BILL ANALYSIS Ó
SB 98
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Date of Hearing: August 29, 2013
ASSEMBLY COMMITTEE ON BUDGET
Nancy Skinner, Chair
SB 98 (Budget and Fiscal Review Committee) - As Amended:
August 27, 2013
SENATE VOTE : Not relevant
SUBJECT : Technical corrections and clarifications to health
and human services budget trailer bills adopted as part of the
2013-14 Budget.
SUMMARY : This bill specifies components of the Historical
Allocation methodology for purposes of counties calculating
revenue and costs for health care, and makes technical
corrections and clarifications to recently-enacted health and
human services budget trailer bills. Specifically, this bill :
1)Makes changes to sections effectuated through recently-enacted
trailer bill legislation (AB 85, Chapter 24, Statutes of
2013):
a) Proposes a "Historical Allocation" methodology to fairly
allocate available revenues proportionally for all
unreimbursed costs incurred by county public hospital
health systems, by determining the historical amounts or
percentages of three specified revenue sources. This
proposed methodology was developed, and agreed to, by
Department of Health Care Services (DHCS) and the
California Association of Public Hospitals & Health
Systems, as required by AB 85. This methodology will
determine the sources and amounts of each of the following
three historical revenue sources that are currently used by
counties to fund Medi-Cal and uninsured costs: 1)
unrestricted special local health funds; 2) one-time and
carry-forward revenues; and, 3) county general purpose
funds.
b) Repeals obsolete statute that directs DHCS to develop an
allocation methodology by September 13, 2013, for the
purpose of such a methodology being codified in statue.
The proposed methodology, required by this section, is
contained within this bill.
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c) Specifies a specific calculation methodology for the
applicable shortfalls and their relative proportions.
d) Specifies a specific calculation methodology for the
applicable total funding amounts for each funding source
and the amount of each source needed to fund the total
shortfall.
e) Specifies a specific calculation methodology for the
applicable amount of each source to allocate as a revenue
source for Medi-Cal and uninsured health costs.
f) Specifies certain aspects of the calculation methodology
that are to be unique to Los Angeles County.
g) Changes references to other sections of law as they were
adopted in AB 85, in a new Section 17600.50, to instead
reference those sections as they read on January 1, 2012 or
July 1, 2013, so as to accurately account for fund levels
and to avoid artificially inflating the amounts of growth
funds being redirected.
h) Corrects erroneous citations for the Family Support
Subaccount, removing the word "Services" where it was
previously incorrectly included.
i) Provides additional time to establish the historical
amounts and for counties to elect the 60/40 option or the
formula.
j) Makes other technical, nonsubstantive changes to
provisions enacted by AB 85 to correct errors and comply
with administrative norms requested by the Department of
Finance (DOF), State Controller's Office (SCO), and
counties.
2)Makes additional changes to sections effectuated through AB
85, specifically with respect to the use of sales tax and
vehicle license fee (VLF) funds as follows:
a) Requires the SCO to allocate sales tax and VLF funds to
health and social services accounts as these funds were
allocated prior to enactment of AB 85.
b) Requires the SCO to transfer, on a monthly basis and
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pursuant to a schedule provided by the DOF, no more than
$300 million in sales tax funds from the Social Services
Subaccount to the Health Subaccount in 2013-14. This
change constitutes an appropriation.
c) For 2014-15 and all fiscal years thereafter, requires
the SCO to transfer, on a monthly basis and pursuant to a
schedule provided by DOF, no more than $1 billion annually
in sales tax funds from the Social Services Subaccount to
the Health Subaccount.
d) Requires the SCO to adjust on a monthly basis, pursuant
to a schedule provided by Finance, the monthly VLF
distributions to reflect the equal exchange of sales tax
funds from the Social Services Subaccount to the Health
Subaccount that begins in 2013-14.
e) Clarifies that the transfers and adjustments above
cannot be used in calculating future year sales tax and VLF
allocations to the social services and health accounts.
3)Makes changes to sections effectuated through recently-enacted
human services-related trailer bills, including AB 74 and SB
94 (Chapters 21 and 37 respectively, Statutes of 2013) as
follows:
a) Changes the term "licensed vehicle" to "motor vehicle"
in the section of law that was recently revised relating to
the allowable value of a licensed vehicle retained by an
applicant or recipient of California Work Opportunity and
Responsibility to Kids (CalWORKs) aid. This change allows
for the valuation and exemption rules to apply to
unlicensed vehicles.
b) Makes a nonsubstantive change to clarify that any month
in which "any of" the specified conditions exists shall not
be counted as one of the 24 months of participation allowed
under current law.
c) Corrects a code reference that had been included in the
Coordinated Care Initiative trailer bill, SB 94, related to
the provision of services in certain counties.
d) Corrects an erroneously included reporting provision
regarding the Low-Income Home Energy Assistance Program
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(LIHEAP) service benefit that had previously been stricken
in recently chaptered legislation.
e) Specifies that the nominal LIHEAP services benefit be
funded through the LIHEAP grant allocated for outreach
activities in accordance with state and federal
requirements.
EXISTING LAW
1)Commencing January 1, 2014, as revised by AB 74, requires, for
eligibility and participation in the CalWORKs program, that
the equity value of each licensed vehicle belonging to an
applicant or recipient not be greater than $9,500.
2)Requires, with certain exceptions, every individual, as a
condition of eligibility for aid under the CalWORKs program,
to participate in certain welfare-to-work activities for a
period of 24 months. Existing law provides that any month in
which certain conditions exist shall not be counted as one of
the 24 months of participation.
3)States the Legislature's intent to create a program in
California that provides a LIHEAP service benefit, through the
LIHEAP block grant, to all recipient households of CalFresh,
the state's version of the federal Supplemental Nutrition
Assistance Program (SNAP).
4)Establishes the Local Revenue Fund (LRF), a continuously
appropriated fund, that allocates VLF and sales tax funds, and
creates various accounts and subaccounts within that fund,
including the Health Subaccount and the Social Services
Subaccount, each of which receive funding from the LRF.
5)Requires, pursuant to AB 85, a reallocation of funds in the
2013-14 fiscal year and subsequent fiscal years to change the
relative percentages of funds from sales tax and VLF fund
sources that are allocated to the Health Subaccount and the
Social Services Subaccount. Specifically, AB 85 requires
permanently redirecting $1 billion in sales tax allocations
from the Social Services Subaccount to the Health Subaccount,
and, vice versa, $1 billion in VLF allocations.
6)Requires counties, through a choice of methodologies, to
provide specified health services to eligible county residents
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who are indigent.
7)Requires DHCS, in consultation with the counties, to determine
the historical low-income shortfall between Medi-Cal and
uninsured revenues and the costs incurred by county public
hospital health systems for health services to Medi-Cal
beneficiaries and uninsured patients.
8)Requires DHCS to submit to the Legislature a "fair and
reasonable methodology" to allocate three specific funding
amounts to determine the historical amounts necessary for the
operation of the county public hospital health system formula.
FISCAL EFFECT : According to the Department of Finance, there
is no fiscal effect as a result of these largely technical and
clarifying changes.
COMMENTS : This bill is necessary in order to codify the
Historical Allocation methodology developed and agreed to by
DHCS and public hospital systems, in order to fully implement AB
85. The bill also makes numerous technical corrections that
will clarify and ease the implementation of health and human
services budget trailer bills associated with the 2013-14
Budget.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Andrea Margolis and Nicole Vazquez /
BUDGET / (916) 319-2099