Appropriations Committee Report – Week 16, 2019

FLOOR ACTION:

HF 759—Administration and Regulation Budget

HF 766—Health and Human Services Budget

SF 603 – Funding for dual enrollment, allowing it to replace required courses

SF 638—Standings

FLOOR ACTION:

HF 759—Administration and Regulation Budget

HF 759 is the agreed-to Administration and Regulation budget. The bill appropriates $56.54 million from the General Fund, which is an $8 million increase over estimated net FY 19 budget.

 

FY 19 Supplemental

• DAS: $3,524,611 for utilities shortfall for FY19.

 

Notable recommended increase – FY20

• Ethics and Campaign Disclosure: $68,500 (additional staff attorney)
• IGOV: $200,000 (for salaries, adds two FTE for tax policy analyst and health care policy assistant)
• Terrace Hill Quarters: $140,070 (Senate matched House).
• Dept. of Management: $125,000 (Retirements and one new FTE).
• Dept. of Revenue: $1.07 million for processing system upgrade (House had $2 million).
• DAS: $168,000 to use toward future utility expenses.

 

NEW:

• OCIO: $1.3 million – Owe feds $ 1.3 million for receiving and spending too much grant money.

• OCIO: Broadband Grants: $5 million
  • Creating a consistent source of funding for the broadband grant program.
• DAS: $50,000 for new State Properties Information Project
  • Establishes a listing of real property owned/leased by the state.

 

Non-general fund Info:

• Sec. of State Address Confidentially Program   
  • Due to popularity, authorization granted to increase spending by $75,000 to $195,000.
• Racing and Gaming Commission
  • Contingent on adoption of sports betting.
  • Additional $275,000 and three FTEs (generated from sports betting income).
• Insurance Division: $220,000 for Insurance Fraud Investigation (down from $675,000)
  • The division must use two FTEs to hire two investigators within the insurance fraud bureau.

 

New policy language:

• Dept. of Administrative Services
  • Requires DAS to submit a report on property owned/leased by the State. The Department must submit its findings and recommendations to the Legislature by December 31, 2019, and every year after.
  • Requires the OCIO to submit a quarterly report to the Legislature and to the chairpersons and ranking members of the Senate and House committees on appropriations, detailing the status of technology upgrades or enhancements for State agencies. The report must include a list of State agencies coordinating or working with the OCIO and a list of State agencies not coordinating or working with the OCIO.
• Hotel licensing fee
  • Changes the cutoff for the hotel licensing fee increase from “more than one hundred one guest rooms” to “one hundred one guest rooms or more” (drafting mistake).

 

Adopted by House, but deleted by the Senate and House GOP agreement

• Requires DAS or the Board of Regents, as applicable, to initiate an investigation of a complaint alleging sexual harassment upon receipt or referral, and to complete the investigation within 180 days of receiving the complaint.
• Permits a State employee aggrieved by a violation of Iowa Code section 19B.12, to file a civil action within two years after the date of the alleged violation in a court of competent jurisdiction.
• Extends the time within which a claimant may bring a claim for discriminatory or unfair practice under Iowa Code section 216.15 from 300 days to two years, except as provided in Iowa Code section 614.8.
• Requires the Secretary of State to devote $100,000 from the funds appropriated for voter education and outreach.
  [4/26: 34-15 (Yes: Republicans, Bisignano, Boulton, Kinney; Absent: Feenstra)]

 

HF 766—Health and Human Services Budget

HF 766 provides funding for the Department of Aging (IDA), including the Long Term Care Ombudsman’s Office; Department of Human Services (DHS), including Medicaid; Department of Public Health (IDPH); and Veteran’s Affairs (VA), including the Veteran’s Home.

 

General Fund	Actual     FY 18	Net FY 19  (includes Supp)	HF 766 FY 20	Senate Strikeafter FY 20 S-3201	Final Agreement S-3247	Diff Net 19 vs. Senate 20
Aging	$12,092,745	$12,192,745	$12,341,262	12,341,262	12,341,262	$148,517
IDPH	$50,714,559	$54,871,995	$55,414,262	54,992,262	55,492,262	$620,267
VA	$11,216,581	$11,303,476	$11,378,476	11,378,476	11,378,476	$75,000
DHS	$1,687,256,980	$1,893,701,159	$1,862,754,698	1,857,924,761	1,857,974,761	-$35,726,398
Regents				550,000	0	$0
TOTAL	$1,761,239,648	$1,972,069,375	$1,941,888,698	1,937,186,761	1,937,186,761	-$34,882,614

 

The bill appropriates $1.937 billion, an increase of $115.4 million compared to FY19. The budget included a $150.3 million supplemental increase in the FY19 appropriation to cover the Medicaid shortfall.

• The $550,000 for Rural Psychiatry Residencies ($400,000) and Psychiatric Training ($150,000) is allocated to IDPH.
• $50,000 increase to the Iowa Donor network is eliminated.
• Nursing Facility Rebasing is funded at $23.4 million.
• Assertive Community Treatment (ACT) increase is $211,332.
• $700,000 for Children’s Mental Health Coordinators in MHDS regions is eliminated.
• $1.3 million for DHS technology is eliminated.

 

Significant Policy in Final Agreement

• HF 710 requires the director of IDPH to hire and supervise the executive directors of the Board of Medicine, Board of Nursing, Dental Board and Pharmacy Board.
• HF 726 combines and eliminates boards and councils and eliminates reimbursement for public members, EXCEPT the final agreement leaves the Tobacco Commission status quo.
• SF 414 provides Medicaid coverage for legal permanent resident pregnant women.
• No state or local government unit or tax-supported district must provide sex reassignment surgery or any other cosmetic, reconstructive or plastic surgery related to transsexualism, hermaphroditism, gender identity disorder or body dysmorphic disorder. If services are not provided, it is not a violation of the Civil Rights Code.
• Adds two items for which DHS can collect liquidated damages from MCOs: if an MCO reports that system issues are fixed and the problem recurs within 60 days; and failure of an MCO to complete provider credentialing or to accurately load provider rosters as required in the contract.
• Eliminates a section that implemented an expedited claims dispute process for all outstanding claims when an MCO terminates its contract.
• Terminates contract between IDPH and Iowa Hospital Association for data collection and issues an RFP.
• Allows the State Training School in Eldora to refuse to accept a child at the facility if the Superintendent notifies the court that it is unable to accept placement.
• Restricts funding for the following programs from a provider who promotes or provides abortions, EXCEPT Unity Point can still get the grants: Title 10; PREP; SRAE (Sex Ed Grants).
• Requests that DHS submit a CMS waiver to implement an intergovernmental transfer for nursing homes owned by non-state governmental entities. This would draw down additional federal dollars.
• Mandates that any pass-through funds appropriated by IDPH or DHS to other third-party organizations cannot be used for lobbying activities.
• A supplemental appropriation for FY19 of $150.3 million for Medicaid.
• The Senate version meets the joint target of $1,937,186,761. The House version was $4.7 million over the joint target.
• The FY20 budget is $35 million less than the FY19 budget that includes the supplemental appropriation. The FY20 budget is $115 million more than was appropriated last session for FY19 when you subtract the supplemental appropriation.
• The supplemental was needed for FY19 due to negotiated increases with the MCOs.
• Like last year, the FY20 appropriation does NOT include any increases that might be negotiated with the MCOs for FY20, which means a supplemental will be necessary next session as well.
• The bill contains no significant improvements to privatized Medicaid.

 

Department on Aging

• $150,000 increase to IDA for the Pre-Medicaid Pilot Project that assists non-Medicaid patients who wish to return to their community after a nursing home stay. The total for the project is now $250,000.
• The Office of Long Term Care Ombudsman is status quo.

 

Department of Public Health

• NEW ITEM: Increase of $550,000 to IDPH for rural psychiatry residency and training; $400,000 for rural psychiatry residencies and $150,000 for psychiatric training for nurse practitioners and physician assistants. Appropriates money through IDPH to UI.
• $338,000 for Your Life Iowa hotline expansion to include children’s mental health.
• $58,000 increase to the Drug Donation Depository Program.
• $20,000 increase to Specialty Health Care.
• Tobacco Use and Prevention remains status quo at $4 million in both House and Senate.

 

Veteran’s Affairs

• $75,000 increase to Veteran’s Affairs general department operations.
• Veteran’s Home is status quo.
• Home Ownership Assistance program is status quo ($2 million).
• County VA grants remain status quo ($990,000).

 

Department of Human Services

• Overall increase to Field Operations of $6.3 million.
  • Increase of $1.5 million to DHS field operations for more staff positions to lower caseloads. DHS must hire 29 FTEs).
  • $4.4 million increase for Field Operations to maintain current staffing at 1,438 FTEs (salaries).
  • $409,223 to hire six FTEs to work on the ELIAS project.
• $1.2 million increase for Eldora State Training School.
• $4.1 million increase to Child and Family Services for core services and program growth.
• Child Care Assistance includes an increase of $3 million to annualize FY19 provider rate increases; an increase of $4 million to reflect the forecasted need; and an increase of $1.1 million to meet the federal quality set-aside requirements. This is status quo from the general fund but is funded with $8.1 million from the Child Care Development Fund received previously.
• $345,896 increase to Cherokee Mental Health Institute; $1.65 million increase to Independence Mental Health Institute; and Glenwood and Woodward receive net reductions ($1.3 million) due to FMAP changes that bring in more federal funds.
• $1.2 million to Civil Commitment Unit for Sex Offenders (CCUSO) replaces one-time funding and funds additional staff.
• $1.4 million increase for medical contracts (IME).
• Family Investment Program (FIP) status quo.
• $12.3 million increase to the State’s Children’s Health Insurance plan (Hawki) to account for the phase down of the 23% enhanced ACA FMAP rate to 11.5%.
• $150.3 million FY19 supplemental appropriation.
• $62.4 million general increase for FY20.
• $23.4 million for nursing facility rebasing.
• $1.5 million increase for Critical Access Hospitals (rural hospitals). A reimbursement rate adjustment will be developed by DHS to distribute the increased funding for Medicaid services provided by Critical Access Hospitals.
• $1.2 million increase to eliminate the waiting list for the Children’s Mental Health HCBS waiver. As of March 1, there were 1,051 children on the waiting list (Children’s Board recommendation).
• $1 million increase for the tiered rates to increase supported community living provider daily rate cells for all tiers, effective July 1, 2019.
• A decrease of $195,000 due to a veto of a durable medical equipment project.
• This is an overall net decrease of $56.8 million compared to the FY19 total that includes the supplemental.
• HF 690 (Children’s Mental Health) fiscal note indicated a need for $423,110 in additional state dollars for Medicaid in FY20. This is now built into the Medicaid balance sheet. No specific appropriation is included in the bill so it just adds to the underfunded amount.
• Medicaid is underfunded by $9.1 million.
• This FY20 HHS budget does NOT include funds for any negotiated increases for the MCOs in FY20 so the need for a supplemental during the 2020 session is expected.
• Provides an additional FTE for work on Your Life Iowa Legislature.
• Provides an additional FTE for the First Five Program to focus on local agency contract management.
• Specifies $861,000 to be spent on contract with Brain Injury Alliance.
• Adds the option of “grade level” to the program reporting metrics that Prevent Blindness must track.
• Adds a slightly different version of SF 414 to direct DHS to request a waiver from CMS to provide Medicaid coverage for lawfully admitted pregnant women without a five-year wait.
• Requires DHS to review the costs associated with expanding the Medical Assistance Management Information System (MMIS) to integrate a single, statewide system to serve as a central portal to submit all prior-authorization requests. Study is due March 31, 2020.
• Requires DHS and IDPH to develop recommendations for the enhanced delivery of services for co-occurring conditions across provider types and payers. A five-year plan is to be developed.
• Allows Polk County to transfer funds from any other county fund to the County Mental Health and Disability Services Fund in FY20.
• Extends the repeal of the Hospital Health Care Access Assessment to the end of FY21.
• DHS is required to notify chairs and ranking members of the HHS budget subcommittee, LSA and caucus staff within 30 days of the execution or amendment of an MCO contract, and within 30 days of determining the incentive payment withhold amount.
• Requires DHS and IDA to continue to collaborate to develop a cost allocation plan requesting federal financial participation (matching federal funds) for the Aging and Disability Resource Centers.
• Uses general terms instead of “continue to contract with an existing independent statewide direct care worker organization for the purpose of health care and public health workforce initiatives.”
• Requires a dollar-for-dollar match for funds to Epilepsy Foundation over $50,000.
• Reorganizes MAAC by eliminating the executive committee and limits the voting membership of the Council to 10 members.
• Requires the Division of Criminal and Juvenile Justice Planning at the Dept. of Human Rights to convene a workgroup to review and develop a plan for transferring graduated sanctions and court-ordered services funding, and oversight of group foster care placements from DHS to the Office State Court Administrator. Report due December 15, 2019.
• Requires DHS to adopt rules to require that both managed care and fee-for-service use a uniform process for prior authorizations beginning October 1, 2019.
• Mandates that any pass-through funds appropriated by IDPH or DHS to other third-party organizations cannot be used for lobbying activities.
• Director of the Department of Public Health is to hire and supervise the executive directors of the Board of Medicine, Board of Pharmacy, Dental Board and Nursing Board.
• Combines and eliminates some health-related boards. Eliminates reimbursement costs for some boards. Tobacco Commission stays status quo.
• IDPH is required to work with stakeholders to develop a proposal for distributing funds in a manner closely aligned with IDPH priorities and goals. Report due December 15, 2019.
  1^st passage: [4/26: 31-19 (No: Democrats, Greene)]
  2^nd passage: [4/27: 31-17 (No: Democrats, Greene; Excused: Lykam, T. Taylor)]

 

SF 603 – Funding for dual enrollment, allowing it to replace required courses

SF 603 has three main provisions and is estimated to cost between $1 million and $3 million. It also will require a $108,000 for a new FTE at Iowa Department of Education.

First, SF 603 increases supplementary weighting for liberal arts concurrent/dual enrollment from .46 to .50.

Second, the bill allows concurrent enrollment programs to supplant, rather than supplement, two high school courses currently required to be “offered and taught” under the state’s educational standards. The bill allows one of the required science or math units to be taught under dual enrollment if the number of pupils enrolled exceeds five and the school district’s total enrollment does not exceed 600 pupils. Public school with more than 600 students may use college classes to count for one existing “offer and teach” requirement for science or math, but they will not receive additional/weighted funding. This is estimated to increase the school aid amount by $2 million.

Before schools can use the program, they must show a “good faith effort” to hire a certified high school teacher for the courses. Additionally, the bill adds requirements before a high school course can be supplanted:

• Enrollment of the unit must exceed five students.
• The unit must be offered during the regular school day.
• The unit is made accessible by the school district to all eligible students.

The bill expands the Chapter 709 sexual exploitation language to provide additional protects for high school students when taking community colleges courses. Community college instructors are not currently considered school employees for purposes of sexual misconduct/assault on a minor by a school employee. This would close that loophole.

Third, the bill provides new state funding to pay for concurrent community college enrollment of private school students. Like new student population thresholds for public schools, accredited private schools can use concurrent enrollment to supplant one science or math course. They can get “extra funding” if they have student populations less than 200 students. If a nonpublic school has more than 200 enrolled students, they can still use community colleges to cover offer and teach requirements, but no extra/weighted funding will be provided. This provision has an appropriation of $1 million in the Higher Education budget. If the nonpublic schools exceed this, funding will be pro-rated to the community colleges.
[4/26: 48-0 (Excused: Lykam, T. Taylor)]

 

SF 638—Standings

SF 638, as amended by S-3227, makes adjustments to various General Fund standing appropriations and results in a decrease in appropriations of $31.7 million for FY20. Total standings appropriation for FY20 will be $3.84 billion.

 

Division I–Standing appropriations and related matters

Nonpublic school transportation: Limits the FY20 General Fund appropriation to the Department of Education for nonpublic school transportation to $8,197,091.

Instructional Support Program: Suspends the standing appropriation of $14.8 million to the Department of Education. School districts may use local property taxes and income surtaxes to fund their portion of the Program. State funding for this program has not been provided since FY11.

State School Aid and AEA funding: Reduces FY20 State School Aid to Area Education Agencies (AEAs) by an additional $15 million, for a total reduction of $22.5 million.

Special Funds-Salary Adjustments: Salary adjustments may be funded (as determined by Department of Management) using unappropriated moneys remaining in special funds for which the Legislature has not made an operating budget appropriation.

 

Division II–Miscellaneous Appropriations

Volunteer Fire Fighters: $50,000 FY20 General Fund appropriation to the Department of Public Safety (DPS) for volunteer fire fighter training and related equipment needs. Specifies that the DPS may reallocate funds appropriated for this section as necessary to best fulfill the needs provided for in the appropriation. The Department must notify the LSA and the DOM of any reallocation, and provide information regarding the rationale for reallocating moneys. This appropriation was in an amendment offered by Senator Hogg and Senator T. Taylor. All Senate Democrats voted for this increase to the volunteer firefighters. The amendment failed on a party-line vote.

 

Division III–Miscellaneous Provisions

Ombudsman Annual Report due date change: Changes the due date of the Ombudsman’s report to the Legislature from April 1 to December 31 of each year. The report is about the ombudsman’s functions during the preceding fiscal year instead of the preceding calendar year.

Groundwater Hazard Statement: Prohibits county recorders from charging/collecting a fee for submitting or filing a groundwater statement. Currently and historically, county recorders have not collected fees for groundwater hazard statements in real estate property transactions. In September 2018, the County Recorders Association determined that this was an error and that starting on July 1, 2019, county recorders would start collecting fees as prescribed by law. HF 708/SF 626 are still alive and address groundwater hazard statements and fees (not the same as the language in the Standings bill).

 

Division IV—Corrective Provisions

Makes corrective changes identified by LSA to numerous bills passed and signed by the Governor this year. Corrective provisions for SF 570 (Immunity from civil liability for volunteers during disasters); HF 634 (merging various juvenile justice and human rights boards); HF 690 (Children’s Mental Health), SF 274 (campus “free speech”); SF 435 (towable recreational vehicles); HF 765 (RIIF); HF 679 (Substantive Code Editor’s Bill); SF 558 (Domestic Surplus Lines); SF 559 (electronic insurance notices); HF 610 (adult guardianships and conservatorships); and SF 333 (non-substantive Code Editor’s bill).

 

Division V—Flood Recovery

Flood Recovery: Creates a new Flood Recovery Fund under the control of the Flood Mitigation Board. A political subdivision of Iowa is eligible to receive moneys from the fund if the political subdivision is located in a Presidential Disaster Area from the severe storms and flooding from March 12, 2019, and is also located in a county where the federal emergency management agency’s individual assistance program has been activated. The applicable counties are Fremont, Harrison, Mills, Monona, Pottawattamie, Shelby and Woodbury. For a project to be eligible for funding, it must support flood response, flood recovery or flood mitigation. The bill appropriates $15 million from the General Fund from FY19 to the Flood Recovery Fund. The funds do not revert. The Department of Homeland Security and Emergency management may adopt emergency rules. These sections of the bill take effect upon enactment.

 

Division VI—State Budget Process

This division is the same as HF 740 as passed by the House on April 15, 48-0. The language codifies provisions relating to the salary model administrator, which appeared annually in standings appropriation bills. In the past, the language required the five institutions under the jurisdiction of the State Board of Regents to provide salary data to the Department of Management (DOM) and Legislative Services Agency (LSA). The new language no longer references five institutions. It instead references 262.7: the University of Iowa, including the university of Iowa Hospitals and Clinics; Iowa State University, including the Agricultural Experiment Station; University of Northern Iowa; the Iowa Braille and Sight Saving School; the State School for the Deaf; the Oakdale Campus; and the University of Iowa Hospitals and Clinics’ Center for Disabilities and Development.

Also, this division codifies provisions relating to the state budget process that appear biennially and apply annually in the standings appropriations bill; requires State agencies to submit budget information each year to the DOM and include all proposed expenditures, supporting data and explanations; requires state agencies to consult with LSA prior to submitting expenditure estimates to DOM; requires expenditures to be prioritized by program or by expected results, including performance measures. By codifying these sections, we will not see them in future standings bills.

 

Division VII—Blackout Special Registration Plates

Allows the Iowa Department of Transportation to issue a $35 blackout special registration plate. The plate’s background must be black and the numbering white. The vehicle owner must not place a frame that blocks plate number, state or county name, or validation/registration sticker. Monies collected will be deposited into the Road Use Tax Fund. In addition to the initial $35 fee, there is a $10 annual fee for blackout license plates and a $5 fee, if applicable, for personalized plates. Similar to SF 271 (in W&M).

 

Division VIII—Gambling Regulation

Sports Wagering: Amends SF 617, Sports Wagering bill. The language prohibits a person from selling, granting, assigning or turning over to another person the operation of an individually branded Internet site to conduct advanced deposit wagering for the licensee.

Annual Audit of licensee operations: Allowing for multi-county casinos to have just one audit of the parent company.

 

Division IX—Public Utilities

Public Utilities: This language is similar to SSB 1256 (Senate W&M). It modifies energy efficiency and demand response plan filing requirements for certain public utilities. This portion of the bill amends the Iowa Utilities Board (IUB) approval process for energy efficiency program budgets to not allow IUB to approve a plan that has a budget exceeding the 2%/1.5% thresholds that were established in legislation last year (SF 2311). Current language says that IUB cannot require a utility to have a budget exceeding the cap. Three gas utilities did have program budgets above the cap limit when the Energy Center/CGREER assessment was included in the program budget. The language is similar to SSB 1256, but it does not mandate the Energy Center/CGREER assessment be included in program budgets or that noncompliant plans be resubmitted to the board for approval. The new language states IUB will not require or allow an electric utility to adopt an energy efficiency plan that results in projected cumulative average annual costs that exceed the 2%/1.5% thresholds.

 

Division X—Board of Regents Capital Projects

Board of Regents Capital Projects Report: The Board of Regents must submit a report to the Legislature by December 13, 2019, on financing for capital projects at Regent institutions. The report will go back to capital projects initiated by the Regents since January 1, 2004, and will include recommendations to the Legislature on the type of projects that should be eligible for state funding; the share of state-funded capital projects that should be funded with non-state dollars; and how the fundraising plan will be developed for state-funded projects.

Repeal Regents Match Requirement in RIIF budget: Repeals the section of the RIIF budget that required matching dollars for Regents construction projects.

 

Division XI—Watershed Management Authorities

Allowing for areas in the Geological Survey Hydrologic Unit Code 8 Watershed outside of Iowa to participate in any 28E Watershed Management Authority. This will allow Hamburg to be eligible for certain disaster funding.

 

House Amendment:

The House amendment changes an effective date for HF 692 (elections bill) from effective upon enactment to July 1. In addition, the amendment makes significant changes to Iowa’s judicial nominating commission process and undoes a system for choosing judges that was voted on and adopted by the people of Iowa in the 1960s. The changes include:

• The governor will appoint nine members to the state judicial nominating commission, rather than eight. They will still be subject to Senate confirmation.
• Commissioners are limited to one six-year term on the commission.
• If an appointed member misses a meeting where the commission conducts interviews or selects nominees, the commissioner is considered to have submitted a resignation.
• Members of the state judicial nominating commission will choose the chairperson of the commission.
• All judicial nominating commissioners are subject to removal by the executive council.
• Nominating petitions for commissioners will need only 10 signatures.
• The governor will be notified of judicial officer vacancies, rather than the chair of each commission receiving notification.
• The governor will call the meetings of the judicial nominating commissions when a judicial vacancy occurs.
• The commissioners can do individual interviews with nominees prior to commission meetings.
• The state judicial nominating commission will adopt uniform rules for all the judicial nominating commissions to use, for consistency.
• If any part of the law is found unconstitutional, the invalidity does not affect other provisions.
• If any provision is preliminarily enjoined, no judicial nominating commission will meet to nominate someone to serve as a judge or justice while the injunction is in effect or while any appeal of the preliminary injunction or a related permanent injunction is pending.
• The chief justice will be elected by a majority vote of the justices on the Supreme Court for a two-year term, with the term of the current chief justice expiring on January 15, 2021. However, the chief justice is eligible for re-selection.
• This division is effective upon enactment.
  1^st passage: [4/26:31-18; party-line (Absent: Feenstra)]
  Final passage:[4/27: 32-16; party-line (Absent: Lykam, T. Taylor)]