Chief Sponsor: Justin L. Fawson

Senate Sponsor: Ann Millner


8     General Description:
9          This bill modifies provisions relating to the review and approval procedures for certain
10     federal funds requests under the Federal Funds Procedures Act and requires the review
11     of certain intergovernmental transfers under the Federal Funds Procedures Act.
12     Highlighted Provisions:
13          This bill:
14          ▸     increases oversight of intergovernmental transfers by prohibiting a city owned
15     hospital or city owned nursing care facility that will participate in an
16     intergovernmental transfer program from operating in another city or county without
17     entering into an interlocal agreement;
18          ▸     amends definitions;
19          ▸     modifies the federal funds requests that are subject to the review and approval
20     procedures under the Federal Funds Procedures Act;
21          ▸     makes intergovernmental transfer programs between the Department of Health and
22     a local government entity for Medicaid federal funding subject to the Federal Funds
23     Procedures Act;
24          ▸     prohibits the creation of new Medicaid intergovernmental transfer programs after
25     July 1, 2017, unless the Department of Health submits the intergovernmental
26     transfer program for review as a new grant under the Federal Funds Procedures Act;
27          ▸     establishes a requirement for the Department of Health to submit an annual report to
28     the Executive Appropriations Committee regarding Medicaid intergovernmental
29     transfer programs; and

30          ▸     makes technical changes.
31     Money Appropriated in this Bill:
32          None
33     Other Special Clauses:
34          None
35     Utah Code Sections Affected:
36     AMENDS:
37          10-8-90, as last amended by Laws of Utah 2003, Chapter 292
38          26-18-18, as last amended by Laws of Utah 2016, Chapter 279
39          63J-5-102, as last amended by Laws of Utah 2016, Chapter 272
40          63J-5-103, as last amended by Laws of Utah 2015, Chapter 190
41     ENACTS:
42          26-18-21, Utah Code Annotated 1953
43          63J-5-206, Utah Code Annotated 1953

45     Be it enacted by the Legislature of the state of Utah:
46          Section 1. Section 10-8-90 is amended to read:
47          10-8-90. Ownership and operation of hospitals.
48          (1) Each city of the third, fourth, or fifth class and each town of the state is authorized
49     to construct, own, and operate hospitals and to join with other cities, towns, and counties in the
50     construction, ownership, and operation of hospitals.
51          (2) Beginning July 1, 2017, a hospital under Subsection (1) that owns a nursing care
52     facility regulated under Title 26, Chapter 21, Health Care Facility Licensing and Inspection
53     Act, and uses an intergovernmental transfer as that term is defined in Section 26-18-21 may not
54     enter into a new agreement or arrangement to operate a nursing care facility in another city,
55     town, or county without first entering into an agreement under Title 11, Chapter 13, Interlocal
56     Cooperation Act, or other contract with the other city, town, or county to operate the nursing
57     care facility.

58          Section 2. Section 26-18-18 is amended to read:
59          26-18-18. Optional Medicaid expansion.
60          (1) For purposes of this section, "PPACA" means the same as that term is defined in
61     Section 31A-1-301.
62          (2) The department and the governor shall not expand the state's Medicaid program to
63     the optional population under PPACA unless:
64          (a) the governor or the governor's designee has reported the intention to expand the
65     state Medicaid program under PPACA to the Legislature in compliance with the legislative
66     review process in Sections 63N-11-106 and 26-18-3; and
67          (b) [notwithstanding Subsection 63J-5-103(2),] the governor submits the request for
68     expansion of the Medicaid program for optional populations to the Legislature under the high
69     impact federal funds request process required by Section 63J-5-204, Legislative review and
70     approval of certain federal funds request.
71          (3) The department shall request approval from the Centers for Medicare and Medicaid
72     Services within the United States Department of Health and Human Services for waivers from
73     federal statutory and regulatory law necessary to implement the health coverage improvement
74     program under Section 26-18-411. The health coverage improvement program under Section
75     26-18-411 is not Medicaid expansion for purposes of this section.
76          Section 3. Section 26-18-21 is enacted to read:
77          26-18-21. Medicaid intergovernmental transfer report.
78          (1) As used in this section:
79          (a) (i) "Intergovernmental transfer" means the transfer of public funds from:
80          (A) a local government entity to another nonfederal governmental entity; or
81          (B) from a nonfederal, government owned health care facility regulated under Chapter
82     21, Health Care Facility Licensing and Inspection Act, to another nonfederal governmental
83     entity.
84          (ii) "Intergovernmental transfer" does not include the transfer of public funds from one
85     state agency to another state agency.

86          (b) "Intergovernmental transfer program" means a reimbursement category authorized
87     by the Medicaid state plan or waiver authority for intergovernmental transfers.
88          (c) "Local government entity" means a county, city, town, special service district, or
89     local education agency as that term is defined in Section 63J-5-102.
90          (2) (a) An entity that receives federal Medicaid dollars from the department as a result
91     of an intergovernmental transfer shall, on or before August 1, 2017, and on or before August 1
92     each year thereafter, provide the department with:
93          (i) information regarding the payments funded with the intergovernmental transfer as
94     authorized by and consistent with state and federal law;
95          (ii) the entity's analysis of the entity's ability to repay federal funds, to the extent
96     required by the department in the contract for the intergovernmental transfer, if there is a
97     federal disallowance of the intergovernmental transfer; and
98          (iii) other information required by the department in the contract for the
99     intergovernmental transfer.
100          (b) On or before October 15, 2017, and on or before October 15 each year thereafter,
101     the department shall prepare a report for the Executive Appropriations Committee that
102     includes:
103          (i) the amount of each intergovernmental transfer under Subsection (2)(a);
104          (ii) the department's analysis of the risk of a federal disallowance for the state; and
105          (iii) other information the department gathers about the intergovernmental transfer
106     under Subsection (2)(a).
107          (3) The department shall not create a new intergovernmental transfer program after
108     July 1, 2017, unless the department reports to the Executive Appropriations Committee, in
109     accordance with Section 63J-5-206, before submitting the new intergovernmental transfer
110     program for federal approval. The report shall include information required by Subsection
111     63J-5-102(1)(d) and the analysis required in Subsections (2)(a) and (b).
112          Section 4. Section 63J-5-102 is amended to read:
113          63J-5-102. Definitions.

114          (1) As used in this chapter:
115          (a) (i) "Agency" means a department, division, committee, commission, council, court,
116     or other administrative subunit of the state.
117          (ii) "Agency" includes:
118          (A) executive branch entities;
119          (B) judicial branch entities; and
120          (C) the State Board of Education.
121          (iii) "Agency" does not mean higher education institutions or political subdivisions.
122          (b) (i) "Federal funds" means cash or other money received from the United States
123     government or from other individuals or entities for or on behalf of the United States and
124     deposited with the state treasurer or any agency of the state.
125          (ii) "Federal funds" includes federal assistance and federal assistance programs,
126     however described.
127          (iii) "Federal funds" does not include money received from the United States
128     government to reimburse the state for money expended by the state.
129          (c) "Federal funds reauthorization" means:
130          (i) the formal submission from an agency to the federal government applying for or
131     seeking reauthorization of federal funds which the state is currently receiving;
132          (ii) the formal submission from an agency to the federal government applying for or
133     seeking reauthorization to participate in a federal program in which the state is currently
134     participating that will result in federal funds being transferred to an agency; or
135          (iii) that period after the first year of a previously authorized and awarded grant or
136     funding award, during which federal funds are disbursed or are scheduled to be disbursed after
137     the first year because the term of the grant or financial award extends for more than one year.
138          (d) (i) "Federal funds request summary" means a document detailing:
139          (A) the amount of money that is being requested or is available to be received by the
140     state from the federal government for each federal funds reauthorization or new federal funds
141     request;

142          (B) those federal funds reauthorizations and new federal funds requests that are
143     included as part of the agency's proposed budget for the fiscal year, and the amount of those
144     requests;
145          (C) the amount of new state money, if any, that will be required to receive the federal
146     funds or participate in the federal program;
147          (D) the number of additional permanent full-time employees, additional permanent
148     part-time employees, or combination of additional permanent full-time employees and
149     additional permanent part-time employees, if any, that the state estimates are needed in order to
150     receive the federal funds or participate in the federal program; and
151          (E) any requirements that the state must meet as a condition for receiving the federal
152     funds or participating in the federal program.
153          (ii) "Federal funds request summary" includes, if available:
154          (A) the letter awarding an agency a grant of federal funds[;] or [(B)] other official
155     documentation awarding an agency a grant of federal funds[.]; and
156          (B) a document detailing federal maintenance of effort requirements.
157          (e) "Federal maintenance of effort requirements" means any matching, level of effort,
158     or earmarking requirements, as defined in Office of Management and Budget requirements,
159     that are imposed on an agency as a condition of receiving federal funds.
160          (f) "Local education agency" or "LEA" means:
161          (i) a school district;
162          (ii) a charter school; or
163          (iii) the Utah Schools for the Deaf and the Blind.
164          (g) "New federal funds" means:
165          (i) federal assistance or other federal funds that are available from the federal
166     government that:
167          (A) the state is not currently receiving; or
168          (B) exceed the federal funds amount most recently approved by the Legislature by
169     more than 25% for a federal grant or program in which the state is currently participating;

170          (ii) a federal assistance program or other federal program in which the state is not
171     currently participating; or
172          (iii) a one-time TANF request.
173          (h) "New federal funds request" means:
174          (i) the formal submission from an agency to the federal government:
175          (A) applying for or otherwise seeking to obtain new federal funds; or
176          (B) applying for or seeking to participate in a new federal program that will result in
177     federal funds being transferred to an agency; or
178          (ii) a one-time TANF request.
179          (i) (i) "New state money" means money, whether specifically appropriated by the
180     Legislature or not, that the federal government requires Utah to expend as a condition for
181     receiving the federal funds or participating in the federal program.
182          (ii) "New state money" includes money expended to meet federal maintenance of effort
183     requirements.
184          (j) "One-time TANF request" means a proposed expenditure by the Department of
185     Workforce Services from its reserves of federal Temporary Assistance for Needy Families
186     funds:
187          (i) for a project or program that will last for a fixed amount of time and is not an
188     ongoing project or program of the Department of Workforce Services; and
189          (ii) that is greater than $1,000,000 over the amount most recently approved by the
190     Legislature.
191          (k) (i) "Pass-through federal funds" means federal funds provided to an agency that are
192     distributed to local governments or private entities without being used by the agency.
193          (ii) "Pass-through federal funds" does not include federal funds provided to the State
194     Board of Education that are distributed to a local education agency or other subrecipient
195     without being used by the State Board of Education.
196          (l) "State" means the state of Utah and all of its agencies, and any administrative
197     subunits of those agencies.

198          (2) When this chapter describes an employee as a "permanent full-time employee" or a
199     "permanent part-time employee," it is not intended to, and may not be construed to, affect the
200     employee's status as an at-will employee.
201          Section 5. Section 63J-5-103 is amended to read:
202          63J-5-103. Scope and applicability of chapter.
203          (1) Except as provided in Subsection (2), and except as otherwise provided by a statute
204     superseding provisions of this chapter by explicit reference to this chapter, the provisions of
205     this chapter apply to each agency and govern each federal funds request.
206          (2) (a) This chapter does not govern federal funds requests for:
207          [(a)] (i) except as provided in Section 63J-5-206, the Medical Assistance Program,
208     commonly known as Medicaid; and
209          [(b)] (ii) except as provided in Section 63J-5-206, the Children's Health Insurance
210     Program[;].
211          (b) Until Subsections (2)(c) and (d) apply, this chapter does not govern federal funds
212     requests for:
213          [(c)] (i) the Women, Infant, and Children program;
214          [(d)] (ii) the Temporary Assistance for Needy Families program, except for a one-time
215     TANF request as defined in Section 63J-5-102;
216          [(e)] (iii) Social Security Act money;
217          [(f)] (iv) the Substance Abuse Prevention and Treatment program;
218          [(g)] (v) Child Care and Development Block Grant;
219          [(h)] (vi) SNAP Administration and Training money;
220          [(i)] (vii) Unemployment Insurance Operations money;
221          [(j)] (viii) Federal Highway Administration money;
222          [(k)] (ix) the Utah National Guard; or
223          [(l)] (x) pass-through federal funds.
224          (c) Federal funds requests described in Subsection (2)(b) are subject to the provisions
225     of this chapter:

226          (i) beginning on January 1, 2018, for each agency that receives more than
227     $200,000,000 annually in federal funds; or
228          (ii) beginning on July 1, 2018, for each agency that receives $200,000,000 or less
229     annually in federal funds.
230          (d) Maintenance of effort reporting requirements described in Subsection 63J-5-
231     102(1)(d)(ii)(B) may not be required until:
232          (i) January 1, 2018, for each agency that receives more than $200,000,000 annually in
233     federal funds; or
234          (ii) July 1, 2018, for each agency that receives $200,000,000 or less annually in federal
235     funds.
236          (3) The governor need not seek legislative review or approval of federal funds
237     received by the state if:
238          (a) the governor has declared a state of emergency; and
239          (b) the federal funds are received to assist victims of the state of emergency under
240     Section 53-2a-204.
241          Section 6. Section 63J-5-206 is enacted to read:
242          63J-5-206. Intergovernmental transfers for Medicaid.
243          (1) Subject to Subsections (2) and (3), an intergovernmental transfer program under
244     Section 26-18-21 is subject to the same review provisions as a federal funds request under this
245     chapter.
246          (2) Notwithstanding Subsection (1), if an intergovernmental transfer program created
247     under Subsection 26-18-21(3) will result in the state receiving total payments of $1,000,000 or
248     more per year from the federal government, the intergovernmental transfer program is subject
249     to the same review provisions as a high impact federal funds request in Subsections
250     63J-5-204(3), (4), and (5).
251          (3) Beginning on July 1, 2017, an intergovernmental transfer program created before
252     July 1, 2017, is subject to the federal funds review process of Section 63J-5-201 for periods
253     after July 1, 2017.