
Colusa	0.0847
Contra Costa	2.3115
Del Norte	0.1237
El Dorado	0.3966
Fresno	3.1419
Glenn	0.1304
Humboldt	0.6175
Imperial	0.5425
Inyo	0.1217
Kern	1.8574
Kings	0.4229
Lake	0.2362
Lassen	0.1183
Los Angeles	27.9666
Madera	0.3552
Marin	0.9180
Mariposa	0.0792
Mendocino	0.4099
Merced	0.8831
Modoc	0.0561
Mono	0.0511
Monterey	1.1663
Napa	0.3856
Nevada	0.2129
Orange	5.3423
Placer	0.5034
Plumas	0.1134
Riverside	3.6179
Sacramento	4.1872
San Benito	0.1010
San Bernardino	4.5494
San Diego	7.8773
San Francisco	3.5335
San Joaquin	2.4690
San Luis Obispo	0.6652
San Mateo	2.5169
Santa Barbara	1.0745
Santa Clara	5.0488
Santa Cruz	0.7960
Shasta	0.5493
Sierra	0.0345
Siskiyou	0.2051
Solano	0.6694
Sonoma	1.1486
Stanislaus	1.4701
Sutter/Yuba	0.6294
Tehama	0.2384
Trinity	0.0826
Tulare	1.4704
Tuolumne	0.1666
Ventura	1.9311
Yolo	0.5443
Berkeley	0.2688
Tri-City	0.2347

 

(b) The Department of Finance shall recalculate the resource
base used in determining the General Growth Subaccount
allocations to the Health Account, Mental Health Account, and
Social Services Account of the local health and welfare trust fund
of each city, county, and city and county for the 1994-95 fiscal
year general growth allocations according to subdivisions (c) and
(d). For the 1995-96 fiscal year and annually begin delete thereafter end delete begin insert until the
end of the 2012-13 fiscal year end insert , the Department of Finance shall
prepare the schedule of allocations of growth based upon the
recalculation of the resource base as provided by subdivision (c).

(c) For the Mental Health Account, the Department of Finance
shall do all of the following:

(1) Use the following sources as reported by the State
Department of Mental Health:

(A) The final December 1992 distribution of resources
associated with Institutes for Mental Disease.

(B) The 1990-91 fiscal year state hospitals and community
mental health allocations.

(C) Allocations for services provided for under Chapter 1294
of the Statutes of 1989.

(2) Expand the resource base with the following nonrealigned
funding sources as allocated among the counties:

(A) Tobacco surtax allocations made under Chapter 1331 of the
Statutes of 1989 and Chapter 51 of the Statutes of 1990.

(B) For the 1994-95 allocation year only, Chapter 1323 of the
Statutes of 1990.

(C) 1993-94 fiscal year federal homeless block grant allocation.

(D) 1993-94 fiscal year Mental Health Special Education
allocations.

(E) 1993-94 fiscal year allocations for the system of care for
children, in accordance with Chapter 1229 of the Statutes of 1992.

(F) 1993-94 fiscal year federal Substance Abuse and Mental
Health Services Administration block grant allocations pursuant
to Subchapter 1 (commencing with Section 10801) of Chapter 114
of Title 42 of the United States Code.

(d)  begin delete For end delete begin insert Until the end of the 2012-13 fiscal year, for end insert the Health
Account, the Department of Finance shall use the historical
resource base of state funds as allocated among the counties, cities,
and city and county as reported by the State Department of Health
Services in a September 17, 1991, report of Indigent and
Community Health Resources.

(e) The Department of Finance shall use these adjusted resource
bases for the Health Account and Mental Health Account to
calculate what the 1994-95 fiscal year General Growth Subaccount
allocations would have been, and together with 1994-95 fiscal
year Base Restoration Subaccount allocations, CMSP subaccount
allocations, equity allocations to the Health Account and Mental
Health Account as adjusted by subparagraph (E) of paragraph (2)
of subdivision (c) of Section 17606.05, and special equity
allocations to the Health Account and Mental Health Account as
adjusted by subdivision (e) of Section 17606.15 reconstruct the
1994-95 fiscal year General Growth Subaccount resource base
for the 1995-96 allocation year for each county, city, and city and
county. Notwithstanding any other provision of law, the actual
1994-95 general growth allocations shall not become part of the
realignment base allocations to each county, city, and city and
county. The total amounts distributed by the Controller for general
growth for the 1994-95 allocation year shall be reallocated among
the counties, cities, and city and county in the 1995-96 allocation
year according to this paragraph, and shall be included in the
general growth resource base for the 1996-97 allocation year and
each fiscal year thereafter. For the 1996-97 allocation year and
fiscal years thereafter, the Department of Finance shall update the
base with actual growth allocations to the Health Account, Mental
Health Account, and Social Services Account of each county, city,
and city and county local health and welfare trust fund in the prior
year, and adjust for actual changes in nonrealigned funds specified
in subdivision (c) in the year prior to the allocation year.

begin insert

(f) For the 2013-14 fiscal year and every fiscal year thereafter,
the Controller shall do all of the following:

end insert begin insert

(1) Allocate to the mental health account of each county or city
and county based on a schedule provided by the Department of
Finance. The Department of Finance shall recalculate the resource
base used in determining the General Growth Subaccount
allocations to mental health account in accordance with
subdivision (c) and allocate based on that recalculation.

end insert begin insert

(2) Allocate 18.4545 percent of the total General Growth
Subaccount to the Health Account.

end insert begin insert

(3) Allocate to the Child Poverty and Family Supplemental
Support Subaccount in the Sales Tax Account the remainder of the
funds in the General Growth Subaccount.

end insert

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 17609.02 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 17609.02. end insert   

Except as provided in Section 17600.20, funds
deposited in the family support account may be expended only to
pay for an increased county contribution toward the costs of
CalWORKs as those funds were allocated by the Department of
Finance.

end insert

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Article 11 (commencing with Section 17610) is added
to Chapter 6 of Part 5 of Division 9 of the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 11. end insert   Family Support Subaccount True-Up Process

 

begin insert 17610. end insert   

(a) In June 2016 and for every fiscal year thereafter,
for every county that selected the option pursuant to paragraph
(1) of subdivision (b) or paragraph (1) of subdivision (c) of Section
17600.50, the Director of Finance shall make a final determination
of the amount of the allocation attributable to each county and
city and county should have been pursuant to subdivision (d) of
Section 17603 for the penultimate fiscal year.

(b) The amount of the final determination amount for each
county or city and county shall be subtracted from the amount
attributable to each county or city and county that was actually
transferred in the applicable fiscal year. This calculation shall be
made at the same time as the final determination in subdivision
(a).

(c) The Director of Finance shall promptly notify every affected
county and the Joint Legislative Budget Committee of the
determinations made pursuant to subdivisions (a) and (b).

(d) If the difference calculated in subdivision (b) is negative,
the state shall pay the applicable county the difference and those
funds shall be deposited in that county’s health account of the
local health and welfare trust fund. Notwithstanding Section 13340
of the Government Code, there is hereby continuously appropriated
to the Director of Finance the funds necessary to pay any amounts
owed pursuant to this subdivision.

(e) If the difference determined in subdivision (b) is positive,
the applicable county or city and county shall pay the difference
to the family support account within the health and welfare trust
fund of that city or city and county. If within three months of receipt
of the determination made in subdivision (b), the county or city
and county has failed to make the payment, then the Director of
Finance shall provide a supplemental schedule to the Controller
to have 1.5 times the amount of the determination transferred from
the next Health Subaccount allocations of the applicable county
or city and county to the Family Support Subaccount until 1.5
times the amount owed has been deposited in the family support
account.

begin insert 17610.5. end insert   

(a) There is hereby created a 2013-14 Special
Holding Account in the Family Support Subaccount. Starting
January 1, 2014, and ending July 25, 2014, funds transferred to
the Family Support Subaccount that are attributable to every
county or city and county that chose to be subject to paragraph
(1) of subdivision (b), or paragraph (1) of subdivision (c), of
Section 17600.50 shall be placed in the 2013-14 Special Holding
Account.

(b) No later than April 20, 2014, the State Department of Health
Care Services shall provide an updated savings estimate for every
county and city and county that chose to be subject to paragraph
(1) of subdivision (b), or paragraph (1) of subdivision (c) of Section
17600.50 to the Department of Finance. On or before May 14,
2014, the Department of Finance shall, for each county or city
and county described in subdivision (a), determine whether the
actual savings for each county or city and county is greater or
lesser than the amount of funds deposited into the Special Holding
Account.

(c) If the revised estimate of savings is greater than the funds
estimated by the Department of Finance to be deposited in the
Special Holding Account, the funds shall be transferred back to
the Family Support Subaccount by June 30, 2014, for allocation.

(d) If the revised estimate of savings is less than the funds
estimated by the Department of Finance to be deposited in the
Special Holding Account, the difference between the amount
estimated to be transferred and the revised estimated savings
amount shall be transferred to the health account of the local
health and welfare trust fund of every affected county or city and
county pursuant to a schedule prepared by the Director of Finance
in consultation with the California State Association of Counties
and provided to the Controller.

(e) This section shall remain in effect only until January 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2015, deletes or extends that date.

begin insert 17611. end insert   

(a) On or before January 10 following the end of each
fiscal year, for every county subject to subdivision (a) or (d) or
that selected the option pursuant to paragraph (2) of subdivision
(b), or paragraph (2) of subdivision (c), of Section 17600.50, the
Director of Finance shall make a final determination of how much
the allocation attributable to each county and city and county
should have been pursuant to subdivision (d) of Section 17603 for
the prior fiscal year. This determination shall be based on the
sharing ratios provided in Section 17600.50.

(b) The amount of the final determination amount for each
county or city and county shall be subtracted from the amount
attributable to each county or city and county that was actually
transferred in the applicable fiscal year.

(c) At the same time the Director of Finance makes the
determination in subdivision (a), the director shall adjust the
schedules provided to the Controller pursuant to subdivision (d)
of Section 17603. Notwithstanding Section 17603, the Controller
shall only adjust amounts payable by the County Medical Services
Program in order to reconcile underpayment or overpayment made
to the Family Support Subaccount by the County Medical Services
Program and counties participating in the County Medical Services
Program in the preceding fiscal year.

(d) The Director of Finance shall notify every affected county
and the Joint Legislative Budget Committee of the determinations
made pursuant to subdivisions (a) and (b).

end insert

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Article 12 (commencing with Section 17612.1) is
added to Chapter 6 of Part 5 of Division 9 of the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 12. end insert   Redirection of Realignment

 

begin insert 17612.1. end insert   

(a) For the 2013-14 fiscal year and each fiscal year
thereafter, for each public hospital health system county that
selected the option in paragraph (1) of subdivision (c) of Section
17600.50, the total amount that would be payable for the fiscal
year from 1991 Health Realignment funds under Sections 17603,
17604, 17606.10 and 17606.20, as those sections read on January
1, 2012, and deposited by the Controller into the local health and
welfare trust fund health account of the county in the absence of
this section shall be determined.

(b) The redirected amount determined for the public hospital
health system county pursuant to Section 17612.3 shall be divided
by the total determined in subdivision (a), except that, with respect
to the County of Los Angeles, the redirected amount shall be
determined by taking into account the adjustments required in
Section 17612.5.

(c) The resulting fraction determined in subdivision (b) shall
be the percentage of 1991 Health Realignment funds under Sections
17603, 17604, 17606.10, and 17606.20, as those sections read on
January 1, 2012, to be deposited each month into the Family
Support Subaccount.

(d) The total amount deposited into the Family Support
Subaccount under subdivision (c) with respect to a public hospital
health system county for a fiscal year shall not exceed the
redirected amount determined pursuant to Section 17612.3, and
shall be subject to the appeal processes, and judicial review as
described in subdivision (d) of Section 17612.3.

(e) The Legislature finds and declares that this article is not
intended to change the local obligation pursuant to Section 17000.

begin insert 17612.2. end insert   

For purposes of this article, the following definitions
shall apply:

(a) “Adjusted patient day” means a county public hospital
health system’s total number of patient census days, as defined by
the Office of Statewide Health Planning and Development,
multiplied by the following fraction: the numerator that is the sum
of the county public hospital health system’s total gross revenue
for all services provided to all patients, including nonhospital
services, and the denominator that is the sum of the county public
hospital health system’s gross inpatient revenue. The adjusted
patient days shall pertain to those services that are provided by
the county public hospital health system and shall exclude services
that are provided by contract or out-of-network clinics or hospitals.

(b) “Base year” means the fiscal year ending three years prior
to the fiscal year for which the redirected amount is calculated.

(c) “Blended CPI trend factor” means the blended percent
change applicable for the fiscal year that is derived from the
nonseasonally adjusted Consumer Price Index for All Urban
Consumers (CPI-U), United States City Average, for Hospital and
Related Services, weighted at 75 percent, and for Medical Care
Services, weighted at 25 percent, all as published by the United
States Bureau of Labor Statistics, computed as follows:

(1) For each prior fiscal year within the period to be trended
through the current fiscal year, the annual average of the monthly
index amounts shall be determined separately for the Hospital and
Related Services Index and the Medical Care Services Index.

(2) The year-to-year percentage changes in the annual averages
determined in paragraph (1) for each of the Hospital and Related
Services Index and the Medical Care Services Index shall be
calculated.

(3) A weighted average annual percentage change for each
year-to-year period shall be calculated from the determinations
made in paragraph (2), with the percentage changes in the Hospital
and Related Services Index weighted at 75 percent, and the
percentage changes in the Medical Care Services Index weighted
at 25 percent. The resulting average annual percentage changes
shall be expressed as a fraction, and increased by 1.00.

(4) The product of the successive year-to-year amounts
determined in paragraph (3) shall be the blended CPI trend factor.

(d) “Cost containment limit” means the public hospital health
system county’s Medi-Cal costs and uninsured costs determined
for the 2014-15 fiscal year and each subsequent fiscal year,
adjusted as follows:

(1) Notwithstanding paragraphs (2) to (4), inclusive, at the
public hospital health system county’s option it shall be deemed
to comply with the cost containment limit if the county demonstrates
that its total health care costs, including nursing facility, mental
health, and substance use disorder services, that are not limited
to Medi-Cal and uninsured patients, for the fiscal year did not
exceed its total health care costs in the base year, multiplied by
the blended CPI trend factor for the fiscal year. A county electing
this option shall elect by November 1 following the end of the fiscal
year, and submit its supporting reports for meeting this
requirement, including the annual report of financial transactions
required to be submitted to the Controller pursuant to Section
53891 of the Government Code.

(2) (A) The public hospital health system county’s Medi-Cal
costs, uninsured costs, and other entity intergovernmental transfer
amounts for the fiscal year shall be added together. Medi-Cal
costs, uninsured costs, and other entity intergovernmental transfer
amounts for purposes of this paragraph are as defined in
subdivisions (q), (t), and (y) for the relevant fiscal period.

(B) The public hospital health system county’s Medi-Cal costs,
uninsured costs, and imputed other entity intergovernmental
transfer amounts for the base year shall be added together and
multiplied by the blended CPI trend factor. The base year costs
used shall not reflect any adjustments under this subdivision.

(C) The fiscal year amount determined in subparagraph (A)
shall be compared to the trended amount in subparagraph (B). If
the amount in subparagraph (B) exceeds the amount in
subparagraph (A), the public hospital health system county shall
be deemed to have satisfied the cost containment limit. If the
amount in subparagraph (A) exceeds the amount in subparagraph
(B), the calculation in paragraph (3) shall be performed.

(3) (A) If the number of adjusted patient days of service
provided by the county public hospital health system for the fiscal
year exceeds its number of adjusted patient days of service
rendered in the base year by at least 10 percent, the excess adjusted
patient days above the base year for the fiscal year shall be
multiplied by the cost per adjusted patient day of the county public
hospital health system for the base year. The result shall be added
to the trended base year amount determined in subparagraph (B)
of paragraph (2), yielding the applicable cost containment limit,
subject to paragraph (4).

(B) If the number of adjusted patient days of service provided
by a county’s public hospital health system for the fiscal year does
not exceed its number of adjusted patient days of service rendered
in the base year by 10 percent, the applicable cost containment
limit is the trended base year amount determined in subparagraph
(B) of paragraph (2), subject to paragraph (4).

(4) If a public hospital health system county’s costs, as
determined in subparagraph (A) of paragraph (2), exceeds the
amount determined in subparagraph (B) of paragraph (2) as
adjusted by paragraph (3), the portion of the following cost
increases incurred in providing services to Medi-Cal beneficiaries
and uninsured patients shall be added to and reflected in any cost
containment limit:

(A) Electronic Health Records and related implementation and
infrastructure costs.

(B) Costs related to state or federally mandated activities,
requirements, or benefit changes.

(C) Costs resulting from a court order or settlement.

(D) Costs incurred in response to seismic concerns, including
costs necessary to meet facility seismic standards.

(E) Costs incurred as a result of a natural disaster or act of
terrorism.

(5) If a public hospital health system county’s costs, as
determined in subparagraph (A) of paragraph (2), exceeds the
amount determined in subparagraph (B) of paragraph (2) as
adjusted by paragraphs (3) and (4), the county may request that
the department consider other costs as adjustments to the cost
containment limit, including, but not limited to, transfer amounts
in excess of the imputed other entity intergovernmental transfer
amount trended by the blended CPI trend factor, costs related to
case mix index increases, pension costs, expanded medical
education programs, increased costs in response to delivery system
changes in the local community, and system expansions, including
capital expenditures necessary to ensure access to and the quality
of health care. Costs approved by the department shall be added
to and reflected in any cost containment limit.

(e) “County indigent care health realignment amount” means
the product of the health realignment amount times the health
realignment indigent care percentage, as computed on a
county-specific basis.

(f) “County public hospital health system” means a designated
public hospital identified in paragraphs (6) to (20), inclusive, and
paragraph (22) of subdivision (d) of Section 14166.1, and its
affiliated governmental entity clinics, practices, and other health
care providers that do not provide predominantly public health
services. A county public hospital health system does not include
a health care service plan, as defined in subdivision (f) of Section
1345 of the Health and Safety Code. The Alameda County Medical
Center and County of Alameda shall be considered affiliated
governmental entities.

(g) “Department” means the State Department of Health Care
Services.

(h) “Health realignment amount” means the amount that, in
the absence of this article, would be payable to a public hospital
health system county under Sections 17603, 17604, 17606.10, and
17606.20, as those sections read on January 1, 2012, for the fiscal
year that is deposited by the Controller into the local health and
welfare trust fund health account of the public hospital health
system county.

(i) “Health realignment indigent care percentage” means the
county-specific percentage determined in accordance with the
following, and established in accordance with the procedures
described in subdivision (c) of Section 17612.3.

(1) Each public hospital health system county shall identify the
portion of that county’s health realignment amount that was used
to provide health services to the indigent, including Medi-Cal
beneficiaries and the uninsured, for each of the historical fiscal
years along with verifiable data in support thereof.

(2) The amounts identified in paragraph (1) shall be expressed
as a percentage of the health realignment amount of that county
for each historical fiscal year.

(3) The average of the percentages determined in paragraph
(2) shall be the county’s health realignment indigent care
percentage.

(4) To the extent a county does not provide the information
required in paragraph (1) or the department determines that the
information provided is insufficient, the amount under this
subdivision shall be 85 percent.

(j) “Historical fiscal years” means the state 2008-09 to
2011-12, inclusive, fiscal years.

(k) “Hospital fee direct grants” means the direct grants
described in Section 14169.7 that are funded by the Private
Hospital Quality Assurance Fee Act of 2011 (Article 5.229
(commencing with Section 14169.31) of Chapter 7 of Part 3), or
direct grants made in support of health care expenditures funded
by a successor statewide hospital fee program.

(l) “Imputed county low-income health amount” means the
predetermined, county-specific amount of county general purpose
funds assumed, for purposes of the calculation in Section 17612.
3, to be available to the county public hospital health system for
services to Medi-Cal and uninsured patients. County general
purpose funds shall not include any other revenues, grants, or
funds otherwise defined in this section. The imputed county
low-income health amount shall be determined as follows and
established in accordance with subdivision (c) of Section 17612.
3.

(1) For each of the historical fiscal years, an amount determined
to be the annual amount of county general fund contribution
provided for health services to Medi-Cal beneficiaries and the
uninsured, which does not include funds provided for nursing
facility, mental health, and substance use disorder services, shall
be determined through methodologies described in subdivision
(ab).

(2) If a year-to-year percentage increase in the amount
determined in paragraph (1) was present, an average annual
percentage trend factor shall be determined.

(3) The annual amounts determined in paragraph (1) shall be
averaged, and multiplied by the percentage trend factor, if
applicable, determined in paragraph (2), for each fiscal year after
the 2011-12 fiscal year through the applicable fiscal year.
However, if the percentage trend factor determined in paragraph
(2) is greater than the applicable percentage change for any year
of the same period in the blended CPI trend factor, the percentage
change in the blended CPI trend factor for that year shall be used.
The resulting determination is the imputed county low-income
health amount for purposes of Section 17612.3.

(m) “Imputed gains from other payers” means the
predetermined, county-specific amount of revenues in excess of
costs generated from all other payers for health services that is
assumed to be available to the county public hospital health system
for services to Medi-Cal and uninsured patients, which shall be
determined as follows and established in accordance with
subdivision (c) of Section 17612.3.

(1) For each of the historical fiscal years, the gains from other
payers shall be determined in accordance with methodologies
described in subdivision (ab).

(2) The amounts determined in paragraph (1) shall be averaged,
yielding the imputed gains from other payers.

(n) “Imputed other entity intergovernmental transfer amount”
means the predetermined average historical amount of the public
hospital health system county’s other entity intergovernmental
transfer amount, determined as follows and established in
accordance with subdivision (c) of Section 17612.3.

(1) For each of the historical fiscal years, the other entity
intergovernmental transfer amount shall be determined based on
the records of the public hospital health system county.

(2) The annual amounts in paragraph (1) shall be averaged.

(o) “Medicaid demonstration revenues” means payments paid
or payable to the county public hospital health system for the fiscal
year pursuant to the Special Terms and Conditions of the federal
Medicaid demonstration project authorized under Section 1115
of the federal Social Security Act entitled the “Bridge to Health
Care Reform” (waiver number 11-W-00193/9), for uninsured care
services from the Safety Net Care Pool or as incentive payments
from the Delivery System Reform Improvement Pool, or pursuant
to mechanisms that provide funding for similar purposes under
the subsequent demonstration project. Medicaid demonstration
revenues do not include the nonfederal share provided by county
public hospital health systems as certified public expenditures,
and are reduced by any intergovernmental transfer by county
public hospital health systems or affiliated governmental entities
that is for the nonfederal share of Medicaid demonstration
payments to the county public hospital health system or payments
to a Medi-Cal managed care plan for services rendered by the
county public hospital health system, and any related fees imposed
by the state on those transfers; and by any reimbursement of costs,
or payment of administrative or other processing fees imposed by
the state relating to payments or other Medicaid demonstration
program functions. Medicaid demonstration revenues shall not
include Safety Net Care Pool revenues for nursing facility, mental
health, and substance use disorder services, as determined from
the pro rata share of eligible certified public expenditures for such
services, or revenues that are otherwise included as Medi-Cal
revenues.

(p) “Medi-Cal beneficiaries” means individuals eligible to
receive benefits under Chapter 7 (commencing with Section 14000)
of Part 3, except for: individuals who are dual eligibles, as defined
in paragraph (4) of subdivision (c) of Section 14132.275, and
individuals for whom Medi-Cal benefits are limited to cost sharing
or premium assistance for Medicare or other insurance coverage
as described in Section 1396d(a) of Title 42 of the United States
Code.

(q) “Medi-Cal costs” means the costs incurred by the county
public hospital health system for providing Medi-Cal services to
Medi-Cal beneficiaries during the fiscal year, which shall be
determined in a manner consistent with the cost claiming protocols
developed for Medi-Cal cost-based reimbursement for public
providers and under Section 14166.8, and, in consultation with
each county, shall be based on other cost reporting and statistical
data necessary for an accurate determination of actual costs as
required in Section 17612.4. Medi-Cal costs shall include all
fee-for-service and managed care hospital and nonhospital
components, managed care out-of-network costs, and related
administrative costs. The Medi-Cal costs determined under this
paragraph shall exclude costs incurred for nursing facility, mental
health, and substance use disorder services.

(r) “Medi-Cal revenues” means total amounts paid or payable
to the county public hospital health system for medical services
provided under the Medi-Cal State Plan that are rendered to
Medi-Cal beneficiaries during the state fiscal year, and shall
include payments from Medi-Cal managed care plans for services
rendered to Medi-Cal managed care plan members, Medi-Cal
copayments received from Medi-Cal beneficiaries, but only to the
extent actually received, supplemental payments for Medi-Cal
services, and Medi-Cal disproportionate share hospital payments
for the state fiscal year, but shall exclude Medi-Cal revenues paid
or payable for nursing facility, mental health, and substance use
disorder services. Medi-Cal revenues do not include the nonfederal
share provided by county public hospital health systems as certified
public expenditures. Medi-Cal revenues shall be reduced by all of
the following:

(1) Intergovernmental transfers by the county public hospital
health system or its affiliated governmental entities that are for
the nonfederal share of Medi-Cal payments to the county public
hospital health system, or Medi-Cal payments to a Medi-Cal
managed care plan for services rendered by the county public
hospital health system for the fiscal year.

(2) Related fees imposed by the state on the transfers specified
in paragraph (1).

(3) Administrative or other fees, payments, or transfers imposed
by the state, or voluntarily provided by the county public hospital
health systems or affiliated governmental entities, relating to
payments or other Medi-Cal program functions for the fiscal year.

(s) “Newly eligible beneficiaries” means individuals who meet
the eligibility requirements in Section 1902(a)(10)(A)(i)(VIII) of
Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described
in Section 1905(y) of the federal Social Security Act (42 U.S.C.
Sec. 1396d(y)) such that expenditures for services provided to the
individual are eligible for the enhanced federal medical assistance
percentage described in that section.

(t) “Other entity intergovernmental transfer amount” means
the amount of intergovernmental transfers by a county public
hospital health system or affiliated governmental entities, and
accepted by the department, that are for the nonfederal share of
Medi-Cal payments or Medicaid demonstration payments for the
fiscal year to any Medi-Cal provider other than the county public
hospital health system, or to a Medi-Cal managed care plan for
services rendered by those other providers, and any related fees
imposed by the state on those transfers.

(u) “Public hospital health system county” means a county in
which a county public hospital health system is located.

(v) “Redirected amount” means the amount to be redirected in
accordance with Section 17612.1, as calculated pursuant to
subdivision (a) of Section 17612.3.

(w) “Special local health funds” means the amount of the
following county funds received by the county public hospital
health system for health services during the fiscal year:

(1) Assessments and fees restricted for health-related purposes.
The amount of the assessment or fee for this purpose shall be the
greater of subparagraph (A) or (B). If, because of restrictions and
limitations applicable to the assessment or fee, the county public
hospital health system cannot expend this amount, this amount
shall be reduced to the amount actually expended.

(A) The amount of the assessment or fee expended by the county
public hospital health system for the provision of health services
to Medi-Cal and uninsured beneficiaries during the fiscal year.

(B) The amount of the assessment or fee multiplied by the
average of the percentages of the amount of assessment or fees
that were allocated to and expended by the county public hospital
health system for health services to Medi-Cal and uninsured
beneficiaries during the historical fiscal years. The percentages
for the historical fiscal years shall be determined by dividing the
amount allocated in each fiscal year as described in subparagraphs
(B) and (C) of paragraph (2) of subdivision (ab) by the actual
amount of assessment or fee expended in the fiscal year.

(2) Funds available pursuant to the Master Settlement
Agreement and related documents entered into on November 23,
1998, by the state and leading United States tobacco product
manufacturers during a fiscal year. The amount of the tobacco
settlement funds that may be used for this purpose shall be the
greater of subparagraph (A) or (B), less any bond payments and
other costs of securitization.

(A) The amount of the funds expended by the county public
hospital health system for the provision of health services to
Medi-Cal and uninsured beneficiaries during the fiscal year.

(B) The amount of the tobacco settlement funds multiplied by
the average of the percentages of the amount of tobacco settlement
funds that were allocated to and expended by the county public
hospital health system for health services to Medi-Cal and
uninsured beneficiaries during the historical fiscal years. The
percentages for the historical fiscal years shall be determined by
dividing the amount allocated in each fiscal year as described in
subparagraph (C) of paragraph (2) of subdivision (ab) by the
actual amount of tobacco settlement funds expended in the fiscal
year.

(x) “Subsequent demonstration project” means the federally
approved Medicaid demonstration project implemented after the
termination of the federal Medicaid demonstration project
authorized under Section 1115 of the federal Social Security Act
entitled the “Bridge to Health Care Reform” (waiver number
11-W-00193/9), the extension of that demonstration project, or
the material amendment to that demonstration project.

(y) “Uninsured costs” means the costs incurred by the public
hospital health system county and its affiliated government entities
for purchasing, providing, or ensuring the availability of services
to uninsured patients during the fiscal year. Uninsured costs shall
be determined in a manner consistent with the cost-claiming
protocols developed for the federal Medicaid demonstration project
authorized under Section 1115 of the federal Social Security Act
entitled the “Bridge to Health Care Reform” (waiver number
11-W-00193/9), including protocols pending federal approval,
and under Section 14166.8, and, in consultation with each county,
shall be based on any other cost reporting and statistical data
necessary for an accurate determination of actual costs incurred.
For this purpose, no reduction factor applicable to otherwise
allowable costs under the demonstration project or the subsequent
demonstration project shall apply. Uninsured costs shall exclude
costs for nursing facility, mental health, and substance use disorder
services.

(z) “Uninsured patients” means individuals who have no source
of third-party coverage for the specific service furnished, as further
defined in the reporting requirements established pursuant to
Section 17612.4.

(aa) “Uninsured revenues” means self-pay payments made by
or on behalf of uninsured patients to the county public hospital
health system for the services rendered in the fiscal year, but shall
exclude revenues received for nursing facility, mental health, and
substance use disorder services. Uninsured revenues do not include
the health realignment amount or imputed county low-income
health amount and shall not include any other revenues, grants,
or funds otherwise defined in this section.

(ab) “Historical allocation” means the allocation for the
amounts in the historical years described in subdivisions (l), (m),
and (w) for health services to Medi-Cal beneficiaries and uninsured
patients. The allocation of those amounts in the historical years
shall be done in accordance with a process to be developed by the
department, in consultation with the counties, which includes the
following required parameters:

(1) For each of the historical fiscal years, the Medi-Cal costs,
uninsured costs, and costs of other entity intergovernmental
transfer amounts, as defined in subdivisions (q), (t), and (y), and
the Medicaid demonstration, Medi-Cal and uninsured revenues
with respect to the services as defined in subdivisions (o), (r), and
(aa), shall be determined. For these purposes, Medicaid
demonstration revenues shall include applicable payments as
described in subdivision (o) paid or payable to the county public
hospital health system under the prior demonstration project
defined in subdivision (c) of Section 14166.1, under the Low
Income Health Program (Part 3.6 (commencing with Section
15909)), and under the Health Care Coverage Initiative (Part 3.5
(commencing with Section 15900)), none of which shall include
the nonfederal share of the Medicaid demonstration payments.
The revenues shall be subtracted from the costs, yielding the initial
low-income shortfall for each of the historical fiscal years.

(2) The following amounts shall be allocated, but shall not
exceed, the initial low-income shortfall determined in paragraph
(1) for each year:

(A) First, the county indigent care health realignment amount
shall be applied 100 percent against the initial low-income
shortfall.

(B) Second, special local health funds specifically restricted for
indigent care shall be applied 100 percent against the initial
low-income shortfall.

(C) Third, all other sources of funding, excluding funds for
nursing facility, mental health, and substance use disorder services
and gains from other payers, shall be allocated in a fair and
reasonable manner to determine the proportion applied to, and
not to exceed, the initial low-income shortfall. Other sources of
funding shall include any of the following:

(i) Unrestricted special local health funds.

(ii) One-time funds received by the county public hospital health
system for health services for that year or prior period
carry-forward amounts, or carry-forward amounts.

(iii) County general purpose funds described in subdivision (l).

(D) Finally, to the extent that the process above does not result
in completely allocating revenues up to the amount necessary to
address the initial low-income shortfall in the historical years,
gains from other payers shall be allocated to fund those costs only
to the extent that such other payer gains exist.

(ac) “Gains from other payers” means the county-specific
amount of revenues in excess of costs generated from all other
payers for health services. For purposes of this subdivision,
patients with other payer coverage are patients who are identified
in all other financial classes, including, but not limited to,
commercial coverage and dual eligible, other than Medi-Cal and
uninsured.

(ad) “New mandatory other entity intergovernmental transfer
amounts” means other entity intergovernmental transfer amounts
required by the state after July 1, 2013.

begin insert 17612.21. end insert   

For the purposes of determining the fair and
reasonable manner of allocation described in subparagraph (C)
of paragraph (2) of subdivision (ab) of Section 17612.2, it is the
intent of the Legislature to codify an allocation methodology by
September 13, 2013. Prior to that codification, the following steps
shall occur:

(a) The department shall meet with representatives of the county
public hospital health systems to formulate the fair and reasonable
allocation methodology.

(b) No later than August 1, 2013, the department shall submit
to the Legislature a proposed allocation methodology. If the county
public hospital health systems and the department fail to agree on
a proposed allocation methodology, the department shall also be
required to submit an alternative approach from the county public
hospital health systems, which the county public hospital health
systems shall submit to the department prior to July 30, 2013, and
the department’s analysis of why it chose its recommended
approach.

(c) If the Legislature enacts legislation implementing the
allocation methodology described in subparagraph (C) of
paragraph (2) of subdivision (ab) of Section 17612.2 by July 1,
2014, then notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, may
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or similar
instructions.

(d) If the Legislature does not enact legislation implementing
the allocation methodology described in subparagraph (C) of
paragraph (2) of subdivision (ab) of Section 17612.2 by July 1,
2014, the department may implement the allocation methodology
described in subparagraph (C) of paragraph (2) of subdivision
(ab) of Section 17612.2 only by means that are in conformity with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code.

begin insert 17612.3. end insert   

(a) For each fiscal year, commencing with the
2013-14 fiscal year, the amount to be redirected in accordance
with Section 17612.1 shall be determined for each public hospital
health system county as follows:

(1) The public hospital health system county’s revenues and
other funds paid or payable for the state fiscal year shall be
comprised of the total of the following:

(A) Medi-Cal revenues.

(B) Uninsured revenues.

(C) Medicaid demonstration revenues.

(D) Hospital fee direct grants.

(E) Special local health funds.

(F) The county indigent care health realignment amount.

(G) The imputed county low-income health amount.

(H) Imputed gains from other payers.

(I) The amount by which the public hospital health system
county’s costs exceeded the cost containment limit for the fiscal
year, expressed as a negative number, multiplied by 0.50.

(2) The following, incurred by the public hospital health system
county for the fiscal year, not to exceed in total the cost
containment limit, shall be subtracted from the sum in paragraph
(1):

(A) Medi-Cal costs.

(B) Uninsured costs.

(C) The lesser of the other entity intergovernmental transfer
amount or the imputed other entity intergovernmental transfer
amounts.

(D) New mandatory other entity intergovernmental transfer
amounts.

(3) The resulting amount determined in paragraph (2) shall be
multiplied by 0.80, except that for the 2013-14 fiscal year the
resulting amount determined in paragraph (2) shall be multiplied
by 0.70.

(4) If the amount in paragraph (3) is a positive number, that
amount, subject to paragraph (5), shall be redirected in accordance
with Section 17612.1. If the amount determined in paragraph (3)
is a negative number, the redirected amount shall be zero.

(5) Notwithstanding any other law, the amount to be redirected
as determined in paragraph (4) for any fiscal year shall not exceed
the county indigent care health realignment amount for that fiscal
year.

(6) (A) The redirected amount shall be applied until the later
of the following:

(i) June 30, 2023.

(ii) The beginning of the fiscal year following a period of two
consecutive fiscal years in which both of the following occur:

(aa) The total interim amount determined under subdivision (b)
of Section 17612.3 in May of the previous fiscal year is within 10
percent of the final, reconciled amount in subdivision (d) of that
section.

(bb) The final, reconciled amounts under subdivision (d) of
Section 17612.3 are within 5 percent of each other.

(B) After the redirected amount ceases as provided in
subparagraph (A), a permanent redirected amount shall be
established to be an amount determined by calculating the
percentage that the redirected amount was in the last fiscal year
of the operation of this article of the county’s health realignment
amount of that same fiscal year, multiplied by the county’s health
realignment amount of all subsequent years.

(b) Commencing with the 2014-15 fiscal year, the department
shall calculate an interim redirected amount for each public
hospital health system county under subdivision (a) by the January
immediately prior to the starting fiscal year, using the most recent
and accurate data available. For purposes of the interim
determinations, the cost containment limit shall not be applied.
The interim redirected amount shall be updated in the May before
the start of the fiscal year in consultation with each public hospital
health system county and based on any more recent and accurate
data available at that time. During the fiscal year, the interim
redirected amount will be applied pursuant to Section 17612.1.

(c) The predetermined amounts or historical percentages
described in subdivisions (i), (l), (m), (n), and (w) of Section
17612.2 shall each be established in accordance with the following
procedure:

(1) By September 30, 2013, each public hospital health system
county shall determine the amount or percentage described in the
applicable subdivision, and shall provide this calculation to the
department, supported by verifiable data and a description of how
the determination was made.

(2) If the department disagrees with the public hospital health
system county’s determination, the department shall confer with
the public hospital health system county by November 15, 2013.

(3) If no agreement between the parties has been reached by
December 31, 2013, the department shall apply the county’s
determination when making the interim calculations pursuant to
subdivision (b), until a decision is issued pursuant to paragraph
(6).

(4) A public hospital health system county may submit a petition
to the County Health Care Funding Resolution Committee,
established pursuant to Section 17600.60, to seek a decision
regarding the historical percentage or amount to be applied in
calculations under this section.

(5) The County Health Care Funding Resolution Committee
shall hear and make a determination as to whether the county’s
proposed percentage or amount complies with the requirements
of this section taking into account the data and calculations of the
county and any alternative data and calculations submitted by the
department.

(6) The committee shall issue a decision within 45 days of the
petition. If the county chooses to contest the determination, the
decision of the committee will be applied for purposes of any
interim calculation under subdivision (b) until a final decision is
issued pursuant to de novo administrative review pursuant to
paragraph (2) of subdivision (d).

(d) (1) The data for the final calculations under subdivision
(a) for the fiscal year shall be submitted by public hospital health
system counties within 12 months after the conclusion of each
fiscal year as required in section 17612.4. The data shall be the
most recent and accurate data from the public hospital health
system county’s books and records pertaining to the revenues paid
or payable, and the costs incurred, for services provided in the
subject fiscal year. The department shall make final calculations
using the data submitted pursuant to this paragraph by December
31 of the following fiscal year, and shall provide the calculation
to the county. The final calculations will also reflect the application
of the cost containment limit, if any. A recalculation and
reconciliation shall be completed by the department within six
months thereafter.

(2) The director shall establish an expedited formal appeal
process for a public hospital health system county to contest the
determinations made in this article, and only as follows:

(A) The public hospital health system county shall have 30
calendar days, following the issuance of a determination made
under this article, to file an appeal with the Director of Health
Care Services. All appeals shall be governed by Section 100171
of the Health and Safety Code, except for those provisions of
paragraph (1) of subdivision (d) of Section 100171 of the Health
and Safety Code relating to accusations, statements of issues,
statement to respondent, and notice of defense, and except as
otherwise set forth in this section. All appeals shall be in writing
and shall be filed with the State Department of Health Care
Service’s Office of Administrative Hearings and Appeals. An
appeal shall be deemed filed on the date it is received by the Office
of Administrative Hearings and Appeals.

(i) An appeal shall specifically set forth each issue in dispute,
which may include any component of the determination, and
include the public hospital health system county’s contentions as
to those issues. A formal hearing before an Office of Administrative
Hearings and Appeals Administrative Law Judge shall commence
within 45 days of the filing of the appeal requesting a formal
hearing. A final decision shall be adopted within 60 days of the
close of the record, but no later than five months following the
issuance of the appeal.

(ii) If the public hospital health system county fails to file an
appeal within 30 days of the issuance of a determination made
under this article, the determination of the department shall be
deemed final and not appealable either administratively or to a
court of general jurisdiction.

(B) If a final decision is not issued by the department within
two years of the issuance of a determination made under this
article, the public hospital health system county shall be deemed
to have exhausted its administrative remedies and shall not be
precluded from pursuing any available judicial review. However,
the time period in this subdivision shall be extended by either of
the following:

(i) Undue delay caused by the public hospital health system
county.

(ii) An extension of time granted to a public hospital health
system county at its sole request, or following the joint request of
the public hospital health system county and the department.

(D) If the final decision issued by the department pursuant to
this section results in a different determination than that originally
determined by the department, then the Department of Finance
shall adjust the original determination by that amount, pursuant
to a process developed by the Department of Finance and in
consultation with the public hospital health system counties.

(e) For purposes of this article, all references to “health
services” or “health care services,” unless specified otherwise,
shall exclude nursing facility, mental health, and substance use
disorder services.

begin insert 17612.4. end insert   

(a) Beginning with the 2013-14 state fiscal year,
each county that has elected to participate in the County Savings
Determination Process shall, within five months after the end of
each fiscal year, submit initial reports including all of the
following:

(1) All revenue data required for the operation of Section
17612.3, including all of the following:

(A) Medi-Cal revenues.

(B) Uninsured revenues.

(C) Medicaid demonstration revenues.

(D) Hospital fee direct grants.

(E) Special local health funds.

(2) All cost data required for the operation of Section 17612.3,
including all of the following:

(A) Medi-Cal costs.

(B) Uninsured costs.

(C) Other entity intergovernmental transfer amounts.

(D) New mandatory other entity intergovernmental transfer
amounts.

(b) Notwithstanding paragraph (2) of subdivision (a), a county
that reports data to the department pursuant to Section 14166.8
is only required to report cost data under this section to the extent
not already reported to the department pursuant to Section 14166.8
for a given fiscal year.

(c) Counties shall submit final reports of cost and revenue data
identified in paragraphs (1) and (2) of subdivision (a) to the
department for each fiscal year no later than June 30 of the fiscal
year ending one year after the subject fiscal year.

(d) The department shall develop, in consultation with counties,
the methodologies used to determine the costs and revenues
required to be reported and the format of those submissions.

(e) Reports submitted under this section shall be accompanied
by a certification by an appropriate local public official attesting
to the accuracy of the reports.

begin insert 17612.5. end insert   

(a) For the 2013-14 fiscal year and each year
thereafter, the amount to be redirected in accordance with Section
17612.1 for the County of Los Angeles shall be determined in
accordance with Section 17612.3, except that the formula in
subdivision (a) of Section 17612.3 shall be replaced with the
following formula:

(1) The total revenues as defined in paragraph (7) of subdivision
(b) paid or payable to the County of Los Angeles, Department of
Health Services, for the fiscal year, which shall include special
local health funds and as adjusted in accordance with Section
17612.6, shall be added together.

(2) The sum of three hundred twenty-three million dollars
($323,000,000), which represents the imputed county low-income
health amount trended annually by 1 percent from the 2012-13
fiscal year through the applicable fiscal year, and the county
indigent care health realignment amount, as determined in
accordance with subdivision (e) of section 17612.2 for the fiscal
year.

(3) The amount by which the county’s total costs exceeded the
cost containment limit for the fiscal year, expressed as a negative
number, multiplied by 0.50.

(4) (A) The total costs as defined in paragraph (6) of subdivision
(b) incurred by or on behalf of the County of Los Angeles,
Department of Health Services, during the fiscal year shall be
added together, but shall not exceed the cost containment limit
determined in accordance with paragraph (3) of subdivision (b).

(B) The costs in paragraph (A) shall be subtracted from the sum
of paragraphs (1) to (3), inclusive.

(5) The resulting amount determined in subparagraph (B) of
paragraph (4) shall be multiplied by 0.80, except that for the
2013-14 fiscal year, the resulting amount determined in
subparagraph (B) of paragraph (4) shall be multiplied by 0.70.

(6) If the amount in paragraph (5) is a positive number, that
amount, subject to paragraph (7), shall be redirected in accordance
with Section 17612.1 of this article. If the amount determined in
paragraph (5) is a negative number, the redirected amount shall
be zero.

(7) Notwithstanding any other provision of law, the amount to
be redirected as determined in paragraph (6) for any fiscal year
shall not exceed the county indigent care health realignment
amount for that fiscal year.

(8) (A) The redirected amount shall be applied until the later
of:

(i) June 30, 2023.

(ii) The beginning of fiscal year following a period of two
consecutive fiscal years that both of the following occur:

(aa) The total interim amount determined under subdivision (b)
of Section 17612.3 in May of the previous fiscal year is within 10
percent of the final, reconciled amount in subdivision (d ) of that
section.

(bb) The final, reconciled amounts under subdivision (d) of
Section 17612.3 are within 5 percent of each other.

(B) After the redirected amount ceases as provided in
subparagraph (A), a permanent redirected amount shall be
established to be an amount determined by calculating the
percentage that the redirected amount was in the last fiscal year
of the operation of this article of the county’s health realignment
amount of that same fiscal year, multiplied by the county’s health
realignment amount of all subsequent years.

(b) Except as otherwise provided in this section, the definitions
in Section 17612.2 shall apply. For purposes of this section, and
for purposes the calculations in Section 17612.3 that apply to the
County of Los Angeles, the following definitions shall apply:

(1) “Adjusted patient day” means LA County DHS’s total
number of patient days multiplied by the following fraction: the
numerator that is the sum of the county public hospital health
system’s total gross revenue for all services provided to all
patients, including nonhospital services, and the denominator that
is the sum of the county public hospital health system’s gross
inpatient revenue. The adjusted patient days shall pertain to those
services that are provided by the LA County DHS, and shall
exclude services that are provided by contract or out-of-network
clinics or hospitals. For purposes of this paragraph, gross revenue
shall be adjusted as necessary to reflect the relationship between
inpatient costs and revenues and outpatient costs and charges.

(2) “Blended CPI trend factor” means the blended percent
change applicable for the state fiscal year that is derived from the
nonseasonally adjusted Consumer Price Index for All Urban
Consumers (CPI-U), United States City Average, for Hospital and
Related Services, weighted at 90 percent, and for Medical Care
Services, weighted at 10 percent, all as published by the United
States Bureau of Labor Statistics, computed as follows:

(A) For each prior fiscal year, within the period to be trended
through the fiscal year, the annual average of the monthly index
amounts shall be determined separately for the Hospital and
Related Services Index and the Medical Care Services Index.

(B) The year-to-year percentage changes in the annual averages
determined in subparagraph (A) for each of the Hospital and
Related Services Index and the Medical Care Services Index shall
be determined.

(C) A weighted average annual percentage change for each
year-to-year period shall be calculated from the determinations
made in subparagraph (B), with the percentage changes in the
Hospital and Related Services Index weighted at 90 percent, and
the percentage changes in the Medical Care Services Index
weighted at 10 percent. The resulting average annual percentage
changes shall be expressed as a fraction, and increased by 1.00.

(D) The product of the successive year to year amounts
determined in subparagraph (C) shall be the blended CPI trend
factor.

(3) “Cost containment limit” means the LA County DHS’s total
costs determined for the 2014-15 fiscal year and each subsequent
fiscal year adjusted as follows:

(A) The County of Los Angeles will be deemed to comply with
the cost containment limit if the county demonstrates that its total
costs for the fiscal year did not exceed its total costs in the base
year, multiplied by the blended CPI trend factor for the fiscal year
as reflected in the annual report of financial transactions required
to be submitted to the Controller pursuant to Section 53891 of the
Government Code. If the total costs for the fiscal year exceeded
the total cost in the base year, multiplied by the blended CPI trend
factor for the fiscal year, the calculation in subparagraph (B) shall
be performed.

(B) (i) If the number of adjusted patient days of service provided
by LA County DHS for the fiscal year exceeds its number of
adjusted patient days of service rendered in the base year by at
least 10 percent, the excess adjusted patient days above the base
year for the fiscal year shall be multiplied by the cost per adjusted
patient day of the public hospital health system for the base year.
The result shall be added to the trended base year amount
determined in subparagraph (A), yielding the applicable cost
containment limit, subject to subparagraph (C). Costs per adjusted
patient day shall be based upon only those LA County DHS costs
incurred for patient care services.

(ii) If the number of adjusted patient days of service provided
by LA County DHS for the fiscal year does not exceed its number
of adjusted patient days of service rendered in the base year, the
applicable limit is the trended base year amount determined in
subparagraph (A) subject to subparagraph (C).

(C) If LA County DHS’s total costs for the fiscal year in as
determined in subparagraph (A) exceeds the trended cost as
determined in subparagraph (A) as adjusted by subparagraph (B),
the following cost increases shall be added to and reflected in any
cost containment limit:

(i) Electronic health records and related implementation and
infrastructure costs.

(ii) Costs related to state or federally mandated activities,
requirements, or benefit changes.

(iii) Costs resulting from a court order or settlement.

(iv) Costs incurred in response to seismic concerns, including
costs necessary to meet facility seismic standards.

(v) Costs incurred as a result of a natural disaster or act of
terrorism.

(vi) The total amount of any intergovernmental transfer for the
nonfederal share of Medi-Cal payments to the hospital facility
described in subdivision (f) of Section 14165.50.

(D) If LA County DHS’s total costs, as adjusted by
subparagraphs (B) and (C), exceed total costs for the fiscal year,
the county may request that the department consider other costs
as adjustments to the cost containment limit, including, but not
limited to, transfer amounts in excess of the imputed other entity
intergovernmental transfer amount trended by the blended CPI
trend factor, costs related to case mix index increases, pension
costs, expanded medical education programs, increased costs in
response to delivery system changes in the local community, and
system expansions, including capital expenditures necessary to
ensure access to and the quality of health care. Costs approved
by the department shall be added to and reflected in the cost
containment limit.

(4) “Health realignment indigent care percentage” means 83
percent.

(5) “Special local health funds” means the total amount of the
following funds received by LA County DHS and expended for
health services during the fiscal year:

(A) Assessments and fees restricted for health-related purposes.

(B) Ninety-one percent of the funds available pursuant to the
Master Settlement Agreement and related documents entered into
on November 23, 1998, by the state and leading United States
tobacco product manufacturers and allocated to LA County DHS
during a fiscal year.

(6) “Total costs” means the actual net expenditures, excluding
encumbrances, for all operating budget units of the LA County
DHS. Operating budget units consist of four Hospital Enterprise
Funds plus the LA County DHS’s budget units within the county
general fund. Net expenditures, excluding encumbrances, are those
recognized within LA County DHS, net of intrafund transfers,
expenditure distributions, and all other billable services recorded
from and to the LA County DHS enterprise funds and the LA
County DHS general fund budget units, determined based on its
central accounting system known as eCAPS, as of November 30
of the year following the fiscal year, and shall include the new
mandatory other entity intergovernmental transfer amounts, as
defined in subdivision (ad) of Section 17612.2, and the lesser of
other entity intergovernmental transfer amounts or the imputed
other entity intergovernmental transfer amounts.

(7) “Total revenues” means the sum of the revenue paid or
payable for all operating budget units of the LA County DHS
determined based on its central accounting system known as
eCAPS, as of November 30 of the year following the fiscal year.

(8) “LA County DHS” means operating budget units consisting
of four hospital enterprise funds plus the DHS budget units within
the county’s general fund.

begin insert 17612.6. end insert   

(a) For purposes of this section, the following
definitions shall apply:

(1) “Type A payers” means the following sources of revenue
for amounts paid to the County of Los Angeles, Department of
Health Services:

(A) Title XVIII of the federal Social Security Act, known as the
Medicare program.

(B) Commercial health insurance.

(C) In-home supportive services, consistent with Article 7
(commencing with Section 12300) of Chapter 3 and Chapter 7
(commencing with Section 14000) of Part 3.

(2) “Type B payers” means the following sources of revenue
for amounts paid to the County of Los Angeles, Department of
Health Services:

(A) Patient care revenues received for services provided to other
county departments.

(B) State payments for patient financial services workers.

(C) Other federal payers, not including Medicare and Medicaid.

(3) “Historical Base Type A revenues” means revenues from
Type A payers in the historical fiscal years, calculated as follows:

(A) For each historical fiscal year, the actual revenue received
from Type A payers.

(B) Calculate the average of the historical year’s amounts in
subparagraph (A). This average shall be considered the historical
Base Type A revenues.

(4) “Historical Base Type B revenues” means revenues from
Type B payers in the historical fiscal years, calculated as follows:

(A) For each historical fiscal year, the actual revenue received
from Type B payers.

(B) Calculate the average of the historical years amounts in
subparagraph (A). This average shall be considered the historical
Base Type B revenues.

(5) “Type A payer revenue” means the amount of revenue that
is the greater of the following:

(A) The amount of the revenue received from Type A payers for
services rendered during the fiscal year.

(B) The historical Base Type A revenues, as adjusted by the
Type A adjustment, defined in paragraph (8).

(6) “Type B payer revenue” means the amount of revenue that
is the greater of the following:

(A) The amount of the revenue received from Type B payers for
services rendered during the fiscal year.

(B) The historical Base Type B revenues.

(7) “Baseline Type A payer costs” means the average of the
costs of services provided to Type A payer patients rendered in
each of the four historical fiscal years to be determined as follows:

(A) For each historical year, the actual costs incurred in
providing services to Type A payer patients.

(B) Calculate the average of the historical fiscal year amounts
in subparagraph (A), this average shall be considered the baseline
Type A payer costs.

(8) “Type A adjustment” means the value of the revenue
adjustment to historical base Type A revenues as defined in
paragraph (3).

(A) This adjustment will occur only if the Type A payer revenue
for the fiscal year is less than historical base, otherwise the
adjustment is considered to be zero.

(B) If the requirement in subparagraph (A) is met, then there
will only be an adjustment if one or more of the specified Type A
payers’ data meets all of the following conditions:

(i) The Type A payer revenue for the fiscal year is less than the
historical base.

(ii) The Type A payer costs for the fiscal year are less than the
historical base trended by the blended CPI trend factor.

(iii) The Type A payer volume for the fiscal year is less than the
historical base.

(C) For each Type A payer that meets all the conditions in
subparagraph (B) the adjustment to the Type A payer revenue for
that Type A payer will be as follows:

(i) Calculate the percentage decrease in cost from the baseline
Type A payer cost as trended by the blended CPI trend factor as
defined in subdivision (b) and applied from the 2010-11 fiscal
year to the subject fiscal year.

(ii) Calculate the percentage decrease in volume, based on the
adjusted patient days, from the baseline Type A payer volume to
the subject fiscal year.

(iii) Calculate the average of the percentages in clauses (i) and
(ii).

(iv) The percentage in clause (ii) shall be applied to the
historical Base Type A payer revenue for the individual Type A
payer.

(b) The Type A payer revenues included in the total revenues
in subdivision (a) of Section 17612.5 shall be the greater of the
adjusted historical Type A baseline or the actual revenues received
from Type A payers for services rendered in the subject fiscal year.

(c) The Type B payer revenues included in the total revenues
in subdivision (a) of Section 17612.5 shall be the greater of the
historical Base Type B revenues or the actual revenues received
from Type B payers for services rendered in the subject fiscal year.

begin insert 17612.65. end insert   

Notwithstanding the provisions of subdivision (d)
of Section 17612.3 that require final reconciliation to occur within
two years after the close of the fiscal year, if, subsequent to final
reconciliation, payments to a county public hospital health system
under the federal Medicaid demonstration project authorized by
Section 1115 of the federal Social Security Act entitled the “Bridge
to Health Care Reform” (waiver number 11-W-00193/9) or
subsequent demonstration project are reduced or recouped based
on the department’s failure to meet the applicable budget neutrality
limit on Medicaid funding or similar requirements contained in
the applicable demonstration project Special Terms and
Conditions, the redirected amount for the affected fiscal years
shall be recalculated under subdivision (a) of Section 17612.3 to
reflect the reduction in Medicaid demonstration revenues. The
resulting reduction in the redirected amount for each affected year
shall be refunded to the affected public hospital health system
county in a manner to be agreed upon by the county and the
Department of Finance.

begin insert 17612.7. end insert   

Notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the department, without taking any further regulatory action,
shall implement, interpret, or make specific this article by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions.

begin insert 17612.8. end insert   

The department shall submit an application to the
federal Centers for Medicare and Medicaid Services for a
subsequent demonstration project, as defined in subdivision (x) of
Section 17612.2. The subsequent demonstration project shall seek
to maximize federal Medicaid funding for county public hospital
health systems and shall include components that maintain a
comparable level of support for delivery system reform in the
county public hospital health systems as was provided under the
federal Medicaid demonstration project authorized under Section
1115 of the federal Social Security Act entitled the “Bridge to
Health Care Reform” (waiver number 11-W-00193/9).

end insert

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Article 13 (commencing with Section 17613.1) is
added to Chapter 6 of Part 5 of Division 9 of the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 13. end insert   Redirection of Realignment for Counties

 

begin insert 17613.1. end insert   

(a) For the 2013-14 fiscal year and each fiscal year
thereafter, for each county, the total amount that would be payable
for the fiscal year from 1991 Health Realignment funds under
Sections 17603, 17604, 17606.10, and 17606.20, as those sections
read on January 1, 2012, and deposited by the Controller into the
local health and welfare trust fund health account of the county
in the absence of this section, shall be determined pursuant to
paragraph (2) of subdivision (b) of Section 17600.50.

(b) The redirected amount determined for the county pursuant
to Section 17613.3, or in accordance with subdivision (b) of Section
17600.50 option-to-forgo formula, shall be divided by the total
determined in subdivision (a).

(c) The resulting fraction determined in subdivision (b) shall
be the percentage of 1991 Health Realignment funds under Sections
17603, 17604, 17606.10, and 17606.20, as those sections read on
January 1, 2012, to be deposited each month into the Family
Support Subaccount.

(d) The total amount deposited pursuant to subdivision (c) with
respect to a county for a fiscal year shall not exceed the redirected
amount determined pursuant to Section 17613.3, and shall be
subject to the appeal processes, and judicial review as described
in subdivision (d) of Section 17613.3.

(e) The Legislature finds and declares that this article is not
intended to change the local obligation pursuant to section 17000.

begin insert 17613.2. end insert   

For purposes of this article, the following definitions
shall apply:

(a) “Base year” means the fiscal year ending three years prior
to the fiscal year for which the redirected amount is calculated.

(b) “Blended CPI trend factor” means the blended percent
change applicable for the fiscal year that is derived from the
nonseasonally adjusted Consumer Price Index for All Urban
Consumers (CPI-U), United States City Average, for Hospital and
Related Services, weighted at 75 percent, and for Medical Care
Services, weighted at 25 percent, all as published by the United
States Bureau of Labor Statistics, computed as follows:

(1) For each prior fiscal year within the period to be trended
through the state fiscal year, the annual average of the monthly
index amounts shall be determined separately for the Hospital and
Related Services Index and the Medical Care Services Index.

(2) The year-to-year percentage changes in the annual averages
determined in paragraph (1) for each of the Hospital and Related
Services Index and the Medical Care Services Index shall be
determined.

(3) A weighted average annual percentage change for each
year-to-year period shall be calculated from the determinations
made in paragraph (2), with the percentage changes in the Hospital
and Related Services Index weighted at 75 percent, and the
percentage changes in the Medical Care Services Index weighted
at 25 percent. The resulting average annual percentage changes
shall be expressed as a fraction, and increased by 1.00.

(4) The product of the successive year to year amounts
determined in paragraph (3) shall be the blended CPI trend factor.

(c) “Calculated cost per person” is determined by dividing
county indigent program costs by the number of indigent program
individuals for the applicable fiscal year. If a county expands
eligibility, the enrollment count is limited to those indigent program
individuals who would have been eligible for services under the
eligibility requirements in existence on July 1, 2013, except if
approved as an exception allowed pursuant to subparagraph (3)
of paragraph (C) of subdivision (d).

(d) “Cost containment limit” means the county’s indigent
program costs determined for the 2014-15 fiscal year and each
subsequent fiscal year, to be adjusted as follows:

(1) (A) The county’s indigent program costs for the state fiscal
year shall be determined as indigent program costs for purposes
of this paragraph for the relevant fiscal period.

(B) The county’s calculated costs per person for the base year
will be multiplied by the blended CPI trend factor and then
multiplied by the county’s fiscal year indigent program individuals.
The base year costs used shall not reflect any adjustments under
this subdivision.

(C) The fiscal year amount determined in subparagraph (A)
shall be compared to the trended amount in subparagraph (B). If
the amount in subparagraph (B) exceeds the amount in
subparagraph (A), the county will be deemed to have satisfied the
cost containment limit. If the amount in subparagraph (A) exceeds
the amount in subparagraph (B), the calculation in paragraph (2)
shall be performed.

(2) If a county’s costs as determined in subparagraph (A) of
paragraph (1) exceeds the amount determined in subparagraph
(B) of paragraph (1), the following costs, as allocated to the
county’s indigent care program, shall be added to the cost and
reflected in any containment limit:

(A) Costs related to state or federally mandated activities,
requirements, or benefit changes.

(B) Costs resulting from a court order or settlement.

(C) Costs incurred as a result of a natural disaster or act of
terrorism.

(3) If a county’s costs as determined in subparagraph (A) of
paragraph (1) exceed the amount determined in subparagraph (B)
of paragraph (1), as adjusted by paragraph (2), the county may
request that the department consider other costs as adjustments
to the cost containment limit. These costs would require
departmental approval.

(e) “County” for purposes of this article means the following
counties: Fresno, Merced, Orange, Placer, Sacramento, San Diego,
San Luis Obispo, Santa Barbara, Santa Cruz, Stanislaus, Tulare,
and Yolo.

(f) “County indigent care health realignment amount” means
the product of the health realignment amount times the health
realignment indigent care percentage, as computed on a
county-specific basis.

(g) “County savings determination process” means the process
for determining the amount to be redirected in accordance with
Section 17613.1, as calculated pursuant to subdivision (a) of
Section 17613. 3.

(h) “Department” means the State Department of Health Care
Services.

(i) “Health realignment amount” means the amount that, in the
absence of this article, would be payable to a county under Sections
17603, 17604, 17606.10, and 17606.20, as those sections read on
January 1, 2012, for the fiscal year that is deposited by the
Controller into the local health and welfare trust fund health
account of the county.

(j) “Health realignment indigent care percentage” means the
county-specific percentage determined in accordance with the
following, and established in accordance with the procedures
described in subdivision (c) of Section 17613.3:

(1) Each county shall identify the portion of that county’s health
realignment amount that was used to provide health services to
the indigent, including the indigent program individuals, for each
of the historical fiscal years, along with verifiable data in support
thereof.

(2) The amounts identified in paragraph (1) shall be expressed
as a percentage of the health realignment amount of that county
for each fiscal year of the historical fiscal years.

(3) The average of the percentages determined in paragraph
(2) shall be the county’s health realignment indigent care
percentage.

(4) To the extent a county does not provide the information
required in paragraph (1) or the department determines that the
information required is insufficient, the amount under this
subdivision shall be considered to be 85 percent.

(k) All references to “health services” or “health care services,”
unless specified otherwise, shall exclude mental health and
substance use disorder services.

(l) “Historical fiscal years” means the fiscal years 2008-09 to
2011-12, inclusive.

(m) “Imputed county low-income health amount” means the
predetermined, county-specific amount of county general purpose
funds assumed, for purposes of the calculation in Section 17613.
3, to be available to the county for services to indigent program
individuals. The imputed county low-income health amount shall
be determined as set forth below and established in accordance
with subdivision (c) of Section 17613.3.

(1) For each of the historical fiscal years, an amount shall be
determined as the annual amount of county general fund
contribution provided for health services to the indigent, which
does not include funds provided for mental health and substance
use disorder services, through a methodology to be developed by
the department, in consultation with the California State
Association of Counties.

(2) If a year-to-year percentage increase in the amount
determined in paragraph (1) was present, an average annual
percentage trend factor shall be determined.

(3) The annual amounts determined in paragraph (1) shall be
averaged and multiplied by the percentage trend factor, if
applicable, determined in paragraph (2), for each fiscal year after
the 2011-12 fiscal year through the applicable fiscal year.
Notwithstanding the foregoing, if the percentage trend factor
determined in paragraph (2) is greater than the applicable
percentage change for any year of the same period in the blended
CPI trend factor, the percentage change in the blended CPI trend
factor for that year shall be used. The resulting determination is
the imputed county low-income health amount for purposes of
Section 17613. 3.

(n) “Indigent program costs” means the costs incurred by the
county for purchasing, providing, or ensuring the availability of
services to indigent program individuals during the fiscal year.
The costs for mental health and substance use disorder services
shall not be included in these costs.

(o) “Indigent program individuals” means all individuals
enrolled in a county indigent health care program at any point
throughout the fiscal year. If a county does not enroll individuals
into an indigent health care program, indigent program individuals
shall mean all individuals who used services offered through the
county indigent health care program in the fiscal year.

(p) “Indigent program revenues” means self-pay payments
made by or on behalf of indigent program individuals to the county
for the services rendered in the fiscal year, but shall exclude
revenues received for mental health and substance use disorder
services.

(q) “Redirected amount” means the amount to be redirected in
accordance with Section 17613.1, as calculated pursuant to
subdivision (a) of Section 17613. 3.

(r) “Special local health funds” means the amount of the
following county funds received by the county for health services
to indigent program individuals during the fiscal year and shall
include funds available pursuant to the Master Settlement
Agreement and related documents entered into on November 23,
1998, by the state and leading United States tobacco product
manufacturers during a fiscal year. The amount of the tobacco
settlement funds to be used for this purpose shall be the greater
of subparagraph (A) or (B), less any bond payments and other
costs of securitization.

(A) The amount of the funds expended by the county for the
provision of health services to indigent program individuals during
the fiscal year.

(B) The amount of the tobacco settlement funds multiplied by
the average of the percentages of the amount of tobacco settlement
funds that were allocated to and expended by the noncounty for
health services to indigent program individuals during the
historical fiscal years.

begin insert 17613.3. end insert   

(a) For each fiscal year commencing with the
2013-14 fiscal year, the amount to be redirected in accordance
with Section 17613.1 shall be determined for each county as set
forth in this section.

(1) The county’s revenues and other funds paid or payable for
the fiscal year shall be comprised of the total of the following:

(A) Indigent program revenues.

(B) Special local health funds.

(C) The county indigent care health realignment amount.

(D) The imputed county low-income health amount.

(2) Indigent program costs incurred by the county for the fiscal
year, not to exceed in total the cost containment limit, shall be
subtracted from the sum in paragraph (1).

(3) The resulting amount shall be multiplied by 0.80, except
that for the 2013-14 fiscal year where the resulting amount shall
be multiplied by 0.70.

(4) If the amount in paragraph (3) is a positive number, that
amount, subject to paragraph (5), shall be redirected in accordance
with Section 17613.1. If the amount determined in paragraph (3)
is a negative number, the redirected amount shall be zero.

(5) Notwithstanding any other law, the amount to be redirected
as determined in paragraph (4) for a fiscal year shall not exceed
the county indigent care health realignment amount for that fiscal
year.

(6) (A) The redirected amount shall be applied until the later
of the following:

(i) June 30, 2023.

(ii) The beginning of the fiscal year following a period of two
consecutive fiscal years in which both of the following occur:

(aa) The total interim amount determined under subdivision (b)
in May of the previous fiscal year is within 10 percent of the final,
reconciled amount in subdivision (d).

(bb) The final, reconciled amounts under subdivision (d) are
within 5 percent of each other.

(B) After the redirected amount ceases as provided in
subparagraph (A), a permanent redirected amount shall be
established to be the amount determined by calculating the
percentage that the redirected amount was in the last fiscal year
of the operation of this article of the county’s health realignment
amount of that same fiscal year, multiplied by the county’s health
realignment amount of all subsequent years.

(b) Starting with the 2014-15 fiscal year, the department shall
calculate an interim redirected amount for each county under
subdivision (a) by the January immediately prior to the starting
fiscal year, using the most recent and accurate data available. For
purposes of the interim determinations, the cost containment limit
shall not be applied. The interim redirected amount shall be
updated in the May before the start of the fiscal year in consultation
with each county and based on any more recent and accurate data
available at that time. During the fiscal year, the interim redirected
amount will be applied pursuant to Section 17613.1.

(c) The predetermined amounts or historical percentages
described in subdivisions (i), (m), and (n) of Section 17613.2 shall
each be established in accordance with the following procedure:

(1) By September 30, 2013, each county shall determine the
amount or percentage described in the applicable subdivision, and
shall provide this calculation to the department, supported by
verifiable data and a description of how the determination was
made.

(2) If the department disagrees with the county’s determination,
the department shall confer with the county by November 15, 2013.

(3) If no agreement between the parties has been reached by
December 31, 2013, the department shall apply the county’s
determination when making the interim calculations pursuant to
subdivision (b), until a decision is issued pursuant to paragraph
(6).

(4) A county may submit a petition to the County Health Care
Funding Resolution Committee, established pursuant to Section
17600.60, to seek a decision regarding the historical percentage
or amount to be applied in calculations under this section.

(5) The County Health Care Funding Resolution Committee
shall hear and make a determination as to whether the county’s
proposed percentage or amount complies with the requirements
of this section based on the data and calculations of the county
and any alternative data and calculations submitted by the
department.

(6) The County Health Care Funding Resolution Committee
shall issue a decision within 45 days of the petition. If the county
chooses to contest the determination, the decision of the committee
will be applied for purposes of any interim calculation under
subdivision (b) until a final decision is issued pursuant to de novo
administrative review under paragraph (2) of subdivision (d).

(d) (1) The data for the final calculations under subdivision
(a) for the fiscal year shall be submitted by counties within 12
months after the conclusion of each fiscal year as required in
Section 17613.4. The data shall be the most recent and accurate
data from the county’s books and records pertaining to the
revenues paid or payable, and the costs incurred, for services
provided in the subject fiscal year. The department shall make
final calculations using the data submitted pursuant to this
paragraph by December 31 of the following fiscal year, and shall
provide the calculation to the county. The final calculations will
also reflect the application of the cost containment limit, if any. A
recalculation and reconciliation shall be completed by the
department within six months thereafter.

(2) The Director of Health Care Services shall establish an
expedited formal appeal process for a county to contest the
determinations made in this article, and only as follows:

(A) The county shall have 30 calendar days, following the
issuance of a determination made under this article, to file an
appeal with the director. All appeals shall be governed by Section
100171 of the Health and Safety Code, except for those provisions
of paragraph (1) of subdivision (d) of Section 100171 of the Health
and Safety Code relating to accusations, statements of issues,
statement to respondent, and notice of defense, and except as
otherwise set forth in this section. All appeals shall be in writing
and shall be filed with the State Department of Health Care
Service’s Office of Administrative Hearings and Appeals. An
appeal shall be deemed filed on the date it is received by the Office
of Administrative Hearings and Appeals.

(i) An appeal shall specifically set forth each issue in dispute,
including, but not limited to, any component of the determination,
and include the county’s contentions as to those issues. A formal
hearing before an Office of Administrative Hearings and Appeals
Administrative Law Judge shall commence within 45 days of the
filing of the appeal requesting a formal hearing. A final decision
shall be adopted within 60 days of the close of the record, but no
later than five months following the issuance of the appeal.

(ii) If the county fails to file an appeal within 30 days of the
issuance of a determination made under this article, the
determination of the department shall be deemed final and not
appealable either administratively or to a court of general
jurisdiction.

(B) If a final decision is not issued by the department within
two years of the issuance of a determination made under this
article, the county shall be deemed to have exhausted its
administrative remedies, and shall not be precluded from pursuing
any available judicial review. However, the time period in this
subdivision shall be extended by either of the following:

(i) Undue delay caused by the county.

(ii) An extension of time granted to a county at its sole request,
or following the joint request of the county and the department.

(C) If the final decision issued by the department pursuant to
this section results in a different determination than that originally
made by the department, then the Department of Finance shall
adjust the original determination by that amount, pursuant to a
process developed by the Department of Finance and in
consultation with the California State Association of Counties.

begin insert 17613.4. end insert   

(a) Beginning with the 2013-14 fiscal year, each
county that has elected to participate in the County Savings
Determination Process shall, within five months after the end of
each fiscal year, be required to submit initial reports on both of
the following:

(1) All revenue data required for the operation of Section
17613.3, including both of the following:

(A) Indigent program revenues.

(B) Special local health funds.

(2) All cost data required for the operation of Section 17613.3,
including indigent program costs.

(b) Counties shall submit final reports of cost and revenue data
identified in subdivision (a) to the department for the each fiscal
year no later than June 30 of the fiscal year ending one year after
the subject fiscal year.

(c) The department shall develop, in consultation with California
State Association of Counties, the methodologies used to determine
the costs and revenues required to be reported and the format of
the submissions.

(d) Reports submitted under this section shall be accompanied
by a certification by an appropriate public official attesting to the
accuracy of the reports.

(e) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or similar
instructions.

end insert

begin insert

begin insert SEC. 22. end insert   

end insert begin insert

(a) The Department of Finance, the State Department
of Health Care Services, the State Department of Social Services,
and the Controller, in consultation with the California State
Association of Counties, shall collaborate to implement Sections
17600.15, 17600.50, 17601.75, 17603, 17604, 17606.10, 17610,
and 17611 of the Welfare and Institutions Code, as added and
amended by this act, to further the intent of the Legislature.

end insert begin insert

(b) If a county or city and county is unable to meet its immediate
fiscal obligations for health programs due to cashflow issues
stemming from changes in allocations from the Health Subaccount,
the Department of Finance shall work with the California State
Association of Counties and the affected county or city and county
to implement procedures regarding the allocations to address
those cashflow issues.

end insert

begin insert

begin insert SEC. 23. end insert   

end insert begin insert

(a) It is the intent of the Legislature that if the federal
government enacts a reform to federal immigration laws that
results in the provision of a pathway to citizenship for otherwise
undocumented persons, and the federal law does not provide for
federal financial participation for nonemergency Medi-Cal services
to those persons or federal funding for advanced premium tax
credits through the California Health Benefit Exchange, the
formulas in Section 17600.50 of the Welfare and Institutions Code
shall be reviewed.

end insert begin insert

(b) In order to assist the Legislature in carrying out its intent,
if the federal government enacts a reform to federal immigration
laws that results in the provision of a pathway to citizenship for
otherwise undocumented persons, and the federal law does not
provide for federal financial participation for nonemergency
Medi-Cal services to those persons or federal funding for advanced
premium tax credits through the California Health Benefit
Exchange, the State Department of Health Care Services shall
analyze the potential impacts on county health care expenditures
related to this population and report to the applicable fiscal and
policy committees within 90 days of the federal enactment, or by
March 1 of the following year, whichever date is later.

end insert

begin insert

begin insert SEC. 24. end insert   

end insert begin insert

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert

begin insert

begin insert SEC. 25. end insert   

end insert begin insert

This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2013.

end delete