Amended in Assembly August 19, 2016

Amended in Assembly June 10, 2016

Amended in Assembly May 25, 2016

Senate Bill No. 835

Introduced by Committee on Budget and Fiscal Review

January 7, 2016

begin delete An act to amend Sections 14169.53 and 14169.75 of the Welfare and Institutions Code, relating to Medi-Cal, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately, bill related to the budget. end delete begin insert An act to amend Sections 905.2, 8590.6, and 15820.946 of, and to add Section 15820.947 to, the Government Code, to amend Section 37001.5 of, and to add Section 43011.3 to, the Health and Safety Code, relating to state government, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 835, as amended, Committee on Budget and Fiscal Review. begin delete Medi-Cal: hospitals: quality assurance fee. end delete begin insert State government. end insert

begin insert

Existing law with respect to claims against public entities authorizes the “board,” as defined, to assess a surcharge to the state entity against which an approved claim was filed in an amount not to exceed 15% of the claim. Existing law requires the surcharge to be deposited into the General Fund and provides that it may be appropriated in support of the board in the annual Budget Act.

end insert begin insert

This bill would specify that the Department of General Services may assess this surcharge, would require the surcharge to be deposited into the Service Revolving Fund, and would specify that the surcharge may be appropriated to the department in the annual Budget Act.

end insert begin insert

Existing law defines a human trafficking caseworker to mean a human trafficking caseworker as defined by the Evidence Code.

end insert begin insert

This bill would expand that definition to include a human trafficking caseworker who is employed by a homeless services provider that serves homeless children or youth and has completed a minimum of 8 hours of training focused on victims of human trafficking from the Runaway and Homeless Youth Training and Technical Assistance Center.

end insert begin insert

Existing law authorizes the State Public Works Board to issue up to $270,000,000 in revenue bonds, notes, or bond anticipation notes to finance the acquisition, design, and construction of approved adult local criminal justice facilities, setting aside $20,000,000 to be awarded to the County of Napa.

end insert begin insert

Article XXXIV of the California Constitution, among other things, prohibits any state public body from developing, constructing, or acquiring a low-rent housing project before a majority of the qualified electors vote upon and approve the project. Existing law provides that the words “develop, construct, or acquire” for the purposes of that constitutional provision shall not be interpreted to include specified activities of a state public body.

end insert begin insert

This bill would include in those specified activities the financing for a specified low-rent housing project by a state public body, as provided.

end insert begin insert

Existing law requires the State Air Resources Board to establish criteria for the evaluation of the effectiveness of motor vehicle pollution control devices and, after establishment of those criteria, requires the state board to evaluate motor vehicle pollution control devices that have been submitted to it for testing.

end insert begin insert

Existing law requires vehicles in this state to be equipped with correctly installed, operational motor vehicle pollution control devices or systems, with specified exceptions, including an alteration, modification, or modifying device, apparatus, or mechanism found by resolution of the state board to either not reduce the effectiveness of a required motor vehicle pollution control device or to result in emissions from the modified or altered vehicle that are at levels that comply with existing state or federal standards for that model-year of the vehicle being modified or converted. Existing law authorizes aftermarket and performance parts with valid state board executive orders to be sold and installed concurrent with a motorcycle’s transfer to an ultimate purchaser.

end insert begin insert

This bill would authorize the state board to enter into agreements with private entities and receive, on behalf of the state, contributions from private sources in the form of equipment or money in order to expedite the processing of applications, resolutions, and executive orders pertaining to the above exception to the requirement that vehicles be equipped with pollution control devices or systems and the authorization to sell and install aftermarket and performance parts with a valid executive order. The bill would require all moneys received to be separately accounted for, be deposited into the Air Pollution Control Fund, and available to the state board for these purposes upon appropriation of the Legislature.

end insert begin insert

This bill would appropriate $3,000,000 from the Gambling Control Fund to the Department of Justice for the purposes of addressing the backlog in investigations related to card room licensing.

end insert begin insert

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

end insert begin delete

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. Existing law, subject to federal approval, imposes a hospital quality assurance fee, as specified, on certain general acute care hospitals to be deposited into the Hospital Quality Assurance Revenue Fund. Existing law provides that moneys in the Hospital Quality Assurance Revenue Fund are continuously appropriated during the first program period of January 1, 2014, to December 31, 2016, inclusive, and available only for certain purposes, including paying for health care coverage for children, as specified, and making supplemental payments for certain services to private hospitals and increased capitation payments to Medi-Cal managed care plans. For subsequent program periods, existing law requires that the moneys in the Hospital Quality Assurance Revenue Fund be used for the above-described purposes upon appropriation by the Legislature in the annual Budget Act. Existing law provides that these provisions are inoperative on January 1, 2017, and that a hospital is not required to pay the hospital quality assurance fee after that date, as specified.

end delete begin delete

This bill would extend the operation of these provisions to January 1, 2018. The bill would instead, for the second program period and subsequent program periods, require moneys in the Hospital Quality Assurance Revenue Fund to be continuously appropriated, thereby making an appropriation, for the above-described purposes.

end delete begin delete

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

end delete begin delete

This bill would declare that it is to take effect immediately as an urgency statute.

end delete

Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 905.2 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

905.2.  

(a) This section shall apply to claims against the state
filed with the Department of General Services except as provided
in subparagraph (B) of paragraph (2) of subdivision (b).

(b) There shall be presented in accordance with this chapter and
Chapter 2 (commencing with Section 910) all claims for money
or damages against the state:

(1) For which no appropriation has been made or for which no
fund is available but the settlement of which has been provided
for by statute or constitutional provision.

(2) (A) For which the appropriation made or fund designated
is exhausted.

(B) Claims for reissuance of stale, dated, or replacement
warrants shall be filed with the state entity that originally issued
the warrant and, if allowed, shall be paid from the issuing entity’s
current appropriation.

(3) For money or damages on express contract, or for an injury
for which the state is liable.

(4) For which settlement is not otherwise provided for by statute
or constitutional provision.

(c) Claimants shall pay a filing fee of twenty-five dollars ($25)
for filing a claim described in subdivision (b), except for claims
for reissuance of stale, dated, or replacement warrants as described
in subparagraph (B) of paragraph (2) of subdivision (b). This fee
shall be deposited into the Service Revolving Fund and shall only
be available for the support of the Department of General Services
upon appropriation by the Legislature.

(1) The fee shall not apply to the following persons:

(A) Persons who are receiving benefits pursuant to the
Supplemental Security Income (SSI) and State Supplementary
Payment (SSP) programs (Article 5 (commencing with Section
12200) of Chapter 3 of Part 3 of Division 9 of the Welfare and
Institutions Code), the California Work Opportunity and
Responsibility to Kids Act (CalWORKs) program (Chapter 2
(commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code), the federal Supplemental Nutrition
Assistance Program (SNAP; 7 U.S.C. Sec. 2011 et seq.), or Section
17000 of the Welfare and Institutions Code.

(B) Persons whose monthly income is 125 percent or less of the
current monthly poverty line annually established by the Secretary
of California Health and Human Services pursuant to the federal
Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35),
as amended.

(C) Persons who are sentenced to imprisonment in a state prison
or confined in a county jail, or who are residents in a state
institution and, within 90 days prior to the date the claim is filed,
have a balance of one hundred dollars ($100) or less credited to
the inmate’s or resident’s trust account. A certified copy of the
statement of the account shall be submitted.

(2) Any claimant who requests a fee waiver shall attach to the
application a signed affidavit requesting the waiver and verification
of benefits or income and any other required financial information
in support of the request for the waiver.

(3) Notwithstanding any other law, an applicant shall not be
entitled to a hearing regarding the denial of a request for a fee
waiver.

(d) The time for the Department of General Services to
determine the sufficiency, timeliness, or any other aspect of the
claim shall begin when any of the following occur:

(1) The claim is submitted with the filing fee.

(2) The fee waiver is granted.

(3) The filing fee is paid to the department upon the
department’s denial of the fee waiver request, so long as payment
is received within 10 calendar days of the mailing of the notice of
the denial.

(e) Upon approval of the claim by the Department of General
Services, the fee shall be reimbursed to the claimant, except that
no fee shall be reimbursed if the approved claim was for the
payment of an expired warrant. Reimbursement of the filing fee
shall be paid by the state entity against which the approved claim
was filed. If the claimant was granted a fee waiver pursuant to this
section, the amount of the fee shall be paid by the state entity to
the department. The reimbursement to the claimant or the payment
to the department shall be made at the time the claim is paid by
the state entity, or shall be added to the amount appropriated for
the claim in an equity claims bill.

(f) The begin delete board end delete begin insert Department of General Services end insert may assess a
surcharge to the state entity against which the approved claim was
filed in an amount not to exceed 15 percent of the total approved
claim. The begin delete board end delete begin insert department end insert shall not include the refunded filing
fee in the surcharge calculation. This surcharge shall be deposited
into the begin delete General end delete begin insert Service Revolving end insert Fund and may be appropriated
in support of the begin delete board as reimbursements to Item 7870-001-0001
of Section 2.00 of end delete begin insert department in end insert the annual Budget Act.

(1) The surcharge shall not apply to approved claims to reissue
expired warrants.

(2) Upon the request of the department in a form prescribed by
the Controller, the Controller shall transfer the fees from the state
entity’s appropriation to the appropriation for the support of the
department. However, the department shall not request an amount
that shall be submitted for legislative approval pursuant to Section

begin delete 13928. end delete begin insert 14659.10. end insert

(g) The filing fee required by subdivision (c) shall apply to all
claims filed after June 30, 2004, or the effective date of this statute.
The surcharge authorized by subdivision (f) may be calculated and
included in claims paid after June 30, 2004, or the effective date
of the statute adding this subdivision.

(h) This section shall not apply to claims made for a violation
of the California Whistleblower Protection Act (Article 3
(commencing with Section 8547) of Chapter 6.5 of Division 1 of
Title 2).

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 8590.6 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

8590.6.  

For the purposes of this article:

(a) “Comprehensive services” means primary services that
include all of the following:

(1) Shelter or established referral services for shelter on a 24
hours a day, seven days a week, basis.

(2) A 24 hours a day, seven days a week, telephone hotline for
crisis calls.

(3) Temporary housing and food facilities.

(4) Psychological support and peer counseling provided in
accordance with Section 1038.2 of the Evidence Code.

(5) Referrals to existing services in the community.

(6) Emergency transportation, as feasible.

(b) “Director” means the Director of the Office of Emergency
Services.

(c) “Fund” means the Human Trafficking Victims Assistance
Fund.

(d) “Human trafficking caseworker” means a human trafficking
caseworker as defined in Section 1038.2 of the Evidence begin delete Code. end delete

begin insert Code, or a human trafficking caseworker who is employed by a
homeless services provider that serves homeless children or youth
and has completed a minimum of eight hours of training focused
on victims of human trafficking from the Runaway and Homeless
Youth Training and Technical Assistance Center. end insert

(e) “Office” means the Office of Emergency Services.

(f) “Qualified nonprofit organization” means a nongovernmental,
nonprofit organization that does both of the following:

(1) Employs a minimum of one individual who is a human
trafficking caseworker.

(2) Provides services to victims of human trafficking, including,
but not limited to, housing assistance, counseling services, and
social services to victims of human trafficking.

(g) “Victim of human trafficking” means any person who is a
trafficking victim as described in Section 236.1 of the Penal Code
and satisfies either of the following conditions:

(1) Was trafficked in the state.

(2) Fled his or her trafficker to the state.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 15820.946 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

15820.946.  

(a) The participating county contribution for adult
local criminal justice facilities financed under this chapter shall
be a minimum of 10 percent of the total project costs. The BSCC
may reduce contribution requirements for participating counties
with a general population below 200,000 upon petition by a
participating county to the BSCC requesting a lower level of
contribution.

(b) The BSCC shall determine the funding and scoring criteria
consistent with the requirements of this chapter. Financing shall
be awarded only to those counties that have previously received
only a partial award or have never received an award from the
state within the financing programs authorized in Chapters 3.11
(commencing with Section 15820.90) to 3.131 (commencing with
Section 15820.93), inclusive. begin delete Notwithstanding this restriction,
twenty million dollars ($20,000,000) of the amount authorized in
Section 15820.942 shall be set aside and awarded to Napa County. end delete
The funding criteria shall include, as a mandatory criterion,
documentation of the percentage of pretrial inmates in the county
jail from January 1, 2015, to December 31, 2015, inclusive, and a
description of the county’s current risk assessment based pretrial
release program. Funding preference shall also be given to counties
that are most prepared to proceed successfully with this financing
in a timely manner. The determination of preparedness to proceed
shall include the following:

(1) Counties providing a board of supervisors’ resolution
authorizing an adequate amount of available matching funds to
satisfy the counties’ contribution and approving the forms of the
project documents deemed necessary, as identified by the board
to the BSCC, to effectuate the financing authorized by this chapter,
and authorizing the appropriate signatory or signatories to execute
those documents at the appropriate times. The identified matching
funds in the resolution shall be compatible with the state’s
lease-revenue bond financing.

(2) Counties providing documentation evidencing CEQA
compliance has been completed. Documentation of CEQA
compliance shall be either a final Notice of Determination or a
final Notice of Exemption, as appropriate, and a letter from county
counsel certifying the associated statute of limitations has expired
and either no challenges were filed or identifying any challenges
filed and explaining how they have been resolved in a manner that
allows the project to proceed as proposed.

(c) Funding consideration shall be given to counties that are
seeking to replace compacted, outdated, or unsafe housing capacity
that will also add treatment space or counties that are seeking to
renovate existing or build new facilities that provide adequate
space for the provision of treatment and rehabilitation services,
including mental health treatment.

(d) A participating county may replace existing housing
capacity, realizing only a minimal increase of capacity, using this
financing authority if the requesting county clearly documents an
existing housing capacity deficiency.

(e) A participating county with a request resulting in any
increase in capacity using this financing authority shall be required
to certify and covenant in writing that the county is not, and will
not be, leasing housing capacity to any other public or private
entity for a period of 10 years beyond the completion date of the
adult local criminal justice facility.

(f) Any locked facility constructed or renovated with state
funding awarded under this program shall include space to provide
onsite, in-person visitation capable of meeting or surpassing the
minimum number of weekly visits required by state regulations
for persons detained in the facility.

(g) Any county applying for financing authority under this
program shall include a description of efforts to address sexual
abuse in its adult local criminal justice facility constructed or
renovated pursuant to this chapter.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 15820.947 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 15820.947. end insert   

Notwithstanding the award restriction in
subdivision (b) of Section 15820.946, twenty million dollars
($20,000,000) of the amount authorized in Section 15820.942 shall
be set aside and awarded to the County of Napa without the
submission of any further adult local criminal justice facility
proposal. This amount may be utilized in conjunction with a partial
award made to the County of Napa pursuant to Chapter 3.131
(commencing with Section 15820.93). These awards represent the
maximum state contribution for the adult local criminal justice
facility in the County of Napa.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 37001.5 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

37001.5.  

The words “develop, construct, or acquire,” as used
in Section 1 of Article XXXIV of the State Constitution, shall not
be interpreted to apply to activities of a state public body when
begin delete such end delete begin insert that end insert body does any of the following:

(a) Provides financing, secured by a deed of trust or other
security instrument to a private owner of existing housing; or
acquires a development, for which financing previously has been
provided, as a temporary measure to protect its security and with
an intention to change the ownership so that it will not continue
to be the owner of a low-rent housing project.

(b) Acquires or makes improvements to land which is anticipated
to be sold, ground leased, or otherwise transferred to a private
owner prior to its development as a low-rent housing project,
provided (1) the land and improvements thereon are not subject
to an exemption from property taxation by reason of public
ownership for more than five years following acquisition or
improvement by the state public body, or (2) such an exemption
from property taxation persists beyond the five-year period and
no alternative use is designated for the land or improvements, but
any property tax revenues lost by affected taxing agencies on
account of the exemption of land or improvements from property
taxes by reason of public ownership of the property, or any interest
in the property after the five-year period, are fully reimbursed by
payments in lieu of taxes following the expiration of the five-year
period.

(c) Leases existing dwelling units from the private owner of
such units, provided the lease or a subtenancy thereunder does not
result in a decrease of property tax revenues with respect to the
dwelling units leased.

(d) Provides assistance to the private owner or occupant of
existing housing which enables an occupant to live in decent, safe,
and sanitary housing at a rent he or she can afford to pay.

(e) Provides assistance to a low-rent housing project and
monitors construction or rehabilitation of begin delete such end delete begin insert that end insert project and
compliance with conditions of begin delete such end delete begin insert that end insert assistance to the extent
of:

(1) Carrying out routine governmental functions.

(2) Performing conventional activities of a lender.

(3) Imposing constitutionally mandated or statutorily authorized
conditions accepted by a grantee of assistance.

(f) Provides assistance to a development prior to its becoming
a low-rent housing project without intending or expecting that the
development will become a low-rent housing project, as defined.

(g) Provides financing for a low-rent housing project pursuant
to Chapter 6.7 (commencing with Section 51325) of Part 3 of
Division 31.

begin insert

(h) Provides financing for a low-rent housing project pursuant
to Article 3.2 (commencing with Section 987.001) and Article 5y
(commencing with Section 998.540) of Chapter 6 of Division 4 of
the Military and Veterans Code. This subdivision shall apply to
all low-rent housing projects that convert the project’s financing
to permanent financing after January 1, 2017.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 43011.3 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 43011.3. end insert   

The state board may enter into agreements with
private entities and receive, on behalf of the state, contributions
from private sources in the form of equipment or money in order
to expedite the processing of applications, resolutions, and
executive orders pertaining to subdivisions (h) and (i) of Section
27156 of the Vehicle Code. All moneys received pursuant to this
section shall be separately accounted for and deposited in the Air
Pollution Control Fund and shall be available, upon appropriation,
to the state board for purposes of this section.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert begin insert

The sum of three million dollars ($3,000,000) is hereby
appropriated from the Gambling Control Fund to the Department
of Justice for the purposes of Schedule (2) of Item 0820-001-0567
of Section 2.00 of the Budget Act of 2016 in order to address the
backlog in investigations related to card room licensing

end insert

begin insert

begin insert SEC. 8. 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.  

Section 14169.53 of the Welfare and Institutions
Code is amended to read:

14169.53.  

(a) (1) All fees required to be paid to the state
pursuant to this article shall be paid in the form of remittances
payable to the department.

(2) The department shall directly transmit the fee payments to
the Treasurer to be deposited in the fund. Notwithstanding Section
16305.7 of the Government Code, any interest and dividends
earned on deposits in the fund from the proceeds of the fee assessed
pursuant to this article shall be retained in the fund for purposes
specified in subdivision (b).

(b) (1) Notwithstanding subdivision (c) of Section 14167.35,
subdivision (b) of Section 14168.33, and subdivision (b) of Section
14169.33, all funds from the proceeds of the fee assessed pursuant
to this article in the fund, together with any interest and dividends
earned on money in the fund, shall continue to be used exclusively
to enhance federal financial participation for hospital services
under the Medi-Cal program, to provide additional reimbursement
to, and to support quality improvement efforts of, hospitals, and
to minimize uncompensated care provided by hospitals to uninsured
patients, as well as to pay for the state’s administrative costs and
to provide funding for children’s health coverage, in the following
order of priority:

(A) To pay for the department’s staffing and administrative
costs directly attributable to implementing this article, not to exceed
two hundred fifty thousand dollars ($250,000) for each subject
fiscal quarter, exclusive of any federal matching funds.

(B) To pay for the health care coverage, as described in
subdivision (g), except that for the two subject fiscal quarters in
the 2013-14 fiscal year, the amount for children’s health care
coverage shall be one hundred fifty-five million dollars
($155,000,000) for each subject fiscal quarter, exclusive of any
federal matching funds.

(C) To make increased capitation payments to managed health
care plans pursuant to this article and Section 14169.82, including
the nonfederal share of capitation payments to managed health
care plans pursuant to this article and Section 14169.82 for services
provided to 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)).

(D) To make increased payments and direct grants to hospitals
pursuant to this article and Section 14169.83, including the
nonfederal share of payments to hospitals under this article and
Section 14169.83 for services provided to 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)).

(2) Notwithstanding subdivision (c) of Section 14167.35,
subdivision (b) of Section 14168.33, and subdivision (b) of Section
14169.33, and notwithstanding Section 13340 of the Government
Code, the moneys in the fund shall be continuously appropriated
during the first program period only, without regard to fiscal year,
for the purposes of this article, Article 5.229 (commencing with
Section 14169.31), Article 5.228 (commencing with Section
14169.1), Article 5.227 (commencing with Section 14168.31),
former Article 5.226 (commencing with Section 14168.1), former
Article 5.22 (commencing with Section 14167.31), and former
Article 5.21 (commencing with Section 14167.1).

(3)  Notwithstanding any other law, for the second program
period and subsequent program periods, the moneys in the fund
shall be continuously appropriated, without regard to fiscal year,
for the purposes of this article and Sections 14169.82 and 14169.83.

(c) Any amounts of the quality assurance fee collected in excess
of the funds required to implement subdivision (b), including any
funds recovered under subdivision (d) of Section 14169.61, shall
be refunded to general acute care hospitals, pro rata with the
amount of quality assurance fee paid by the hospital, subject to
the limitations of federal law. If federal rules prohibit the refund
described in this subdivision, the excess funds shall be used as
quality assurance fees for the next program period for general acute
care hospitals, pro rata with the amount of quality assurance fees
paid by the hospital for the program period.

(d) Any methodology or other provision specified in this article
may be modified by the department, in consultation with the
hospital community, to the extent necessary to meet the
requirements of federal law or regulations to obtain federal
approval or to enhance the probability that federal approval can
be obtained, provided the modifications do not violate the spirit,
purposes, and intent of this article and are not inconsistent with
the conditions of implementation set forth in Section 14169.72.
The department shall notify the Joint Legislative Budget Committee
and the fiscal and appropriate policy committees of the Legislature
30 days prior to implementation of a modification pursuant to this
subdivision.

(e) The department, in consultation with the hospital community,
shall make adjustments, as necessary, to the amounts calculated
pursuant to Section 14169.52 in order to ensure compliance with
the federal requirements set forth in Section 433.68 of Title 42 of
the Code of Federal Regulations or elsewhere in federal law.

(f) The department shall request approval from the federal
Centers for Medicare and Medicaid Services for the implementation
of this article. In making this request, the department shall seek
specific approval from the federal Centers for Medicare and
Medicaid Services to exempt providers identified in this article as
exempt from the fees specified, including the submission, as may
be necessary, of a request for waiver of the broad-based
requirement, waiver of the uniform fee requirement, or both,
pursuant to paragraphs (1) and (2) of subdivision (e) of Section
433.68 of Title 42 of the Code of Federal Regulations.

(g) (1) For purposes of this subdivision, the following
definitions shall apply:

(A) “Actual net benefit” means the net benefit determined by
the department for a net benefit period after the conclusion of the
net benefit period using payments and grants actually made, and
fees actually collected, for the net benefit period.

(B) “Aggregate fees” means the aggregate fees collected from
hospitals under this article.

(C) “Aggregate payments” means the aggregate payments and
grants made directly or indirectly to hospitals under this article,
including payments and grants described in Sections 14169.54,
14169.55, 14169.57, and 14169.58, and subdivision (b) of Section
14169.82.

(D) “Net benefit” means the aggregate payments for a net benefit
period minus the aggregate fees for the net benefit period.

(E) “Net benefit period” means a subject fiscal year or portion
thereof that is in a program period and begins on or after July 1,
2014.

(F) “Preliminary net benefit” means the net benefit determined
by the department for a net benefit period prior to the beginning
of that net benefit period using estimated or projected data.

(2) The amount of funding provided for children’s health care
coverage under subdivision (b) for a net benefit period shall be
equal to 24 percent of the net benefit for that net benefit period.

(3) The department shall determine the preliminary net benefit
for all net benefit periods in the first program period before July
1, 2014. The department shall determine the preliminary net benefit
for all net benefit periods in a subsequent program period before
the beginning of the program period.

(4) The department shall determine the actual net benefit and
make the reconciliation described in paragraph (5) for each net
benefit period within six months after the date determined by the
department pursuant to subdivision (h).

(5) For each net benefit period, the department shall reconcile
the amount of moneys in the fund used for children’s health
coverage based on the preliminary net benefit with the amount of
the fund that may be used for children’s health coverage under
this subdivision based on the actual net benefit. For each net benefit
period, any amounts that were in the fund and used for children’s
health coverage in excess of the 24 percent of the actual net benefit
shall be returned to the fund, and the amount, if any, by which 24
percent of the actual net benefit exceeds 24 percent of the
preliminary net benefit shall be available from the fund to the
department for children’s health coverage. The department shall
notify the Joint Legislative Budget Committee and the fiscal and
appropriate policy committees of the Legislature of the results of
the reconciliation for each net benefit period pursuant to this
paragraph within five working days of performing the
reconciliation.

(6) The department shall make all calculations and
reconciliations required by this subdivision in consultation with
the hospital community using data that the department determines
is the best data reasonably available.

(h) After consultation with the hospital community, the
department shall determine a date upon which substantially all
fees have been paid and substantially all supplemental payments,
grants, and rate range increases have been made for a program
period, which date shall be no later than two years after the end
of a program period. After the date determined by the department
pursuant to this subdivision, no further supplemental payments
shall be made under the program period, and any fees collected
with respect to the program period shall be used for a subsequent
program period consistent with this section. Nothing in this
subdivision shall affect the department’s authority to collect quality
assurance fees for a program period after the end of the program
period or after the date determined by the department pursuant to
this subdivision. The department shall notify the Joint Legislative
Budget Committee and fiscal and appropriate policy committees
of that date within five working days of the determination.

(i) Use of the fee proceeds to enhance federal financial
participation pursuant to subdivision (b) shall include use of the
proceeds to supply the nonfederal share, if any, of payments to
hospitals under this article for services provided to 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.

SEC. 2.  

Section 14169.75 of the Welfare and Institutions Code
is amended to read:

14169.75.  

Notwithstanding Section 14169.72, this article shall
become inoperative on January 1, 2018. A hospital shall not be
required to pay the fee after that date unless the fee was owed
during the period in which the article was operative, and payments
authorized under Section 14169.53 shall not be made unless the
payments were owed during the period in which the article was
operative.

SEC. 3.  

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.

SEC. 4.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to provide continued health care coverage for
Californians at the earliest possible time, it is necessary that this
bill take effect immediately.

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